UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
(Rule 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934 (Amendment No. __________)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [__]
Check the appropriate box:
[__] Preliminary Proxy Statement
[__] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ X] Definitive Proxy Statement
[__] Definitive Additional Materials
[__] Soliciting Material under Rule 14a-12
TRUSTCO BANK CORP NY
_________________________________________________________
Name of the Registrant as Specified In Its Charter
_________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X] No fee required.
[__] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
_______________________________________________________________
(2) Aggregate number of securities to which transaction applies:
_______________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
_______________________________________________________________
(4) Proposed maximum aggregate value of transaction:
_______________________________________________________________
(5) Total fee paid:
_______________________________________________________________
[__] Fee paid previously with preliminary materials.
[__] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
_______________________________________________________________
(2) Form, Schedule or Registration Statement No.:
_______________________________________________________________
(3) Filing Party:
_______________________________________________________________
(4) Date Filed:
_______________________________________________________________
TRUSTCO Bank Corp NY [Logo]
5 Sarnowski Drive, Glenville, New York 12302
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Shareholders of TrustCo Bank Corp NY:
Notice is hereby given that the Annual Meeting of Shareholders of TrustCo
Bank Corp NY, a New York corporation, will be held at 192 Erie Boulevard,
Schenectady, New York 12305, on May 9, 2005, at 10:00 a.m. local time, for
the purpose of considering and voting upon the following matters:
1. Election of directors.
2. Ratification of the appointment of KPMG LLP as TrustCo's independent
auditors for 2005.
3. Any other business that properly may be brought before
the meeting or any adjournment thereof.
By Order of the Board of Directors,
Robert M. Leonard
Secretary
April 4, 2005
PLEASE SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE, WHETHER
YOU PLAN TO ATTEND THE MEETING OR NOT. YOU MAY WITHDRAW YOUR PROXY AT ANY
TIME PRIOR TO THE MEETING, OR AT THE MEETING.
TRUSTCO BANK CORP NY
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
May 9, 2005
This proxy statement is furnished in connection with the solicitation by
the board of directors of TrustCo Bank Corp NY ("TrustCo") of proxies to be
voted at TrustCo's Annual Meeting of Shareholders. The Annual Meeting will be
held at 10:00 a.m. local time on Monday, May 9, 2005, at 192 Erie Boulevard,
Schenectady, New York 12305. This proxy statement and the form of proxy were
first mailed to shareholders on or about April 4, 2005.
The record date for the Annual Meeting is March 23, 2005. Only
shareholders of record at the close of business on March 23, 2005 are entitled
to notice of and to vote at the Annual Meeting. Shareholders of record on that
date are entitled to one vote for each share of TrustCo common stock held by
them. Each share of TrustCo's common stock has one vote, and, as of March 1,
2005, there were 74,926,993 shares of common stock outstanding.
The Annual Meeting will be held if a majority of the outstanding shares of
TrustCo's common stock, constituting a quorum, is represented at the meeting.
If a shareholder returns a properly executed proxy card, his or her shares
will be counted for purposes of determining a quorum at the meeting, even if
the shareholder abstains from voting. Shares not voted by brokers and other
entities holding shares on behalf of beneficial owners will not be counted.
All shares of TrustCo's common stock represented at the Annual Meeting by
properly executed, dated proxies will be voted according to the instructions
indicated on the proxy card. If shareholders return a signed proxy card but
fail to instruct how the shares registered in their names must be voted, the
shares will be voted as recommended by TrustCo's board of directors. The
board of directors recommends that shareholders vote:
- "for" each of the nominees for director, and
- "for" ratification of the appointment of KPMG LLP as TrustCo's
independent auditors.
If any matter not described in this proxy statement is properly
presented at the Annual Meeting, the persons named in the proxy card will use
their judgment to determine how to vote the shares for which they have voting
authority. TrustCo does not know of any other matters to be presented at the
Annual Meeting.
Any shareholder executing a proxy solicited hereby has the power to revoke
it by giving written notice to the Secretary of TrustCo at any time prior to
the exercise of the proxy.
1
TrustCo will solicit proxies primarily by mail, although proxies also
may be solicited by directors, officers, and employees of TrustCo or our
wholly-owned subsidiary, Trustco Bank. These persons may solicit proxies
personally or by telephone, and they will receive no additional compensation
for such services. TrustCo has also retained Regan & Associates, Inc. to aid
in the solicitation of proxies for a solicitation fee of $4,500 plus expenses
and a delivery fee of $1,750. The entire cost of this solicitation will be
paid by TrustCo.
THE ANNUAL MEETING
A description of the items to be considered at the Annual Meeting, as well
as other information concerning TrustCo and the meeting, is set forth below.
Item 1. Election of Directors
The first item to be acted upon at the Annual Meeting is the election of
two directors to serve on the TrustCo board of directors. The nominees for
election as directors for three-year terms expiring at TrustCo's 2008 Annual
Meeting are Anthony J. Marinello, M.D., Ph.D. and William D. Powers. Each of
the nominees is an incumbent director and was approved by TrustCo's board of
directors.
TrustCo's Amended and Restated Certificate of Incorporation provides that
TrustCo's board of directors will consist of not less than five nor more than
fifteen members, with, under TrustCo's Bylaws, the total number of directors
to be fixed by resolution of the board or the shareholders. Currently, the
number of directors is fixed at five with one vacancy.
TrustCo's Certificate of Incorporation and Bylaws require TrustCo's board
to be divided into three classes, as nearly equal in number as possible, with
one class to be elected each year for a term of three years. Directors who
reach the mandatory retirement age of 75 during their term of office cease to
be directors and must vacate their office.
The pages that follow set forth information regarding TrustCo's
nominees, as well as information regarding the remaining members of TrustCo's
board. Proxies will be voted in accordance with the specific instructions
contained in the proxy card; properly executed proxies that do not contain
voting instructions will be voted "for" the election of TrustCo's nominees.
If any such nominee becomes unavailable to serve, the shares represented by
all valid proxies will be voted for the election of such other person as
TrustCo's board may recommend. Each of TrustCo's nominees has consented to
being named in this Proxy Statement and to serve if elected. The board of
directors has no reason to believe that any nominee will decline or be unable
to serve if elected.
Information with regard to the business experience of each director and
the ownership of common stock on December 31, 2004 has been furnished by each
director or has been obtained from TrustCo's records. TrustCo's common stock
is the only class of equity security outstanding.
2
INFORMATION ON TRUSTCO DIRECTORS AND NOMINEES
NOMINEES FOR ELECTION AS TRUSTCO DIRECTORS(1) FOR
THREE-YEAR TERM TO EXPIRE IN 2008
Shares of TrustCo Common
Stock Beneficially Owned
Name and Principal Occupation(2) No. of Shares (3) Percent of Class
Anthony J. Marinello, M.D., Ph.D., 61,291 *
Age 49, Physician. Director of TrustCo
and Trustco Bank since 1999.
