THE ANNUAL MEETING

A description of the items to be considered at the Annual Meeting, as well as other information concerning TrustCo and the meeting, is set forth below.

Proposal 1 - Election of Directors

The first item to be acted upon at the Annual Meeting is the election of two directors to serve on the TrustCo board of directors. The nominees for election as directors for three-year terms expiring at TrustCo’s 20192020 Annual Meeting are Dennis A. De GennaroDr. Anthony J. Marinello and Brian C. Flynn.William D. Powers. Each of the nominees is an incumbent director, although Mr. Flynn was appointed by the board of directors to fill a vacancy and joined the board on February 16, 2016. Eacheach nominee was approved by the Nominating and Corporate Governance Committee of TrustCo’s board of directors.directors, as well as by the full board of directors of TrustCo.

TrustCo’s Certificate of Incorporation provides that TrustCo’s board of directors will consist of not less than five nor more than fifteen members, with, under TrustCo’s Bylaws, the total number of directors to be fixed by resolution of the board or the shareholders. Currently, TrustCo and Trustco Bank have eight directors. The termthe board of Robert A. McCormick, the former chairman, president, and chief executive officereach of TrustCo and Trustco Bank will expire at the Annual

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Meeting, and, as announced by TrustCo on February 18, 2016, Mr. McCormick has decided to retire from the board of directors at that time rather than seek a new term. The board of directors has decided not to immediately fill the vacancy on the board that will be created upon Mr. McCormick’s retirement and to reduce the size of the board until such time, if any, that the board decides to add a new director. Accordingly, effective upon the close of the Annual Meeting and Mr. McCormick’s retirement, the board will beis fixed at seven members.

The pages that follow set forth information regarding TrustCo’s nominees, as well as information regarding the remaining members of TrustCo’s board. Proxies will be voted in accordance with the specific instructions contained in the proxy card; properly executed proxies that do not contain voting instructions will be voted “FOR” the election of TrustCo’s nominees. If any such nominee becomes unavailable to serve, the shares represented by all valid proxies will be voted for the election of such other person as TrustCo’s board may recommend. Each of TrustCo’s nominees has consented to being named in this proxy statement and to serve if elected. The board of directors has no reason to believe that any nominee will decline or be unable to serve if elected.

Information with regard to the business experience of each director and nominee and the ownership of common stock on December 31, 20152016 has been furnished by each director and nominee or has been obtained from TrustCo’s records. TrustCo’s common stock is the only class of its equity securities outstanding.

INFORMATION ON TRUSTCO DIRECTORS AND NOMINEES

NOMINEES FOR ELECTION AS TRUSTCO DIRECTORS⁽¹⁾ FOR

THREE-YEAR TERMS TO EXPIRE IN 20192020

OTHER TRUSTCO DIRECTORS⁽¹⁾

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See footnotes on page 7.

OTHER TRUSTCO DIRECTORS⁽¹⁾

See Footnotes on Page 6

4OTHER TRUSTCO DIRECTORS⁽¹⁾(continued)

See footnotes on page 7.

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See footnotes on page 7.

INFORMATION ON TRUSTCO EXECUTIVE OFFICERS

See Footnotes on Page 6

INFORMATION ON TRUSTCO EXECUTIVE OFFICERS (continued)

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See footnotes on page 7-8.

TRUSTCO DIRECTORS, NOMINEES, AND EXECUTIVE OFFICERS AS A GROUP (15(13 INDIVIDUALS) BENEFICIALLY OWN 5,245,8114,519,381 SHARES OF COMMON STOCK, WHICH REPRESENTS 5.51%4.56% OF THE OUTSTANDING SHARES.

Footnotes:

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See footnotes on page 8.

Board Meetings and Committees

TrustCo’s full board held tentwelve meetings during 2015.2016. All of the directors, except for Robert A. McCormick and Robert J. McCormick, would be considered to be “independent directors” under the listing qualifications rules for companies such as TrustCo, whose shares are traded on The NASDAQ Stock Market. TrustCo’s independent directors met in executive session twice during 2015.2016. All directors fully attended all board meetings (except one board member missedwas absent and excused from one meeting), and allthe independent directors fully attended both executive session meetings during 2015.2016.

TrustCo maintains a Nominating and Corporate Governance Committee, an Audit Committee, a Compensation Committee, a Board Compliance Committee, a Fiduciary Committee, a Nominating and Corporate Governance Committee, and a Risk Committee. The charter of each of the committees may be found on TrustCo’s website (www.trustcobank.com) under the “Investor Relations” tab.

The Nominating and Corporate Governance Committee held sevenfour meetings in 2015.2016. The directors currently serving on the Nominating and Corporate Governance Committee are Dr. Anthony J. Marinello (Chairman), Dennis A. De Gennaro, Brian C. Flynn, Thomas O. Maggs, William D. Powers, and William J. Purdy. The function of the Nominating and Corporate Governance Committee is to assist the board by recommending and reviewing individuals for consideration as directors and develop and annually review governance guidelines applicable to the Company.

TrustCo’s Audit Committee held eleventwelve meetings in 2015.2016. The directors currently serving on the Audit Committee are William D. Powers (Chairman), Dennis A. De Gennaro, Brian C. Flynn, Thomas O. Maggs, Dr. Anthony J. Marinello, and William J. Purdy. The purpose of the Audit Committee is to oversee the Company’s accounting and financial reporting processes and audits of the Company’s financial statements; the committee’s functions also include the review of TrustCo’s and Trustco Bank’s internal audit procedures and the review of the adequacy of internal accounting controls for TrustCo and Trustco Bank. In addition, the Audit Committee annually recommends the use of external audit firms by TrustCo and Trustco Bank in the coming year, after reviewing performance of the existing vendors and available audit resources. Please refer to the discussion under “Audit Committee” for a more detailed description of the Audit Committee’s activities.

TrustCo’s Compensation Committee held sixfive meetings in 2015.2016. The directors currently serving on the Compensation Committee are Thomas O. Maggs (Chairman), Dennis A. De Gennaro, Brian C. Flynn, Dr. Anthony J. Marinello, William D. Powers, and William J. Purdy. The

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function of the Compensation Committee is to generally oversee the employee compensation and benefit policies, plans and programs of TrustCo and Trustco Bank, including the establishment, annual review and approval of the compensation of the executive officers. In addition, the Compensation Committee is responsible for annually reviewing board compensation and making appropriate recommendations for changes thereto. Please refer to the discussion under “Executive Compensation” for a more detailed description of the Compensation Committee’s activities relative to the named executive officers.

The board of directors of Trustco Bank created the Board Compliance Committee in June 2015, and the committee held sixtwelve meetings in 2015.2016. The directors currently serving on the Board Compliance Committee are William D. Powers (Chairman), Dennis A. De Gennaro, Brian C. Flynn, Thomas O. Maggs, Dr. Anthony J. Marinello, and William J. Purdy. The function of the Compliance Committee is to provide assistance to the board in fulfilling its oversight responsibility relating to compliance with legal and regulatory requirements and Trustco Bank’s policies, including overseeing Trustco Bank’s communications and responses to and cooperation with the Office of the Comptroller of Currency (“OCC”) and other governmental authorities with jurisdiction over TrustCo or Trustco Bank, and any agreements, orders or directives with respect to such authorities, including the July 21, 2015 agreement between Trustco Bank and the OCC.

