COMMUNITY FINANCIAL SYSTEM, INC. — Director's Dealing 2015

Mar 20, 2015

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: COMMUNITY BANK SYSTEM, INC. (CBU)
CIK: 0000723188
Period of Report: 2014-12-31

Reporting Person: ACE BRIAN R (Director)

Non-Derivative Transactions

Date	Security	Code	Shares	Price	A/D	Holdings After	Ownership
2014-12-31	Common Stock	J	17635.298	—	Disposed	0	Indirect
2014-12-31	Common Stock	J	17635.298	—	Acquired	46049.3169	Direct

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2015-03-18	Phantom Stock (Deferred Stock Units)	$	A	850	Acquired		Common Stock (850)	Direct

Holdings (Non-Derivative)

Security	Shares	Ownership
Common Stock	125.839	Indirect

Holdings (Derivative)

Security	Exercise Price	Expiration	Underlying	Shares	Ownership
Phantom Stock (Deferred Compensation)	$		Common Stock (24725.8938)	24725.8938	Direct
Phantom Stock (Stock Balance Plan)	$		Common Stock (3063.22)	3063.22	Direct

Footnotes

F1: Distribution from the Laceyville Hardware SEP into the reporting person's SEP IRA.

F2: Includes 678.298 shares acquired in 2014 under the Community Bank System, Inc. Dividend Reinvestment Plan.

F3: Includes 186.404 shares acquired in 2014 under the Community Bank System, Inc. Dividend Reinvestment Plan.

F4: Includes 4.839 shares acquired in 2014 under the Community Bank System, Inc. Dividend Reinvestment Plan.

F5: The reporting person has received deferred stock units under the Community Bank System, Inc. 2014 Long-Term Incentive Plan. Each phantom stock unit which represents a deferred stock unit is the economic equivalent of one share of Community Bank System, Inc. common stock and will be settled in common stock at a predetermined date.

F6: Each unit of phantom stock is the economic equivalent of one share of Community Bank System, Inc. common stock. The units of phantom stock relating to the Deferred Compensation Plan will be settled in Community Bank System, Inc. common stock at future dates selected by the reporting person.

F7: Includes 227.8895 units acquired on January 9, 2015 pursuant to the Deferred Compensation Plan's dividend reinvestment feature.

F8: Each phantom stock unit is the economic equivalent of one share of Community Bank System, Inc. common stock. Phantom Stock (Stock Balance Plan) may be settled upon the later of the reporting person's attainment of age 55 or termination of service on Community Bank System, Inc.'s Board of Directors.

F9: Includes 90.44 units of phantom stock acquired in 2014 under the Stock Balance Plan's dividend reinvestment feature.