William D. Powers, Age 63, Partner, 60,813 *
Powers & Company, LLC (consultants);
former Chairman, New York Republican
State Committee. Director of TrustCo and
Trustco Bank since 1995.
OTHER TRUSTCO DIRECTORS
Shares of TrustCo Common
Stock Beneficially Owned
Name and Principal Occupation(2) No. of Shares (3) Percent of Class
Joseph A. Lucarelli, Age 64, President, 120,023 *
Traditional Builders (residential
home builder and developer). Former
President, Bellevue Builders Supply, Inc.
Director of TrustCo and Trustco Bank
since 1999.
Robert A. McCormick, Age 68, Chairman 2,962,455 3.89
of TrustCo and Trustco Bank since 2001.
President of TrustCo and Trustco Bank
1982-2002. President and Chief Executive
Officer of TrustCo and Trustco Bank
1984-2002. Director of TrustCo and
Trustco Bank since 1980. Mr. McCormick
retired as an executive officer of TrustCo
and Trustco Bank as of November 1, 2002.
William J. Purdy, Age 70, President, Welbourne 50,357 *
& Purdy Realty, Inc. Director of TrustCo and
Trustco Bank since 1991.
See footnotes on page 4.
3
INFORMATION ON TRUSTCO EXECUTIVE OFFICERS
Shares of TrustCo Common
Stock Beneficially Owned
Name and Principal Occupation(2) No. of Shares(3) Percent of Class
Robert J. McCormick, Age 41, 753,282 1.01
President and Chief Executive Officer
of TrustCo since January 2004, Executive
Officer of TrustCo since 2001 and
President and Chief Executive Officer of
Trustco Bank since November 2002. Joined
Trustco Bank in 1995. Robert J.
McCormick is the son of Robert A.
McCormick.
Robert T. Cushing, Age 49, 1,002,545 1.33
Executive Vice President and Chief
Financial Officer of TrustCo since
January 2004, President and Chief
Executive Officer of TrustCo from
November 2002 to December 2003; Executive
Officer of TrustCo and Trustco Bank since
1994. Joined Trustco Bank in 1994.
Scot R. Salvador, Age 38, Executive 141,673 *
Vice President and Chief Banking Officer
of TrustCo and Trustco Bank since January
2004. Executive Officer of TrustCo and
Trustco Bank since 2004. Joined Trustco
Bank in 1995.
Robert M. Leonard, Age 42, Secretary 50,760 *
of TrustCo and Trustco Bank
since 2003. Administrative Vice President
of TrustCo and Trustco Bank since
2004. Executive Officer of TrustCo and
Trustco Bank since 2003. Joined
Trustco Bank in 1986.
See footnotes below.
TRUSTCO DIRECTORS, NOMINEES, AND EXECUTIVE OFFICERS AS A GROUP (9
INDIVIDUALS) BENEFICIALLY OWN 5,203,199 SHARES OF COMMON STOCK, WHICH
REPRESENT 6.70% OF THE OUTSTANDING SHARES.
Footnotes:
(1) Directors of TrustCo Bank Corp NY are also directors of Trustco Bank.
(2) Each of the directors has held, or retired from, the same position or
another executive position with the same employer during the past five
years, except William D. Powers, who formed Powers, & Company, LLC, in
2001 after serving as Chairman of the New York Republican State
Committee for at least the previous five years.
4
(3) Each director and executive officer named herein has sole voting and
investment power with respect to the shares listed above except as noted
below. Voting or investment power is shared by the spouse or other
immediate family members with respect to the number of shares indicated
for the following directors or officers: Dr. Anthony J. Marinello,
19,248 shares, Robert J. McCormick, 7,803 shares, Robert T. Cushing,
8,093, and Robert M. Leonard, 9,108 shares. Voting or investment power
is held by the spouse or other immediate family members with respect to
the number of shares indicated for the following directors or officers,
each of whom disclaims beneficial ownership of such securities: Robert
T. Cushing, 379,923 shares; Joseph A. Lucarelli, 23,805 shares; Dr.
Anthony J. Marinello, 15,195 shares; Robert A. McCormick, 68,994 shares;
Robert J. McCormick, 4,207 shares; and Robert M. Leonard, 152 shares.
Voting authority for 99,674 shares owned beneficially by Robert J.
McCormick is vested in Trustco Bank as trustee for a trust, the
beneficiary of which is Robert J. McCormick. Included for Robert J.
McCormick are 96,736 shares in trust at Trustco Bank for which Robert J.
McCormick is co-trustee. Included for Robert J. McCormick are 94,347
shares which are held by Trustco Bank as a co-trustee of trusts for the
benefit of Robert J. McCormick or his family. The number of shares owned
by each of the directors and executive officers includes options to
acquire the following number of shares: Robert T. Cushing, 589,036
shares; Robert M. Leonard, 24,400 shares, Joseph A. Lucarelli, 10,040
shares; Dr. Anthony J. Marinello, 23,249 shares; Robert A. McCormick,
1,652,063 shares; Robert J. McCormick, 398,220 shares; William D.
Powers, 2,000 shares; William J. Purdy, 19,224 shares, and Scot R.
Salvador, 126,324 shares.
* Less than 1%.
Director Fees, Committees and Attendance
TrustCo's board held ten meetings during 2004. Each director
currently receives for his services as director a fee in the amount of
$10,000 for each meeting attended of the TrustCo or Trustco Bank board of
directors. In addition, under a consulting agreement with TrustCo, Robert A.
McCormick received office space, access to a company car, and club membership
similar to what he was receiving prior to his retirement in 2002 as president
and chief executive officer of TrustCo and Trustco Bank. The value of these
benefits was approximately $66,000 for 2004. None of the members of TrustCo's
board is an officer or employee of TrustCo or Trustco Bank, and all of the
directors except for Mr. McCormick would be considered to be "independent
directors" under the listing qualifications rules for companies, such as
TrustCo, whose shares are traded on The Nasdaq Stock Market, Inc.
TrustCo directors who are not also employees of TrustCo or Trustco Bank
are eligible to participate in the TrustCo Bank Corp NY Directors Performance
Bonus Plan, which was adopted by the TrustCo board in 1997. Under the
Directors Performance Bonus Plan, nonemployee directors are eligible to be
awarded "units," the value of which is based upon the appreciation in value
of TrustCo's common stock between the date of the award and the occurrence of
a "change in control" as defined in the Directors Performance Bonus Plan. The
units so awarded vest, and payments under the Directors Performance Bonus
Plan are to be made, only upon the occurrence of a change in control. Each
nonemployee director has been awarded 34,981 units under the Directors
Performance Bonus Plan at a base price of $5.95 per unit (except for Mr.
