SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
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240.14a-12
M&T Bank Corporation
- --------------------------------------------------------------------------------
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M&T BANK CORPORATION
One M&T Plaza
Buffalo, New York 14203
1999
Notice of Annual Meeting of Stockholders
and
Proxy Statement
YOUR VOTE IS IMPORTANT
It is important that your shares be represented and voted at the Annual Meeting
of Stockholders. This year, most stockholders will have a choice of using a
traditional proxy card or voting by telephone. Check your proxy card or the
information forwarded by your bank, broker or other holder of record to see
which options are available to you.
ELIMINATE DUPLICATE MAILINGS
M&T Bank Corporation currently provides annual and quarterly reports to
stockholders who receive proxy statements. If you are a stockholder of record
and have more than one account in your name or the same address as other
stockholders of record, you may authorize M&T Bank Corporation to discontinue
mailings of multiple annual and quarterly reports. To discontinue duplicate
mailings, mark the appropriate box on each proxy card for each stockholder
account that you do NOT wish to receive annual and quarterly reports.
M&T BANK CORPORATION
One M&T Plaza Buffalo, New York 14203
March 11, 1999
Dear Stockholder,
You are cordially invited to attend the 1999 annual meeting of stockholders of
M&T Bank Corporation. Our annual meeting will be held on the 10th floor of One
M&T Plaza in Buffalo, New York on Tuesday, April 20, 1999 at 11:00 a.m.
Stockholders will be asked to elect 22 directors and to approve an amendment to
the M&T Bank Corporation 1983 Stock Option Plan that will broaden the definition
of persons eligible to receive grants under the Stock Option Plan. Information
about the nominees for director and the amendment to the Stock Option Plan can
be found in the attached proxy statement.
Whether or not you presently plan to attend the meeting, please indicate your
vote by using the enclosed proxy card or by voting by telephone. You may
withdraw your proxy if you attend the meeting and wish to vote in person.
We urge you to vote for the election of all 22 nominees and to approve the
amendment to the M&T Bank Corporation 1983 Stock Option Plan.
ROBERT J. BENNETT ROBERT G. WILMERS
Chairman of the Board President and Chief Executive Officer
M&T BANK CORPORATION
One M&T Plaza Buffalo, New York 14203
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TIME................. 11:00 a.m., local time, on Tuesday, April 20, 1999.
PLACE................ One M&T Plaza
10th Floor
Buffalo, New York 14203
ITEMS OF BUSINESS.... (1) To elect 22 directors for a term of one (1) year
and until their successors have been elected and
qualified.
(2) To consider the approval of an amendment to the
M&T Bank Corporation 1983 Stock Option Plan to
broaden the definition of persons eligible to receive
grants under the plan, as described in the
accompanying Proxy Statement.
(3) To transact such other business as may properly
come before the meeting and any adjournments thereof.
RECORD DATE.......... Holders of the Common Stock of record at 5:00 p.m. on
March 1, 1999 are entitled to vote at the meeting.
PROXY VOTING......... It is important that your shares be represented and
voted at the meeting. You can vote your shares by one
of the following methods: Mark, sign, date and
promptly return the enclosed proxy card in the
postage-paid envelope furnished for that purpose, OR
vote by telephone using the instructions on the
enclosed proxy card. Any proxy may be revoked in the
manner described in the accompanying Proxy Statement
at any time prior to its exercise at the Annual
Meeting of Stockholders.
MARIE KING
March 11, 1999 Corporate Secretary
TABLE OF CONTENTS
Page
----
INTRODUCTION ................................................................ 1
VOTING RIGHTS ............................................................... 1
PRINCIPAL BENEFICIAL OWNERS OF SHARES ....................................... 2
ACQUISITION OF FNB ROCHESTER CORP ........................................... 4
ELECTION OF DIRECTORS ....................................................... 4
NOMINEES FOR DIRECTOR ....................................................... 4
PROPOSED AMENDMENT TO THE M&T BANK CORPORATION
1983 STOCK OPTION PLAN .......................................... 10
STOCK OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS ......................... 15
Section 16(a) Beneficial Ownership Reporting Compliance ......... 17
PERFORMANCE GRAPH ........................................................... 17
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS ............................ 19
Compensation Committee Report on Executive Compensation ......... 19
Compensation Committee Interlocks and Insider Participation ..... 21
Executive Compensation .......................................... 21
Stock Option Grants in 1998 ..................................... 23
Stock Options and Stock Appreciation Rights Exercised in 1998 and
Year-End Values ............................................. 25
Pension Plan .................................................... 26
Supplemental Benefit Plans ...................................... 27
Employment Agreement ............................................ 28
Directors' Fees ................................................. 28
TRANSACTIONS WITH DIRECTORS AND EXECUTIVE OFFICERS .......................... 30
BOARD OF DIRECTORS, COMMITTEES OF THE BOARD AND
ATTENDANCE ...................................................... 30
NOTIFICATION OF BYLAW AMENDMENT ............................................. 31
OTHER MATTERS ............................................................... 31
INDEPENDENT PUBLIC ACCOUNTANTS .............................................. 32
SOLICITATION COSTS .......................................................... 32
STOCKHOLDER PROPOSALS ....................................................... 32
APPENDIX A
BYLAW PROVISIONS AFFECTING THE ELECTION OF DIRECTORS AND
THE CALLING AND CONDUCT OF MEETINGS OF STOCKHOLDERS
M&T BANK CORPORATION
---------
PROXY STATEMENT
---------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of M&T Bank Corporation of proxies in the accompanying form
for use at the 1999 Annual Meeting of Stockholders or any adjournment or
adjournments thereof.
The proxies designated on the form, or any one of them, may exercise all the
powers of said proxies and each shall have the power to appoint a substitute to
act in his place.
The Annual Meeting of Stockholders of M&T Bank Corporation will be held on the
10th floor of One M&T Plaza in Buffalo, New York on Tuesday, April 20, 1999, at
11:00 a.m., local time.
M&T Bank Corporation's mailing address is One M&T Plaza, Buffalo, New York
14203, and its telephone number is (716) 842-5445.
This Proxy Statement and the accompanying form of proxy are first being sent to
stockholders on or about March 11, 1999. A copy of M&T Bank Corporation's Annual
Report for 1998, including financial statements, accompanies this Proxy
Statement but is not part of the proxy solicitation materials.
VOTING RIGHTS
Stockholders of record at 5:00 p.m., Eastern Standard Time, on March 1, 1999 are
entitled to vote at the Annual Meeting. At that time M&T Bank Corporation had
outstanding 7,725,294 shares of common stock, $5 par value per share ("Common
Stock"). Each share of Common Stock is entitled to one vote.
Shares may not be voted at the meeting unless the owner is present or
represented by proxy. A stockholder can be represented through the return of a
physical proxy or by utilizing the telephone voting procedures. The telephone
voting procedures are designed to authenticate stockholders by use of a control
number and to allow stockholders to confirm that their instructions have been
properly recorded. The method by which you vote will in no way limit your right
to vote at the Annual Meeting if you later decide to attend in person. A
stockholder giving a proxy may revoke it at any time before it is exercised by
giving written notice of such revocation or by delivering a later dated proxy or
by the vote of the stockholder in person at the Annual Meeting.
1
Proxies will be voted in accordance with the stockholder's direction, if any.
Unless otherwise directed, proxies will be voted in favor of the election as
directors of the persons named under the caption "NOMINEES FOR DIRECTOR" and in
favor of the amendment to the M&T Bank Corporation 1983 Stock Option Plan
("Stock Option Plan").
The vote of a plurality of the shares of Common Stock present or represented at
the meeting is required for the election of directors, assuming a quorum is
present or represented at the meeting. The vote of a majority of the votes cast
at the meeting is required to approve the amendment to the Stock Option Plan. An
abstention with respect to approving the amendment to the Stock Option Plan will
not constitute a vote cast and therefore will not affect the outcome of the vote
on the Stock Option Plan. The presence in person or by proxy of the holders of a
majority of the Common Stock outstanding will constitute a quorum for the
transaction of business at the meeting. Broker non-votes will be counted as
being present or represented at the meeting for purposes of establishing a
quorum, but will not have an effect on the outcome of the vote for the election
of directors or the amendment to the Stock Option Plan.
PRINCIPAL BENEFICIAL OWNERS OF SHARES
The following table sets forth certain information with respect to all persons
or groups known by M&T Bank Corporation to be the beneficial owners of more than
5% of its outstanding Common Stock as of March 1, 1999.
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER OF SHARES PERCENT OF CLASS
- ------------------------------------ ---------------- ----------------
A group comprised of:
Argali [BVI] Limited P.O. Box 71 30,200 less than 1%
Craigmuir Chambers Rd. Town
Tortola, British Virgin Islands
Hofin Anstalt P.O. Box 83 310,022 4.01%
Vaduz, Liechtenstein
Rem Foundation Allgemeines Treuunternehmen 451,320 5.84%
Postfach 34 722, FL 9490
Vaduz, Liechtenstein
Roche Foundation One M&T Plaza, 19th floor 10,000 less than 1%
Buffalo, NY 14203
West Ferry Foundation One M&T Plaza, 19th floor 21,100 less than 1%
Buffalo, NY 14203
Elisabeth Roche Wilmers One M&T Plaza, 19th floor 50,261 less than 1%
Buffalo, NY 14203
Robert G. Wilmers One M&T Plaza, 19th floor 583,847 7.45%
Buffalo, NY 14203
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Total for group 1,425,650 (1) 18.20%
2
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER OF SHARES PERCENT OF CLASS
- ------------------------------------ ---------------- ----------------
National Indemnity 3024 Harney Street 506,930 (2) 6.56%
Company Omaha, NE 68131
Oppenheimer Capital Oppenheimer Tower 561,660 (3) 7.27%
World Financial Center
New York, NY 10281
- ---------------
(1) The members of this group have jointly filed with the Securities
and Exchange Commission ("SEC") a Schedule 13D, as amended,
indicating that they constitute a "group" as such term is used in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
("Exchange Act"). Each member of the group has indicated in such
amended Schedule 13D or otherwise advised M&T Bank Corporation that
such member has sole voting and dispositive power with respect to
the shares indicated opposite such member's name in the table.
Robert G. Wilmers, President and Chief Executive Officer of M&T
Bank Corporation, is the trustee of the West Ferry Foundation, a
charitable trust formed by him, and, as trustee, he holds sole
voting and dispositive power over the shares which it owns. Mr.
Wilmers is also the sole director and the president of the Roche
Foundation, and he holds sole voting and dispositive power over the
shares held by it. As to Mr. Wilmers, the shares indicated in the
table include the shares owned by the West Ferry Foundation, the
shares owned by the Roche Foundation, 40,000 shares owned by a
limited liability company of which he is sole stockholder and
managing member, and 110,000 shares subject to options granted
under the Stock Option Plan which are currently exercisable or are
exercisable within 60 days after March 1, 1999 and which were
deemed to be outstanding for purposes of calculating the percentage
of outstanding shares beneficially owned by Mr. Wilmers and the
group. See also the footnotes applicable to Mr. Wilmers in the
table set forth under the caption "STOCK OWNERSHIP BY DIRECTORS AND
EXECUTIVE OFFICERS." Hofin Anstalt is a corporation controlled by
Jorge G. Pereira, a director and vice chairman of the Board of
Directors of M&T Bank Corporation. The shares indicated for Hofin
Anstalt include shares held by its wholly owned subsidiaries and 22
shares owned by Mr. Periera through his participation in the M&T
Bank Corporation Directors' Stock Plan (the "Directors' Stock
Plan"). See the footnotes applicable to Mr. Pereira in the table
set forth under the caption "STOCK OWNERSHIP BY DIRECTORS AND
EXECUTIVE OFFICERS."
