File #333-9691
Rule 424(b)(3)
Central Vermont Public Service Corporation
Dividend Reinvestment and Common Stock Purchase Plan
Summary of Plan
The Dividend Reinvestment and Common Stock Purchase Plan (the "Plan")
of Central Vermont Public Service Corporation (the "Company") provides the
holders of the Company's Common and Preferred Stock (collectively, "Stock")
and individuals or entities who are not currently stockholders (depending
on legal residence) with a convenient method of purchasing Common Stock, $6
Par Value ("Common Stock"), of the Company.
Common Stock purchased under the Plan consists of shares purchased on
the open market.
The Price Per Share of Common Stock purchased under the Plan will be
the weighted average price per share (adjusted for brokerage commissions
and, if applicable, certain Related Costs) at which such shares are
purchased on the open market by the Plan Administrator for the participants
in the Plan.
The Plan allows a Participant to elect:
a. to have all dividends on Stock currently owned by the
Participant reinvested in shares of Common Stock and to make Optional Cash
Payments into the Plan;
b. to receive dividends in cash and to make only Optional Cash
Payments into the Plan to purchase shares of Common Stock;
c. to make automatic monthly investments by electronic funds
transfers from a checking or savings account;
d. to deposit share certificates for safekeeping.
In the event of Optional Cash Payments under either (a) or (b) or (c)
above, each investment (other than the Initial Investment) must be at least
$100, and not total more than $6,000 per calendar quarter, as further
discussed in Question 2.
This Prospectus describes the terms and conditions of the Plan and
should be retained for future reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES
AND EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION NOR
HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is December 1, 1997
</PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the
Securities and Exchange Commission (the "Commission"). Information, as of
particular dates, concerning directors and officers of the Company,
remuneration and any material interests of such persons in transactions
with the Company, is disclosed in proxy statements distributed to
stockholders of the Company and filed with the Commission. Such reports,
proxy statements and other information filed by the Company can be
inspected and copied at the public reference facilities of the Commission
at 450 Fifth Street, N.W., Washington, D.C.; Room 1228, Everett McKinley
Dirksen Building, 219 South Dearborn Street, Chicago, IL; and Room 1100,
Federal Building, 26 Federal Plaza, New York, NY. Certain securities of the
Company are listed on the New York Stock Exchange, where reports, proxy
statements and other information concerning the Company can also be
inspected.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are hereby incorporated by reference in this
Prospectus:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1996.
2. The Company's Report on Form 8-K dated February 28, 1997.
3. The Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1997.
4. The Company's definitive proxy statement dated March 21, 1997,
in connection with its Annual Meeting of Stockholders held on May 6, 1997.
5. The description of the Company's Common Stock contained in the
Company's registration statement on Form 8-A pursuant to Section 12(b), as
amended.
All documents filed with the Commission pursuant to Sections 13, 14
and 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of this offering shall be deemed to be incorpo-
rated by reference into this Prospectus and to be a part hereof from the
date of filing of such documents.
The Company hereby undertakes to provide without charge to each person
to whom a copy of this Prospectus has been delivered, on the written or
oral request of any such person, a copy of any or all of the documents
referred to above which have been or may be incorporated in this Prospectus
by reference, other than exhibits to such documents. Requests for such
copies should be directed to Joseph M. Kraus, Vice President, Secretary and
General Counsel, Central Vermont Public Service Corporation, 77 Grove
Street, Rutland, VT 05701, (802) 747-5429.
THE COMPANY
Central Vermont Public Service Corporation (the "Company") is the
issuer of the shares of common stock offered hereby. The principal
executive offices of the Company are located at 77 Grove Street, Rutland,
Vermont 05701
DESCRIPTION OF THE PLAN
The following is a question and answer statement of the provisions of
the Company's Plan. Throughout this document, unless the context clearly
requires otherwise, the masculine gender shall include the feminine.
DEFINITIONS
Authorization Form The form completed and signed by a Stockholder to join
the Plan.
Automatic Monthly Investment A means of investment whereby a
participant elects to have a designated amount of funds to be withdrawn
from a checking or savings account on a monthly basis of at least $100 per
month and no more than $6,000 per calendar quarter, for the purchase of
additional shares of Common Stock.
Cut-off Date The date by which Optional Cash Payments and Initial
Investments must be received from Participants to be invested on the 15th
of that month. The Cut-off Date is the 10th day of each month or the prior
business day if the 10th falls on a Saturday, Sunday, or holiday. Payroll
deductions received through the last payday of any given month will be
invested on the 15th of the following month.
Dividend Payment Date The date on which dividends are payable; currently
on or about the 15th day of February, May, August and November for Common
Stock; and for all series of Preferred Stock, on the first day of January,
April, July and October.