Lucarelli, whose base price is $8.59 per unit).
5
TrustCo maintains a standing Audit Committee, which held four meetings
in 2004. The directors currently serving on the Audit Committee are William D.
Powers (Chairman), Joseph A. Lucarelli, Dr. Anthony J. Marinello, and William
J. Purdy. The function of the Audit Committee is to review TrustCo's and
Trustco Bank's internal audit procedures and also to review the adequacy of
internal accounting controls for TrustCo and Trustco Bank. In addition, the
Audit Committee annually recommends the use of particular external audit
firms by TrustCo and Trustco Bank in the coming year, after reviewing
performance of the existing vendors and available audit resources. Please
refer to the discussion under "Audit Committee" for a more detailed
description of the Audit Committee's activities.
TrustCo's Compensation Committee held two meetings in 2004. The four
directors serving on the Compensation Committee were Joseph A. Lucarelli
(Chairman), Dr. Anthony J. Marinello, William D. Powers, and William J.
Purdy. The function of the Compensation Committee was to review general
compensation practices of Trustco Bank and to recommend to the board of
directors of Trustco Bank the salary and benefits for Trustco Bank's
executive officers. The discussion under "Report on Executive Compensation"
contains a more detailed description of the Compensation Committee's
activities.
TrustCo provides an informal process for shareholders to send
communications to the board. Shareholders who wish to contact the board or
any of its members may do so in writing to TrustCo Bank Corp NY, P.O. Box
1082, Schenectady, New York 12301-1082.
Although TrustCo does not have a policy with regard to board
members' attendance at the Annual Meeting of Shareholders, all of the
directors are encouraged to attend such meetings, and all of our directors
attended our 2004 Annual Meeting.
Director Nomination Policies
Each of the nominees slated for election at the Annual Meeting is an
incumbent director and was considered and selected by the board of directors.
The nominees were considered and approved unanimously by TrustCo's
independent directors.
The board of directors believes it is appropriate for TrustCo not to
have a standing nominating committee because a high percentage (four out of
five, or 80%) of TrustCo's directors are independent directors under The
Nasdaq Stock Market's listing qualifications rules. Moreover, the board
believes that all of its directors have significant expertise in the
operations and needs of TrustCo and its board and have valuable insights to
offer regarding the value that qualified directors can bring to TrustCo and
whether at any given time there might be any needs that the board may have
that are not being adequately served by the current board members.
Consequently, the board believes TrustCo and its shareholders are best served
by having all directors participate in the deliberative process of choosing
nominees for directors of TrustCo.
6
To provide guidance to the board in its consideration of nominees for
board membership, TrustCo's board of directors has adopted a Director
Nominations Policy. A copy of this policy was included as an appendix to
TrustCo's proxy statement for its 2004 Annual Meeting of Shareholders. The
board believes that it is the responsibility of each member of the board to
identify, and bring to the attention of the full board, persons who may be
suitable for election to the board, and the board will maintain an active
file of potential suitable candidates for consideration as nominees.
As a general matter, the board believes that a candidate for board
membership should have high personal and professional ethics, integrity and
values; an inquiring and independent mind, practical wisdom and mature
judgment; broad policy-making experience in business, government or community
organizations; expertise useful to TrustCo and complementary to the
background and experience of other board members; willingness to devote the
time necessary to carrying out the duties and responsibilities of Board
membership; commitment to serve on the board over a period of several years
to develop knowledge about TrustCo, its strategy and its principal
operations; and willingness to represent the best interests of all of
TrustCo's constituencies.
After a possible candidate is identified, the board will investigate
and assess the qualifications, experience and skills of the candidate. The
investigation process may, but need not, include one or more meetings with
the candidate by a member or members of the board. From time to time, but at
least once each year, the full board will meet to evaluate the needs of the
board and to discuss the candidates for nomination to the board. Such
candidates may be presented to the shareholders for election or appointed to
fill vacancies. All nominees must be approved by a majority of the
independent members of the board.
The board will consider written recommendations by shareholders for
nominees for election to the board. The persons identified in such
recommendations will be evaluated under the same criteria and procedures used
for other board candidates. Under TrustCo's Bylaws, the written
recommendations must be delivered or mailed to the board not less than 14 and
not more than 50 days prior to any meeting of shareholders called for the
purpose of the election of directors, or not later than 7 days prior to the
meeting if less than 21 days' notice of the meeting is provided.
TrustCo and Trustco Bank Executive Officer Compensation
The following table sets forth, for the fiscal year ended December
31, 2004, the compensation paid to or accrued on behalf of the most highly
compensated executive officers of TrustCo and Trustco Bank. The value of
incidental personal benefits, which may not be directly related to job
performance, has been included, where applicable, according to the Securities
and Exchange Commission requirements. Each of the executive officers
described in the following table (with the exception of Robert M. Leonard)
has an employment agreement and a supplemental retirement agreement described
in subsequent pages.
7
Summary Compensation Table
Long Term
Compensation
Annual Compensation Awards
Securities
Other Underlying All other
Annual Options/ Compensa-
Salary Bonus Compensation SARs tion
Year ($) ($)(1) ($)(2) (#) ($)
Robert J. McCormick(3)
President & Chief 2004 325,000 698,750 40,109 300,000 --
Executive Officer, 2003 300,000 645,000 21,723 -- --
TrustCo and Trustco 2002 300,000 645,000 26,076 150,000 --
Bank
Robert T. Cushing(4)
Executive Vice President, 2004 300,000 645,000 17,344 100,000 --
& Chief Financial 2003 300,000 645,000 21,557 -- --
Officer, TrustCo 2002 300,000 645,000 23,424 100,000 --
and Trustco Bank
Scot R. Salvador
Executive Vice President, 2004 175,000 376,250 18,109 150,000 --
& Chief Banking Officer,
TrustCo and Trustco Bank
Robert M. Leonard
Secretary, and Administra- 2004 89,156 24,114 390 7,500 --
tive Vice President,
TrustCo and Trustco Bank
Nancy A. McNamara(5)
Former Vice President, 2004 99,180 213,238 14,954 -- --
TrustCo; Former Senior 2003 300,000 645,000 27,340 -- --
Vice President, Trustco 2002 300,000 645,000 29,425 100,000 --
Bank
(1) Bonus amounts include payments to senior executive officers of TrustCo as
short-term incentive compensation pursuant to the incentive program
described in greater detail herein under the caption "Report on Executive
Compensation."
(2) Includes amounts reimbursed by TrustCo for the payment of
taxes pursuant to established benefit plans.
(3) Robert J. McCormick became President and Chief Executive Officer of
Trustco Bank on November 1, 2002 and President and Chief Executive
Officer of TrustCo on January 1, 2004.
