SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal year ended: December 31, 2002
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission File Number: 1-12709
-------
TOMPKINS TRUSTCO, INC. EMPLOYEE STOCK OWNERSHIP PLAN
----------------------------------------------------
(Full title of plan)
TOMPKINS TRUSTCO, INC.
------------------------------------------------------------
(Name of issuer of the securities held pursuant to the plan)
P.O. Box 460, The Commons
Ithaca, New York 14851
(607) 273-3210
----------------------------------------
(Address of principal executive offices)
TOMPKINS TRUSTCO, INC.
----------------------
EMPLOYEE STOCK OWNERSHIP PLAN
-----------------------------
FINANCIAL STATEMENTS
--------------------
AND
---
SUPPLEMENTAL SCHEDULES
----------------------
* * *
DECEMBER 31, 2002 and 2001
--------------------------
TABLE OF CONTENTS
-----------------
Page No.
--------
INDEPENDENT AUDITOR'S REPORT 1
FINANCIAL STATEMENTS
Statement of Net Assets Available for Benefits as of December 31,
2002 2
Statement of Net Assets Available for Benefits as of December 31,
2001 3
Statement of Changes in Net Assets Available for Benefits for the
Year Ended December 31, 2002 4
Statement of Changes in Net Assets Available for Benefits for the
Year Ended December 31, 2001 5
Notes to Financial Statements 6
SUPPLEMENTAL SCHEDULES
Schedule of Assets Held for Investment Purposes at End of Year as
of December 31, 2002 (Schedule I) 11
Schedule of Investment Assets That Were Both Acquired and Disposed
of Within the Plan Year for the Year Ended December 31, 2002
(Schedule II) 12
Schedule of Reportable Transactions for the Year Ended December 31,
2002 (Schedule III) 13
Independent Auditor's Report
----------------------------
May 2, 2003
To the Compensation and Personnel Committee
and Board of Directors of Tompkins Trustco, Inc.
Employee Stock Ownership Plan
We have audited the accompanying statements of net assets available for
benefits of the Tompkins Trustco, Inc. Employee Stock Ownership Plan ("the
Plan") as of December 31, 2002 and 2001, and the related statements of changes
in net assets available for benefits for the years then ended. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for benefits of the
Plan as of December 31, 2002 and 2001, and the changes in net assets available
for benefits for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedules of
Assets Held for Investment Purposes at End of Year as of December 31, 2002,
Investment Assets That Were Both Acquired and Disposed of Within the Plan Year
for the Year Ended December 31, 2002, and Reportable Transactions for the Year
Ended December 31, 2002 are presented for the purpose of additional analysis and
are not a required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These supplemental schedules are the responsibility of the Plan's
management. The supplemental schedules have been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
Dannible & McKee, LLP
Syracuse, New York
TOMPKINS TRUSTCO, INC.
----------------------
EMPLOYEE STOCK OWNERSHIP PLAN
-----------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
----------------------------------------------
DECEMBER 31, 2002
-----------------
Assets Allocated Unallocated Total
------ ------------ ------------ ------------
Investments, at fair value (Notes 2 and 5):
Money market funds $ 734 $ 40 $ 774
Corporate stock of Tompkins Trustco, Inc. 17,816,709 704,586 18,521,295
------------ ------------ ------------
Total investments 17,817,443 704,626 18,522,069
------------ ------------ ------------
Employer contributions receivable 88,117 -- 88,117
------------ ------------ ------------
Net assets available for benefits $ 17,905,560 $ 704,626 $ 18,610,186
============ ============ ============
See accompanying notes to financial statements.
-2-
TOMPKINS TRUSTCO, INC.
----------------------
EMPLOYEE STOCK OWNERSHIP PLAN
-----------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
----------------------------------------------
DECEMBER 31, 2001
-----------------
Assets Allocated* Unallocated Total*
------ ------------ ------------ ------------
Investments, at fair value (Notes 2 and 5):
Money market funds $ 514 $ 36 $ 550
Corporate stock of Tompkins Trustco, Inc. 17,046,398 1,298,505 18,344,903
------------ ------------ ------------
Total investments 17,046,912 1,298,541 18,345,453
------------ ------------ ------------
Receivables:
Accrued interest and dividends 5 -- 5
------------ ------------ ------------
Total receivables 5 -- 5
------------ ------------ ------------
Total assets 17,046,917 1,298,541 18,345,458
------------ ------------ ------------
Liabilities
-----------
Term loan payable (Note 6) -- 150,344 150,344
------------ ------------ ------------
Total liabilities -- 150,344 150,344
------------ ------------ ------------
Net assets available for benefits $ 17,046,917 $ 1,148,197 $ 18,195,114
============ ============ ============
* Restated - See Note 12.
See accompanying notes to financial statements.
-3-
TOMPKINS TRUSTCO, INC.
----------------------
EMPLOYEE STOCK OWNERSHIP PLAN
-----------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
---------------------------------------------------------
YEAR ENDED DECEMBER 31, 2002
----------------------------
Allocated Unallocated Total
------------ ------------ ------------
Additions to net assets attributed to:-
Investment income:
Net appreciation (depreciation) in fair
value of investments (Note 5) $ 362,024 $ (9,110) $ 352,914
Dividends 488,264 23,096 511,360
Gain on sale of investments 1,396,388 -- 1,396,388
------------ ------------ ------------
Total investment income 2,246,676 13,986 2,260,662
------------ ------------ ------------
Contributions:
Employer contributions 88,117 -- 88,117
Employer contributions for loan principal -- 127,251 127,251
Employer contributions for loan interest -- 4,277 4,277
------------ ------------ ------------
Total contributions 88,117 131,528 219,645
------------ ------------ ------------
Allocation of 16,284 shares of corporate
stock of Tompkins Trustco, Inc. 584,810 -- 584,810
------------ ------------ ------------
Total additions 2,919,603 145,514 3,065,117
------------ ------------ ------------
Deductions from net assets attributed to:
Transfer to other plan (Note 9) 243,925 -- 243,925
Benefits paid to participants 1,817,035 -- 1,817,035
Interest expense -- 4,275 4,275
Allocation of 16,284 shares of corporate
stock of Tompkins Trustco, Inc. -- 584,810 584,810
------------ ------------ ------------
Total deductions 2,060,960 589,085 2,650,045
------------ ------------ ------------
Net increase (decrease) 858,643 (443,571) 415,072
Net assets available for benefits, beginning
of year, as previously reported 17,631,727 1,148,197 18,779,924
Restatement amount (Note 12) (584,810) -- (584,810)
------------ ------------ ------------
Net assets available for benefits, beginning of
year, as restated 17,046,917 1,148,197 18,195,114
------------ ------------ ------------
Net assets available for benefits, end of year $ 17,905,560 $ 704,626 $ 18,610,186
============ ============ ============
See accompanying notes to financial statements.
-4-
TOMPKINS TRUSTCO, INC.
----------------------
EMPLOYEE STOCK OWNERSHIP PLAN
-----------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
---------------------------------------------------------
YEAR ENDED DECEMBER 31, 2001
----------------------------
Allocated* Unallocated Total*
------------ ------------ ------------
Additions to net assets attributed to:-
Investment income:
Net appreciation in fair value of
investments (Note 5) $ 4,358,221 $ 395,197 $ 4,753,418
Dividends 394,730 35,639 430,369
Gain on sale of investments 1,037,690 -- 1,037,690
------------ ------------ ------------
Total investment income 5,790,641 430,836 6,221,477
------------ ------------ ------------
Contributions:
Employer contributions for loan principal -- 48,666 48,666
Employer contributions for loan interest -- 29,808 29,808
------------ ------------ ------------
Total contributions -- 78,474 78,474
------------ ------------ ------------
Transfers from other plans (Note 8) 12,911,570 668,695 13,580,265
------------ ------------ ------------
Total additions 18,702,211 1,178,005 19,880,216
------------ ------------ ------------
Deductions from net assets attributed to:
Transfer to other plan (Note 9) 260,464 -- 260,464
Benefits paid to participants 1,394,830 -- 1,394,830
Interest expense -- 29,808 29,808
------------ ------------ ------------
Total deductions 1,655,294 29,808 1,685,102
------------ ------------ ------------
Net increase 17,046,917 1,148,197 18,195,114
Net assets available for benefits, beginning
of year -- -- --
------------ ------------ ------------
Net assets available for benefits, end of year $ 17,046,917 $ 1,148,197 $ 18,195,114
============ ============ ============
* Restated - See Note 12.
See accompanying notes to financial statements.
-5-
TOMPKINS TRUSTCO, INC.
----------------------
EMPLOYEE STOCK OWNERSHIP PLAN
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
Note 1 - Description of the Employee Stock Ownership Plan
---------------------------------------------------------
The following description of the Tompkins Trustco, Inc. (the "Company")
Employee Stock Ownership Plan (the "Plan") provides only general information.
Participants should refer to the Plan agreement for a more complete description
of the Plan's provisions.
General - The Plan was adopted effective January 1, 2001. The Plan is
an employee stock ownership plan covering eligible employees who have completed
one (1) year of service. It is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA). The Plan is administered by the
Compensation and Personnel Committee appointed by the Company's Board of
Directors (the "Board"). The Trust Department of Tompkins Trustco, Inc. is the
Plan's Trustee (the "Trustee"). All investments are non-participant directed.
Effective December 31, 1999, the Company acquired Letchworth
Independent Bancshares Corporation, holding corporation for the Bank of Castile.
Letchworth Independent Bancshares Corporation operated a leveraged employee
stock ownership plan known as Letchworth Independent Bancshares Corporation
Employee Stock Ownership Plan. Effective January 1, 2001, Letchworth Independent
Bancshares Corporation Employee Stock Ownership Plan merged with the Plan (see
Note 8).
As described in Note 6, the Plan purchased voting common stock of the
Company using the proceeds of a borrowing from the Company. The borrowing is
collateralized by unallocated shares of stock and is to be repaid over a period
of not more than ten (10) years by Company contributions to the Plan. As the
Plan makes each payment of principal, an appropriate percentage of stock will be
released and allocated to eligible employees' accounts in accordance with
applicable regulations under the Internal Revenue Code (IRC). Shares vest fully
upon allocation. Accordingly, the financial statements of the Plan for 2002 and
2001 present separately, the assets and liabilities and changes therein
pertaining to the accounts of employees with vested rights in allocated stock
(allocated) and stock not yet allocated to employees (unallocated). Under the
Plan agreement, the Trustee shall vote all common stock of the Company unless
otherwise directed by agreement.
Company contributions - The Company shall, for each Plan year,
contribute to the Plan out of profits a discretionary amount, which shall not
exceed 5% of participant compensation. This discretionary contribution is in
addition to the required non-elective contribution (see Note 4).
Participants' accounts - Each participant's account is credited with an
allocation of the Company's discretionary and non-elective contributions and an
allocation of Plan earnings. Allocations of Company contributions are based upon
the participant's compensation and the allocations of Plan earnings are based
upon participant account balances. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's account.
-6-
Forfeitures on non-vested account balances are allocated to participants'
accounts as Company contributions.
Eligibility - An employee shall become eligible for participation in
the Plan on the first day of the month coinciding with completing one (1) year
of employment and attaining the age of twenty-one (21). However, any employee of
the Company or its affiliated entities on December 31, 2000, automatically
became a participant of the Plan on January 1, 2001. Leased employees, employees
covered under a collective bargaining agreement and "On-Call" employees are not
eligible to participate.
Vesting - Participants whose account balances transferred into the Plan
on January 1, 2001, are fully vested. Employees who became eligible to
participate in the Plan after January 1, 2001, will become vested in the Plan
over a five (5) year period.
Payments of benefits - Upon retirement or disability, a participant may
elect to receive either a lump sum amount equal to the value of their account or
payments on an instalment method. Distributions to participants upon termination
of employment other than for retirement or disability may be made in a lump sum.
Note 2 - Summary of significant accounting policies
---------------------------------------------------
Basis of presentation - The accompanying financial statements have been
prepared on the accrual basis and present the net assets available for benefits
and changes in those assets.
Use of estimates - The preparation of financial statements in
conformity with accounting principles generally accepted in the United States of
America requires the Plan administrator to make estimates and assumptions that
affect the reported amounts of assets, liabilities and changes therein, and
disclosure of contingent assets and liabilities. Actual results may differ from
those estimates.
Participant loans - The Plan may make loans to participants in an
amount equal to the lesser of $50,000 or one-half of the value of the
participant's vested account balance. Loans will be payable over a five (5) year
period and bear interest at the prime rate.
Risks and uncertainties - The Plan provides for various investment
options in any combination of the Company's stocks and money market funds.
Investment securities are exposed to various risks, such as interest rate,
market and credit. Due to the level of risk associated with certain investment
securities and the level of uncertainty related to changes in the value of
investment securities, it is at least reasonably possible that changes in risks
in the near term would materially affect participants' account balances and the
amounts reported in the statements of net assets available for benefits and the
statements of changes in net assets available for benefits.
Investments - Investments are recorded at fair value. The investment in
the Company's common stock is valued at December 31, 2002 and 2001, at the
market value as listed on the American stock exchange for publicly traded
securities. The value per share of common stock at December 31, 2002 and 2001,
was $44.10 and $40.25, respectively.
-7-
Economic dependency and concentration of risk - The Plan has
approximately 99% and 98% of its assets invested in Tompkins Trustco, Inc.
Common Stock as of December 31, 2002 and 2001, respectively. Accordingly, the
Plan is dependent upon the financial condition of the Company.
Note 3 - Administration of Plan assets
--------------------------------------
The Trustee of the Plan holds the Plan's assets, which consist
principally of Tompkins Trustco, Inc. common shares. Dividends on the stock are
paid in cash to the participants or reinvested to buy more shares of common
stock for a participant account, or used to make loan payments.
Certain administrative functions are performed by officers or employees
of the Company or its subsidiaries. No such officer or employee receives
compensation from the Plan. Administrative expenses, including maintaining
participant accounts, legal and accounting costs are paid directly by the
Company.
Note 4 - Employer non-elective contributions
--------------------------------------------
In addition to the Company's discretionary contribution, the Company is
obligated to make contributions in cash to the Plan which, when aggregated with
the dividends and interest earnings of the Plan's unallocated fund, equal the
amount necessary to enable the Plan to make payments of principal and interest
due on its term loan.
Note 5 - Investments
--------------------
The Plan's investments are held by the Company's administered trust
fund. The fair values of investments are as follows:
December 31,
---------------------------
2002 2001
------------ ------------
Tompkins Trustco, Inc. Common Stock - Allocated
(404,007 in 2002 and 423,513 shares in 2001) $ 17,816,709 $ 17,046,398
Tompkins Trustco, Inc. Common Stock - Unallocated
(15,977 shares in 2002 and 32,261 shares in 2001) 704,586 1,298,505
Money market funds - Allocated 734 514
Money market funds - Unallocated 40 36
------------ ------------
Total investments at fair value $ 18,522,069 $ 18,345,453
============ ============
In March 2003 and 2002, the Plan allocated 15,977 and 22,091 shares,
respectively, which had previously been released but not allocated.
Investments that represent 5% or more of the Plan's net assets
($930,509 for 2002 and $909,756 for 2001) are separately identified above.
-8-
The Plan's investments appreciated (depreciated) in fair value as
follows:
Year ended December 31,
---------------------------
2002 2001
------------ ------------
Tompkins Trustco, Inc. Common Stock - Allocated $ 362,024 $ 4,358,221
Tompkins Trustco, Inc. Common Stock - Unallocated (9,110) 395,197
------------ ------------
Net appreciation in fair value $ 352,914 $ 4,753,418
============ ============
Note 6 - Term loan payable
--------------------------
The Plan has a $486,661 term loan agreement with the Company, which is
collateralized by unallocated shares of Company stock. The term loan agreement
provides for the loan to be repaid over a period not to exceed ten (10) years,
requiring a minimum annual payment of principal of $48,666 with interest payable
annually at prime rate plus 1.0%, currently at 5.25%. The outstanding balance on
the loan at December 31, 2001, was $150,344. During 2001, the Plan utilized
certain plan assets to pay additional principal of approximately $106,000.
During 2002, the note was repaid in full.
Note 7 - Termination of the Plan
--------------------------------
The Company reserves the right to terminate the Plan at any time,
subject to Plan provisions and provisions of ERISA. Upon Plan termination, all
assets would be used to pay the administrative expenses, liquidation expenses
and participant claims until all fund assets have been expended. The Company
would not be entitled to receive any assets or other benefits upon termination
of the Plan.
Note 8 - Plan mergers and transfers
-----------------------------------
Effective January 1, 2001, The Tompkins Trustco, Inc. Investment and
Stock Ownership Plan ("ISOP") spun off and transferred $9,563,019 of assets to
the Plan for the purpose of providing a discretionary profit sharing
contribution to employees which consists mainly of Company stock. Furthermore,
the Plan merged with the Bank of Castile Employee Stock Ownership Plan and
$4,017,246 of net assets were transferred into the Plan.
Note 9 - ESOP diversification and transfers
-------------------------------------------
Under the Plan document, participants meeting certain age and service
requirements may elect to diversify an eligible portion of Company stock held in
their account within ninety (90) days after the close of each Plan year. The
participants may make this election over a six (6) year period. In the first (5)
five years a participant may diversify up to 25% of the number of shares
allocated to their account. In the sixth year, the percentage changes to 50%.
The funds elected to be diversified, are transferred to the ISOP and invested in
funds as chosen by the participant. During 2002 and 2001, the Plan transferred
$243,925 and $260,464 to the ISOP, respectively.
-9-
Note 10 - Plan amendments
-------------------------
Effective May 1, 2001, the Plan was amended to allow all affiliated
entities of the Company to participate in the Plan.
Effective January 1, 2002, the Plan was amended as required by the
Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) to include
catch-up contributions for participants fifty (50) years of age and older and to
increase annual compensation limit for contribution and benefit purposes.
Note 11 - Tax status
--------------------
The Company has filed for a determination letter from the Internal
Revenue Service to determine that the Plan is qualified and the trust
established under the Plan is tax-exempt, under the appropriate sections of the
Internal Revenue Code. The Company has not received its determination letter.
However, the Plan administrator and the Plan's tax counsel believe that the Plan
is currently designed and operated in compliance with the applicable
requirements of the Code. Therefore, they believe that the Plan was qualified
and the related trust was tax-exempt as of the financial statement date.
Note 12 - Correction of contribution amount
-------------------------------------------
In 2001 employer contributions were accrued improperly. The 2001
financial statements have been restated for this item. The result of this
correction was to reduce the net increase in net assets in 2001 by $584,810.
-10-
SUPPLEMENTAL SCHEDULES
----------------------
SCHEDULE I
----------
TOMPKINS TRUSTCO, INC.
----------------------
EMPLOYEE STOCK OWNERSHIP PLAN
-----------------------------
EIN #16-1601020
---------------
PLAN #003
---------
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
--------------------------------------------------------------
(Required Disclosure of Line 4i on Schedule H of Form 5500)
-----------------------------------------------------------
DECEMBER 31, 2002
-----------------
---------------------------------------------------------------------------------------------------------
(c)
Description of investment
(b) including maturity date, rate of (e)
Identity of issue, borrower, interest, collateral, par or (d) Current
(a) lessor or similar party maturity value Cost value
---------------------------------------------------------------------------------------------------------
Federated Prime Obligations
Fund Money Market Fund, 734 shares $ 734 $ 734
US Treasury Cash and cash equivalents 40 40
* Tompkins Trustco, Inc. Common Stock, 419,984 shares 6,289,728 18,521,295
------------ ------------
Total investments $ 6,290,502 $ 18,522,069
============ ============
---------------------------------------------------------------------------------------------------------
* A party-in-interest as defined by ERISA.
-11-
SCHEDULE II
-----------
TOMPKINS TRUSTCO, INC.
----------------------
EMPLOYEE STOCK OWNERSHIP PLAN
-----------------------------
EIN #16-1601020
---------------
PLAN #003
---------
SCHEDULE OF INVESTMENT ASSETS
-----------------------------
THAT WERE BOTH ACQUIRED AND DISPOSED OF WITHIN THE PLAN YEAR
------------------------------------------------------------
(Required Disclosure of Line 4i on Schedule H of Form 5500, Part 2)
-------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 2002
------------------------------------
--------------------------------------------------------------------------------------------
(b)
Description of investment
(a) including maturity date, rate (c) (d)
Identity of issue, borrower, of interest, collateral, par or Costs of Proceeds of
lessor, or similar party maturity value acquisitions dispositions
--------------------------------------------------------------------------------------------
- NONE -
-12-
SCHEDULE III
------------
TOMPKINS TRUSTCO, INC.
----------------------
EMPLOYEE STOCK OWNERSHIP PLAN
-----------------------------
EIN #16-1601020
---------------
PLAN #003
---------
SCHEDULE OF REPORTABLE TRANSACTIONS
-----------------------------------
(Required Disclosure Of Schedule H, Line 4j On Form 5500)
---------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 2002
------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Description
of asset
(include
interest rate Current value
Identity of and maturity Expense of asset on
party in case of a Purchase Selling incurred with Cost of transaction Net gain
involved loan) price price Lease rental transaction asset date (loss)
-----------------------------------------------------------------------------------------------------------------------------
- NONE -
-13-
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the plan) have duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly authorized.
TOMPKINS TRUSTCO, INC. EMPLOYEE STOCK OWNERSHIP PLAN
Administrator: TOMPKINS TRUST COMPANY
Date: July 14, 2003 By: /s/ FRANCIS M. FETSKO
---------------------
Francis M. Fetsko
Executive Vice President
Chief Financial Officer
-14-
Exhibit Index
-------------
Exhibit Number Description Page
-------------- ----------- ----
23.1 Consent of Dannible & McKee
-15-