Enrollment Form The form to be completed and signed by a Non-Stockholder
to join the Plan.
Initial Investment The payment, required of Non-Stockholders upon
execution of the Enrollment Form, of between $250 and $6,000 (in United
States Dollars) to make an initial purchase of Common Stock.
Investment Date The date or dates of each month on which shares of Common
Stock are purchased with Optional Cash Payments, cash dividends, payroll
deductions, Initial Investments and Automatic Monthly Investments;
currently investments commence on the 15th day of each month, or the prior
business day if the 15th falls on a Saturday, Sunday, or holiday.
Non-Stockholder An individual or entity not currently a holder of record
of the Company's Stock. Non-stockholders may become Participants,
depending on their state or other jurisdiction of legal residence. Due to
differences in applicable securities laws, the Plan is not offered in all
jurisdictions.
Optional Cash Payment A means of investment whereby a Participant may
make Optional Cash Payments (in United States Dollars), by check or money
order, into the Plan in amounts of at least $100 per Investment, and no
more than $6,000 per calendar quarter, for the purchase of additional
shares of Common Stock.
Participant An individual or entity, whether previously a Stockholder or
a Non-Stockholder, who has enrolled in the Plan. To remain a Participant,
a Stockholder must have at least one share of Common Stock credited to his
account. A Participant who has terminated his participation in the Plan
will receive a check for the cash value of any fractional share remaining.
Price Per Share The weighted average price per share (adjusted for
brokerage commissions and, if applicable, certain Related Costs) at which
such shares are purchased for Participants on the applicable Investment
Date on the open market.
Record Date The date, usually 15 days before the Dividend Payment Date,
by which a Stockholder must own Stock to receive the dividend payable on
the next Dividend Payment Date.
Related Costs Those costs, in addition to brokerage commissions,
representing certain of the Company's actual costs and expenses incurred in
maintaining and administering the Plan, such as printing and mailing costs,
which the Company may in its discretion elect to pass through to
Participants as part of the Price Per Share. See Questions 3 and 17 for
additional information regarding Related Costs.
Settlement Date The date on which the final purchase of the Company's
Common Stock on any given Investment Date settles.
Stock The Company's Common Stock and all classes and series of Preferred
Stock.
Stockholders Holders of record of the Company's Common and/or all classes
and series of Preferred Stock.
Total Amount Invested As to any particular Participant, the aggregate of
the applicable Initial Investment, Optional Cash Payments, Automatic
Monthly Investments, cash dividends, and payroll deductions, less brokerage
commissions and, if applicable, Related Costs, invested on behalf of such
Participant on any Investment Date.
PURPOSE
1. What is the purpose of the Plan?
The Plan provides Stockholders and Non-Stockholders who qualify with a
convenient and economical way to purchase shares of Common Stock with
Optional Cash Payments, including the Initial Investment, Automatic Monthly
Investments, payroll deductions, and/or reinvested dividends.
BENEFITS
2. What are the advantages of the Plan?
* Stockholders have the ability to elect to have dividend payments
on any or all classes or series of Stock reinvested in Common Stock and (if
desired) making Optional Cash Payments, Automatic Monthly Investments, or
continuing to receive cash dividends and making Optional Cash Payments or
Automatic Monthly Investments of at least $100 to purchase Common Stock
through the Plan.
* Non-Stockholders who qualify may become Participants by making
an Initial Investment of at least $250, not to exceed $6,000, to purchase
Common Stock through the Plan. See Question 13 for additional information.
* Optional Cash Payments may be made occasionally or at regular
intervals, as the Participant desires. Dividend payments not reinvested
will be paid in the usual manner.
* Full investment of funds including the Initial Investment,
Optional Cash Payments, Automatic Monthly Investments and/or reinvested
dividends is possible through the purchase of whole and fractional shares
of Common Stock.
* The Plan offers a "safekeeping" service whereby Participants may
deposit, free of any service charges, certificates representing Common
Stock into the Plan. Shares of Common Stock so deposited will be credited
to the account of the Participant.
* Participants may sell shares of Common Stock credited to their
account through the Plan at a minimal cost. See Question 35 for additional
information.
* A Participant may direct the Plan Administrator, at any time and
at no cost to the Participant, to issue certificates for shares held in the
Plan, to transfer all or a portion of the shares of Common Stock credited
to his account to the account of another Participant (or to set up an
account for a new Participant in connection with such transfer) or to send
certificate(s) representing such shares to the Participant or another
designated person or entity. See Questions 25 and 38 for additional
information.