(4) Mr. Cushing was President, Chief Executive Officer and Chief Financial
Officer of TrustCo from November 1, 2002 until December 31, 2003 and
became Executive Vice President and Chief Financial Officer of TrustCo
on January 1, 2004.
(5) Ms. McNamara retired as of May 2004.
8
Option/SAR Grants in Last Fiscal Year
The following table sets forth, for the fiscal year ended December 31, 2004,
information with respect to each of TrustCo's executive officers concerning
grants of stock options.
Potential Realizable Value
At Assumed Annual Rates
Of Stock Price
Appreciation
Individual Grants For Option Term(4)
Number of % of Total
Securities Options/SARs Exercise
Underlying Granted to or Base
Options/SARs Employees in Price Expiration
Name Granted (#)(1) Fiscal Year(2) ($/Sh)(3) Date 5% 10%
Robert J. McCormick 300,000 44.3% $13.55 11/19/2014 $2,556,000 $6,480,000
Robert T. Cushing 100,000 14.8% 13.55 11/19/2014 852,000 2,160,000
Scot R. Salvador 150,000 22.1% 13.55 11/19/2014 1,278,000 3,240,000
Robert M. Leonard 7,500 1.1% 13.55 11/19/2014 63,900 162,000
(1) Options, which were granted on November 19, 2004, become exercisable in
five annual installments beginning on that date.
(2) The total number of options granted in 2004 was 677,500, of which
557,500 (82.3%) were issued to the executive officers named above,
12,000 (1.8%) were issued to nonemployee directors, and 108,000 (15.9%)
were issued to officers and employees of TrustCo and Trustco Bank, other
than the executive officers named above.
(3) Exercise or base price is equal to the closing price for the common stock
as quoted by The Nasdaq Stock Market on the date of the grant.
(4) The amounts included reflect pre-tax gain. The dollar amounts under
these columns are the result of calculations assuming stock price
appreciation at the 5% and 10% annualized rates required by S.E.C. rules
and, therefore, are not intended to forecast possible future
appreciation, if any, of TrustCo's stock price, including any
appreciation in the event of a change in control. TrustCo's per share
stock price would be $22.07 and $35.15 if it increased by 5% and 10%
respectively, compounded annually over the option term.
Aggregated Option/SAR Exercises in Last Fiscal Year, and Fiscal Year-End
Option/SAR Values
The following table sets forth with respect to each of the named
executive officers information concerning exercises of stock options and
stock appreciation rights during the year ended December 31, 2004, as well as
the value of unexercised options and stock appreciation rights as of December
31, 2004.
9
Number of
Securities
Underlying Value of Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-End (#)(2) FY-End ($)(3)
Shares Acquired Value Exercisable/ Exercisable/
Name On Exercise (#) Realized($)(1) Unexercisable Unexercisable
Robert J. McCormick 9,000 $ 71,640 398,220/310,580 $1,430,390/217,943
Robert T. Cushing 304,340 2,414,570 589,036/141,160 2,761,823/183,086
Scot R. Salvador -- -- 126,324/141,587 475,905/74,411
Nancy A. McNamara 171,970 1,038,290 507,019/0 1,957,669/0
Robert M. Leonard -- -- 24,400/13,600 83,516/25,904
(1) The amounts shown reflect pre-tax gain and represent the difference
between the stock option exercise price and the market value of the
stock on the date of exercise.
(2) The number of exercisable options shown includes options exercisable on
December 31, 2004 or within 60 days of that date. (3)The amounts shown
reflect pre-tax gain. The value of unexercised in-the-money options and
SARs is based on the December 31, 2004, closing price for TrustCo common
stock of $13.79.
TrustCo Retirement Plans
Trustco Bank has a defined benefit retirement plan pursuant to which
annual retirement benefits are based on years of service to a maximum of 30
years and average annual earnings of the highest five consecutive years during
the final ten years of service. The defined benefit retirement plan is fully
funded by Trustco Bank contributions. In addition, TrustCo has a supplemental
retirement plan, which is an actuarial plan, under which additional
retirement benefits are accrued for eligible executive officers. Under the
supplemental retirement plan, the amount of supplemental retirement benefits
is based upon annual contributions that are actuarially calculated to achieve
a benefit at normal retirement that approximates the differences between (i)
the total retirement benefit the participant would have received under the
defined benefit retirement plan without taking into account limitations on
compensation, annual benefits, and years of service; and (ii) the retirement
benefit the participant is projected to receive under the defined benefit
retirement plan at normal retirement. The supplemental retirement plan
provides benefits based on years of service to a maximum of 40 years. The
supplemental account balance of a participant on any valuation date may not
exceed $7,000,000.
The following table shows the approximate retirement benefits that would
have been payable in 2004 to salaried employees, under both the defined benefit
retirement plan and the supplemental retirement plan, assuming retirement of
such person at age 65 and payment of benefits in the form of a life annuity.
Earnings used in calculating benefits under these plans are approximately
equal to cash amounts reflected as salary plus bonus in the Summary
Compensation Table. These plans permit service and earnings to continue to be
credited for employment after age 65. The benefits set forth in the following
table are in addition to those that may be received as Social Security
benefits. The years of service at normal retirement age 65 for the executive
officers named in the Summary Compensation Table would be as follows: Robert
J. McCormick, 33 years, Robert T. Cushing, 27 years; and Scot R. Salvador, 35
years.
10
Pension Plan Table
Annual Benefits for Years of Serviced
Remuneration 15 20 25 30 35
$200,000 $ 56,800 $ 75,700 94,600 $114,600 $118,000
300,000 86,800 115,700 144,600 174,600 180,800
400,000 116,800 155,700 194,600 234,600 243,500
500,000 146,800 195,700 244,600 294,600 306,300
600,000 176,800 235,700 294,600 354,600 369,100
700,000 206,800 275,700 344,600 414,600 431,900
800,000 236,800 315,700 394,600 474,600 494,700
900,000 266,800 355,700 444,600 534,600 557,500
1,000,000 296,800 395,700 494,600 594,600 620,300
1,100,000 326,800 435,700 544,600 654,600 683,000
1,200,000 356,800 475,700 594,600 714,600 745,800
1,300,000 386,800 515,700 644,600 774,600 808,600
Generally, an employee who has attained age 55 and has ten years of
service has the right to elect to immediately begin receiving adjusted
retirement benefits less than those indicated in the table upon any separation
from service with Trustco Bank. The Internal Revenue Code places a maximum
limit on the benefits that can be provided under qualified retirement plans
such as Trustco Bank's defined benefit retirement plan. For 2004, the annual
Internal Revenue Code limit for a straight-life annuity benefit at normal
retirement age was $165,000, which amount is actuarially reduced for
participants who retire and begin receiving benefits early.
