SCHEDULE 14A INFORMATION
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(Amended by Sec Act Rel No. 7331; Exch Act Rel No. 37692, eff. 10/7/96.)
<PAGE>
March 28, 2000
Dear Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders
of Central Vermont Public Service Corporation at 10:00 a.m. on Tuesday,
May 2, 2000 at the Killington Grand Hotel Conference Center, Killington
Road, Killington, Vermont. Refreshments will be served at 9:00 a.m.
At this meeting you will be asked to elect four directors to serve for a
three-year term and one director for a one-year term. Also, you will be
asked to approve a Stock Option Plan for Key Employees.
Your vote is very important to us. In order to ensure that your shares
may be represented at the meeting and to avoid additional expense of
solicitation, we urge that you promptly vote, sign and return the
enclosed proxy in the return envelope provided. If you do plan on
attending the Annual Meeting, which we hope you will, you may revoke
your proxy and vote your shares in person.
Thank you for your confidence and continued support.
Sincerely,
ROBERT H. YOUNG
President and
Chief Executive Officer
<PAGE>
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
77 Grove Street
Rutland, Vermont 05701
______________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 2, 2000
______________________
To the Holders of Common Stock:
The Annual Meeting of Stockholders of Central Vermont Public
Service Corporation will be held at the Killington Grand Hotel
Conference Center, Killington Road, Killington, Vermont, on Tuesday,
May 2, 2000, at 10:00 a.m., for the following purposes:
1. To approve the Stock Option Plan for Key Employees;
2. To elect four directors for a term of three years and one
director for a term of one year; and
3. To act upon any matters incidental to or in furtherance of the
foregoing and upon any matters which may properly come before
the meeting or at any adjournments thereof.
Each of the above items is described in the Proxy Statement which
accompanies this Notice.
The Board of Directors has fixed the close of business on February
24, 2000, as the record date for the determination of the holders of the
Company's Common Stock entitled to notice of, and to vote at, the
meeting and any adjournments thereof.
By Order of the Board of Directors,
Joseph M. Kraus, Senior Vice President,
Corporate Secretary and General Counsel
Rutland, Vermont
March 28, 2000
YOUR VOTE IS IMPORTANT
Whether or not you plan to attend the meeting in person, we urge you to
VOTE, SIGN, DATE, AND RETURN THE ENCLOSED PROXY promptly in the envelope
provided.
<PAGE>
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
77 Grove Street
Rutland, Vermont 05701
______________________
March 28, 2000
PROXY STATEMENT
___________________
This Proxy Statement and form of Proxy are being furnished in
connection with the solicitation of proxies by the Board of Directors of
Central Vermont Public Service Corporation ("CVPS", the "Company" or
the "Corporation"), a Vermont corporation. The solicited proxies will
be voted at the Annual Meeting of Stockholders (the "Annual Meeting") to
be held at the Killington Grand Hotel Conference Center, Killington
Road, Killington, Vermont at 10:00 a.m. on May 2, 2000 and at any
adjournments thereof.
Proxies in the accompanying form, unless previously revoked, will
be voted as directed by the stockholders giving such proxy. If no
direction is given, proxies will be voted FOR the Stock Option Plan for
Key Employees, FOR the election, as Directors, of the five nominees
listed on the proxy, and at the discretion of the Proxy holder(s) upon
any matters incidental to or in furtherance of the foregoing and upon
any matters which may properly come before the Annual Meeting or at any
adjournments thereof. Any proxy may be revoked by written notice or by
a duly executed proxy bearing a later date delivered to the Secretary of
the Company at any time before it is exercised, or by attending the
Annual Meeting and voting in person.
The Company will bear the cost of solicitation hereunder. The
solicitation of proxies by mail may be followed by solicitation by
officers or other employees or representatives of the Company. In
addition, the Company has retained Morrow & Co., a proxy solicitation
firm, to assist in the solicitation of proxies for the meeting. The
estimated fee for such services is $6,500 plus reimbursement of
reasonable out-of-pocket expenses. The Company will request banks,
brokers, and other similar agents or fiduciaries to forward these proxy
materials to beneficial owners of stock, and, if requested, will
reimburse them for the costs thereof.
A copy of the Annual Report of the Company containing its audited
financial statements for 1999 accompanies this Proxy Statement.
The Proxy Statement and form of Proxy were first sent to
stockholders on or about the date of this Notice.
VOTING SECURITIES
The Directors have fixed February 24, 2000, as the record date for
determination of stockholders entitled to notice of and to vote at the
meeting, consisting of 11,466,805 shares of Common Stock of the Company
(the "Common Stock") outstanding. Each share of Common Stock is
entitled to one vote.
In accordance with Securities and Exchange Commission ("SEC")
rules, boxes and a blank space are provided on the proxy card for
stockholders to designate whether they wish to vote "FOR" or to
"WITHHOLD AUTHORITY" to vote for one or more of the nominees for
Director. Under Vermont law, in order for action to be taken on a
matter, a quorum must exist as to that matter, which is defined for this
purpose as a majority of the votes entitled to be cast in person or by
proxy on the matter. Abstentions are counted in determining whether a
quorum has been reached on a particular matter. If a quorum exists, then
with respect to any action to be taken on a matter, other than the
election of Directors, that matter would be approved if the votes cast
favoring the action exceed the votes cast opposing the action. In this
respect, abstentions are not counted as opposing votes.
With respect to the election of Directors, a plurality of the votes
cast by the shares entitled to vote in the election is required for the
election of Directors (i.e., the nominees receiving the greatest number
of votes will be elected at a meeting at which a quorum is present). In
this respect, abstentions are not counted for purposes of the election
of Directors.
ARTICLE 1
STOCK OPTION PLAN FOR KEY EMPLOYEES
In order to attract, retain and motivate talented key employees who
will exert their best efforts and work toward the long-term best
interests of the Company and its subsidiaries, the Board of Directors
has adopted, subject to stockholder approval, the Stock Option Plan for
Key Employees (the "Plan"). The Plan is intended to strongly ally the
interests of Company management with that of stockholders and provide
significant incentives for management to increase stockholder value.
