SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
FIRST EMPIRE STATE CORPORATION
- ----------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
Richard A. Lammert, Esq.
Senior Vice President, General
Counsel and Secretary
One M&T Plaza
Buffalo, New York 14240
(716) 842-5390
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(Name of Person Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-
6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
Not applicable.
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2) Aggregate number of securities to which transaction applies:
Not applicable.
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
Not applicable.
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
Not applicable.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
1) Amount previously paid: Not applicable.
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2) Form, Schedule or Registration Statement No. Not applicable.
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3) Filing party: Not applicable.
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4) Date filed: Not applicable.
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FIRST EMPIRE STATE CORPORATION
One M&T Plaza Buffalo, New York 14240
March 10, 1994
Dear Stockholder,
You are cordially invited to attend the 1994 annual meeting of
stockholders of First Empire State Corporation. Our annual meeting will be
held on the 10th floor of One M&T Plaza in Buffalo, New York on Tuesday,
April 19, 1994 at 11:00 a.m.
Stockholders will be asked to elect 18 directors. Information about the
nominees is set forth in the attached proxy statement.
Whether or not you presently plan to attend the meeting, please indicate
your vote on the enclosed proxy card, sign and date it, and then return it in
the enclosed postage-paid envelope. 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 18 nominees.
/s/ Paul B. Murray /s/ Robert G. Wilmers
PAUL B. MURRAY ROBERT G. WILMERS
Chairman of the Board President and Chief Executive Officer
FIRST EMPIRE STATE CORPORATION
One M&T Plaza
Buffalo, New York 14240
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The 1994 Annual Meeting of Stockholders of First Empire State
Corporation will be held on the 10th floor of One M&T Plaza in Buffalo, New
York on Tuesday, April 19, 1994 at 11:00 A.M., local time, for the following
purposes:
1. To elect eighteen (18) directors for a term of one (1) year and
until their successors have been elected and qualified; and
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Stockholders of record at 5:00 P.M., Eastern Standard Time, on March 1,
1994, are entitled to notice of, and to vote at, the meeting. Each
stockholder, even though he or she now plans to attend the meeting, is
requested to execute the enclosed proxy card and return it without delay in
the enclosed postage-paid envelope. Any stockholder present at the meeting
may withdraw his or her proxy and vote personally on each matter brought
before the meeting.
By Order of the Board of Directors
/s/ Richard A. Lammert
RICHARD A. LAMMERT
Secretary
March 10, 1994
1
FIRST EMPIRE STATE CORPORATION
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of First Empire State Corporation ("First Empire" or
the "Company") of proxies in the accompanying form for use at the 1994 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 First Empire will be held on the
10th floor of One M&T Plaza in Buffalo, New York on Tuesday, April 19, 1994,
at 11:00 A.M., local time.
First Empire's mailing address is One M&T Plaza, Buffalo, New York 14240
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 10, 1994. A copy of the Annual Report
for 1993, 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,
1994 are entitled to vote at the Annual Meeting. At that time First Empire
had outstanding 6,862,810 shares of Common Stock, $5 par value ("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.
Proxies will be voted in accordance with the stockholder's direction, if any.
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.
Unless otherwise directed, proxies will be voted in favor of the election as
directors of the persons named under the caption "NOMINEES FOR DIRECTOR."
2
The vote of a plurality of the shares of the Company's 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
presence in person or by proxy of the holders of a majority in voting power
of the Common Stock will constitute a quorum for the transaction of business
at the meeting. Under New York law and the Company's Restated Certificate of
Incorporation and Bylaws, broker non-votes will be counted as being present
or represented at the meeting but will not have an effect on the outcome of
the vote for the election of directors.
PRINCIPAL BENEFICIAL OWNERS OF SHARES
The following table sets forth certain information with respect to all
persons or groups known by the Company to be the beneficial owners of more
than 5% of its shares as of March 1, 1994.
TITLE OF NAME AND ADDRESS NUMBER PERCENT
CLASS OF BENEFICIAL OWNER OF SHARES OF CLASS
- ------------ ------------------- --------- -----------
Common Stock A group ("Group I")
comprised of:
Robert G. Wilmers 637,073 9.21%
One M&T Plaza
Buffalo, NY 14240
West Ferry Foundation 7,200 less than 1%
One M&T Plaza
Buffalo, NY 14240
Rem Foundation 451,320 6.58%
Allgemeines Treuun-
ternehmen,
Postfach 34 722,
FL 9490
Vaduz, Liechtenstein
Hofin Anstalt 388,400 5.66%
P.O. Box 83
Vaduz, Liechtenstein
Argali [BVI] Limited 30,200 less than 1%
P.O. Box 71
Craigmuir Chambers
Road Town
Tortola, British
Virgin Islands ------------- ------------
Total for Group I 1,506,993 (1) 21.80%
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TITLE OF NAME AND ADDRESS NUMBER PERCENT
CLASS OF BENEFICIAL OWNER OF SHARES OF CLASS
- ------------ ------------------- --------- -----------
Common Stock A group ("Group II")
comprised of:
Brent D. Baird 421,888 (2) 6.15%
and others
1350 One M&T Plaza
Buffalo, NY 14203
9% Convertible National Indemnity 40,000 (3) 100% (3)
Preferred Company
Stock 3024 Harney Street
Omaha, NE 68131
- -----
(1) The members of Group I 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 Group I has indicated in such amended Schedule 13D or
otherwise advised the Company that such member has sole voting and
dispositive power with respect to the shares indicated opposite such
member's name in the table. Mr. Wilmers 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.