The board of directors of TrustCo created the Fiduciary Committee in October 2016, and the committee held one meeting in 2016. The directors currently serving on the Fiduciary Committee are Robert J. McCormick (Chairman), Dennis A. De Gennaro, Brian C. Flynn, Thomas O. Maggs, Dr. Anthony J. Marinello, William D. Powers, and William J. Purdy. The function of the Fiduciary Committee is to assist the board of directors in fulfilling its responsibilities with respect to the Trustco Bank Financial Service Department regarding fiduciary, agency and custodial activities; oversee the Financial Services Department in providing estate administration, trust administration, investment management services, and custodial services; advise the board of directors with respect to the adoption of appropriate policies to be observed in offering such services; oversee and enforce sound risk management practices calculated to minimize risk and loss to Trustco Bank and its customers; and report to the board of directors on the activity of the Financial Services Department in the conduct of its business.

The board of directors of TrustCo created the Risk Committee in February 2016, and the committee held three meetings in 2016. The directors currently serving on the Risk Committee are William J. Purdy (Chairman), Dennis A. De Gennaro, Brian C. Flynn, Thomas O. Maggs, Dr. Anthony J. Marinello, and William D. Powers. The function of the Risk Committee is to oversee the Company’s enterprise risk management program and to ensure that risk is appropriately identified, measured, treated, monitored, and reported within the governance structure approved by the board.

Each member during 2015 of the committees described above attended all meetings of each such committee. Although he is now acommittee during 2016 (except that one member of each committee,was absent and excused from the December meetings). Mr. Flynn wasjoined the board in February 2016 and did not aattend the January meetings.

Compensation Committee Interlocks and Insider Participation. No member of the board of directorsCompensation Committee: (1) was an officer or employee of TrustCo or Trustco Bank during 2015.Bank; (2) was formerly an officer of TrustCo or Trustco Bank; or (3) had any relationship requiring disclosure by TrustCo under the SEC’s rules governing disclosure of related party transactions. No executive officer of TrustCo served as a director or member of a compensation committee of another entity, one of whose executive officers served as a member of TrustCo’s Board of Directors or Compensation Committee.

Board Leadership Structure and Role in Risk Oversight

Board Leadership.The position of TrustCo’s chairman of the board and the office of its president and chief executive officer are held by different persons. The chairman of the board, Dennis A. De Gennaro, is an independent director who has been a member of the board since 2009. Mr. De Gennaro became chairman in January 2016 to serve a term ending upon the earlier of December 31, 2018 or the date the board elects a successor chairman. Mr. De Gennaro is a member of the Nominating and Corporate Governance Committee, the Audit Committee, the Compensation Committee, the Board Compliance Committee, the Fiduciary Committee, and the Risk Committee. Under TrustCo’s Corporate Governance Guidelines, the positions of chief executive officer and chairman of the board are separate and the members of the board elect a chairman as they deem appropriate from time to time from among TrustCo’s independent directors. Also under the guidelines, in order to better ensure that the chairman of the board will have the opportunity to carry out the planning and direction duties associated with the chairman’s position, the chairman is to be elected to a term to expire three years from its start date or on such earlier date as the board elects a new chairman. (The board retains,

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however, the authority to elect a director as chairman even though the then-current chairman has not served in that role for three years and is not obligated to nominate forre-election by shareholders a director whose three-year tenure as chairman is not complete.) At least once each year, the Corporate Governance Committee will consider the performance of the chairman relative to the Corporate Governance Guidelines and may make such recommendations as it deems appropriate.

The board of directors has determined that the separation of the roles of chairman of the board and chief executive officer enhances board independence and oversight. More specifically, the board believes that separating the roles will allowallows the Company’s president and chief executive officer, Robert J. McCormick, to better focus on developing and implementing corporate initiatives, enhancing shareholder value and strengthening business and operations, while allowing the chairman of the board to lead the board in its fundamental role of providing advice to, and independent oversight of, management.

Role in Risk Oversight.Risk is inherent in the operation of every financial institution, and management of risk is a key part of the institution’s success. Risks faced by TrustCo and Trustco Bank include credit risk, interest rate risk, liquidity risk, operational risk, strategic risk, and reputational risk. TrustCo management is responsible for theday-to-day management of the risks faced by the Company, while the board of directors as a whole is ultimately responsible for risk management oversight. In carrying out its responsibilities in this area, the board has delegated important duties to its committees. The newly formed Risk Committee will have, as noted above, responsibility to oversee the management of the Company’s Enterprise Risk Management program and to ensure that risk is appropriately identified, measured, treated, monitored, and reported within the governance structure approved by the board. The Audit Committee assists the full board with respect to the adequacy of TrustCo’s internal controls and financial reporting process, the independence and performance of TrustCo’s internal and external auditors, and compliance with legal and regulatory requirements. The Trustco Bank Board Compliance Committee assists the board with respect to compliance with legal and regulatory requirements. The Fiduciary Committee oversees the Company’s Financial Services Department and assists the full board in managing risk associated therewith, as well as in fulfilling its responsibilities regarding fiduciary, agency and custodial activities. Finally, the Compensation Committee has the authority to conduct annual reviews of the Company’s incentive compensation practices to assess the extent to which such arrangements and practices encourage risk-taking and whether the level of encouragement of such risk-taking is appropriate under the circumstances. The Compensation Committee has concluded that the compensation policies are not reasonably likely to have a material adverse effect on the Company.

The entire board reviews and approves, on an annual basis, all significant policies that address risk within TrustCo’s consolidated organization, including credit risk, interest rate risk, liquidity risk, operational risk, strategic risk, and reputational risk. The board monitors risk through reports received on a periodic basis from management, and the board annually approves the Company’s business continuity plan as well as its insurance program.

Director Nominations

Each of the nominees standing for election at the Annual Meeting was considered and selected by the Nominating and Corporate Governance Committee and unanimously approved by TrustCo’s independent directors.

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The Nominating and Corporate Governance Committee is appointed by the board of directors in part to review and identify individuals qualified to become board members and to recommend to the board the nominees for consideration at the Annual Meeting.

As a general matter, the board believes that a candidate for board membership should have high personal and professional ethics, integrity, and values; an inquiring and independent mind, practical wisdom, and mature judgment; broad policy-making experience in business, government, or community organizations; expertise useful to TrustCo and complementary to the background and experience of other board members; willingness to devote the time necessary to carrying out the duties and responsibilities of board membership; commitment to serve on the board over a period of several years to develop knowledge about TrustCo, its strategy, and its principal operations; and willingness to represent the best interests of all of TrustCo’s constituencies. Although neither the committee nor the full board of directors has a formal policy with respect to diversity, the committee and the board have a general objective of having a board that encompasses a broad range of talents and expertise and reflects a diversity of background, experience, and viewpoints.

After a potential candidate is identified, the committee will investigate and assess the qualifications, experience, and skills of the candidate. The investigation process may, but need not, include one or more meetings with the candidate by a member or members of the committee. From time to time, but at least once each year, the committee meets to evaluate the needs of the board and to discuss the candidates for nomination to the board. Such candidates may be presented to the shareholders for election or appointed to fill vacancies. All nominees must be approved by the committee and by a majority of the independent members of the board.