The Plan is a successor to the Stock Option Plan for Key Employees which
was adopted by the stockholders in 1997.
A general description of the basic features of the Plan is set
forth below. Such description is qualified in its entirety by reference
to the full text of the Plan. The full text of this Plan is included as
Schedule A to this Proxy Statement.
THE PLAN
The Plan allows for the award to key employees of the Company and
its wholly-owned subsidiaries of options to purchase shares of Common
Stock of the Company. The Plan will be administered by the Compensation
Committee of the Board of Directors (the "Committee") and the key
employees to whom options may be granted under the Plan will be
determined from time to time by the Committee. No determination has
been made as to future awards which may be granted under the Plan,
although it is anticipated that approximately fifteen individuals,
including the named executive officers in the Summary Compensation
Table, will be eligible to participate in the Plan. As of February 24,
2000, no options have yet been granted under the Plan.
The maximum number of shares of Common Stock of the Company as to
which awards of options may be issued under the Plan may not exceed
350,000 shares. In the event of certain extraordinary corporate events
(e.g., a stock split, stock dividend, recapitalization, merger, etc.),
the Committee may make any adjustments to the shares of Common Stock
covered by the Plan or an option under the Plan that it deems necessary,
or may cancel any or all outstanding options in exchange for a cash
payment.
An option is an award that entitles an individual to purchase
shares of Common Stock at a price fixed at the time the option is
granted. All options granted under the Plan will be non-qualified stock
options. Options awarded under the Plan will be in the form approved by
the Committee from time to time and may include such additional terms
and conditions as the Committee may deem desirable, but in no event may
any such additional terms and conditions be inconsistent with the Plan.
The purchase price per share for all options awarded under the Plan will
be determined by the Committee, but may not be less than the fair market
value of a share of Common Stock on the date the option is granted. No
option awarded under the Plan may be exercisable after the expiration of
ten years from the date the option was granted.
In the event an optionee terminates employment for any reason other
than his or her death, Disability or Retirement (as such terms are
defined in the Plan), his or her then exercisable options will expire
three months after the date of his or her termination and any option
that was not exercisable as of such date of termination will immediately
expire upon the optionee's date of termination. Any option held by an
optionee will become fully exercisable upon the termination of an
optionee by reason of his or her death, Disability or Retirement and
will expire one year from such optionee's date of termination. In the
event of an optionee's termination of employment by reason of death,
Disability or Retirement or other good cause, the Committee may, at its
sole discretion, extend the post-termination exercise period through any
date not later than the date which is ten years following such
optionee's date of termination. However, in no event may the term of
any option awarded under the Plan exceed ten years from the date such
option is granted.
If a Change in Control of the Company (as described in the Plan)
occurs then all options (other than those held by optionees whose
employment has terminated) will become fully exercisable as of the date
such Change in Control occurred.
The Board of Directors has the sole authority to amend any provision
of the Plan, except no amendment to the Plan may materially decrease a
key employee's rights under an option without that employee's consent.
The Board of Directors may from time to time amend or discontinue the
granting of options or terminate the Plan, provided, however, that no
such action may increase the maximum number of shares of Common Stock
available for awards under the Plan, or cause the Plan not to comply
with the Securities Exchange Act of 1934 or Section 162(m) of the
Internal Revenue Code (the "Code").
FEDERAL INCOME TAX TREATMENT
The following brief summary of the effect of federal income
taxation upon the Participants and the Company with respect to the
exercise of options under the Plan does not purport to be complete and
reference should be made to the applicable provisions of the Code. In
addition, this summary does not discuss the provisions of the income tax
laws of any municipality, state or foreign country in which the
Participant may reside. As such, each Participant is advised to consult
with his or her own tax advisor for particular federal, as well as state
and local income and any other tax advice.
In general, there are no tax consequences to the Optionee or to the
Company on the grant of a stock option which does not qualify as an
incentive stock option within the meaning of Section 422 of the Code (a
"non-qualified stock option"). On exercise, however, the Optionee
generally will recognize ordinary income equal to the excess of the fair
market value of the shares as of the exercise date over the purchase
price paid for such shares, and the Company will generally be entitled
to a deduction equal to the amount of ordinary income recognized by the
Optionee. Upon a subsequent disposition of the shares received under a
non-qualified stock option, the difference between the amount realized
on such disposition and the fair market value of the shares on the date
of exercise generally will be treated as a capital gain or loss. With
respect to any such disposition, the Company will not be entitled to a
tax deduction.
Generally, the Company will be required to make arrangements for
withholding applicable taxes with respect to any ordinary income
recognized by a recipient in connection with options exercised under the
Plan. As a condition to the delivery of any shares pursuant to the
exercise of any option, the Committee may require that the Optionee, at
the time of exercise, pay to the Company an amount to satisfy the
applicable tax withholding obligation or any greater amount of
withholding that the Committee may determine. In addition, the
Committee may permit or require an Optionee to satisfy all or a part of
the tax withholding obligations incident to the exercise of an option by
having the Company withhold a portion of the shares of Common Stock that
would otherwise be issuable to the Optionee.
Special rules will apply in cases where an Optionee pays the
exercise price by delivering previously owned shares of Common Stock.
The surrender of such shares will not result in the recognition of gain
with respect to such surrendered shares, but a like number of shares
acquired will have a carryover basis. If an Optionee surrenders shares
of Common Stock to satisfy applicable withholding tax requirements, the
surrender of such shares may result in the recognition of gain or loss
in respect thereof.
If the provisions of the Plan relating to a Change in Control
become applicable, certain compensation payments or other benefits
received by "disqualified individuals" (as defined in Section 280G(c) of
the Code) under the Plan or otherwise may cause or result in "excess
parachute payments" (as defined in Section 280G(b)(1) of the Code).
Pursuant to Section 280G of the Code, any amount that constitutes an
excess parachute payment is not deductible by the Company. In addition,
Section 4999 of the Code generally imposes a 20% excise tax on the
amount of any such excess parachute payments received by such
disqualified individual, and any such excess parachute payments will not
be deductible by the Company (or a subsidiary).
Generally under Section 162(m) of the Code, the amount of
compensation paid to the Chief Executive Officer and the four other most
highly paid executive officers of the Company in the year for which a
deduction is claimed by the Company (including its subsidiaries) is
limited to $1,000,000 per person in any year, except that qualified
performance-based compensation will be excluded for purposes of
calculating the amount of compensation subject to this $1,000,000
limitation. The ability of the Company to claim a deduction for
compensation paid to any other executive officer or employee of the
Company (including its subsidiaries) is not affected by this provision.
The Company has structured the Plan so that the Company may claim a
deduction in connection with the exercise of non-qualified stock options
provided that the requirements imposed on qualified performance-based
compensation under Section 162(m) of the Code and the regulations
thereunder are satisfied with respect to such awards.
The total number of outstanding shares of Common Stock on February
24, 2000 was 11,466,805 shares at a closing price of $10.6875 per share
on the New York Stock Exchange.
The Plan will become effective as of May 2, 2000 subject to
approval by the Company's stockholders. The Plan will terminate on May
2, 2005, except with respect to awards then outstanding. After such
date no further awards may be granted under the Plan.
APPROVAL OF THE PLAN
To become effective, the votes cast in favor of the Plan must
exceed the votes cast opposing the Plan provided that a quorum is
present. Abstentions are not treated as votes against the proposal. In
addition, because the Company is a regulated utility, the Plan may not
become effective without the approval of the Vermont Public Service
Board.
The Board of Directors recommends a vote FOR approval of this proposal.
If not otherwise specified, proxies will be voted FOR Article 1.
ARTICLE 2
ELECTION OF DIRECTORS
The Company's Articles of Incorporation and By-Laws provide for the
division of the Board of Directors into three classes having staggered
terms of office as nearly equal in number as possible. In accordance
with the Company's By-Laws, the Board of Directors has fixed at ten (10)
the number of Directors for the ensuing year.
The nominees for election at this Annual Meeting to serve as
Directors for a three-year term which expires at the 2003 Annual Meeting
are: Robert L. Barnett, Frederic H. Bertrand, Robert G. Clarke, and Mary
Alice McKenzie.
In order to keep the classes of Directors as nearly equal in number
as possible, Timothy S. Cobb, a new nominee for election at this Annual
Meeting, is to serve as Director for a one-year term which expires at
the 2001 Annual Meeting.
Proxies will be voted (unless otherwise instructed) in favor of the
election of the five nominees as indicated in the table below. Each of
the nominees has consented to serve as a Director if elected. While it
is not anticipated that any of the persons listed will be unable to
serve as a Director, if any of the persons listed are unable to serve,
then the proxies will be voted for such other person or persons as the
present Board of Directors shall determine.
The following sets forth certain information, including age,
principal occupation, directorships, and business experience during the
past five years, regarding the Directors and nominees for Director.
Unless otherwise indicated, the principal occupation of the Directors or
nominees for Director has been the same for the past five years.
Director
Since
--------
NOMINEES WHOSE TERMS WILL EXPIRE IN YEAR 2003:
Robert L. Barnett (59) Executive Vice President 1996
and President, Commercial, Government, and Industrial
Solutions Sector (formerly Land Mobile Products Sector)
Motorola, Inc. (communications equipment) since 1995;
President, Nexteps, Inc. (telecommunications consulting
firm) from 1993 to 1995. Mr. Barnett is also a Director
of Johnson Controls, Inc. and USG Inc.
Frederic H. Bertrand (63) Chairman of the Board of the 1984
Company since October 1997; Chairman of the Board and
Chief Executive Officer, National Life Insurance Co. from
1987 to February 1997. Mr. Bertrand is also Chairman and
Director of Catamount Energy Corporation and serves as a
Director of The Chittenden Corporation, Union Mutual Fire
Insurance Co., and Vermont Electric Power Company, Inc.
Robert G. Clarke (49) Interim Chancellor, Vermont State 1997
Colleges since November 1999; President, Vermont Technical
College from 1984 to November 1999. Mr. Clarke is also a
Director of Connecticut Valley Electric Company Inc.,
Vermont Electric Power Company, Inc., and the Granite
Savings Bank.
Mary Alice McKenzie (42) President, Fresh Connections and 1992
McKenzie of Vermont (manufacturer of food products). Ms.
McKenzie is also a Director of Vermont Electric Power
Company, Inc. and Vermont Yankee Nuclear Power Corporation.
NOMINEE FOR DIRECTOR WHOSE TERM WILL EXPIRE IN YEAR 2001:
Timothy S. Cobb (58) Chairman, President and Chief
Executive Officer (CEO), Salient 3 Communications, Inc.,
(formerly Gilbert Associates, Inc.) since 1995; President
& CEO, Gilbert Associates, Inc. from 1994 to 1995; President
& CEO, Gilbert/Commonwealth, Inc. (design & engineering of
electric power facilities) from 1991 to 1994.
DIRECTORS WHOSE TERMS WILL EXPIRE IN YEAR 2001:
Janice L. Scites (49) Vice President, Internet 1998
Implementation Strategy, AT&T since November 1997; Vice
President, Value-Added Services, AT&T from October 1996 to
October 1997; Vice President, Business Customer Care,
Business Markets, AT&T from July 1995 to October 1996;
President, Connecticut Mutual Customer Services Group,
Connecticut Mutual Life Insurance Company from September
1993 to July 1995. Ms. Scites is also a Director of
Personnel Group of America, Inc.
Luther F. Hackett (66) President, Hackett, Valine 1979
& MacDonald, Inc. (Insurance Agents). Mr. Hackett is also
a Director of Catamount Energy Corporation, Vermont
Electric Transmission Company, Inc., Banknorth Group, Inc.,
and serves as Chairman and Director of Vermont Electric
Power Company, Inc.
DIRECTORS WHOSE TERMS WILL EXPIRE IN YEAR 2002:
Rhonda L. Brooks (47) President of the Roofing Systems 1996
Business, Owens Corning ("Owens") (building materials and
fiberglass composites) since December 1997; Vice President,
Investor Relations, Owens from January to December 1997;
Vice President, Marketing, Composites, Owens from 1995 to
1996. Ms. Brooks is also a Director of Meritor Automotive,
Inc.
Patrick J. Martin (59) President, North American Solutions 1997
Group, Xerox Corporation ("Xerox") (office products) since
January 2000; Corporate Senior Vice President and President,
Developing Markets Operations, Xerox from January 1999 to
January 2000; President, Americas Customer Operations, Xerox
from 1996 to January 1999; President, Office Document Products
Division from 1993 to 1996. Mr. Martin is also a Director of
Comptek Research.
Robert H. Young (52) President and Chief Executive Officer of 1995
the Company since 1995; Executive Vice President and Chief
Operating Officer of the Company from 1993 to 1995. Mr. Young
is also Director, President and Chief Executive Officer of
Connecticut Valley Electric Company Inc., Catamount Energy
Corporation, and Catamount Resources Corporation. Mr. Young
also serves as Director and Chairman of Vermont Yankee Nuclear
Power Corporation and as a Director of Vermont Electric Power
Company, Inc., Vermont Electric Transmission Company, Inc.,
and Yankee Atomic Electric Company.
VOTE REQUIRED
The election of a Director requires the affirmative vote of a
plurality of the votes cast by the shares entitled to vote in the
election at a meeting at which a quorum is present.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ARTICLE 2.
MEETINGS OF THE BOARD
During 1999, the Board of Directors held nine regular and two
special meetings. Each Director attended at least 75% of the aggregate
of all meetings of the Board and Committees of which he or she was a
member.
COMMITTEES OF THE BOARD
The Company has standing Executive, Audit, Compensation and
Nominating Committees of its Board of Directors. Members of the
Committees are appointed annually by the Board.
The Executive Committee has substantially all the powers of the
Board of Directors in the management of the business and affairs of the
Company between meetings of the Board. The present members of the
Executive Committee are: Frederic H. Bertrand, Chairperson, Luther F.
Hackett, and Robert H. Young. During 1999, the Executive Committee held
three meetings.
The Audit Committee of the Board, composed entirely of outside
Directors, reviews and reports to the Board of Directors on the findings
and recommendations of the Company's independent public accountants, the
Company's internal audit procedures, examinations by regulatory
authorities, and matters having a material effect on the Company's
financial operations. The present members of the Audit Committee are:
Luther F. Hackett, Chairperson, Robert L. Barnett, Rhonda L. Brooks,
Robert G. Clarke, and Mary Alice McKenzie. During 1999, the Audit
Committee held four meetings.
The Compensation Committee of the Board, composed entirely of
outside Directors, is responsible for reviewing and making
recommendations to the Board of Directors concerning the compensation of
executive officers of the Company and certain subsidiaries. Members of
the Compensation Committee are also responsible for the administration
of the Stock Option Plans for Key Employees and the Restricted Stock
Plan for Non-employee Directors and Key Employees. The present members
of the Compensation Committee are: Patrick J. Martin, Chairperson,
Frederic H. Bertrand, Rhonda L. Brooks, and Janice L. Scites. During
1999, the Compensation Committee held five meetings.
The Nominating Committee is responsible for recommending candidates
for election as Directors of the Company. The Nominating Committee will
consider recommendations by the stockholders for nomination as
Directors. Recommendations should be forwarded to the Secretary of the
Company on or before December 1 preceding the Annual Meeting for which
such nomination is sought. The present members of the Nominating
Committee are: Mary Alice McKenzie, Chairperson, Robert L. Barnett,
Patrick J. Martin, and Robert H. Young. During 1999, the Nominating
Committee held one meeting.
DIRECTORS' COMPENSATION
Directors of the Company are paid an annual retainer of $10,000.
Under the 1997 Restricted Stock Plan for Non-employee Directors and Key
Employees (the "Restricted Plan"), the non-employee Directors receive
50% of their annual retainer in Common Stock (instead of cash) with a
three-year vesting period. Members of the Executive Committee are paid
an additional annual retainer of $500. The Chairman of the Board
receives an additional $30,000 annual retainer and the Chairperson of
each Committee receives an additional $2,000 annual retainer. Directors
were also paid $700 plus expenses for each Board meeting attended and
$350 for each Committee meeting attended if held on the same day as a
meeting of the Board or held by telephone, and a fee of $700 plus
expenses for attendance at each other meeting of such Committee.
In September 1999, the Board voted to change the fees that each
Board member receives. Effective January 1, 2000, Directors will be
paid $1,000 plus expenses for each Board meeting attended and $500 for
each Committee meeting attended if held on the same day as a meeting of
the Board or held by telephone, and a fee of $1,000 plus expenses for
attendance at each other meeting of such Committee. Annual retainers
remain the same.
As President and Chief Executive Officer, Mr. Young receives no
director's retainer or other fees for serving on the Board or any of its
Committees.
Under the Restricted Plan, 236 shares and 192 shares of Common
Stock based on a price per share of $10.5937 and $13.00 respectively,
representing $5,000 of the annual cash retainer were awarded in 1999 to
each of the following Directors: Robert L. Barnett, Frederic H.
Bertrand, Rhonda L. Brooks, Robert G. Clarke, Luther F. Hackett, Patrick
J. Martin, Mary Alice McKenzie, and Janice L. Scites.
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
Under the 1998 Stock Option Plan for Non-employee Directors (the
"Plan"), approved in 1998 by the stockholders, non-employee Directors
receive stock options with respect to 2,250 shares of Common Stock on
the first business day after each of the 2000, 2001, and 2002 annual
meetings of the Company's stockholders. Optioned shares are reflected
in the individual stockholdings of the Directors set forth below under
"Stock Ownership of Directors, Nominees, Executive Officers, and Certain
Beneficial Owners". The exercise price of the options issued to
Participant Directors in 1999 was $10.625 per share, which represents
the Fair Market Value of the Company's Common Stock on the date of
grant. For purposes of the Plan, the Fair Market Value of stock is
defined as the average of the high and low trading prices reported on
the composite tape on the date specified, or if no sale takes place on
such date, the average of the bid and asked prices on such date. Stock
options are exercisable during the period beginning six months after the
date of grant and ending five years thereafter except in the event that
the option expires during a limited trading period declared by the
Corporate Secretary, in which case the exercise period shall be extended
for thirty days following termination of the limited trading period.
All stock options are exercisable at a fixed price equal to the Fair
Market Value of the Common Stock on the date the option is granted.
The total number of shares that may be issued under the Plan may not
exceed 112,500 in the aggregate, subject to proportional adjustments,
and such shares may be either authorized but unissued shares or shares
previously issued and reacquired by the Company. The Plan is effective
for five years, terminating in year 2002.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers to file reports of ownership
and changes in ownership of Company securities with the SEC and to
furnish the Company with copies of all such reports. It also requires
directors, officers and persons who beneficially own more than ten
percent (10%) of the Company's stock to file initial reports of
ownership and subsequent reports of changes in ownership with the SEC
and the New York Stock Exchange.
Based solely on a review of the copies of such reports prepared and
filed with the Commission during 1999 by the Company's executive
officers and directors, and on written representations that no other
reports were required, the Company believes its directors and executive
officers have complied with all Section 16(a) filing requirements. The
Company does not have a ten percent holder.
STOCK OWNERSHIP OF DIRECTORS, NOMINEES, EXECUTIVE OFFICERS AND
CERTAIN BENEFICIAL OWNERS
The following table sets forth the number of shares of Common Stock
of the Company beneficially owned by (1) each Director, (2) each nominee
Director, (3) each of the named executive officer in the Summary
Compensation Table, (4) all the Directors, nominees for Director and
executive officers as a group as of January 31, 2000, and (5) each
person known by the Company to beneficially own more than 5% of the
outstanding shares of Common Stock as of December 31, 1999.
Shares of Common Stock Percent
Name Beneficially Owned (1)(2)(3)(4) of Class
- - - ---- ------------------------------- --------
L. Douglas Barba 26,350 (1)
Robert L. Barnett 8,643 (1)
Frederic H. Bertrand 14,055 (5) (1)
Francis J. Boyle 37,600 (1)
Rhonda L. Brooks 8,143 (1)
Kent R. Brown 40,428 (6) (1)
Robert G. Clarke 8,643 (7) (1)
Timothy S. Cobb 0 ---
Luther F. Hackett 18,686 (8) (1)
Patrick J. Martin 8,643 (1)
Mary Alice McKenzie 10,352 (9) (1)
Janice L. Scites 3,678 (1)
Douglas D. Sinclair 31,200 (1)
Robert H. Young 157,931 (10) 1.4 %
All directors, nominees
and executive officers
as a group (20) 472,119 4.1%
Sanford C. Bernstein &
Co., Inc 1,056,120 (11) 9.2%
767 Fifth Avenue
New York, NY 10153
No director, nominee for director, or executive officer owns any
shares of the various classes of the Company's outstanding non-voting
preferred stock.
(1) No Director, nominee for Director, or executive officer owns
beneficially in excess of 1% of CVPS' outstanding Common Stock, except
for Robert H. Young. Except as otherwise indicated in the footnotes to
the table, each of the named individuals possesses sole voting and
investment power over the shares listed.
(2) Includes shares that the named individuals have a right to acquire
pursuant to options granted under the 1993 and 1998 Stock Option Plans
for Non-employee Directors as follows: Messrs. Bertrand and Hackett,
11,250 each; Messrs. Barnett, Clarke, Martin, and Ms. Brooks, 6,750
each; Ms. McKenzie, 9,000; and, Ms. Scites, 2,250. Includes 893 shares
awarded under the Restricted Stock Plan for Non-employee Directors and
Key Employees, for each of Messrs. Barnett, Bertrand, Clarke, Hackett,
Martin, Ms. Brooks, and Ms. McKenzie; and, 428 shares for Ms. Scites.
(3) Includes shares that the named executive officers have a right to
acquire pursuant to options granted under the 1988 and 1997 Stock Option
Plans for Key Employees as follows: Mr. Barba, 26,350; Mr. Boyle,
37,600; Mr. Brown, 39,200; Mr. Sinclair, 31,200; Mr. Young, 154,860.
All executive officers as a group 391,276 shares.
(4) Includes shares that the named executive officers hold indirectly
under the Company's Employee Savings and Investment (401(k)) and
Employee Stock Ownership Plans as follows: Mr. Young, 2,367 shares.
(5) Includes 1,912 shares held jointly with Mr. Bertrand's spouse over
which he has voting and investment power.
(6) Includes 1,228 shares held jointly with Mr. Brown's spouse over
which he shares voting and investment power.
(7) Includes 1,000 shares held jointly with Mr. Clarke's spouse over
which he shares voting and investment power.
(8) Includes 3,000 shares owned by corporations over which Mr. Hackett
has voting and investment power.
(9) Includes 150 shares held jointly with Ms. McKenzie's spouse over
which she has voting and investment power.
(10) Includes one share held by Mr. Young's spouse as custodian for his
son over which Mr. Young disclaims beneficial ownership and 341 shares
held by his spouse over which she has sole voting and investment power.
(11) Sanford C. Bernstein & Co., Inc. has discretionary investment
authority with respect to certain customer accounts holding in the
aggregate 31,120 shares of the Common Stock of the Company. Such shares
are held on behalf of persons who have the right to receive, or the
power to direct the receipt of dividends from, or the proceeds from the
sale of, such securities. Sanford C. Bernstein & Co., Inc. has sole
voting power over 838,600 shares and sole dispositive power over
1,056,120 shares.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
COMPENSATION PHILOSOPHY
The philosophy of the Compensation Committee (the "Committee"),
with regard to executive compensation, is to maintain a total
compensation pay package which, by virtue of its design and target
levels, enables the Company to recruit the best talent for our jobs, to
retain high performing employees by strongly rewarding exceptional
performance, to encourage employees to develop their skills and
abilities and encourages and supports performance and decisions that
strengthen the Company financially and strategically, including
enhancing customer service. Executive officer compensation, including
the compensation of the Chief Executive Officer ("CEO"), is comprised of
a base salary, annual Management Incentive Plan ("MIP") payout and a
Long Term Incentive Plan ("LTIP") payout, as described below. The value
of the LTIP is based on the value the Company delivers to shareholders
over time. The value of the MIP is specifically tied to the Company's
performance measured by the consolidated earnings per share, customer
satisfaction and individual performance in the last fiscal year. The
base salary range is set based on benchmarking to other companies of our
size, and within the range, a specific officer's salary is set based on
qualification, experience and proven performance. In addition, certain
officers can receive additional amounts based on the performance of
Catamount Energy Corporation for the last fiscal year as described
below.