As to Mr. Wilmers, the shares indicated in the table include the shares
owned by the West Ferry Foundation and 51,500 shares subject to options
granted under the First Empire State Corporation 1983 Stock Option Plan
("Stock Option Plan") which are currently exercisable or are exercisable
within 60 days after March 1, 1994 and which were deemed to be
outstanding for purposes of calculating the percentage of outstanding
shares beneficially owned by Mr. Wilmers and Group I. 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 the Company. The shares
indicated for Hofin Anstalt include shares held by its wholly owned
subsidiaries.
(2) Brent D. Baird, a director of the Company, and twelve of his associates
have jointly filed with the SEC a Schedule 13D, as amended, disclaiming
that they constitute a "group" as such term is used in Section 13(d)(3)
of the Exchange Act and reporting that they are beneficial owners, in
the aggregate, of in excess of 5% of the outstanding Common Stock. Mr.
Baird has sole voting and dispositive power with respect to 6,184 shares
that he owns individually. An additional 214,000 shares are owned by
entities of which Mr. Baird is a director or trustee, and as to which
shares he may be deemed to share voting or dispositive power. In
addition, he has remainder interests in trusts that own an aggregate of
40,104 shares. The remaining 161,600 shares, as to which Mr. Baird
disclaims beneficial ownership, are owned by members of Mr. Baird's
family,
4
either individually or as trustee, or by a charitable foundation, all
the trustees of which are members of Mr. Baird's family.
(3) Warren E. Buffett, Berkshire Hathaway Inc. and National Indemnity
Company have jointly filed with the SEC a Schedule 13G reporting that
they are the beneficial owners of 100% of the Company's series 9%
Convertible Preferred Stock ("9% Preferred Stock"), and, pursuant to the
conversion privilege thereunder, that they are the beneficial owners of
in excess of 5% of the outstanding Common Stock. The Schedule 13G
indicates that the reporting persons have shared voting and dispositive
powers with respect to the 40,000 shares of the 9% Preferred Stock. The
9% Preferred Stock is directly owned by National Indemnity Company, a
subsidiary of Berkshire Hathaway Inc., and is convertible at any time
into shares of the Common Stock at an initial conversion price of
$78.90625 per share, subject to certain antidilution adjustments. Based
upon the 6,862,810 shares of the Common Stock outstanding as of the
close of business on March 1, 1994, the complete exercise of the
conversion privilege would result in the issuance of 506,930 shares of
the Common Stock, or 6.88% of the Common Stock that would be outstanding
following conversion. The holder of the 9% Preferred Stock is not
entitled to vote at the Annual Meeting of Stockholders to be held on
April 19, 1994.
ELECTION OF DIRECTORS
Shares represented by properly executed proxies will be voted, unless
such authority is withheld, for the election as directors of First Empire of
the following eighteen (18) persons, to hold office until the 1995 Annual
Meeting of Stockholders and until their successors have been elected and
qualified. Each of the nominees listed below was elected at the 1993 Annual
Meeting of Stockholders. If any nominee for any reason should become
unavailable for election or if a vacancy should occur before the election
(which events are not expected), it is intended that the shares represented
by the proxies will be voted for such other person as the Company'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, 1994 and includes their affiliations with
First Empire's subsidiary banks, Manufacturers and Traders Trust Company
("M&T Bank") and The East New York Savings Bank ("East New York"), and with
First Empire's other subsidiaries.
5
NOMINEES FOR DIRECTOR
BRENT D. BAIRD IS 55, IS A MEMBER OF THE EXECUTIVE AND COMPENSATION
COMMITTEES AND HAS BEEN A DIRECTOR SINCE 1983.
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 and a member of the Executive, Trust
and Investment, Nomination, and Community Reinvestment Act Committees of M&T
Bank. He is a director of East New York, M&T Capital Corporation and M&T
Financial Corporation. Mr. Baird is chairman of the board of trustees of
First Carolina Investors, Inc. and president of Citizens Growth Properties,
both of which are engaged in the real estate business. He is also a director
of Oglebay Norton Company and Todd Shipyards Corporation.
JOHN H. BENISCH IS 58 AND HAS BEEN A DIRECTOR SINCE 1988.
Mr. Benisch is a limited principal of Abrams Benisch Riker, Inc., a real
estate firm based in New York City which is engaged in leasing, management
and consulting services. Abrams Benisch Riker, Inc. is also an owner/member
of Colliers International Property Consultants, which has regional offices
throughout the United States and internationally. Mr. Benisch is a director
of East New York and a member of its Mortgage Investment Committee. He is a
director of the reconstituted board of directors of Integrated Resources,
Inc. Mr. Benisch is a member of The Real Estate Board of New York, Inc. and
a member of the 53rd Street Association N.Y.C. He is also an honorary
director of St. Mary's Hospital for Children, Bayside, New York, and is a
member of The Salvation Army Greater New York Advisory Board.
ANGELA BONTEMPO IS 53 AND HAS BEEN A DIRECTOR SINCE 1991.
Sr. Angela Bontempo served as the administrator of Health Services at
Covenant House in New York City from July through December of 1993. She was
president and chief executive officer of Sisters of Charity Hospital,
Buffalo, New York, from January 1987 to October 1992. Sr. Bontempo is a
director of M&T Bank. She is a director of the New York State Public Health
Council and chair of the New York State Board of Examiners of Nursing Home
Administrators. Sr. Bontempo is also a member of the Daughters of Charity
National Health System, Inc. Committee on Human Resources and the American
College of Health Care Executives.
PATRICK J. CALLAN IS 57 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 director of East New York
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 Committee, the Association for Foreign Investors in
U.S. Real Estate and The Real Estate Board of New York, Inc.
6
DAVID N. CAMPBELL IS 52 AND HAS BEEN A DIRECTOR SINCE 1987.