The committee will consider written recommendations by shareholders for nominees for election to the board. The persons identified in such recommendations will be evaluated under the same criteria and procedures used for other board candidates. Under TrustCo’s bylaws, written nominations of persons for election to the board of directors must be delivered or mailed to the board not fewer than 14 and not more than 50 days prior to any meeting of shareholders called for the purpose of the election of directors, or not later than 7 days prior to the meeting if fewer than 21 days’ notice of the meeting is provided.

Shareholder Communications with Board and Board Attendance at Annual Meeting of Shareholders

TrustCo provides an informal process for shareholders to send communications to the board. Shareholders who wish to contact the board or any of its members may do so in writing to TrustCo Bank Corp NY, Attention: Corporate Secretary, P.O. Box 1082, Schenectady, New York 12301-1082.

Although TrustCo does not have a policy with regard to board members’ attendance at the Annual Meeting of Shareholders, the directors are encouraged to attend such meetings, and all of the directors attended the 20152016 Annual Meeting.

Vote Required and Recommendation

The two nominees for election to the TrustCo board for three-year terms expiring at the 20192020 Annual Meeting of Shareholders who receive the greatest number of votes will be elected to the board. Each nominee must, however, receive the affirmative vote of a majority of the outstanding shares of TrustCo common stock in order to be elected a director.elected.

THE TRUSTCO BOARD RECOMMENDS ATHAT TRUSTCO SHAREHOLDERS VOTE “FOR” THE ELECTION OF THE TRUSTCO DIRECTOR NOMINEES AS TRUSTCO DIRECTORS, WHICH IS ITEM 1 ON THE TRUSTCO PROXY CARD.

Proposal 2 - Advisory Resolution on the Compensation of TrustCo’s Named Executive Officers

Section 14A the Securities Exchange Act of 1934 requires TrustCo to providehas annually provided shareholders with the opportunity to vote to approve, on a nonbinding advisory basis, the compensation of the named executive officers as disclosed in this proxy statement, including the Compensation Discussion and Analysis, and the tabular disclosure regarding the compensation of the named executive officers and the accompanying narrative. (This opportunity is often referred to as a “say-on-pay”“say-on-pay” vote or proposal.) At least once every six years, TrustCo must hold a non-binding, advisory vote on the frequency of future say-on-pay votes, with stockholders having the choice of every year, every two years, or every three years. TrustCo held its first frequency vote at its 2011 annual meeting of shareholders, and the next frequency vote will be held in 2017.

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Although TrustCo’s shareholders have approved holding the say-on-pay vote every third year, TrustCo’s Compensation Committee and the full board of directors have determined that an annual advisory vote on the compensation of the named executive officers would better serve the Company and its shareholders. In the view of the board, since the compensation of the named executive officers is evaluated, adjusted as appropriate, and approved on an annual basis, the views of the Company’s shareholders as expressed in the say-on-pay advisory vote should also be considered annually. Annual advisory votes, in the view of the board, provide an effective means of communicating shareholder views about the Company’s executive compensation programs.

Thesay-on-pay proposal described below gives TrustCo shareholders the opportunity to endorse, or not endorse, the compensation of the named executive officers. The vote on the proposal is not intended to address any specific element of executive compensation. Further, the vote is advisory, which means that it is not binding on TrustCo, its board of directors, or the Compensation Committee. The Compensation Committee will, however, take into account the outcome of the vote when considering future executive compensation decisions. Please refer to the “Compensation Discussion and Analysis” for a discussion of the effect of the vote on thesay-on-pay proposal at TrustCo’s 2016 annual meeting on the Compensation Committee’s decisions during 2016.

As discussed in more detail in the Compensation Discussion and Analysis, TrustCo seeks to offer a compensation structure for its executive officers designed to compare favorably with its peer group while taking into account the experience and responsibilities of each particular executive officer. TrustCo also seeks to provide compensation incentives that promote the enhancement of shareholder value in conjunction with encouraging and rewarding a high level of performance evidenced through the achievement of corporate and individual financial and business objectives and managing and minimizing the level of risk inherent in any compensation program. The Compensation Committee and the board of directors believe that the policies and procedures described in the Compensation Discussion and Analysis are effective in implementing the Company’s compensation program and achieving its goals and that the compensation of the Company’s named executive officers in 20152016 reflects and supports these compensation policies and procedures.

Resolution

In light of the foregoing, TrustCo is asking shareholders to approve the following resolution at the Annual Meeting:

RESOLVED, that the shareholders of TrustCo Bank Corp NY approve, on an advisory basis, the compensation of the named executive officers, as disclosed in TrustCo’s Proxy Statement for the 20162017 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the 20152016 Summary Compensation Table, and the other related tables and narrative disclosure.

Vote Required and Recommendation

The affirmative vote of a majority of all of TrustCo’s issued and outstanding shares of common stock is required to adopt the foregoing resolution approving the compensation of TrustCo’s named executive officers. Abstentions on properly executed proxy cards and shares not

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voted by brokers and other entities holding shares on behalf of beneficial owners will have the same effect as a vote “against” this proposal. Dissenters’ rights are not available to shareholders who object to the proposal.

THE TRUSTCO BOARD RECOMMENDS THAT TRUSTCO SHAREHOLDERS VOTE “FOR” THIS PROPOSAL, WHICH IS ITEM 2 ON THE TRUSTCO PROXY CARD.

Proposal 3 - Advisory Resolution on the Frequency of an Advisory Vote on the Compensation of TrustCo’s Named Executive Officers

TrustCo is required under the federal securities laws to provide shareholders the opportunity to vote, on a nonbinding, advisory basis, as to how frequently TrustCo should seek future “say on pay” advisory votes on the compensation of its named executive officers.

More specifically, TrustCo is asking whether shareholders would prefer that thesay-on-pay advisory vote occur every year, every two years or every three years. (Shareholders also may, if they wish, abstain from casting a vote on this proposal.) The board of directors will take into consideration the outcome of the resolution when considering the frequency of the advisory vote on executive compensation in the future.

Although TrustCo’s shareholders in 2011 approved holding thesay-on-pay vote every third year, TrustCo’s Compensation Committee and the full board of directors subsequently determined that an annual advisory vote on the compensation of the named executive officers would better serve the Company and its shareholders. In the view of the board, since the compensation of the named executive officers is evaluated, adjusted as appropriate, and approved on an annual basis, the views of the Company’s shareholders as expressed in thesay-on-pay advisory vote should also be considered annually. Annual advisory votes, in the view of the board, provide an effective means of communicating shareholder views about the Company’s executive compensation programs.

Because the vote on the frequency of the say on pay advisory vote also is advisory, it is not binding on the board or TrustCo in any way. It is expected, however, that the board of directors and the Compensation Committee will take the outcome of the vote into account when considering the frequency of future advisory votes on executive compensation.

Resolution

Shareholders may cast a vote on the preferred voting frequency by selecting the option of one year, two years or three years (or abstain) when voting in response to the following resolution:

RESOLVED, that the shareholders of TrustCo Bank Corp NY determine, on an advisory basis, whether the preferred frequency of an advisory vote on the executive compensation of the Company’s named executive officers as set forth in the Company’s proxy statement should be every year, every two years, or every three years.