(2) National Indemnity Company has advised M&T Bank Corporation that
the reporting person has shared voting and dispositive powers with
respect to the indicated shares.
(3) Oppenheimer Capital has filed with the SEC a Schedule 13G, as
amended, reporting that it has shared voting and dispositive power
with respect to the indicated shares.
3
ACQUISITION OF FNB ROCHESTER CORP.
On December 9, 1998, M&T Bank Corporation and FNB Rochester Corp. signed an
Agreement and Plan of Reorganization providing for M&T Bank Corporation's
acquisition of FNB Rochester Corp. and its subsidiary bank, First National Bank
of Rochester, which operates 19 branches in western and central New York State.
At December 31, 1998, FNB Rochester Corp. reported $588 million in assets. The
transaction is expected to be completed at the end of May 1999, at which time
FNB Rochester Corp. will be merged into a subsidiary of M&T Bank Corporation and
First National Bank of Rochester will be merged into M&T Bank. The Agreement and
Plan of Reorganization provides that following the completion of the
transaction, R. Carlos Carballada, president and chief executive officer of FNB
Rochester Corp., and Michael J. Falcone, chairman of the board of FNB Rochester
Corp., will be elected directors of M&T Bank Corporation and M&T Bank. The
Agreement and Plan of Reorganization requires that the merger be approved by the
stockholders of FNB Rochester Corp., but does not require the approval of the
stockholders of M&T Bank Corporation.
ELECTION OF DIRECTORS
Shares represented by properly executed proxies will be voted, unless such
authority is withheld, for the election as directors of M&T Bank Corporation of
the following twenty-two (22) persons, to hold office until the 2000 Annual
Meeting of Stockholders and until their successors have been elected and
qualified. Each of the nominees listed below was elected at the 1998 Annual
Meeting of Stockholders, except for Mr. Newman, who became a director on July
21, 1998, and Mr. Sadler, who became a director on February 16, 1999. If any
nominee for any reason should become unavailable for election or if a vacancy
should occur before the election, it is intended that the shares represented by
the proxies will be voted for such other person as M&T Bank Corporation's
management shall designate.
The principal occupation of each of the nominees for the last five years was
substantially the same as is listed below. The information with respect to the
nominees is as of March 1, 1999 and includes their affiliations with M&T Bank
Corporation's subsidiary banks, Manufacturers and Traders Trust Company ("M&T
Bank") and M&T Bank, National Association ("M&T Bank, N.A."), and with M&T Bank
Corporation's other subsidiaries.
NOMINEES FOR DIRECTOR
WILLIAM F. ALLYN IS 63, IS A MEMBER OF THE AUDIT COMMITTEE AND HAS BEEN A
DIRECTOR SINCE 1998.
Mr. Allyn is president of Welch Allyn, Inc., a manufacturer of medical
instruments. He is a director of M&T Bank and a member of its Examining
Committee. Mr. Allyn is a director of Niagara Mohawk Power Corporation and
Oneida Limited, Inc. He is a trustee of Syracuse University and an overseer of
the Thayer School of Engineering at Dartmouth College. Mr. Allyn is a board
member and regional chairman of the Business Council of New York and is chairman
of the Manufacturers Association of Central New York. BRENT D. BAIRD IS 60, IS A
MEMBER OF THE EXECUTIVE AND COMPENSATION COMMITTEES AND HAS BEEN A DIRECTOR
SINCE 1983.
4
Mr. Baird is a private investor. Prior to 1992, he was a limited partner of
Trubee, Collins & Co., Inc., a member firm of the New York Stock Exchange, Inc.
Mr. Baird is a director of M&T Bank and a member of its Executive, Trust and
Investment, Nomination, and Community Reinvestment Act Committees. He is a
director of M&T Financial Corporation and a member of M&T Bank's Directors
Advisory Council-New York City Division. Mr. Baird is chairman of the board of
directors of First Carolina Investors, Inc. and president of Citizens Growth
Properties, both of which are engaged in the real estate business. He is also
president and a director of Merchants Group, Inc. and a director of Oglebay
Norton Company, Todd Shipyards Corporation, Exolon-ESK Company, Barrister
Information Systems Corporation and Ecology and Environment, Inc.
JOHN H. BENISCH IS 63 AND HAS BEEN A DIRECTOR SINCE 1988.
Mr. Benisch is a founder and limited principal of Colliers ABR, Inc., a real
estate firm based in New York City which is engaged in leasing, management and
consulting services. Colliers ABR, Inc. is also an owner/member of Colliers
International Property Consultants, which has regional offices throughout the
United States and internationally. He is a member of M&T Bank's Directors
Advisory Council-New York City Division and a member of its Community
Reinvestment Act Committee. Mr. Benisch is a member of The Real Estate Board of
New York, Inc. He is also an honorary trustee of St. Mary's Hospital for
Children, Bayside, New York, and is a member of The Salvation Army of Greater
New York Advisory Board.
ROBERT J. BENNETT IS 57 AND HAS BEEN A DIRECTOR SINCE 1998. HE IS CHAIRMAN OF
THE BOARD OF M&T BANK CORPORATION AND A MEMBER OF ITS EXECUTIVE COMMITTEE.
Mr. Bennett is a vice chairman of the board and a director of M&T Bank and a
member of its Executive and Trust and Investment Committees, and a director of
M&T Bank, N.A. He is chairman of M&T Bank's Directors Advisory Council-Syracuse
Division. Mr. Bennett assumed his positions with M&T Bank Corporation and M&T
Bank upon M&T Bank Corporation's acquisition of ONBANCorp, Inc. on April 1,
1998. From May 1989 through March 31, 1998, he served as chairman of the board,
president and chief executive officer of ONBANCorp, Inc. and its main bank
subsidiary, and from September 1, 1993 through March 31, 1998 as a director of
Franklin First Savings Bank, a subsidiary of ONBANCorp, Inc. Mr. Bennett is a
director of Health Alliance of CNY, Inc., Farmers and Traders Life Insurance
Company and Welch Allyn, Inc., and is a director and president of the
Metropolitan Development Foundation of Central New York, Inc.
C. ANGELA BONTEMPO IS 58, IS THE CHAIRMAN OF THE AUDIT COMMITTEE AND HAS BEEN A
DIRECTOR SINCE 1991.
Ms. Bontempo is the president and chief executive officer of Bryant & Stratton
Business Institute, Inc., a business college. From 1994 through 1998, she served
as senior vice president and executive director of the Roswell Park Cancer
Institute. She is a director of M&T Bank and the chairman of its Examining
Committee. Ms. Bontempo is also a member of the advisory board of Ciminelli
Development Company, Inc.
5
and the Dean's Advisory Council of the School of Management of the State
University of New York at Buffalo, and a director of the American Automobile
Association, Western and Central New York.
ROBERT T. BRADY IS 58, IS A MEMBER OF THE COMPENSATION COMMITTEE AND HAS BEEN A
DIRECTOR SINCE 1994.
Mr. Brady is president, chief executive officer and chairman of the board of
directors of Moog Inc., a manufacturer of control systems and components for
aircraft, satellites and automated machinery. He is a director of M&T Bank. Mr.
Brady is a director of Seneca Foods Corporation, Acme Electric Corporation,
National Fuel Gas Company and Astronics Corporation. He is also vice chairman of
the board of directors of the Buffalo Niagara Partnership and serves as a
trustee of the University at Buffalo Foundation, Inc.
PATRICK J. CALLAN IS 62 AND HAS BEEN A DIRECTOR SINCE 1988.
Mr. Callan is a principal of The RREEF Funds, pension fund real estate
investment advisors and managers. He is a partner of RREEF America Partners and
a trustee of BRT Realty Trust. Mr. Callan is a member of M&T Bank's Directors
Advisory Council-New York City Division and a member of its Mortgage Investment
Committee. He is also a member of The New York University Real Estate Institute
Advisory Board, the MIT Center for Real Estate Advisory Board, the Association
for Foreign Investors in U.S. Real Estate and The Real Estate Board of New York,
Inc.
RICHARD E. GARMAN IS 68, IS A MEMBER OF THE EXECUTIVE COMMITTEE AND HAS BEEN A
DIRECTOR SINCE 1987.
Mr. Garman is president and chief executive officer of A.B.C. Paving Co., Inc.,
a general construction contractor, and Buffalo Crushed Stone, Inc., an operator
of quarries and asphalt production facilities, both of which are located in
Buffalo, New York. He is a director of M&T Bank and a member of its Executive
and Trust and Investment Committees. Mr. Garman is a director of Merchants
Group, Inc. and of Associated General Contractors - New York State. He is also
chairman of the board of the Buffalo Niagara Partnership and chairman of the
Greater Niagara Frontier Council of the Boy Scouts of America.
JAMES V. GLYNN IS 64, IS A MEMBER OF THE AUDIT COMMITTEE AND HAS BEEN A DIRECTOR
SINCE 1994.
Mr. Glynn is president and owner of Maid of the Mist Corporation, a provider of
scenic boat tours of Niagara Falls. He is a director of M&T Bank and a member of
its Examining Committee. Mr. Glynn is a director of National Fuel Gas Company.
He is vice chairman of the board of trustees of Niagara University. Mr. Glynn
also is a director of Artpark & Company and the Buffalo Niagara Partnership.
ROY M. GOODMAN IS 68 AND HAS BEEN A DIRECTOR SINCE 1984.
6
Senator Goodman is a New York State senator serving his sixteenth term in the
Legislature representing the East Side of Manhattan. He is the deputy majority
leader for policy of the New York State Senate, chairman of the Senate Committee
on Investigations, Taxation, and Government Operations, and chairman of the
Senate Special Committee on the Arts and Cultural Affairs. Senator Goodman
serves as a member of the National Council on the Arts for the National
Endowment for the Arts, a position to which he was appointed in 1989 by then
President Bush.
PATRICK W.E. HODGSON IS 58, IS A MEMBER OF THE AUDIT COMMITTEE AND HAS BEEN A
DIRECTOR SINCE 1987.
Mr. Hodgson is president of Cinnamon Investments Limited, a private investment
company with real estate and securities holdings. He is chairman of the board of
Todd Shipyards Corporation and he held the additional position of chief
executive officer from February 1993 through July 1997. From June 1994 through
August 1996, Mr. Hodgson served as chairman of the board of Scotts Hospitality
Inc. He is a director and a member of the Examining Committee of M&T Bank, and a
director of M&T Capital Corporation. Mr. Hodgson is a director of Todd Shipyards
Corporation, First Carolina Investors, Inc., Scotts Restaurants Inc., Versacold
Corp and Exolon-ESK Company. He is also chairman of the board of T-W Truck
Equippers Inc., Buffalo, New York.
SAMUEL T. HUBBARD, JR. IS 49 AND HAS BEEN A DIRECTOR SINCE 1994.
