One Chemung Canal Plaza
Elmira, New York 14901
Dear Fellow Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of Chemung Financial Corporation on Thursday, May 10, 2018Tuesday, June 6, 2023 at the Holiday Inn Elmira – Riverview,Chemung Canal Trust Company, located at 760 East Water Street,One Chemung Canal Plaza, Elmira, New York, at 2:00 p.m., Eastern Time. If you are unable to attend the meeting in person, we will also provide a telephone conference line for shareholders to listen to the meeting as disclosed under “General Voting Information.”
The Annual Meeting will begin with a review of the matters to be voted upon by the shareholders, as described in the accompanying Notice of Annual Meeting of Shareholders and related Proxy Statement. In addition to the formal business matters upon which shareholder action is required, we will report to you on the condition of your Company, what we accomplished in 2017,2022, and our plans for the future.
Your vote is important. We want to be sure that your shares are represented and that your vote is properly accounted for and, whether or not you plan to attend the Annual Meeting, we request that you vote your shares. You may vote your shares by telephone, by the Internet or by returning the encloseda requested proxy card, as further explained in the Proxy Statement. Please see the attached Notice of Annual Meeting of Shareholders and accompanying Proxy Statement for additional information regarding how to vote your shares.
We encourage you to review the following Proxy Statement for a better understanding of the Corporation, its compensation practices and corporate governance structure, as well as a summary of the matters that will be voted on this year. We have attempted to present the information contained in the Proxy Statement in a straightforward and easily understood manner. However, much of the information presented is required by law to be included in a certain format. We appreciate your taking the time to read our Proxy Statement and hope that we have addressed the issues that interest you, our shareholders. Thank you for your support and investment in Chemung Financial Corporation.
Sincerely,
Anders M. Tomson
President & Chief Executive Officer
One Chemung Canal Plaza
Elmira, New York 14901
April 27, 2023
NOTICE OF 2023 ANNUAL MEETING OF SHAREHOLDERS OF CHEMUNG FINANCIAL CORPORATION | ||
1.To elect four (4) directors for a term of three years expiring in 2021;2026 [Proposal 1];
3.To ratify the appointment of three directorsCrowe LLP as the Corporation's independent registered public accounting firm for a term of onethe fiscal year expiring in 2019;ending December 31, 2023 [Proposal 3]; and
| 4.To |
Our Annual Meeting will be held in person. We encourage all of our shareholders to participate in the meeting. If you plan to attend the Annual Meeting, itmeeting in person, please register your planned in-person attendance with us at least five (5) business days prior to the meeting by writing to Kathleen S. McKillip, Corporate Secretary, Chemung Financial Corporation, One Chemung Canal Plaza, P.O. Box 1522, Elmira, NY 14902-1522 or by email at kmckillip@chemungcanal.com. Pre-registration, as well as matching picture identification, is necessary to gain entrance to the secure area of our headquarters building where the meeting will be held. The in-person meeting will be held at 2:00 p.m. on Tuesday, June 6, 2023, at the Chemung Financial Corporation Headquarters Building, One Chemung Canal Plaza, Elmira, NY 14901. Parking is importantgenerally available in the parking lot, on street, or at the public garage located across from the headquarters on Baldwin Street. If you are unable to attend the meeting in person, we will also provide a telephone conference line for shareholders to listen to the meeting. Shareholders participating via telephone conference will not be able to vote, make comments or ask questions as this conference line is in listen-only mode. Instructions for how to participate via telephone conference in listen-only mode are disclosed under “General Voting Information.”
We have elected to take advantage of Securities and Exchange Commission (“SEC”) rules that your shares are represented atallow us to furnish proxy materials to certain shareholders over the Internet. We believe furnishing proxy materials to our shareholders over the Internet allows us to provide shareholders with the information they need, while lowering the costs of delivery and reducing the environmental impact of the Annual Meeting. Please voteIf you have received the Notice of Internet Availability, you will not receive a printed copy of the proxy materials unless you request it by completing, signing and mailing the enclosed Proxy Card in the postage-paid envelope provided, or vote by telephone or via the Internet following the instructions onfor requesting such proxy materials contained in the Proxy Card. If you do attendNotice of Internet Availability and summarized in the Annual Meeting, you may revoke your proxy and vote your shares in person.statement.
The Corporation’s Board of Directors (the "Board”) has fixed the close of business on March 12, 2018 has been fixedApril 10, 2023 as the record date for the determination of thedetermining shareholders entitled to notice of and to vote at the Annual Meeting. Only shareholders of record at the close of business on that date are entitled to vote at the Annual Meeting.Please see the “Additional Voting Information” section of the Proxy Statement for more information on how to vote.
Please ensure that your shares are represented at the 2023 Annual Meeting, as your vote is very important.
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Kathleen S. McKillip Corporate Secretary | ||||||||
CHEMUNG FINANCIAL CORPORATION, P.O. BOX 1522, ELMIRA, NEW YORK 14901 (607) 737-3711 IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR SHAREHOLDERS MEETING TO BE HELD JUNE 6, 2023 This proxy statement, the Corporation’s Annual Report on Form 10-K, and an abbreviated report for the twelve-month period are available at http://astproxyportal.com/ast/01079 | ||||||||
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ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JUNE 6, 2023
We are providing this proxy statement (the “Proxy Statement”) in connection with the solicitation of proxies on behalf of the Board of Directors
Availability of Proxy Materials
In accordance with rules adopted by the SEC, instead of mailing a printed copy of our materials to each shareholder of record, we furnished our proxy materials, including the Notice of Annual Meeting of Shareholders, this Proxy Statement, the Annual Report to Shareholders on Form 10-K for the year ended December 31, 2022, and an abbreviated report for the twelve-month period, by sending a notice of internet availability of proxy materials (the “Notice of Internet Availability”) and providing access to such documents over the formInternet. Generally, shareholders will not receive printed copies of Proxythe proxy materials unless they request them. Shareholders of record who prefer to receive a paper or e-mail copy of our proxy materials must follow the instructions below or as provided in the Notice of Internet Availability for requesting such materials. The Notice of Internet Availability only identifies the items to be voted on at the Annual Meeting accompany this Proxy Statement. The 2018 Proxy StatementMeeting. You cannot vote by marking the Notice of Internet Availability and 2017returning it.
To view ONLINE: visit http://astproxyportal.com/ast/01079 24 hours a day, seven days a week, through the conclusion of the Annual ReportMeeting. You will need your Notice of Internet Availability with your control number in order to Shareholders are available at http://www.astproxyportal.com/ast/01079.log in and view the proxy material.
To receive a PAPER or E-MAIL copy: you MUST REQUEST a paper or e-mail copy of the proxy materials. There is NO charge to receive a paper or e-mail copy of the materials. Please choose one of the following methods for your request prior to May 23, 2023:
(1)By Internet: | https://us.astfinancial.com/OnlineProxyVoting/ProxyVoting/RequestMaterials You may request mailed proxy materials or sign-up for e-mail delivery by clicking on “Sign-up For E-Delivery.” | ||||
| (2) By Telephone: | 1-888-Proxy-NA (1-888-776-9962) in the United States or 1-718-921-8562 from foreign countries from any touch-tone telephone. | ||||
| (3) (3) By E-Mail: | To request materials, please send an e-mail to help@astfinancial.com and include your control number (available on your Notice of Internet Availability) in the subject line. The body of the e-mail MUST include the following: •Your preference to receive printed proxy materials via mail or e-mail, and •If you would like this election to apply to the delivery of materials for all future shareholder meetings. | ||||
This Proxy Statement is provided in connection with the solicitation of proxies by the Board of Directors (the “Board”) for use at the Annual Meeting of Shareholders (the “Annual Meeting”) of Chemung Financial Corporation (“Chemung(the “Corporation” or “Chemung Financial” or “the Corporation”) to be held on Thursday, May 10, 2018Tuesday, June 6, 2023, at 2:00 p.m., at the Holiday Inn Elmira – Riverview, 760 East Water Street,One Chemung Canal Plaza, Elmira, New York.
The release of the Notice Regarding the Availability of Proxy Materials, the Notice of 2023 Annual Meeting of Shareholders, Entitled to Vote
To vote, please follow the record date there were 4,761,224 shares of common stock of the Corporation outstanding and entitled to vote. Each share of common stock of the Corporation is entitled to one vote on each matter that properly comes before the meeting.
Notice Regarding the Availability of Proxy Materials. The deadline for the telephone and Internet voting is 11:59 p.m. Eastern Daylight Time on May 9, 2018.
Please be sure that your shares are represented at the Annual Meeting by holders of common stock of the Corporation present in person, or represented bycompleting and submitting your proxy and entitled to vote on such election, meaning that the nominees for each directorship who receive the most votes will be elected. Only shares voted in favor of a nominee will be counted toward the achievement of a plurality. The advisory vote on the compensation of the NEOs Say-On-Pay and the frequency of the Say-On-Pay vote are non-binding (Proposals 2 and 3) and being provided as required by Rule 14a-21(a) of the Securities Exchange Act (the "Exchange Act"). The next advisory vote on frequency of the Say-On-Pay will occur at the 2023 Annual Meeting of the Shareholders. The Say-On-Pay vote requires the affirmative vote of a majority of the votes cast at the meeting. With respect to the frequency of the Say-on-Pay vote, the time period (every year, two years or three years) receiving the affirmative vote of a majority of the votes cast at the Annual Meeting will be the frequency approved by shareholders; however, if one of the time periods presented does not receive a majority of the votes, the Board has determined to treat the time period that receives the greatest number of votes as the time period selected by the shareholders.
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Vote Required and Board Recommendations
| Proposal | Item | Votes Required for Approval | Board of Directors Recommendation | Effect of Abstentions | Effect of Uninstructed Shares Held by Broker, Bank or Other Agent | ||||||||||||||||||||||
| Voting Proposal | Election of Directors | A plurality of votes cast by holders of shares of common stock of the Corporation entitled to vote | “FOR” | Not Voted | Not Voted | ||||||||||||||||||||||
| Voting Proposal | Approval, on | An affirmative vote of a majority of all votes cast by the holders of common stock of the Corporation entitled to vote | “FOR,” on an advisory basis, the Corporation’s executive compensation (Say-On-Pay) | Not Voted | Not Voted | ||||||||||||||||||||||
| Voting Proposal | Ratification of the | An affirmative vote of a majority of all votes cast by the holders of common stock of the Corporation entitled to vote | “FOR” the ratification of the appointment of the independent registered public accounting firm, Crowe | Not Voted | Discretionary Vote | ||||||||||||||||||||||
| Additional Voting Information | ||
Frequently Asked Questions:
Who is entitled to vote?
The Corporation has one class of Proxies
stock outstanding, common stock, $0.01 par value per share. At the close of business on the record date of April 10, 2023, there were 4,710,018 shares outstanding. The costholders of soliciting proxiesthese shares are considered shareholders of record and will be paidentitled to vote at the Annual Meeting or any adjournment thereof. Each of these shareholders will receive Notice of the Annual Meeting and instructions on how to vote their shares. Each share outstanding on the record date is entitled to vote. Shares held in treasury by the Corporation. In additionCorporation are not eligible to solicitations by mail, somevote and do not count toward a quorum.
What are “broker non-votes” and how are they voted at the Annual Meeting?
Shares of the directors, officersCorporation common stock can be held in (i) certificate form; (ii) by “book entry” at the Corporation’s transfer agent, American Stock Transfer & Trust Company, LLC; or employees(iii) in “street name” at a broker. When shares owned by you are held in street name, the broker will solicit your vote and provide the Corporation with the results of the Bankvote for all of the Corporation shares it holds in your account. On “routine” matters, if you as the beneficial owner of the shares do not provide the broker with voting instructions, the broker has the right to vote these shares in its own discretion. However, a broker is not allowed to exercise its discretion on voting shares held in street name on any “non-routine” matter. On such matters, these shares may conduct solicitationsonly be voted by the broker in accordance with express voting instructions received by the broker from you, the beneficial owner of the shares. The votes attached to such shares, that is, shares that may or may not be voted by a broker except in accordance with the owner’s voting instructions, are referred to as “broker non-votes.”
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This year, the only matter that will be considered a “routine” matter is Proposal 3, the ratification of the Corporation’s independent registered public accounting firm. Proposal 1, the election of directors, and Proposal 2, Say-On-Pay, are non-routine matters; therefore, shares held by a broker in street name cannot be voted on by the broker at his or her discretion for those proposals. If your shares are held at a broker, the Corporation urges you to provide voting instructions to your broker so that your vote may be counted.
How are Dividend Reinvestment Plan shares voted?
Shares owned by you in the Chemung Financial Corporation Dividend Reinvestment Plan (“DRIP”) on the record date will be combined with all other shares owned by you directly on that date and presented to you with voting instructions.
Shares owned by the Corporation employees in the 401K Profit Sharing, Savings and Investment Plan (the “401K Plan”) on the record date will be voted by the employees. Participants will receive a separate voting form from the transfer agent, American Stock Transfer and Trust Company, via email for this purpose. If a participant does not vote for his or her Corporation shares held in the 401K Plan, the participant’s shares will be voted for in accordance with the “mirror voting” provisions of the 401K Plan. Under the “mirror voting” provisions, such shares will be voted in a pro rata manner calculated to reflect most accurately the instructions received from those account holders who did vote.
What constitutes a quorum?
A quorum of shareholders is necessary to hold a valid meeting. A quorum will be present if shareholders holding at least a majority of the outstanding shares are present at the Annual Meeting in person or represented by proxy. Holders of 2,355,010 shares must be present in person or represented by proxy in order to have a quorum. Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted by your broker, bank or other nominee) or if you vote in person at the meeting. Abstentions and broker non-votes will be counted for purposes of whether a quorum is present. If there is no quorum, the holders of the majority of shares present at the Annual Meeting in person or represented by proxy may adjourn the Annual Meeting to another date.
How many votes are required for approval of Proposal 1?
The first item on the agenda is the election of four directors. The affirmative vote of the holders of a plurality of the shares of common stock present in person or represented by proxy at the Annual Meeting and eligible to vote on such matter is required for the election of each director. A “plurality” means receiving a higher number of votes for such position than any other candidate, up to the maximum number of directors to be chosen at the Annual Meeting. Because there are only as many nominees (four) as there are directors to be elected (four) at this year’s meeting, a director nominee is assured of being elected if he or she receives any “For” votes, regardless of how many negative votes (“Withhold Authority”) are cast for that director.
How many votes are required for approval of Proposal 2?
The second item on the agenda is the advisory approval of the executive compensation, Say-On-Pay. The affirmative vote of a majority of the shares of common stock present in person or represented by proxy at the Annual Meeting and voting on this proposal is required to approve, by advisory vote, the compensation paid to the NEOs. Abstentions and broker “non-votes” will not be counted in determining the number of votes cast and; therefore, will have no effect on the outcome of this vote. A proxy or ballot marked “Abstain” on Proposal 2 will not have the same effect as a vote “Against” such proposal. A proxy or ballot marked “Against” on Proposal 2 is an actual vote (and counts in the total number of votes cast on the proposal). Therefore, a vote “Against” Proposal 2 makes it more difficult to achieve shareholder advisory approval of Say-On-Pay than a vote to “Abstain.”
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How many votes are required for approval of Proposal 3?
The third item on the agenda is ratification of the independent registered public accounting firm, Crowe LLP. The affirmative vote of a majority of the shares of common stock present in person or represented by proxy at the Annual Meeting and voting on this proposal is required for ratification. Brokers will be eligible to vote on Proposal 3. A proxy or ballot marked “Abstain” on Proposal 3 will not have the same effect as a vote “Against” such proposal. A proxy or ballot marked “Against” on Proposal 3 is an actual vote (and counts in the total number of votes cast on the proposal). Therefore, a vote “Against” Proposal 3 makes it more difficult to achieve shareholder ratification than a vote to “Abstain.”
How do I vote?
If you are a shareholder of record as of the close of business on April 10, 2023, you will be entitled to vote at the Annual Meeting, or any adjournment or postponement thereof. You can ensure that your shares are voted properly by submitting your proxy by calling 1-800-776-9437 (United States & Canada) or 1-718-921-8500 (Internationally), visiting www.voteproxy.com or by completing, signing and dating the proxy card that will be provided to you upon request. Shareholders of record should receive a notice with voting instructions and the ability to request Proxy Materials. In order for your vote to count by proxy, it has to be received by 11:59 p.m., Eastern Time, on June 5, 2023. If your shares are held by a broker, bank or other agent, you must follow the voting instructions on the form you receive from your broker, bank or other agent. If you hold shares through a broker or bank or other agent and wish to vote in person at the Annual Meeting, you must obtain a “legal” proxy from your broker, bank or other agent.
May I revoke my proxy?
A shareholder may revoke a proxy at any time before it is voted by: (1) delivering written notice of revocation bearing a later date than the proxy to the Secretary of the Corporation at One Chemung Canal Plaza, Elmira, New York 14901; (2) submitting a later-dated proxy by mail, telephone or via the internet; or (3) by voting in person at the Annual Meeting. Attendance at the Annual Meeting will not by itself constitute a revocation of a proxy. To revoke your proxy, you must complete and submit a ballot at the Annual Meeting or submit a later-dated proxy. If your shares are registered in the name of your broker, bank or other agent, you should follow your broker’s, bank’s or other agent’s instructions regarding the revocation of proxies.
How are proxies being solicited?
Proxies are being solicited electronically, by telephone and by mail. Proxies may also be solicited without additional compensation by directors, officers and other employees personally, by telephone or other appropriate means without remuneration.means. The Corporation will bear all costs of proxy solicitation. The Corporation has retained Laurel Hill Advisory Group, LLC to assist in soliciting proxies, and has agreed to pay Laurel Hill Advisory Group, LLC a fee of $6,000 plus reasonable expenses for these services. The Corporation may also request nominees, brokerage houses, custodians and fiduciaries to forward soliciting material to beneficial owners of the Corporation’s common stock and will reimburse such intermediaries for their reasonable expenses in forwarding proxy materials.
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| Additional Shareholder Information | ||
Additional Matters for Consideration at the 2023 Annual Meeting
Please note the deadline for submission of proposals by shareholders for consideration at the 2023 Annual Meeting has passed. This applies to proposals that shareholders might wish to include in the Corporation’s Proxy Statement for the Annual Meeting (this Proxy Statement), proposals that shareholders might wish to include in their own proxy materials, which they would prepare, file with the SEC and disseminate to shareholders, or proposals that shareholders might wish to submit directly to a shareholder vote, in person, at the Annual Meeting. Therefore, no additional matters may be proposed by any shareholder for submission, or submitted, to a vote of the shareholders generally at the Annual Meeting, other than procedural issues such as adjournment, postponement or continuation. On such procedural issues, all shares represented at the Annual Meeting by proxy may be voted at the discretion of the attorneys-in-fact named in the proxies, to the extent permitted by law.