Mr. Campbell is chairman of the board, chief executive officer and a
director of Computer Task Group, Inc., a provider of professional software
development services. Mr. Campbell is a director of M&T Bank. He is a
director of National Fuel Gas Company, Gibraltar Steel Corp., Image Business
Systems Corporation and Dunlop Tire Corporation. Mr. Campbell is a member of
the Governor's Council on Fiscal and Economic Priorities, a position to which
he was appointed by Governor Cuomo. He is regional vice chairman of The
Business Council of New York State, Inc. and a director of the New York State
Science and Technology Foundation. Mr. Campbell is chairman of the Roswell
Park Cancer Institute Community Council and a director of the Greater Buffalo
Partnership. He is also a member of the University Council of the State
University of New York at Buffalo, and a trustee of Niagara University.
JAMES A. CARRIGG IS 60 AND HAS BEEN A DIRECTOR SINCE 1992.
Mr. Carrigg is chairman of the board, president, chief executive officer
and a director of New York State Electric & Gas Corporation. He is a member
of the Directors Advisory Council of the Endicott Trust Division of M&T Bank.
Mr. Carrigg is a director of Security Mutual Life Insurance Company of
New York, Home Mutual Insurance Company and Utilities Mutual Insurance
Company. He is also a director of the New York Business Development
Corporation.
BARBER B. CONABLE, JR. IS 71 AND HAS BEEN A DIRECTOR SINCE 1991.
Mr. Conable retired as the president of The World Bank in September
1991, a position which he had held since 1986. He represented the 30th
District of New York in the U.S. House of Representatives from 1965 to 1985,
and served as a New York State senator in 1963 and 1964. Mr. Conable is a
director of M&T Bank, and serves as chairman of the Directors Advisory
Council of its Rochester Division. He is a director of Corning Incorporated
and American International Group, Inc. Mr. Conable is chairman of the
National Committee on U.S.-China Relations, chairman of the Executive
Committee of the Board of Regents of the Smithsonian Institution, and a
member of the United Nations Commission on Global Governance. He is also a
trustee fellow and member of the Executive Committee of Cornell University.
RICHARD E. GARMAN IS 63, 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 and member of the
Executive and Trust and Investment Committees of M&T Bank. Mr. Garman is a
director of Merchants Insurance Group. He is a director of the Associated
General Contractors - New York State, the Greater Buffalo Partnership and
Millard Fillmore Hospitals. Mr. Garman is also chairman of the Greater
Niagara Frontier Council of the Boy Scouts of America.
7
ROY M. GOODMAN IS 63 AND HAS BEEN A DIRECTOR SINCE 1984.
Senator Goodman is a New York State senator serving his thirteenth term
in the Legislature representing the East Side of Manhattan. He is the senior
assistant majority leader of the New York State Senate and serves as chairman
of the Senate Committee on Investigations, Taxation, and Government
Operations and the Majority Program Development Committee. Senator Goodman
is also chairman of the Senate Special Committee on the Arts and Cultural
Affairs. He 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 former President Bush.
PATRICK W.E. HODGSON IS 53, 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. Since February
1993, he has served as chairman of the board and chief executive officer of
Todd Shipyards Corporation. Prior to 1990, Mr. Hodgson was president of
London Machinery Company Limited, London, Ontario, a manufacturer of truck
bodies and equipment. 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 president of T-W Truck Equippers Inc., Buffalo, New York, and a
director of Kissing Bridge Corp., Glenwood, New York, and Niagara Blower Co.,
Buffalo, New York. He is also a director of Todd Shipyards Corporation,
First Carolina Investors, Inc., Scotts Hospitality Inc. and Exolon-ESK
Company.
LAMBROS J. LAMBROS IS 58, IS A MEMBER OF THE AUDIT COMMITTEE AND HAS BEEN A
DIRECTOR SINCE 1984.
Mr. Lambros is a private investor. He 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, Mr. Lambros 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.
WILFRED J. LARSON IS 66, IS A MEMBER OF THE AUDIT COMMITTEE AND HAS BEEN A
DIRECTOR SINCE 1987.
Mr. Larson retired in 1991 as president and chief executive officer of
Westwood-Squibb Pharmaceuticals Inc., Buffalo, New York, a subsidiary of the
Bristol-Myers Squibb Company. Prior to his retirement, he also served as a
vice president of Bristol-Myers Squibb Company. Mr. Larson is a director and
a member of the Examining and Community Reinvestment Act Committees of M&T
Bank. He is a director of Pratt & Lambert, Inc. and Bryant & Stratton
Business Institute, Inc. Mr. Larson is a trustee of Children's Hospital of
Buffalo, Inc. and a director of the University at Buffalo Foundation, Inc.
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JORGE G. PEREIRA IS 60 AND HAS BEEN A DIRECTOR SINCE 1982. HE IS VICE
CHAIRMAN OF THE BOARD OF FIRST EMPIRE AND IS THE CHAIRMAN OF ITS COMPENSATION
COMMITTEE.
Mr. Pereira is a private investor. He is vice chairman of the board and
a director of M&T Bank, and serves as chairman of its Nomination Committee.
Mr. Pereira is also a director of East New York. He is the owner of Hofin
Anstalt, a private investment company.
WILLIAM C. SHANLEY, III IS 68 AND HAS BEEN A DIRECTOR SINCE 1988.
Mr. Shanley retired in 1991 as president of Tate & Lyle Inc. Prior to
October 1990, he was president and chief executive officer of Amstar Sugar
Corporation. Tate & Lyle Inc. and Amstar Sugar Corporation are subsidiaries
of Tate & Lyle PLC, a sugar, cereal sweetener and starch group. He is a
director of East New York and a member of its Executive and Examining
Committees.
RAYMOND D. STEVENS, JR. IS 67, IS A MEMBER OF THE EXECUTIVE AND COMPENSATION
COMMITTEES AND HAS BEEN A DIRECTOR SINCE 1970.
