UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 27, 2005
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Tompkins Trustco, Inc.
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(Exact name of registrant as specified in its charter)
New York 1-12709 16-1482357
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
The Commons, PO Box 460, Ithaca, New York 14851
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(Address of Principal executive offices) (Zip Code)
Registrant's telephone number, including area code (607) 273-3210
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17CFR 240.13e-4(c))
Item 1.01 Entry into a material definitive agreement
Executive Benefits
On December 28, 2005, Tompkins Trustco, Inc. entered into Supplemental Executive
Retirement Agreements ("SERP") with James W. Fulmer, Stephen S. Romaine, Stephen
E. Garner, and Francis M. Fetsko. The SERP agreements provide for a retirement
benefit at age 65 equal to 75% of an average of the executive's highest five
years of base salary during the participant's employment. Retirement benefits
under these agreements are reduced by payments due under the Company's defined
benefit retirement plan and federal social security benefits. The agreements
also include change in control provisions that provide a continuation of the
executive's compensation for a period of three years in the event of a change in
control. The agreements with Mr. Fulmer, Mr. Romaine, and Mr. Garner include
severance payments in the instance of a termination without cause of 24, 12, and
18 months compensation, respectively. Mr. Fulmer, Mr. Romaine and Mr. Garner
also entered into Split-Dollar Agreements that provide a death benefit equal to
four times the executive's salary (subject to a cap) payable from proceeds of
existing Bank Owned Life Insurance Policies. The SERP agreements and
Split-Dollar Agreements for Mr. Fulmer, Mr. Garner and Mr. Romaine replace SERP
agreements and employment contracts that were previously in place for those
individuals.
Item 8.01. Other Events
Acceleration of Stock Option Vesting
The Compensation Committee of the Board of Directors of Tompkins Trustco, Inc.
("Tompkins") approved the accelerated vesting of all currently outstanding
unvested stock options, except for those options issued to executive officers of
Tompkins. The affected options were previously awarded to officers and employees
under the Company's 2001 Stock Ownership Plan. There is no change to the
Company's compensation philosophy and all other terms and conditions applicable
to such options, including the exercise prices and exercise periods, remain
unchanged. No options held by "named executive officers" are affected by the
vesting acceleration.
The decision to accelerate the vesting, which is effective on December 27, 2005,
was made primarily to reduce non-cash compensation expense that the Company
would have recorded in its income statement in future periods upon the adoption
of Financial Accounting Standards Board Statement No. 123R (Share-Based Payment)
in January 2006. The Compensation Committee believes it is in the best interest
of its shareholders to accelerate the vesting of these options to eliminate
compensation expense in future periods. It is expected that in 2006, Tompkins
will not be required to recognize approximately $434,000, net of taxes, as a
result of the accelerated vesting. Tompkins estimates that the accelerated
vesting will result in lower compensation expense related to stock options of
approximately $1.2 million, net of taxes, over the remaining vesting period of
the affected options. Since the Corporation currently accounts for its stock
options in accordance with Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees ("APB No. 25"), it will report the
eliminated future compensation expense related to the affected options in its
fourth quarter 2005 financial statements as a pro-forma disclosure.
As a result of this action, options to purchase up to 201,188 shares of common
stock become exercisable immediately. Without the acceleration, the Options
would have vested on dates ranging from April 18, 2006 to October 3, 2010. Based
on the Corporation's closing stock price of $45.43 price per share on the
approval date of the accelerated vesting, 100% of the total accelerated options
have exercise prices below the closing market price at the time of acceleration.
The average exercise price of the 201,188 options for which vesting has been
accelerated is $40.45 per share. Under the intrinsic value provision of APB No.
25, the Corporation will expense approximately $63,000 as a result of this
acceleration during the fourth quarter of 2005. Without the acceleration,
approximately 70,000 of the 201,188 options would have fully vested by September
30, 2006.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TOMPKINS TRUSTCO, INC.
Date: December 28, 2005 By: /s/ JAMES J. BYRNES
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James J. Byrnes
Chairman and CEO