Mr. Hubbard is a private investor. Prior to November 1998, he was president,
chief executive officer and a director of The Alling & Cory Company, a wholesale
distributor of fine printing paper and industrial and business products. He is a
director of M&T Bank and is a member and the chairman of its Directors Advisory
Council-Rochester Division. Mr. Hubbard is a director of Rochester Gas &
Electric Corp., the Genesee Corporation and The Sodus Cold Storage Co., Inc. He
is also a trustee of the Rochester Institute of Technology.
RUSSELL A. KING IS 69 AND HAS BEEN A DIRECTOR SINCE 1998.
Mr. King is a consulting partner of King and King Architects, Manlius, New York,
and had served as chief executive officer of that firm until his retirement in
1993. He is a director of M&T Bank and a member of its Community Reinvestment
Act Committee. Mr. King is a director of Unity Mutual Life Insurance Co. and a
director and chairman of Onondaga Venture Capital. He is a member emeritus of
the American Institute of Architects.
LAMBROS J. LAMBROS IS 63, IS A MEMBER OF THE AUDIT COMMITTEE AND HAS BEEN A
DIRECTOR SINCE 1984.
7
Mr. Lambros is a private investor. Since October 1995, he also has been managing
director of J.W. Childs Associates, L.P., a private investment company. Mr.
Lambros was chairman, president, chief executive officer and a director of
Norfolk Holdings Inc., an independent oil and gas exploration and production
company, from 1986 through 1993. Prior to 1986, he had been executive vice
president and a director of Amerada Hess Corporation, an integrated oil and gas
producer, refiner and marketer, where he was responsible for that company's
financial and administrative activities.
REGINALD B. NEWMAN, II IS 61 AND HAS BEEN A DIRECTOR SINCE 1998.
Mr. Newman is president of NOCO Energy Corp., a distributor of petroleum
products. He is a director of M&T Bank. Mr. Newman is also a director of Rand
Capital Corp. and the Buffalo Niagara Partnership.
PETER J. O'DONNELL, JR. IS 67 AND HAS BEEN A DIRECTOR SINCE 1998.
Mr. O'Donnell is president and chief executive officer of Pine Tree Management
Corporation, a management consulting company based in Clarks Summit,
Pennsylvania. He is a director of M&T Bank and a member of M&T Bank's Directors
Advisory Council-Pennsylvania Division.
JORGE G. PEREIRA IS 65 AND HAS BEEN A DIRECTOR SINCE 1982. HE IS VICE CHAIRMAN
OF THE BOARD OF M&T BANK CORPORATION AND IS THE CHAIRMAN OF ITS COMPENSATION
COMMITTEE.
Mr. Pereira is a private investor. He is a vice chairman of the board and a
director of M&T Bank, and serves as chairman of its Nomination Committee. Mr.
Pereira is also the owner of Hofin Anstalt, a private investment company.
ROBERT E. SADLER, JR. IS 53 AND HAS BEEN A DIRECTOR SINCE 1999. HE IS AN
EXECUTIVE VICE PRESIDENT OF M&T BANK CORPORATION.
Mr. Sadler is president and a director of M&T Bank and president, chief
executive officer and a director of M&T Bank, N.A. He also is chairman of the
board and a director of M&T Mortgage Corporation; chairman of the board,
president and a director of M&T Real Estate, Inc.; chairman of the board and a
director of M&T Securities, Inc.; chairman of the board and a director of M&T
Financial Corporation; and a director and officer of a number of other
subsidiaries of M&T Bank. Mr. Sadler serves a director of Security Mutual Life
Insurance Company of New York, is a member of the board of trustees of Canisius
College and the Buffalo Sports Enterprises Foundation, Inc., and is a member of
the board of managers of the Buffalo Society of Natural Sciences.
JOHN L. VENSEL IS 63 AND HAS BEEN A DIRECTOR SINCE 1998.
8
Mr. Vensel is chairman and chief executive officer of Crucible Materials
Corporation, a manufacturer and distributor of specialty steels and stainless
pipe and tube. He is a director of M&T Bank. Mr. Vensel is chairman of the board
of trustees of Crouse Health and a member of the board of trustees of LeMoyne
College, the Metropolitan Development Association, and the Manufacturers
Association of Central New York.
HERBERT L. WASHINGTON IS 48 AND HAS BEEN A DIRECTOR SINCE 1996.
Mr. Washington is president of H.L.W. Fast Track, Inc., the owner and operator
of nineteen McDonald's Restaurants located in Ohio and Pennsylvania. He is also
the owner of Syracuse Minority Television, Inc. Mr. Washington is a director of
M&T Bank and a member of its Community Reinvestment Act Committee. He is a
trustee of the Rochester Institute of Technology and a member of the board of
governors of Strong Memorial Hospital.
JOHN L. WEHLE, JR. IS 52, IS A MEMBER OF THE EXECUTIVE COMMITTEE AND HAS BEEN A
DIRECTOR SINCE 1994.
Mr. Wehle is chairman of the board, chief executive officer and president of the
Genesee Corporation, and chairman of the board and chief executive officer of
The Genesee Brewing Company, Inc. He is a director of M&T Bank and a member of
its Executive and Trust and Investment Committees. Mr. Wehle is chairman of the
board of trustees and the chairman of the executive committee of the Genesee
Country Museum, and a trustee of the United Neighborhood Center of Greater
Rochester Foundation, Inc. He is also a director of the University of Rochester
Medical Center, a member of its executive committee and chairman of its
facilities committee, a director of Strong Partners Health System, a director of
The Greater Rochester Chamber of Commerce and a member of its executive
committee, and a director of the Industrial Management Council and the Trooper
Foundation, State of New York, Inc.
ROBERT G. WILMERS IS 64 AND HAS BEEN A DIRECTOR SINCE 1982. HE IS THE PRESIDENT
AND CHIEF EXECUTIVE OFFICER OF M&T BANK CORPORATION, AND IS THE CHAIRMAN OF ITS
EXECUTIVE COMMITTEE.
Mr. Wilmers is chairman of the board, chief executive officer and a director of
M&T Bank, chairman of its Executive Committee and a member of its Trust and
Investment Committee; chairman of the board and a director of M&T Bank, N.A.;
and a director of M&T Financial Corporation. Prior to the acquisition of
ONBANCorp, Inc. in April 1998, he had held the additional position of chairman
of the board of M&T Bank Corporation since April 1994. Mr. Wilmers served as
president of M&T Bank from March 1984 through June 1996. He is also a director
of the Buffalo Niagara Partnership and The Business Council of New York State.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL 22 NOMINEES.
9
PROPOSED AMENDMENT TO THE M&T BANK CORPORATION 1983 STOCK OPTION PLAN
The purpose of the Stock Option Plan is to aid in maintaining and developing
strong management through encouraging the ownership of Common Stock by key
employees and to provide an incentive to the continued service of such key
employees. The Stock Option Plan originally was adopted by the Board of
Directors in 1983 and approved by the stockholders in 1984. In 1986, 1988, 1990,
1992, 1995 and 1998, the Board of Directors adopted amendments to the Stock
Option Plan, in each case with subsequent approval by the stockholders. In
February 1999, the Board of Directors adopted a further amendment to the Stock
Option Plan ("1999 Amendment"), subject to the stockholder approval solicited by
this proxy statement.
DESCRIPTION OF AND REASONS FOR THE 1999 AMENDMENT
The 1999 Amendment revised the Stock Option Plan in one respect. The Board of
Directors and management believe that the ability to make grants and awards
under the Stock Option Plan has enhanced M&T Bank Corporation's ability to
attract and retain qualified key employees of a type eligible to participate in
the Stock Option Plan. They further believe that it is in the best interests of
M&T Bank Corporation and its stockholders to recognize the contributions of ALL
employees in the success of M&T Bank Corporation by providing appropriate
incentives to its employees, including grants of options.
Under the Stock Option Plan in effect prior to the approval of the 1999
Amendment, only certain officers of M&T Bank Corporation or its subsidiaries
determined to be in a managerial, professional, or other key position of M&T
Bank Corporation or its subsidiaries were eligible for grants under the Stock
Option Plan. In order for all employees to be eligible to receive grants and
awards under the Stock Option Plan, the Board of Directors amended the
definition of "Key Employee" to permit any employee of M&T Bank Corporation and
its subsidiaries to be eligible to receive grants under the Stock Option Plan.
Following stockholder approval, section 1(o) of the Stock Option Plan will read
as follows:
(o) "Key Employee" means (i) any Employee selected by the Committee
to receive Options or Rights under the Plan, or (ii) a former
trustee or officer of The East New York Savings Bank who, upon
closing of the acquisition by the Company of The East New York
Savings Bank, was granted nonstatutory stock options under the Plan
pursuant to the terms of Section 5(i) of the Merger Agreement by
and between M&T Bank Corporation, The East New York Savings Bank
and the incorporators of West Interim Savings Bank.
Approval of the 1999 Amendment will not require an increase in the number of
shares available for issuance under the Stock Option Plan, and stockholders are
not being asked to approve the issuance of additional shares under the Stock
Option Plan. There are currently 2,500,000 shares of Common Stock authorized for
issuance pursuant to the Stock Option Plan. As of March 1, 1999, stock options,
stock appreciation rights and stock appreciation rights exercisable only for
cash covering 2,302,893 shares of Common Stock had been granted under the Stock
Option Plan, options covering 223,747 shares of Common Stock previously granted
under the Stock Option Plan had become available for reissuance due to the
termination or expiration of previously granted stock options and stock
appreciation rights exercisable only for cash, and 1,189,662 shares
of Common Stock had been issued. Based upon the foregoing, 420,854 shares of
Common Stock remain available for future grants.
10
DESCRIPTION OF THE PLAN
The following summary is a brief description of the significant provisions of
the Stock Option Plan and does not purport to be a complete statement of the
terms and conditions of the Stock Option Plan, a copy of which, as amended and
restated, is available by writing to M&T Bank Corporation at One M&T Plaza,
Buffalo, New York 14203, Attention: Human Resources.
SHARES SUBJECT TO GRANT. M&T Bank Corporation has acquired, and intends to
continue to acquire, as necessary, Common Stock in the open market to fulfill
its obligations under the Stock Option Plan and intends to distribute such
shares upon the exercise of options and rights under the Stock Option Plan,
which are exercisable in shares of the Common Stock. The Stock Option Plan and
grants made thereunder are subject to certain antidilution provisions.
ADMINISTRATION. The Stock Option Plan is administered by a committee consisting
of two or more disinterested members of the Board of Directors. The present
members of the committee, known as the Compensation Committee, are Messrs.
Pereira, Baird and Brady. Subject to the provisions of the Stock Option Plan,
the Compensation Committee is authorized to determine eligibility, to grant
stock options and stock appreciation rights, and to otherwise administer the
Stock Option Plan.
M&T Bank Corporation's Board of Directors may terminate the Stock Option Plan at
any time and may amend it in any respect, except that stockholder approval is
required for certain types of amendments, including the 1999 Amendment. The
Stock Option Plan, as currently in effect, will terminate on February 17, 2008.
The Stock Option Plan will remain in effect after its termination for the
purpose of administering outstanding grants.
ELIGIBILITY. Stock options and stock appreciation rights may be granted to key
employees of M&T Bank Corporation and its subsidiaries and to certain former
trustees of The East New York Savings Bank ("East New York"), a subsidiary of
M&T Bank Corporation that was merged with and into M&T Bank on May 24, 1997.