Mr. Stevens is chairman of the board and a director of Pratt & Lambert,
Inc., manufacturer of paints, coatings and adhesives, headquartered in
Buffalo, New York. Prior to March 1989, Mr. Stevens held the additional
position of chief executive officer of Pratt & Lambert, Inc. He is a
director and a member of the Executive, Trust and Investment, and Nomination
Committees of M&T Bank. He is a trustee of the Buffalo General Hospital.
Mr. Stevens is also a former chairman of the National Paint and Coatings
Association.
PETER TOWER IS 72 AND HAS BEEN A DIRECTOR SINCE 1970.
Mr. Tower is a private investor. Prior to March 1989, he was president,
chief executive officer and treasurer of C.J. Tower Inc., customhouse brokers
headquartered in Buffalo, New York, a subsidiary of McGraw-Hill Inc. Mr.
Tower is a director of M&T Bank. He is also a director of the Buffalo State
College Foundation, Inc.
RICHARD D. TRENT IS 68, IS A MEMBER OF THE AUDIT COMMITTEE AND HAS BEEN A
DIRECTOR SINCE 1988.
Dr. Trent is president emeritus of Medgar Evers College of the City
University of New York, a university professor emeritus of the City
University of New York and a consultant in educational administration. He
retired in 1991 as a university professor and professor of educational
administration at the Brooklyn College of the City University of New York.
Dr. Trent is a director of East New York, a member of its Executive and
Community Reinvestment Act Committees, and serves as chairman of its
Examining Committee. He is a director and member of the Examining Committee
of M&T Bank. Dr. Trent was the founding president of Medgar Evers College of
the City University of New York. He is also a director of the Greater
New York Council of the Boy Scouts of America and the Center for Creative
Collaboration.
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ROBERT G. WILMERS IS 59 AND HAS BEEN A DIRECTOR SINCE 1982. HE IS THE
PRESIDENT AND CHIEF EXECUTIVE OFFICER OF FIRST EMPIRE, AND IS THE CHAIRMAN OF
ITS EXECUTIVE COMMITTEE.
Mr. Wilmers is chairman of the board, president, chief executive officer
and a director of M&T Bank, chairman of its Executive Committee and a member
of its Trust and Investment Committee; a director and member of the Executive
Committee of East New York; and a director of a number of other M&T Bank or
First Empire subsidiaries. He is a director of the Greater Buffalo
Partnership, the Federal Reserve Bank of New York and The Business Council of
New York State, Inc., and a member of the Visiting Committee of the John F.
Kennedy School of Government at Harvard University. Mr. Wilmers is also a
director of the Albright-Knox/Buffalo Fine Arts Academy.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
THE ELECTION OF ALL 18 NOMINEES.
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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 executive officers
as a group is set forth in the table below as of March 1, 1994, 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
- ------------------------ ---------------- ---------
Brent D. Baird 70,288 (1) 1.02%
John H. Benisch 5,753 (2) (10)
Angela Bontempo - -
Patrick J. Callan 5,953 (2) (10)
David N. Campbell 1,010 (10)
James A. Carrigg 479 (10)
Barber B. Conable, Jr. 500 (10)
Richard E. Garman 22,500 (10)
Roy M. Goodman - -
Patrick W.E. Hodgson 5,700 (3) (10)
Lambros J. Lambros 6,000 (10)
Wilfred J. Larson 3,488 (10)
Paul B. Murray 67,779 (2)(4)(5) (10)
Jorge G. Pereira 388,400 (6) 5.66
William C. Shanley, III 12,051 (2) (10)
Raymond D. Stevens, Jr. 4,756 (7) (10)
Peter Tower 105,000 (8) 1.53
Richard D. Trent 5,153 (2) (10)
Samuel F. Ward 5,000 (10)
Robert G. Wilmers 637,073 (2)(5)(6)(9) 9.21
William A. Buckingham 23,304 (2)(5) (10)
Robert E. Sadler, Jr. 37,265 (2)(5) (10)
James L. Vardon 26,912 (2)(5) (10)
All directors and executive
officers as a group
(29 persons) 1,527,053 (2)(5) 21.57%
(1) See footnote (2) to the table set forth under the caption "PRINCIPAL
BENEFICIAL OWNERS OF SHARES."
(2) Includes the following shares of Common Stock subject to options granted
under the Stock Option Plan which are currently exercisable or are
exercisable within 60 days after March 1, 1994: Mr. Benisch - 4,753
shares; Mr. Callan - 1,953 shares; Mr. Murray - 50,759 shares;
Mr. Shanley - 4,951 shares; Dr. Trent - 4,953 shares; Mr. Wilmers -
51,500 shares;
11
Mr. Buckingham - 21,200 shares; Mr. Sadler - 14,231 shares; Mr. Vardon -
3,850 shares; all directors and executive officers as a group - 216,252
shares.
(3) Includes 600 shares of Common Stock 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.
(4) Includes 7,919 shares of Common Stock held by a close relative.
(5) Includes the following shares of Common Stock through participation in
the First Empire State Corporation Retirement Savings Plan and Trust
("Retirement Savings Plan"): Mr. Murray - 9,101 shares; Mr. Wilmers -
2,837 shares; Mr. Buckingham - 1,604 shares; Mr. Sadler - 1,389 shares;
Mr. Vardon - 812 shares; all directors and executive officers as a group
- 18,579 shares.
(6) See footnote (1) to the table set forth under the caption "PRINCIPAL
BENEFICIAL OWNERS OF SHARES."
(7) Includes 1,116 shares of Common Stock held as trustee for another and
for which beneficial ownership is disclaimed.
(8) Includes 15,600 shares of Common Stock owned by a charitable foundation
formed by Mr. Tower. Mr. Tower is a trustee of such foundation and
holds shared voting and dispositive power over the shares of Common
Stock owned by it, but he has no pecuniary interest in any of the shares
owned by the charitable foundation, and he disclaims any beneficial
interest in, and beneficial ownership of, such shares.