* Statements of account will be mailed to each Participant showing
all transactions completed during the year to date and other information
related to his account.
* Brokerage commissions are generally lower than those paid by
individual purchasers for this service. See Question 17 for additional
information.
3. What are the disadvantages of the Plan?
* No interest is paid on dividends, Optional Cash Payments,
including Initial Investments, Automatic Monthly Investments and payroll
deductions held pending investment or reinvestment.
* Optional Cash Payments and Initial Investments must be received
by the applicable Cut-off Date to be invested on the Investment Date.
* Participants have no control over the price. Participants will
not know the number of shares purchased or the Price Per Share until the
investment of funds has been completed. See Questions 16 and 18 for
additional information.
* Shares purchased through the Plan involve the payment of
brokerage commissions by Participants although such commissions are
generally lower than the brokerage commissions applicable to individual
purchases of a small number of shares.
* The Company has reserved the right to pass through to
Participants Related Costs, which would increase the Price Per Share of
Common Stock purchased under the Plan.
ADMINISTRATION
4. Who administers the Plan for Participants?
BankBoston, N.A., the Company's Transfer Agent, through Boston
EquiServe, or such successor administrator as the Company may designate
Plan Administrator, administers the Plan, maintains records, sends
statements of account to participants and performs other duties relating to
the Plan. The Plan Administrator also handles purchases and sales and
holds all shares of Common Stock purchased in accordance with the
provisions of the Plan.
5. Where should correspondence and telephone communications regarding
the Plan be directed?
Any correspondence concerning the Plan should be mailed to:
BankBoston, N.A.
c/o Boston EquiServe
Attn: DRP Department
P. O. Box 8040
Boston, MA 02266-8040
When writing, please reference Central Vermont Public Service
Corporation and include a daytime telephone number.
Shareholder Services Representatives may also be reached by telephone
at (800) 736-3001 (within the US) or 781-575-3100 Monday through Friday,
9:00 am to 6:00 pm (Eastern Standard Time).
6. Who purchases the shares for the Plan?
The Plan Administrator makes all purchases of the Company's Common
Stock on the open market necessary to meet the requirements of the Plan.
The Company does not exercise any direct or indirect control over the
prices or timing of purchases made by the Plan Administrator.
PARTICIPATION
7. Who is eligible to participate?
Any Stockholder and any Non-Stockholder who qualifies is eligible to
participate in the Plan. A beneficial owner whose shares are registered in
a name other than his own (e.g., broker or bank nominee) must have those
shares transferred into his name in order to be eligible to participate
with dividends from them unless such broker or bank nominee participates in
the Plan. A beneficial owner may not directly participate in the Optional
Cash Payment or Automatic Monthly Investments feature of the Plan.
Employees of the Company and its wholly-owned subsidiaries are
eligible to participate in the Plan through payroll deductions. See
Question 28 for additional information.
8. How do Stockholders become Participants in the Plan?
Stockholders may join the Plan at any time by checking the appropriate
box and signing an Authorization Form and returning it to the Plan
Administrator at the address listed in Question 5. If the Stock is jointly
owned, all registered owners must sign the Authorization Form.
9. What does the Authorization Form provide?
The Authorization Form allows Stockholders to indicate how they want
to participate in the Plan. Stockholders complete the Authorization Form,
indicating whether they want to (a) reinvest dividends and make Optional
Cash Payments, or (b) participate in the Plan by making Optional Cash
Payments only. If no box is checked, the participant's account will be
coded for full dividend reinvestment and dividends will be reinvested. The
Authorization Form also provides for the appointment of the Plan
Administrator to purchase shares on behalf of the Participant.
10. How do Non-Stockholders become Participants?
Non-Stockholders, depending on the state or other jurisdiction of
their legal residence, may join the Plan by completing and signing an
Enrollment Form and returning it to the Plan Administrator, at the address
listed in Question 5, with an Initial Investment of at least $250 but not
more than $6,000. The payment must be in the form of a check or money
order, made payable to BankBoston.
NO INTEREST WILL BE PAID ON INITIAL INVESTMENTS PENDING INVESTMENT
11. What does the Enrollment Form provide?
The Enrollment Form allows Non-Stockholders who qualify to enroll and
participate in the Plan in addition to providing for the appointment of the
Plan Administrator to purchase shares on behalf of the Participant. The
Enrollment Form also allows the Non-Stockholder to indicate whether he
wants to (a) reinvest dividends and make Optional Cash Payments, or (b)
participate in the Plan by making Optional Cash Payments only and/or (c)
make Automatic Monthly Investments. If no box is checked, the
participant's account will be coded for full dividend reinvestment and
dividends will be reinvested. Upon receiving the Enrollment Form with the
Initial Investment, the Plan Administrator will establish an account and
apply the Initial Investment to the purchase of Common Stock on the next
applicable Investment Date.