Other directors who are not officers or employees, including members of the
Compensation Committee, are not eligible to receive grants.
As of March 1, 1999, there were approximately 870 employees of M&T Bank
Corporation and its subsidiaries and 6 former trustees of East New York
potentially eligible to receive grants under the Stock Option Plan, 6 of whom
held only options, 426 of whom held options with limited stock appreciation
rights attached thereto, and 10 of whom held stock appreciation rights
exercisable for cash with limited stock appreciation rights attached thereto. As
of such date, the weighted average exercise price of unexercised options and
stock appreciation rights was $270.95 per share. The closing price of a share of
Common Stock on the New York Stock Exchange on March 1, 1999 was $479.75 per
share. Approval of the 1999 Amendment will increase the number of employees
eligible to receive grants and awards under the Stock Option Plan from
approximately 870 employees to approximately 6,375 employees.
Under the terms of the Stock Option Plan, an officer or other key employee may
not be granted in any fiscal year of M&T Bank Corporation stock options and/or
stock appreciation rights covering more than 50,000
11
shares of Common Stock, except that a newly-hired executive officer of M&T Bank
Corporation may receive an additional one-time grant of stock options and/or
stock appreciation rights covering up to 50,000 shares of Common Stock upon
commencement of employment with M&T Bank Corporation.
STOCK OPTIONS. Incentive stock options and nonstatutory stock options granted
under the Stock Option Plan permit optionees to purchase Common Stock from M&T
Bank Corporation at exercise prices of not less than the fair market value of
the optioned stock at the date of grant. All options granted under the Stock
Option Plan expire not more than ten years after the date of grant (ten years
and one day in the case of nonstatutory stock options). An optionee may receive
more than one option. The amount of stock subject to incentive stock options
granted after 1986 to any optionee that may first become exercisable in any
calendar year is subject to limitations set forth in the Internal Revenue Code
of 1986, as amended (the "Internal Revenue Code"). The options that already have
been granted under the Stock Option Plan generally become exercisable in
installments during the terms of the options. These options, however, may become
exercisable in full at any time upon the occurrence of certain events.
The Compensation Committee is authorized to provide in its discretion for the
payment of the exercise price otherwise than in cash, including by delivery of
shares of Common Stock, valued at fair market value on the date of exercise, or
by a combination of both cash and Common Stock. The agreements for previously
granted options provide that no shares of Common Stock may be used for payment
of the exercise price unless they have been held by the optionee for a specified
holding period prior to the date of exercise.
STOCK APPRECIATION RIGHTS. Nonlimited stock appreciation rights and limited
stock appreciation rights provide alternative means by which optionees may be
able to realize the benefits of appreciation in the value of Common Stock.
Nonlimited stock appreciation rights may be granted in connection with the grant
of an incentive or nonstatutory stock option or of a limited stock appreciation
right, or by amendment of an outstanding nonstatutory stock option or limited
stock appreciation right ("related rights"). Nonlimited stock appreciation
rights also may be granted independently of any option or stock appreciation
right ("nonrelated rights"). Upon exercise, a nonlimited stock appreciation
right entitles the optionee to elect to receive in cash, Common Stock or a
combination thereof, or to receive only in cash if the nonlimited stock
appreciation right is exercisable only for cash, the excess of the market value
of a specified number of shares of Common Stock at the time of exercise over,
generally speaking, the market value of the same number of shares of Common
Stock at the time of grant. The consent of the Compensation Committee may be
required for an election to receive cash on the exercise of a stock appreciation
right.
Limited stock appreciation rights may be granted as related or nonrelated
rights, generally subject to the same rules as apply to related nonlimited stock
appreciation rights. Such rights may be exercised only in the event of a tender
or exchange offer for Common Stock which, if successful, would cause the offeror
to become the beneficial owner of 20% or more of the outstanding Common Stock.
The grants that already have been made require that, before a limited stock
appreciation right may be exercised, the Compensation Committee must determine
that consummation of the tender offer or exchange offer would result in a change
in control of M&T Bank Corporation.
12
When a limited stock appreciation right is a related right to an incentive stock
option, the grantee is entitled, upon exercise, to receive in cash the excess of
the market value of a specified number of shares of Common Stock at the time of
exercise over, generally speaking, the market value of the same number of shares
of Common Stock at the time of grant. A limited stock appreciation right that is
not a related right to an incentive stock option entitles the optionee, upon
exercise, to receive in cash the excess of the "offer price" multiplied by a
specified number of shares of Common Stock, over the market value of the same
number of shares of Common Stock at the time of grant. The "offer price" is the
greater of the highest price paid by the offeror in the tender or exchange offer
during the ninety days prior to exercise or the highest market value of the
Common Stock during such period.
SUMMARY OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES
INCENTIVE STOCK OPTIONS. In general, an optionee will not recognize income at
the time of the grant or exercise of an incentive stock option. However, the
difference between the aggregate exercise price and the fair market value of the
shares of Common Stock received upon exercise is an adjustment item for purposes
of the alternative minimum tax. If an optionee does not exercise an incentive
stock option within a certain specified period after termination of employment,
an incentive stock option will be treated for tax purposes as a nonstatutory
stock option, as described below under the caption "Nonstatutory Stock Options
and Stock Appreciation Rights."
In general, gain or loss from the sale or exchange of shares acquired upon
exercise of an incentive stock option will be taxed as capital gain or loss.
However, if certain holding period requirements with respect to the shares
acquired upon exercise of an incentive stock option are not satisfied, an
optionee will be required to recognize ordinary income at the time of
disposition. Any gain recognized on disposition in excess of the ordinary income
resulting therefrom will be capital gain, and any loss recognized will be a
capital loss.
If an optionee recognizes ordinary income upon exercise of an incentive stock
option or as the result of a disposition of shares prior to the expiration of
the applicable holding periods, M&T Bank Corporation will be entitled to a
deduction in the same amount.
NONSTATUTORY STOCK OPTIONS AND STOCK APPRECIATION RIGHTS. An optionee will not
recognize income on the grant of a nonstatutory stock option or a stock
appreciation right, but generally will recognize ordinary income on exercise of
either. The amount of income recognized on exercise of a nonstatutory stock
option generally will be measured by the excess, if any, of the fair market
value of the shares at the time of exercise over the exercise price, regardless
of whether the exercise price is paid in cash or stock. The amount of income
recognized on exercise of a stock appreciation right generally will be equal to
the amount of cash and the fair market value of any shares received at the time
of exercise plus the amount of any taxes withheld. Where ordinary income is
recognized by an optionee in connection with the exercise of a nonstatutory
stock option or stock appreciation right, the employer corporation will be
entitled to a deduction in the amount of ordinary income so recognized, subject
to satisfying certain tax reporting requirements.
PARACHUTE PAYMENTS. Where payments to an employee that are contingent on a
change in control of the employer corporation exceed limits specified in the
Internal Revenue Code, the employee generally is liable for a 20% excise tax on,
and the employer corporation generally is not entitled to any deduction for, a
specified portion of such payments. If a change in control of M&T Bank
Corporation were to occur,
13
payments of cash upon exercise of limited stock appreciation rights, and an
acceleration of vesting of options pursuant to a change in control, would be
relevant in determining whether the excise tax and deduction disallowance rules
would be triggered.
GENERAL. The rules governing the tax treatment of options and stock appreciation
rights, and an optionee's receipt of stock or cash pursuant to the exercise
thereof are quite technical, so that the above description of tax consequences
is necessarily general in nature and does not purport to be complete. Moreover,
statutory provisions are, of course, subject to change, as are their
interpretations, and their application may vary in individual circumstances.
Finally, the tax consequences under applicable state or local law may not be the
same as under the federal income tax laws.
ACCOUNTING TREATMENT
Under current accounting principles followed by M&T Bank Corporation, neither
the grant nor the exercise of an incentive stock option or a nonstatutory stock
option under the Stock Option Plan with an exercise price not less than the fair
market value of Common Stock at the date of grant requires any charge against
earnings. M&T Bank Corporation is required to disclose in a footnote to its
financial statements the pro forma effects of stock-based compensation
arrangements on net income and earnings per share, based on the estimated grant
date fair value of stock options that are expected to vest.
Stock appreciation rights require a charge against the earnings of M&T Bank
Corporation each accounting period the value of such rights increases. The
charge related to stock appreciation rights will vary depending upon, among
other factors, the amount of stock appreciation rights granted, stock price
changes above the grant price, and the length of time that stock appreciation
rights have been outstanding. Such charge is based, generally speaking, on the
difference between the exercise price specified in the related right, or the
market value of Common Stock on the date of grant, and the current market price
of Common Stock. In the case of limited stock appreciation rights, such charge
would not be made until the time of the tender offer or exchange offer. In the
event of a decline in the market price of Common Stock subsequent to a charge
against earnings related to the estimated costs of stock appreciation rights, a
reversal of prior charges is made (but not to exceed aggregate prior charges).
CERTAIN OTHER INFORMATION
For information concerning the compensation of directors and executive officers
of M&T Bank Corporation, please refer to the information under the caption
"COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS." Neither cash nor Common
Stock received upon exercise of an option or a stock appreciation right under
the Stock Option Plan will be treated as compensation under any employee benefit
plan of M&T Bank Corporation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSED AMENDMENT TO THE STOCK
OPTION PLAN.
14
STOCK OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS
Direct and indirect ownership of Common Stock by each of the directors and the
executive officers who are named in the Summary Compensation Table (the "Named
Executive Officers"), and by the directors and all executive officers as a group
is set forth in the table below as of March 1, 1999, together with the
percentage of total shares outstanding represented by such ownership. (For
purposes of this table, beneficial ownership has been determined in accordance
with the provisions of Rule 13d-3 under the Exchange Act, under which, in
general, a person is deemed to be the beneficial owner of a security if he or
she has or shares the power to vote or to direct the voting of the security or
the power to dispose or to direct the disposition of the security, or if he or
she has the right to acquire the beneficial ownership of the security within 60
days.)
PERCENT
NAME OF BENEFICIAL OWNER NUMBER OF SHARES OF CLASS
- ------------------------ ---------------- --------
William F. Allyn 1,067 (1)(2) (11)
Brent D. Baird 187,326 (2)(3) 2.42%
John H. Benisch 4,160 (1)(2) (11)
Robert J. Bennett 44,350 (1)(4)(5) (11)
C. Angela Bontempo 174 (2)(6) (11)
Robert T. Brady 217 (2) (11)
Patrick J. Callan 6,485 (1)(2) (11)
Richard E. Garman 25,527 (2) (11)
James V. Glynn 1,049 (2) (11)
Roy M. Goodman 11 (2) (11)
Patrick W.E. Hodgson 5,735 (2)(7) (11)
Samuel T. Hubbard, Jr. 218 (2)(8) (11)
Russell A. King 2,993 (1)(2) (11)
Lambros J. Lambros 6,014 (2) (11)
Wilfred J. Larson 5,722 (2) (11)
Reginald B. Newman, II 1,132 (2)(9) (11)
Peter J. O'Donnell, Jr. 1,374 (1)(2) (11)
Jorge G. Pereira 310,022 (2)(10) 4.01%
Robert E. Sadler, Jr. 71,385 (1)(5) (11)
John L. Vensel 971 (1)(2) (11)
Herbert L. Washington 317 (2) (11)
John L. Wehle, Jr. 228 (2) (11)
Robert G. Wilmers 583,847 (1)(5)(10) 7.45%
John L. Pett 26,016 (1)(5) (11)
Adam C. Kugler 9,934 (1)(5) (11)
All directors and executive
officers as a group
(32 persons) 1,388,591 (1)(4) 17.36%
15
- --------------
(1) Includes the following shares subject to options (a) granted under the
Stock Option Plan, or (b) granted under an ONBANCorp, Inc. stock option
plan, the obligations of which have been assumed by M&T Bank
Corporation and converted into options to receive shares of Common
Stock, all of which are currently exercisable or are exercisable within
60 days after March 1, 1999: Mr. Allyn - 241 shares; Mr. Benisch - 223
shares; Mr. Bennett - 31,768 shares; Mr. Callan - 447 shares; Mr. King
- 322 shares; Mr. O'Donnell - 483 shares; Mr. Sadler - 40,600 shares;
Mr. Vensel - 383 shares; Mr. Wilmers - 110,000 shares; Mr. Pett -
10,700 shares; Mr. Kugler - 7,850 shares; all directors and executive
officers as a group - 272,991 shares.