(9) Includes 3,390 shares of Common Stock held by close relatives for which
beneficial ownership is disclaimed.
(10) Less than 1%.
Under Section 16(a) of the Exchange Act, the Company'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 American Stock Exchange.
Specific due dates for these reports have been established, and the Company
is required to report in this proxy statement any failure to file by these
dates during 1993. The Company 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 John L.
Pett, an officer of the Company, failed to file on a timely basis one monthly
report relating to three transactions which he subsequently late-filed. In
making this statement, the Company 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 Statement of Changes in Beneficial Ownership)
were required to be filed under the applicable rules of the SEC.
12
PERFORMANCE GRAPH
The graph below contains a comparison of the cumulative stockholder
return on the Common Stock against the cumulative total returns of the S&P
500 Composite Index, compiled by Standard & Poor's Corporation, and the KBW
50 Index, compiled by Keefe, Bruyette & Woods, Inc., for the five-year period
beginning on December 31, 1988 and ending on December 31, 1993. The KBW 50
Index is comprised of fifty American banking companies, including all money-
center and most major regional banks.
Comparison of Five-Year Cumulative Total Return*
[This space left intentionally blank.
See APPENDIX for a description of the Performance Graph.]
Stockholder Value at Year End*
1988 1989 1990 1991 1992 1993
---- ---- ---- ---- ---- ----
First Empire $100 $128 $109 $202 $276 $292
S&P 500 Index $100 $132 $128 $166 $179 $197
KBW 50 Index $100 $119 $ 85 $135 $172 $182
* Assumes a $100 investment on December 31, 1988 and reinvestment of all
dividends.
13
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
A key objective of First Empire is to attract, develop and maintain
strong executive officers who are capable of maximizing the Company's
performance for the benefit of its stockholders. In furtherance of this
objective, the Compensation Committee has adopted a compensation strategy for
its executive officers which utilizes competitive 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 the Company's success. First Empire 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 First Empire. The Compensation Committee considered
eighteen commercial banking companies which it believed were reasonably
comparable to the Company's asset size and performance and which were
generally located in the northeast or midwest (the "comparative group of
banks"). Ten of the eighteen 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 First Empire'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 First Empire'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 First Empire's executive officers above the median of
the comparative group of banks.
First Empire'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 First Empire'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 First Empire's profitability. First Empire's
net operating earnings after taxes for 1993 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 1993's awards
to First Empire'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
14
qualitative performance factors to evaluate the 1993 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: the
Company's earnings growth; its asset quality relative to the banking industry
as a whole; the integration of the Company's acquisitions; and market share.
Another factor which the Compensation Committee considered in determining the
Chief Executive Officer's 1993 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, First Empire provides potentially significant
long-term incentive opportunities to its executive officers through
discretionary grants of stock options and stock appreciation rights under the
Stock Option Plan, thereby emphasizing the potential creation of long-term
stockholder value and more closely aligning the interests of First Empire's
executive officers with those of its stockholders. Stock options and stock
appreciation rights are considered good 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 the Company'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 the Company, individual performance and
competitive practices within the comparative group of banks.
In 1993, 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 First Empire; and the level of past awards of stock options
or stock appreciation rights granted to each executive officer. In the
determination of the Chief Executive Officer's 1993 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.
All of the 1993 performance factors considered by the Compensation
Committee in its salary determinations and its annual incentive and stock
option awards made to the Company'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 the Company's executive officers is competitive and
reflects the Company's performance. Also, the Compensation Committee
believes that the Company's compensation programs have helped to focus First
Empire's executive officers on increasing the Company's performance and
stockholder value.
Effective as of January 1, 1994, Section 162(m) of the Internal Revenue
Code of 1986 (the "Internal Revenue Code") generally denies a deduction to
any publicly-held corporation for compensation
15
paid to its chief executive officer and its four other highest-paid executive
officers to the extent that any such individual's compensation exceeds $1
million, subject to certain exceptions, including one for "performance-based
compensation." Under Section 162(m) of the Internal Revenue Code and the
proposed regulations and transition rules issued by the Internal Revenue
Service, it is highly unlikely that any one of the Company's executive
officers will receive compensation in 1994 that is nondeductible under
Section 162(m). The Company intends to study the application of Section
162(m) of the Internal Revenue Code to its compensation plans and practices,
and will consider possible changes thereto that may be necessary to qualify
the compensation paid to its executive officers for deductibility 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
Raymond D. Stevens, Jr.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Pereira, Baird and Stevens served as members of the Compensation
Committee throughout 1993, and are currently serving as such.
Mr. Pereira is vice chairman of First Empire and M&T Bank, titular posts
without day-to-day managerial responsibilities which he has held since April
18, 1984. Mr. Baird served as chairman of the board of M&T Capital
Corporation, the venture capital subsidiary of M&T Bank, from August 4, 1983
to April 20, 1987. Neither Mr. Pereira nor Mr. Baird has received additional
compensation for serving in such capacities.
The members of the Compensation Committee and their associates are, as
they have been in the past, customers of, and have had transactions with, the
bank subsidiaries of the Company; and additional transactions may be expected
to take place in the future between such persons and subsidiaries. Any loans
from the Company's subsidiary banks to such persons and their associates
outstanding at any time since the beginning of 1993 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 following table contains information concerning the compensation
received by the Company's Chief Executive Officer and the four other most
highly compensated executive officers of the Company in the three fiscal
years ended December 31, 1993.