Trustco Bank's supplemental retirement plan provides that supplemental
benefits will be paid in a single lump sum to a participant who terminates
employment for reasons other than retirement on or after his normal
retirement date. A participant who retires on or after his normal retirement
date may elect to be paid the supplemental benefits upon separation of
service from Trustco Bank in one of the benefit forms provided under the
defined benefit retirement plan or in a single lump sum or installments over
a five-year period. Also under the supplemental retirement plan, Trustco
Bank, in its discretion, may at any time elect to make a lump sum
distribution of a participant's supplemental benefit. The amount of this
single payment is equal to the participant's supplemental account balance
under the plan.
The supplemental retirement plan is unfunded for tax purposes. However,
Trustco Bank has established an irrevocable trust to fund its obligations
under these and other executive compensation plans. Trustco Bank is required
to make annual contributions to the trust, although the assets of the trust
remain subject to Trustco Bank's general creditors in the event of
insolvency.
Employment Contracts and Termination of Employment Arrangements
TrustCo and Trustco Bank have entered into employment agreements with
Robert J. McCormick, Robert T. Cushing, and Scot R. Salvador. In addition,
TrustCo and Trustco Bank have continued obligations under the employment
agreement with Robert A. McCormick.
11
Executive Officers' Employment Agreements
The executive officers' employment agreements provide that their
annual compensation will be their annual base salary plus their executive
incentive bonus under the Executive Officer Incentive Plan described below.
The annual base salary may not be less than their annual base salary for the
preceding calendar year (except in the initial year of the agreement), and
the officers are entitled to participate fully in any disability, death
benefit, retirement, executive incentive compensation, or pension plans
maintained by TrustCo or Trustco Bank. However, as described in greater
detail under "Report on Executive Compensation," they have ceased to be
eligible to participate in the Trustco Bank Profit Sharing Plan in
consideration of the potential benefits under the TrustCo Executive Officer
Incentive Plan. In the event the employment of any executive officer is
terminated within twelve months prior to or two years after a change in
control, for any reason other than good cause, or retirement at the mandatory
retirement age, then the officer will receive an amount equal to 2.99 times
his or her then-current annual compensation, to be paid in a single lump sum
within ten days of termination. Upon the announcement of a change in control,
an officer may notify TrustCo and Trustco Bank of his or her intent to
terminate employment as of the date of the change in control and will then
receive termination benefits no later than fifteen days prior to consummation
of the change in control. The officers are also entitled to the pro rata
portion of their annual award under the Executive Officer Incentive Plan,
payable no later than fifteen days prior to the closing date of the change in
control or, if the change in control is unannounced, within ten days after
the change in control. The employment agreements also provide for a gross-up
payment in the event that the amounts payable to them upon their termination
under the employment agreement or any other agreement are subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code.
Upon termination of employment due to retirement or disability,
TrustCo or Trustco Bank must provide to each executive officer and his or her
spouse, for the rest of their lives, the same health insurance benefits
provided by TrustCo and Trustco Bank under their medical insurance plan prior
to their retirement or disability. TrustCo and Trustco Bank will also provide
to them for their life the same life insurance benefits provided to retirees
by TrustCo and Trustco Bank under their life insurance plan.
Each of the employment agreements defines termination to include (a)
any reduction in then-current annual compensation (including executive
incentive compensation), disability, death, retirement, pension, or profit
sharing benefits (unless such reductions are applied to all Trustco Bank
employees as part of a validly adopted plan of cost containment), or their
responsibilities or duties; (b) either TrustCo's or Trustco Bank's relocation
or a change in an officer's base location; (c) receipt of a nonrenewal notice
pursuant to the employment agreement; or (d) the unilateral election by an
officer to terminate the employment agreement. Notwithstanding the foregoing,
the parties to the employment agreements have agreed that their ineligibility
to participate in the Trustco Bank Profit Sharing Plan will not effect a
termination of the employment agreement.
McCormick Employment Agreement
Under Robert A. McCormick's employment agreement, TrustCo and/or
Trustco Bank will provide to Mr. McCormick and his wife, for the rest of Mr.
McCormick's life, or the life of his spouse, the same health insurance
benefits provided to Mr. McCormick and his family by TrustCo and Trustco Bank
prior to his retirement. TrustCo and Trustco Bank will also provide to Mr.
McCormick for his life the same life insurance benefits provided to retirees
by TrustCo and Trustco Bank under their life insurance plan.
12
General Provisions
In addition to termination payments under a change of control, each
employment agreement provides for (under certain circumstances) (a) the
payment in full of each employee's compensation due, including retirement,
pension, and profit sharing plans, through the termination date, (b) the
continuation of health insurance benefits for the longer of the executive's
life or the life of his spouse and group life insurance benefits for the
executive, (c) the cost of any legal expenses as a result of such
termination, and (d) the transfer of the executive's company car (at book
value) and country club membership.
Performance Bonus Plan
Under the TrustCo Bank Corp NY Performance Bonus Plan, officers and
key employees of TrustCo and its subsidiaries are eligible to be awarded
units, the value of which is based upon the appreciation in value of
TrustCo's common stock between the date of the award and the occurrence of a
"change in control" as defined in the plan. The units so awarded vest, and
payments under the plan are to be made, fifteen days prior to the closing
date of an announced change in control or upon the occurrence of an
unannounced change in control or upon a participant's termination of
employment with TrustCo within the year prior to a change of control. A
participant who terminates employment on or after age 65 and who continues to
serve as a director will remain a participant in the plan. In 1997, Robert A.
McCormick was awarded 1,399,205 units, and Robert T. Cushing and Nancy A.
McNamara were each awarded 524,702 units, all at a stock-split adjusted base
price of $5.95 per unit. Effective January 1, 2003 Robert J. McCormick was
awarded 534,702 units at a base price of $10.78 per unit. Scot R. Salvador
was awarded 524,702 units effective January 1, 2004 at a base price of
$13.15.
Report on Executive Compensation
The Compensation Committee of Trustco Bank was responsible in 2004 for
determining the compensation of employees and officers of TrustCo and Trustco
Bank, including the chief executive officer and the executive officers named
in the Summary Compensation Table that appears elsewhere in this Proxy
Statement. Each of TrustCo's current executive officers named in the Summary
Compensation Table has an employment agreement, except Robert M. Leonard,
with each of TrustCo and Trustco Bank. These employment agreements were
described above.
The Compensation Committee of the board of directors of Trustco Bank, the
present members of which are Joseph A. Lucarelli (Chairman), Dr. Anthony J.
Marinello, William D. Powers, and William J. Purdy (none of whom was an
officer of TrustCo or Trustco Bank during 2004), furnished the following
report on executive compensation to the board of directors of Trustco Bank,
which has been adopted by TrustCo's board of directors for the year ended
December 31, 2004.