(2) Includes the following shares held by the outside directors through
their participation in the Directors' Stock Plan: Mr. Allyn - 25
shares; Mr. Baird - 38 shares; Mr. Benisch - 37 shares; Ms. Bontempo -
29 shares; Mr. Brady - 17 shares; Mr. Callan - 38 shares; Mr. Garman -
27 shares; Mr. Glynn - 24 shares; Mr. Goodman - 11 shares; Mr. Hodgson
- 35 shares; Mr. Hubbard - 18 shares; Mr. King - 23 shares; Mr. Lambros
- 14 shares; Mr. Larson - 30 shares; Mr. Newman - 9 shares; Mr.
O'Donnell - 27 shares; Mr. Pereira - 22 shares; Mr. Vensel - 17 shares;
Mr. Washington - 17 shares; and Mr. Wehle - 28 shares.
(3) Includes 140,000 shares owned by an entity of which Mr. Baird is a
director and as to which he shares voting and dispositive power.
(4) Includes 1,061 shares held by trusts for which the director is a
trustee and in which the director has a pecuniary interest and
investment power.
(5) Includes the following shares through participation in the M&T Bank
Corporation Retirement Savings Plan and Trust ("Retirement Savings
Plan"): Mr. Bennett - 1,273 shares; Mr. Sadler - 1,755 shares; Mr.
Wilmers - 3,458 shares; Mr. Pett - 1,816 shares; Mr. Kugler - 872
shares; all directors and executive officers as a group - 9,540 shares.
(6) Includes 25 shares held by a trust for which the director is a trustee
and in which the director has a pecuniary interest and investment
power.
(7) Includes 600 shares held by a close relative for which beneficial
ownership is disclaimed. Also includes 4,500 shares of Common Stock
owned by a corporation controlled by Mr. Hodgson.
(8) Includes 200 shares held by a trust for which the director is a trustee
and in which the director has a pecuniary interest and investment
power.
(9) Includes 123 shares held by a close relative for which beneficial
ownership is disclaimed.
(10) See footnote (1) to the table set forth under the caption "PRINCIPAL
BENEFICIAL OWNERS OF SHARES."
(11) Less than 1%.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
16
Under Section 16(a) of the Exchange Act, M&T Bank Corporation's directors and
officers and persons who are the beneficial owners of more than 10% of the
Common Stock are required to report their ownership of the Common Stock, options
and stock appreciation rights (other than certain cash-only rights) and any
changes in that ownership to the SEC and the New York Stock Exchange. Specific
due dates for these reports have been established, and M&T Bank Corporation is
required to report in this proxy statement any failure to file by these dates
during 1998. M&T Bank Corporation believes that all of these filing requirements
were satisfied by its directors and officers and by the beneficial owners of
more than 10% of the Common Stock, except that Mr. Bennett was late in filing
one report relating to two transactions and Mr. Newman was late in reporting the
ownership of shares of Common Stock held by a close relative for which
beneficial ownership is disclaimed. In making the foregoing statements, M&T Bank
Corporation has relied on copies of the reporting forms received by it or on the
written representations from certain reporting persons that no Forms 5 (Annual
Statements of Changes in Beneficial Ownership) were required to be filed under
the applicable rules of the SEC.
PERFORMANCE GRAPH
The graph which has been omitted from this filing contains a comparison of
the cumulative stockholder return on the Common Stock against the cumulative
total returns of the KBW 50 Index, compiled by Keefe, Bruyette & Woods, Inc.,
and the S&P 500 Index, compiled by Standard & Poor's Corporation, for the
five-year period beginning on December 31, 1993 and ending on December 31,
1998. The KBW 50 Index is comprised of fifty American banking companies,
including all money-center and most major regional banks.
17
Comparison of Five-Year Cumulative Return*
[THIS SPACE INTENTIONALLY LEFT BLANK]
Stockholder Value at Year End*
- -----------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
M&T Bank Corporation $100 $ 98 $159 $213 $347 $390
KBW 50 Index $100 $ 95 $152 $215 $314 $340
S&P 500 Index $100 $101 $139 $171 $229 $294
- -----------------------------------------------------------------------------
* Assumes a $100 investment on December 31, 1993 and reinvestment of all
dividends.
18
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
A key objective of M&T Bank Corporation is to attract, develop and maintain
strong executive officers who are capable of maximizing M&T Bank Corporation's
performance for the benefit of its stockholders. In furtherance of this
objective, the Compensation Committee has adopted a compensation strategy for
executive officers which utilizes reasonable salaries, while placing heavy
emphasis on the use of variable incentives such as awards of cash bonuses and
grants of stock options in order to reward longer-term contributions to M&T Bank
Corporation's success. M&T Bank Corporation periodically compares its
compensation levels, practices and financial performance to a select group of
commercial banking institutions of similar size, geographic market and business
makeup to M&T Bank Corporation. The Compensation Committee considered twenty-one
commercial banking companies which it believed were reasonably comparable to M&T
Bank Corporation's asset size and performance and which were generally located
in the northeast or midwest (the "comparative group of banks"). Seventeen of the
twenty-one commercial banking companies forming the comparative group of banks
considered by the Compensation Committee were included in the KBW 50 Index
compiled by Keefe, Bruyette & Woods, Inc.
Base salaries of M&T Bank Corporation's executive officers are determined by
competitive, market-based pay practices, performance evaluations and expected
future contributions. In line with its strategy of emphasizing variable pay, the
Compensation Committee generally targets the salaries of M&T Bank Corporation's
executive officers at or below the median of the comparative group of banks,
while also considering the unique responsibilities and performance of each
executive officer. Overall, the Compensation Committee targets the total cash
compensation of M&T Bank Corporation's executive officers above the median of
the comparative group of banks.
M&T Bank Corporation's executive officers participate in an annual incentive
compensation plan ("Annual Incentive Plan"). The Annual Incentive Plan provides
for discretionary grants of cash awards to executive officers out of a fund
established annually by the Compensation Committee. In establishing this fund,
the Compensation Committee considers M&T Bank Corporation's profitability, as
well as the number of participants in the Annual Incentive Plan, and may
establish a minimum threshold of net operating earnings after taxes below which
no fund will be created. At the end of the year, the Compensation Committee may
increase the size of the established fund in its discretion by no more than 50%
to take into account its subjective assessment of management's contribution to
M&T Bank Corporation's profitability. M&T Bank Corporation's net operating
earnings after taxes for 1998 exceeded the minimum threshold of profitability
which had been previously established by the Compensation Committee, thereby
initiating the payment of cash bonuses to its executive officers under the
Annual Incentive Plan, but the Compensation Committee did not exercise its
discretion to increase the aggregate size of the fund above the predetermined
level.
The aggregate amount of the Annual Incentive Plan pool and 1998's awards to M&T
Bank Corporation's executive officers thereunder were reviewed and approved by
the Compensation Committee. The Compensation Committee considered, but did not
formally weight, a number of quantitative and qualitative
19
performance factors to evaluate the 1998 performance of executive officers and
other employees under the Annual Incentive Plan. The performance factors
considered were: growth and composition of earnings; achieving business plans;
asset quality; market share; and responsiveness to the economic environment. In
determining its discretionary evaluation of the Chief Executive Officer's
performance, the Compensation Committee considered, but did not formally weight,
the following performance factors: M&T Bank Corporation's earnings growth; its
asset quality relative to the banking industry as a whole; and market share in
key markets and service niches. Another factor which the Compensation Committee
considered in determining the Chief Executive Officer's 1998 incentive award was
its philosophy of providing the Chief Executive Officer with greater long-term
opportunities in the form of stock options and placing a lesser emphasis on base
salary and annual cash incentives.
Consistent with its objective of attracting, developing and maintaining strong
executive management, M&T Bank Corporation provides potentially significant
long-term incentive opportunities to its executive officers through
discretionary grants of stock options under the Stock Option Plan, thereby
emphasizing the potential creation of long-term stockholder value and more
closely aligning the interests of M&T Bank Corporation's executive officers with
those of its stockholders. Stock options are considered effective long-term
incentives by the Compensation Committee because an executive can profit only if
the value of the Common Stock increases. In making these grants, the
Compensation Committee considers its subjective assessment of M&T Bank
Corporation's past financial performance and future prospects, an executive
officer's current level of ownership of the Common Stock, the period during
which an executive officer has been in a key position with M&T Bank Corporation,
individual performance and competitive practices within the comparative group of
banks.
In 1998, the Compensation Committee considered, but did not formally weight, the
following factors in connection with the number of options granted to each
executive officer: the competitive practices within the comparative group of
banks; the individual executive officer's position and potential within M&T Bank
Corporation; and the level of past awards of stock options or stock appreciation
rights made to each executive officer. In the determination of the Chief
Executive Officer's 1998 stock option award, the Compensation Committee also
considered its philosophy of providing him with greater long-term opportunities
in the form of stock options and placing a lesser emphasis on base salary and
annual cash incentives.
The 1998 performance factors considered by the Compensation Committee in its
salary determinations and its annual incentive and stock option awards made to
M&T Bank Corporation's executive officers exceeded predetermined objectives or,
where no predetermined level had been set, were deemed to be above industry
averages or otherwise exceeded the Compensation Committee's expectations. The
Compensation Committee believes that the total compensation provided to M&T Bank
Corporation's executive officers is competitive and reflects M&T Bank
Corporation's performance. Also, the Compensation Committee believes that M&T
Bank Corporation's compensation programs have helped to focus M&T Bank
Corporation's executive officers on increasing M&T Bank Corporation's
performance and stockholder value.
Section 162(m) of the Internal Revenue Code generally denies a deduction to any
publicly held corporation for compensation paid to its chief executive officer
and its four other highest-paid executive officers to the
20
extent that any such individual's compensation exceeds $1 million, subject to
certain exceptions, including one for "performance-based compensation." The
Compensation Committee believes that none of M&T Bank Corporation's executive
officers received compensation in 1998 which was nondeductible under Section
162(m) of the Internal Revenue Code.