Vote Required and Recommendation

The board of directors will consider the alternative (every year, every two years, or every three years) receiving the highest number of votes as the recommendation of TrustCo shareholders with respect to the frequency of the advisory vote on executive compensation. Dissenters’ rights are not available to shareholders who object to the proposal.

THE TRUSTCO BOARD OF DIRECTORS RECOMMENDS THAT TRUSTCO SHAREHOLDERS VOTE “FOR” THEONE YEAR (EVERY YEAR)OPTION ON THIS PROPOSAL, WHICH IS ITEM 3 ON THE TRUSTCO PROXY CARD.

Proposal 4 - Ratification of the Appointment of Independent Auditors

The Audit Committee of TrustCo’s board of directors has recommended, and the board of directors on February 16, 201621, 2017 reappointed, Crowe Horwath LLP as TrustCo’s Independent Auditors for the year ending December 31, 2016.2017. At the Annual Meeting, shareholders will consider and vote on the ratification of the engagement of Crowe Horwath LLP for the fiscal year ending December 31, 2016.2017. Information with respect to the services provided in 20152016 and 20142015 to TrustCo by Crowe Horwath LLP is presented under the Audit Committee discussion, above. Representatives of Crowe Horwath LLP are expected to be present at the Annual Meeting to make a statement if they so desire and are also expected to be available to respond to appropriate questions that may be raised.

The following table presents fees for professional audit services, as well as other professional or consulting services, rendered by Crowe Horwath LLP. The services included audits of TrustCo’s annual consolidated financial statements for the years ended December 31, 20152016 and 20142015 and of the effectiveness of internal controls over financial reporting, tax return preparation services, and other services provided by Crowe Horwath LLP during the years ended December 31, 20152016 and 2014.2015.

TrustCo’s Audit Committee held twelve meetings in 2016. The directors currently serving on the Audit Committee are William D. Powers (Chairman), Dennis A. De Gennaro, Brian C. Flynn, Thomas O. Maggs, Dr. Anthony J. Marinello, and William J. Purdy. The purpose of the Audit Committee is to oversee the Company’s accounting and financial reporting processes and audits of the Company’s financial statements; the committee’s functions also include the review of TrustCo’s and Trustco Bank’s internal audit procedures and the review of the adequacy of internal accounting controls for TrustCo and Trustco Bank. In addition, the Audit Committee annually recommends the use of external audit firms by TrustCo and Trustco Bank in the coming year, after reviewing performance of the existing vendors and available audit resources. Please refer to the discussion under “Audit Committee” for a more detailed description of the Audit Committee’s activities.

Vote Required and Recommendation

The affirmative vote of a majority of all of TrustCo’s issued and outstanding shares of common stock is required to ratify the appointment of Crowe Horwath LLP as TrustCo’s Independent Auditors for the year ending December 31, 2016.2017. Abstentions on properly executed proxy cards and shares not voted by brokers and other entities holding shares on behalf of

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beneficial owners will have the same effect as a vote “against” this proposal. Dissenters’ rights are not available to shareholders who object to the proposal.

THE TRUSTCO BOARD RECOMMENDS THAT TRUSTCO SHAREHOLDERS VOTE “FOR” THIS PROPOSAL, WHICH IS ITEM 34 ON THE TRUSTCO PROXY CARD.

Other Matters

TrustCo’s board of directors is not aware of any other matters that may come before the Annual Meeting. If any matter not described in this proxy statement is properly presented at the Annual Meeting, the persons named in the proxy card will use their judgment to determine how to vote the shares for which they have voting authority.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This Compensation Discussion and Analysis (the “CD&A”) describes the objectives, policies and components of TrustCo’s 20152016 executive compensation program for its named executive officers. In addition, the CD&A will discuss and analyze the decisions of and actions taken by the Compensation Committee during, before and after 20152016 as those decisions and actions relate to such objectives and policies and the compensation paid to or earned by the named executive officers during 2015.2016.

Named Executive Officers

TrustCo has identified the following as executive officers as its named executive officers for 2015:officers:

Of those, Messrs. McCormick, Ozimek, Cushing, Salvador, Leonard, and Schreck are the Named Executive Officers.

Objectives of Executive Compensation Program

Our executive compensation program is designed to promote the following compensation objectives:

One of the objectives in structuring executive compensation plans and programs is to consider shareholder input when and as appropriate.

Engagement, Feedback and Changes

TrustCo has embraced an extensive shareholder outreach program through which ongoing shareholder input is sought regarding executive compensation and governance practices. During 2016, TrustCo reached out to its 10 largest investors, representing 36.5% of its outstanding shares. Through this outreach, TrustCo had conversations with investors representing 11% of the outstanding shares. In response to the input received, a number of substantive changes have been made. TrustCo values shareholder views and insights and believes that its engagement program builds informed relationships, promotes transparency, and improves accountability. The ultimate goal is to meaningfully relate executive pay to corporate performance. After listening to shareholder feedback and performing further analysis, TrustCo implemented the following changes:

Trustco has made significant and meaningful changes to the way it approaches governance and the way it discloses information about its operation and the compensation of its executives. The goal of these efforts is to provide shareholders with the data needed to fully evaluate the Company’s performance as measured against relevant metrics. The changes made demonstrate TrustCo’s commitment to such matters. TrustCo’s shareholder outreach is viewed as ongoing and not transactional and it will address other and new matters as they are presented.

Adoption of Clawback Policy

In July of 2016, TrustCo adopted an Executive Compensation Clawback Policy (the “Policy”) that provides for the recovery by the Company of certain elements of compensation received by executive officers of the Company if the Company is required to restate its financial statements or if an executive officer has committed an act of material fraud or misconduct.

In general, if the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with a financial reporting requirement under the securities laws, regardless of whether such restatement is a result of misconduct, and the Compensation Committee determines that one or more of the Company’s executive officers covered by the Policy received incentive-based compensation in excess of what should have been received based on the restatement during the three completed fiscal years immediately preceding the date on which the Company is required to prepare the restatement, the Company must recover the amount of such excess compensation, subject to certain, limited exceptions.

Executive Summary of Compensation Decisions for 20152016

For the past several years, TrustCo has been transitioning its executive compensation program from a program with an emphasis on short-term and fixed pay to a program that puts a

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greater emphasis on long-term and performance-based compensation. In 2015,2016, the Compensation Committee continued to emphasize long-term and performance-based compensation through suspension, of, or nominal use of, increases in base salaries and a continuation of the long-term and performance-based programs implemented in prior years. The following summary highlights the key decisions made and actions taken by the Compensation Committee during and prior to 20152016 with respect to the compensation paid to and earned by the named executive officers for 2015.2016.

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Highlights of 20152016 Business Results

TrustCo continued its strong performance in 2015. Net income2016. Foryear-end 2016, total shareholder return was $42.2 million,up 48.07% compared to $44.2 million in 2014. Included in the 2014 results are $2.7 million in one-time items, without which net income would have been $41.5 million. For year end 2015, returnpeer group median of 42.57%. Return on average equity and efficiency ratio were 10.41%9.94% and 55.08%55.67%, respectively, compared to 8.77%8.83% and 61.94%59.13% for the peer group median (the peer group consists of New York, New Jersey and Florida banks and thrifts with assestsassets between two and ten billion dollars as of September 30, 2015)2016). The Committee attributes this successful performance in part to the efforts of the Company’s executive officers, including the named executive officers, whose efforts are encouraged and rewarded by the Company’s executive compensation program.