13
Under the supervision and direction of the Compensation Committee, TrustCo
and Trustco Bank have developed compensation policies, plans, and programs
that seek to enhance the profitability of TrustCo and Trustco Bank, and
ultimately shareholder value, by aligning closely the financial interests of
TrustCo's Chief Executive Officer and senior management with those of its
shareholders. It continues to be the purpose and intent of the Compensation
Committee to design a compensation program that reflects the standards of
performance of Trustco Bank, with particular emphasis on setting goals tied
to return on shareholders' equity previously defined by the board of
directors of Trustco Bank.
The function of the Compensation Committee is to review the general
compensation structure for the senior executive officers of Trustco Bank
(Robert J. McCormick, Robert T. Cushing; and Scot R. Salvador) and to
recommend to the board of directors of Trustco Bank the salary and benefits
of such senior executive officers. The components of executive compensation
for the senior executive officers include salary, bonus, stock options, and
cash payments under the defined benefit retirement plan, the supplemental
retirement plans, and TrustCo's Executive Officer Incentive Plan. The
Compensation Committee evaluates individual performance and corporate
profitability to determine the level of any compensation adjustment to take
effect as of January of the following year. The Compensation Committee also
identifies persons within Trustco Bank eligible to participate in the two
incentive plans and the supplemental retirement plan.
The Compensation Committee met two times during the year, August,
2004, and December, 2004. It is the aim of the Compensation Committee to
determine salary and benefit levels of executive compensation (including the
compensation of the Chief Executive Officer) principally upon the basis of
overall corporate performance, although elements of corporate performance
upon which compensation decisions are made may vary from year to year in the
discretion of the Compensation Committee and among executive officers. In
making any such determination, the Compensation Committee will consider a
number of factors including, among others, TrustCo's and Trustco Bank's
return on equity, attainment of net income goals and total asset targets,
overall profitability from year to year, banking experience of individual
officers, scope of responsibility within the overall organization,
performance, and particular contributions to TrustCo and Trustco Bank during
the course of the year, and other relevant factors, including involvement in
community matters that may better position the organization to serve the
immediate needs of Trustco Bank's market. The Compensation Committee uses
broad discretion when determining compensation levels and considers all of
the above criteria. It does not assign a specific weight to any of these
factors when establishing salary and benefit levels.
The Compensation Committee may also consider compensation programs
offered to executives performing similar duties for competing depository
institutions and their holding companies, with a particular focus on the
level of compensation paid by comparable institutions. To assist in this
evaluation, an industry group of eighteen regional bank holding companies,
which group is comprised of the institutions that constitute the SNL
Financial LC Super Regional Bank Index, was identified by the Compensation
Committee for performance and compensation comparisons. While Trustco Bank is
comparatively smaller in terms of total asset size than some members of this
peer group, the Compensation Committee believes that Trustco Bank compares
favorably with these institutions in terms of overall corporate performance.
The Compensation Committee further takes into consideration what it considers
to be the unique size of TrustCo's executive group as compared to other
financial institutions. Trustco Bank and TrustCo currently operate with three
executive officers, all of which have a very broad scope of responsibilities,
whereas all other institutions in this peer group have a larger pool of
executive officers.
14
As part of the evaluation, the Compensation Committee reviews financial
information for comparable companies. The Compensation Committee utilized
data prepared by SNL Financial for return on average assets and return on
average equity of a peer group of companies. These calculations were
performed by SNL Financial utilizing information and methodologies that they
determined. The SNL Financial report indicated that the peer group of
companies had a return on average assets of 1.41% as compared to TrustCo with
a 1.96%. The report also indicated that the peer group had a return on
average equity of 16.05% as compared to TrustCo with a 23.56%. Another factor
in determining executive compensation is TrustCo's efficiency ratio, which
according to SNL Financial was 39.91%; whereas, the peer group average for
efficiency ratio was 56.93%.
Pursuant to the policies regarding salaries and benefits described in this
report, the Compensation Committee recommended Robert J. McCormick's annual
salary be increased to $360,000, Robert T. Cushing's annual salary to remain
at $300,000, and Scot R. Salvador's annual salary be increased to $200,000
for 2005.
The Compensation Committee continues to believe that Trustco Bank is
better able to attract, retain, and motivate Trustco Bank's senior executive
officers to achieve superior performance if a relatively large percentage of
their compensation is at risk. In other words, Trustco Bank's compensation
for its senior executive officers is designed with an objective of providing
less total compensation when TrustCo's performance is poorer than a peer
group of companies (currently, the companies comprising the SNL Financial LC
Super Regional Bank Index), and providing superior total compensation when
performance is superior to that of the peer group.
In evaluating corporate performance for purposes of establishing
short-term incentive compensation awards for senior executive officers under
the Executive Officer Incentive Plan, the Compensation Committee evaluated
TrustCo's performance as compared with TrustCo's profit plan for the year,
and also evaluated financial results (generally return on equity) as compared
with the index for the current year. In the opinion of the Compensation
Committee, return on equity is the most significant measure of performance of
TrustCo and its relative importance to shareholders. Therefore, the target
pools were established to provide senior executive officers with an incentive
to increase return on equity performance. The Compensation Committee then
established a percentage of target pool to be paid as short-term incentive
compensation under the Executive Officer Incentive Plan. The target pool
payment would be made to senior executive officers based on TrustCo's return
on average equity for the year. The range of target returns on average equity
was from 14%, which equates to a 40% payout of base compensation, to 20%
return on average equity, which equates to a 125% payout of base
compensation. The incentive plan provides a 15 percentage point increase in
bonus payout for each 1% increase in return on average equity beyond 20%.
Senior executive officers would receive no incentive compensation award for
return on average equity below 14%. Return on average equity in 2004 was
26.65%.
In consideration of the potential benefits payable under the
incentive program described above, senior executive officers are not eligible
to participate in Trustco Bank's Profit Sharing Plan.
15
The Compensation Committee's actions concerning compensation were
ultimately judgments based upon the committee's ongoing assessment and
understanding of TrustCo and its senior executive officers, performance of its
senior executive officers, and whether or not cash payments or incentive
payments would provide an appropriate award or incentive to the senior
executive officers' contribution to TrustCo's past and future performance.
COMPENSATION COMMITTEE: Joseph A. Lucarelli, Chairman
Dr. Anthony J. Marinello
William D. Powers
William J. Purdy
Audit Committee
The Audit Committee of TrustCo's board is responsible for providing
independent, objective oversight of TrustCo's accounting functions, internal
controls, and financial reporting process. The Audit Committee is composed of
four directors, each of whom is independent under listing standards of The
Nasdaq Stock Market. Additionally, each member of the Audit Committee
satisfies the "financial sophistication" requirement also set forth in those
listing standards. In addition, to assist in the performance of its duties,
the Audit Committee retained Marvin and Company, PC, an independent
accounting firm, as a consultant to the committee.