This report was prepared by the Compensation Committee of the Board of
Directors:
Jorge G. Pereira, Chairman
Brent D. Baird
Robert T. Brady
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Pereira, Baird and Brady served as members of the Compensation Committee
throughout 1998, and are currently serving as such. Mr. Pereira is vice chairman
of M&T Bank Corporation and of M&T Bank, titular posts without day-to-day
managerial responsibilities which he has held since April 18, 1984. Mr. Pereira
has not received additional compensation for serving in such capacity.
Members of the Compensation Committee and their associates are, as they have
been in the past, customers of, and have had transactions with, the banking
subsidiaries of M&T Bank Corporation, and additional transactions may be
expected to take place in the future between such persons and subsidiaries. Any
loans from M&T Bank Corporation's subsidiary banks to such persons and their
associates outstanding at any time since the beginning of 1998 were made in the
ordinary course of business of the banks on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons, and did not involve more than normal
risk of collectibility or present other unfavorable features.
EXECUTIVE COMPENSATION
The table on the following page contains information concerning the compensation
received by M&T Bank Corporation's Chief Executive Officer and the four other
most highly compensated executive officers of M&T Bank Corporation in the three
fiscal years ended December 31, 1998.
21
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------- ------------
AWARDS
SECURITIES ALL
UNDERLYING OTHER
OPTIONS/ COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS SARS SATION
- --------------------------- ---- ------ ----- ------ ---------
($) ($) (#) ($)(*)
Robert G. Wilmers 1998 400,000 450,000 10,000 12,718
President and Chief Executive 1997 400,000 400,000 10,000 13,019
Officer of M&T Bank Corporation; 1996 400,000 350,000 10,000 12,718
Chairman of the Board and Chief
Executive Officer of M&T Bank
Robert J. Bennett 1998 397,692 450,000 0 2,011,759
Chairman of the Board of M&T 1997 -- -- -- --
Bank Corporation and Vice 1996 -- -- -- --
Chairman of M&T Bank
Robert E. Sadler, Jr. 1998 347,115 425,000 7,000 9,944
President of M&T Bank; 1997 322,115 400,000 7,000 11,489
Executive Vice President 1996 300,000 375,000 8,000 11,130
of M&T Bank Corporation
John L. Pett 1998 200,000 235,000 4,000 12,167
Executive Vice President and 1997 197,115 225,000 4,000 71,549
Chief Credit Officer of M&T Bank 1996 173,077 190,000 4,000 9,266
Corporation and M&T Bank
Adam C. Kugler 1998 198,270 245,000 3,000 9,223
Executive Vice President and 1997 185,000 245,000 1,500 8,859
Treasurer of M&T Bank 1996 184,500 235,000 2,500 8,473
Corporation and M&T Bank
22
(*) Includes a $7,200 contribution in 1998 for each of Messrs. Wilmers,
Sadler, Pett and Kugler and a $2,100 contribution in 1998 for Mr.
Bennett by M&T Bank Corporation to the Retirement Savings Plan, a
qualified defined contribution plan providing for salary reduction
contributions by participants and matching contributions by M&T Bank
Corporation. Includes the following 1998 credits by M&T Bank
Corporation under the M&T Bank Corporation Supplemental Retirement
Savings Plan for the benefit of the Named Executive Officers: Messrs.
Wilmers, Bennett and Sadler - $3,412; Mr. Pett - $1,800; and Mr. Kugler
- $1,748. Includes the following insurance premiums paid by M&T Bank
Corporation in 1998 in respect of term life insurance for the benefit
of the Named Executive Officers: Mr. Wilmers - $2,106; Mr. Bennett -
$6,247; Mr. Sadler - $650; Mr. Pett - $3,167; and Mr. Kugler - $275.
Includes a $2,000,000 payment made to Mr. Bennett upon the commencement
of his employment with M&T Bank Corporation. See "COMPENSATION OF
EXECUTIVE OFFICERS AND DIRECTORS - Employment Agreement."
STOCK OPTION GRANTS IN 1998
The following table contains information with respect to the grants of stock
options under the Stock Option Plan during the fiscal year ended December 31,
1998 to the Named Executive Officers who are covered by the Summary Compensation
Table. No stock appreciation rights were granted under the Stock Option Plan in
1998 other than limited stock appreciation rights granted in tandem with stock
options.
OPTION/SAR GRANTS IN THE LAST FISCAL YEAR
INDIVIDUAL GRANTS
-------------------------------------------------------------------------------
NUMBER PERCENT
OF OF TOTAL
SECUR- OPTIONS/
ITIES SARS
UNDER- GRANTED TO
LYING EMPLOYEES
OPTIONS IN EXERCISE EXPIR- GRANT DATE
/SARS FISCAL OR ATION PRESENT
NAME GRANTED YEAR BASE PRICE DATE VALUE
- ---- ------- ---- ---------- ---- -----
(#)(1) (4) ($/SHARE) ($)(5)
(2)(3)
Robert G. Wilmers 10,000 6.9% $442.0625 1/20/08 $1,146,000
Robert J. Bennett -- -- -- -- --
Robert E. Sadler, Jr. 7,000 4.9 442.0625 1/20/08 802,200
John L. Pett 4,000 2.8 442.0625 1/20/08 458,400
Adam C. Kugler 3,000 2.1 442.0625 1/20/08 343,800
23
- -----------
(1) Title of securities subject to grant: Common Stock.
(2) All grants to the Named Executive Officers include grants of an equal
number of related (or "tandem") limited stock appreciation rights.
Limited stock appreciation rights may be exercised only in the event of
a tender or exchange offer ("Offer") for the Common Stock (a) which, if
successful, would cause the offeror to become the beneficial owner of
20% or more of the outstanding Common Stock, and (b) that the
Compensation Committee determines would result in a change in control
of M&T Bank Corporation, if consummated. Upon exercise, a limited stock
appreciation right granted in tandem with a nonstatutory stock option
entitles the holder to receive cash in an amount equal to the excess of
(a) the highest price paid pursuant to the Offer during the 90 days
prior to exercise, or (b) the highest market value of a share of Common
Stock during the 90 days prior to exercise, whichever is greater, over
the market value of a share of Common Stock on the date of grant. A
limited stock appreciation right granted in tandem with an incentive
stock option entitles the holder to receive cash in an amount equal to
the appreciation in the market value of a share of Common Stock since
the date of grant.
(3) The stock options are exercisable in installments that provide vesting
of 10% of the optioned stock after the first anniversary of the grant,
an additional 20% after the second anniversary, 30% more after the
third anniversary, and the remaining 40% after the fourth anniversary.
(4) Excludes shares of Common Stock subject to options granted under the
Stock Option Plan to directors who are not employees of M&T Bank
Corporation. See "Directors' Fees."
(5) M&T Bank Corporation used a binomial option pricing model to determine
the grant date present value of stock options granted in 1998 upon the
belief that such model is the most reasonable method of estimating the
value of stock options granted under the Stock Option Plan. The
estimated value per option is $114.60, which was calculated through the
use of the following assumptions: an option term, based on historical
data since the inception of the Stock Option Plan, of 6.5 years,
representing the estimated period between the grant dates of options
under the Stock Option Plan and their exercise dates; an interest rate
that represents the yield on a zero-coupon U.S. Treasury security with
a maturity date corresponding to that of the adjusted option term;
volatility calculated using weekly stock prices for the three-year
(156-week) period prior to the grant date; and an estimated dividend
yield of .72%, calculated using the annualized cash dividend paid on
December 31, 1997 and the closing price of the Common Stock on the date
the options were granted. M&T Bank Corporation also deducted 10% to
reflect an estimate of the probability of forfeiture prior to vesting,
based on historical data since the inception of the Stock Option Plan.
The actual value an executive may realize will depend upon the excess
of the price of the Common Stock over the exercise price on the date
the option is exercised. Accordingly, there is no assurance that the
value ultimately realized by an executive officer, if any, will
approximate the value estimated by the model.
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS EXERCISED IN 1998 AND YEAR-END
VALUES
24
The following table reflects the number of stock options and stock appreciation
rights exercised by the Named Executive Officers in 1998, the total gain
realized upon exercise, the number of stock options and stock appreciation
rights held at the end of the year, and the realizable gain of the stock options
and stock appreciation rights that are "in-the-money." In-the-money stock
options and stock appreciation rights are stock options or stock appreciation
rights with exercise prices that are below the year-end stock price because the
stock value increased since the date of the grant.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FISCAL YEAR-END FISCAL YEAR-END (2)
---------------- ------------------
SHARES
ACQUIRED VALUE
ON REAL- EXER- UN- UN-
EXER- IZED CIS- EXERCIS- EXERCIS- EXERCIS-
NAME CISE (1) ABLE ABLE ABLE ABLE
- -------------------------- ---------- --------------- ----------- ------------ -------------- ---------------
(#) ($) (#) (#) ($) ($)
Robert G. Wilmers 30,000 11,835,000 101,000 34,000 41,114,062 8,016,250
Robert J. Bennett -- -- 28,012 5,634 9,568,985 1,628,456
Robert E. Sadler, Jr. 12,501 5,400,407 35,400 22,100 13,753,050 4,917,481
John L. Pett -- -- 8,300 11,200 3,164,743 2,297,050
Adam C. Kugler 400 149,050 12,900 6,700 5,361,906 1,305,943
- ---------------
(1) Based upon the difference between the closing price of the Common Stock
on the New York Stock Exchange on the date or dates of exercise and the
exercise price or prices for the stock options or stock appreciation
rights.
(2) Based upon the closing price of the Common Stock on the New York Stock
Exchange on December 31, 1998 of $518.9375 per share.
PENSION PLAN
25
The following table sets forth the annual retirement benefits under the regular
benefit formula of the M&T Bank Corporation Pension Plan ("Pension Plan")
payable upon retirement to persons within specified levels of remuneration and
years of service classifications assuming attainment of age 65 during 1999.
PENSION PLAN TABLE (1) (2) (3)
YEARS OF SERVICE
------------------------------------------------------------------------
REMUNERATION 10 15 20 25 30
------------ -------- --------- --------- --------- --------
$150,000 23,847 35,771 47,694 59,618 71,541
250,000 40,847 61,271 81,694 102,118 122,541
350,000 57,847 86,771 115,694 144,618 173,541
450,000 74,847 112,271 149,694 187,118 224,541
550,000 91,847 137,771 183,694 229,618 275,541
650,000 108,847 163,271 217,694 272,118 326,541
- --------------
(1) The table assumes a straight-life annuity form of payment. The
retirement benefits provided under the regular benefit formula of the
Pension Plan, as depicted in the table, are not subject to any
deduction for Social Security or other offset amounts.
(2) The amounts in the table have not been restricted to those within the
maximum annual retirement benefit which is currently permissible under
the Internal Revenue Code. That limit (the "IRS Benefit Limit") is
$130,000 for 1999. Also, in calculating a participant's benefit, annual
compensation in excess of a limit set annually by the Secretary of the
Treasury may not be considered. That limit (the "IRS Compensation
Limit") is $160,000 for 1999.
(3) The amounts shown in the "Remuneration" column of the table are
intended to approximate the average of an employee's highest base
annual salary paid during any five consecutive calendar year period in
the ten calendar years preceding the employee's retirement. The average
annual amount over the five-year period is called "Covered
Compensation."
As of December 31, 1998, Covered Compensation taken into account under the
Pension Plan for each of the Named Executive Officers was as follows: Mr.