Compensation Committee and Management Role in Determining Compensation for the Named Executive Officers

The Compensation Committee has responsibility for overseeing the Company’s executive compensation policies and practices, including establishing annual salaries, long-term incentive and

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equity incentive arrangements, annual incentive arrangements, and all other benefits and other compensation programs for the Company’s named executive officers. The Compensation Committee is solely responsible for setting the compensation of Mr. McCormick, the Company’s chief executive officerChief Executive Officer (“CEO”). As for the other named executive officers, the CEO generally makes recommendations to the Compensation Committee, which then evaluates the recommendations in light of the named executive officers’ performance, the Company’s performance, and other factors, and then determines the levels and structure of compensation for these executives.

In making its decisions, the Compensation Committee considers a number of factors including among others:

The Compensation Committee also considers other relevant factors, including involvement in the community, that might better position the organization to serve the immediate needs of Trustco Bank’s market. The Compensation Committee generally considers most or all of the above criteria, but does not generally assign a specific weight to any of these factors in making compensation decisions and may choose certain criteria in one year and others in other years. Except for specific goals set with respect to certain compensation programs described herein or otherwise set forth below, the Compensation Committee makes compensation decisions on a discretionary basis considering such factors and criteria as it deems appropriate from year to year.

Use of Peer Companies

As part of the Company’s analysis, review and implementation of its executive compensation program, the Compensation Committee reviews aspects of the financial performance of a group of companies the Company considers to be peer companies, as well as the compensation paid to certain executive officers of these peer companies. For example, annual bonus awards paid pursuant to the Company’s Executive Officer Incentive Plan are based on the achievement of certain performance metrics relative to the achievement of the same metrics by these peer companies. In addition, the Compensation Committee typically reviews the total compensation, including base salary, incentive compensation, equity awards, and other compensation, paid to the

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top three to five executive officers of these peer companies. While the Compensation Committee considers certain aspects of the financial performance of peer companies and the compensation paid to the named executive officers of peer companies relative to the Company’s performance and compensation paid to the Company’s named executive officers, it does not specifically benchmark compensation against these peer companies. Rather, the Compensation Committee uses the information as a general guide to setting compensation for the Company’s named executive officers.

The Compensation Committee typically determines the Company’s then currentthen-current peer group in December of each year in connection with setting certain aspects of annual compensation for the following year. The criteria the Compensation Committee uses to determine peer companies is generally the same from year to year and consists of New York, New Jersey and Florida basedFlorida-based banks and thrifts with assets of between $2 and $10 billion (measured as of the end of September of each year). The Compensation Committee is of the view that inasmuch as the Company’s major market areas are in Upstate New York, Downstate New York/Northern New Jersey and Florida, thesecomparably-sized companies wereare a reasonable representation of its peers. As of December 31, 2014,2015, the Company had total assets of approximately $4.64$4.73 billion. The composition of the peer group may change from year to year as new companies enter the relevant market or on account of the changes in the size of companies or mergers or acquisitions.

In December of 2014,2015, the Compensation Committee selected a peer group consisting of 2226 banks and thrifts.

The Company’s peer group selected in 20142015 consisted of the following companies (the “Peer Group”).:

In addition, for 2014,2015, the Compensation Committee also reviewed compensation paid to the executive officers of companies in a peer group designed by Institutional Shareholder Services, Inc. (“ISS”), a third-party provider of corporate governance research and analysis and shareholder advisory services for TrustCo in 2014. The ISS peer group was composed of companies having the

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same Global Industry Classification Standard as the Company and a similar asset size and market value. The ISS peer group consisted of the following companies (the “ISS Peer Group”).:

In December of 2014,2015, as part of itsyear-end review of the Company’s executive compensation program, the Compensation Committee reviewed the base salary and total compensation paid to the top five executive officers of the companies in the Peer Group. In addition, the Compensation Committee also compared the Company’s overall performance with that of companies in the Peer Group.

For 20132014 (the most recent period for which such information was available in December of 2014)2015), the median and average total compensation for the two separate Peer Groups was as follows:

By comparison, the total compensation for 20132014 for Messrs. McCormick, Ozimek, Cushing, Salvador, Leonard, and Schreck was $2,128,000, $1,388,000, $1,245,000, $567,000approximately $2,258,000, $246,000, $1,514,000, $1,330,000, $932,000, and $404,000,$462,000, respectively.

Utilizing performance data as of September 30, 2014,2015, the Compensation Committee concluded the Company’s overall performance compared favorably with that of the Company Peer Group. On an annualized basis, through September 30, 2014,2015, the comparison is as follows:

As reported by SNL Financial LC, TrustCo’s return on average equity was 11.80%10.43%, compared to a 20142015 Company Peer Group median, on an annualized basis, of 7.25%8.72% and a 20142015 Company Peer Group average of 5.90%7.89%. For the same period, on an annualized basis, TrustCo’s efficiency ratio was 52.27%56.04%, compared to the 20142015 Company Peer Group median of 59.78%61.97%, and a 20142015 Company Peer Group average of 64.84%61.76%. Further, TrustCo’s return on average assets was .89% compared to a 2015 Company Peer Group median, on an annualized basis, of .91% and a 2015 Company Peer Group average of .88%. TrustCo’snon-performing assets compared to total assets were 1.04% compared to a 2015 Company Peer Group median, on an annualized basis, of .69% and a 2015 Company Peer Group average of .86%.

While the Company is of similar size to the members of its peer group, the Compensation Committee also takes into consideration the unique size of the Company’s executive group as compared to other companies in the Company Peer Group. TrustCo and Trustco Bank typically operate with four senior executive officers, all of whom have a very broad scope of responsibilities. The Compensation Committee believes that the other institutions in the Company Peer Group have a larger pool of such officers having similar responsibilities.

Based on the data available in December of 2014,2015, the Compensation Committee concluded that the base salaries and total compensation of the Company’s top threefour named executive officers (Messrs. McCormick, Cushing, Salvador, and Salvador)Leonard) were competitive with the Company Peer Group, taking into account the scope of their respective responsibilities, the compensation paid by the Company Peer Group for similar positions, and the performance of the Company relative to the Company Peer Group, while the base salaries and total compensation of Messrs, LeonardSchreck and SchreckOzimek remained below the average compensation levels for the fourth and fifth highest paid executive officers of both Peer Groups.levels.

Compensation Consultants

The Company periodically retains independent compensation consultants to assess the compensation of the named executive officers and certain other executives to ensure pay competitiveness.competitiveness, including Arthur J. Gallagher & Co. In addition, the Compensation Committee has the authority to retain compensation consultants, periodically reviews information provided by or through third-party sources, and often relies on TrustCo’s Human Resources Department to gather such information.