16
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------- --------------
AWARDS
SECURITIES
UNDERLYING ALL
OPTIONS/ OTHER
NAME AND PRINCIPAL POSTION YEAR SALARY BONUS SARS COMPENSATION
- -------------------------- ---- ------- ------- -------- -------------
($) ($) (#) ($)(1)
Robert G. Wilmers 1993 $400,000 $200,000 20,000 $11,963
President and Chief 1992 400,000 150,000 15,000 11,649
Executive Officer of 1991 400,000 128,000 25,000
First Empire; Chairman
of the Board, President
and Chief Executive
Officer of M&T Bank
Robert E. Sadler, Jr. 1993 248,646 300,000 7,500 19,571
Executive Vice President 1992 235,000 270,000 10,000 10,536
of First Empire and M&T 1991 234,230 258,000 5,000
Bank
William A. Buckingham 1993 235,000 245,000 5,000 12,994
Executive Vice President 1992 235,000 245,000 4,000 12,718
of First Empire and 1991 235,000 235,000 0
M&T Bank (2)
Paul B. Murray 1993 425,000 50,000 3,174 21,787
Chairman of the Board of 1992 425,000 50,000 4,042 15,123
First Empire; Chairman of 1991 425,000 46,000 8,019
the Board, President and
Chief Executive Officer
of East New York
James L. Vardon 1993 205,000 250,000 7,000 10,118
Executive Vice President 1992 205,000 250,000 7,000 24,060
and Chief Financial 1991 205,000 250,000 5,000
Officer of First Empire
and M&T Bank
- -----
(1) Includes the following 1993 contributions by the Company to the
Retirement Savings Plan for the benefit of the Named Executive Officers:
Messrs. Wilmers, Sadler and Murray - $10,613; Mr. Buckingham - $10,575;
and Mr. Vardon - $9,225. Includes the following insurance premiums paid
by the Company in 1993 in respect of term life insurance for the benefit
of the Named Executive Officers: Mr. Wilmers - $1,350; Mr. Sadler -
$237; Mr. Buckingham - $2,419; Mr. Murray - $11,174; and Mr. Vardon -
$893. Includes $8,721 of above-market
17
interest earned by Mr. Sadler in 1993 in respect of bonus payments which
he deferred in prior years.
(2) Mr. Buckingham commenced his employment with the Company on April 30,
1990. As a part of his agreement to join the Company, he was granted
a stock option and a stock appreciation right covering an aggregate of
40,000 shares of the Common Stock.
STOCK OPTION GRANTS IN 1993
The table below contains information with respect to the grants of stock
options under the Stock Option Plan during the fiscal year ended December 31,
1993 to the Named Executive Officers who are covered by the Summary
Compensation Table. No stock appreciation rights were granted under the
Stock Option Plan in 1993 other than limited stock appreciation rights
granted in tandem with stock options.
OPTION/SAR GRANTS IN THE LAST FISCAL YEAR
INDIVIDUAL GRANTS
----------------------------------------------------
NUMBER PERCENT
OF OF TOTAL
SECUR- OPTIONS/
ITIES SARS
UNDER- GRANTED TO
LYING EMPLOYEES
OPTIONS IN EXERCISE EXPIR- GRANT DATE
/SARS FISCAL OR ATION PRESENT
NAME GRANTED YEAR BASE PRICE DATE VALUE
- ------------------ ------- --------- -------- ------- ------------
(#)(1) (4) ($/SHARE) ($)(5)
(2)(3)
Robert G. Wilmers 20,000 16.9% $133.875 1/20/03 $834,400
Robert E. Sadler, Jr. 7,500 6.3 133.875 1/20/03 312,900
William A. Buckingham 5,000 4.2 133.875 1/20/03 208,600
Paul B. Murray 3,174 2.7 133.875 1/20/03 132,419
James L. Vardon 7,000 5.9 133.875 1/20/03 292,040
- -----
(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,
except for the grant to Mr. Murray. 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 the Company, if consummated.
18
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 the Company.
See "Directors' Fees."
(5) The Company used a binomial option pricing model to determine the grant
date present value of stock options granted in 1993 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 Company also
believes that such model will be more consistent with the option pricing
methodology which the Company currently intends to utilize in disclosing
the estimated effect on the Company's net income and per share earnings
of option grants in the footnotes to the Company's financial statements
for the year ending December 31, 1994, and thereafter, if the Financial
Accounting Standards Board adopts a final accounting rule which
incorporates the current proposals contained in its exposure draft
("Accounting for Stock-Based Compensation") released on June 30, 1993.
The estimated value per option is $41.72, 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 6.75
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 1.40%, the approximate annualized cash dividend rate
paid with respect to a share of the Common Stock on December 31, 1993.
The Company also deducted 12% 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 be at or near the value estimated
by the model.
19
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS EXERCISED IN 1993 AND YEAR-END
VALUES
The following table reflects the number of stock options and stock
appreciation rights exercised by the Named Executive Officers in 1993, 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 grew 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 - $ - 42,000 53,000 $3,953,063 $2,305,061
Robert E. Sadler, Jr. - - 13,981 22,000 1,316,246 830,313
William A. Buckingham 500 38,063 17,900 24,600 1,342,063 1,376,625
Paul B. Murray - - 47,622 17,032 4,577,232 991,807
James L. Vardon 3,200 223,681 - 18,800 - 730,688
- -------
(1) Based upon the difference between the closing price of the Common Stock
on the American 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 American Stock
Exchange on December 31, 1993 of $140.75 per share.
RETIREMENT PLAN
The table below sets forth the annual retirement benefits under the
regular benefit formula of the First Empire State Corporation Retirement Plan
("Retirement Plan") payable upon retirement to persons within specified
levels of remuneration and years of service classifications assuming
attainment of age 65 during 1994.