Wilmers -$404,693; Mr. Bennett - $522,691; Mr. Sadler - $297,647; Mr. Pett -
$173,319; and Mr. Kugler - $183,766. With respect to Mr. Bennett, his Covered
Compensation includes compensation paid to him during his employment by
ONBANCorp, Inc. For purposes of the Pension Plan, such executive officers had
the following years of service at year end 1998: Mr. Wilmers - 15 years; Mr.
Bennett - 1 year; Mr. Sadler - 14 years; Mr. Pett - 20 years; and Mr. Kugler - 8
years.
26
In addition to the annual retirement benefit accrued under the regular benefit
formula of the Pension Plan, Mr. Bennett is also entitled to receive from the
Pension Plan a $36,776 annual retirement benefit he accrued under the retirement
plan of ONBANCorp, Inc. as of March 31, 1998, payable upon retirement at age 65.
The ONBANCorp, Inc. retirement plan was a qualified defined benefit plan that
merged into the Pension Plan upon M&T Bank Corporation's acquisition of
ONBANCorp, Inc. The amount to be received by Mr. Bennett has been restricted to
the IRS Compensation Limit, but not the IRS Benefit Limit, and includes a
reduction for a Social Security offset.
SUPPLEMENTAL BENEFIT PLANS
In addition to retirement benefits under the Pension Plan, M&T Bank has agreed
to pay a supplemental retirement benefit to Mr. Bennett in an amount equal to
the difference between his benefit under the Pension Plan providing him with
credit for an additional 13 years of service, and the amount, if any, payable to
him from such plan. The supplemental retirement benefits to be paid to Mr.
Bennett will be paid from an irrevocable "rabbi trust" previously established by
ONBANCorp, Inc. which was funded upon the acquisition of ONBANCorp, Inc. by M&T
Bank Corporation. The supplemental benefit to be paid to Mr. Bennett is not
dependent upon his entitlement to retirement benefits under the Pension Plan;
however, the supplemental benefit to be paid to him is reduced by payments which
he will receive from the retirement plan of his previous employer. Based on
current actuarial assumptions associated with his participation in the Pension
Plan, $156,606 would be payable to Mr. Bennett annually as supplemental
retirement benefits commencing at age 65. An actuarially reduced amount would be
payable to him if he elects early retirement.
In addition to retirement benefits under the Pension Plan, M&T Bank has agreed,
on an unfunded basis, to pay a supplemental retirement benefit to Mr. Sadler in
an amount equal to the difference between 55% of his average annual
compensation, as defined in the Pension Plan, but without regard to the IRS
Benefit and Compensation Limits, and the amount, if any, payable to him from
such plan. The supplemental retirement benefit to be paid to Mr. Sadler is not
dependent upon his entitlement to retirement benefits under the Pension Plan;
however, the supplemental benefit to be paid to him is reduced by payments which
he will receive from the retirement plan of his previous employer. Based on
current actuarial assumptions associated with his participation in the Pension
Plan, $119,301 would be payable to Mr. Sadler annually as supplemental
retirement benefits commencing at age 65. An actuarially reduced amount would be
payable to him if he elects early retirement.
The M&T Bank Corporation Supplemental Pension Plan (the "Supplemental Pension
Plan") provides for the payment of supplemental retirement benefits based on a
maximum compensation level of $235,840 to select management and highly
compensated employees of certain of M&T Bank Corporation's affiliates whose
benefits payable under the Pension Plan are limited by the IRS Compensation
Limit. The supplemental benefits are dependent upon a participant's entitlement
to benefits under the Pension Plan. A participant's supplemental benefit is
equal to the excess of (a) the payment he would have received under the Pension
Plan had compensation under that plan been capped at $235,840 rather than at the
IRS Compensation Limit, over (b) the payment actually received under the Pension
Plan. Each of the Named Executive Officers is eligible to participate in the
Supplemental Pension Plan and, in accordance with the terms of the Supplemental
27
Pension Plan, M&T Bank has agreed, on an unfunded basis, to pay retirement
benefits under the Supplemental Pension Plan to each of them. With respect to
Messrs. Bennett and Sadler, the supplemental benefit under the Supplemental
Pension Plan is reduced by the supplemental retirement benefit which M&T Bank
has agreed to pay to them in accordance with the two preceding paragraphs. Based
on current actuarial assumptions associated with participation in the Pension
Plan, Messrs. Wilmers, Kugler and Pett would receive the following amounts
payable to them annually if they retired at age 65: Mr. Wilmers - $7,420; Mr.
Kugler - $19,529; and Mr. Pett - $28,050. An actuarially reduced amount would be
payable if the participant elected early retirement. Based on current actuarial
assumptions associated with their participation in the Pension Plan, Messrs.
Bennett and Sadler would receive no benefits under the Supplemental Pension
Plan.
EMPLOYMENT AGREEMENT
In connection with the execution of the merger agreement with ONBANCorp, Inc.,
M&T Bank Corporation entered into an employment agreement with Mr. Bennett which
provides for his employment commencing on April 1, 1998 and terminating on July
1, 2001. During that time, Mr. Bennett will serve as chairman of the board of
M&T Bank Corporation and as a vice chairman of M&T Bank. Pursuant to the terms
of his employment agreement, Mr. Bennett received a cash payment of $2,000,000
on April 1, 1998, he will be paid an annual base salary of not less than
$550,000 and annual bonuses at least equal to those of the most highly
compensated executive officer of M&T Bank Corporation, and he is eligible to
receive equity- and non-equity-based bonuses and awards at least equal to 70
percent of the amount of such awards made to the most highly compensated
executive officer of M&T Bank Corporation. His employment agreement also
requires that M&T Bank Corporation pay Mr. Bennett an additional $1,000,000
retention bonus on April 1, 1999.
If Mr. Bennett's employment is terminated either by M&T Bank Corporation or Mr.
Bennett prior to July 1, 2001, then under certain circumstances he will be
entitled to receive (1) the $1,000,000 retention bonus described above, if not
previously paid, (2) the total amount of the annual base salary and annual
bonuses that would have been paid to him through July 1, 2001, (3) a payment
equal to the value of an additional three years of service under the Retirement
Savings Plan and the Pension Plan, (4) a continuation of employee welfare
benefits for up to three years, and (5) outplacement consulting services upon
Mr. Bennett's request.
DIRECTORS' FEES
M&T BANK CORPORATION. Directors of M&T Bank Corporation who are not also
salaried officers of M&T Bank Corporation or its subsidiaries receive an annual
retainer of $10,000 plus $750 for each meeting of the Board of Directors
attended. Such directors who are members of a committee of the Board of
Directors of M&T Bank Corporation receive $500 for each committee meeting
attended. If a director's domicile is more than 100 miles from the location of a
board or committee meeting, such director receives an additional $375 for
attending the board meeting and an additional $250 for attending the committee
meeting. The Board of Directors has established a limitation on total
compensation for services as a director or advisory director of
28
M&T Bank Corporation and its subsidiaries of $40,000 per year. All directors of
M&T Bank Corporation are entitled to reimbursement for travel expenses
incidental to their attendance at meetings.
Outside directors of M&T Bank Corporation are paid one-half of their annual
compensation in Common Stock through their participation in the Directors' Stock
Plan. The number of shares of Common Stock to be paid is determined by dividing
the amount of such compensation payable in shares of Common Stock by the closing
price of a share of Common Stock on the New York Stock Exchange on the date
immediately preceding the day the compensation is payable. See footnote (2) to
the table set forth under the caption "STOCK OWNERSHIP BY DIRECTORS AND
EXECUTIVE OFFICERS" for the number of shares of Common Stock beneficially owned
by each outside director through his or her participation in the Directors'
Stock Plan.
In connection with its acquisition of East New York, M&T Bank Corporation agreed
to grant to persons who became directors and advisory directors of M&T Bank
Corporation and its subsidiaries upon M&T Bank Corporation's acquisition of East
New York and certain other officers of East New York, on an annual basis,
nonstatutory stock options to purchase shares of the Common Stock having an
aggregate fair market value on the date of grant, in the case of an officer,
equal to his then basic annual compensation and, in the case of a non-officer
director, equal to the aggregate amount of his then annual retainer and his
board and committee meeting fees in the last full calendar year preceding the
date of grant. During 1998, Messrs. Benisch and Callan each were granted options
covering 90 shares, each with an exercise price of $442.0625 per share. As a
result of the merger of East New York with M&T Bank in May 1997, M&T Bank
Corporation has also agreed, subject to its fiduciary duties, to cause each East
New York director to become a member of the Directors Advisory Council of the
New York City Division of M&T Bank until the earlier of such director's 75th
birthday or resignation and to cause M&T Bank to hold the requisite number of
meetings and to appoint such advisory director to the requisite number of
committees so that the advisory director would receive compensation equivalent
to the compensation received as a director of East New York. Messrs. Benisch and
Callan each serve as members of the Directors Advisory Council of the New York
City Division of M&T Bank under such agreement and receive an annual retainer of
$18,000, a fee of $750 for each Council meeting attended, a fee of $500 for each
Community Reinvestment Act Committee meeting attended and a fee of $1,000 for
each Mortgage Investment Committee meeting attended. If a director's domicile is
more than 100 miles from the location of a council or committee meeting, such
fees are increased by 50 percent.
M&T BANK. Directors of M&T Bank Corporation who also serve as directors of M&T
Bank or its subsidiaries, if not salaried officers of M&T Bank Corporation or
its subsidiaries, receive attendance fees for each board, council or committee
meeting attended. Such attendance fees are identical to the schedule of fees
paid to directors of M&T Bank Corporation for board and committee meetings
attended. In addition, Mr. Baird, as a member of the Directors Advisory Council
of the New York City Division of M&T Bank, receives an annual retainer of
$10,000 and a fee of $1,125 for each such meeting attended; Mr. Hubbard, as the
chairman of the Directors Advisory Council of the Rochester Division of M&T
Bank, receives a fee of $750 for each such meeting attended by him; and Mr.
O'Donnell, as a member of the Directors Advisory Council of the Pennsylvania
Division of M&T Bank, receives an annual retainer of $6,000 and a fee of $600
29
for each such meeting attended by him. All such directors of M&T Bank and its
subsidiaries are entitled to reimbursement for travel expenses incidental to
their attendance at meetings.
TRANSACTIONS WITH DIRECTORS AND EXECUTIVE OFFICERS
Directors and executive officers of M&T Bank Corporation and their associates
are, as they have been in the past, customers of, and have had transactions
with, the banking subsidiaries of M&T Bank Corporation, and additional
transactions may be expected to take place in the future between such persons
and subsidiaries. Any loans from M&T Bank Corporation's subsidiary banks to such
persons and their associates outstanding at any time since the beginning of 1998
were made in the ordinary course of business of the banks on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons, and did not involve more
than normal risk of collectibility or present other unfavorable features.
BOARD OF DIRECTORS, COMMITTEES OF THE BOARD AND ATTENDANCE
The Board of Directors held five meetings during 1998. Each of the directors
attended at least 75% of the total number of meetings of the Board of Directors
and of the committees on which the director served, except for Messrs. Brady,
Garman, Hubbard, Lambros, Vensel and Washington.