In September 2014,June of 2016, the Company engagedretained Arthur J. Gallagher &and Co. (“Gallagher”) to undertakereview the base salaries paid to Chief Risk Officers among TrustCo’s peers. Because of a surveylack of certain aspectspublicly disclosed information about Chief Risk Officers with respect to companies in the Company Peer Group, Gallagher developed a broader peer group composed of financial institutions having an asset size comparable to TrustCo’s (the “Chief Risk Officer Peer Group”). The median asset size of the compensation paid to the top five executives of each companyfinancial institutions in the Chief Risk Officer Peer Group for purposes of comparing the Company’s long-term equity incentive award program with those of the Peer Group. In collecting the data, Gallagher reviewed the peer companies’ proxy statements for 2014, 2013 and 2012 which reflected the compensation paid during 2013, 2012 and 2011. Gallagher reviewed a variety of compensation elements, including (i) the value of long-term equity incentive awards granted to executives, (ii) the types of long-term equity incentive granted to executives, and (iii) salary and target bonus levels of executives, to calculate total compensation of executives and long-term equity incentive awards as a percent of total compensation. Among other methodologies, Gallagher used regression analysis to determine the “market” level of equity and cash compensation among the peer companies.

Gallagher found that among the peer companies, 38% granted time-vested stock options, 69% granted time-vested full share awards (restricted stock and restricted stock units) and 56% granted performance-vested awards. Among other findings, Gallagher determined that, (i) while the

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value of the long-term equity incentive awards (stock options, restricted stock units and performance shares) granted by the Company to the named executive officers as a group was generally in line with the Peer Group, the value of the long-term equity incentive awards granted to Mr. McCormick was slightly below market, (ii) theapproximately $5 million. The median base salary for Chief Risk Officers in the Chief Risk Officer Peer Group was $301,000. Gallagher indicated that in similar circumstances, where additional responsibilities are added to core responsibilities, total compensation is typically adjusted upward by 10% to 20%. As such, based in part on the survey data, the added compliance and regulatory responsibilities attendant to a Chief Risk Officer, and Mr. Leonard was below market,Leonard’s performance in the prior year and (iii)handling of the mixadded responsibilities through the first part of time-vested stock options2016, the Compensation Committee increased Mr. Leonard’s base salary by approximately 11% from $275,000 to $305,000.

The companies in the Chief Risk Officer Peer Group are: Ameris Bancorp, Banc of California, Inc., Bancfirst Corp, BBCN Bancorp, Inc., Boston Private Financial Holdings, Inc., Camden National Corp., Centerstate Banks, Inc., Financial Institutions, Inc., First Connecticut Bancorp, Independent Bank Group, Inc., LegacyTexas Financial Group, Inc.; LendingClub Corp., Midwestone Financial Group, National Bank Holdings, Corp., OFG Bankcorp, Park Sterling Corp., S&T Bancorp, Inc., Seacoast Banking Corp. of Florida, South State Corp., State Bank Financial Corp., and time-vested full value shares (restricted stock and restricted stock units) was trending away from stock options in favorUnivest Corp of full value shares.Pennsylvania.

20152016 Executive Compensation Program

For 20152016 there were three basic elements to TrustCo’s executive compensation program, each of which hassub-elements: annual compensation (comprised of salary, incentive bonus and other annual benefits), long-term compensation (comprised of stock options, restricted stock units, performance shares and the performance bonus program), and retirement compensation (comprised of defined benefit pension plan, the profit sharing/401(k) plan, and the supplemental retirement plan).

As a general matter, the Compensation Committee initially considers total compensation levels of the Company Peer Group prior to making compensation decisions with respect to each of the individual elements of executive compensation.

The description below provides discussion and analysis for each element of TrustCo’s executive compensation program for 2015,2016, including the relevant history of those components and the compensation decisions made for 2015.2016.

Annual Compensation

Base Salary. Annual salary is the base compensation for the Company’s named executive officers and is intended to provide a portion of compensation which is fixed to give our named executive officers resources upon which to live and provide them with a certain level of financial security. The salaries for our named executive officers are established based upon the scope of their respective responsibilities, taking into account competitive market compensation paid by the Peer Group for similar positions along with the performance of these companies relative to the performance of the Company. Salaries are reviewed at least annually and are also reviewed upon the request of the board of directors.

For 2015,2016, the Compensation Committee again determined not to increase the base salaries for Messrs. McCormick, Cushing, and Cushing,Salvador, which remained fixed at $880,000, $640,000, and $520,000 respectively (and base salaries for Messrs. McCormick and Cushing have remained fixed for the past sixseven years) at $880,000 and $640,000, respectively.. In making this determination,these determinations, the Compensation Committee reviewed comparable base salaries of executives in the Peer Group and the relative performance of the peer companies. Although the Compensation Committee believes that these executive officers’ performance through the third quarter of 20142015 led to the Company substantially outperforming ourCompany’s solid performance relative to the Peer Group, consistent with the Company’s policy to

gradually increase the proportion of performance-based compensation to fixed compensation, the Compensation Committee elected not to increase their base salaries. Instead, the Compensation Committee believes that the Company’s Executive Officer Incentive Plan (annual performance bonuses) and/or the Equity Incentive Plan (stock options, restricted units and performance share awards under the Amended and Restated TrustCo Bank Corp NY 2010 Equity Incentive Plan) are properly structured to reward exceptional performance with appropriate increased compensation.

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In determining the base salaries for Messrs. Salvador, LeonardSchreck and SchreckOzimek for 2015,2016, the Compensation Committee considered the Company’s overall financial performance along with the performance of the individual officers and the responsibilities each officer holds within the organization, each officer’s experience and the goals of each department for which the officer has responsibility. The Compensation Committee also considered the base salaries paid to executive officers at Peer Group Companies holding comparable positions.

After As previously discussed, Mr. Leonard received a recommendation from Mr. McCormick, and a review of Mr. Salvador’s overall performance, and considering that Mr. Salvador’s base salary has been frozen for the past four years, the Compensation Committee increased Mr. Salvador’s base salary by a modest 1.9% from $510,000increase in June 2016 attendant to $520,000.

After a recommendation from Mr. McCormick, and a review the Gallagher survey of Peer Group compensation, which revealed that Mr. Leonard’s base salary was below market, and of Mr. Leonard’s overall performance during 2014, the Compensation Committee increased his 2015 base salary by 5.8% from $260,000 to $275,000.

After a recommendation from Mr. McCormick and a review of Mr. Schreck’s overall performance during 2014, consistent with prior year increases and approximatelychange in line with average annual salary increases nationwide, the Committee increased his 2015 base salary by 2.9% from $255,000 to $262,500.

In 2014, in anticipation of Mr. Cushing’s retirement, Mr. Ozimek was promoted to the position of Chief Financial Officer of TrustCo and Trustco Bank. In recognition of the additional duties and responsibilities assumed by Mr. Ozimek and based in part on base salaries paidtitle to Chief Financial Officers at Peer Group companies, the Compensation Committee increased his base salary from $142,500 to $225,000.Risk Officer, among other reasons.

Executive Officer Incentive Plan for 20152016. The Executive Officer Incentive Plan provides for annual bonus compensation for the named executive officers based on the achievement of certain corporate performance targets. The Compensation Committee reviews and adjusts as appropriate the plan bonus opportunities, performance targets, structure and other metrics on an annual basis. In December of 2014,early 2016, the Compensation Committee met and approved the bonus opportunities, performance targets, structure and other metrics for 2015.the year.