Proxy Cards Returned Without Specific Voting Instructions
Shares represented by properly executed proxies will be voted as directed. If you return a signed proxy card without specific voting instructions for any or all proposals, your shares will be voted “FOR” each of the Board’s four Director nominees on Proposal 1; “FOR” Say-On-Pay on Proposal 2; “FOR” ratification of the appointment of Crowe LLP on Proposal 3; and, “FOR” any other procedural matter properly submitted for shareholder consideration, in such manner as the shareholders’ attorneys-in-fact may determine, in their discretion, to be appropriate and in the best interests of shareholders generally.
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| Voting Proposal 1 - Election of Directors | ||
The Board is divided into three classes of directors, as equal in number as possible, with generally, one class to be elected each year for a term of three years. Following this year's one-year term elections, it is the Board's intent to re-balance the classes in 2019. The Board is not aware that any nominee named in this Proxy Statement will be unable or unwilling to serve as a director.
Shareholders will be entitled to elect four directors for a three-year term expiring at the 2021 Annual Meeting of Shareholders and three directors for a one-year term expiring at the 20192026 Annual Meeting of Shareholders, or until their respective successors havesuccessor has been duly elected and qualified. Unless authority to vote for the nominees is withheld, the shares represented by the enclosed Proxy Card, if properly executed and returned, will be voted “FOR” the election of the nominees. Should any nominee become unable to serve as a director, the persons named as proxies will vote for any alternative nominee who may be nominated by the Board. The Board has nominated for election Richard E. Forrestel Jr., Stephen M. Lounsberry III, Anders M. Tomson and G. Thomas Tranter Jr. to terms listed below.
All four nominees were unanimously recommended by the Nominating and Governance Committee to the Board, have been determined to be qualified, and have consented to serve if elected.
There are no arrangements or understandings between any director or director nominee and any other persons pursuant to which he or she was selected as a director or nominee. None of the directors are party to any agreement or arrangement that would require disclosure pursuant to Listing Rule 5250(b)(3) of NASDAQ®, where the Corporation’s common stock is listed. This rule requires disclosure of agreements or arrangements between a director and a third party related to the director’s service on the Board.
The Board is not aware that any nominee named in this Proxy Statement will be unable or unwilling to serve as a director. Under applicable law and the Corporation’s Bylaws, directors are elected by a plurality of the shares voted at the Annual Meeting, meaning the nominees receiving the most “For” votes will be elected.
•Vote Recommendation: Your Board recommends you vote “For” each of the Corporation’s four nominees:
Richard E. Forrestel Jr., Stephen M. Lounsberry III, Anders M. Tomson and G. Thomas Tranter Jr.
Director Nomination Process
The Nominating and Governance Committee is responsible for identifying and recommending to the full Board suitable nominees to serve as directors. Director nominees are selected based upon the following criteria:
•Individual Strengths: The candidate’s knowledge, skill, experience and business expertise.
•Board Composition: The objective of achieving certain characteristics for the Board as a
group, such as diversity of experience, skills, gender, race, ethnicity and
age are factors, among others, considered in this process.
The Nominating and Governance Committee reviews annually with the Board the composition of the Board as a whole and considers whether the Board reflects an appropriate balance of knowledge, experience, skills and expertise of diversity. Among other factors, the Committee looks for director nominees who know the communities and industries that the Corporation serves. The Committee utilizes the following process when identifying and evaluating the individuals that it recommends to the Board as director nominees:
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•The Committee reviews the qualifications of each candidate who has been properly recommended or nominated by the shareholders, as well as those candidates who have been identified by management, individual members of the Board or, if the Committee determines, a search firm.
•The Committee evaluates the performance and qualifications of individual members of the Board eligible for reelection at the annual meeting of shareholders.
•The Committee considers the suitability of each candidate, including the current members of the Board, in light of the current needs of the Board. In evaluating the suitability of the candidates, the Committee considers many factors including character, judgment, independence, business expertise, experience, other commitments, and such other factors as the Committee determines are pertinent.
•After such review and consideration, the Nominating and Governance Committee recommends that the Board select the slate of director nominees.
The Board will give substantial weight to the recommendations of the Nominating and Governance Committee in selecting director nominees. For information on how shareholders may participate in the director nomination process, see below.
Annual Meeting Shareholder Proposal Process
Shareholder Submissions of Director Nominees for the 2024 Annual Meeting
Any shareholder submission of a candidate for the Board to consider as one of its nominees for director at the 2024 Annual Meeting of Shareholders must be directed in writing not later than 120 days prior to the anniversary date on which the Corporation’s proxy statement was made available to shareholders in connection with the previous year’s annual meeting, or if such nomination is to be made at a meeting of shareholders other than an annual meeting, a reasonable time before the mailing of the Corporation’s proxy material to the Corporate Secretary, One Chemung Canal Plaza, Elmira, New York 14901, and must include: (i) the name and address of the shareholder proposing a nominee for consideration; (ii) the number of shares owned by the notifying shareholder and the date the shares were acquired; (iii) any material interest of the notifying shareholder in the nomination and a statement in support of the nominee with references; (iv) the name, age, address and contact information for each proposed nominee; (v) the principal occupation or employment of each proposed nominee; (vi) the number of shares of the Corporation’s common stock that are owned by the nominee as of the record date; (vii) detailed information of any relationship or understanding between the proposing shareholder and the nominee; (viii) detailed information of any relationship between the nominee and the Corporation within the last three years; and, (ix) other information regarding the nominee as would be required to be included in the Proxy Statement pursuant to Regulation 14A of the Exchange Act.
A shareholder may act directly to nominate his or her own director candidates at our 2024 Annual Meeting of Shareholders by following the procedures set forth in the subsection titled “Shareholder Proposals for Inclusion in the 2024 Proxy Statement.” Such direct nominations by shareholders not involving the Board’s nomination are subject to the deadlines and procedures described and set forth in our Bylaws and applicable rules of the SEC, including minimum advance notice to the Board.
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Nominee and Continuing Director Biographies
The biography of each of the nominees and continuing directors listed below containson the following page contain information regarding the individual’sindividuals’ service as a director, business experience, and other director positions, if any, held currently or at any time during the last five years, and individual experience, qualifications, and skills that contribute to the Board’s effectiveness as a whole. Age as of January 1, 2023.
Nominees for Election Term Expires 2021(term expiring in 2026, if elected)
Name of Beneficial Owner | Number of Shares Beneficially Owned | (1) | Percentage of Shares Beneficially Owned | ||||
| More than 5% Owner: | |||||||
| Chemung Canal Trust Company, Elmira, NY 14901 | 440,943 | (2) | 9.26 | % | |||
| Other Beneficial Owner: | |||||||
| Chemung Canal Trust Company Profit-Sharing, Savings and Investment Plan | 152,100 | (3) | 3.19 | % | |||
| Directors, Nominees and Named Executive Officers: | |||||||
| Larry Becker | 37,707 | (4) | * | ||||
| Ronald M. Bentley | 41,660 | * | |||||
| Bruce W. Boyea | 4,509 | (7) | * | ||||
| David M. Buicko | 500 | * | |||||
| David J. Dalrymple | 373,301 | (5) | 7.84 | % | |||
| Robert H. Dalrymple | 268,824 | (6) | 5.65 | % | |||
| Clover M. Drinkwater | 12,155 | * | |||||
| Denise V. Gonick | 0 | * | |||||
| Stephen M. Lounsberry III | 17,271 | (7) | * | ||||
| John F. Potter | 57,337 | (7)(8) | 1.20 | % | |||
| Jeffrey B. Streeter | 0 | * | |||||
| Richard W. Swan | 70,861 | (9) | 1.49 | % | |||
| Anders M. Tomson | 24,205 | (10) (13) | * | ||||
| G. Thomas Tranter Jr. | 20,216 | * | |||||
| Kevin B. Tully | 1,547 | (11) | * | ||||
| Thomas R. Tyrrell | 4,651 | * | |||||
| Louis C. DiFabio | 20,946 | (10) (13) | * | ||||
| Karl F. Krebs | 5,544 | (10) (13) | * | ||||
| Karen R. Makowski | 11,879 | (10) (13) | * | ||||
| Thomas W. Wirth | 9,183 | (10) (13) | * | ||||
| Directors and executive officers as a group (20 persons) | 982,297 | (12) | 20.63% | ||||
| *Less than 1% based upon 4,761,224 outstanding as of March 12, 2018 | |||||||
| (1) | Under Rule 13d-3 of the Exchange Act, a person is considered a beneficial owner of a security if he/she has or shares voting power or investment power over the security or has the right to acquire beneficial ownership of the security within 60 days from the date of this filing. "Voting Power" is the power to vote or direct the voting of shares. "Investment Power" is the power to dispose or direct the disposition of shares. | ||||||
| (2) | Held by the Bank in various fiduciary capacities, either alone or with others. Includes 440,943 shares held with shared voting power. There are 245,956 shares held with shared dispositive powers. Shares held in a co-fiduciary capacity by the Bank are voted by the co-fiduciary in the same manner as if the co-fiduciary were the sole fiduciary. Shares held by the Bank as sole trustee will be voted by the Bank only if the trust instrument provides for voting of the shares at the direction of the grantor or a beneficiary and the Bank actually receives voting instructions. | ||||||
 | Richard E. Forrestel Jr., age 65, has served as a director since October 2020. Since 1987, he has served as Treasurer of Cold Spring Construction Company, a highway construction firm. He is a CPA. Qualifications to serve on the Board include experience in accounting, auditing, strategic planning and his former experience serving on the board of directors of a community bank for 22 years where he gained experience and knowledge in all aspects of banking. | |||||||
 | Stephen M. Lounsberry III, age 69, has served as a director since 1995. Since 1981, he has served as President of Applied Technology Manufacturing Corp., a manufacturer of machined industrial and railroad component parts. He was formerly a commercial bank internal auditor and vice president of a community bank. Qualifications to serve on the Board include experience in management, marketing, sales, operation, strategic planning and his knowledge of all aspects of banking. | |||||||
 | Anders M. Tomson, age 55, has served as a director since 2016. Since December 2016, he has served as President & Chief Executive Officer (“CEO”) of the Corporation and the Bank. From 2015 through 2016, he served as President and Chief Operating Officer (“COO”) of the Bank and was responsible for Retail Client Services during that time. Formerly, from 2011 through 2015, he served as | |||||||
 | G. Thomas Tranter Jr., age 68, has served as a | |||||||
8
Continuing Directors (term expiring in 2024)
 | Raimundo C. Archibold Jr., age 64, has served as a director since February 2021. Since 2010, he has been a Managing Director of Schwartz Heslin Group, a business advisory and investment banking firm servicing family and entrepreneur-owned businesses. Prior to 2010, he worked for various investment banking firms servicing technology companies as well as financial institutions. Qualifications to serve on the Board include strategic planning, corporate finance and accounting, mergers and acquisitions, community development, and financing for over 30 years. | ||||
 | David J. Dalrymple, age 69, has served as a director since 1993, and is currently Chairman of the respective Boards of the Corporation and the Bank. Since 2014, he has served as President of Dalrymple Gravel and Contracting, a company specializing in producing construction materials for highway construction. He previously held the position of President of Dalrymple Holding Corporation from 1993 until 2014. He is the brother of Robert H. Dalrymple, also a director of the Corporation and Bank. Qualifications to serve on the Board include over 30 years of experience in business ownership, financial planning experience and strong managerial and organizational skills. | ||||
 | Denise V. Gonick, age 56, has served as a director since 2018. She is the founder of Cross Sound Concepts, a strategic advisory firm. From 2012 through 2019, she served as President & CEO of MVP Health Care, a family of companies offering a range of health benefit plans and options combined with leading-edge wellness programs that help reduce health risks and control health care costs. Prior to that she was the Chief Legal Officer and Corporate Secretary of MVP Health Care. Qualifications to serve on the Board include seven years as CEO of a health insurer, 17 years corporate legal experience, leadership, transactions, strategic planning, executive management, financial management, compliance and government relations. | ||||
 | Joseph F. Meade IV, age 42, has served as a director since 2022. Since 2018, he has served as President & CEO of Mercury Aircraft Inc., the parent company for several manufacturing companies including Mercury Minnesota, Inc. and Mercury Aircraft de Mexico. Mr. Meade is the son-in-law of G. Thomas Tranter Jr., also a director of the Corporation and Bank. Qualifications to serve on the Board include 20 years of experience in manufacturing, administration, international management and ownership, including financial and strategic planning. | ||||
 | Thomas R. Tyrrell, age 72, has served as a director since 2014. Since 2014, he has served as Vice President of NFP Corp. (formerly Rose & Kiernan, Inc.), a general insurance agency in the | ||||
9
Continuing Directors (term expiring in 2025)
 | Ronald M. Bentley,age 70, has served as | ||||
 | David M. Buicko, age 69, has served as a director since 2018. Since 2016, he has served as President & CEO of Galesi Group, a diverse real estate company with a commitment to investing in | ||||
 | Robert H. Dalrymple, age 72, has | ||||
 | Jeffrey B. Streeter, age 55, has served as a director since 2018. Since 2002, he has served as owner and | ||||
10
Director Compensation
The Compensation Committee periodically reviews and is responsible for the design, implementation and administration of the Corporation’s compensation program for members of the Board of Directors and makes recommendations to the Board with respect to the type and amounts of compensation payable to the directors for service on the Boards of the Corporation, Bank and respective board committees.
Each non-employee director of the Corporation and Bank receives a flat annual retainer fee of $11,500; plus, a supplemental retainer fee for the Chair of the Corporation's and Bank's Board and Chair of the Corporation's and Bank's Committees and is based upon the number of meetings held during the year. This fee is paid quarterly and trued-up in January of the following year based upon the number of meetings held during the prior year. Each non-employee director serving as Chair of the Corporation’s and Bank’s Board, or Audit Committee, receives an additional supplemental annual retainer commensurate with the increased responsibility accompanying such position. All non-employee directors receive a flat fee for attending meetings of the Corporation’s and Bank’s Board and committees. Mr. Tomson received no compensation for his service as a director in 2022.
The following table presents the various cash fees paid to non-employee directors in 2022 for their service on the Corporation’s and Bank’s Boards and committees.
BASIC ANNUAL RETAINER FEES(1) | |||||
| ($) | |||||
| Basic Annual Retainer | 11,500 | ||||
| Chair of the | 7,750 | ||||
| Chair of Audit Committee Supplemental Retainer | 2,875 | ||||
| Chair of Audit Committee Chair Fees | 1,250 | ||||
| Chair of Loan Committee Chair Fees | 3,000 | ||||
| Chair of Trust Committee Chair Fees | 1,500 | ||||
| Chair of Compensation Committee Chair Fees | 1,000 | ||||
| Chair of Nominating and Governance Committee Chair Fees | 750 | ||||
| Chair of Asset Liability Committee Chair Fees | 1,000 | ||||
MEETING FEES(2) | |||||
| ($) | |||||
| Board of Directors | 500 | ||||
| Chair of the Board | 500 | ||||
| Committees of the Board | 500 | ||||
| Chair of Committees | 500 | ||||
(1) Annual Retainer fees are paid on a quarterly basis, based on the position held on the Corporation's and Bank's Board and Committee and trued-up in January of the following year. | |||||
(2) Based on per meeting attendance. | |||||
11
The Directors’ Deferred Fee Plan allows non-employee directors of the Corporation or the Bank to elect to defer receipt of fees payable to the director for service as a member of the Board of Directors of the Corporation or the Bank. At the election of a director, the deferred fees are converted into units and allocated to a unit value account, which appreciates or depreciates as would an actual share of common stock of the Corporation. A director’s unit value account is credited with declared dividends pursuant to a formula described in the Plan. The units are paid to the director in the form of common stock of the Corporation. The common stock of the Corporation payable under the Directors’ Deferred Fee Plan is paid to the director either at a specified age or time elected by the director, at termination of the director’s service with the Corporation and/or Bank, or upon the occurrence of a change in control as defined in the Directors’ Deferred Fee Plan. The number of shares of common stock of the Corporation payable to a director with a unit value account under the Plan represents, at all times, a general unfunded obligation of the Bank, and each director participating in the Directors’ Deferred Fee Plan will be a general creditor of the Bank with respect to the value of his or her unit value accounts. Currently, there is one non-active participant in the Directors’ Deferred Fee Plan.
2022 Director Compensation Table
The following Director Compensation Table summarizes all compensation paid by the Corporation and Bank to the non-employee directors of the Corporation and Bank for the fiscal year ended December 31, 2022.
Directors | Fees Earned or Paid in Cash | Number of Shares Awarded (1) | Stock Awards(2) | All Other Compensation | 2022 Total Compensation | |||||||||||||||
| ($) | (#) | ($) | ($) | ($) | ||||||||||||||||
| Raimundo C. Archibold Jr. | 28,500 | 615 | 28,013 | 572 | (7) | 57,085 | ||||||||||||||
Larry H. Becker(5) | 15,250 | 615 | 28,013 | 1,072 | (4)(7) | 44,335 | ||||||||||||||
| Ronald M. Bentley | 32,500 | 637 | 29,015 | 2,760 | (3)(4)(7) | 64,275 | ||||||||||||||
| David M. Buicko | 34,625 | 706 | 32,158 | 657 | (7) | 67,444 | ||||||||||||||
| David J. Dalrymple | 50,000 | 895 | 40,767 | 832 | (7) | 91,599 | ||||||||||||||
| Robert H. Dalrymple | 35,000 | 703 | 32,022 | 654 | (7) | 67,676 | ||||||||||||||
| Richard E. Forrestel Jr. | 31,000 | 615 | 28,013 | 572 | (7) | 59,585 | ||||||||||||||
| Denise V. Gonick | 29,000 | 615 | 28,013 | 1,050 | (3)(7) | 58,063 | ||||||||||||||
| Stephen M. Lounsberry III | 33,500 | 637 | 29,015 | 592 | (7) | 63,107 | ||||||||||||||
Joseph F. Meade IV(6) | 6,875 | — | — | — | 6,875 | |||||||||||||||
| Jeffrey B. Streeter | 31,000 | 615 | 28,013 | 572 | (7) | 59,585 | ||||||||||||||
| G. Thomas Tranter Jr. | 34,000 | 648 | 29,516 | 603 | (7) | 64,119 | ||||||||||||||
| Thomas R. Tyrrell | 33,500 | 637 | 29,015 | 592 | (7) | 63,107 | ||||||||||||||
(1) Represents the number of shares of the Corporation's unvested common stock awarded to each Director for the fiscal year ending December 31, 2022, which will fully vest on the first anniversary of the grant date. Any fractional shares are rounded up to the next whole share. | ||||||||||||||||||||
(2) Represents the fair value of awards granted on January 27, 2022. The assumptions used to determine the value of the stock awards are described in Note 14 of the Corporation's audited consolidated financial statements contained in the Corporation's Form 10-K. | ||||||||||||||||||||
(3) Represents mileage paid to certain directors to attend Board and committee meetings during 2022. | ||||||||||||||||||||
(4) Represents Advisory Board fees earned during 2022. | ||||||||||||||||||||
(5) Mr. Becker retired from the Board on June 7, 2022. | ||||||||||||||||||||
(6) Mr. Meade joined the Board in September 2022 and was not yet entitled to restricted stock dividends. | ||||||||||||||||||||
(7) Includes dividends paid on restricted stock in 2022. | ||||||||||||||||||||
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| Voting Proposal 2 - Advisory Approval of the Corporation's 2022 Executive Compensation ("Say-On-Pay") | ||
Summary and Board Recommendation
Proposal 2 is a proposal to approve, on an advisory basis, the Corporation’s 2022 executive compensation (“Say-On-Pay”), as described in the “Compensation Discussion and Analysis” section. This vote is not intended to address a specific item of compensation, but rather the overall compensation of the Named Executive Officers (“NEOs”) and the philosophies, policies and practices as described in this Proxy Statement. Say-On-Pay is an advisory proposal, which means that the vote on executive compensation is not binding on the Corporation, Board or the Compensation Committee of the Board.