The Executive Committee of the Board of Directors is empowered to act in the
board's stead when the Board of Directors is not in session, during which time
the Executive Committee possesses all of the board's powers in the management of
the business and affairs of M&T Bank Corporation except as otherwise limited by
law. The Executive Committee met once during 1998. Messrs. Wilmers (Chairman),
Baird, Bennett, Garman and Wehle comprise the current membership of the
Executive Committee.
The Audit Committee met five times during 1998 with representatives of M&T Bank
Corporation's independent accountants. In addition to recommending the selection
of the independent accountants each year, the Audit Committee reviews the
activities of the examining committees of M&T Bank Corporation's subsidiary
banks, the audit plan and scope of work of the independent accountants, the
results of the annual audit and the limited reviews of quarterly financial
information, the recommendations of the independent accountants with respect to
internal controls and accounting procedures, and any other matters it deems
appropriate. Ms. Bontempo (Chairman), and Messrs. Allyn, Glynn, Hodgson and
Lambros are the current members of the Audit Committee.
The Compensation Committee is responsible for administering the Stock Option
Plan, including the making of grants thereunder, for administering the Annual
Incentive Plan, the Directors' Stock Plan and, in addition, for making such
determinations and recommendations as the Compensation Committee deems necessary
or appropriate regarding the remuneration and benefits of employees of M&T Bank
Corporation and its
30
subsidiaries. The Compensation Committee met twice during 1998. Messrs. Pereira
(Chairman), Baird and Brady currently serve as the members of the Compensation
Committee.
M&T Bank Corporation does not have a standing committee of its Board of
Directors on nominations, or any other committee performing similar functions.
NOTIFICATION OF BYLAW AMENDMENT
On February 16, 1999, the Board of Directors amended M&T Bank Corporation's
Bylaws to establish reasonable procedures for the conduct of a meeting of
stockholders. As amended, the Bylaws establish a fixed date by which M&T Bank
Corporation must receive any stockholder proposal in order for the item to be
properly brought before a meeting of stockholders. Under the advance notice
provision, the deadline for proposals to be included in M&T Bank Corporation's
proxy statement for its annual meetings or for proposals to be presented at a
stockholders meeting is 120 days prior to the day of the month on which M&T Bank
Corporation first mailed its proxy materials for the prior year's annual
meeting. For other stockholder meetings or annual meetings held on a date that
is more than 30 days from the date of the preceding year's annual meeting, the
deadline for the submission of stockholder proposals is the close of business on
the tenth day following the date public disclosure of the date of such meeting
is first made.
In its quarterly report for the quarter ended June 30, 1998, M&T Bank
Corporation disclosed December 10, 1998 as the date by which stockholder
proposals had to be submitted for consideration at the 1999 Annual Meeting of
Stockholders. M&T Bank Corporation had received no stockholder proposals as of
the date of this Proxy Statement.
Although the Bylaw amendment is intended to establish reasonable procedures for
the conduct of a meeting of stockholders and to help ensure that M&T Bank
Corporation will have an adequate period of time to review and respond to a
stockholder proposal, the advance notice procedures could have an anti-takeover
effect. A copy of the text of the Bylaw provision discussed above is set forth
in Appendix A to this Proxy Statement.
OTHER MATTERS
The Board of Directors of M&T Bank Corporation is not aware that any matters not
referred to in the form of proxy will be presented for action at the meeting. If
any other matters properly come before the meeting, it is the intention of the
persons named in the enclosed proxy to vote the shares represented thereby in
accordance with their best judgment.
31
INDEPENDENT PUBLIC ACCOUNTANTS
On the recommendation of the Audit Committee of the Board of Directors, the firm
of PricewaterhouseCoopers LLP, certified public accountants, has been selected
as M&T Bank Corporation's principal independent public accountants for the year
1999, a capacity in which it has served since 1984. Representatives of
PricewaterhouseCoopers LLP are expected to be present at the Annual Meeting. The
representatives may, if they wish, make a statement and, it is expected, will be
available to respond to appropriate questions.
SOLICITATION COSTS
The cost of soliciting proxies in the accompanying form will be borne by M&T
Bank Corporation. The solicitation is being made by mail, and may also be made
by telephone or in person using the services of a number of regular employees of
M&T Bank Corporation and its subsidiary banks at nominal cost. Banks, brokerage
firms and other custodians, nominees and fiduciaries will be reimbursed by M&T
Bank Corporation for expenses incurred in sending proxy material to beneficial
owners of the Common Stock.
STOCKHOLDER PROPOSALS
A stockholder wishing to submit a proposal for consideration at the 2000 Annual
Meeting of Stockholders should do so not later than November 12, 1999.
March 11, 1999
32
APPENDIX A
BYLAW PROVISIONS AFFECTING THE
ELECTION OF DIRECTORS AND THE CALLING AND CONDUCT
OF MEETINGS OF STOCKHOLDERS
ARTICLE I
SECTION 12. ADVANCE NOTICE OF PROPOSALS: At an annual or special
meeting of the stockholders, only such business shall be conducted as shall have
been properly brought before the meeting. To be properly brought before an
annual meeting, business (a) must be specified in the notice of the meeting, (b)
otherwise properly brought before the meeting by or at the direction of the
Board of Directors, or (c) otherwise properly brought before the meeting by a
stockholder.
For business to be properly brought before an annual meeting of
stockholders pursuant to clause (c) above, the stockholder must have given
timely notice thereof to the Corporate Secretary of the Corporation and such
business must be a proper matter for stockholder action. To be timely, a
stockholder's notice shall be delivered to the Corporate Secretary at the
principal executive offices of the Corporation not later than the following
dates: (1) at the close of business on the 120th day prior to the date on which
the Corporation first mailed its proxy materials for the preceding year's annual
meeting of stockholders if the date of the annual meeting is not changed more
than 30 days from the date of the preceding year's annual meeting, and (2) with
respect to any other annual meeting or special meeting of stockholders, the
close of business on the tenth day following the date of public disclosure of
the date of such meeting is first made. In no event shall the announcement of an
adjournment of an annual meeting or special meeting of stockholders commence a
new time period for the giving of a stockholder's notice as described above.
Such stockholder's notice shall set forth (a) as to the stockholder giving the
notice (i) the names and business addresses of the stockholder and all Persons
(as such term is defined in Section 3(a)(9) of the Securities Exchange Act of
1934, as amended, through the date of adoption of these Bylaws) acting in
concert with the stockholder; (ii) the names and addresses of the stockholder
and the Persons identified in clause (i), as they appear on the Corporation's
books (if they so appear); and (iii) the class and number of shares of the
Corporation beneficially owned by the stockholder and the Persons identified in
clause (i), (b) as to the business being proposed, (i) a brief description of
the business desired to be brought before the meeting; (ii) the reasons for
conducting such business at the meeting; and (iii) any material interest of the
stockholder in such business; and (c) such other information as the Board of
Directors reasonably determines is necessary or appropriate to enable the Board
of Directors and stockholders of the Corporation to consider the proposal. The
person presiding at the annual meeting shall, if the facts warrant, determine
and declare to the meeting that business was not properly brought before the
meeting in accordance with the provisions of this section and, if he or she
shall so determine, he or she shall declare to the meeting that any business not
properly brought before the meeting shall not be transacted.
A-1
995-PS-99
P M&T BANK CORPORATION
R
O ANNUAL MEETING OF STOCKHOLDERS - APRIL 20, 1999 AT 11:00 A.M.
X
Y THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John LiDestri, Robert A. Ganley and Timothy
T. Tevens as Proxies and authorizes said Proxies, or any one of them, to
represent and to vote all of the shares of common stock of M&T Bank
Corporation which the undersigned may be entitled to vote at the Annual Meeting
of Stockholders to be held on April 20, 1999 and any adjournments thereof (i) as
designated on the items set forth on the reverse side and (ii) at the discretion
of said Proxies, or any one of them, on such other matters as may properly come
before the meeting.
(MARK, SIGN AND DATE ON REVERSE SIDE)
-------------
SEE REVERSE
SIDE
-------------
/X/Please mark
vote as in
this example
1. ELECTION OF DIRECTORS
NOMINEES: (01) William F. Allyn, (02) Brent D. Baird, (03) John H. Benisch,
(04) Robert J. Bennett, (05) C. Angela Bontempo (06) Robert T. Brady,
(07) Patrick J. Callan, (08) Richard E. Garman, (09) James V. Glynn,
(10) Roy M. Goodman, (11) Patrick W.E. Hodgson, (12) Samuel T. Hubbard, Jr.,
(13) Russell A. King, (14) Lambros J. Lambros, (15) Reginald B. Newman, II,
(16) Peter J. O'Donnell, Jr., (17) Jorge G. Pereira, (18) Robert E. Sadler,
Jr., (19) John L. Vensel, (20) Herbert L. Washington, (21) John L. Wehle, Jr.
and (22) Robert G. Wilmers
/ / FOR / / WITHHELD
ALL FROM ALL
NOMINEES NOMINEES
-----------------------------------------------------------
IF PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS SPECIFIED
OR, IF NOT SPECIFIED, WILL BE VOTED FOR ALL NOMINEES AND FOR
APPROVAL OF THE AMENDMENT TO THE M&T BANK CORPORATION 1983
STOCK OPTION PLAN. A VOTE FOR ALL NOMINEES AND FOR THE
APPROVAL OF THE 1983 STOCK OPTION PLAN AMENDMENT IS
RECOMMENDED.
-----------------------------------------------------------
For, except vote withheld from the following nominees(s):
/ /
- ----------------------------------------------------------
2. 1983 STOCK OPTION PLAN AMENDMENT
To approve the amendment to the FOR AGAINST ABSTAIN
M&T Bank Corporation 1983 Stock / / / / / /
Option Plan described in the
accompanying Proxy Statement;
Signature Date
------------------ --------
Mark here for Mark here if Mark here to
address / / you plan / / discontinue / /
change and to attend duplicate
note change the meeting annual and
at left quarterly
reports
Please mark, date and sign below exactly as name appears
hereon and return this proxy in the envelope provided.
Persons signing as executors administrators, trustees, etc.
should so indicate. If a joint account, all should sign.
Signature Date
------------------------ ---------------
INSTRUCTIONS FOR VOTING YOUR PROXY
Stockholders of record have two alternative ways of voting their proxies:
1. By Mail (traditional method); or
2. By Telephone (using a Touch-Tone Phone).
Your telephone vote authorizes the named proxies to vote your shares in the
same manner as if you marked, signed and returned your proxy card. Please
note all votes cast via the telephone must be cast prior to 3:00 p.m. E.S.T.,
April 19, 1999.
It's fast, convenient, and immediate!
Call Toll-Free on a Touch-Tone Phone
1-877-PRX-VOTE (1-877-779-8683)
Follow these four easy steps:
1. Read the accompanying Proxy Statement and Proxy Card.
2. Call the toll-free number 1-877-PRX-VOTE.
3. Enter your 14 digit Control Number located on your Proxy Card above your
name.
4. Follow the recorded instructions.
Your vote is important!
Call 1-877-PRX-VOTE anytime!
IT IS NOT NECESSARY TO RETURN YOUR PROXY CARD IF YOU ARE VOTING BY TELEPHONE
PLEASE NOTE THAT THE LAST VOTE RECEIVED, WHETHER BY TELEPHONE OR BY MAIL,
WILL BE THE VOTE COUNTED.