The corporate performance targets set for 20152016 included return on average equity, return on average assets, efficiency ratio, and the ratio of nonperforming assets to total assets, each as measured against the composite performance of the Peer Group. The Compensation Committee selected these particular performance measures because it considers them to be important factors in driving corporate performance. Bonuses were earned for 20152016 only for achievement of corporate targets equal to or better than the Peer Group median and are based on threshold (20%(15% of base salary), target (30%(45% of base salary) and maximum (50%(60% of base salary) level of achievement.

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The following table sets forth the corporate performance targets, weightings, levels of achievement and other details under the Executive Officer Incentive Plan for 2015. Results and bonus awards under the plan were capped at a maximum of 50% of salary in 2015.2016.

20152016 Executive Officer Incentive Plan

In calculating the bonuses earned under the Executive Officer Incentive Plan, the Compensation Committee multiplied the weightingweighted percentages of the performance goals that were achieved (35%(25% for each of “return on average equity” and “efficiency ratio”“return on average assets”) by the level of achievement (20% better than peer group(target performance, 45%, for “return on average equity” and 13% better than peer groupthreshold performance, 15%, for “efficiency ratio” for “target” level of achievement) and corresponding percentage of“return on average assets”) by the executive’s base salary (30% of base salary for target level of achievement). Based on this calculation,salary. Accordingly, the Compensation Committee determined that the 2015 annual bonus was equal to 21% of the executive officers’ base salaries.

As noted above, in November 2015, and thus prior to the determination of the amounts payable to them under the2016 Executive Officer Incentive Plan generated bonuses for Messrs. McCormick, Ozimek, Cushing, Salvador, and Leonard, agreed to waive the amounts that would be payable to them. Based upon the Company’s results for 2015, the amounts that would have been payable to Messrs. McCormick, Cushing, Salvador and Leonard under the plan would have been $184,800, $134,400, $109,200 and $57,750, respectively, for a total of $486,150. As to Messrs. Ozimek and Schreck for 2015, the level of achievement of the corporate performance targets is set forth above$132,000, $35,250, $96,000, $78,000, $45,750, and the bonuses earned by those officers under the plan represented 21.00% of base salary or $47,250 and $55,125,$40,875, respectively.

Contingent Bonus Payments.Payments. Consistent with the Company’s practice of placing more emphasis on long-term compensation and to reward executives for sustained performance over more than one year, in December of 2014,early 2016, when the Compensation Committee approved the bonus opportunities and performance targets for 2015,2016, it required, as allowed under the plan, that to the extent that the achievement level for 20152016 resulted in bonus amounts in excess of 30% of base

salary for the executives, payment of the amount in excess of 30% (the “Contingent Bonus”) would be contingent on achievement of the same corporate performance goals set for 20152016 (return on average equity, return on average assets, efficiency ratio, and the ratio ofnon-performing assets) relative to the Peer Group

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average performance for 2016.2017. Payment levels were based on threshold (100% of Contingent Bonus), target (115% of Contingent Bonus) and maximum (125% of Contingent Bonus) level of achievement. At the threshold level, the Contingent Bonus would not be earned unless performance for at least two of the performance goals for 2015 is2016 are within 20% of (no more than 20% worse than) of the Peer Group average performance level for 2016.2017. Payment of any amount in excess of 100% of the Contingent Bonus would be subject to achievement of corporate performance goals at a level better than the Peer Group average performance. For 2015,2016, the Executive Officers Incentive Plan paid out 21%15% of base salary to the participating executive officers who did not waive the bonus.officers. As such, no amount of the 20152016 bonus was subject to this Contingent Bonus payment feature.

2016 Contingent Bonus Payment

The Compensation Committee believes that the Executive Officer Incentive Plan, as currently structured with the long-term performance feature, will incentivizeencourage and reward executives for achievement of key corporate performance goals that will contribute to long-term sustained performance, drive long-term shareholder value creation, and encourage executive decision making that mitigates excessive long-term risk. Moreover, it believes based on the Gallagher survey, that payment levels relative to base salary percentages are generally consistent with Peer Group bonus compensation levels and serve to reward executives for superior performance over more than one year with enhanced performance-based compensation in lieu of increased fixed compensation.

Other Annual Benefits

Annual Benefits.Benefits. The Company provides certain other annual benefits to the named executive officers in the form of (i) the benefits under its Executiveexecutive medical reimbursement plan described below, (ii) use of Company cars, (iii) country club memberships, (iv) financial planning services and (v) additional tax “gross up” payments. In addition to the specific reasons set forth below for providing these benefits, the Compensation Committee believes they help to provide a comprehensive compensation program that fosters the retention of our current executive officers and will serve to attract new highly talented, results-driven executives as the need may arise. The Compensation Committee believes that the value of these other annual benefits to the Company’s

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overall executive compensation program and the individual named executive officers outweighs the cost to the Company, which is set forth in the “All Other Compensation” column of the “Summary Compensation Table” below.

Executive Medical Reimbursement Plan.Plan. Messrs. McCormick, Cushing, Salvador and Leonard are participants in the Company’s Executive Medical Reimbursement Plan.executive medical reimbursement plan. The plan is intended to provide for the reimbursement of medical, hospitalization, and dental expenses that exceed the deductible orco-payment limits under the Company’s general medical insurance plans. The plan is intended to provide selected named executive officers with the basic resources upon which to live and provide them with a certain level of financial security in the face of extraordinary medical expenses, thus ensuring they remain focused on the Company’s business goals.

Use of Company Cars.Cars. The Company provides all of the named executive officers with the use of a car. The Compensation Committee believes that this benefit is generally consistent with industry practice (a majority of the peer companies provide a similar benefit) and recognizes and rewards the named executive officers for their achievement to the level of a senior executive.

Club Memberships.Memberships. The Company provides all of the named executive officers with membership in a club of their choice. The Compensation Committee believes that this benefit is generally consistent with industry practice (a majority of the peer companies provide a similar benefit) and provides a platform for the executives to entertain clients and potential clients of the Company and fosters interaction with other community leaders, which is intended to drive business development and, ultimately, Company performance.

Financial Planning.Planning.The Company pays for the cost of financial planning services for Messrs. McCormick, Cushing, Salvador, and Leonard by a professional consulting firm. This benefit is intended to enhance the overall efficiency of the Company’s executive compensation program by ensuring that the participating executive officers consider and properly plan for the various estate tax consequences, and generally take full advantage of the Company’s various compensation programs, taking into account their individual circumstances.

Additional Tax Payments.Payments. The Company makes additional annual payments to the named executive officers to ensure that the effect of the above-mentioned other annual benefits are tax neutral to the executives. Given that these benefits are generally designed with a business purpose, this additional tax benefit ensures that the value of these other annual benefits is not diminished and does not create additional financial consequences for the executives.