An Enrollment Form or an Authorization Form may be obtained at any
time by contacting the Plan Administrator as indicated in Question 5.
12. When may Stockholders join the Plan?
A Stockholder may join the Plan at any time and will become a
Participant when the Plan Administrator receives the signed Authorization
Form. However, to participate with reinvested dividends the Authorization
Form must be received by the Plan Administrator at least two weeks before
the Dividend Payment Date on which the Participant wants to begin
reinvesting dividends.
If a Stockholder wants to join the Plan with only Optional Cash
Payments, enrollment should be timed such that investments may be made as
discussed in Question 24.
13. When may Non-Stockholders join the Plan?
A Non-Stockholder who qualifies may join the Plan at any time and will
become a Participant when the Plan Administrator receives the signed
Enrollment Form and the Initial Investment. In order to be invested on the
next Investment Date, an Initial Investment must be received no later than
the applicable Cut-off Date.
14. May a Participant change his method of participation in the Plan
after enrollment?
Yes, by submitting a revised Authorization Form or sending a written
request signed by all registered owners to the address specified in
Question 5. A change in dividend reinvestment will be effective with the
next Dividend Payment Date, if the request for change is received at least
two weeks before that Date.
AUTOMATIC MONTHLY INVESTMENT
15. What is Automatic Monthly Investment and how does it work?
Participants may make Optional Cash Payments by means of an Automatic
Monthly Investment of not less that $100 nor more than $2,000 per month by
electronic funds transfer from a predesignated U.S. bank account. If a
Participant has already established a Plan account and wishes to initiate
Automatic Monthly Investments, the Participant must complete and sign an
automatic monthly investment form and return it to the Plan Administrator
together with a voided blank check (for a checking account) or deposit slip
(for a savings account) for the account from which funds are to be
withdrawn. Automatic monthly investment forms may be obtained from the
Plan Administrator. Forms will be processed and will become effective as
promptly as practicable.
Non-stockholders may also enroll by completing the appropriate section
of the Enrollment Form.
Once Automatic Monthly Investment is initiated, funds will be
withdrawn from the Participant's designated account approximately five
business days prior to the investment date.
Participants may change the amount of their Automatic Monthly
Investment by completing and submitting to the Plan Administrator a new
automatic monthly investment form. To be effective with respect to a
particular Investment Date, however, the new automatic monthly investment
form must be received by the Plan Administrator by the 25th day of the
month preceding such Investment Date. Participants may terminate their
Automatic Monthly Investment by notifying the Plan Administrator in
writing.
ACQUISITION OF SHARES
16. What will be the Price Per Share of Common Stock purchased under
the Plan?
The Price Per Share will be the weighted average Price Per Share
(adjusted for brokerage commissions and, if applicable, certain Related
Costs) at which such shares are purchased for Participants on the
applicable Investment Date.
COSTS
17. What will be the cost per share of Common Stock purchased under the
Plan?
Participants pay the brokerage commissions on the shares purchased.
Because of the volume of shares purchased through the Plan, commissions are
generally lower than those which Participants would otherwise pay should
they purchase, individually, a like number of shares.
It is estimated at this time that such brokerage commissions and
Related Costs will not exceed five cents per share; however, these costs
are subject to change over time.
There are no expenses in connection with withdrawal from the Plan
unless the Participant requests that shares held under the Plan be sold
(see Questions 33 & 35).
At present, all costs of administration of the Plan (other than
brokerage commissions) are paid by the Company. However, the Company
reserves the right at any time to charge Related Costs. Participants will
be notified in advance prior to the effective date should the Company
determine to charge such costs.
18. How many shares of Common Stock will be purchased for a
Participant?
After the investment of funds has been completed, each Participant's
account will be credited with the number of shares of Common Stock,
including fractions computed to three decimal places, equal to the Total
Amount Invested divided by the weighted average Price Per Share.
A Participant may not request the purchase of a specific number of
shares or the Price Per Share at which shares are to be purchased. A
Participant may not restrict or control purchases by the Plan
Administrator.
In the case of a Participant who is subject to backup withholding tax
on dividends under the Plan, or a foreign Participant whose dividends are
subject to United States income tax withholding, the amount of the tax to
be withheld will be deducted from the amount of the dividends and only the
reduced amount will be reinvested.
DIVIDEND REINVESTMENT
19. How does dividend reinvestment work?
Unless a Participant has checked the "Optional Cash Payments Only" box
on the Authorization or Enrollment Form, the Plan Administrator will invest
the dividends paid on the applicable Stock including dividends paid on
fractional shares, if any, in additional Common Stock. The Price Per
Share is described in Question 16.
20. When will shares of Common Stock be purchased with reinvested
dividends?
Dividends paid in any given month will be reinvested on the Investment
Date in the same month. The Plan Administrator, at its sole discretion,
determines the exact timing of purchases for allocation to the accounts of
Participants in the Plan, as well as the number of shares to be so
purchased at any time, depending upon the amount of reinvested dividends,
market conditions and the requirements of federal securities laws. The
Plan Administrator is required, however, to complete purchases within
thirty days after receiving the funds to be used for such purpose. Shares
are credited to Participants' accounts as of the Settlement Date.
NO INTEREST WILL BE PAID ON DIVIDENDS HELD PENDING INVESTMENT
21. May a Stockholder reinvest dividends from only a portion of a
particular class or series of shares owned and registered in the same name?
No. A Stockholder may not participate in the Plan with respect to
less than all of the shares of a single class or series of the Company's
Stock registered in the Stockholder's name. However, if the Stockholder
has shares of the Company's Stock registered in more than one name - for
example, some shares registered in the name "John Smith" and others
registered in the name "John J. Smith" - then such Stockholder may elect to
have the dividends on shares registered in one name reinvested under the
Plan but decline to have the dividends on shares registered in the other
name reinvested under the Plan. Similarly, the Stockholder may elect to
have the dividends on any class or series of the Company's Stock reinvested
under the Plan but decline to have the dividends on any other class or
series of the Company's Stock so reinvested.
OPTIONAL CASH PAYMENTS
22. How do Optional Cash Payments work?
The option to make cash payments to purchase additional shares of
Common Stock is available to all Participants. If a Participant has
checked the "Optional Cash Payments Only" box on the Authorization or
Enrollment Form, a Participant will be paid the dividends on Stock
registered in his name as well as dividends on the shares credited to his
account under the Plan.
Any number of Optional Cash Payments may be made in each calendar
year, but each such payment must be at least $100 per investment and no
more than $6,000 per calendar quarter. The same amount need not be sent
each quarter or with respect to each Investment Date, and there is no
obligation to make any Optional Cash Payment at any time.
Any Optional Cash Payment received from a Participant in an amount
less than $100 at any one time, or any amount in excess of $6,000 per
calendar quarter, is returned to the Participant.
Optional Cash Payments should be made by check or money order payable
to BankBoston. The statement of account sent to all Participants following
an investment has a remittance form attached for future Optional Cash
Payments. All payments should be mailed to the address shown in Question
23.
23. Can Optional Cash Payments be included with the electric utility
payment?
No. All Optional Cash Payments submitted with an optional cash
remittance form should be mailed to:
BankBoston
P.O. Box 370042
Boston, MA 02241-0742
Optional Cash Payments submitted without an optional cash remittance form
should be mailed to:
BankBoston
DRP Department
P.O. Box 8040
Boston, MA 02266-8040
Please reference Central Vermont Public Service Corporation on your check
or money order.
24. When will Optional Cash Payments be invested?
Consistent with the Plan Administrator's fiduciary obligations, market
conditions and the requirements of federal securities laws. Optional Cash
Payments will be invested monthly on the Investment Date. The Price Per
Share is described in Question 16.
All Optional Cash Payments to be invested on a particular Investment
Date must be received by the Plan Administrator by the applicable Cut-off
Date. Optional Cash Payments received after the applicable Cut-off Date
will be held by the Plan Administrator until the next applicable Investment
Date. Optional Cash Payments will be refunded if a written request is
received by the Plan Administrator on or before the applicable Cut-off
Date.
NO INTEREST WILL BE PAID ON OPTIONAL CASH PAYMENTS HELD PENDING
INVESTMENT
CERTIFICATES
25. Are certificates issued for shares of Common Stock purchased under
the Plan?
Certificates for shares of Common Stock purchased under the Plan are
not issued to Participants but are registered in the name of a nominee for
the Plan. This service protects against loss, theft or destruction of
stock certificates. The number of shares of Common Stock (including
fractional shares to three decimal places) credited to an account under the
Plan are shown on a Participant's statement of account.
Upon written request by a Participant, certificates for any number of
whole shares credited to an account under the Plan will be issued.
Certification of shares will not affect reinvestment of dividends (if
previously elected) on those shares. Requests for the issuance of
certificates should be mailed to the address shown in Question 5.
Certificates for fractional shares of Common Stock will not be issued under
any circumstances.
26. How will certificates be registered when issued?
Certificates will be issued in the Participant's name as set forth on
the Company's shareholder records or see Question 38 for additional
options.
27. May a participant transfer shares of Common Stock of the Company
registered in his name into a Plan account for safekeeping?
Yes, at the time of enrollment or at any time thereafter, Participants
may take advantage of the Plan's cost-free safekeeping services.
Certificates will be deposited into the Plan upon receipt by the Plan
Administrator. Do not endorse such certificates. A completed
Authorization Form must also be received, if not already enrolled in the
Plan. The shares of Common Stock will be transferred into the name of the
nominee for the Plan, as custodian, and credited to the Participant's
account. Thereafter, shares deposited for safekeeping will be treated in
the same manner as shares purchased through the Plan. Thus, shares held
for safekeeping may be transferred or sold through the Plan in a convenient
and efficient manner; see Questions 35 & 38. It is the responsibility of
the Participant to retain his records relative to the cost of any shares
represented by certificates deposited into safekeeping.
Participants who wish to deposit their Common Stock certificates with
the Plan Administrator should consider sending them by registered mail,
first class mail, or certified mail, return receipt requested, to the
address listed in Question 5, since the Participant bears the risk of
replacement costs if the certificates are lost in transit.
Certificates sent by overnight delivery service should be addressed
to:
BankBoston, N.A.
Attn: DRP Department
150 Royall Street
Canton, MA 02021
Please attach the remittance form found at the bottom of your
transaction statement or include a written request instructing the Plan
Administrator to deposit the Common Stock certificate into your Plan
account under the "Safekeeping" feature.
EMPLOYEES
28. How does an employee participate in the Plan through payroll
deductions?
An eligible employee may join the Plan at any time by completing a
Payroll Deduction Authorization Form ("Payroll Form") and returning it to
the Payroll Department. If the employee is not currently a Stockholder, an
Initial Investment of $100 must be made prior to initiating payroll
deductions.
An employee may authorize payroll deductions totaling between $100 and
$6,000 per calendar quarter. Deductions for employees who currently have
less than $100 per quarter deducted have been grandfathered. However, the
aggregate of an individual employee's Initial Investment, Optional Cash
Payments and payroll deductions may not exceed $6,000 per calendar quarter.
If the employee makes Optional Cash Payments which, together with payroll
deductions, exceed $6,000 per calendar quarter, the Plan Administrator will
return to the employee the amount exceeding $6,000.
29. When will employee payroll deductions be invested?
Payroll deductions will be invested on the Investment Date following
the month in which the deductions were made. No interest will be paid on
payroll deductions held pending investment.
30. How does an employee change the payroll deduction or method of
participation?
An employee can revise, change or terminate the amount of payroll
deduction or method of participation at any time by giving written notice
to the Payroll Department. The payroll form may be used for these
purposes. Commencement, revision or termination of payroll deductions will
become effective as soon as practicable after an employee's request is
received by the Payroll Department. If the employee has notified the
Payroll Department of his withdrawal from the Plan at least two weeks
before the Investment Date, the amount withheld since the last investment
will be returned by the Payroll Department.
REPORTS TO PARTICIPANTS
31. How will Participants be advised of their purchase of Common Stock?
As soon as practicable after each Investment Date, the Plan
Administrator will send each affected Participant a statement of account.
These statements, containing cumulative information on a calendar year
basis, are a Participant's record of the number, price and dates shares
were purchased. The last statement received should be retained until the
next one is received. However, the last statement of each calendar year
should be retained permanently for accounting purposes. Federal tax
information will be sent by January 31st of each year. Foreign Participants
will also receive tax information indicating the amount of United States
income tax withheld.
32. What other Company communications will Participants receive?
Each Participant will receive a copy of the current Prospectus for the
Plan, a copy of all communications mailed to Stockholders, including
Quarterly and Annual Reports, the Notice of and Proxy Statement for Annual
Meeting of Stockholders, a form of proxy and income tax information for
reporting dividends. Beneficial owners who participate through their
brokers will receive communications and tax information directly from them.
WITHDRAWAL FROM THE PLAN
33. How does a Participant withdraw from the Plan?
In order to withdraw from the Plan, a Participant must provide written
notification that he wants to withdraw to the address shown in Question 5.
A Participant may complete and sign the reverse side of the remittance
form, which is the bottom portion of his statement of account, and mail
that form to the address in Question 5. If a Participant withdraws from
the Plan or if the Company terminates the Plan, certificates for whole
shares of Common Stock credited to the account of the Participant under the
Plan will be issued and a check will be remitted to the Participant for any
fractional share. A Participant may also withdraw by having his shares
sold. See Question 35.
34. When may a Participant withdraw from the Plan?
Participants may withdraw at any time by notifying the Plan
Administrator in writing. To terminate the reinvestment of dividends, the
written request to withdraw must be received by the Plan Administrator
before the applicable Record Date. If the request to withdraw is received
by the Plan Administrator subsequent to the applicable Record Date but
before the actual Dividend Payment Date, the dividend paid on such date
will be reinvested for the Participant's account. The Participant's next
dividend and all subsequent dividends will be paid in cash.
If a Participant transfers all shares of Common and/or Preferred Stock
registered in his name as opposed to the shares credited to his account
under the Plan, the Participant will continue in the Plan as before with
respect to shares credited to his account under the Plan until the
Participant withdraws from the Plan.
SALE OF SHARES
35. How will shares held in the Participant's account be sold?
A Participant may request to sell all of the shares, or a partial
number of shares, of Common Stock credited to his account in the Plan. In
order for a Participant to sell some or all of the shares credited to his
account, he must provide written notification that he wants to withdraw to
the address shown in Question 5. A Participant may complete and sign the
reverse side of the remittance form, which is the bottom portion of his
statement of account, and mail that form to the address in Question 5.
The sale will be made as soon as practicable but normally within ten
trading days after receipt of the request. The Participant will receive
the proceeds of the sale less any related brokerage commissions and any
applicable taxes. The Plan Administrator may commingle each Participant's
shares with those of other Participants for the purpose of executing sales
resulting in a net sale of shares.
There will ordinarily be a delay in processing sell requests received
during the 14-16 trading day period beginning on or about the 8th day of
February, May, August and November.
FEDERAL TAX TREATMENT OF PARTICIPATION IN THE PLAN
36. What are the Federal income tax consequences of participation in
the Plan?
Participants in the Plan, in general, have the same Federal Income Tax
obligations with respect to their reinvested dividends as do shareholders
who are not Participants in the Plan. Therefore, such dividends which a
Participant reinvests under the Plan are taxable even though the
Participant does not actually receive a dividend check, but, instead, uses
them to purchase additional shares under the Plan. Participants purchasing
shares under the Plan with Initial Investments, Optional Cash Payments or
Automatic Monthly Investments realize no taxable income at the time of
investment.
Employees who participate in the Plan through payroll deductions will
realize ordinary income in the amount of the payroll deductions, just as
they would have if such compensation had been paid to them directly in
cash, and such amounts are subject to regular payroll taxes. The Plan is
not a tax-qualified or tax-deferred employee benefit plan.
The tax basis of shares purchased under the Plan is equal to the
purchase price (including brokerage commissions and Related Costs, where
applicable).
A Participant's holding period for shares purchased pursuant to the
Plan will begin on the day following the applicable Investment Date.
A Participant will not realize any taxable income solely as a result
of receiving a certificate for some or all of the whole shares already
credited to his account under the Plan, nor upon withdrawal from or
termination of the Plan.
A Participant will recognize a gain or a loss when shares are sold,
whether such sale is pursuant to his request upon his withdrawal from the
Plan or takes place after withdrawal from or termination of the Plan. A
Participant will also recognize a gain or a loss when he receives a cash
payment for a fraction of a share. In either event, the amount of the gain
or loss is the difference between the amount which the Participant receives
for the shares or fraction of a share and the tax basis thereof.
In the case of a shareholder who is subject to backup withholding tax
on dividends under the Plan, or a foreign shareholder whose dividends are
subject to United States income tax withholding, the amount of the tax to
be withheld will be deducted from the amount of the dividends and only the
reduced amount will be reinvested.
All participants are urged to consult their own tax advisors to
determine the particular tax consequences--federal, state, and local--which
may result from their participation in the Plan and the subsequent disposal
by them of shares purchased through the Plan.
OTHER INFORMATION
37. What happens when a Participant sells or transfers all certificated
shares of Common Stock of the Company registered in his name?
If a Participant sells or transfers all shares for which he holds a
certificate but maintains the shares credited to his account under the
Plan, dividends will continue to be reinvested on the shares credited to
his account (unless the account is an "Optional Cash Payments Only"
account) and Optional Cash Payments will be accepted for that account,
until the Participant withdraws from the Plan and as long as there is at
least one full share in the Participant's account. Otherwise, a check will
be issued to the Participant for the fractional share and the account will
be closed.
38. What about transfers of shares within the Plan?
If a Participant wishes to transfer the ownership of all or part of
his shares held under the Plan to a Plan account for another person,
whether by gift, private sale or otherwise, the Participant may effect such
transfer at no cost to the Participant by mailing a properly executed stock
power to the Plan Administrator. Requests for transfer are subject to the
same requirements as for the transfer of Common Stock certificates,
including the requirement of a Medallion Signature guarantee on the stock
power, as well as receipt of a Form W-9, and an Authorization Form. The
required documents are available upon request from the Plan Administrator
at the address in Question 5.
Shares so transferred will continue to be held by the Plan
Administrator under the Plan. An account will be opened in the name of the
transferee, if he is not already a Participant. If the transferee is not
already a registered shareholder or a Plan Participant, the donor may make
a reinvestment election for the transferee at the time of the gift. If no
election is made at the time of the gift, the new account will be coded for
full dividend reinvestment and dividends will be reinvested. The
transferee may change the reinvestment election after the gift has been
made. The transferee will receive a statement showing the number of shares
transferred to and held in the transferee's Plan account.
A Participant may also withdraw shares and have the stock certificate
issued in the name of another person by submitting a properly executed
stock power, including the above mentioned signature guarantee.
39. What happens if the Company issues a stock dividend or declares a
stock split?
Any shares distributed by the Company resulting from a stock split or
a stock dividend on shares of Common Stock will be credited to the
Participant's Account.
40. How will a Participant's stock be voted at meetings of
stockholders?
Each Participant will be furnished a proxy card and will be entitled
to vote all shares credited to his account under the Plan in addition to
certificate shares held by the Participant directly.
41. What are the responsibilities of the Company under the Plan?
The Company and the Plan Administrator in administering the Plan are
not liable for any act done in good faith or for any good faith omission to
act including, without limitation, any claim of liability arising out of
failure to terminate a Participant's account upon such Participant's death
before receipt of notice in writing of such death or with respect to the
Price Per Share of any shares purchased under the Plan, or any fluctuation
in the market value after any purchase or sale of Common Stock.
PARTICIPANTS SHOULD RECOGNIZE THAT THE COMPANY CANNOT ASSURE A
PROFIT
OR PROTECT AGAINST A LOSS ON THE COMMON STOCK PURCHASED UNDER THE
PLAN, NOR
CAN THE COMPANY CONTROL PURCHASES BY THE PLAN ADMINISTRATOR.
THE COMPANY CANNOT GUARANTEE THAT DIVIDENDS ON SHARES OF ITS
COMMON
STOCK MIGHT NOT BE REDUCED OR ELIMINATED.
42. May the Plan be changed or discontinued?
The Company reserves the right to amend, suspend, modify or terminate
the Plan at any time. Notice of any such amendment, suspension,
modification or termination will be sent to all Participants.
USE OF PROCEEDS
The Company does not receive any proceeds from the purchase of shares
under the Plan as all such shares are purchased on the open market.
EXPERTS
The consolidated financial statements and schedules of Central Vermont
Public Service Corporation and subsidiaries, included and incorporated by
reference in the Company's Annual Report on Form 10-K for the year ended
December 31, 1996, and incorporated by reference herein, have been examined
by Arthur Andersen LLP, independent public accountants, for the periods
indicated in their report thereon. Such consolidated financial statements
and schedules have been incorporated herein by reference in reliance upon
the reports of Arthur Andersen LLP and upon the authority of Arthur
Andersen LLP as experts in accounting and auditing.
</PAGE>
No dealer, salesman or any other person has been authorized to give
any information or to make any representations other than those contained
in this Prospectus, and, if given or made, such other information or
representations must not be relied upon as having been authorized by the
Company. Neither the delivery of the Prospectus nor any sale made
hereunder shall, under any circumstances, create any implication that there
has been no change in the affairs of the Company since the date hereof.
This Prospectus does not constitute an offer by the Company to sell
securities in any jurisdiction to any person to whom it is unlawful for the
Company to make such an offer in such jurisdiction. This Prospectus
relates only to the Common Stock offered hereby and is not to be relied
upon in connection with the purchase or sale of any other securities of the
Company.
TABLE OF CONTENTS
Summary of Plan.....................................................1
Available Information............................................... 2
Incorporation of Certain Documents by Reference.....................2
The Company.........................................................3
Description of the Plan.............................................3
Definitions....................................................3
Purpose........................................................4
Benefits.......................................................4
Administration.................................................5
Participation..................................................6
Automatic Montlhy Investment...................................8
Acquisition of Shares..........................................8
Costs.......................................................... 8
Dividend Reinvestment..........................................9
Optional Cash Payments.........................................10
Certificates...................................................11
Employees......................................................12
Reports to Participants........................................12
Withdrawal from the Plan.......................................13
Sale of Shares.................................................13
Federal Tax Treatment of Participation in the Plan.............14
Other Information..............................................14
Use of Proceeds.....................................................16
Experts............................................................. 16