The Audit Committee operates under a written Charter approved by the
board of directors. Each year, the Audit Committee reviews the adequacy of
the Charter and recommends any changes or revisions that the committee
considers necessary or appropriate. A copy of TrustCo's Audit Committee
charter, which was reviewed and approved by TrustCo's board of directors on
March 15, 2005, was attached to TrustCo's proxy statement for its 2004 Annual
Meeting of Shareholders.
The following table presents fees for professional audit services rendered
by KPMG LLP ("KPMG") for the audit of TrustCo's annual consolidated financial
statements for the fiscal years ended December 31, 2004, and 2003, and fees
billed for other services provided by KPMG during 2004 and 2003.
2004 2003
Audit fees $ 315,000 $ 212,000
Audit related fees(1) 23,500 28,000
Tax fees(2) 148,110 152,665
All other fees(3) 85,700 132,600
Total fees $ 572,310 $ 525,265
(1) For 2004 and 2003, audit related fees consisted of fees for audits of
certain employee benefit plan financial statements. Fees for 2003 also
include fees for an audit of Trustco Bank's collateral maintenance
levels as required by the Federal Home Loan Bank of New York.
(2) For 2004 and 2003, tax fees include tax return preparation services
and other compliance services.
(3) For 2004, all other fees include $79,000 for tax planning services and
$6,700 for other tax services. For 2003, all other fees include $125,000
for tax planning services and $7,600 for other tax services.
16
It is the Audit Committee's policy to preapprove all audit and
nonaudit services provided by the Company's independent accountants.
As such, all of the services described above were approved by the
Audit Committee.
Report of the Audit Committee
Management is responsible for TrustCo's internal controls and
financial reporting process. TrustCo's independent accountants, KPMG, are
responsible for performing an independent audit of TrustCo's consolidated
financial statements in accordance with auditing standards generally accepted
in the United States of America and issuing a report thereon. TrustCo's
Internal Audit Department is responsible for monitoring compliance with
internal policies and procedures. The Audit Committee's responsibility is to
monitor and oversee the financial reporting and audit processes. In
performing its oversight, the Audit Committee reviews the performance of KPMG
and Trustco's internal auditors.
In connection with these responsibilities, the Audit Committee met
with management and KPMG to review and discuss TrustCo's December 31, 2004
consolidated financial statements. The Audit Committee also discussed with
KPMG the matters required by Statement on Auditing Standards No. 61
(Communication with Audit Committees) and received the written disclosures
from KPMG required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees).
The Audit Committee discussed KPMG's independence with KPMG and has
considered whether the nonaudit services provided by KPMG during the fiscal
year ended December 31, 2004 were compatible with maintaining KPMG's
independence. The Committee has concluded that the nonaudit services provided
do not impair the independence of KPMG.
Based upon the Audit Committee's discussions with management and the
independent accountants, and its review of the information described in the
preceding paragraphs, the Audit Committee has recommended that the board of
directors include the audited consolidated financial statements in TrustCo's
Annual Report on Form 10-K for the year ended December 31, 2004, to be filed
with the Securities and Exchange Commission.
AUDIT COMMITTEE: William D. Powers, Chairman
Joseph A. Lucarelli
Dr. Anthony J. Marinello
William J. Purdy
17
Share Investment Performance
The following graphs show changes over five-year and fifteen-year
periods in the value of $100 invested in: (1) TrustCo's common stock; (2) the
Standard & Poor's 500 index; and (3) an industry group of twenty other
regional bank holding companies compiled by SNL Financial LC, called the
Super Regional Bank Index. The fifteen-year period is presented in addition
to the five-year period required by the S.E.C. because it provides additional
perspective. TrustCo management believes that longer term performance is of
greater importance to TrustCo shareholders. The banks comprising the Super
Regional Bank Index are: AmSouth Bancorp, BB&T Corp., Comerica Inc., Fifth
Third Bancorp, First Horizon National Corp., Huntington Bancshares Inc.,
KeyCorp, M&T Bank Corp., Marshall & Ilsley Corporation, National City Corp.,
PNC Financial Services Group, Inc., Popular Inc., Regions Financial Corp.,
SunTrust Banks, Inc., U.S. Bancorp, Wachovia Corp., Wells Fargo & Co., and
Zions Bancorp.
The year-end pre-tax values of each investment are based on share price
appreciation plus dividends paid, with cash dividends reinvested the date
they were paid.
18
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN*
AMONG TRUSTCO BANK CORP NY, THE S&P 500 INDEX
AND THE SUPER REGIONAL BANKS INDEX
[GRAPH]
Period Ending
Index 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04
TrustCo Bank Corp NY 100.00 111.12 138.44 124.55 159.82 175.26
S&P 500* 100.00 91.20 80.42 62.64 80.62 89.47
SNL Super Regional Bank Index 100.00 124.88 121.29 125.06 160.58 178.00
COMPARISON OF 15-YEAR CUMULATIVE TOTAL RETURN*
AMONG TRUSTCO BANK CORP NY, THE S&P 500 INDEX
AND THE SUPER REGIONAL BANKS INDEX
[GRAPH]
Period Ending
Index 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
TrustCo Bank Corp NY 100 95 147 192 270 278 384 448 688 906 833 926 1153 1038 1331 1460
S&P 500* 100 97 126 136 149 152 209 257 343 442 536 488 431 335 431 479
SNL Super Regional
Bank Index 100 81 137 175 183 173 270 374 542 584 477 596 579 597 766 849
*Source: CRSP, Center for Research in Security Prices, Graduate School of Business, The University of Chicago 2005. Used
with permission. All rights reserved. crsp.com. SNL Financial LC (C) 2005
19
Vote Required and Recommendation
The two nominees for election to the TrustCo board for three-year
terms expiring at the 2008 Annual Meeting of Shareholders who receive the
greatest number of votes will be elected to the board. Each nominee must
receive the affirmative vote of a majority of the outstanding shares of
TrustCo common stock in order to be elected a director.
THE TRUSTCO BOARD RECOMMENDS A VOTE FOR THE ELECTION OF THE TRUSTCO
DIRECTOR NOMINEES AS TRUSTCO DIRECTORS, WHICH IS ITEM 1 ON THE TRUSTCO
PROXY CARD.
Item 2. Ratification of the Appointment of Independent Auditors
KPMG LLP was the independent auditor for TrustCo for the year ended
December 31, 2004, and the board of directors has again selected and appointed
them as the independent auditor for the year ending December 31, 2005. A
resolution will be presented at the Annual Meeting to ratify their appointment
as independent auditors. The independent auditors will report on the
consolidated financial statements of TrustCo for the current calendar year
and will perform such other nonaudit services as may be required of them.