At the 2022 Annual Meeting, shareholders voted to approve the compensation program of the Corporation’s NEOs for the fiscal year ended December 31, 2021. After a comprehensive market review and in light of strong stockholder support, we concluded that no substantial changes to our executive compensation program were required. Approval of Say-On-Pay will require the affirmative vote of the holders of a majority of the shares of common stock present or represented by proxy at the Annual Meeting and voting on this proposal.
•Vote Recommendation: Your Board recommends you vote “For,” on an advisory basis, the Corporation’s executive compensation (Say-On-Pay).
Say-On-Pay Details
The Compensation of the Corporation’s NEOs is disclosed in the “Compensation Discussion and Analysis,” the summary compensation table, and the other related tables and narrative disclosures contained elsewhere in this Proxy Statement. As discussed in those disclosures, the Board believes that our executive compensation philosophy, policies, and practices provide a strong link between each NEO’s compensation and our short and long-term performance. The objective of our executive compensation program is to provide compensation which is competitive with our peers of comparable size and business model based on our performance, and aligned with the long-term interest of our shareholders.
•Change in Control Agreements: Consistent with shareholder advisory guidance, the Corporation’s executive change in control agreements provide for “double trigger” severance benefits upon the NEO’s qualifying termination event in connection with a change in control.
•Balanced: The Corporation’s bonus program is a balanced program based on predefined goals of both the Corporation and the individual executive’s performance.
•Annual Review: The annual bonus is based on predefined goals that are reviewed and updated yearly and are set to encourage long-term profitability within accepted conservative risk parameters.
•Shareholder Aligned: Long-term equity-based incentives, such as restricted stock awards, recognize and encourage an alignment of executives’ goals over the long term with those of the shareholders. Awards under the Restricted Stock Plan provide for vesting over a five-year period.
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2021 Equity Incentive Plan
Our shareholders approved the Chemung Financial Corporation 2021 Equity Incentive Plan (the "2021 Equity Incentive Plan") on June 8, 2021. The purpose of the 2021 Equity Incentive Plan is to promote the long-term financial success of the Corporation, and its subsidiaries, including the Bank by providing a means to attract, retain and reward individuals who contribute to such success and to further align their interests with those of the Corporation's stockholders through the ownership of Corporation common stock. The 2021 Equity Incentive Plan will remain in effect as long as any awards under it are outstanding provided, however, that no awards may be granted under the 2021 Equity Incentive Plan after the day immediately prior to the ten-year anniversary of the Effective Date. No further awards will be granted under the Chemung Financial Corporation 2014 Omnibus Plan, including its component plans (the "2014 Omnibus Plan"), and such plan will remain in existence solely for the purpose of administering outstanding grants thereunder. Employees and directors of the Corporation or its subsidiaries are eligible to receive awards under the 2021 Equity Incentive Plan, except that non-employee directors may not be granted incentive stock options.
Subject to permitted adjustments for certain corporate transactions, the maximum number of shares of Corporation common stock that may be delivered to participants under the 2021 Equity Incentive Plan is equal to 170,000 shares of Corporation common stock (the “Share Limit”). Shares of Corporation common stock subject to the Share Limit may be issued pursuant to grants of stock options, restricted stock awards or restricted stock units. The Share Limit is reduced, on a one-for-one basis, for each share of common stock subject to a stock option, restricted stock award or restricted stock unit.
If any award granted under the 2021 Equity Incentive Plan expires, terminates, is canceled or is forfeited without being settled or exercised or is settled without the issuance of shares of common stock, shares of the Corporation common stock subject to such award will be made available for future grant under the 2021 Equity Incentive Plan. If any shares are surrendered or tendered to pay the exercise price of a stock option, such shares will not again be available for grant under the 2021 Equity Incentive Plan. In addition, shares of Corporation common stock withheld in payment for purposes of satisfying tax withholding obligations with respect to an award do not become available for re-issuance under the 2021 Equity Incentive Plan.
The 2021 Equity Incentive Plan is administered by the members of the Corporation’s Compensation Committee who are “Disinterested Board Members,” as defined in the 2021 Equity Incentive Plan. The Compensation Committee has full and exclusive power within the limitations set forth in the 2021 Equity Incentive Plan to make all decisions and determinations regarding: (i) the selection of participants and the granting of awards; (ii) establishing the terms and conditions relating to each award; (iii) adopting rules, regulations and guidelines for carrying out the 2021 Equity Incentive Plan’s purpose; and (iv) interpreting the provisions of the 2021 Equity Incentive Plan and any award agreement. The 2021 Equity Incentive Plan also permits the Committee to delegate all or part of its responsibilities and powers to any person or persons selected by it.
Set forth below is information as of December 31, 2022 regarding equity compensation plans categorized by those plans that have been approved by shareholders and those plans that have not been approved by shareholders.
| Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options and Rights | Weighted Average Exercise Price | Number of Securities Remaining Available for Issuance Under Plan(1) | ||||||||
| (#) | ($) | (#) | |||||||||
| Equity compensation plans approved by shareholders | -- | -- | 116,029 | ||||||||
| Equity compensation plans not approved by shareholders | -- | -- | -- | ||||||||
| Total | -- | -- | 116,029 | ||||||||
(1) Represents the number of shares that | |||||||||||
14
| Voting Proposal 3 – Ratification of the Selection of Crowe LLP as the Corporation’s | |||||||||
Summary and Board Recommendation
The Audit Committee of the Corporation has selected the independent registered public accounting firm, Crowe LLP (“Crowe”), as the Corporation’s independent registered public accounting firm for the year ending December 31, 2023. The selection process included a thorough review of Crowe’s performance in prior years, the quality and expertise of the Crowe management team, its understanding and expertise in the industries in which the Corporation operates, the appropriateness of the fees charged, and its familiarity with the Corporation’s internal controls and accounting policies and practices.
Although shareholder approval of the appointment of Crowe is not required, the Board believes that it is important to give shareholders an opportunity to ratify the decision of the Audit Committee. If the selection is not ratified, the Audit Committee will consider the shareholders’ views in future retention of the Corporation’s independent registered public accounting firm.
A representative of Crowe is expected to be present at the Annual Meeting and will have the opportunity to make a statement if desired and may be available to respond to appropriate questions.
Ratification of the selection of Crowe will require the affirmative vote of the holders of a majority of the shares of common stock present in person or represented by proxy at the Annual Meeting and voting on this proposal.
•Vote Recommendation: Your Board recommends you vote “For” the ratification of the independent registered public accounting firm, Crowe LLP, as the independent registered public accounting firm of the Corporation for the year ending December 31, 2023.
15
| Audit Committee Report | ||
In accordance with its written charter adopted by the Board of Directors, the Corporation’s Audit Committee assists the Board in fulfilling its oversight responsibilities for the integrity of the Corporation’s financial statements, systems of internal accounting and financial controls, compliance with legal regulatory requirements, and the independent auditor’s qualifications, independence and performance as well as the performance of its internal audit function. The members of the Audit Committee meet the independence requirements of applicable laws and rules as determined by the Board. Five meetings of the Audit Committee were held during 2022. The charter was approved in February 2023 and can be viewed on the Bank’s website at: https://s25.q4cdn.com/655202364/files/doc_downloads/governance/2023/04/2023-2-14-Audit-Committee-Charter.pdf
On March 21, 2023, the Audit Committee appointed the independent registered public accounting firm, Crowe LLP, as the Corporation’s independent auditors for the year ending December 31, 2023.
The Audit Committee has reviewed and discussed with management and with Crowe LLP, the Corporation’s audited consolidated financial statements for the year ended December 31, 2022. The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC; and, received the written disclosures and the letter from the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and have discussed with the independent registered public accounting firm their independence from the Corporation. The Audit Committee also discussed the quality and adequacy of the Corporation’s internal controls with management and the independent auditors. In addition, the Audit Committee reviewed with Crowe LLP their audit plans, audit scope and identification of audit risks.
Based upon the above-mentioned reviews and discussions with management and Crowe, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2022 to be filed with the Securities and Exchange Commission.
| The Audit Committee: | |||||||||||
| David M. Buicko, Chairman | Jeffrey B. Streeter | ||||||||||
| David J. Dalrymple | G. Thomas Tranter Jr. | ||||||||||
| Richard E. Forrestel Jr. | Thomas R. Tyrrell | ||||||||||
This foregoing Audit Committee Report is not “soliciting material,” is not deemed “filed” with the SEC, and shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing of ours under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, except to the extent we specifically incorporate this report by reference.
16
Fees Paid to Independent Registered Public Accounting Firm
| Type of Service | Fiscal Years Ended December 31, | ||||||||||
| 2022 | 2021 | ||||||||||
| ($) | ($) | ||||||||||
| Audit Fees | 368,500 | 335,000 | |||||||||
| Audit-Related Fees | 75,000 | 30,000 | |||||||||
| Tax Fees | — | — | |||||||||
| Captive Insurance Subsidiary Fees | 23,575 | 23,050 | |||||||||
| All Other Fees | — | — | |||||||||
| Total Fees | 467,075 | 388,050 | |||||||||
The audit fees were for professional services rendered for the audit of the Corporation’s annual financial statements, the independent auditor’s report on internal control over financial reporting, review of financial statements included in the Corporation’s Quarterly Reports filed on Form 10-Q, additional audit procedures and testing related to CECL implementation, and services that are normally provided by Crowe LLP, in connection with statutory and regulatory filings or engagements.
The $75,000 in Audit-Related Fees for 2022 consisted of consulting and auditing services related to the implementation of ASC 326 (CECL). This work remains ongoing and we expect additional fees in 2023. The $30,000 in Audit-Related Fees for 2021 consisted of $20,000 for additional review of new accounting software and the $10,000 for services related to the consent issued with the filing of the Form S-8 dated June 21, 2021 with the SEC.
The Captive Insurance Subsidiary Fees for 2022 and 2021 were for audit and tax services.
Audit Committee Pre-Approved Policies and Procedures
The Audit Committee pre-approves the audit and permissible non-audit services provided by the independent auditors. These services may include audit services, non-audit services, audit-related services, tax services and other services. Crowe LLP and management periodically report to the Audit Committee regarding the extent of services provided by the independent auditor in accordance with this pre-approval, and the fees for the services performed to date. The Audit Committee may also pre-approve additional services on a case-by-case basis. In the period between meetings of the Audit Committee, the Audit Committee Chair or a delegated sub-committee is authorized to pre-approve such services provided that such pre-approval is ratified by the Audit Committee at its next regularly-scheduled meeting.
17
| Corporate Governance | ||
The business of the Corporation is managed under the direction of its Board of Directors in accordance with the laws of New York State. The Board serves as the ultimate decision-making body of the Corporation, except for those matters reserved to or shared with the shareholders. The Board selects and oversees the members of senior management, who are charged by the Board with conducting the business of the Corporation. The directors are responsible to exercise their business judgment as they reasonably believe will further the long-range best interests of the Corporation, its shareholders and other stakeholders. The Board believes that the success of the Corporation depends on its financially sound performance to further its strategic objectives and its adherence to high standards of business ethics focusing on the letter and spirit of regulatory and legal mandates. At least once a year, the Board will take an active role in reviewing strategic planning of the Corporation and will exercise oversight over the implementation of strategic planning.
The Nominating and Governance Committee of the Board is responsible for ensuring that the Board is properly constituted to meet its fiduciary obligations to shareholders and the Corporation has and follows appropriate governance standards. This assessment includes whether individual directors or nominees qualify as independent under applicable laws and guidelines, as well as consideration of diversity, age, skills and experience of the directors as a group in the context of the needs of the Board. A majority of the directors must meet the criteria for general Board independence as required and defined by NASDAQ®.
The Board’s membership is divided into three classes, as equal in number as possible, with one class generally to be elected each year by the Corporation’s shareholders for a term of three years. The Nominating & Governance Committee identifies and recommends to the full Board suitable candidates for nomination for Director, including, when appropriate, incumbent directors. In making its recommendations, the Nominating and Governance Committee will consider any proposals it properly receives from shareholders for director nominees. Shareholders may propose a director candidate for consideration by the Nominating and Governance Committee by following the rules described under the heading “Shareholder Submissions of Director Nominees for the 2024 Annual Meeting” in the Additional Shareholder Information section. The Nominating and Governance Committee’s recommendations of candidates for nomination will be based on its determination as to the suitability of the particular individuals, and the slate as a whole, to serve as directors of the Corporation and Bank, taking into account the criteria described in the “Director Nomination Process” in the “Voting Proposal 1 – Election of Directors” section.
The Board does not believe that directors should be subject to term limits. While term limits may in some cases enhance the flow of fresh ideas and viewpoints in the boardroom, they may also result in the loss of knowledgeable and experienced directors, whose insights into the Corporation and its operations typically expand and deepen over time. When evaluating whether incumbent directors should be re-nominated, the Nominating and Governance Committee will consider, in addition to the incumbent’s prior performance on the Board, each such director’s attendance record for meetings of the Corporation’s Board, its subsidiary bank’s Board and committees on which the director serves, as applicable, and the same general qualities and attributes, such as suitability, personal character, integrity, general experience and background that it applies to new candidates for director. Additionally, the Corporation’s Bylaws provide that directors will retire from the Board at the first Annual Meeting of Shareholders held on or after they attain the age of 75. The Board may waive the limitation in its discretion or establish a greater age in the future.
18
Board Organization and OperationLeadership Structure
Chemung Financial is managed under the direction of its Board. All members of the Corporation’s Board also serve on the Board of the Bank. The Board establishes policies and strategies and regularly monitors the effectiveness of management in carrying out these policies and strategies. Members of the Board are kept informed of the Corporation’s business activities through discussions with key members of the management team, by reviewing materials provided to the Board and by participating in meetings of the Board and its committees. The Board currently consists of sixteenthirteen members. The Corporation separates the roles of CEO and Chairman of the Board, which provides the appropriate balance between strategy development and independent oversight of management and a higher degree of independence and transparency between the Board and management. The CEO is familiar with the Corporation’s business and industry and is responsible for identifying strategic priorities and leading the discussion and execution of strategy. The Chairman of the Board presides at all executive sessions of the Board, facilitating teamwork and communication between management and the Board, while providing guidance to the CEO. Mr. David J. Dalrymple served as Chairman of the Board in 2017.
2022. The Corporation’s Governance Guidelines requireCorporation believes that oversight by the Chairman of the Board, consistcombined with the Corporation’s overall corporate governance structure, policies and practices as outlined earlier, maximizes the effectiveness of a majority of independent directors. Based upon a review of the responses of the directors to questions regarding affiliations, compensation history, employment, and relationships with family members and others, the Board determined that all directors except for Messrs. Bentley and Tomson meet the independence requirements of applicable laws and rules and NASDAQ listing requirements as determined by theleadership. The Nominating and Governance Committee. Committee and the independent directors will continue to evaluate the Board’s leadership structure as part of its regular reviews of corporate governance and succession planning to ensure that it remains best suited for the Corporation and shareholders.
Board Diversity Matrix (as of December 31, 2022)
The following relationships were reviewed for independence: 1) Mr. Boyea is Chairman, President & CEO of Security Mutual Life Insurance Company (“Security Mutual”) from which the Bank leased its branch located at 127 Court Street, Binghamton, New York under a lease agreement through June 2030. In July 2017, Security Mutual sold its interestbelieves in the propertybenefits that diversity brings to an unrelated third party from which the Bank continues to lease the property. Annual rent paid to Security Mutual in 2017 totaled $79,000. The Board also considered loans participations sold to Security Mutual. CFS offers insurance products to its customers through Security Mutual. CFS earned income of less than $1,000 related to these insurance products during the year ended December 31, 2017. The Bank purchased insurance products from Security Mutual in the amount of $34,000 during the year ended December 31, 2017. 2) Ms. Drinkwater is a partner in the law firm of Sayles and Evans and the Bank utilized legal services from the firm totaling $17,000 during 2017. 3) Mr. Buicko is a member of Westcott Road Development, LLC from which the Bank leases its branch located at Two Rush Street, Schenectady, New York, under a lease agreement through February 2033 with monthly rent expense totaling $6,200 beginning in January 2017. A copy of the Corporate Governance Guidelines can be viewed on the Bank's website at:
| Total Number of Directors: 13 | ||||||||||||||
| Female | Male | Non-Binary | Did Not Disclose | |||||||||||
| Part I: Gender Identity: | ||||||||||||||
| Directors | 1 | 8 | — | 4 | ||||||||||
| Part II: Demographic Background | ||||||||||||||
| African American or Black | — | — | — | — | ||||||||||
| Alaskan Native or Native American | — | — | — | — | ||||||||||
| Asian | — | — | — | — | ||||||||||
| Hispanic or Latinx | — | — | — | — | ||||||||||
| Native Hawaiian or Pacific Islander | — | — | — | — | ||||||||||
| White | 1 | 7 | — | — | ||||||||||
| Two or More Races or Ethnicities | — | 1 | — | — | ||||||||||
| LGBTQ+ | — | — | — | — | ||||||||||
| Did Not Disclose Demographic Background | 4 | |||||||||||||
19
Anti-Hedging Policy
The Corporation’s anti-hedging and anti-pledging provisions are covered in the Corporation’s Insider Trading Policy. Under the policy, directors and executive officers are prohibited from engaging in short sales of Corporation stock and from engaging in transactions in publicly-traded options, such as puts, calls and other derivative securities based on which heCorporation stock including any hedging, monetization or she served.similar transactions designed to decrease the risks associated with holding Corporation stock. In addition, directors and executive officers are prohibited from pledging Corporation stock as collateral for any loan or holding Corporation stock in a margin account.
Board Committees
The Board has four standing committees of the Corporation’s Boardwhose membership and responsibilities must meet certain NASDAQ® and SEC requirements. These standing committees are the Executive, Audit, Enterprise Risk, Nominating and Governance and Compensation and Personnel andCommittees (collectively, the “Committees”). The Board may from time to time establish or maintain additional committees, as it deems necessary or appropriate, the membership of which may include one or more directors, as well as non-directors. One such additional committee that the Board has established is the Executive Committee, which is described later in this section.
Committee Membership
The Nominating and Governance Committee.Committee regularly reviews committee membership and makes recommendations for changes on an annual basis, with consideration given to the qualifications and preferences of individual directors and the specific requirements, if any, of NASDAQ® and the SEC for service on such Committees. The Board gives consideration to rotating committee members periodically, to the extent feasible under applicable laws and regulations governing the membership requirements of the Committees, but the Board does not believe rotation should be mandated as policy, nor that service by a director on a committee should be subject to term limits. All members of the four standing Committees are independent directors, as defined (and generally required) under applicable law, rules and regulations (see “Director Independence” later in this section for more detail). A table showing the current members of each of the standing Committees follows:
| Director | Audit Committee | Enterprise Risk Committee | Compensation & Personnel Committee | Nominating & Governance Committee | ||||||||||
| Raimundo C. Archibold Jr. | ü | |||||||||||||
| Ronald M. Bentley | ü | |||||||||||||
| David M. Buicko | Chair | |||||||||||||
| David J. Dalrymple | ü | Chair | ü | ü | ||||||||||
| Robert H. Dalrymple | ü | ü | ||||||||||||
| Richard E. Forrestel Jr. | ü | ü | ||||||||||||
| Denise V. Gonick | ü | ü | ü | |||||||||||
| Stephen M. Lounsberry III | ü | Chair | ü | |||||||||||
| Joseph F. Meade IV | ü | |||||||||||||
| Jeffrey B. Streeter | ü | ü | ||||||||||||
| G. Thomas Tranter Jr. | ü | ü | ü | |||||||||||
| Thomas R. Tyrrell | ü | ü | Chair | |||||||||||
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Each of the four standing Committees has its own charter that sets forth the purposes, goals and responsibilities of the committee, servesas well as the qualifications for membership, procedures for appointing members, structure and operations, and policies for Board oversight of the committee. Each has the power to hire, at the Corporation’s expense, independent accounting, compensation, financial, legal or other consultants, as the members may deem necessary and appropriate, consistent with the overall authority to retain such advisors as set forth in a dual capacitythe committee’s charter, including budgeting or professional conditions and limitations. Management approval will not be required for engagement of consultants, although management normally will be advised and consulted prior to any such engagement to avoid, among other things, conflicts of interest. The charters of each committee can be viewed on the Bank’s website at: https://chemungfinancial.q4ir.com/corporate-information/documents/default.aspx
Committee Descriptions
A description of each of the four standing Committees, as well as the Executive Committee, forfollows:
•Audit Committee: Mr. Buicko is the Corporation and the Bank. The Executive Committee may, during the interval between Board meetings, exercise allChair of the authority of the Board, except those powers that are expressly reserved to the Board under law or the Corporation’s Bylaws. In 2017, members of the Executive Committee included Messrs. D. Dalrymple (Chair), Bentley, R. Dalrymple, Swan, Tomson and Ms. Drinkwater. There was one meeting of the Executive CommitteeAudit Committee; he has served in 2017.
•Compensation and Personnel Committee: The primary responsibilities Mr. Lounsberry is the Chair of the Compensation and Personnel Committee (the “Compensation Committee”) are; he has served in this role since 2012. The Compensation Committee’s primary responsibilities include to exercise authority, in its sole discretion, to retain and terminate, or obtain the advice of any adviser to be used to assist it in the performance of its duties, but only after taking into consideration factors relevant toin the adviser’s independence from management as specified in NASDAQNASDAQ® Listing Rule 5605(d)(3), or any successor provision thereto; dischargethereto, exercise authority or submit to the Board’s dutiesDisinterested Board Members for ratification (depending on the terms of the compensation plan) relating to the compensation of the executive officers, including reviewingto review and determiningdetermine the compensation of the CEO and the other named executive officers; Named Executive Officers, review the Corporation’s compensation policiesplans and programs affecting other employees;employees, review management’s proposals for the election and promotion of officers;officers, monitor compensation trends; and, select a peer group of companies against which to compare the Corporation’s compensation for the CEO, executive officers and chief auditor. The Compensation Committee'sCommittee’s oversight of ourthe Bank’s incentive compensation plans, includesincluding setting corporate measures and goals consistent with principles of safety and soundness, approvingmake recommendations to the Board relating to awards and administering long-term equity awards. Director compensation is established by the Corporation’s Board of Directors upon the recommendation of the Compensation Committee. The Compensation Committee met fourfive times in 2017. The members of2022. For additional information, see the “Director Compensation Committee meet the independence requirements of applicable laws and rules as determined by the Board. In 2017, members of the Compensation Committee included Messrs. Lounsberry (Chair), D. Dalrymple, R. Dalrymple, Swan and Tranter. A copy of the Compensation and Personnel Committee Charter can be viewed on the Bank’s website at:” section.
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•Nominating and Governance Committee: The Nominating and Governance Committee consists of Ms. Drinkwater (Chair) and Messrs. D. Dalrymple, R. Dalrymple, Lounsberry, Potter and Tyrrell. The Nominating and Governance Committee met four times in 2017. The membersMr. Tyrrell is the Chair of the Nominating and Governance Committee meet the independence requirements of applicable laws and rules as determined by the Board. In general, theCommittee; he has served in this role since 2019. The Nominating and Governance Committee overseesCommittee’s primary responsibilities include oversight of the Corporation’s corporate governance matters on behalf of the Board and is responsible for the identification and recommendation of individuals qualified to become members of the Board. The Nominating and Governance Committee’s functions include: (i)Directors, identifying, evaluating and recommending qualified director nominees; (ii)nominees, considering shareholder nominees for election to the Board; (iii)Board, reviewing annually and reporting to the Nominating and Governance CommitteeBoard regarding the independence of the directors, reviewing committee structure and making recommendations to the full Board for committee membership; (iv)membership, recommending corporate governance guidelinesCorporate Governance Guidelines to the Board; and (v) overseeing a self-evaluation process for the Board, and its committees.
overseeing the Board and committee self-evaluation process. The Nominating and Governance Committee reviews annually withmet two times in 2022.
•Enterprise Risk Committee: Mr. David J. Dalrymple is the Board the compositionChair of the Board as a wholeEnterprise Risk Committee; he has served in this role since the establishment of the committee in 2016. The responsibilities of the Enterprise Risk Committee include monitoring the Corporation’s compliance with legal and considers whetherregulatory requirements, key risk areas to assess the Board reflects an appropriate balanceeffectiveness of knowledge, experience, skills, expertiserisk management policies and diversity. Among other factors,procedures, reviewing management’s assessment of the Committee looks for director nominees who know the communities and industries thatenterprise risk profile of the Corporation serves.including applicable ratios, trends and key risk indicators for credit, market, liquidity, operational, compliance and legal reputation and strategic risk, environmental, social and corporate governance risk, and the aggregation and correlation of individual risk exposures. At least annually, the committee will review a vendor report which provides a third party risk management program overview, including any vendor issues along with status of critical, high risk, and new vendor due diligence. The Committee utilizes the following process when identifyingcommittee will review a physical safety and evaluating the individuals that it recommendssecurity annual report which provides a timeline of all incidents related to the Board as director nominees:
•Executive Committee:The Committee evaluates the performance and qualifications of individual membersmain purpose of the Board eligible for re-election at the annual meeting of shareholders.
The Directors’ Deferred Fee Plan allows non-employee directorsExecutive Committee has the full authority of each of Chemung Financial and the Bank to elect to defer receipt of fees payableBoard, except those powers that are expressly reserved to the director for service as a memberBoard under law or the Corporation’s Bylaws. For example, the committee is not authorized pursuant to the Bylaws to make submissions to shareholders of any action that requires shareholders’ approval, fill vacancies on the Board of Directors or in any committee, fix compensation of each Chemung Financialthe Board or any committee, amend or repeal the Bylaws or the adoption of new Bylaws or amend or repeal any resolution of the Board. Because the Board believes proper governance involves the entire Board in the Corporation’s decision-making process, the Board strives to keep meetings of the Executive Committee to a minimum. The Executive Committee is currently comprised of the Board Chair, Mr. D. Dalrymple and Messrs. Bentley, Buicko, R. Dalrymple, Lounsberry, Tomson, Tranter and Tyrrell. In 2022, the Executive Committee met one time.
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Executive Session with Independent Directors
In addition to regular Board and committee meetings, directors meeting the general independence test under NASDAQ® meet, at least, two times a year in Executive Session to discuss any matters deemed relevant to the Corporation’s operation and condition. No current members of management are in attendance during these sessions, which are chaired by the Chairman of the Board. Due to the informality and expectation of confidentiality that characterize Executive Sessions, typically no binding corporate decisions or actions are taken nor official records maintained for them. The independent directors held two Executive Sessions in 2022.
Attendance
In 2022, the Corporation’s Board held twelve regularly-scheduled meetings and the Bank. At the election of a director, the deferred fees are converted into units and allocated to a unit value account, which appreciates or depreciates, as would an actual share of common stock of the Corporation. A director’s unit value account is credited with declared dividends pursuant to a formula described in the Plan. The units are paid to the director in the form of common stock of the Corporation. The common stock of the Corporation payable under the Directors’ Deferred Fee Plan is paid to the director, either at a specified age or time elected by the director, at the termination of the director’s service with Chemung Financial and/or the Bank, or upon the occurrence of a change in control as defined in the Directors’ Deferred Fee Plan. The number of shares of common stock of the Corporation payable to a director with a unit value account under the Plan represents at all times a general unfunded obligationBoard of the Bank and eachalso held twelve regularly-scheduled meetings. Each then-current director participating in the Directors’ Deferred Fee Plan will be a general creditorattended at least 75% of the Bank with respectBoard meetings and committee meetings to the value of hiswhich he or her unit value account.
| Directors | Fees Earned or Paid in Cash | Number of Shares Awarded (1) | Market Value of Shares (2) | All Other Compensation(4) | Total | ||||||||||||
| Larry Becker | $20,300 | 406 | $19,529 | $0 | $39,829 | ||||||||||||
| Ronald M. Bentley | $23,000 | 460 | $22,126 | $50,000 | $95,126 | ||||||||||||
| Bruce W. Boyea | $17,000 | 340 | $16,354 | $0 | $33,354 | ||||||||||||
David M. Buicko(3) | $0 | 0 | $0 | $0 | $0 | ||||||||||||
| David J. Dalrymple | $39,850 | 796 | $38,288 | $0 | $78,138 | ||||||||||||
| Robert H. Dalrymple | $20,000 | 400 | $19,240 | $0 | $39,240 | ||||||||||||
| Clover M. Drinkwater | $20,900 | 418 | $20,106 | $0 | $41,006 | ||||||||||||
Denise V. Gonick(3) | $0 | 0 | $0 | $0 | $0 | ||||||||||||
| Stephen M. Lounsberry III | $25,100 | 501 | $24,098 | $0 | $49,198 | ||||||||||||
| John F. Potter | $22,200 | 444 | $21,356 | $0 | $43,556 | ||||||||||||
Jeffrey B. Streeter(3) | $0 | 0 | $0 | $0 | $0 | ||||||||||||
| Richard W. Swan | $21,300 | 426 | $20,491 | $0 | $41,791 | ||||||||||||
| G. Thomas Tranter Jr. | $21,500 | 430 | $20,683 | $0 | $42,183 | ||||||||||||
| Kevin B. Tully | $24,600 | 492 | $23,665 | $0 | $48,265 | ||||||||||||
| Thomas R. Tyrrell | $22,000 | 440 | $21,164 | $0 | $43,164 | ||||||||||||
(1) The total number of shares awarded are determined by dividing the total amount of the annual retainer and fees by the grant price of the shares. Any fractional shares are rounded up to the next whole share. | |||||||||||||||||
(2) These amounts are based on the grant date fair market value of the shares as reported in Note 13 of the Corporation's audited financial statements contained in the Corporation's Form 10-K for the year ended December 2017. . Pursuant to this formula, the rounded, per share market value, at December 31, 2017 was $48.10. | |||||||||||||||||
(3) Messrs. Buicko and Streeter and Ms. Gonick joined the Board in March 2018 and were not yet eligible for participation in the Plan. | |||||||||||||||||
(4) Represents $50,000 in salary in connection with Mr. Bentley's continued employment with the Bank. | |||||||||||||||||
she were assigned. The Corporation does not have a formal policy regarding attendance by a member of the Board at the Corporation’s annual meeting. The Corporation will continue to encourage such attendance.Annual Meeting of Shareholders. In 2017, nine2022, ten of thirteen then-current directors attended the Annual Meeting of Shareholders.
Code of Ethics
The Board of Directors has adopted a Code of Ethics for senior financial officers, which applies to the Bank’s CEO, CFO, Chief Auditor and other senior officers performing accounting, auditing, financial management or similar functions. This Code of Ethics supplements a Code of Business Conduct and Ethics, which governs all employees, officers and directors. Both codes can be viewed on the Bank’s website at the following link: https://chemungfinancial.q4ir.com/corporate-information/documents/default.aspx
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Director Independence
Under applicable law and regulation, it is the responsibility of the Board, through recommendation of the Nominating and Governance Committee, to review and make a determination regarding the independence and qualifications of each member, as well as additional review and determination for members of certain committees.
The Corporation’s Governance Guidelines require that the Board consist of a majority of independent directors. Based upon a review of the annual Directors’ Questionnaires and the responses of the directors to questions regarding affiliation, compensation history, employment, and relationships with family members and others, the Board determined that all directors except for Mr. Tomson meet the independence requirements of the applicable laws and rules and NASDAQ® listing standards. In connection with its evaluation of director independence during 2022, there were no transactions considered other than those described under the section titled “Related Party Transactions.”
There were no “Compensation Committee Interlocks,” as defined under the SEC rules, in existence during the fiscal year 2022. No member of the Compensation Committee is a current or former employee of the Corporation or Bank, except for Ronald M. Bentley, who served as President and CEO of the Bank and Corporation and became independent, per NASDAQ® standards, as of January 1, 2021. No member of the Compensation Committee is party to any related party transaction with the Corporation requiring disclosure by the Corporation or Bank.
In addition to meeting NASDAQ® general independence standards applicable to directors, the directors who serve on the Audit and/or Compensation Committees must meet certain additional independence or regulatory requirements some of which may be more rigorous than the general standards. The Board has determined that Directors Buicko, D. Dalrymple, Forrestel, Streeter, Tranter and Tyrrell, who constitute the Audit Committee, all meet the SEC’s more stringent independence requirements for Audit Committee members. The Board has also determined that Director Buicko qualifies as an “Audit Committee Financial Expert,” as defined by the SEC rules (not all Audit Committee members are required to be financial experts). Further, the Board has determined that Directors Lounsberry, Bentley, D. Dalrymple, R. Dalrymple, Gonick, Tranter and Tyrrell, who constitute the Compensation Committee, all meet the independence requirements of NASDAQ® and the SEC for Compensation Committee members.
Related Party Transactions
•Loans and Extensions of Credit: The Sarbanes-Oxley Act generally prohibits publicly-traded companies from making loans to their executive officers and directors; however, it contains a specific exemption from such prohibition for loans made by federally insured financial institutions, such as the Bank, to their executive officers and directors in compliance with federal banking regulations.
The Bank is engaged, and expects to engage in the future, in banking transactions in the ordinary course of business with executive officers, directors and their related parties, on substantially the same terms, including interest rates and collateral on loans, as those prevailing at the same time for comparable transactions with persons not related to the Bank and that do not involve more than the normal risk of collectability or present other unfavorable features. Additionally, any transactions that would be required to be reported must be reviewed by the Audit Committee or another independent body
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of the Board of Directors. Any transaction with a director is reviewed by and subject to approval of the members of the Board of Directors who are not directly involved in the proposed transaction to confirm that the transaction is on terms that are no more favorable than those that would be available to us from an unrelated third party through an arms-length transaction.
The aggregate outstanding amount of our loans to the executive officers, directors and their related parties was $28.1 million as of December 31, 2022. At December 31, 2022, all loans to directors, executive officers and their related parties were made in the ordinary course of business, were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to the Bank, and did not involve more than the normal risk of collectability or present other unfavorable features. These loans were performing according to their original terms at December 31, 2022, and were made in compliance with federal banking regulation.
•Other Transactions: Mr. Buicko is President and CEO of Galesi Group and a member of Westcott Road Development LLC from which the Bank has leased, since 2018, its branch located at 2 Rush Street, Schenectady, New York, under a lease agreement through February 2033 with a monthly rent and CAM payment of $8,000. The total estimated lease payments beginning in January 2023 through the end of the term of the lease are expected to be $858,497.
Board Risk Oversight
The Board is responsible for establishing the level of risk that the Corporation will take. The Board approves the Corporation'sCorporation’s overall business strategies and significant policies, including those related to managing risk.risks. The Board of Directors has approved significant policies to establish risk tolerances for the institution'sinstitution’s activities and periodically reviews risk exposure limits to align with the changes in the institution'sinstitution’s strategies, address new activities and products, and react to changes in the industry and market conditions. The Board has charged the Enterprise Risk Committee with the oversight of risk management. The Chief Risk Officer (the “CRO”) reports to the CEO and the Enterprise Risk Committee. The CRO is responsible for developing and maintaining a comprehensive process for identifying, assessing, monitoring, and reporting key risks to the organization. The CRO ensures that the risk triggers are appropriate for the nature and complexity of the Bank’sCorporation’s and Corporation'sBank’s business activities and are consistent with the risk parameters established by the Board. The CRO makes regular reports to the Board and Enterprise Risk Committee regarding the status of risk management.
As it relates to the risks inherent in the Corporation’s incentive compensation plans, Internal Auditthe CRO prepares and presents an annual report to the Enterprise RiskCompensation Committee verifying the plans do not encourage excessive risk-taking. This risk assessment includes an evaluation of: (1)of the design of ourthe Bank’s incentive plans to ensure they satisfy bank regulatory requirements and do not encourage excessexcessive or imprudent risk taking; (2)risk-taking, the Board of Director’sBoard’s oversight of our incentive compensation program to ensure that there is effective governance over the program;program and (3) the internal controls over determining incentive payments and a review of the accuracy of the incentive payments and any related accruals. At the present time, the Enterprise RiskCompensation Committee and the Board do not believe these plans create risks that are reasonably likely to have a material adverse effect on the Corporation due to the existence of internal controls and the fact that the incentive payments comprise of a moderate portion of the employees’ total compensation. See the “Compensation Discussion and Analysis” section on page 15 forFor more information, aboutsee the Corporation’s incentive compensation plans.
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Environmental, Social and Governance
The Enterprise Risk Committee has primary oversight of our efforts to be responsible stewards of the environment, to be a good corporate citizen in our communities, and to maintain strong governance practices. The oversight assists the Corporation seeksand Bank to alignfocus better on how we impact our key stakeholders and communities, while also strengthening our business performance.
As presented on the interestsBank’s website, “Chemung Financial embraces its corporate responsibility and commits to fully supporting every community within our footprint. This responsibility requires inclusion, volunteerism, financial support, thoughtful partnerships and the responsible management of our NEOsenvironmental impact. The value we provide to these communities is an integral part of who we are. Our employees’ leadership and service in charitable and civic organizations is foundational to our corporate citizenship. We serve diverse communities and value a representative workforce and Board of Directors. Our community-banking mission focuses equally on all of our stakeholders and promotes the long-term sustainability of our communities.” For more information, visit the Bank’s website at www.chemungcanal.com.
Shareholder Communication with the interestsBoard
Shareholders may communicate to the Board, to an individual director or directors, or to a particular committee of the shareholders.
| Named Executive Officers | ||
The vote onCorporation’s Named Executive Officers for 2022 were Anders M. Tomson - President and CEO; Karl F. Krebs - Executive Vice President, Chief Financial Officer (“CFO”) and Treasurer; Loren D. Cole - Executive Vice President and Chief Information Officer (“CIO”); Peter K. Cosgrove - Executive Vice President, Chief Credit Officer (“CCO”) and Chief Risk Officer (“CRO”); and, Daniel D. Fariello - President, Capital Bank Division.
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| Stock Ownership Information | ||
The following table sets forth the resolution is not intended to address any specific element of compensation, but rather relates to the overall compensationbeneficial ownership of the Corporation’s NEOs,common stock, as described in this Proxy Statement in accordance withdefined under SEC rules, as of April 10, 2023, the compensation disclosure rulesrecord date for the 2023 Annual Meeting, for each director, director nominee and NEO of the SEC. AtCorporation, as well as for all directors and executive officers as a group. Unless otherwise indicated, each of the 2017 Annual Meeting, shareholders votedbeneficial owners named below has sole voting and investment authority with respect to approve the compensation programshares listed. Under Rule 13d-3 of the Exchange Act, a person is considered a beneficial owner of a security if they have or share voting power or investment power over the security or has the right to acquire beneficial ownership of the security within 60 days from the date of this filing. “Voting Power” is the power to vote or direct the voting of shares. “Investment Power” is the power to dispose or direct the disposition of shares.
| Name of Beneficial Owner | Number of Shares Beneficially Owned | Percentage of Shares Beneficially Owned | |||||||||
| Directors, Nominees and NEOs: | (#) | (%) | |||||||||
| Raimundo C. Archibold Jr. | 1,226 | (1) | * | ||||||||
| Ronald M. Bentley | 45,385 | (1) | * | ||||||||
| David M. Buicko | 6,706 | (1) (2) | * | ||||||||
| David J. Dalrymple | 42,730 | (1)(3) | * | ||||||||
| Robert H. Dalrymple | 247,630 | (1)(4) | 5.26% | ||||||||
| Richard E. Forrestel Jr. | 13,395 | (1) | * | ||||||||
| Denise V. Gonick | 4,841 | (1)(5) | * | ||||||||
| Stephen M. Lounsberry III | 20,338 | (1)(6) | * | ||||||||
| Joseph F. Meade IV | 2,421 | (1)(7) | |||||||||
| Jeffrey B. Streeter | 12,852 | (1)(8) | * | ||||||||
| Anders M. Tomson | 51,104 | (9)(11) | 1.08% | ||||||||
| G. Thomas Tranter Jr. | 25,960 | (1) | * | ||||||||
| Thomas R. Tyrrell | 7,049 | (1) | * | ||||||||
| Loren D. Cole | 7,106 | (9)(10)(11) | * | ||||||||
| Peter K. Cosgrove | 4,311 | (11) | * | ||||||||
| Daniel D. Fariello | 8,042 | (9)(11) | * | ||||||||
| Karl F. Krebs | 12,822 | (9) | * | ||||||||
| Directors and executive officers as a group (20 people) | 550,353 | 11.68% | |||||||||
| *Less than 1% based upon 4,710,018 outstanding shares as of April 10, 2023. | |||||||||||
(1) Includes all unvested shares of the Corporation’s common stock held in a restricted stock account at American Stock Transfer and Trust Company LLC on behalf of the directors for their annual stock compensation. Directors Archibold, Bentley, Buicko, D. Dalrymple, R. Dalrymple, Forrestel, Gonick, Lounsberry, Meade, Streeter, Tranter and Tyrrell own 611, 632, 701, 888, 698, 611, 611, 632, 611, 611, 643 and 632, respectively. | |||||||||||
(2) Includes 3,206 shares held solely by David M. Buicko and 3,500 shares held jointly with his spouse. | |||||||||||
(3) Includes 22,100 shares held solely by David J. Dalrymple and 20,630 shares held in trust over which Mr. Dalrymple has voting and dispositive powers. | |||||||||||
(4) Includes 2,167 shares held solely by Robert H. Dalrymple. Includes 234,486 shares held by RD Wood, LLC, which Robert H. Dalrymple and Elizabeth T. Dalrymple manage and have shared voting and dispositive power over. Includes 10,977 shares held by Mr. Dalrymple’s spouse as to which he disclaims beneficial ownership. | |||||||||||
(5) Includes 2,641 shares held solely by Denise V. Gonick and 2,200 shares held jointly with her spouse. | |||||||||||
(6) Excludes 16,551 shares that Stephen M. Lounsberry has credited to his account in memorandum unit form under the Corporation’s Directors’ Deferred Fee Plan. The deferred fees held in memorandum unit form will be paid solely in shares of the Corporation’s common stock pursuant to the terms of the Plan and the election of the plan participants. Shares held in memorandum unit form under the Plan have no voting rights. | |||||||||||
(7) Includes 1,421 shares held solely by Joseph F. Meade IV and 1,000 shares held jointly with his spouse. | |||||||||||
(8) Includes 2,852 shares held solely by Jeffrey B. Streeter and 10,000 shares held in a revocable trust. | |||||||||||
(9) Includes all shares of common stock of the Corporation held for the benefit of certain executive officers by the Bank as trustee of the Bank’s Profit Sharing, Savings and Investment Plan. Messrs. Tomson, Cole, Fariello and Krebs own 14,236, 2,320, 1,464 and 6,136 shares, respectively. | |||||||||||
(10) Includes 11,082 shares owned by spouses of certain officers and directors of which such officers and directors disclaim beneficial ownership. | |||||||||||
(11) Includes all unvested shares of the Corporation’s common stock held in a restricted stock account at American Stock Transfer and Trust Company LLC on behalf of certain executive officers. Messrs. Tomson, Cole, Cosgrove and Fariello own 4,577, 4,029, 3,725 and 4,048 shares, respectively. Mr. Krebs’ restricted stock vested immediately. | |||||||||||
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5% Shareholders
The following table sets forth the beneficial ownership of the Corporation’s NEOscommon stock as of April 10, 2023, the record date for the fiscal year ended December 31, 2016, including 2016 bonuses that were paid in 2017. The Corporation asks that shareholders again vote2023 Annual Meeting, by three holders known by us to approvebe the Corporation’s compensation program for its NEOs as described in this Proxy Statement.
| Name | Number of Shares Owned | Percentage of Shares Owned | |||||||||
| More than 5% Owner (other than directors): | (#) | (%) | |||||||||
| Chemung Canal Trust Company | 264,155 | (1) | 5.61% | ||||||||
| One Chemung Canal Plaza, P.O. Box 1522 | |||||||||||
| Elmira, New York 14902-1522 | |||||||||||
| Dalrymple Family Limited Partnership | 343,542 | (2) | 7.29% | ||||||||
| Henry M. Dalrymple | |||||||||||
| Matthew D. Dalrymple | |||||||||||
| 2105 S. Broadway | |||||||||||
| Pine City, New York 14871 | |||||||||||
| RD Wood LLC | 234,486 | (3) | 5.00% | ||||||||
| Robert H. Dalrymple | |||||||||||
| Elizabeth T. Dalrymple | |||||||||||
| 5 Woodland Way | |||||||||||
| Ithaca, New York 14850-9802 | |||||||||||
(1) Shares held by the Bank in various fiduciary capacities, either alone or with others. Includes 266,155 shares held with shared voting power. There are 185,600 shares held with shared dispositive powers. Shares held in a co-fiduciary capacity by the Bank are voted by the co-fiduciary in the same manner as if the co-fiduciary were the sole fiduciary. Shares held by the Bank as sole trustee will be voted by the Bank only if the trust instrument provides for voting of the shares at the direction of the grantor or beneficiary and the Bank actually receives voting instructions. | |||||||||||
(2) Mr. David J. Dalrymple no longer has shared powers or voting rights of Dalrymple Family Limited Partnership. Mr. Dalrymple’s sons, Henry M. and Matthew D. Dalrymple, are general partners of Dalrymple Family Limited Partnership of which each hold 50% ownership. Based on information reported in a Schedule 13G/A filed with the SEC on February 13, 2023, the Dalrymple Family Limited Partnership and Henry M. Dalrymple and Matthew D. Dalrymple have shared voting and dispositive power over all the shares. | |||||||||||
(3) Robert H. Dalrymple and Elizabeth T. Dalrymple are the managers of RD Wood, LLC. RD Wood, LLC is owned by a family trust and by Elizabeth T. Dalrymple. The above amount includes 2,167 shares held solely by Mr. Robert H. Dalrymple, 10,977 shares held by Mr. Dalrymple’s spouse as to which he disclaims beneficial ownership. Based on the information reported in a Schedule 13G/A filed with the SEC on February 14, 2023, RD Wood, LLC has shared voting and dispositive power over 234,486 shares; Robert H. Dalrymple has shared voting and dispositive power over 234,486 shares; and, Elizabeth T. Dalrymple has shared voting and dispositive power over 234,486 shares. | |||||||||||
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| Compensation Discussion and Analysis | ||
The Compensation Discussion and Analysis the summary compensation table and the other related tables and narrative disclosures contained elsewhere insection of this Proxy Statement. As discussed in those disclosures, the Board believes thatStatement provides our executive compensation philosophy, policies, and procedures provide a strong link between each NEOs’ compensation and our short and long-term performance. The objective of our executive compensation program is to provide compensation which is competitive based on our performance and alignedshareholders with the long-term interest of our shareholders.
Compensation Philosophy and Objectives
As discussed previously,in the “Committee Description” section, the Compensation Committee reviews and administers the Corporation’s compensation policies and practices for the NEOs. The NEOs named in the Summary Compensation Table are: Anders M. Tomson, CEO and Karl F. Krebs, Executive Vice President, Chief Financial Officer and Treasurer. The other NEOs are: Bank executive officers Louis C. DiFabio, Karen R. Makowski and Thomas W. Wirth. Any references to NEOs in this Proxy Statement are to the individuals listed in the preceding sentence.
The Corporation’s compensation philosophy is designed to attract, motivate and retain highly qualified financial services’services professionals capable of maximizing business performance for the benefit of shareholders. The Compensation Committee believes in a simple, straightforwardstraight-forward approach to executive compensation and, therefore, has limited the number and types of plans used to compensate NEOs, as discussedNEOs. For more information on page 16 in the plans, see the “Elements of Compensation” section.
The Corporation’s and Bank’s compensation plans and practices are designed to reward NEOs for satisfying both Bankcorporate and individual performance goals. In 2017,2022, compensation components of NEO compensation consisted of: 1)of base salary; 2) shortsalary, short- and long termlong-term performance-based incentives;incentives, and 3) retirement and other benefits. The Compensation Committee reviews both quantitative and qualitative/qualitative, including subjective measures before applying its judgment to determine appropriate compensation for its NEOs. As a result, incentive plan pay is not tied directly to any specific set of metrics. As such, the Compensation Committee has not established rigid formulas for the allocation between cash and non-cash components, the allocation of short-termshort- and long-term equity incentive compensation, or the percentage by which other NEOs’ compensation opportunity should be in relation to the CEO’s compensation. The Compensation Committee uses peer group data to provide a competitive level of total compensation targeted at the average level of comparably-sized financial institutions. As described below, the Compensation Committee also utilizes an independent compensation consultant to periodically evaluate NEO compensation levels and mix of cash and stock compensation. In 2017,2022, the Compensation Committee believes that the relationship between the NEOs’ total compensation (base salary plus cash and stock-based incentive compensation) and the Corporation’s financial results demonstrates the alignment the Corporation has established between pay and business performance.
Setting Executive Compensation
The Compensation Committee is responsible for the design, implementation and administration of our compensation programplans and practices for ourthe NEOs. The Compensation Committee periodically engages an independent outside consulting firm to conduct a comprehensive review of the Corporation’s executive compensation program. In 2022, the Compensation Committee engaged McLagan (a division of Aon PLC) to conduct an Executive Compensation Review in 2015. After receiving the Report of Findings from McLagan, thea peer group analysis and to review executive compensation. The Corporation’s peer group for compensationwas developed by McLagan with input from the Compensation Committee, using objective parameters to identify bank holding companies of the executive officerssimilar asset size and thebusiness model located in our general geographic region.
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The peer group, for financial benchmarking are now one in the same as reflected below.
| ACNB Corp. | ENB Financial Corp. | The First Bancorp, Inc. | Peoples Financial Services, Inc. | ||||||||
| Arrow Financial Corp. | Enterprise Bancorp Inc. | Franklin Financial Services Corp. | Pioneer Bancorp, Inc. | ||||||||
| Bar Harbor Bankshares, Inc. | Evans Bancorp Inc. | Greene County Bancorp Inc. | Rhinebeck Bancorp, Inc. | ||||||||
| Citizens & Northern Corp. | Farmers National Banc Corp. | LCNB Corp. | Salisbury Bancorp, Inc. | ||||||||
| Civista Bancshares Inc. | Fidelity D & D Bancorp, Inc. | Orange County Bancorp, Inc. | SB Financial Group, Inc. | ||||||||
| Codorus Valley Bancorp, Inc. | Financial Institutions Inc. | Orrstown Financial Services, Inc. | |||||||||
The Compensation Committee evaluates the peer groupsgroup annually for suitability and may modify the peer groupsgroup from time-to-time based on mergers and acquisitions within the industry or other relevant factors.The Corporation does not target any specific element of compensation to compare to amounts paid by the peer group with respect to that element. Rather, the Corporation uses the peer bank data to inform it of the pay levels and practices of the Corporation'sCorporation’s peers as they most closely represent the labor market in which the Bank competes for key talent.Informed by this data, the Compensation Committee’s goal is to provide a competitive level of total compensation targeted at the average level of comparably-sized financial institutions. In 2017,institutions, although actual compensation paid to an NEO may vary based on other factors such as the total annual compensation for each NEO, except the CRO, was below the average total annual compensation of the peer group.individual’s performance, experience, responsibilities and competitive conditions.
Role of Management
Although the Compensation Committee is ultimately responsible for designing our Executive Compensation Program,executive compensation program, input from ourthe CEO is critical in ensuring that the Compensation Committee has the appropriate information needed to make informed decisions.The CEO participates in compensation-related actions associated with the other NEOs purely in an informational and advisory capacity and he presents the other NEOs’ performance summaries and recommendations relating to their compensation to the Compensation
Committee for its review and approval. submission to the Disinterested Board Members for ratification.The CEO neither recommends nor participates in Compensation Committee deliberations regarding his own compensation.
Following our Annual Meeting of StockholdersShareholders on May 11, 2017, weJune 7, 2022, the Compensation Committee reviewed the results of the stockholdershareholder advisory vote on executive compensation with respect to 20162021 compensation actions and decisions for our NEOs. Approximately 85 percentNEOs, which resulted in approximately 98% of the votes cast on the proposal were voted in supportfavor of the compensation outlined in last year's Proxy Statement. proposal.After a comprehensive market review and in light of strong stockholdershareholder support, we concluded that no substantial changes to our Executive Compensation Programexecutive compensation program were required.
Elements of Compensation
In 2017,2022, the Bank's mix of base salary and incentive compensation (which is incentive cash compensation and equity awards) places the average variable pay (i.e., incentive compensation) received by NEO,the NEOs, other than the CEO, at approximately 55%60% of the NEO'stheir base salary.The CEO'sCEO’s incentive pay comprised of cash and unrestrictedrestricted stock, represented approximately 56%65% of his base pay.Awards under the incentive plans are based on the
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Compensation Committee’s independent business judgmentjudgement after evaluating the performance of each executive officerof the NEOs against pre-established Bank goals and individual goals.The Compensation Committee regularly reviews these elements of compensation in order to ensure that, as a whole, they conform to the Bank’s philosophy and objectives.
•Base Salary:Base salary paid to executives is reviewed against market on an annual basis.Base salary levels reflect the Compensation Committee’s perceived value of the position, both in the context of the market data of ourthe Bank’s peer group for similar positions, as well as the individual fulfilling the duties of the position.The CEOreviews the base salaries of the other NEOs with the Compensation Committee and a recommendation for approval is submitted to the full Board.The recommendations are based upon an evaluation process which includes professional and leadership performance as well asand the attainment of goals set forth in the Corporation’s annual business plan.plan and base salary levels of each NEO relative to peers.
| Named Executive Officer | 2021 Salary | 2022 Raise | 2022 Salary | Nature of Increase | |||||||||||||
| % of Base Salary | Amount of Increase | ||||||||||||||||
| ($) | (%) | ($) | ($) | ||||||||||||||
| Anders M. Tomson | 518,000 | 15.83 | 82,000 | 600,000 | Merit and Market-Based | ||||||||||||
| Loren D. Cole | 227,360 | 4.0 | 9,094 | 236,454 | Merit and Market-Based | ||||||||||||
| Peter K. Cosgrove | 238,500 | 4.0 | 9,540 | 248,040 | Merit and Market-Based | ||||||||||||
| Daniel D. Fariello | 235,640 | 4.0 | 9,426 | 245,066 | Merit and Market-Based | ||||||||||||
| Karl F. Krebs | 268,479 | 3.0 | 8,054 | 276,533 | Merit and Market-Based | ||||||||||||
Based on a similar assessment of the NEO'sNEOs’ performance in 2016,2020, the Compensation Committee increased each NEO'sNEO’s base salary as follows in 2017: Mr. DiFabio $5,250; Mr. Krebs $6,365; Mrs. Makowski $5,852 and Mr. Wirth $5,100. The total base salary earned by the NEOs in 2017 is reported in the Summary Compensation Table on page 21.follows:
| Named Executive Officer | 2020 Salary | 2021 Raise | 2021 Salary | Nature of Increase | |||||||||||||
| % of Base Salary | Amount of Increase | ||||||||||||||||
| ($) | (%) | ($) | ($) | ||||||||||||||
| Anders M. Tomson | 480,000 | 7.9 | 38,000 | 518,000 | Merit and Market-Based | ||||||||||||
| Loren D. Cole | 216,110 | 5.2 | 11,250 | 227,360 | Merit and Market-Based | ||||||||||||
| Peter K. Cosgrove | 231,750 | 2.9 | 6,750 | 238,500 | Merit and Market-Based | ||||||||||||
| Daniel D. Fariello | 219,200 | 7.5 | 16,440 | 235,640 | Merit and Market-Based | ||||||||||||
| Karl F. Krebs | 255,694 | 5.0 | 12,785 | 268,479 | Merit and Market-Based | ||||||||||||
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The Compensation Committee conducts an annual performance review of the CEO. The CEO’s performance objectives are defined consistent with, and in support of, the Corporation’s annual business plan. Performance is also measured against progress towards the attainment of the Corporation’s long-term strategic plan. These goals include, but are not limited to, metrics related to net income, return on equity, efficiency, asset quality, bank performance against aits peer group and progress in achieving long-term strategic objectives. For purposes of comparing the relevant financial metrics, the same peer group is used to assess total compensation. SeeFor more information on the peer group, shown on page 15.see the “Setting Executive Compensation” section.
Additionally, in the context of structuring of our incentive compensation plans, the Compensation Committee assesses the individual contributions made by the NEOs, which includes assessing their accountability for specific financial, organization, operational and risk management objectives that are otherwise measurable performance objectives, the attainment of which contributecontributes significantly to the growth and profitability of the Bank'sBank’s business operations.As a result, we believe ourthe Compensation Committee believes the Bank’s incentive compensation plans incentivize ourthe NEOs to effectively plan, organize, supervise, monitor and evaluate the key functional areasarea and departmentsdepartment for which they are responsible and through which ourthe Corporation’s most important corporate objectives are achieved.
The NEOs are eligible for the same benefits available to all other employees of the Bank including life and health insurance, vacation, holidays, and personal and sick leave.
•Short and Long-Term Performance-Based Incentive Compensation:The Corporation has createdadopted incentive compensation plans to motivate and reward senior officers (including the NEOs) for achieving predefined goals.The Compensation Committee and the Board do not subscribe to formula-driven incentive plans, but believe in maintaining discretion over the payment of incentive compensation.This discretion permits the Compensation Committee to make compensation decisions in the best interests of the Corporation and shareholders when events beyond the control of management positively or negatively influence financial results.In
certain circumstances, the Compensation Committee may reduce or increase incentive payments, but in no event may the payments be greater than the levels described below. payments.Each senior officer’s incentive award opportunity is not limited to a specified percentage of the incentive pool.
The Compensation Committee employs cash and restricted stock awards to recognize significant efforts or individual contributions of senior officers, including the NEOs.In determining these awards, many factors are considered including, but not limited to, the Bank’s net earnings vs. original plan, the financial results delivered by the senior officer’s division against goal, service quality results vs. goal, individual success in implementing business plan initiatives, and other contributions made by the senior officer to the Bank’s success.The senior officers eligible for an award, the criteria used to determine individual awards, and actual awards are reviewed with the Compensation Committee.There is no expectation that these awards will be paid each year.The Compensation Committee approved a cash bonus pool representing 30% of the aggregate base salaries of NEOs and 20% of the aggregate base salaries of senior officers.In November 2017, the Compensation Committee revised the restricted stock pool to represent 30% of the aggregate base salaries of NEO's and 20% of the aggregate base salaries of senior officers to get the Bank in line with peers and aid in recruitment and retention efforts. In 2017,2022, the cash awards totaled $370,500$680,000 and the value of the restricted stock awards totaled $507,500,$837,500 for a total of $878,000$1,660,508 (based on the grant date fair value) representing approximately 34%49% of the aggregate base salaries of plan participants.As mentioned previously, stated, these two components of incentive compensation for NEOs (other than the CEO) represent approximately 55%60% of the NEO’sNEOs’ base salary. The Compensation Committee approved both a cash and stock bonus representing 56% ofsalaries.In 2022, the CEO's base salary. In 2017, the CEO'sCEO’s cash award totaled $100,721$210,000 and the value of the unrestrictedrestricted stock award totaled $108,735 (which includes $22,222 for$181,517 (based on the Directors' Stock Compensation Plan which Mr. Tomson is a participant),grant date fair value) for a total of $209,456.$391,517.
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The following paragraphs provide a further description of these plans.the Corporation’s compensation and benefit plans in which the NEOs participate:
Chemung Financial CorporationAmended and Restated Restricted Stock 2021 Equity Incentive Plan, (the “Restricted Stock Plan”): In 2010, which was approved by shareholders in June 2021, to promote the Board approved a Restricted Stock Plan for officers of the Bank, excluding the CEO. The Compensation Committee may make discretionary grants of restricted shares of the Corporation’s common stock to officers selected to participate in the Plan. The Compensation Committee believes that these awards: 1) align the interests of the Bank’s executives and senior managers with the interestslong-term financial success of the Corporation, and its shareholders; 2) ensure thatSubsidiaries, including the Corporation’s compensation practices are competitiveBank by providing a means to attract, retain and comparablereward individuals who contribute to such success and to further align their interests with its peers; and 3) promote retention of select management level employees. The awards are based on the performance, responsibility and contributionsthose of the NEOs and other senior officers.Corporation's shareholders through the ownership of Corporation common stock. The 2021 Equity Incentive Plan will remain in effect as long as any awards under it are outstanding provided, however, that no awards may be granted under the 2021 Equity Incentive Plan after the day immediately prior to the ten-year anniversary of the Effective Date. Mr. Tomson recommends to the Compensation Committee (other than his own compensation) the number of shares to be awarded to senior officers including the NEOs, which is subjectNEOs. The Compensation Committee granted restricted stock awards to the approval of the Compensation Committee. The awards may not exceed 15,000 shares per year in the aggregate. 19twenty senior officers including Messrs. DiFabio,Tomson, Cole, Cosgrove, Fariello and Krebs Wirth and Mrs. Makowski were awarded restricted stockfor their service in 2017.2022. These shares vest over a five-year period lapse with termination of employment, with or without cause, and vest(except that the award Mr. Tomson received vests after one year). Vesting accelerates immediately in case of death, disability or an involuntary termination following a change ofin control.
Retirement and Other Benefits:The CorporationBank sponsors the Chemung Canal Trust Company 401(k) Defined Contribution Profit Sharing, Savings and Investment Plan (the "401(k) Plan"“401(k) Plan”) which covers all eligible employees.The CorporationBank contributes a non-discretionary 3% of gross annual wages for each eligible participant, regardless of the participant’s deferral, indeferral. In addition, tothe Bank makes a matching contribution of 50% matchof a participant’s deferrals up to 6% of gross annual wages.All contributions made on or after January 1, 2017 will vest immediately, while all previous employer contributions continue vesting on a five-year vesting schedule.The plan's401(k) Plan’s assets consist of Chemung Financial Corporation common stock, as well as other common and preferred stocks, U.S. Government securities and corporate bonds and notes, and mutual funds. The Bank instituted a total "freeze" of the notes.
•Chemung Canal Trust Company Pension Plan (the "Pension Plan"): The Bank maintains a defined benefit pension plan, which was frozen effective as of January 1, 2017. Messrs. DiFabio, Krebs, Tomson, Wirth and Mrs. Makowski receive a 3% non-discretionary contribution to the 401(k) Plan subject to limitations imposed by the Internal Revenue Code of 1986, as amended (the “Code”), and applicable regulations. Effective January 1, 2017, as a result of the total "freeze" of the Pension Plan, all eligible employees will participateThe NEOs are not participants in the 401(k) Plan subject to limitations imposed by the Code and applicable regulations.frozen pension plan.
The Bank may discontinue future contributions to any participant at any time.Benefits are payable upon the earlier of retirement, disability, death or a change in control.The annual Bank contribution is credited as of the last day of the applicable plan year provided that the participant is actively employed on that date.
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•Perquisites:The NEOs are granted perquisites which the Compensation Committee believes are modest, reasonable and similar to those provided to executive officers at peer financial institutions and are designed to assist the executives in carrying out their duties. Club memberships are provided to the NEOs to enable them to interact and foster relationships with clients and local business people.leaders. Mr. Tomson has the use of a Bank-owned vehicle for business purposes. Mrs. Makowskipurposes and Messrs. DiFabio, Krebs and Wirth each receivedperiodically uses a car allowanceservice in order to continue facilitating meetings and conducting business, as necessary, during 2017.his travel time.
Compensation Committee Report
The Compensation Committee of the Board has reviewed and discussed with management the foregoing Compensation Discussion and Analysis with management and, basedsection, as required by item 402(b) of the SEC’s Regulation S-K. Based on its review and discussion, the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in thisthe Proxy Statement.
| The Compensation | |||||||||||||||
| Stephen M. Lounsberry III, Chairman | Denise V. Gonick | ||||||||||||||
| Ronald M. Bentley | G. Thomas Tranter Jr. | ||||||||||||||
| David J. Dalrymple | Thomas R. Tyrrell | ||||||||||||||
| Robert H. Dalrymple | |||||||||||||||
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| Executive Officers | ||
The following table sets forth certain information regarding the NEOs and other executive officers of the Corporation and Bank.Bank as of January 1, 2023:
| Name | Age | Position | |||||||||||
 | Anders M. Tomson | 55 | CEO of the Corporation and the Bank | ||||||||||
 | Loren D. Cole | 50 | Executive Vice President and Chief Information Officer of the Bank (2018); Senior Vice President and Chief Information Officer of the Bank (2017); Senior Vice President of Bank of Oklahoma (2017); Executive Vice President of SpiritBank Corp. (2011). Mr. Cole has been with the Bank since 2017. | ||||||||||
 | Peter K. Cosgrove | 62 | Executive Vice President, Chief Credit Officer and Chief Risk Officer (2020); Executive Vice President and Chief Credit Officer (2019); Regional Sales Executive, East Region, at KeyBank (2016); and member of the Merger Integration Leadership Team at KeyBank (2015-2017). Mr. Cosgrove has been with the Bank since 2019. | ||||||||||
 | Daniel D. Fariello | 46 | President of Capital Bank, a division of Chemung Canal Trust Company (2018); Senior Vice President of Capital Bank (2013); Relationship Manager (Commercial Loan Officer) of First Niagara Bank N.A. (2005). Mr. Fariello has been with the Bank since 2013. | ||||||||||
 | Kimberly A. Hazelton | 55 | Executive Vice President of the Bank (2016) responsible for Retail Client Services, Marketing and Business Services; Chief Operation Officer (2014) at Alternatives Federal Credit Union; Market President, Retail (2007-2013) at TD Bank. Mrs. Hazelton has been with the Bank since 2016. Mrs. Hazelton is not an NEO. | ||||||||||
 | Jeffrey P. Kenefick | 56 | Regional President of the Bank (January 4, 2021); Senior Vice President (2019-2021); Executive Vice President, Commercial & Strategic Development and Regional President, Five Star Bank (2016); Executive Vice President, Commercial Banking and Regional President (2013-2016). Mr. Kenefick has been with the Bank since 2019. Mr. Kenefick is not an NEO. | ||||||||||
 | Karl F. Krebs | 66 | Chief Financial Officer and Treasurer of the Corporation and Executive Vice President, Chief Financial Officer and Treasurer of the Bank | ||||||||||
 | |||||||||||||
| Thomas W. Wirth | 57 | Executive Vice President of the Bank (2015) responsible for the Wealth Management Group; Senior Vice President of the Bank (2004) responsible for Investment Services. Mr. Wirth has been with the Bank since 1987. Mr. Wirth is not an NEO. | |||||||||||
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| Executive Compensation | ||
•Summary Compensation Table
| Name and Principal Position | Year | Salary | Bonus | Stock Awards | Change in Pension Value (7) | All Other Compensation (8) | Total | ||||||||||||||||
| ($) | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||||
Anders M.Tomson President & Chief Executive Officer(2) | 2017 | 375,000 | 100,721 | (1)(6) | 108,735 | (4) | — | 153,692 | 738,148 | ||||||||||||||
| 2016 | 326,923 | 60,000 | (1) | 60,088 | (4) | — | 114,335 | 561,346 | |||||||||||||||
| 2015 | 276,033 | — | (3) | — | (3) | — | 93,890 | 369,923 | |||||||||||||||
| Karl F. Krebs Executive Vice President, Chief Financial Officer, and Treasurer | 2017 | 218,797 | 65,340 | (2) | 70,709 | (5) | — | 91,578 | 446,424 | ||||||||||||||
| 2016 | 212,425 | 55,000 | (2) | 49,739 | (5) | — | 73,679 | 390,843 | |||||||||||||||
| 2015 | 206,238 | 45,000 | (2) | 34,698 | (5) | — | 69,124 | 355,060 | |||||||||||||||
| Louis C. DiFabio Executive Vice President | 2017 | 180,770 | 52,748 | (2) | 51,666 | (5) | — | 77,140 | 362,324 | ||||||||||||||
| 2016 | 175,202 | 50,000 | (2) | 38,698 | (3) | 86,936 | 25,862 | 376,698 | |||||||||||||||
| Karen R. Makowski Executive Vice President & Chief Risk Officer | 2017 | 201,136 | 52,775 | (2) | 57,130 | (5) | — | 79,200 | 390,241 | ||||||||||||||
| 2016 | 195,277 | 45,000 | (2) | 38,698 | (5) | — | 65,988 | 344,963 | |||||||||||||||
| 2015 | 189,590 | 45,000 | (2) | 40,950 | (5) | — | 62,086 | 337,626 | |||||||||||||||
| Thomas W. Wirth Executive Vice President | 2017 | 175,302 | 45,235 | (2) | 48,961 | (5) | — | 72,412 | 341,910 | ||||||||||||||
| 2016 | 170,196 | 28,638 | (2) | 16,580 | (3) | 77,569 | 23,170 | 316,153 | |||||||||||||||
(1) The amounts shown for bonus represents amounts paid in 2017 and 2016. | |||||||||||||||||||||||
(2) The amounts shown for salary and bonus represent amounts earned in 2017, 2016, and 2015. | |||||||||||||||||||||||
(3) In 2015, Mr. Tomson participated in the Incentive Compensation Plan, which paid in January of the following year rather than December. | |||||||||||||||||||||||
(4) The awards to Mr. Tomson were made under the terms of the Incentive Compensation Plan. The awards are fully vested upon grant and reflect the grant date fair value of the stock on December 31 of the year earned. The stock award granted to Mr. Tomson in 2017 includes director fees in the amount of $22,222. | |||||||||||||||||||||||
(5) The amounts shown for Messrs. Krebs, DiFabio, Wirth and Mrs. Makowski represent shares granted under the Restricted Stock Plan and reflect the grant date fair market value as reported in Note 13 of the Corporation’s audited consolidated financial statements contained in the Corporation’s Form 10-K for the year ended December 31, 2017. Twenty percent of the restricted stock awarded vests each year commencing with the first anniversary date of the award and is 100 percent vested on the fifth anniversary date. See table on page 22 captioned “Grants of Plan-Based Awards.” The amount of the awards are determined in the discretion of the Compensation Committee as discussed on page 17. | |||||||||||||||||||||||
(6) $19,471 of Mr. Tomson's bonus is an additional cash bonus awarded to Mr. Tomson pursuant to a Bank-wide 5% cash bonus plan in which all non-sales employees participate. Other NEOs are not eligible to participate in this 5% cash bonus pool. | |||||||||||||||||||||||
(7) The amounts shown represent the aggregate change, during the respective year, in the present value of the named executive officers’ accumulated pension benefit from the Pension Plan. The Board approved a total "freeze" of the Pension Plan effective January 1, 2017. | |||||||||||||||||||||||
(8) The amounts shown include non-discretionary and matching contributions made by the Bank to the 401(k) Plan, dividends paid on unvested restricted stock, Defined Contribution SERP contributions, and perquisites, such as car allowance or personal portion of Bank-owned vehicles and club memberships. The NEOs participate in certain group health, life, disability and medical reimbursement plans, not disclosed in the Summary Compensation Table, that are generally available to salaried employees and do not discriminate in scope, terms and operation. See table below captioned “All Other Compensation Table.” | |||||||||||||||||||||||
•All Other Compensation for 2022
| Name | Employer Contribution to 401(k) | Dividends on Restricted Stock | Automobile Allowance/Usage | Club Memberships | Defined Contribution SERP | Total | ||||||||||||
| ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||
| Anders M. Tomson | 37,391 | 1,334 | 17,964 | 22,003 | 75,000 | 153,692 | ||||||||||||
| Karl F. Krebs | 25,913 | 3,151 | 8,209 | 10,545 | 43,760 | 91,578 | ||||||||||||
| Louis C. DiFabio | 21,007 | 3,271 | 7,303 | 9,405 | 36,154 | 77,140 | ||||||||||||
| Karen R. Makowski | 23,659 | 3,335 | 6,718 | 5,261 | 40,227 | 79,200 | ||||||||||||
| Thomas W. Wirth | 19,745 | 1,610 | 7,176 | 8,821 | 35,060 | 72,412 | ||||||||||||
•Grants of Plan-Based Awards
| Name | Grant Date | All Other Stock Awards: Number of Shares of Stock | Grant Date Fair Value of Stock Awards | ||||||
| (#) | ($) | ||||||||
| Anders M. Tomson | 01/03/2018 | 462 | 22,222 | (1) | |||||
| 01/05/2017 | 2,380 | 86,513 | (2) | ||||||
| Karl F. Krebs | 12/20/2017 | 1,307 | 70,709 | (3) | |||||
| Louis C. DiFabio | 12/20/2017 | 955 | 51,666 | (3) | |||||
| Karen R. Makowski | 12/20/2017 | 1,056 | 57,130 | (3) | |||||
| Thomas W. Wirth | 12/20/2017 | 905 | 48,961 | (3) | |||||
(1) This grant was awarded to Mr. Tomson as part of Directors' Compensation Plan and reflects the grant date fair market value as reported in Note 13 of the Corporation’s audited consolidated financial statements contained in the Corporation’s Form 10-K for the year ended December 31, 2017. | |||||||||
(1) This grant was awarded to Mr. Tomson as part of a year-end bonus pursuant to the Incentive Compensation Plan and reflects the grant date fair market value as reported in Note 13 of the Corporation’s audited consolidated financial statements contained in the Corporation’s Form 10-K for the year ended December 31, 2016. | |||||||||
(2) These amounts represent the grant date fair market value of as reported in Note 13 of the Corporation’s audited consolidated financial statements contained in the Corporation’s Form 10-K for the year ended December 31, 2017. The stock was awarded under the Restricted Stock Plan. | |||||||||
•Restricted Stock Vested During the Fiscal Year Ended December 31, 2022
•Deferred Compensation
•Defined Contribution SERP
•Potential Payments Under Change in Control
Summary Compensation Table
| Name and Principal Position | Year | Salary (1) | Cash Bonus (1) | Stock Awards | Change in Pension Value | All Other Compensation (4) | Total | |||||||||||||||||||
| ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||
| Anders M. Tomson | 2022 | 600,000 | 210,000 | 181,517 | (2) | — | 185,382 | 1,176,899 | ||||||||||||||||||
| President & CEO | 2021 | 518,000 | 181,500 | 157,515 | (2) | — | 159,127 | 1,016,142 | ||||||||||||||||||
| 2020 | 480,000 | 157,500 | 125,054 | (2) | — | 151,223 | 902,748 | |||||||||||||||||||
| Karl F. Krebs | 2022 | 276,533 | 82,500 | 82,544 | (3) | — | 83,235 | 524,812 | ||||||||||||||||||
| Executive Vice President, | 2021 | 268,789 | 88,000 | 88,038 | (3) | — | 82,386 | 527,213 | ||||||||||||||||||
| CFO and Treasurer | 2020 | 256,186 | 108,500 | 46,525 | (3) | — | 83,276 | 494,487 | ||||||||||||||||||
| Loren D. Cole | 2022 | 236,454 | 70,000 | 70,041 | (3) | — | 77,358 | 453,853 | ||||||||||||||||||
| Executive Vice President | 2021 | 227,710 | 74,250 | 74,269 | (3) | — | 71,015 | 447,244 | ||||||||||||||||||
| and CIO | 2020 | 216,542 | 84,000 | 36,019 | (3) | — | 69,193 | 405,754 | ||||||||||||||||||
| Peter K. Cosgrove | 2022 | 248,040 | 75,000 | 75,024 | (3) | — | 86,172 | 484,236 | ||||||||||||||||||
| Executive Vice President, | 2021 | 238,867 | 79,750 | 79,786 | (3) | — | 81,728 | 480,131 | ||||||||||||||||||
| CCO and CRO | 2020 | 232,010 | 77,000 | 33,032 | (3) | — | 76,868 | 418,910 | ||||||||||||||||||
| Daniel D. Fariello | 2022 | 245,066 | 72,500 | 72,532 | (3) | — | 71,568 | 461,666 | ||||||||||||||||||
| President, | 2021 | 236,003 | 77,000 | 77,004 | (3) | — | 70,548 | 460,555 | ||||||||||||||||||
| Capital Bank Division | 2020 | 219,832 | 80,500 | 34,507 | (3) | — | 66,244 | 401,083 | ||||||||||||||||||
(1) The amounts shown for salary represent the annual rate of base salary and the amounts shown for bonus represent amounts earned in 2022, 2021 and 2020, respectively. | ||||||||||||||||||||||||||
(2) The amounts shown for Mr. Tomson were made under the terms of the 2021 Equity Incentive Plan and reflect the grant date fair value as reported in Note 14 of the Corporation's audited consolidated financial statements contained in the Corporation's Form 10-K. The awards granted during 2022 are restricted and fully vest on the first anniversary of the grant date. The awards granted during 2021 and 2020 were fully vested upon grant. The stock awards granted to Mr. Tomson for 2021 and 2020 include director fees in the amounts of $31,942 and $22,337, respectively. | ||||||||||||||||||||||||||
(3) The amounts shown for Messrs. Krebs, Cole, Cosgrove and Fariello represent shares granted under the 2021 Equity Incentive Plan and reflect the grant date fair value as reported in Note 14 of the Corporation’s audited consolidated financial statements contained in the Corporation’s Form 10-K. Twenty percent of the restricted stock awarded vests each year commencing with the first anniversary date of the award and is 100 percent vested on the fifth anniversary date. For more information on the restricted stock granted, see the “Grants of Plan-Based Awards Table” section. The amount of the awards are determined in the discretion of the Compensation Committee as discussed in the “Elements of Compensation” section. | ||||||||||||||||||||||||||
(4) The amounts shown include non-discretionary and matching contributions made by the Bank to the 401(k) Plan, dividends paid on unvested restricted stock, Defined Contribution SERP contributions and perquisites such as car allowance, personal portion of Bank-owned vehicles and club memberships. | ||||||||||||||||||||||||||
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All Other Compensation Table for 2022
| Name | Employer Contributions to 401(k) | Dividends on Restricted Stock Awards | Automobile Allowance/ Usage | Club Memberships | Defined Contribution SERP Contribution | Total | |||||||||||||||||
| ($) | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||||
| Anders M. Tomson | 18,300 | 3,706 | 18,318 | 25,057 | 120,000 | 185,382 | |||||||||||||||||
| Karl F. Krebs | 18,300 | 0 | (1) | 0 | 9,629 | 55,307 | 83,235 | ||||||||||||||||
| Loren D. Cole | 16,244 | 4,351 | 0 | 9,473 | 47,291 | 77,358 | |||||||||||||||||
| Peter K. Cosgrove | 16,019 | 3,359 | 0 | 17,186 | 49,608 | 86,172 | |||||||||||||||||
| Daniel D. Fariello | 13,913 | 4,344 | 0 | 4,298 | 49,013 | 71,568 | |||||||||||||||||
(1) Mr. Krebs restricted stock awards are fully vested as he has reached retirement age. | |||||||||||||||||||||||
Grants of Plan-Based Awards Table
| Name | Grant Date | All Other Stock Awards: Number of Shares of Stock | Grant Date Fair Value of Stock Awards(3) | |||||||||||
| (#) | ($) | |||||||||||||
| Anders M. Tomson | 1/12/2022 | 3,985 | (1) | 181,517 | ||||||||||
| Karl F. Krebs | 12/20/2022 | 1,789 | (2) | 82,544 | ||||||||||
| Loren D. Cole | 12/20/2022 | 1,518 | (2) | 70,041 | ||||||||||
| Peter K. Cosgrove | 12/20/2022 | 1,626 | (2) | 75,024 | ||||||||||
| Daniel D. Fariello | 12/20/2022 | 1,572 | (2) | 72,532 | ||||||||||
(1) This grant was awarded to Mr. Tomson as part of a year-end bonus for 2021. The award was granted pursuant to the 2021 Equity Incentive Plan on January 12, 2022 and fully vests on the first anniversary of the grant date. | ||||||||||||||
(2) These grants were awarded on December 20, 2022 and vest in five equal annual installments commencing on the first anniversary of the grant date. | ||||||||||||||
(3) These amounts represent the grant date fair value as reported in Note 14 of the Corporation's audited consolidated financial statements contained in the Corporation's Form 10-K for the year ended December 31, 2022. The stock was awarded under the 2021 Equity Incentive Plan. | ||||||||||||||
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Outstanding Equity Awards at December 31, 20172022 Table
The following table shows all outstanding restricted stock awards held by each NEO under the 2021 Equity Incentive Plan and the Restricted Stock Plan as of December 31, 2022.
| Name | Grant Date | Number of Shares or Units of Stock That Have Not Yet Vested(1) | Market Value of Shares or Units of Stock That Have Not Vested(2) | ||||||||
| (#) | ($) | ||||||||||
| Anders M. Tomson | 01/12/2022 | 3,985 | 182,792 | ||||||||
| Loren D. Cole | 12/20/2022 | 1,518 | 69,631 | ||||||||
| 12/15/2021 | 1,282 | 58,805 | |||||||||
| 12/16/2020 | 615 | 28,210 | |||||||||
| 12/18/2019 | 426 | 19,541 | |||||||||
| 12/19/2018 | 188 | 8,624 | |||||||||
| Peter K. Cosgrove | 12/20/2022 | 1,626 | 74,585 | ||||||||
| 12/15/2021 | 1,377 | 63,163 | |||||||||
| 12/16/2020 | 564 | 25,871 | |||||||||
| 12/18/2019 | 158 | 7,247 | |||||||||
| Daniel D. Fariello | 12/20/2022 | 1,572 | 72,108 | ||||||||
| 12/15/2021 | 1,329 | 60,961 | |||||||||
| 12/16/2020 | 590 | 27,063 | |||||||||
| 12/18/2019 | 358 | 16,421 | |||||||||
| 12/19/2018 | 199 | 9,128 | |||||||||
(1) Restricted stock awards vest in five equal annual installments commencing on the grant date, other than the awards made to Mr. Tomson, which vest on the first anniversary of the grant date. | |||||||||||
(2) These amounts are based on $45.87, the closing price for the Corporation's common stock on December 31, 2022. | |||||||||||
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| Restricted Stock Awards Under the Restricted Stock Plan | ||||||||
| Name | Grant Date | Number of Shares or Units of Stock That Have Not Vested (1) | Market Value of Shares or Units of Stock That Have Not Vested (2) | |||||
| (#) | ($) | |||||||
| Karl F. Krebs | 12/20/2017 | 1,307 | 62,867 | |||||
| 12/20/2016 | 1,100 | 52,910 | ||||||
| 12/16/2015 | 763 | 36,700 | ||||||
| 12/17/2014 | 426 | 20,491 | ||||||
| Louis C. DiFabio | 12/20/2017 | 955 | 45,936 | |||||
| 12/20/2016 | 856 | 41,174 | ||||||
| 12/16/2015 | 654 | 31,457 | ||||||
| 12/17/2014 | 426 | 20,491 | ||||||
| 12/20/2013 | 187 | 8,995 | ||||||
| Karen R. Makowski | 12/20/2017 | 1,056 | 50,794 | |||||
| 12/20/2016 | 856 | 41,174 | ||||||
| 12/16/2015 | 654 | 31,457 | ||||||
| 12/17/2014 | 426 | 20,491 | ||||||
| 12/20/2013 | 187 | 8,995 | ||||||
| Anders M. Tomson | 12/17/2014 | 426 | 20,491 | |||||
| 12/20/2013 | 187 | 8,995 | ||||||
| Thomas W. Wirth | 12/20/2017 | 905 | 43,531 | |||||
| 12/20/2016 | 367 | 17,653 | ||||||
| 12/16/2015 | 327 | 15,729 | ||||||
| 12/17/2014 | 142 | 6,830 | ||||||
| 12/20/2013 | 125 | 6,013 | ||||||
(1) Restricted stock awards vest over a five year period after the date of the grant. | ||||||||
(2) These amounts represent the market value of $48.10, the closing price for the Corporation's common stock on December 29, 2017. | ||||||||
Restricted Stock Vested During the Fiscal Year Ended December 31, 20172022 Table
The following table shows all restricted stock awards held by each NEO under the Restricted Stock Plan or the 2021 Equity Incentive Plan that vested during the year-ended December 31, 2022.
| Name | Vested Date | Number of Shares of Stock Awards Acquired on Vesting | Value Realized on Vesting | |||||||||||
| (#) | ($) | |||||||||||||
| Karl F. Krebs | 12/20/2022 | 1,789 | 78,000 | (1) | ||||||||||
| Loren D. Cole | 12/15/2022 | 320 | 14,304 | (2) | ||||||||||
| 12/16/2022 | 205 | 9,053 | (3) | |||||||||||
| 12/16/2022 | 213 | 9,406 | (3) | |||||||||||
| 12/19/2022 | 187 | 8,135 | (4) | |||||||||||
| 12/20/2022 | 73 | 3,183 | (1) | |||||||||||
| Peter K. Cosgrove | 12/15/2022 | 344 | 15,377 | (2) | ||||||||||
| 12/16/2022 | 188 | 8,302 | (3) | |||||||||||
| 12/16/2022 | 78 | 3,444 | (3) | |||||||||||
| Daniel D. Fariello | 12/15/2022 | 332 | 14,840 | (2) | ||||||||||
| 12/16/2022 | 196 | 8,655 | (3) | |||||||||||
| 12/16/2022 | 179 | 7,905 | (3) | |||||||||||
| 12/19/2022 | 199 | 8,657 | (4) | |||||||||||
| 12/20/2022 | 121 | 5,276 | (1) | |||||||||||
(1) These amounts are based on $43.60, the closing price of Chemung Financial Corporation’s common stock on the 12/20/2022 vesting date. | ||||||||||||||
(2) These amounts are based on $44.70, the closing price of Chemung Financial Corporation’s common stock on the 12/15/2022 vesting date. | ||||||||||||||
(3) These amounts are based on $44.16, the closing price of Chemung Financial Corporation’s common stock on the 12/16/2022 vesting date. | ||||||||||||||
(4) These amounts are based on $43.50, the closing price of Chemung Financial Corporation’s common stock on the 12/19/2022 vesting date. | ||||||||||||||
Chemung Financial Corporation Amended and Restated Restricted Stock Plan (the "Restricted Stock Plan")
Prior to the approval of the 2021 Equity Incentive Plan, the Corporation granted awards to executive officers, excluding the CEO, under the Restricted Stock Plan, a component plan of the 2014 Omnibus Plan. Awards granted under the Restricted Stock Plan vest over a five-year period, lapse with termination of employment, unless otherwise waived by the Compensation Committee, and vest immediately in case of death, disability or a change in control. In connection with the implementation of the 2021 Equity Incentive Plan, no more awards are permitted to be granted under the Restricted Stock Plan and the plan will remain in existence solely for the purpose of administering outstanding grants thereunder. For additional information, see the "Summary Compensation Table" section.
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| Name | Vested Date | All Other Stock Awards: Number of Shares of Stock | Vested Date Fair Value of Stock Awards | ||||||
| (#) | ($) | ||||||||
| Karl F. Krebs | 12/20/2017 | 274 | 14,823 | (1) | |||||
| 12/15/2017 | 213 | 11,134 | (2) | ||||||
| 12/15/2017 | 254 | 13,277 | (2) | ||||||
| Louis C. DiFabio | 12/20/2017 | 187 | 10,117 | (1) | |||||
| 12/20/2017 | 213 | 11,523 | (1) | ||||||
| 12/19/2017 | 158 | 8,549 | (3) | ||||||
| 12/15/2017 | 218 | 11,395 | (2) | ||||||
| 12/15/2017 | 213 | 11,134 | (2) | ||||||
| Karen R. Makowski | 12/20/2017 | 213 | 11,523 | (1) | |||||
| 12/20/2017 | 187 | 10,117 | (1) | ||||||
| 12/19/2017 | 198 | 10,714 | (3) | ||||||
| 12/15/2017 | 218 | 11,395 | (2) | ||||||
| 12/15/2017 | 213 | 11,134 | (2) | ||||||
| 02/06/2017 | 217 | 7,708 | (4) | ||||||
| Anders M. Tomson | 12/20/2017 | 187 | 10,117 | (1) | |||||
| 12/19/2017 | 237 | 12,824 | (3) | ||||||
| 12/15/2017 | 213 | 11,134 | (2) | ||||||
| Thomas W. Wirth | 12/20/2017 | 125 | 6,763 | (1) | |||||
| 12/20/2017 | 91 | 4,924 | (1) | ||||||
| 12/19/2017 | 158 | 8,549 | (3) | ||||||
| 12/15/2017 | 109 | 5,697 | (2) | ||||||
| 12/15/2017 | 71 | 3,711 | (2) | ||||||
(1) These amounts represent the market value of $54.10, the closing price for the Corporation’s common stock on the 12/20/2017 vesting date. | |||||||||
(2) These amounts represent the market value of $52.27, the closing price for the Corporation’s common stock on the 12/15/2017 vesting date. | |||||||||
(3) These amounts represent the market value of $54.11, the closing price for the Corporation’s common stock on the 12/19/2017 vesting date. | |||||||||
(4) This amount represents the market value of $35.52, the closing price of the Corporation's common stock on the 2/6/2017 vesting date. | |||||||||
Deferred Compensation Plan
The Deferred Compensation Plan allows a select group of management and employees to defer all or a portion of their annual compensation to a future date. Eligible employees areand generally highly compensatedhighly-compensated employees and are designated by the Board of Directors from time to time. Messrs. Tomson, Cosgrove and Krebs were the only NEOs who participated in the Deferred Compensation Plan in 2022. Investments in the plan are recorded as trading assets and deferred amounts are an unfunded liability of the Corporation. The Deferred Compensation Plan requires deferral elections be made before the beginning of the calendar year during which the participant will perform the services to which the compensation relates. Participants in the Deferred Compensation Plan are required to elect a form of distribution, either lump sum payment or annual installments not to exceed ten years, and a time of distribution, either a specified age or a specified date. The terms and conditions for the deferral of compensation are subject to the provisions of Section 409A of the IRS Code. The income from investments and cost of the plan are recorded as dividend, non-interest income, and non-interest expenses, respectively, in the consolidated statements of income.
Deferred Compensation Table
As previously discussed in the “Deferred Compensation Plan” section, the Bank maintains a Deferred Compensation Plan. The following table sets forth the contributions made by the NEOs for 2022.
| Name | Year | Executive Contributions in Fiscal Year 2022 | Registrant Contributions in Fiscal Year 2022 | Aggregate Earnings in Fiscal Year 2022(1) | Aggregate Balance as of December 31, 2022(2) | ||||||||||||
| ($) | ($) | ($) | ($) | ||||||||||||||
| Anders M. Tomson | 2022 | 39,075 | — | 2,464 | 102,410 | ||||||||||||
| Peter K. Cosgrove | 2022 | 274,918 | — | 19,876 | 881,695 | ||||||||||||
| Karl F. Krebs | 2022 | 27,653 | — | 7,778 | 292,311 | ||||||||||||
(1) These amounts are not reported in the "Summary Compensation Table" section. | |||||||||||||||||
(2) Amounts reflected in the “Summary Compensation Table” section for 2021 for Messrs. Tomson, Cosgrove and Krebs include $39,075, $272,495 and $27,653, respectively, and for 2020 include $30,250, $265,644 and $25,635, respectively. | |||||||||||||||||
Pension Benefits
•Tax Qualified Pension Plan: Messrs. DiFabio and Wirth are participants inThe Bank adopted the Pension Plan, which is a non-contributory defined benefit pension plan. The Pension Plan isplan and a “qualified plan” under the Code and therefore must be funded. Contributions are deposited to the Planplan and held in trust. The Pension Plan assets may only be used to pay retirement benefits and eligible plan expenses.
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•Defined Contribution Supplemental Executive Retirement Plan (the "Defined(the “Defined Contribution SERP"SERP”): The Defined Contribution SERP is provided to certain executives, including the NEOs, to motivate and retain key management employees by providing a non-qualified retirement benefit that is payable at retirement, disability, death and certain other events. In 2017, Messrs. DiFabio, Krebs, Tomson, WirthUnder the Defined Contribution SERP, the Bank will make an annual contribution to each participant's account equal to 20% of the participant's base salary until the earlier of (i) the participant's termination of employment for any reason or (ii) the discontinuation of the participant's participation in the plan. The annual contribution is credited on the last day of the plan year, provided that the participant is employed on that date. On the first day of each calendar quarter, participants' accounts are credited with simple interest at a rate of return equal to the average yield on 5-year U.S. treasury notes for the immediately preceding calendar quarter. Participants are zero percent vested in their account until they have participated in the plan for five years. Participants become 50% vested in their account after five years of participation in the plan and Mrs. Makowski werean additional 10% for each year of participation thereafter. Participants become fully vested in their account in the only active participants.event of attaining normal retirement age, a change in control, death or disability.
The Defined Contribution SERP is intended to be an unfunded plan maintained primarily for the purpose of providing deferred compensation benefits for a select group of management or highly compensatedhighly-compensated employees under SectionsSection 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act of 1974. The Defined Contribution SERP'sSERP’s expense is the Corporation’s annual contribution plus interest credits.
| Name | Plan Name | Number of Years Credited Service | Present Value of Accumulated Benefit | ||||
| ($) | |||||||
| Louis C. DiFabio | Chemung Canal Trust Company Pension Plan | 27 | 525,680 | ||||
| Thomas W. Wirth | Chemung Canal Trust Company Pension Plan | 30 | 529,932 | ||||
Defined Contribution SERP Table
| Name | Registrant Contribution in Fiscal Year 2022(1) | Aggregate Earnings in Fiscal Year 2022(1) | Aggregate Balance as of December 31, 2022(2) | ||||||||
| ($) | ($) | ($) | |||||||||
| Anders M. Tomson | 120,000 | 22,612 | 885,856 | ||||||||
| Karl F. Krebs | 55,307 | 11,885 | 457,832 | ||||||||
| Loren D. Cole | 47,291 | 3,926 | 180,249 | ||||||||
| Peter K. Cosgrove | 49,608 | 3,360 | 163,392 | ||||||||
| Daniel D. Fariello | 49,013 | 5,212 | 225,543 | ||||||||
(1) Contributions are reflected in the “Summary Compensation Table” section for the fiscal year ended December 31, 2022. No aggregate earnings were reported in the “Summary Compensation Table” section. | |||||||||||
(2) Amounts reflected in the “Summary Compensation Table” section in 2021 for Messrs. Tomson, Krebs, Cole, Cosgrove and Fariello include $103,600, $53,758, $45,542, $47,773 and $47,201, respectively. Amounts reflected in the “Summary Compensation Table” section for 2020 for Messrs. Tomson, Krebs, Cole and Cosgrove include $96,000, $51,237, $43,309 and $46,402, respectively. Mr. Fariello was not an NEO in 2020. | |||||||||||
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| Name | Registrant Contribution | Aggregate Earnings(1) | Aggregate Balance(2) | ||||||
| ($) | ($) | ($) | |||||||
| Anders M. Tomson | 75,000 | 5,036 | 341,858 | ||||||
| Karl F. Krebs | 43,760 | 2,562 | 179,542 | ||||||
| Louis C. DiFabio | 36,154 | - | 36,154 | ||||||
| Karen R. Makowski | 40,227 | 3,678 | 235,135 | ||||||
| Thomas W. Wirth | 35,060 | - | 35,060 | ||||||
(1) No amounts reported in the Executive Compensation Table on page 21. | |||||||||
(2) Amounts reflected in the Executive Compensation Table for previous years: Mr. Tomson $122,694; Mr. Krebs $84,465; Mr. DiFabio $0; Mr. Wirth $0; and, Mrs. Makowski $78,675. | |||||||||
| Name | Year | Employee Contribution | Registrant Contribution | Aggregate Earnings(1) | Aggregate Balance(2) | ||||||||
| ($) | ($) | ($) | ($) | ||||||||||
| Karl F. Krebs | 2017 | 21,880 | - | 5,388 | 116,208 | ||||||||
| Louis C. DiFabio | 2017 | 15,996 | - | 5,163 | 157,519 | ||||||||
| Karen R. Makowski | 2017 | 9,300 | - | 3,891 | 57,606 | ||||||||
(1) No amounts reported in the Executive Compensation Table on page 21. | |||||||||||||
(2) Amounts reflected in the Executive Compensation Table for previous years: Mr. Krebs $43,123; Mr. DiFabio $27,256; and, Mrs. Makowski $15,753. | |||||||||||||
Pay Ratio Disclosure
The Bank’s compensation program is designed to motivate all employees to carry out the Corporation’s mission of value for our shareholders, value for our clients, value for our employees and value for our communities. The Corporation aims to pay appropriate compensation at all levels within the Bank.
The following is a reasonable estimate calculation, prepared in accordance with SEC rules, of the ratio of the total annual compensation paid to Mr. Tomson, our President and& CEO, to the median of the total annual compensation of all of ourthe Bank’s employees except Mr. Tomson, for 2017.2022.
Our median employee for this calculation was determined using wages from our payroll records as reported to the Internal Revenue Service on Form W-2 for all of our active employees, excluding Mr. Tomson, as of December 31, 2017.2022. We included all employees, whether employed on a full-time, part-time or seasonal basis. We annualized the data used in the calculation only for our full-time employees who were hired during 2017.2022.
After identifying the median employeeemployees as described above, we determined that the median employee had a total annual compensation of $41,402$41,432 for 2017, which was determined using the same methodology as required by the SEC for named executive officers as set forth in the summary compensation table on page 21.2022. The total annual compensation for Mr. Tomson for the same period shown in the summary compensation table was $738,148.$1,176,899. The ratio of Mr. Tomson’s totalTomson’s annual compensation for 20172022 to the median total annual compensation of all other employees for 20172022 was 18:estimated to be 28:1.
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Pay Versus Performance
We are required by SEC rules to disclose the following information regarding compensation paid to our Named Executive Officers (“NEOs”). The amounts set forth below under the headings “Compensation Actually Paid to PEO” and “Average Compensation Actually Paid to non-PEO NEOs” have been calculated in a manner consistent with Item 402(v) of Regulation S-K. Footnote (2) below sets forth the adjustments from the Total Compensation as reported in the Summary Compensation Table above.
The following table sets forth additional compensation information of our Chief Executive Officer (PEO) and our non-PEO NEOs along with total shareholder return ("TSR") and net income for fiscal years 2022 and 2021:
| Value of Initial Fixed $100 Investment based on: | ||||||||||||||||||||
Year | Summary Compensation Table (SCT) Total for PEO(1) | Compensation actually paid to PEO(1) | Average SCT Total for non-PEO NEOs(1) | Average Compensation actually paid to non-PEO NEOs(1) | TSR(4) | Net Income(5) | ||||||||||||||
| 2022 | $1,176,899 | $1,179,170 | $481,142 | $480,209 | $139 | $28,783 | ||||||||||||||
| 2021 | $1,016,142 | $1,019,869 | $478,786 | $501,351 | $140 | $26,425 | ||||||||||||||
(1)Mr. Tomson was our PEO in 2022 and 2021. In 2022 and 2021, the non-PEO NEOs were Messrs. Krebs, Cole, Cosgrove and Fariello.
(2) To calculate Compensation Actually Paid for the PEO, the following adjustments were made to Summary Compensation Table total compensation, calculated in accordance with the SEC methodology for determining Compensation Actually Paid for each year shown:
| Adjustments to PEO Compensation | |||||||||||
| 2022 | 2021 | ||||||||||
| Summary Compensation Table Total | $1,176,899 | $1,016,142 | |||||||||
Minus Restricted Stock Awards from Summary Compensation Table | (181,517) | (157,514) | |||||||||
Plus Year-End Equity Value of Unvested Awards Granted During the Year | 182,792 | — | |||||||||
Plus Change in Value of Unvested Awards Granted in Prior Years | (2,710) | — | |||||||||
Plus Value of Awards Granted and Vested During Year | — | 161,241 | |||||||||
Plus Change in Value of Prior Years' Awards Vested During Year | — | — | |||||||||
Minus Value of Performance-Based Awards Forfeited During Year | — | — | |||||||||
Plus Dividends and Earning Paid on Awards in the Covered Fiscal Year Prior to Vest | 3,706 | — | |||||||||
| Compensation Actually Paid | $1,179,170 | $1,019,869 | |||||||||
(3) To calculate average Compensation Actually Paid for the non-PEO NEOs, the following adjustments were made to Summary Compensation Table total compensation, calculated in accordance with the SEC methodology for determining Compensation Actually Paid for each year shown:
| Adjustments to non-PEO Compensation | |||||||||||
| 2022 | 2021 | ||||||||||
| Summary Compensation Table Total | $481,142 | $478,786 | |||||||||
Minus Restricted Stock Awards from Summary Compensation Table | (75,035) | (79,774) | |||||||||
Plus Year-End Equity Value of Unvested Awards Granted During the Year | 54,080 | 57,876 | |||||||||
Plus Change in Value of Unvested Awards Granted in Prior Years | (1,027) | 14,803 | |||||||||
Plus Value of Awards Granted and Vested During Year | 19,500 | 21,198 | |||||||||
Plus Change in Value of Prior Years' Awards Vested During Year | (1,464) | 6,619 | |||||||||
Minus Value of Performance-Based Awards Forfeited During Year | — | — | |||||||||
Plus Dividends and Earning Paid on Awards in the Covered Fiscal Year Prior to Vest | 3,013 | 1,843 | |||||||||
| Compensation Actually Paid | $480,209 | $501,351 | |||||||||
(4) Cumulative TSR is calculated using the Company's common share price at the end and the beginning of the applicable measurement period assuming reinvestment of dividends.
(5) Net income as reported on the Company's consolidated financial statements.
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The following charts illustrate the relationship between compensation actually paid to the NEOs for 2021 and 2022, and each of the financial metrics stated therein.
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| Agreements with Named Executive Officers | ||
The following paragraph summarizes the estimated amounts payable to each of the NEOs under their change in control agreements assuming employment was terminated December 31, 2022.
The Bank has entered into a Change in Control Agreement with Mr. Tomson, President and CEO. If within 12 months following a change in control, Mr. Tomson’s employment is terminated without cause or Mr. Tomson resigns for good reason, the agreement provides for a cash severance payment equal to 2.99 times the highest annual rate of base salary and highest annual incentive award paid to, or earned by, Mr. Tomson for any of the two calendar years ending with the year in which Mr. Tomson’s employment ended. Payments would be made in equal monthly installments for thirty-six (36) months following the effective date of the termination. The executive's shares of restricted stock shall immediately vest and all restrictions thereon shall lapse. See “Potential Payments Table” below for more information.
The Bank has entered into Change in Control Agreements with executive officers Krebs, Cole, Cosgrove and Fariello. If within 12 months following a change in control, the executive’s employment is terminated without cause or the executive resigns for good reason, the agreements provide for payments of 2.0 times the executive’s highest annual rate of base salary and highest annual incentive award paid to, or earned by, the executive for any of the two calendar years ending with the year in which the executive’s employment ended. Payments would be made in equal monthly installments for twenty-four (24) months following the effective date of the termination. The executive’s shares of restricted stock shall immediately vest and all restrictions thereon shall lapse. See “Potential Payments Table” below for more information.
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Potential Payments Table:
| Name and Principal Position | Type of Payment | Involuntary Termination Without Cause or Voluntary Termination For Good Reason Within One Year of Change in Control(1)(2)(3) | Voluntary Resignation | Retirement | Disability | Death | Involuntary Termination With Cause(1) | Involuntary Termination Without Cause or Voluntary Termination for Good Reason(1)(3) | ||||||||||||||||||
| ($) | ($) | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||||||
| Severance | 3,049,800 | — | — | — | — | — | — | |||||||||||||||||||
| Anders M. Tomson | Restricted Stock(4) | 182,792 | — | — | 182,792 | 182,792 | — | — | ||||||||||||||||||
| President and CEO | Non-Qualified SERP(5) | 885,856 | 885,856 | 885,856 | 885,856 | 885,856 | — | 885,856 | ||||||||||||||||||
| Disability | — | — | — | 231,718 | — | — | — | |||||||||||||||||||
| Total | 4,118,447 | 885,856 | 885,856 | 1,300,365 | 1,068,648 | — | 885,856 | |||||||||||||||||||
| Severance | 905,066 | — | — | — | — | — | — | |||||||||||||||||||
| Karl F. Krebs | Restricted Stock(4) | — | — | — | — | — | — | — | ||||||||||||||||||
| Executive Vice President, | Non-Qualified SERP(5) | 457,832 | 457,832 | 457,832 | 457,832 | 457,832 | — | 457,832 | ||||||||||||||||||
| CFO and Treasurer | Disability | — | — | — | — | — | — | — | ||||||||||||||||||
| Total | 1,362,898 | 457,832 | 457,832 | 457,832 | 457,832 | — | 457,832 | |||||||||||||||||||
| Severance | 769,908 | — | — | — | — | — | — | |||||||||||||||||||
| Loren D. Cole | Restricted Stock(4) | 184,810 | — | — | 184,810 | 184,810 | — | — | ||||||||||||||||||
| Executive Vice President, | Non-Qualified SERP(5) | 180,249 | — | — | 180,249 | 180,249 | — | — | ||||||||||||||||||
| and CIO | Disability | — | — | — | 309,736 | — | — | — | ||||||||||||||||||
| Total | 1,134,967 | — | — | 674,795 | 365,059 | — | — | |||||||||||||||||||
| Severance | 815,080 | — | — | — | — | — | — | |||||||||||||||||||
| Peter K. Cosgrove | Restricted Stock(4) | 170,866 | — | — | 170,866 | 170,866 | — | — | ||||||||||||||||||
| Executive Vice President, | Non-Qualified SERP(5) | 163,392 | — | — | 163,392 | 163,392 | — | — | ||||||||||||||||||
| CCO and CRO | Disability | — | — | — | 108,018 | — | — | — | ||||||||||||||||||
| Total | 1,149,338 | — | — | 442,276 | 334,258 | — | — | |||||||||||||||||||
| Severance | 798,132 | — | — | — | — | — | — | |||||||||||||||||||
Restricted Stock(4) | 185,682 | — | — | 185,682 | 185,682 | — | — | |||||||||||||||||||
| Daniel D. Fariello | Non-Qualified SERP(5) | 225,543 | — | — | 225,543 | 225,543 | — | — | ||||||||||||||||||
| President, Capital Bank Division | Disability | — | — | — | 352,083 | — | — | — | ||||||||||||||||||
| Total | 1,209,357 | — | — | 763,307 | 411,224 | — | — | |||||||||||||||||||
(1) The term "cause" generally means personal dishonesty, willful misconduct, breach of fiduciary duty, willful violation of any law, rule, or regulation (other than traffic violations or similar offenses), gross insubordination, or gross negligence. For the purposes of this paragraph, no act or failure to act shall be considered "willful" unless done or omitted to be done, by the executive officer not in good faith and without a reasonable belief that the executive officer's action or omission is in the best interests of the Bank. In no event shall the executive officer be deemed to have been terminated by Cause unless and until there shall have been delivered to the executive officer a copy of a certification by a majority of the non-officer members of the Board of Directors finding that the executive was guilty of conduct deemed to be Cause. | ||||||||||||||||||||||||||
(2) The term "change in control" generally means (i) any merger, consolidation or other corporate reorganization in which the Corporation or the Bank is not the surviving corporation, (ii) the event that any "person" (as that term is used in Section 13(d) and 14(d)(2) of the Exchange Act) becomes the beneficial owner, directly or indirectly, of securities of the Corporation or the Bank representing thirty percent (30%) or more of the combined voting power of the Bank's then outstanding securities, provided that the acquisition of additional securities or voting power by a person who, as of the date of this Agreement, already is the direct or indirect beneficial owner of twenty percent (20%) of such combined voting power, shall not constitute a change of control, or (iii) the event in which a majority of the members of the Corporation's or the Bank's Board of Directors is replaced during any twenty-four (24) month period or who was appointed to the Corporation's or the Bank's Board of Directors during such twenty-four (24) month period as a result of a directive, supervisory agreement or order issued by the primary federal regulator of the Corporation or the Bank prior to the date of appointment or election. | ||||||||||||||||||||||||||
(3) The term "good reason" generally means (i) a material reduction in the executive officer's base salary or benefits in effect as of the effective date of the change in control; (ii) a material reduction in the executive officer's authority, duties or responsibilities from the position and attributes associated with the executive officer's position (or any successor executive position in effect as of the effective date of the change in control); (iii) a relocation of the executive officer's principal place of employment in effect immediately prior to the effective date of the change in control, resulting in an increase of the executive officer's commute of thirty (30) miles or more; or (iv) a material breach of the executive officer's change in control agreement by the Bank. | ||||||||||||||||||||||||||
(4) Our 2021 Equity Incentive Plan and the Restricted Stock Plan provide that, if the executive officer's employment is terminated without cause or if the executive officer resigns for good reason, after the effective date of the change in control (i.e., "double-trigger"), then the executive officer's unvested restricted stock awards become fully vested. The value of equity amounts represents the fair value of $45.87 per share, the closing price for the Corporation's common stock on December 31, 2022. | ||||||||||||||||||||||||||
(5) In the event of change in control, the executive officer's Defined Contribution SERP account will become fully vested and paid in a lump sum cash payment (i.e., "single trigger"). | ||||||||||||||||||||||||||
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| Delinquent Section 16(a) Reports | ||
The Corporation’s executive officers and directors, as well as any 10% shareholders of the Corporation, are required by Section 16(a) of the Securities Exchange Act of 1934 requires directors and certain officers of the Bank and persons who beneficially own more than ten percent of the outstanding shares of the Corporation’s common stock to file reports of beneficial ownership and changes of beneficialwith the SEC regarding their ownership of shares ofCorporation common stock, ofincluding changes in their stock ownership. The Corporation has reviewed these reports filed by the CorporationCorporation’s executive officers and directors during 2022, along with written statements received from the SEC. SEC regulations require such persons to furnish the Corporation with copies of all Section 16(a) reports they file.directors and executive officers. Based solely upon review of the copies of suchthese reports furnished to the Corporation and its representatives and certain representations that no other reports were required, subject to the SEC reporting requirements, all persons except Mr. Swandirectors and Mrs. Hazelton who each had one late report with one transaction,executive officers filed the required reports on a timely basis.
| Shareholder Proposals for Inclusion in the 2024 Proxy Statement | |||||
| Type of Service | Fiscal Years Ended December 31, | ||||
| 2017 | 2016 | ||||
| Audit Fees | $275,000 | $256,000 | |||
| Audit-Related Fees | 7,500 | 40,000 | |||
| Captive Insurance Subsidiary Fees | 18,000 | 130,000 | |||
| All Other Fees | — | — | |||
| Total Fees | $300,500 | $426,000 | |||
The Corporation’s Board will establish thea date for the 20192024 Annual Meeting of Shareholders. Under SEC regulations, in order for a shareholder to be entitled to have a shareholder proposal included in the Corporation’s proxy statement for the 2019 meeting, the shareholder must be a record or beneficial owner of a least 1% or $2,000 in market value of shares entitled to be voted at the meeting, and shall have held such shares for at least one year and shall continue to own such shares through the date on which the meeting is held. The shareholder'sshareholder’s proposal must be received by the Corporate Secretary of Chemung Financial Corporation at its principal executive offices, One Chemung Canal Plaza, Elmira, New York 14901, no later than November 30, 2018,December 29, 2023, which is 120 days prior to the anniversary date the proxy statement for the 20192023 Annual Meeting will bewas first mailed.made available. The shareholder must also satisfy the other requirements of SEC Rule 14a-8. Under SEC Rule 14a-19, a shareholder intending to engage in a director election contest with respect to the Corporation's annual meeting of shareholders to be held in 2024 must give the Corporation notice of its intent to solicit proxies by providing the names of its nominees and certain other information at least 60 calendar days before the anniversary of the previous year's annual meeting. This deadline is April 8, 2024. Additionally, our Corporation Bylaws require the name and address of record of the proposing shareholder, appropriate information regarding the matter sought to be presented or person to be nominated, as well as the number of shares of our common stock that are owned by the proposing shareholder. Note that this requirement is separate from the notice requirements described in this Proxy Statement regarding the advance notice that is required before a shareholder is permitted to present a proposal for a vote at any annual meeting pursuant to the Corporation’s Bylaws.
The Corporation’s 2017 Annual ReportBylaws establish an advance notice procedure with regard to Shareholders on Form 10-K, together withcertain matters, including shareholder proposals and director nominations, which are properly brought before an abbreviated report forannual meeting of shareholders. To be timely, a shareholder’s notice must be delivered to or mailed and received at the twelve-month period accompanies thisCorporation’s principal executive offices not less than 120 calendar days prior to the anniversary date the Proxy Statement which was mailedfirst made available to shareholders onin connection with the previous year’s annual meeting of shareholders. In the event that no annual meeting was held in the previous year or about March 30, 2018. The annual report is not partthe date of the proxy solicitation materials. The Annual Report on Form 10-K is also available onannual meeting has been changed by more than 30 days from the Bank’s website, http://www.snl.com/IRW/Docs/100690 and will be furnished to anydate contemplated at the time of the previous year’s Proxy Statement, notice by the shareholder upon written request to the Corporate Secretary, One Chemung Canal Plaza, Elmira, New York 14901.
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