Long-Term Compensation

Long-Term Incentive Program. The Company maintains a long-term incentive compensation program through the Amended and Restated TrustCo Bank Corp NY 20152010 Equity Incentive Plan (Amended and Restated as of March 21, 2017) (the “Equity Incentive Plan”), the Performance Bonus Plan and Performance-Based Stock Appreciation Units. The Equity Incentive Plan provide for annual equity-based awards and the Performance Bonus Plan and the performance-Based Stock Appreciation Units provide for equity-based compensation in connection with a change in control. The Company believes that compensation in the form of equity-based awards ties the interests of the named executive officers with those of our shareholders and thereby drives long-term success.

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The Equity Incentive Plan was established to advance the interests of the Company and its shareholders by providing to executive officers an opportunity to acquire equity ownership in the Company along with the incentive advantages inherent in that equity ownership. The plan allows for the grant of a variety of equity-based awards, including stock options, restricted stock, restricted stock units and performance shares, and is administered by the Compensation Committee, which is empowered to determine the time, amount and recipients of awards and the other terms and conditions of awards to be granted thereunder, including the exercise price, vesting schedule, and expiration dates.

When granting equity-based awards to any of the named executive officers, the Compensation Committee reviews the executive officer’s position and individual performance in light of the Company’s goals to drive long-term performance and tie the interests of the named executive officers with those of our shareholders. The Compensation Committee also reviews awards granted to similarly situated officers at Peer Group companies. Ultimately, however, the Compensation Committee makes discretionary judgments based on these factors and its ongoing assessment and understanding of TrustCo and its executive officers. Awards are designed to ensure each named executive officer has a sense of ownership in the financial growth and the growth in total shareholder return of the Company.

In making the 20152016 annual equity awards, the Compensation Committee sought to award a specific present value of long-term compensation in the form of time-vested and performance-vested awards to each of the named executive officers based on their seniorityposition and contributions to the Company. The mix of different types of awards was intended to combine the retention and downside risk benefits inherent in restricted stock units and performance unitsshares with the shareholder value creation benefits inherent in stock options, while mitigating the perceived excessive risk that potentially manifests itself through a single type of award approach. Consistent with the Company’s continued emphasis on performance-based compensation tied to specific corporate goals, the Compensation Committee maintained its past practice of weighting the equity awards more heavily towards performance-vested awards (performance shares), which again represented 50%60% of the overall value granted in 2015. The Gallagher survey confirmed that2016 and eliminated options from the mix of time-vested awards (in the form of stock options and restricted stock units) and performance-vested awards, with a heavier weighting towards performance-vested awards, is consistent with the types of equity awards granted by companies in the Peer Group.2016 program.

Based in part on the findings in the Gallagher survey that the value of the long-term equity incentive awards (stock options, restricted stock units and performance shares) granted by the Company to the named executive officers as a group was generally in line with the Peer Group, theThe Compensation Committee sought to keep the total value of all the equity awards granted in 20152016 approximately the same as the total value to those awarded in 20142015 and 2013.2014. (The Summary Compensation Table provides additional information regarding the value of restricted stock awards and option grants.) Although the Gallagher survey found that the value of the long-term equity incentive award granted to Mr. McCormick in past years was below market, the Compensation Committee elected not to increase the value of the award to Mr. McCormick for 2015.

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Stock Option and Restricted Stock Unit Awards. In years prior to 2014,years, the Compensation Committee granted stock options and restricted stock unit awards in relatively equal proportion based on value. For example, in 2013, 50% Based upon industry data, the Committee is

of the value attributable to time-vested equity awards was granted inview that the form of stock options and 50% was granted in the form of restricted stock unit awards. Based on the findings in the Gallagher survey that Peer Group companies wereare trending away from use of stock options, for 2014options. In 2016, the Compensation Committee shifted the time-vested portion of the equity awardsentirely away from the use of stock options. The remaining 50% of the value of time-vested equity awards was granted in the form of performance shares, which are discussed in more detail below. For 2015, as in 2014, 35% of the valueRather, 60% of the time-vested equity awards waswere granted in the form ofperformance shares (see below) and 40% in restricted stock units and only 15% was granted in the form of stock options.units.

In 20152016 the Compensation Committee granted the following stock option and restricted stock unit awards to each of the named executive officers:

The exercise price of all stock options granted was $6.43 per share, the closing price of the Company’s common shares on November 17, 2015, the date of grant. The stock options will vest in equal annual amounts over a five year period, with all options being fully vested as of November 17, 2020. The stock options will expire on November 17, 2025 if unexercised. The periods of restriction applicable to the restricted stock unit awards will lapse as to all units awarded in a single tranche on November 17, 2018.15, 2019. In addition, vesting of options and the lapse of the restrictions may accelerate upon certain events, including the death, disability, or retirement of an award holder or upon a change in control of TrustCo. All restricted stock units are settled in cash only; no shares of the Company’s common stock will be issued in connection with the lapse of the period of restriction applicable to the units.

The definition of “change in control” is contained in the Equity Incentive Plan and is substantially the same as the definition contained in the senior executives’ employment agreements and the Performance Bonus Plan described below (and also substantially the definition set forth in the U.S. Treasury Department regulations under Section 409A of the Internal Revenue Code). The Compensation Committee believes that the definition of change in control is customary within the banking industry and that the circumstances under which change in control benefits would vest or become payable are reasonable.

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Performance Share Awards. In consultation with and based upon advice from a compensation consultant, in 2013 the Compensation Committee established the performance share award program under the Equity Incentive Plan. Consistent with that plan, in 20152016 the Compensation Committee granted the following performance-based equity awards to each of the named executive officers:

Each performance share represents the right to receive upon settlement an amount in cash equal to the fair market value of one share of TrustCo common stock. The performance shares generally will vest at the end of a three-year performance period based upon continued employment through the end of the performance period and the achievement of corporate performance goals. The three-year performance period for the 20152016 awards runs from January 1, 20162017 through December 31, 20182019 (the “Performance Period”). For the awards granted in 2015,2016, the achievement of the performance goals condition will be measured byas follows:

The Company’s Return on Average Equity measured as the percentage increase in the Company’s diluted earnings per share (“Diluted EPS”) asaverage of each of the endthree years within the defined performance period against a comparative group of the Performance Period over the Company’s Diluted EPS for the year ended December 31, 2015 (“Base Diluted EPS”). Based on a 2012 peer group comparison, for those companies that granted performance-vested long-term incentive awards, earnings per share was the most common criteria used. The number of performance shares subject toinstitutions with vesting will depend on the level of increase in Diluted EPS over the Base Diluted EPSand payout occurring at the end of the Performance Period.performance period and payout prior to March 15, 2020. The following table below sets forthoutlines the threshold, targetpeer ranking and maximum vesting criteriathe corresponding adjustment factor:

Return on Average Equity for the 2015 awards.Performance Period

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Upon completion of the Performance Period, the Compensation Committee will evaluate and determine the extent to which the time-based vesting conditions and performance-based vesting conditions have been satisfied and will certify the level of the performance goals attained and the amount payable as a result thereof. Payment in respect of the performance shares will be made in a lump sum in cash to the recipients on a date no later than March 15 of the year following the end of the Performance Period. Performance shares may vest, and be settled, prior to the end of the Performance Period upon the death, disability or retirement of a participant, or in the event of a change in control of TrustCo.

Achievement of 2013 Performance Share Awards.In November of 2013, the named executive officers received the following Performance Share Awards which had a three-year Performance Period that expired on December 31, 2016: