<PAGE>
                                 EXHIBIT 99.1
                                 ------------

                              PROXY STATEMENT FOR
                        SPECIAL MEETING OF SHAREHOLDERS

                       FOUR CORNERS FINANCIAL CORPORATION
                                370 East Avenue
                           Rochester, New York 14604

                   Date of Proxy Statement: February 24, 1999
                         Date of Mailing: March 5, 1999

                Special Meeting of Shareholders: March 26, 1999

         The enclosed Proxy is solicited by The Board of Directors of Four
Corners Financial Corporation (hereinafter the "Company"). Any Proxy given
pursuant to this solicitation may be revoked by the Shareholder at any time
prior to its exercise at the Special Meeting by (i) giving written notice of
revocation to the Executive Vice President of the Company, (ii) properly
submitting to the Company a duly executed Proxy bearing a later date, or (iii)
attending the Special Meeting and voting in person. Attendance at the Special
Meeting will not in and of itself revoke a Proxy. All written notices of
revocation and other communications with respect to revocation of Proxies
should be addressed as follows: William S. Gagliano, Executive Vice President,
370 East Avenue, Rochester, New York 14604. Shares of common stock represented
by properly executed Proxies received at or prior to the Special Meeting and
which have not been revoked will be voted in accordance with the instructions
indicated thereon. If no instructions are indicated on a properly executed
Proxy, such Proxies will be voted FOR each of the proposals set forth in this
Proxy Statement.

         All of the expenses involved in preparing and mailing this Proxy
Statement and the material enclosed herewith will be paid by the Company. The
Company will reimburse banks, brokerage firms and other custodians, nominees
and fiduciaries for expenses reasonably incurred by them in sending Proxy
material to beneficial owners of stock.

         Holders of a majority of the issued and outstanding common stock of
the Company must be present in person or by Proxy in order to establish a
quorum for conducting business at the Special Meeting. Only record holders of
the common stock at the close of business on February 24, 1999 are entitled to
vote at the Special Meeting. On that day, 3,293,403 shares of the $.04 par
value common stock of the Company were issued and outstanding. Each share is
entitled to one vote at the Special Meeting.

SHAREHOLDERS ARE ENCOURAGED TO READ AND REVIEW CAREFULLY THIS PROXY STATEMENT
AND THE FINANCIAL INFORMATION AND EXHIBITS INCLUDED HEREWITH. NO PERSONS HAVE
BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER
THAN THOSE CONTAINED IN THIS PROXY STATEMENT IN CONNECTION WITH THE
SOLICITATION OF PROXIES MADE HEREBY, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR ANY OTHER PERSON.


<PAGE>



THE SPECIAL MEETING
-------------------

         At the Special Meeting, the record holders of the Company's common
stock on February 24, 1999 (the record date for the Special Meeting) will be
asked to consider, vote upon and approve the following proposals:


                  1.       To approve the Board of Directors adoption of an
                           Amendment to the Company's restated Certificate of
                           Incorporation which provides for: (a) a reduction of
                           the number of authorized shares of the Company's
                           Common Stock from 15,000,000 authorized shares with
                           a par value of $.04 per share to 150,000 authorized
                           shares with a par value of $4.00 per share and (b) a
                           1 for 100 reverse stock split of the Company's
                           currently issued and outstanding common stock;


                  2.       To approve a cash payment in the amount of $12.00
                           times each fraction of a share resulting from such
                           reverse stock split in lieu of the issuance of any
                           resulting fractional shares;


                  3.       To approve the payment by the Company of the
                           indebtedness owed to Shareholders owing fractional
                           shares resulting from the 1 for 4 reverse stock
                           split effective July 31, 1992, together with the
                           payment of simple interest on the amount of such
                           indebtedness.


         The text of the proposed Certificate of Amendment to the Company's
restated Certificate of Incorporation is set forth in Exhibit A to this Proxy
Statement. The adoption of Proposals One and Two is conditioned upon the
adoption of each other. Consequently, a vote against Proposal One will have the
effect of a vote against Proposal Two. Proposals One and Two are referred to in
this Proxy Statement together as the "Reverse Stock Split". Proposal Three is
not related to or in any way conditioned upon the adoption of Proposals One and
Two and a vote for or against Proposals One and Two will have no effect upon
Proposal Three and a vote for or against Proposal Three will have no effect
upon Proposals One and Two.




                                      -2-
<PAGE>





OVERVIEW OF THE REVERSE STOCK SPLIT
-----------------------------------

         The following is a brief overview of certain information regarding
Proposals One and Two which, together, are referred to as the "Reverse Stock
Split" throughout this Proxy Statement. This overview is not intended to be a
complete description of the matters covered in this Proxy Statement regarding
the Reverse Stock Split and is subject to and qualified in its entirety by
reference to the more detailed information contained elsewhere in this Proxy
Statement, including the Exhibits hereto and the documents incorporated by
reference herein.

Purpose of the Reverse Stock Split
----------------------------------

         The purpose of the Reverse Stock Split is to cause the Company to
become a privately owned corporation and to afford approximately 1,138
Shareholders to receive cash consideration for all or a portion of their equity
position in the Company which is, in the reasonable belief of the Board of
Directors, a fair price for such equity position, without such persons
incurring the attendant costs of sale. See "The Reverse Stock Split Purpose;
The Reverse Stock Split - Fairness."

The Reverse Stock Split - Structure and Payment of Cash Consideration
---------------------------------------------------------------------

         If the Reverse Stock Split is approved by the Shareholders at the
Special Meeting, the Company expects to file a Certificate of Amendment to the
Company's Restated Certificate of Incorporation with the Secretary of State of
the State of Delaware. The form of the Certificate of Amendment is attached as
Exhibit A to this Proxy Statement.

         Pursuant to the terms of the Certificate of Amendment, on the
Effective Date of filing, the authorized shares of the Company's common stock
will be reduced from 15,000,000 authorized shares with a par value of $.04 per
share to 150,000 authorized shares with a par value of $4.00 per share. On the
Effective Date, each 100 shares of the Company's common stock, $.04 par value
per share, issued and outstanding immediately prior to the Effective Date will
be automatically converted into 1 share of the Company's common stock, with a
par value of $4.00 per share.

         The Board of Directors has determined, as is permitted under Delaware
corporate law, to make a cash payment in lieu of the issuance of fractional
shares. Consequently, a cash payment of $12.00 times each fraction of a share
resulting from such 1 to 100 Reverse Stock Split will be made, in lieu of the
issuance of any fractional shares, to those Shareholders who, after the Reverse
Stock Split, own a fractional share of common stock. SHAREHOLDERS HOLDING
COMPLETE SHARES, RATHER THAN FRACTIONS, AFTER THE CONSUMMATION OF THE REVERSE
STOCK SPLIT WILL NOT BE ENTITLED TO RECEIVE CASH IN LIEU OF THOSE COMPLETE
SHARES. See "The Reverse Stock Split - Structure and Payment of Cash
Consideration."

The Reverse Stock Split - Certain Effects
-----------------------------------------

                                      -3-
<PAGE>

         As of the record date, 1,008 Shareholders own, in the aggregate 15,275
shares or .46% of the Company's issued and outstanding common stock. Each of
these Shareholders owns fewer than 100 shares so that, if the Reverse Stock
Split is approved, each of these Shareholders will cease being Shareholders of
the Company. Any Shareholder owning fewer than 100 shares may continue as a
Shareholder, even if the Reverse Stock Split is approved, if he or she were to
increase his or her ownership to 100 or more shares prior to the filing of the
Certificate of Amendment with the Secretary of State of the State of Delaware.

         If the Reverse Stock Split is approved, 186 Shareholders owning, in
the aggregate 3,278,128 shares or 99.54% of the Company's issued and
outstanding common stock, will continue as Shareholders since each of these
Shareholders owns 100 or more shares.

Certain Potential Detriments of the Reverse Stock Split
-------------------------------------------------------

o             If the Reverse Stock Split is approved, 1,008 nonaffiliated
              Shareholders, owning in the aggregate 15,275 shares, would cease
              being Shareholders of the Company.

o             If the Reverse Stock Split is approved, 174 nonaffiliated
              Shareholders, owning in the aggregate 395,267 shares, will
              continue as minority Shareholders and consequently will not,
              either singly or by aggregating their shares, be able to elect
              any members of the Company's Board of Directors, thereby
              affecting decisions regarding the Company's management and
              policies, including but not limited to compensation policy,
              dividend policy, merger and/or acquisition strategies, sale of
              the Company and/or its assets as well as decisions taken with
              respect to the ultimate liquidation of the Company and the
              distribution of its net assets to Shareholders;

o             If the Reverse Stock Split is approved, the Company will elect to
              become a private company by applying for termination of the
              registration of its shares of common stock under the Securities
              Exchange Act of 1934. Consequently, management believes that the
              ability of post-Reverse Stock Split Shareholders to locate
              broker/dealers willing to enter quotations for the Company's
              common stock and/or effectuate trades therein may be severely
              curtailed. As a result, it is management's belief that the only
              realistic way for continuing Shareholders to realize upon their
              equity ownership in the Company would be privately-negotiated
              transactions, a corporate redemption and/or liquidation or
              management's ability to locate one or more third-party purchasers
              for the Company's assets or common stock;

o             The Company estimates that it will save between $40,000-$50,000
              annually in costs associated with its periodic reporting
              obligations under the Securities Exchange Act. If the Reverse
              Stock Split is approved, 1,008 nonaffiliated Shareholders, owning
              in the aggregate 15,275 shares for which they will receive an
              aggregate $1,833, will cease to be Shareholders and thereby will
              not participate in such future savings;

                                      -4-
<PAGE>

o             The receipt by a Shareholder of cash in lieu of fractional shares
              of common stock pursuant to the Reverse Stock Split will be a
              taxable transaction for Federal income tax purposes. See
              "Material Federal Income Tax Consequences;"

o             The Board of Directors did not obtain a report or opinion with
              respect to the fairness of the Reverse Stock Split solely from
              the standpoint of the Company's nonaffiliated Shareholders;

o             The Board of Directors did not obtain a nonaffiliated
              representative to act solely on behalf of nonaffiliated
              Shareholders for purposes of negotiating the terms of the Reverse
              Stock Split or preparing a report with respect to the fairness of
              the Reverse Stock Split;

o             The Board of Directors did not structure the Reverse Stock Split
              to require the approval of at least a majority of the Company's
              nonaffiliated Shareholders. In this regard, the Company's
              affiliated Shareholders have stated that they will vote their
              shares for the Reverse Stock Split. Consequently, approximately
              87.5% of the total issued and outstanding common stock of the
              Company entitled to vote for the Reverse Stock Split will be cast
              in favor and thus the Reverse Stock Split will be approved even
              if all of the nonaffiliated Shareholders of the Company vote
              their shares against the Reverse Stock Split;

o             Under the Delaware General Corporation Law, no appraisal rights
              exist with respect to the Reverse Stock Split and the Company is
              not voluntarily according dissenting Shareholders such rights.

o             SHAREHOLDERS OWNING COMPLETE SHARES, RATHER THAN FRACTIONS OF A
              SHARE AFTER THE REVERSE STOCK SPLIT WILL NOT BE ENTITLED TO
              RECEIVE ANY CASH PAYMENT.

o             The 12 cents per share price being offered is 24% of the price
              paid by the Company to purchase a former director's stock in
              September, 1996, and 4% of the price per share paid with respect
              to the 1992 Reverse Stock Split.

Conflicts of Interest
---------------------

         The Company's Affiliated Shareholders own, as of the record date,
2,882,861 shares of the Company's issued and outstanding common stock
representing 87.5% of such stock. If the Reverse Stock Split is approved, 1,008
Shareholders of record, owning 15,275 shares or .46% of such stock, will cease
being Shareholders of the Company. Consequently, the percentage of the Company
owned by the Company's Affiliated Shareholders would increase by .59%, from
87.5% to 88.09%. If the Reverse Stock Split is approved, therefore, the
Affiliated Shareholders' share of any dividends and/or other corporate
distribution, including net proceeds of any liquidating distribution or the net
proceeds generated by the sale of the Company's assets or common stock would
increase by such percentage.

                                      -5-
<PAGE>

The Reverse Stock Split - Background
------------------------------------

         On July 28, 1998, the Board of Directors of the Company met to
consider a proposal to convert the Company to private ownership. In reviewing
the proposal, the Board considered that there has not been an active trading
market for the Company's common stock since February, 1989, none has developed
over the past decade despite management's efforts to stimulate market activity
(including the 1992 reverse stock split) and management's belief that no
significant trading in the Company's common stock is likely to develop in the
foreseeable future. The Board considered that the Company has not qualified and
will not likely qualify in the foreseeable future to have its common stock
eligible for listing on any national securities exchange or for registration on
an inter-dealer quotation system of a registered national securities
association, such as the National Association of Securities Dealers, Inc.
("NASD").

         The Board considered that a significant number of the Company's
Shareholders hold less than 100 shares. Of approximately 1,194 Shareholders of
record, 1,008 (approximately 85% of the Company's Shareholders) own fewer than
100 shares of common stock, aggregating 15,275 out of 3,293,403 issued and
outstanding shares (.46%). The Board noted that none of these Shareholders had
taken an active interest in the Company in over a decade and, due to each
individual Shareholder's small equity position, would likely not take an active
interest (including trading his or her shares) in the foreseeable future. The
Board further noted that of the 1,008 Shareholders, 891 owned 25 or fewer
shares. Thus, even if for any reason, an active market were to develop for the
Company's common stock, at prices of, for example, $.50 or $1.00 per share
(which had not occurred in almost a decade) these Shareholders would
nonetheless have limited opportunities to realize commensurate value for their
shares. Any sales of such Shareholders' shares at such prices would ordinarily
involve disproportionately high brokerage commissions unless the minimum
brokerage commission typically payable on any sale transaction were to be
waived and/or reduced.

         The Board further considered that the Company has incurred, and, if
the Company were to remain a public company, would continue to incur,
substantial costs as the result of its registered status under the Securities
Exchange Act of 1934 (the "Exchange Act"). The Board concluded that the fact
that no Shareholder of the Company, whether large or small, whether affiliated
or nonaffiliated, had taken advantage of the Company's public status for close
to a decade weighed heavily against continuing to incur substantial costs
associated with continued maintenance of a public market for the Company's
common stock.

         Moreover, the Board considered that the sale of the Company (involving
the sale of all or substantially all of the Company's assets, the merger of the
Company into or with another corporation, or another form of business
combination) was not a feasible option at this time. The Board noted that no
third party had expressed any interest in purchasing the assets of the Company,
in merging with the Company, or otherwise in entering into any business
combination with the Company. The Board considered that over the past number of
years, informal discussions with prospective purchasers from time to time had
generated no genuine interest in pursuing formal negotiations for the purchase
of the Company.

                                      -6-
<PAGE>

         Based upon these considerations, the Board concluded that neither the
Company itself nor the Company's Shareholders were deriving any material
benefit from the continued registration of the Company's common stock under the
Exchange Act and that a conversion of the Company to private ownership was both
appropriate and desirable.

Dissenting Shareholders Rights

         Under the Delaware General Corporation Law, the existing holders of
the Company's common stock are not entitled to dissenters' rights of appraisal
in connection with the consummation of the Reverse Stock Split.

Appraisal

         The Board of Directors determined that it would commission the
accounting firm of Bonadio & Co., LLP ("Bonadio"), to conduct an appraisal of
the Company's common stock in order to determine the cash consideration to be
paid to Shareholders owning fractions of shares after the effectiveness of the
Reverse Stock Split ("Fractional Shareholders"). Bonadio submitted its initial
appraisal report to the Board on July 28, 1998 and its final appraisal report
to the Board on September 30, 1998. Based upon the Bonadio appraisal report,
the Board determined that $12.00 times each fraction of a share was a fair
price to pay the Fractional Shareholders. The appraisal report of Bonadio is
found as Exhibit B to this Proxy Statement.

Voting

         The proposed Reverse Stock Split must be approved by a vote of not
less than a majority of the total number of votes cast at the Special Meeting
(including abstentions) in person or by Proxy.

         Broker non-votes will not be treated as votes cast or shares entitled
to vote on matters as to which the applicable rules of the National Association
of Securities Dealers, Inc. withhold the broker's authority to vote in the
absence of direction from the beneficial owner. Non-broker Shareholders who are
present in person or by Proxy and have the legal authority to vote their shares
but who abstain from voting will adversely affect the outcome of this Proposal.

         The Company's affiliated Shareholders, owning 87.5% of the Company's
issued and outstanding common stock as of the record date, have indicated their
intention to vote for the approval of the Reverse Stock Split and consequently,
it will be approved even if all of the Company's nonaffiliated Shareholders
vote against approval.



                                      -7-
<PAGE>



THE REVERSE STOCK SPLIT - BACKGROUND
------------------------------------

         On July 29, 1992, the Company's Board of Directors recommended and the
Shareholders approved a 1 for 4 reverse stock split which became effective on
July 31, 1992. The purpose of the 1992 reverse stock split was to stimulate
interest in the Company's common stock which, prior to the split, had not been
actively traded since February, 1989.

         The Board of Directors has concluded that the 1992 reverse stock split
has not accomplished its purpose of generating an active market for the
Company's common stock. As reported in the Company's Annual Report (Form 10-K)
filed with the Securities and Exchange Commission for the Company's fiscal year
ended December 31, 1997, there is no trading in the Company's common stock,
such stock being listed in the pink sheets by the National Quotations Bureau,
Inc. without bid and/or asked prices for all quarters in 1995, 1996 and 1997
respectively. This pattern has continued during the first, second and third
quarters of fiscal 1998 and management believes that this trend will continue
for the foreseeable future. See "Market Prices for Shares of Common Stock;
Dividends."

         In light of the above circumstances, the Board, at its meeting held
July 28, 1998, considered a proposal to convert the Company to private
ownership. In reviewing the proposal, the Board considered the fact that, as
indicated above, there has not been an active trading market for the Company's
common stock since February, 1989, none has developed over the past decade
despite management's efforts to stimulate market activity (including the 1992
reverse stock split) and management's belief that no significant trading in the
Company's common stock is likely to develop in the foreseeable future. The
Board also noted that management is unaware of any market trades in the
Company's common stock since February, 1989. The Board further considered that
the Company has not qualified and will not likely qualify in the foreseeable
future to have its common stock eligible for listing on any national securities
exchange or for registration on an inter-dealer quotation system of a
registered national securities association, such as the National Association of
Securities Dealers, Inc. ("NASD").

         The Board next considered that only 186 of the Company's 1,194
Shareholders own 100 or more shares, with 891 Shareholders owning 25 or fewer
shares. The Board noted that the only transaction since February, 1989 of which
it was aware, that of a Company repurchase in September, 1996 of 50,000 shares
from a former director in a private transaction, was for $.50 a share.
Consequently, even if, for some reason, an active market for the Company's
shares did develop (at, perhaps, $.50 or even $1.00 per share) a significant
number of Shareholders would not be able to realize commensurate value for
their shares unless a waiver of the normal, minimum brokerage commission were
obtained in each case. Consequently, a considerable number of the Company's
Shareholders would face considerable difficulties in order to effectuate a sale
of their shares and thus, realize any commensurate value on their holdings.




                                      -8-
<PAGE>





         The Board further considered that 1,008 Shareholders own 15,275
shares, representing a .46% ownership interest in the Company. None of these
Shareholders had taken an active interest in the Company and have not
communicated with the Company (including communications regarding the exchange
of shares and payment of cash consideration as a result of the 1992 reverse
stock split) in over a decade. Consequently, the Board concluded, that based
upon the small amount of such Shareholders' holdings and historical experience,
it was quite unlikely that such Shareholders would take an active interest in
the Company (including trading of their shares) in the foreseeable future.

         At the same time, the Company has incurred, and, if the Company were
to remain public, would continue to incur, substantial costs as the result of
its registered status under the Securities Exchange Act of 1934 (the "Exchange
Act"). The Company annually incurs approximately $40,000 - $50,000 in costs
associated with Exchange Act compliance, including legal, auditing, printing
and computer related expenses, to prepare and file its annual reports on Form
10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, reports and
schedules required to be filed by the Company's officers, directors and largest
Shareholders, as well as proxy solicitation materials. The Company's management
is also required to devote substantial time and attention to prepare and review
these filings.

         The Board next considered that the sale of the Company (involving the
sale of all or substantially all of the Company's assets, the merger of the
Company into or with another corporation, or other form of business
combination) was not a feasible option at this time. The Board noted that no
third party had expressed any interest in purchasing the assets of the Company,
in merging with the Company, or otherwise in entering into a business
combination with the Company. The Board considered that over the past number of
years, informal discussions with prospective purchasers from time to time had
generated no genuine interest in pursuing formal negotiations for the purchase
of the Company. More specifically, no contacts and/or negotiations concerning a
merger, consolidation or acquisition have been entered into or occurred since
the commencement of the Company's fiscal year beginning January 1, 1996.

         Based upon the above considerations, the Board concluded that neither
the Company itself nor the Company's Shareholders are deriving any material
benefit from the continued registration of the Company's common stock under the
Exchange Act and that a conversion of the Company to private ownership was both
appropriate and desirable.



                                      -9-
<PAGE>



GOING PRIVATE; CONSIDERATION OF
-------------------------------
ALTERNATIVES TO REVERSE STOCK SPLIT
-----------------------------------

         At its July 28, 1998 meeting, the Board considered that, under rules
promulgated by the Securities and Exchange Commission, it was necessary to
reduce the number of record holders of the Company's common stock to less than
300 in order to "go private" and deregister its common stock under the Exchange
Act. As the result of such deregistration, management believes that the ability
of post-Reverse Stock Split Shareholders to locate broker/dealers willing to
enter quotations or effectuate trades in the Company's common stock would be
severely curtailed since the Company would no longer be required to furnish
such broker/dealers with current information concerning the Company's
operations and financial condition. Unless the Company was to voluntarily
furnish such information (it has made no commitment to do so), management
believes that the ability of broker/dealers to effectuate trades in the
Company's common stock would be virtually eliminated. See "The Reverse Stock
Split Certain Effects."

         The Board reviewed a number of alternatives to the Reverse Stock Split
in order to convert the Company to private ownership. The Board determined that
the first alternative considered, that of privately negotiated or open market
purchases, would be cumbersome and in all likelihood, would not enable the
Company, in any reasonable period of time, to purchase a significant number of
shares of the Company's common stock to ensure the reduction of the number of
the holders of the shares of its common stock to less than 300. The Board noted
that over the past decade the Company has had virtually no meaningful contact
with its numerous but small Shareholders. The Board also determined that the
legal and other transaction costs to implement this alternative would be
substantially greater than the costs to implement the Reverse Stock Split.

         Similarly, the Board concluded that a Company tender offer on a
shareholder-wide basis would not be feasible for the same reasons that the
alternative of privately negotiated or open market purchases would not be
feasible.

         As discussed above, the Board considered the possibility of a sale of
the Company but concluded that the absence of genuine, prospective purchasers
foreclosed this alternative. The Board also considered the alternative of
additional public or private equity financing to enhance the marketability of
the Company's common stock and concluded that this alternative would not be
feasible. The Company would be required, given the current value of its shares,
to sell a substantial number of additional shares of its common stock in order
to create a larger "public float" in its common stock, resulting in the
dilution of all of the current Shareholders' interest in the Company. There
would be no guarantee that such an alternative would create a more active
market in the Company's common stock; however, the Company would remain subject
to the regulatory and reporting requirements of the Exchange Act.

         At its July 28, 1998 meeting, therefore, the Board concluded that the
Reverse Stock Split, including the payment of cash consideration in lieu of
issuing fractional shares, was the most expeditious, efficient and cost
effective method of converting the Company to private ownership. In this
regard, the Board noted that, while the Reverse Stock Split, if approved, would
eliminate a



                                     -10-
<PAGE>

large percentage of existing Shareholders of record (1,008 out of 1,194 or
approximately 85%), such Shareholders own only 15,275 of 3,293,403 (.46%)
outstanding shares. The holders of the Company's equity, represented by 186
Shareholders, would retain and, proportionately, increase their equitable
position in the Company.

THE REVERSE STOCK SPLIT - PURPOSE
---------------------------------

         The purpose of the proposed Reverse Stock Split is to cause the
Company to become a privately-owned corporation in a manner that is both fair
to the Company and to its Shareholders. As discussed above, management believes
that the Company and its Shareholders do not derive significant benefit from
the Company's status as a public company, including the development of a market
of consequence for its shares of common stock and the appreciation in value as
the result of the public trading of such stock. On the other hand, the
conversion of the Company from a public, reporting company to a private,
non-reporting company will result in substantial benefits to the Company,
including elimination of the substantial costs it incurs each year as the
result of its reporting obligations.

         Management proposes to pay cash consideration to Shareholders in lieu
of the issuance to them of fractions of a share resulting from the Reverse
Stock Split. The amount of the cash consideration, $12.00 times each fraction
of a share, was arrived at based upon an appraisal of the Company undertaken by
the Company's independent accounting firm, Bonadio, specifically to arrive at
the amount of such cash consideration. See the "Reverse Stock Split -
Fairness."

         The proposed Reverse Stock Split will afford approximately 1,138 of
the Company's 1,194 Shareholders ("Fractional Shareholders") to receive cash
consideration for all or a portion of their equity position in the Company
which is, in the reasonable belief of the Board of Directors, a fair price for
such equity position. The Board considered its payment of cash consideration to
be significant, given the fact that there is not now and will not likely in the
future develop a market of consequence for the shares of the Company's common
stock to permit any significant trading of such shares. Moreover, the Company's
operational and financial constraints, as reported in the Company's 10-K for
the Company's fiscal year ended December 31, 1997, now prevent and likely in
the foreseeable future will prevent the payment of any dividends from earnings
of the Company to its Shareholders.




                                     -11-
<PAGE>





         Management believes that these Fractional Shareholders will not
receive anything of value for their shares in the foreseeable future. First, no
market has existed for the Company's common stock for almost a decade. There
has been no interest in the Company for over 10 years, whether expressed by
prospective purchasers of the Company as a whole (there have been none) or by
investors placing an offer or bid for shares of the Company in the open market.
There is no current interest in the Company's stock, and management believes
none is likely to develop. Based upon the Company's past history and current
financial condition, it is highly unlikely that any investor would purchase a
minority position in the Company. In other words, management believes such
Fractional Shareholders have no realistic opportunity to sell their shares
since appear to be no buyers for their shares.

THE REVERSE STOCK SPLIT - STRUCTURE AND
---------------------------------------
PAYMENT OF CASH CONSIDERATION
-----------------------------

         If the Reverse Stock Split is approved by the Shareholders at the
Special Meeting, the Company expects to file a Certificate of Amendment to the
Company's Restated Certificate of Incorporation with the Secretary of State of
the State of Delaware on or around December 10, 1998 (the "Effective Date") in
order to effectuate the Reverse Stock Split. The form of the Certificate of
Amendment is attached as Exhibit A to this Proxy Statement.

         Pursuant to the terms of the Certificate of Amendment, on the
Effective Date, the authorized shares of the Company's common stock will be
reduced from 15,000,000 authorized shares with a par value of $.04 per share to
150,000 authorized shares with a par value of $4.00 per share. On the Effective
Date, each 100 shares of the Company's common stock, $.04 par value per share,
issued and outstanding immediately prior to the Effective Date will be
automatically converted into 1 share of the Company's common stock, with a par
value of $4.00 per share.

         As of the record date, there are 3,293,403 common shares issued and
outstanding owned by 1,194 Shareholders. If the Reverse Stock Split is
approved, on the Effective Date, the 3,293,403 common shares will be converted
into 32,723 common shares (after the elimination of fractional shares), owned
by 186 Shareholders. 1,008 Shareholders of record owning, prior to the Reverse
Stock Split, 15,275 shares would be eliminated.

         The Board determined, as is permitted under Delaware law, to make a
cash payment in lieu of the issuance of fractional shares. It commissioned the
accounting firm of Bonadio to conduct an appraisal of the Company for the
specific purpose of arriving at a price to pay for each fractional share.
Bonadio submitted its initial appraisal report to the Board on July 28, 1998
and its final appraisal report to the Board on September 30, 1998. Based upon
the Bonadio appraisal report, the Board determined that $12.00 times each
fraction of a share was a fair price to pay the Fractional Shareholders. The
appraisal report of Bonadio is found as Exhibit B to this Proxy Statement.

         Within 10 days after the Effective Date, the Company will mail to each
Shareholder a notice of the filing of the Certificate of Amendment (the "Notice
of Filing") and a Letter of


                                     -12-
<PAGE>

Transmittal (the "Letter of Transmittal") containing instructions with respect
to the submission of stock certificate(s) to be exchanged for new stock
certificate(s) representative of the number of whole shares owned by each
Shareholder after the effectiveness of the Reverse Stock Split. The Letter of
Transmittal will also contain instructions with respect to the submission of
stock certificate(s) in exchange for the cash consideration to be paid by the
Company in lieu of the issuance of a certificate representing fractional shares
of common stock.

THE NOTICE OF FILING AND THE LETTER OF TRANSMITTAL WILL BE TRANSMITTED BY THE
COMPANY TO THE SHAREHOLDERS AT A DATE SUBSEQUENT TO THE EFFECTIVE DATE.
SHAREHOLDERS SHOULD NOT SEND IN THEIR CERTIFICATES UNTIL THE NOTICE OF FILING
AND LETTER OF TRANSMITTAL ARE RECEIVED AND SHOULD SURRENDER THEIR CERTIFICATES
ONLY WITH THE RETURN OF THE LETTER OF TRANSMITTAL TO THE COMPANY'S TRANSFER
AGENT AND ONLY IN ACCORDANCE WITH THE INSTRUCTIONS SET FORTH IN THE LETTER OF
TRANSMITTAL.

         There will be no service charges payable by the Shareholders in
connection with the exchange of stock certificates or with the payment of cash
consideration in lieu of the issuance of fractional shares of common stock upon
the effectiveness of the Reverse Stock Split. These costs, if any, will be
borne by the Company.

THE REVERSE STOCK SPLIT - FAIRNESS
----------------------------------

         The Board of Directors, at its meeting held July 28, 1998, considered
the fairness of the proposed Reverse Stock Split. At the same meeting, Messrs.
Frank B., Bernard J., Anthony M. Iacovangelo, in their capacity as affiliated
shareholders of the Company and as controlling partners of Wegman Building
Associates (the "Affiliated Shareholders") also considered the fairness of the
proposed Reverse Stock Split. The Board of Directors and Affiliated
Shareholders, unanimously concluded that, for the reasons set forth herein, the
Reverse Stock Split, is fair to, and in the best interests of, both the Company
and its nonaffiliated Shareholders. In making this determination, the Board of
Directors and Affiliated Shareholders, considered the following factors: (i)
current market prices of the Company's common stock; (ii) historical market
prices of the Company's common stock; (iii) net book value of the Company; (iv)
going concern value of the Company; (v) liquidation value of the Company; (vi)
purchase price paid by the Company or its affiliates within the Company's last
two fiscal years; (vii) the appraisal submitted to the Company's Board and its
Affiliated Shareholders by Bonadio; and (viii) whether the Company or any of
its affiliates were aware of firm offers made by any unaffiliated person during
the preceding 18 months for (A) the merger, consolidation of the Company into
or with such unaffiliated person or of such unaffiliated person into or with
the issuer, (B) the sale or the transfer of all or any substantial part of the
assets of the Company or (C) the sale or any other transfer of the securities
of the Company which would enable the securities holder thereof to exercise
control of the Company.

         In assessing these factors, the Board and its Affiliated Shareholders
concluded that it was desirable and appropriate to engage the services of the
Company's accounting firm, Bonadio, to assist each of them in according the
proper weight to be given to each of these factors and to


                                     -13-
<PAGE>

prepare an appraisal of the Company in order to arrive at the cash
consideration to be offered to Fractional Shareholders in connection with the
Reverse Stock Split. In this connection, no restrictions and/or limitations
were placed by either the Board or the Affiliated Shareholders upon Bonadio on
the scope of any investigation to be undertaken or carried on by Bonadio in
making such an appraisal.

         In seeking such assistance, the Board and the Affiliated Shareholders
considered the professional experience and background of the Bonadio firm, its
familiarity with the Company and its business, its familiarity with the U.S.
and New York economies as such economies relate to the housing industry and,
more specifically, the Company's sole business, namely, the Title Insurance
Industry. Bonadio is the second largest CPA firm in the metropolitan area of
Rochester, New York. They have four professional specialists in their business
valuation group who concentrate in this area. Each of the members of their
business valuation group has received specialized training in the area of
business valuations through courses offered by the American Institute of
Certified Public Accountants, the National Association of Certified Valuation
Analysts, and the American Society of Appraisers. Their experience includes
performing business valuations in connection with employee stock ownership
plans, gift and estate taxes, buy-sell agreements, mergers and acquisitions,
and succession planning.

         The Board and the Affiliated Shareholders also noted that there was no
material relationship between the Company, its Affiliated Shareholders and
Bonadio and/or its members, either currently or during the past two years, and
that no material relationship was understood by the Board and its Affiliated
Shareholders to be contemplated in the future.

         The Board of Directors and the Affiliated Shareholders instructed
Bonadio to provide their professional opinion of the fair market value of Four
Corners Financial Corporation and its wholly owned subsidiary on a minority
interest basis as of March 31, 1998.

         The results of the Board's and the Affiliated Shareholders' assessment
of the eight factors set forth above were as follows:

                   (i)     current market prices - no weight assigned since no
                           such prices exist;

                  (ii)     historical market prices - no weight assigned since
                           the last bid price for the Company's common stock
                           was made nearly a decade ago;

                  (iii)    Net book value - assigned partial weight. The net
                           book value of the Company at March 31, 1998 after
                           applicable discounts for liquidity and minority
                           interest was estimated as $304,000 or $.09 per share
                           outstanding. Because this method does not include
                           intangible value related to the Company's
                           operations, it was not accorded substantial weight.

                  (iv)     going concern value - substantial weight assigned as
                           this factor was the major component of Bonadio's
                           "capitalization of earnings" approach to value
                           described on pages 17 and 18 of this Proxy
                           Statement;

                                     -14-
<PAGE>

                  (v)      Liquidation value - assigned partial weight. The
                           liquidation value of the Company at March 31, 1998
                           was estimated to be less than the net book value
                           share of $.09 per share outstanding described in
                           (iii) above. Because the Company is a going concern
                           and because liquidation value does not include
                           intangible value related to the Company's
                           operations, it was not accorded substantial weight.

                  (vi)     purchase price paid by the Company - it was noted
                           that on September 5, 1996 the Company repurchased
                           50,000 shares of its common stock from a former
                           director of the Company at $.50 per share for the
                           total consideration of $25,000.00. The amount of
                           this transaction was equal to the former director's
                           original purchase price for such shares upon his
                           election as a director in 1988. The Board of
                           Directors and Affiliated Shareholders requested
                           Bonadio to give adequate consideration to this
                           transaction during its appraisal process, and the
                           Board and the Affiliated Shareholders have been
                           assured by Bonadio that such consideration was
                           given.

                  (vii)    Bonadio appraisal - the Board and the Affiliated
                           Shareholders accepted Bonadio's appraisal report and
                           its opinion that the fair market value of the cash
                           consideration to be paid to Fractional Shareholders
                           was $12.00 times each fraction of a share resulting
                           from the 1 for 100 Reverse Stock Split. As described
                           on Page 1 of the valuation report, Bonadio's opinion
                           of value relied on a "value in use" or going concern
                           premise. They assumed in their valuation that the
                           Company is an ongoing business enterprise. The
                           concept behind going concern value is that an
                           operating enterprise has a work force, systems,
                           procedures, operating assets and organizational
                           structure in place. Since the Company is a viable
                           operating entity, it has "intangible" value above
                           and beyond the "tangible" value of its assets. The
                           net book and liquidation values were considered by
                           Bonadio but given only minor weight since the
                           intangible value of the Company would be ignored.

                           Bonadio also considered the purchase of shares held
                           by a former director in 1996 at $.50 per share for
                           total consideration of $25,000. The amount of the
                           transaction was equal to the director's original
                           purchase price upon his election as a director in
                           1988.

                           This transaction was considered to be an isolated
                           event with specific circumstances and not an
                           accurate indication of fair market value as would be
                           determined in an efficient market between a
                           hypothetical willing buyer and seller. The number of
                           shares purchased represented less than 2% of the
                           total shares outstanding. Because the transaction
                           was isolated with specific circumstances and was for
                           less than 2% of the total shares



                                     -15-
<PAGE>

                           outstanding, no weight was assigned to this
                           transaction in estimating the current value of the
                           Company.

                  (viii)   firm offers - this factor was assigned no weight
                           since no firm offers have been received.

         The appraisal report of Bonadio relied on by the Board of Directors
and Affiliated Shareholders in order to establish the cash consideration to be
paid to the Fractional Shareholders in connection with the Reverse Stock Split
is attached to this Proxy Statement as Exhibit "B".

         A summary of Bonadio's appraisal report is as follows:

                  (i)      Appraisal Procedures
                           --------------------

                           Bonadio's analysis began with the review of certain
information relating to the financial and operational performance of the
Company. The information included financial statements and tax returns of the
Company for the years ended December 31, 1993 through 1997.

                           Bonadio also utilized information obtained through
analytical reviews of significant accounts, trend analysis, inventory
accounting policies and valuation, management questionnaires and discussions,
including an interview with William S. Gagliano, Executive Vice President,
receivable collection history, business litigation issues, sales analysis, etc.
This information and Bonadio's extensive knowledge of the Company's operating
history was found to be useful in performing the valuation. After it had
collected the information received from the Company or obtained from its own
resources, Bonadio analyzed this information in order to select the methods of
valuation applicable to its appraisal. It arrived at its opinion of value
utilizing generally accepted valuation approaches and methods, including the
capitalization of earnings method. It also considered but did not use the asset
method because the Company does not hold significant tangible assets. The
guideline company method was also considered. However, a publicly traded
company in a similar business with similar operating characteristics could not
be located.

                  (ii)     Objective
                           ---------

                           The objective of the analysis was to provide an
independent opinion of the fair market value of a minority interest in the
Company's common stock as of a reasonably practicable date and the date chosen
was March 31, 1998. The appraisal report, annexed to this Proxy Statement as
Exhibit B, provides a detailed narrative explanation of the methods, procedures
and calculations used to arrive at Bonadio's opinion of fair market value as of
such date. The purpose of the valuation was to provide a basis for valuing the
stock of the Company for purposes of the Reverse Stock Split. The Bonadio
opinion is the result of a detailed analysis of the Company including data
accumulations, quantitative analysis, financial analysis and selection of
appropriate valuation criteria. All of the these items were combined with
informed professional judgment to produce a reasonable opinion of the fair
market value of the Company's stock. Bonadio's opinion of fair market value
relied on "value in use" or going concern value. This premise assumes that the
Company is an ongoing business enterprise with management operating in a
rational way with a goal of maximizing shareholder value. The Bonadio analysis

                                     -16-
<PAGE>

considered those facts and circumstances present with respect to the Company at
the valuation date of March 31, 1998 and Bonadio stated in its opinion that its
opinion of value would likely be different if another valuation date was used.

                  (iii)    Material Factors Considered
                           ---------------------------

                           The appraisal report considered the nature and
history of the Company, its marketing activities and marketing strategies, the
Company's competition, its facilities and equipment, its current state of
financing, its management, the stock ownership of the Company and the Company's
expectations for the future, the United States, New York economic conditions
and outlook in general as well as the conditions and outlook for the Company's
specific business, namely, the title insurance industry.

                  (iv)     Capitalization of Earnings
                           --------------------------

                           The basic approach to valuing the Company was the

capitalization of earnings method. The rate used to capitalize the earnings of
the Company is the estimated rate of return currently available in the market on
alternative investments with comparable risk. Bonadio's estimate of the
capitalization rate of the Company was 22.7% and is derived from market evidence
and is the sum of the following components: a risk free investment rate, which
is represented by the yield on 20 year U.S. Treasury Bonds as of the valuation
date; a premium for risk which is the sum of the following: an equity risk
premium, an additional premium for the extra risk associated with the size of
the Company, and an additional premium for other risk factors specific to the
Company relating to its operations.

                           In determining an adjustment for other risk factors
that should be provided for the Company, Bonadio considered the following
primary factors:

      o        the Company is regional and dependent on the local economy;

      o        there are few barriers to entry;

      o        most customers are loyal to their agent, not necessarily the
               company their agent works for;

      o        the company does not provide specialized or proprietary services;

      o        the Company does not control significant market share in any
               market it operates in;

      o        the Company has a current ratio of less than 1;

      o        the Company is highly leveraged;

                                     -17-
<PAGE>

      o        the Company operates in a mature industry; and

      o        the Company has not experienced stable operating margins and
               earnings in recent years.


                           The following table summarizes how the
capitalization rate of 22.7% was achieved:

                           Risk-free investment rate                6.0%
                           Equity risk premium                      8.2%
                                                                   ------

                           Average market return                   14.2%

                           Risk premium for company size            6.0%
                           Other risk factors                       5.0%
                                                                   ------

                           Discount rate                           25.2%
                           Average growth rate                     (2.5)%
                                                                   ------
                           Capitalization Rate                      22.7%
                                                                   ======


                  (v)      Discount
                           --------

                           For purposes of the valuation, Bonadio applied
discounts to reflect the lack of marketability and the lack of control
associated with a minority interest. In making these discounts, Bonadio noted
that the availability of a marketability discount is based on the inability of
an owner to quickly convert his investment to cash. Despite the fact that the
Company is a public company, trading has been nonexistent since 1989, the stock
is currently listed in the Pink Sheets with virtually no market for its shares,
and consequently for purposes of the valuation, a marketability discount of 10%
was applied.

                           A minority discount was used to reflect the
practical difficulties that a minority
shareholder experiences in influencing management or affecting liquidation in
order to convert his shares to cash. For the purpose of its valuation, a
minority discount of 25% was applied.

                           In accepting the appraisal report of Bonadio, the
Board of Directors and Affiliated Shareholders noted that each had instructed
Bonadio to prepare a fair valuation of the Company's common stock as of March
31, 1998 for the specific purpose of determining the fair value of the cash
consideration to be paid to Fractional Shareholders in lieu of fractional
shares resulting from the Reverse Stock Split and that it had imposed no
limitations on the scope of any investigation to be undertaken or carried on by
Bonadio in making such appraisal.

                                     -18-
<PAGE>

                           The Board of Directors and Affiliated Shareholders
did not structure the Reverse Stock Split to require the approval of at least a
majority of the Company's nonaffiliated Shareholders. Management believed that
such an approach would be extremely cumbersome and ultimately fruitless since
few, if any, nonaffiliated Shareholders have taken any interest, let alone an
active interest, in the Company for over a decade. The Board of Directors and
Affiliated Shareholders noted over the past 10 years, the Company has had
virtually no meaningful contact with its numerous but small Shareholders and
that only a few nonaffiliated Shareholders had exchanged their shares for new
shares as a result of the July, 1992 reverse stock split and/or received the
cash consideration to which they were entitled as a result of such split. See
Proposal Three.

                           Management did not retain a nonaffiliated
independent representative to act on behalf of nonaffiliated Shareholders in
connection with the proposed Reverse Stock Split. The Board of Directors and
Affiliated Shareholders did not believe that retaining such a representative
was justified in the light of the Company's history, its current size and
financial condition as well as the lack of nonaffiliated Shareholder response
to the 1992 reverse stock split. In addition, management noted that while the
Reverse Stock Split, if approved, would result in the elimination of 1,008
nonaffiliated Shareholders of record, such nonaffiliated Shareholders owned
only .46% of the Company's issued and outstanding common stock as of the record
date. Moreover, management did commission Bonadio to opine as to a fair market
value to be paid as cash consideration in connection with the Reverse Stock
Split. The Board of Directors and Affiliated Shareholders concluded that the
retention of Bonadio to perform an appraisal of the Company for the specific
purpose of determining the cash consideration to be paid to Fractional
Shareholders served as an adequate substitute for such representative. The
appraisal report of Bonadio specifically concludes that $12.00 times each
fraction of a share resulting from the Reverse Stock Split constitutes fair
market value and the Board and the Affiliated Shareholders are relying on
Bonadio's opinion in recommending the Reverse Stock Split to the Company's
nonaffiliated Shareholders.

Conflict of Interest
--------------------

         The Board of Directors and Affiliated Shareholders also considered
that the Reverse Stock Split presented potential or actual conflicts of
interest between certain members of the Company's Board of Directors in their
capacity as Affiliated Shareholders and the Company's nonaffiliated
Shareholders. Specifically, it was noted that the Company's Affiliated
Shareholders own, as of the record date, 2,882,861 shares of the Company's
issued and outstanding common stock representing 87.5% of such stock. If the
Reverse Stock Split is approved, 1,008 Shareholders of record, owning 15,275
shares or .46% of such stock, will cease being Shareholders of the Company.
Consequently, the percentage of the Company owned by the Company's Affiliated
Shareholders would increase by .59%, from 87.5% to 88.09%. If the Reverse Stock
Split is approved, therefore, the Affiliated Shareholders' share of any
dividends and/or other corporate distribution, including net proceeds of any
liquidating distribution or the net proceeds generated by the sale of the
Company would correspondingly increase. The Board of Directors and Affiliated
Shareholders did not believe that the percentage increase in the Affiliated
Shareholders' ownership interest in the Company impacted negatively upon the
fairness


                                     -19-
<PAGE>

of the proposed Reverse Stock Split to nonaffiliated Shareholders. This
conclusion was based on the fact that nonaffiliated Shareholders have not had
and management's belief that for the foreseeable future, nonaffiliated
Shareholders will not have any realistic opportunity to convert their shares to
cash, that the proposed Reverse Stock Split does enable such Shareholders to
realize cash for their shares, and the appraisal report of Bonadio provides
that Bonadio's professional opinion that the cash consideration to be paid
constitutes fair market value for the shares of the nonaffiliated Shareholders.

THE REVERSE STOCK SPLIT - CERTAIN EFFECTS
-----------------------------------------

         If the Reverse Stock Split is approved by the Company's Shareholders,
upon the Effective Date, the number of authorized shares of common stock will
be decreased from 15,000,000 shares with a par value of $.04 per share to
150,000 shares with a par value of $4.00 per share. The number of issued and
outstanding shares of common stock will be decreased, after the elimination of
the fractional shares, from 3,293,403 shares to 32,723 shares. The number of
Shareholders of record will be decreased from 1,194 to 186. Shareholders of the
Company who, after the effectiveness of the Reverse Stock Split, remain as
Shareholders of the Company will have their proportionate interest in the
Company increased from 99.54% to 100%. Each share of common stock owned by
Fractional Shareholders which would upon conversion represent a fraction of a
share will be automatically converted into the right to receive from the
Company, in lieu of fractional shares of common stock, cash in the amount of
$12.00 times the fraction of shares such Fractional Shareholders otherwise
would have received. Shareholders owning less than 100 shares of common stock
immediately prior to the Reverse Stock Split will cease to be Shareholders or
have any equity interest in the Company and, therefore, will not share in its
future earnings and growth, if any, will not have any right to vote on any
future corporate matters, and would not share in liquidation proceeds, if any,
if the Company were to dissolve.

         Shareholders who immediately prior to the effectiveness of the Reverse
Stock Split hold fewer than 100 shares of the common stock of the Company may
remain Shareholders by acquiring a sufficient number of shares to raise their
ownership level to 100 or more shares.

         The proposed Reverse Stock Split will eliminate 1,008 out of 1,194
record holders of the Company's common stock, representing .46% of the
Company's pre-Reverse Stock Split equity ownership. The following table sets
forth illustrations of the effect of the Reverse Stock Split for Shareholders
holding various representative number of shares:



                                     -20-
<PAGE>





             Illustrations of the Effect of the Reverse Stock Split
       for Shareholders Holding Various Representative Numbers of Shares
<TABLE>
<CAPTION>

                                     Shares Held    Fractional Share
                     Shares Held     After 100:1        Payout @         Shares Held
      Shareholder     Currently        Reversal         $12/Share       After Pay Out
      -----------     ---------        --------         ---------       -------------

<S>                  <C>             <C>            <C>                 <C>
A                            75            .75            $  9.00               0

B                            99            .99              11.88               0

C                           100           1.00               0                  1

D                           499           4.99              11.88               4

E                         2,500          25.00               0                 25

F                         5,688          56.88              10.56              56

G                        15,758         157.88               6.96             157

H                        50,000         500.00               0                500

I                       369,129       3,691.29               3.48           3,691

J                       919,287       9,192.87              10.44           9,192
</TABLE>

         The shares of Common Stock are currently registered under the Exchange
Act. Such registration may be terminated by application of the Company to the
Securities and Exchange Commission, if the Company has fewer than 300 record
holders of its shares of common stock. If the Reverse Stock Split is approved,
upon the Effective Date, the Company will have fewer than 300 record holders of
its common stock. The Company currently intends to make an application to the
Securities and Exchange Commission for termination of the registration of its
common stock as promptly as possible after the filing of the Certificate of
Amendment.

         Deregistration would substantially reduce the information required to
be furnished by the Company to its Shareholders, would make certain, otherwise
applicable provisions, of the Exchange Act, such as the short-swing profit
recovery provisions of section 16(b) and the requirement of furnishing a proxy
statement in connection with Shareholder meetings pursuant to section 14(a),
inapplicable and would eliminate the requirement that the Company prepare and
file annual, quarterly and current reports under cover of Form 10-K, Form 10-Q
and Form 8-K with the Securities and Exchange Commission.

         As a result of the Company's termination of its 1934 Act registration,
the ability of post-Reverse Stock Split Shareholders to locate broker/dealers
willing to enter quotations for the


                                     -21-
<PAGE>

Company's common stock and/or effectuate trades therein may be severely
curtailed since such broker/dealers would not have access to current
information about the Company and its financial condition. It is management's
belief, therefore, that the only realistic way for continuing Shareholders to
realize upon their equity ownership in the Company would be
privately-negotiated transactions, a corporate redemption and/or liquidation or
management's ability to locate one or more third-party purchasers for the
Company's assets or common stock.

PLANS FOR THE COMPANY AFTER THE REVERSE STOCK SPLIT
---------------------------------------------------

         After the consummation of the Reverse Stock Split, the Company does
not have any present plans or proposals which relate to or would result in any
extraordinary corporate transaction, such as a merger, reorganization, or
liquidation, involving the Company or any of its subsidiaries; a sale or
transfer of a material amount of assets of the Company or any of its
subsidiaries; any change in the present Board of Directors or management of the
Company including, but not limited to, any plan or proposal to change the
number or term of directors, to fill any existing vacancy on the Board of
Directors or to change any material term of the employment contract of any
executive officer or any material change in the present dividend rate or policy
or indebtedness or capitalization of the Company. Upon consummation of the
Reverse Stock Split, the assets, business, and operations of the Company will
be continued substantially as they are currently being conducted as more fully
set forth in the Company's annual report (Form 10-K) for the fiscal year ended
December 31, 1997.

MATERIAL FEDERAL INCOME TAX CONSEQUENCES
----------------------------------------

         The receipt by any Fractional Shareholder of cash in lieu of
fractional shares of common stock pursuant to the Reverse Stock Split will be a
taxable transaction for federal income tax purposes under the Internal Revenue
Code of 1986, as amended (the "Code").

         Under Section 302 of the Code, a Fractional Shareholder will recognize
gain or loss upon receiving cash in lieu of fractional shares of common stock
if (i) the Reverse Stock Split results in a "complete redemption" of all of the
Fractional Shareholder's shares of common stock, (ii) the receipt of cash is
"substantially disproportionate" with respect to the Fractional Shareholder, or
(iii) the receipt of cash is "not essentially equivalent to a dividend" with
respect to the Fractional Shareholder. These three tests are applied by taking
into account not only shares that a Fractional Shareholder actually owns, but
also shares that a Fractional Shareholder constructively owns pursuant to
Section 318 of the Code.

         If any one of these three tests is satisfied, the Fractional
Shareholder will recognize gain or loss equal to the difference between the
amount of cash received by the Fractional Shareholder pursuant to the Reverse
Stock Split and the tax basis in the existing shares of common stock owned by
the Fractional Shareholder immediately prior to the Effective Date of the
Reverse Stock Split. Provided that such shares of common stock constitute a
capital asset in the hands of the Fractional Shareholder, this gain or loss
will be taxed at a maximum rate of 20% if the shares of Common Stock have been
held for more than one year and will constitute short-term capital gain or loss
if the shares of Common Stock are held for one year or less.

                                     -22-
<PAGE>

         Pursuant to the constructive ownership rules of Section 318 of the
Code, a shareholder is deemed to constructively own shares owned by certain
related individuals and entities in addition to these shares actually owned by
the shareholder himself. For instance, an individual shareholder is considered
to own shares owned by or for his or her spouse and his or her children,
grandchildren and parents ("Family Attribution"). A shareholder is also
considered to own a proportionate number of shares owned by estates or certain
trusts in which the shareholder has a beneficial interest, by partnerships in
which the shareholder is a partner, and by corporations in which 50% or more of
the value of the stock is owned directly or indirectly by or for such
shareholder. Similarly, shares directly or indirectly owned by beneficiaries of
estates or certain trusts, by partners of partnerships and, under certain
circumstances, by shareholders of corporations may be considered owned by these
entities ("Entity Attribution"). A shareholder is also deemed to own shares
which the shareholder has the right to acquire by exercise of an option.

         The receipt of cash by a Fractional Shareholder pursuant to the
Reverse Stock Split will result in a "complete redemption" of all of the
Fractional Shareholder shares of common stock, so long as the Fractional
Shareholder does not actually or constructively own any shares of the Company's
common stock as a result of and immediately after the effectiveness of the
Reverse Stock Split. However, even if a Fractional Shareholder constructively
owns shares of the Company's common Stock after the Reverse Stock Split, the
receipt of cash may qualify for capital gain or loss treatment under the
"complete redemption" test provided that (i) the Fractional Shareholder
constructively owns shares of common stock as a result of the Family
Attribution rules (or, in some cases, as a result of a combination of the
Family and Entity Attribution rules), and (ii) the Fractional Shareholder
qualifies for a waiver of the Family Attribution rules (such waiver being
subject to several conditions, one of which is that the Fractional Shareholder
has no interest (other than an interest as a creditor) in the Company
immediately after the Reverse Stock Split including an interest as an officer,
director, or employee.

         Based upon a review of the Company's stock transfer books as certified
by the Company's Transfer Agent, management believes that most Fractional
Shareholders will qualify for capital gain or loss treatment as a result of
satisfying the "complete redemption" requirements. Consequently, management
believes that most Fractional Shareholders will qualify for long-term capital
gains treatment. However, a number of Fractional Shareholders will receive
shares as well as cash in lieu of fractional shares upon the effectiveness of
the Reverse Stock Split. Such Fractional Shareholders may nevertheless qualify
for capital gain or loss treatment by satisfying either the "substantially
disproportionate" or the "not essentially equivalent to a dividend"
requirements. In general, the receipt of cash pursuant to the Reverse Stock
Split will be "substantially disproportionate" with respect to the Fractional
Shareholder if the percentage of shares of common stock owned by the Fractional
Shareholder immediately after the effectiveness of the Reverse Stock Split is
less than 80% of the percentage of shares of common stock actually and
constructively owned by the Fractional Shareholder immediately before the
Reverse Stock Split. Alternatively, the receipt of cash pursuant to the Reverse
Stock Split will, in general, be "not essentially equivalent to a dividend" if
the Reverse Stock Split results in a "meaningful reduction" in the Fractional
Shareholder's proportionate interest in the Company.

                                     -23-
<PAGE>

         If none of the three tests described above is satisfied, a Fractional
Shareholder receiving cash as a result of the Reverse Stock Split will be
treated under the distribution rules of Section 301 of the Code. Generally,
pursuant to Section 301 of the Code, a distribution of cash by a corporation to
its Shareholders is considered a taxable dividend in an amount equal to the
entire amount of cash received by such Shareholder to the extent of the
earnings and profits, both current and accumulated, of such corporation. Since
the Company has generated earnings in each of its last two fiscal years,
Fractional Shareholders who do not qualify for capital gain or loss treatment
under the above described Section 302 rules will be treated as receiving
dividend income under the distribution rules of Section 301.

         The receipt of new shares of common stock by Shareholders as a result
of the Reverse Stock Split in exchange solely for such Shareholders' old shares
of common stock will be a nontaxable transaction for federal income tax
purposes. Consequently, a Shareholder (whether or not a Fractional Shareholder)
receiving new shares of common stock will not recognize gain or loss, or
dividend income, as a result of the Reverse Stock Split with respect to such
shares received. In addition, the basis and holding period attributed to the
old shares of common stock will carry over as the basis and holding period of
such Shareholder's new shares of common stock.

NO FORMAL OPINION OF TAX COUNSEL WAS OBTAINED WITH RESPECT TO THE MATERIAL TAX
ASPECTS OF THE REVERSE STOCK SPLIT.

THE FOREGOING IS ONLY A GENERAL DESCRIPTION OF CERTAIN OF THE FEDERAL INCOME
TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT TO THE SHAREHOLDERS WITHOUT
REFERENCE TO THE PARTICULAR FACTS AND CIRCUMSTANCES OF ANY PARTICULAR
SHAREHOLDER. EACH SHAREHOLDER IS URGED TO CONSULT HIS OR HER OWN TAX ADVISOR TO
DETERMINE THE PARTICULAR TAX CONSEQUENCES TO SUCH SHAREHOLDER OF THE REVERSE
STOCK SPLIT (INCLUDING THE APPLICATION AND EFFECT OF STATE AND LOCAL INCOME AND
OTHER TAX LAWS).



                                     -24-
<PAGE>



THE REVERSE STOCK SPLIT - EXPENSES

         The Company estimates that fees and expenses incurred or to be
incurred by the Company in connection with the Reverse Stock Split will be
approximately $36,333, consisting of the following:


                  Cash Consideration                          $  2,533
                  Legal Fees                                    25,000
                  Accounting Fees                                4,800
                  Printing, Mailing Costs & Filing Fees          4,000
                                                               -------
                                                               $36,333


The Company has paid or will be responsible for paying all of such expenses. It
will pay such expenses, including the cash consideration, from its general
working capital. It will not borrow any funds to pay these expenses.

THE REVERSE STOCK SPLIT - APPRAISAL RIGHTS
------------------------------------------

         Under the Delaware General Corporation Law, as well as under the
Company's Certificate of Incorporation, as amended, the existing holders of the
Company's common stock are not entitled to dissenters' rights of appraisal in
connection with the consummation of the Reverse Stock Split. The Company is not
voluntarily according such rights. Under the Delaware General Corporation Law,
nonaffiliated Shareholders of the Company are entitled to bring an action that
the Board of Directors, in approving the Reverse Stock Split, violated its
fiduciary obligations to the Company's nonaffiliated Shareholders and was not
an appropriate exercise of the Board's business judgment.

THE REVERSE STOCK SPLIT - RECOMMENDATION OF THE
-----------------------------------------------
BOARD OF DIRECTORS AND AFFILIATED SHAREHOLDERS
----------------------------------------------

         The Board of Directors and Affiliated Shareholders, at its meeting
held July 28, 1998, considered and reviewed the Reverse Stock Split and
concluded that the Reverse Stock Split is fair and in the best interests of the
Company and its nonaffiliated Shareholders and unanimously approved the Reverse
Stock Split. The Board of Directors and Affiliated Shareholders unanimously
recommend that the Shareholders vote for approval of the Reverse Stock Split.
The Board of Directors and Affiliated Shareholders stated that they would vote
the shares they beneficially own in favor of the Reverse Stock Split. Messrs
Frank B., Bernard J. and Anthony M. Iacovangelo stated that they would cause
the shares owned by Wegman Building Associates to be voted in favor of the
Reverse Stock Split.



                                     -25-
<PAGE>




      Director/Executive Officer      Shares of Common Stock         Percent
      and Affiliated Shareholders       Beneficially Owned          of Class
      ---------------------------       ------------------          --------

Frank B. Iacovangelo                          1,219,287               37.02%
Bernard J. Iacovangelo                       1,228,687                37.31%
William S. Gagliano                              15,758                 .48%
Anthony M. Iacovangelo                           50,000                1.52%
Wegmans Building Associates                     369,129               11.21%
                                             ----------               ------
                                             2,882,861                87.54%

         Based upon these statements, the Reverse Stock Split will be approved
even if all of the Company's nonaffiliated Shareholders vote against the
Reverse Stock Split.


THE REVERSE STOCK SPLIT - VOTING; VOTE REQUIRED
-----------------------------------------------

         The proposed Reverse Stock Split must be approved by a vote of not
less than a majority of the total number of votes cast at the Special Meeting
(including abstentions) in person or by Proxy.

         Broker non-votes will not be treated as votes cast or shares entitled
to vote on matters as to which the applicable rules of the National Association
of Securities Dealers, Inc. withhold the broker's authority to vote in the
absence of direction from the beneficial owner. Non-broker Shareholders who are
present in person or by Proxy and have the legal authority to vote their shares
but who abstain from voting will adversely affect the outcome of this Proposal.

THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS
OF SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION
CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.


                                     -26-
<PAGE>



                                 PROPOSAL THREE
                                 --------------

         The Shareholders of the Company will be asked at the Special Meeting
to consider, vote upon and approve Proposal to approve the payment by the
Company of the indebtedness owed to Shareholders owing fractional shares
resulting from the 1 for 4 reverse stock split effective July 29, 1992,
together with the payment of simple interest on the amount of such
indebtedness.

         On July 29, 1992, the Company's Board of Directors recommended and the
Shareholders approved a 1 for 4 reverse stock split which, upon the Company's
filing of a Restated Certificate of Incorporation on July 31, 1992 with the
Secretary of State of the State of Delaware, became effective on July 31, 1992.
As the result of the 1992 reverse stock split, the number of authorized shares
of the Company's common stock was reduced from 30,000,000 authorized shares
with a par value of $.01 per share to 15,000,000 authorized shares with a par
value of $.04 per share. Each 4 shares of the Company's common stock, $.01 par
value per share, issued and outstanding immediately prior to July 31, 1992 were
automatically converted into 1 share of the Company's common stock with a par
value of $.04 per share.

         As part of the 1992 reverse stock split, the Company's Board
authorized and the Company's Shareholders approved a cash payment of $3.00
times the fraction of a share to which a Shareholder otherwise would have been
entitled, in lieu of the issuance of fractional shares.

         The legal effect of the 1992 reverse stock split was to reduce the
outstanding number of shares held by Shareholders as of July 31, 1992 by a
factor of 4. In addition, each Shareholder who owned a fraction of shares of
common stock as a result of the 1992 reverse stock split became a creditor of
the Company to the extent of the fraction times $3.00.

         Despite the legal effectiveness of the 1992 reverse stock split, the
overwhelming proportion (97.48%) of the Company's nonaffiliated Shareholders
did not exchange their pre-1992 reverse stock split stock certificates for
post-1992 reverse stock split stock certificates and the Company did not make
payment of the cash consideration owing to such Shareholders owning fractions
of shares.

         In conjunction with its approval of the 1 for 100 Reverse Stock Split
at its meeting held on July 28, 1998, the Board concluded that it would be
appropriate to recommend to the Company's Shareholders that they authorize the
payment by the Company of the indebtedness owed to the Shareholders owning
fractional shares as a result of the 1992 reverse split, together with payment
of simple interest at the rate of 10% per year on the amount of said
indebtedness to the date of payment.

         If the current Reverse Stock Split is approved and this Proposal Three
is approved, the Company shall cause its Transfer Agent to request all
Shareholders to tender their stock certificates currently held by them to the
Transfer Agent. Upon the receipt of such certificates, the Transfer Agent shall
issue to those persons who shall remain Shareholders of the Company upon the
effectiveness of the proposed Reverse Stock Split certificates representing the
number of shares owned by them in the Company upon the effectiveness of the
Reverse Stock Split. The


                                     -27-
<PAGE>

Company shall also cause its Transfer Agent to distribute cash consideration of
$3.00 per fractional share plus 10% interest to the date of payment to those
Shareholders who were entitled to such payment as a result of the 1992 reverse
stock split and, in addition, cash consideration of $12.00 per share to
Fractional Shareholders as a result of the proposed Reverse Stock Split.

         The Company estimates that the amount of cash consideration to be paid
by the Company in connection with this Proposal Three, including payment of
simple interest at the rate of 10% annually calculated from July 31, 1992 to
the estimated date of payment will be approximately $1,700.00.

RECOMMENDATION OF THE BOARD OF DIRECTORS
----------------------------------------

         The Board of Directors, at its meeting held July 28, 1998, considered
and reviewed Proposal Three and concluded that Proposal Three is fair and in
the best interests of the Company and its nonaffiliated Shareholders and
unanimously approved Proposal Three. The Board of Directors unanimously
recommended that the Shareholders vote for approval of Proposal Three. The
Board of Directors stated that they would vote the shares they beneficially own
in favor of Proposal Three. Messrs Frank B., Bernard J. and Anthony M.
Iacovangelo stated that they would cause the shares owned by Wegman Building
Associates to be voted in favor of Proposal Three.



      Director/Executive Officer    Shares of Common Stock         Percent
      and Affiliated Shareholders     Beneficially Owned          of Class
      ---------------------------     ------------------          --------

Frank B. Iacovangelo                        1,219,287               37.02%
Bernard J. Iacovangelo                      1,228,687               37.31%
William S. Gagliano                            15,758                 .48%
Anthony M. Iacovangelo                         50,000                1.52%
Wegmans Building Associates                   369,129               11.21%
                                           ----------               ------
                                            2,882,861               87.54%

         Based upon these statements, Proposal Three will be approved even if
all of the Company's nonaffiliated Shareholders vote against Proposal Three.



                                     -28-
<PAGE>


VOTING; VOTES REQUIRED
----------------------

         The proposed Reverse Stock Split must be approved by a vote of not
less than a majority of the total number of votes cast at the Special Meeting
(including abstentions) in person or by Proxy.

         Broker non-votes will not be treated as votes cast or shares entitled
to vote on matters as to which the applicable rules of the National Association
of Securities Dealers, Inc. withhold the broker's authority to vote in the
absence of direction from the beneficial owner. Non-broker Shareholders who are
present in person or by Proxy and have the legal authority to vote their shares
but who abstain from voting will adversely affect the outcome of this Proposal.

MARKET PRICES FOR SHARES OF COMMON STOCK; DIVIDENDS
---------------------------------------------------
AND COMMON STOCK INFORMATION
----------------------------

         There is a very limited trading in the Company's Common Stock. The
range of high and low bid prices and high and low asked prices for the years
1995, 1996 and 1997 is shown below, as reported by the National Quotations
Bureau, Inc. and as adjusted to reflect the Company's 1 for 4 reverse stock
split which became effective July 31, 1992.

                               COMMON STOCK DATA

         1995                                 BID                   ASKED
         ----                                 ---                   -----
         1ST Quarter                       *Unpriced              *Unpriced
         2nd  Quarter                      *Unpriced              *Unpriced
         3rd Quarter                       *Unpriced              *Unpriced
         4th Quarter                       *Unpriced              *Unpriced

         1996
         1ST Quarter                       *Unpriced              *Unpriced
         2nd  Quarter                      *Unpriced              *Unpriced
         3rd Quarter                       *Unpriced              *Unpriced
         4th Quarter                       *Unpriced              *Unpriced

         1997
         1st Quarter                       *Unpriced              *Unpriced
         2nd  Quarter                      *Unpriced              *Unpriced
         3rd Quarter                       *Unpriced              *Unpriced
         4th Quarter                       *Unpriced              *Unpriced
         February 16, 1989              $2.00  $2.00           $3.00  $3.00

* = Listed in pink sheets without prices.


                                     -29-
<PAGE>

         The above quotations represent prices between dealers and do not
include retail markup, markdown or commission. They do not represent actual
transactions and have not been adjusted for stock dividends.

         The Company's agreement with its Bank placed a restriction on its
payment of dividends and consequently, dividends were declared or paid during
1995, 1996 or 1997.

         On February 24, 1999 the Company had 1,194 holders of record of its
common stock.

         On September 5, 1996, the Company repurchased 50,000 shares of its
common stock from a former director of the Company at $.50 per share (post-1992
reverse split basis)for a total consideration of $25,000 which dollar amount
represented the former director's original purchase price for such shares upon
his election as a director in 1988. The number of shares purchased reflected
the 1 for 4 1992 reverse stock split. As discussed on page 15 of this Proxy
Statement, this transaction was taken into account by Bonadio in making its
determination that $12.00 per share represents a fair market value to be paid
as cash consideration to Fractional Shareholders as a result of the Reverse
Stock Split.

DIRECTORS AND EXECUTIVE OFFICERS
--------------------------------

         The following table names the directors and indicates their age, their
position with the Company or their principal occupation or employment, and the
approximate number of shares of Common Stock beneficially owned by each
director and all directors and officers as a group as of February 24, 1999.
<TABLE>
<CAPTION>
                                                                                    Shares of
                           Position with the Company or                            Common Stock             Percent of
        Name      Age           Principal Occupation         Director Since      Beneficially owned            Class
        ----      ---           --------------------         --------------      ------------------            -----

<S>               <C>    <C>                                 <C>                 <C>                        <C>
Frank B.          58     President and Treasurer (1)                 1987           1,588,416 (3)               48.23%
Iacovangelo

Bernard J.        50     Vice President Secretary                    1987           1,597,816 (4)               48.51%
Iacovangelo

William S.        48     Executive Vice President and                1992              15,758                     .48%
Gagliano                 Director

Anthony M.        57     President, Director and principal           1987             419,129 (5)               12.73%
Iacovangelo              shareholder of Faber
                         Construction., Inc.
                         Rochester, NY (2)

<S>                                                                                 <C>                         <C>
All Directors and Officers of the Company as a group (four persons)                 2,882,861 (6)               87.54%
</TABLE>


                                     -30-
<PAGE>

(1) From 1987 until June 1989, Frank B. Iacovangelo was a director, and on an
interim basis for a period of approximately 11 months was Chairman of the Board
of Charlie Bubbles, Ltd. food service business which filed a petition under
Chapter 11 of the U.S. Bankruptcy Code on November 20, 1989.

(2) During the past five years, Anthony Iacovangelo has also been an owner of
numerous real estate projects.

(3) Includes 300,000 shares owned by children of Frank B. Iacovangelo,
beneficial ownership of which is disclaimed. Also includes 369,129 shares owned
by Wegman Building Associates, a partnership in which Frank Iacovangelo has
shared voting and investment power with respect to the shares owned by the
partnership.

(4) Includes 500,000 shares owned by a Trust for the benefit of Bernard J.
Iacovangelo's children, the Trustees of which are Mr. Iacovangelo's wife,
Patricia, and his brother, Frank. Mr. Iacovangelo disclaims beneficial
ownership of these shares. Also includes 369,129 shares owned by Wegman
Building Associates, a partnership in which Bernard Iacovangelo has shared
voting and investment power with respect to the shares owned by the
partnership.

(5) Includes 369,129 shares owned by Wegman Building Associates, a partnership
in which Anthony Iacovangelo has shared voting and investment power with
respect to the shares owned by the partnership.

(6) Includes 300,000 shares owned by children of Frank B. Iacovangelo
(beneficial ownership which is disclaimed) 500,000 shares owned by a Trust for
the benefit of Bernard J. Iacovangelo's children, the Trustees of which are Mr.
Iacovangelo's wife, Patricia, and his brother, Frank (beneficial ownership of
which is disclaimed) and 369,129 shares owned by Wegman Building Associates, a
partnership in which Messrs. Frank, Bernard and Anthony Iacovangelo share
voting and investment power with respect to the shares owned by the
partnership. The 369,129 shares owned by Wegman Building Associates is counted
only once for purposes of setting forth the approximate number of shares owned
by all directors and executive officers as a group.



                                     -31-
<PAGE>


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth information as of February 24, 1999
showing all persons who, to the Company's knowledge, were beneficial owners of
5% or more of any class of its shares. All persons listed below has sole voting
and investment power with respect to their shares unless otherwise indicated.

                                Amount and Nature of
Name and Address                  Beneficial Ownership       Percent of Class
----------------                  --------------------       ----------------

Frank B. Iacovangelo                1,588,416 (1) (3)              48.23%
39 State Street
Rochester, NY  14614

Bernard J. Iacovangelo              1,597,816 (2) (3)              48.51%
39 State Street
Rochester, NY  14614

Wegman Building Associates             369,129 (3)                 11.21%
39 State Street
Rochester, NY  14614

(1) Includes 300,000 shares owned by children of Frank B. Iacovangelo,
beneficial ownership of which is disclaimed. Also includes 369,129 shares owned
by Wegman Building Associates, a partnership in which Frank Iacovangelo has
shared voting and investment power with respect to the shares owned by the
partnership.

(2) Includes 500,000 shares owned by a Trust for the benefit of Bernard J.
Iacovangelo's children, the Trustees of which are Mr. Iacovangelo's wife,
Patricia, and his brother, Frank. Mr. Iacovangelo disclaims beneficial
ownership of these shares. Also includes 369,129 shares owned by Wegman
Building Associates, a partnership in which Bernard Iacovangelo has shared
voting and investment power with respect to the shares owned by the
partnership.

(3) Wegman Building Associates is a general partnership in which Messrs. Frank,
Bernard and Anthony Iacovangelo share voting and investment power with respect
to the shares owned by the partnership.




                                     -32-
<PAGE>



HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF THE COMPANY
------------------------------------------------------------

         The Company hereby incorporates by reference the financial information
contained in Part II, Item 8 of the Company's 1997 10-K/A, the report of the
independent accountants thereon contained in Part II, Item 8 of the 1997
10-K/A, and Management 's Discussion and Analysis of Financial Condition and
Results of Operations contained in Part II, Item 7 of its 1997 10-K/A.

         The Company hereby incorporates by reference the financial information
contained in Part I, Item 1 of the Company's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1998 and Management's Discussion and Analysis
of Financial Condition and Results of Operations contained in Part I, Item 2 of
the September, 1998 10-Q.

INDEPENDENT PUBLIC ACCOUNTANTS
------------------------------

         The consolidated financial statements included in the Company's Annual
Report on Form 10-K/A for the fiscal year ended December 31, 1997 incorporated
by reference in this Proxy Statement, have been audited by Bonadio, independent
public accountants, as indicated in their report with respect thereto. It is
expected that two representatives of Bonadio will be present at the Special
Meeting to respond to appropriate questions of Shareholders of the Company.

PRO FORMA CONSOLIDATED FINANCIAL INFORMATION OF THE COMPANY
-----------------------------------------------------------

         The pro forma consolidated financial information of the Company
attached as Exhibit C to this Proxy Statement is based on and should be read in
conjunction with the consolidated financial statements of the Company as of and
for the year ended December 31, 1997 and as of and for the nine months ended
September 30, 1998, both incorporated by reference (from the Company's 1997
Form 10-K/A, and the September 30, 1998 Form 10-Q) in this Proxy Statement.

         The pro forma adjustments are based upon available information and
certain assumptions that management believes are reasonable in the
circumstances. The pro forma consolidated financial information purports
neither to represent what the Company's results of operations would actually
have been if the Reverse Stock Split and going private transaction had occurred
on January 1, 1997 or September 30, 1998 nor to project the Company's financial
position or results of operations for any future date or period.

ADDITIONAL INFORMATION
----------------------

         The Company is subject to the informational requirements of the
Exchange Act and in accordance therewith files reports, proxy statements, and
other information with the SEC. Such reports, proxy statements, and other
information can be inspected and copied at the public reference facilities of
the SEC at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C.
20549 and at the regional office of the SEC located at 7 World Trade Center,
13th Floor, Suite 1300, New York, New York 10048. Copies of such materials can
also be obtained at prescribed rates by writing to the Public Reference Section
of the SEC at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549.
The SEC also maintains a web site at


                                     -33-
<PAGE>

http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the SEC.

         Shareholders may obtain a copy of the Company's Annual Report (Form
10-K/A) for the fiscal year ended December 31, 1997 and the Company's Quarterly
Reports (Form 10-Q) for the fiscal quarters ended March 31, 1998, June 30, 1998
and September 30, 1998, as filed with the Securities and Exchange Commission,
by writing the Company, 370 East Avenue, Rochester, New York 14604, Attention:
William S. Gagliano, Executive Vice President.

         This Proxy Statement includes information required by the SEC to be
disclosed pursuant to Rule 13e-3 under the Exchange Act, which governs so-
called "going private" transactions by certain issuers or their affiliates. In
accordance with that rule, the Company has filed with the SEC, under the
Exchange Act, a Rule 13E-3 Transaction Statement with respect to the Reverse
Stock Split. This Proxy Statement does not contain all of the information set
forth in the Rule 13E-3 Transaction Statement, parts of which are omitted in
accordance with the regulations of the SEC. The Rule 13E-3 Transaction
Statement, and any amendments thereto, including exhibits filed as a part
thereof, will be available for inspection and copying at the offices of the SEC
as set forth above.

VOTING OF PROXIES
-----------------

         The shares represented by all valid Proxies received will be voted in
the manner specified on the Proxies. Where specific choices (including
abstentions) with respect to each Proposal are not indicated, THE SHARES
REPRESENTED BY ALL VALID PROXIES RECEIVED WILL BE VOTED FOR APPROVAL OF THAT
PROPOSAL.

         The Board of Directors unanimously recommends that the Shareholders
vote "FOR" Proposals 1, 2 and 3.


                                By the order of the Board of Directors



                                -----------------------------------,
                                BERNARD J. IACOVANGELO, Secretary

                                     -34-