Representatives of KPMG LLP are expected to be present at the Annual Meeting
to make a statement if they so desire and are also expected to be available
to respond to appropriate questions that may be raised.
During the year ended December 31, 2004, KPMG LLP provided various audit
and nonaudit professional services to TrustCo. Audit services so provided
included examination of the consolidated financial statements of TrustCo,
report on internal controls, review, assistance, and consultation in
connection with the filing of the Form 10-K Annual Report with the S.E.C.,
and assistance with accounting and financial reporting requirements. Nonaudit
services so provided included the preparation and planning of corporate tax
returns, audits of benefit plans and compensation issues. Please refer to the
report of TrustCo's Audit Committee, provided above, for additional
information about the services provided by KPMG LLP.
Vote Required and Recommendation
The affirmative vote of a majority of all of TrustCo's issued and
outstanding shares of common stock is required to ratify the appointment of
KPMG LLP as TrustCo's independent auditors for the year ending December 31,
2005. Abstentions on properly executed proxy cards and shares not voted by
brokers and other entities holding shares on behalf of beneficial owners will
have the same effect as a vote "against" this proposal. Dissenters rights are
not available to shareholders who object to the proposal.
THE TRUSTCO BOARD RECOMMENDS THAT TRUSTCO SHAREHOLDERS VOTE FOR THIS
PROPOSAL, WHICH IS ITEM 2 ON THE TRUSTCO PROXY CARD.
20
Other Matters
TrustCo's board of directors is not aware of any other matters that may
come before the Annual Meeting. However, the proxies may be voted with
discretionary authority with respect to any other matters that may properly
come before the Annual Meeting.
S.E.C. Form 10-K
TrustCo will provide without charge a copy of its Annual Report on Form
10-K upon written request. Requests and related inquiries should be directed
to: Robert M. Leonard, Secretary, TrustCo Bank Corp NY, P.O. Box 1082,
Schenectady, New York 12301-1082.
Code of Conduct
TrustCo will provide without charge a copy of its Code of Conduct upon
written request. Requests and related inquiries should be directed to: Cheri
J. Parvis, Vice President-Personnel, TrustCo Bank Corp NY, P.O. Box 1082,
Schenectady, New York 12301-1082.
Ownership of TrustCo Common Stock by Certain Beneficial Owners
TrustCo is not aware of any person who, as of the date hereof, is the
beneficial owner of more than 5% of its common stock.
At March 1, 2005, the Trust Department of Trustco Bank held 3,030,029
shares of TrustCo common stock as executor, trustee, and agent (4.04% of
outstanding shares) not otherwise reported in this Proxy Statement. Neither
TrustCo nor Trustco Bank has any beneficial interest in these shares.
Transactions with TrustCo and Trustco Bank Directors, Executive
Officers and Associates
Some of the directors and executive officers of TrustCo and Trustco Bank,
and some of the corporations and firms with which these individuals are
associated, are also customers of Trustco Bank in the ordinary course of
business, or are indebted to Trustco Bank in respect to loans of $60,000 or
more, and it is anticipated that they will continue to be customers of and
indebted to Trustco Bank in the future. All such loans, however, were made in
the ordinary course of business, do not involve more than normal risk of
collectibility, do not present other unfavorable features, and were made on
substantially the same terms, including interest rates and collateral, as
those prevailing at the same time for comparable Trustco Bank transactions
with unaffiliated persons. In addition, Trustco Bank obtains legal services
from, and pays fees to, a law firm in which Thomas R. McCormick, son of
Robert A. McCormick and brother of Robert J. McCormick, is a partner. Trustco
Bank obtains such services at rates that are substantially the same as those
the firm charges other clients, and the firm is one of a number of law firms
that is retained by TrustCo to provide legal services to it.
21
Insurance for Indemnification of Officers and Directors
TrustCo renewed insurance for the indemnification of its executive
officers and directors and executive officers and directors of Trustco Bank
from St. Paul Mercury Insurance Company effective for the one-year period from
October 10, 2004 to October 10, 2005. The cost of this insurance was $154,000,
and coverage is provided to all executive officers and directors of TrustCo and
Trustco Bank. TrustCo's board of directors has no knowledge of any claims
made or sum paid pursuant to such insurance policy during 2004.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
TrustCo's directors and executive officers, and persons who own more than 10%
of a registered class of TrustCo's equity securities to file initial reports
of ownership and reports of changes of ownership in TrustCo's common stock
and other equity securities with the S.E.C. and to furnish TrustCo with
copies of all Section 16(a) reports they file.
Based solely on a review of the copies of such reports furnished to
TrustCo, and written representations that no other reports were required
during the fiscal year ended December 31, 2004, all Section 16(a) filing
requirements have been met except for a Form 4 filed on December 3, 2004 for
Robert T. Cushing relating to a stock disposition in relation to a stock
option exercise on October 22, 2004 and Form 4's filed on January 6, 2005 for
each of TrustCo's directors and executive officers reflecting new stock option
grants as of November 19, 2004.
SHAREHOLDER PROPOSALS
Shareholder proposals to be considered for inclusion in a proxy statement
in connection with any forthcoming annual meeting of shareholders of TrustCo
must be submitted to TrustCo on a timely basis. Proposals for inclusion in
TrustCo's proxy statement and form of proxy for the annual meeting of
shareholders expected to be held in May of 2006 must meet the requirements
established by the Securities and Exchange Commission for shareholder
proposals and must be received by TrustCo at its principal executive offices
no later than December 6, 2005. Proposals intended to be considered at the
2006 annual meeting but that are not to be included in TrustCo's proxy
statement must be received at TrustCo's principal executive offices not later
than February 17, 2006. Any such proposals, together with any supporting
statements, should be directed to the Secretary of TrustCo.
TRUSTCO SHAREHOLDERS
TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE ANNUAL MEETING, PLEASE
SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING TRUSTCO PROXY CARD IN THE
ENVELOPE PROVIDED. IF YOU PLAN TO ATTEND THE ANNUAL MEETING AND ARE A
SHAREHOLDER OF RECORD, PLEASE MARK THE PROXY CARD APPROPRIATELY AND RETURN
IT. HOWEVER, IF YOUR SHARES ARE NOT REGISTERED IN YOUR OWN NAME, PLEASE
ADVISE THE SHAREHOLDER OF RECORD (YOUR BANK, BROKER, ETC.) THAT YOU WISH TO
ATTEND. THAT FIRM MUST PROVIDE YOU WITH EVIDENCE OF YOUR OWNERSHIP, WHICH
WILL ENABLE YOU TO GAIN ADMITTANCE TO THE ANNUAL MEETING.
22