20
PENSION PLAN TABLE (1) (2)
YEARS OF SERVICE
-------------------------------------------------
REMUNERATION 10 15 20 25 30
- --------------- ------- ------- -------- -------- ---------
$150,000 24,284 36,427 48,569 60,711 72,853
250,000 41,284 61,927 82,569 103,211 123,853
350,000 58,284 87,427 116,569 145,711 174,853
450,000 75,284 112,927 150,569 188,211 225,853
550,000 92,284 138,427 184,569 230,711 276,853
- -------
(1) The table assumes a straight-life annuity form of payment. The retirement benefits
provided by the Retirement Plan, including those that are 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 $118,800 for 1994. 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 $150,000 for 1994.
The compensation covered by the Retirement Plan benefits summarized in
the above table approximates an employee's base annual salary. The covered
compensation for each of the Named Executive Officers in the Summary
Compensation Table would approximate the highest average of the amounts shown
in the "Salary" column of that table which are paid during any five
consecutive calendar year period in the ten calendar years preceding
retirement, subject to the applicable IRS Compensation Limits. For 1993,
covered compensation taken into account under the Retirement Plan for each of
the Named Executive Officers in the Summary Compensation Table was as
follows: Messrs. Wilmers, Sadler and Murray - $235,840, the IRS Compensation
Limit for 1993; Mr. Buckingham - $233,512; and Mr. Vardon - $205,625. For
purposes of the Retirement Plan, such executive officers had the following
years of service at year end 1993: Mr. Wilmers - 11 years; Mr. Sadler - 10
years; Mr. Buckingham - 3 years; Mr. Murray - 16 years; and Mr. Vardon - 9
years.
Under the Retirement Plan as currently in effect, an alternative benefit
formula applies to those employees of East New York, including Mr. Murray,
who met certain age and/or service requirements as of January 1, 1989.
Through the application of this alternative formula, an affected employee's
annual retirement benefits under the Retirement Plan could, under certain
circumstances, exceed those retirement benefits which are depicted in the
foregoing table. Moreover, Mr. Murray accrued an annual retirement benefit
under the retirement plan of East New York that was in effect immediately
prior to its merger with the Retirement Plan. Based on current actuarial
assumptions and subject to the applicable IRS Benefit and Compensation
Limits, the alternative Retirement Plan and predecessor East New York
retirement plan formulas would provide Mr. Murray with annual retirement
payments of $78,084 and $83,015, respectively, if he elected to retire in
1994. Upon retirement, Mr. Murray's retirement benefits
21
will be calculated under the regular benefit formula of the Retirement Plan,
under the alternative benefit formula thereunder or by reference to his
accrued benefit under the predecessor retirement plan of East New York,
whichever is highest.
In addition to retirement benefits under the Retirement Plan, M&T Bank
has agreed, on an unfunded basis, to pay supplemental retirement benefits to
Messrs. Buckingham, Sadler and Vardon in amounts equal to the difference
between 55% of each individual's final average annual compensation, as
defined in the Retirement Plan, but without regard to the IRS Benefit and
Compensation Limits, and the amount, if any, payable to each individual from
such plan. The supplemental retirement benefits to be paid to each of them
are not dependent upon their respective entitlements to retirement benefits
under the Retirement Plan. In the case of Messrs. Buckingham and Sadler, the
supplemental benefits are reduced by payments which they will receive from
the retirement plans of their previous employers. Based on current actuarial
assumptions associated with their participation in the Retirement Plan, the
following amounts would be payable to them annually as supplemental
retirement benefits commencing at age 65: Mr. Buckingham - $29,723; Mr.
Sadler - $59,684; and Mr. Vardon - $62,900. Actuarially reduced amounts
would be payable to any of them who elected early retirement.
EMPLOYMENT AGREEMENT
The Company and East New York entered into an employment agreement with
Mr. Murray on December 24, 1987 which provides for his employment for a term
of three years, renewable for successive one-year terms, and for an annual
basic compensation of not less than $400,000. Mr. Murray had previously
entered into a salary continuation agreement with East New York on April 16,
1987 which provides for the payment of 20% of his base annual salary for a
period of 10 years following his retirement or death.
DIRECTORS' FEES
FIRST EMPIRE. Directors of First Empire who are not also salaried
officers of the Company 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 First
Empire 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 of First Empire and its subsidiaries of $40,000 per
year. All directors of First Empire are entitled to reimbursement for travel
expenses incidental to their attendance at meetings.
In connection with its acquisition of East New York, the Company agreed
to grant to persons who became directors and advisory directors of First
Empire and its subsidiaries upon First Empire'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 or
her then basic annual compensation and,
22
in the case of a non-officer director, equal to the aggregate amount of his
or her then annual retainer and his or her board and committee meeting fees
in the last full calendar year preceding the date of grant. During 1993, Mr.
Murray was granted a stock option covering 3,174 shares with an exercise
price of $133.875 per share. Also in 1993, the following directors of First
Empire were granted options covering the indicated number of shares, each
with an exercise price of $133.875 per share: Messrs. Benisch and Callan and
Dr. Trent - 298 shares; Mr. McLendon - 290 shares; and Mr. Shanley - 274
shares.
M&T BANK. Directors of First Empire who also serve as directors of M&T
Bank or its subsidiaries, if not salaried officers of the Company or its
subsidiaries, receive attendance fees for each board or committee meeting
attended. Such attendance fees are identical to the schedule of fees paid to
directors of First Empire for board and committee meetings attended. All
such directors of M&T Bank and its subsidiaries are entitled to reimbursement
for travel expenses incidental to their attendance at meetings. An unfunded
plan for the deferral of board and committee fees is available to the
directors of M&T Bank whereby a specific amount or percentage of such fees
may be deferred until the later of January 1st following the date the
director leaves the Board of Directors or the date the director reaches age
65. Quarterly compounded interest is credited to the deferred fees at a rate
equal to that paid on M&T Bank's regular savings accounts.
EAST NEW YORK. Each of the former trustees of East New York who became
a director of East New York and who is not a salaried officer of the Company
or its subsidiaries, receives an annual retainer of $18,000, a fee of $750
for each East New York board meeting attended and a fee of $500 for each East
New York committee meeting attended. If a director must travel more than 100
miles to attend 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. Other directors of East New York who also
serve as directors of First Empire, if not salaried officers of the Company
or its subsidiaries, are entitled to the same schedule of attendance fees but
receive an annual retainer of $10,000 and, if applicable, a fee of $750 for
attending each meeting of the Mortgage Investment Committee of East
New York's board. If any such director must travel more than 100 miles to
attend a Mortgage Investment Committee meeting, the director receives an
additional $375 for attending the meeting. Subject to its fiduciary duties,
the Company has agreed to cause each of the former trustees of East New York
who became a director of East New York following the conversion of East New
York from mutual to stock form and its acquisition by the Company on December
24, 1987 to be elected to serve as a director of East New York until the
earlier of the director's 75th birthday or resignation. If East New York is
merged into another bank subsidiary of the Company prior thereto, subject to
its fiduciary duties, the Company has agreed to cause each such East New York
director to become an advisory director of such bank subsidiary until the
earlier of such director's 75th birthday or resignation and to cause the bank
subsidiary 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.
23
TRANSACTIONS WITH DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of the Company and their associates
are, as they have been in the past, customers of, and have had transactions
with, the bank subsidiaries of the Company; and additional transactions may
be expected to take place in the future between such persons and
subsidiaries. Any loans from the Company's subsidiary banks to such persons
and their associates outstanding at any time since the beginning of 1993 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 six meetings during 1993. 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
Sr. Bontempo and Messrs. Callan, Campbell, Carrigg, Goodman and Shanley.
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 the Company except as otherwise
limited by law. The Executive Committee held no meetings during 1993.
Messrs. Wilmers (Chairman), Baird, Garman, Murray and Stevens comprise the
current membership of the Executive Committee.
The Audit Committee met four times during 1993 with representatives of
the Company's independent accountants. In addition to recommending the
selection of the independent accountants each year, the Audit Committee
reviews the activities of the subsidiary banks' examining committees, 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. Messrs. Ward (Chairman), Hodgson, Lambros and Larson, and Dr.
Trent 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 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 the Company and its
subsidiaries. The Compensation Committee met four times during 1993.
Messrs. Pereira (Chairman), Baird and Stevens currently serve as the members
of the Compensation Committee.
First Empire does not have a standing committee of its Board of
Directors on nominations, or any other committee performing similar
functions.
24
OTHER MATTERS
The Board of Directors of First Empire 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.
INDEPENDENT PUBLIC ACCOUNTANTS
On the recommendation of the Audit Committee of the Board of Directors,
the firm of Price Waterhouse, certified public accountants, has been selected
as First Empire's principal independent public accountants for the year 1994,
a capacity in which it has served since 1984. Representatives of Price
Waterhouse 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 First Empire. 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 First Empire and its subsidiary banks at nominal cost. Banks,
brokerage firms and other custodians, nominees and fiduciaries will be
reimbursed by the Company 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 1995
Annual Meeting of Stockholders should do so not later than November 11, 1994.
By Order of the Board of Directors
/s/ Richard A. Lammert
RICHARD A. LAMMERT
Secretary
March 10, 1994
APPENDIX
The Performance Graph contained under the caption "PERFORMANCE GRAPH"
is being filed under cover of Form SE. The Performance Graph contains a
graphic comparison of the cumulative stockholder return on the Common Stock
against the cumulative total returns of the S&P 500 Composite Index and the
KBW 50 Index for the five-year period beginning on December 31, 1988 and
ending on December 31, 1993. The data points depicted on such Performance
Graph are contained in the chart immediately following the space left
intentionally blank under the caption "PERFORMANCE GRAPH."
P FIRST EMPIRE STATE CORPORATION
R
O ANNUAL MEETING OF STOCKHOLDERS - APRIL 19, 1994 AT 11:00 A.M.
X
Y THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints LAURENCE KESSLER, THOMAS C. PERRY and MONTE
P. RIEFLER as Proxies and authorizes said Proxies, or any one of them, to
represent and to vote all of the shares of common stock of First Empire State
Corporation which the undersigned may be entitled to vote at the Annual
Meeting of Stockholders to be held on April 19, 1994 and any adjournment
thereof (i) as designated on the item 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
PLEASE MARK
[ X ] VOTE AS IN
THIS EXAMPLE.
ELECTION OF DIRECTORS
NOMINEES: Brent D. Baird, John H. Benisch, Angela Bontempo, Patrick J.
Callan, David N. Campbell, James A. Carrigg, Barber B. Conable, Jr., Richard
E. Garman, Roy M. Goodman, Patrick W.E. Hodgson, Lambros J. Lambros, Wilfred
J. Larson, Jorge G. Pereira, William C. Shanley, III, Raymond D. Stevens,
Jr., Peter Tower, Richard D. Trent and Robert G. Wilmers
FOR WITHHELD IF PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS
ALL FROM ALL SPECIFIED OR, IF NOT SPECIFIED, WILL BE VOTED FOR
NOMINEES NOMINEES ALL NOMINEES. A VOTE FOR ALL NOMINEES IS RECOMMENDED.
[ ] [ ]
For, except vote withheld from the following nominee(s):
[ ] ______________________________ Mark here for Mark here
address change if you plan
and note change to attend
at left [ ] the meeting [ ]
Please mark, date and sign to
the right exactly as name
appears hereon and return
this proxy in the envelope
provided. Persons signing as Signature:____________ Date:________
executors, administrators,
trustees, etc. should so
indicate. If a joint account,
all should sign. Signature:____________ Date:________