EXECUTIVE OFFICERS' BASE ANNUAL SALARY
It is the policy of the Committee to establish salaries for the CEO
and other executive officers within a range that surrounds the 50th
percentile of salaries of similar positions as reported in the annual
Executive Compensation Survey conducted by the Edison Electric
Institute, adjusted to reflect the size of the Company as determined by
revenues. Executive officers in charge of unregulated subsidiaries are
benchmarked to the 50th percentile of salaries for similar positions at
general industry companies with similar revenues.
Within this range, the salary is determined based on an evaluation
of the individual's qualifications, experience and performance. The
Chief Executive Officer recommends the base salary for those reporting
to him to the Committee.
CHIEF EXECUTIVE OFFICER'S BASE ANNUAL SALARY
The Committee determines the base salary of the Chief Executive
Officer. Mr. Young's promotion from Chief Operating Officer to
President and Chief Executive Officer in 1996 and his current placement
in the salary range was determined by the Compensation Committee and
approved by the Board of Directors. His current salary is based upon
factors such as his level of experience in his position, Company
performance and executive team performance.
1999 MANAGEMENT INCENTIVE PLAN
The Company's executive officers participate in the Company's
annual MIP. The purpose of the MIP is to focus the efforts of the
executive team on the achievement of challenging and demanding corporate
objectives. When corporate performance reaches or exceeds the specified
annual performance objectives, an incentive payment is earned. A
well-directed MIP, in conjunction with competitive salaries and
benefits, provides a level of compensation which fully rewards the
skills and efforts of the executives.
Participants are designated annually by the Board of Directors.
The level of potential payout for the MIP is based on benchmarking of
the incentive levels for officers working for companies our size. In
1999, the named executive officers in the Summary Compensation Table,
other than Mr. Barba, were eligible to participate in the MIP. Mr.
Barba is covered under the Catamount annual Management Incentive Plan
("Catamount MIP") described later.
Performance measures must be met in the following areas to receive
an award. Each measure is equally weighted with the exception of the
consolidated earnings per share multiplier described below.
CONSOLIDATED EARNINGS PER SHARE. A measure of the overall
financial performance.
CUSTOMER SATISFACTION MEASURE. Measures the customers'
satisfaction with CVPS overall and with how CVPS handled their last
inquiry or service request.
INDIVIDUAL PERFORMANCE. Based on advice and recommendation from
the CEO for officers reporting to him, the Committee evaluates
individual officer performance compared to performance objectives set
early in the year, and also evaluates the performance of the CEO versus
his performance objectives.
If all of the performance objectives were to be exceeded, the total
incentive award could represent 35% of base salary for the President and
CEO; 25% for the Senior Vice President, Chief Financial Officer and
Treasurer, Senior Vice President - Engineering and Operations, and Vice
President and General Manager for Business Development. If the target
level of consolidated earnings per share is exceeded, then the overall
award is increased 10%. The value of the MIP payout is awarded half in
cash and half in three-year restricted stock. Starting in 1999, the
Company added a 25% premium to the restricted stock component.
LONG TERM INCENTIVE PLAN
In 1999, the Board of Directors adopted a revised Long Term
Incentive Plan (the "LTIP") for executive officers. Under the LTIP,
one-half of the value of a participant's award is paid in stock options
and the remaining one-half is paid in the form of restricted shares of
Common Stock (rather than all of the value in stock options as was
previously done). The one-half paid in restricted shares of Common
Stock is in the form of performance shares dependent upon reaching
certain Total Shareholder Return ("TSR") performance targets in three
years versus a national peer group of utilities. The number of options
and performance shares awarded to executive officers is determined
utilizing comparisons to officers' long-term incentive values who work
for companies our size in the electric utility industry and in the
general industry.
The stock option portion of the LTIP award is based on the Stock
Option Plan for Key Employees, which was approved in 1997 by the
stockholders, as an important component in its strategy for attracting
and retaining executives of high caliber and helping to focus management
attention on increasing stockholder value. This proxy statement
contains an updated Stock Option Plan for Key Employees which is being
presented for stockholder approval. Stock options are granted to
executive officers annually upon the recommendation of the Committee.
In 1999, the named executive officers in the Summary Compensation Table
received options. All awards are provided by means of non-qualified
stock options which have an exercise price equal to 100% of the Fair
Market Value of the Common Stock of the Company on the date of the
grant. The Committee's policy is that the exercise price of stock
options should not be amended after grant, except in the event of a
stock dividend, stock split or other change in corporate structure or
capitalization affecting the Company's Common Stock.
The other half of the executive officer LTIP is delivered in the
form of restricted performance shares of Common Stock. In 1999, (at the
beginning of the three-year performance cycle), there was a contingent
grant of a fixed number of common shares. The number of shares payable
at the end of the performance cycle (performance 1999-2001) is dependent
on how the Company's financial performance compares to a national peer
group of utilities. The financial performance is measured in terms of
TSR for the three years, relative to the peer group. The number of
shares granted at the end of the cycle ranges from 0 - 2x the number of
shares targeted in the beginning of the cycle, based on our relative
TSR. Dividends payable with respect to restricted shares are reinvested
into additional shares of restricted stock. Once the award is earned,
shares become fully vested.
2000 MANAGEMENT INCENTIVE PLANS
The Board of Directors adopted a revised annual Management
Incentive Plan (the "2000 MIP") to be effective starting with the 2000
plan year (fiscal). In the 2000 MIP, the Board replaced the
Consolidated Earnings Per Share performance measure with Cash Flow from
Operating Activities. In addition, the Board replaced the customer
satisfaction measure with a broader business performance measure, that
includes customer satisfaction as appropriate, for each strategic
business unit or for overall corporate performance, depending on the
officer's responsibilities. In addition, any payout for year 2000
performance paid in year 2001 will be in the form of cash. Also, the
target value to be delivered through the 2000 MIP has been increased to
match the appropriate benchmarks for companies our size in the electric
utility and general industry.
CATAMOUNT INCENTIVE PLANS
Catamount Energy Corporation ("Catamount"), a wholly-owned
subsidiary of Catamount Resources Corporation, also has an annual
Management Incentive Plan ("Catamount MIP") for officers of Catamount
approved annually by its Board of Directors. Under the 1999 Catamount
MIP, its Executive Vice President and General Manager could receive 40%
of his base salary if the maximum payout on all of the standards were to
be achieved. Additional amounts can be added at the Catamount Board's
discretion if objectives are exceeded by more than 20%. Officers of the
Company who are also officers of Catamount may be granted an award by
the Catamount Board based upon the performance of Catamount and the
Catamount Board's subjective evaluation of each officer's individual
contribution to that performance. Amounts paid under the Catamount MIP
to three of the named executives, including Mr. Barba, are set forth in
the Bonus column of the Summary Compensation Table.
In 1998, Catamount also established a Long Term Incentive Plan
("Catamount LTIP") for its eligible officers. The first potential
payout under Catamount's LTIP would be in year 2001 if performance
standards are met for 1998-2000. The maximum payout under this
Catamount LTIP, if all the objectives are fully met, is 25% of the base
salary of the eligible officer.
OTHER PERQUISITES
It is the policy of the Committee not to compensate executive
officers through the use of perquisites. A car is provided to the CEO
and periodic medical examinations for all executive officers are
available. There are no other perquisites provided to any executive
officer.
OTHER COMPENSATION COMMITTEE ITEMS
The Company intends that compensation paid to its executive
officers will be tax deductible, Section 162(m) of the Internal Revenue
Code, as amended, generally limits the Company's federal income tax
deduction for compensation paid in any taxable year to any one of the
five highest paid executive officers named in the Summary Compensation
Table to $1.0 million. The limit does not apply to specified types of
exempt compensation, including payments that are not included in the
employee's gross income, payments made to or from a tax-qualified plan
and compensation that qualifies as qualified performance-based
compensation. Under the tax law, the amount of a qualified
performance-based award must be based entirely on an objective formula,
without any subjective consideration of individual performance. The
Committee has carefully considered the impact of this law. As the
annual cash compensation of each of the Company's executive officers is
below $1.0 million, the limitation imposed by Section 162(m) is not
believed to be applicable. In addition, the stock options granted under
the Company's stock option plans are designed to qualify as exempt
qualified performance-based compensation.
The Committee retains the services of an independent expert to
advise it with respect to the extent to which its pay practices are
consistent with prevailing industry standards. With the assistance of
its advisor, it aggressively reviews its plans each year to assure that
it competitively pays and rewards executives to act in the interests of
the ratepayers and the shareholders.
COMPENSATION COMMITTEE MEMBERS:
Patrick J. Martin, Chairperson
Frederic H. Bertrand
Rhonda L. Brooks
Janice L. Scites
FIVE-YEAR SHAREHOLDER RETURN COMPARISON
- - - ---------------------------------------
The SEC requires that the Company include in its proxy statement a
line-graph presentation comparing cumulative, five-year shareholder
returns on an indexed basis with the S&P 500 Stock Index and either a
published industry or line-of-business index or an index of peer
companies selected by the Company. The Board of Directors has selected
for its peer group index a stock index compiled by the Edison Electric
Institute ("EEI Index"), because it is the most comprehensive and
representative inasmuch as it includes stock performance data for
investor-owned electric utility companies.
<TABLE>
<CAPTION>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
CENTRAL VERMONT, EEI INDEX, S&P 500
<S> <C> <C> <C> <C> <C> <C>
1994 1995 1996 1997 1998 1999
CVPS 100.00 105.10 100.53 137.16 100.12 110.60
EEI Index 100.00 131.02 132.59 168.88 192.34 156.57
S&P 500 100.00 137.41 168.76 224.79 288.63 348.95
Assumes $100 Invested on December 31, 1994
*Total Return Assumes Quarterly Reinvestment of Dividends
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company has a Compensation Committee to approve compensation
for the Company's executive officers. The Compensation Committee
members are Messrs. Martin, Bertrand, Ms. Scites and Ms. Brooks. None
of the Compensation Committee members are involved in a relationship
requiring disclosure as an interlocking executive officer/director under
item 404 of regulation S-K or as a former officer or employee of the
company.
EXECUTIVE COMPENSATION AND OTHER TRANSACTIONS
The following table sets forth all cash compensation paid or to be
paid by the Company and its subsidiaries, as well as the number of stock
option and restricted stock awards earned during the last three fiscal
years by the Company's CEO and the four most highly compensated
executive officers whose salary and bonus for services rendered to the
Company and its subsidiaries in all capacities for 1999 exceeded
$100,000.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Compensation
Annual Compensation Awards (4)
----------------------- ----------------------------
Securities Other Annual
Name and Principal Salary Bonus Underlying Compensation
Position (1) Year ($)(2) ($)(3) Options/SARs(#) $ (5)
- - - ------------------ ---- ------- ------ --------------- ------------
<S> <C> <C> <C> <C> <C>
Robert H. Young 1999 266,000 14,130 31,860/0 7,394
President and CEO 1998 254,400 14,586 53,000/0 7,127
1997 246,758 9,897 35,500/0 7,049
Francis J. Boyle 1999 180,908 6,600 6,700/0 7,052
Senior Vice President, 1998 169,286 7,174 12,500/0 6,665
CFO and Treasurer 1997 159,175 4,654 12,500/0 6,589
Kent R. Brown 1999 180,896 -- 6,700/0 7,107
Senior Vice President, 1998 174,250 -- 12,500/0 6,914
Engineering and 1997 176,081 -- 12,500/0 2,114
Operations
Douglas D. Sinclair (6) 1999 181,892 -- 6,700/0 7,023
Vice President and 1998 175,000 6,178 12,500/0 3,203
General Manager, 1997 117,788 35,000 12,000/0 61,737
Business Development
L. Douglas Barba 1999 152,687 47,100 4,800/0 9,519
Executive Vice President 1998 138,600 48,620 9,000/0 5,881
and General Manager, 1997 143,702 32,990 9,000/0 5,583
Catamount Energy Corporation (7)
</TABLE>
- - - ------------------
(1) - The principal positions listed were held as of December 31, 1999.
(2) - Includes compensation deferred at the election of named executive
officers; and, includes for Mr. Young - director's retainers and fees
earned from Vermont Electric Power Company and compensation for services
performed for Vermont Yankee for which the Company was reimbursed.
(3) - Includes incentive awards by Catamount Energy Corporation as
follows for: Mr. Young: 1999 - $14,130, 1998 - $14,586, 1997 - $9,897;
Mr. Boyle: 1999 - $6,600, 1998 - $7,174, 1997 - $4,654; and, Mr. Barba:
1999 - $47,100, 1998 - $48,620, 1997 - $32,990. For Mr. Sinclair,
includes $6,178 in 1998 and $35,000 bonus in 1997 pursuant to an
employment agreement. The incentive awards for 1999 from the Company
have not yet been determined.
(4) - In addition to what is enumerated, the Company has a long term
incentive plan that awards restricted stock subject to performance based
conditions described in the Long Term Incentive Plan in the Compensation
Committee Report. A valuation of the Restricted Stock awards could be
calculated by multiplying the closing market price at year end of
$10.625 by the number of restricted performance shares as follows: Mr.
Young, 5,320; Messrs. Boyle, Brown and Sinclair, 1,100 each and Mr.
Barba, 800. Dividends payable from shares are reinvested into
additional shares.
(5) - The total amounts shown in this column for 1999 are comprised as
follows:
- Company matching contributions to the Employee Savings and
Investment Plan (401(k)) includes for Mr. Young: $6,591; Mr.
Boyle: $6,539; Mr. Brown: $6,539; Mr. Sinclair: $6,540; and,
Mr. Barba: $6,125.
- Taxable term cost on executive split-dollar insurance (an
insurance plan that gives both employer and employee an interest
in the policy death benefit on the employee's life) includes for
Mr. Young: $803; Mr. Boyle: $513; Mr. Brown: $568; Mr. Sinclair:
$483; and Mr. Barba: $375.
- Pay in lieu of taking vacation based on Company policy for
employees who qualify includes for Mr. Barba: $3,019.
(6) - Compensation data for Mr. Sinclair includes only a portion of 1997
because he was employed by the Company commencing April 28, 1997.
(7) - Catamount Energy Corporation is a subsidiary of Catamount
Resources Corporation (formerly Catamount Investment Corporation), a
subsidiary of Central Vermont Public Service Corporation.
STOCK OPTIONS
The following table sets forth stock options granted to the
Company's current most highly compensated executive officers during 1999
under the Company's Stock Option Plan. Under SEC regulations, companies
are required to project an estimate of appreciation of the underlying
shares of stock during the option term. The Company has chosen a
binomial model approved by the SEC. However, the ultimate value will
depend on the market value of the Company's stock at a future date,
which may or may not correspond to the projections below.
OPTION/STOCK APPRECIATION RIGHTS GRANTS TABLE
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
-------------------------------------
% of
Number of Total
Securities Options/
Underlying SARs
Options/ Granted to Exercise Grant
SARs Employees Or Base Date
Granted In Fiscal Price Expiration Present
Name (#) (1) Year ($/Sh) Date Value($)(2)
- - - ----------------- ----------- ---------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Robert H. Young 31,860/0 40.9% $10.5625 5/04/2009 $73,833
Francis J. Boyle 6,700/0 8.6 10.5625 5/04/2009 15,527
Kent R. Brown 6,700/0 8.6 10.5625 5/04/2009 15,527
Douglas D. Sinclair 6,700/0 8.6 10.5625 5/04/2009 15,527
L. Douglas Barba 4,800/0 6.1 10.5625 5/04/2009 11,124
</TABLE>
- - - --------------------
(1) A total of 77,860 shares were awarded to all plan participants
under the 1997 Stock Option Plan. Stock options are exercisable in
whole or in part from the date of the grant for a period of ten
years and one day.
(2) Per a binomial model as certified by an independent consultant.
The assumptions used for the Model are as follows: Volatility
-- .2982 based on monthly stock prices for the period of
April 30, 1996 to April 30, 1999; Risk-free rate of return
-- 5.50%; Dividend Yield -- 7.26% over the period of April 30, 1996
to April 30, 1999; and a ten-year exercise term.
YEAR-END OPTION TABLE
The following table sets forth stock options exercised by the
Company's CEO and the four other most highly compensated executive
officers during 1999, and the number and value of all unexercised
options at year-end. The value of "in-the-money" options refers to
options having an exercise price which is less than the market price of
the Company's Common Stock on December 31, 1999.
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in Last Fiscal Year(FY)
-------------------------------------------------------
and Fiscal Year-End Option/SAR Values
-------------------------------------
(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options Options
At FY-End (#) At FY-End ($)
Shares Acquired Value Exercisable/ Exercisable/
Name On Exercise(#) Realized($)(1) Unexercisable Unexercisable(1)
- - - --------------- --------------- -------------- ------------- ----------------
<S> <C> <C> <C> <C>
Robert H. Young -0- $ -0- 154,860/0 $ 1,991/0
Francis J. Boyle -0- -0- 37,600/0 419/0
Kent R. Brown -0- -0- 39,200/0 419/0
Douglas D. Sinclair -0- -0- 31,200/0 419/0
L. Douglas Barba -0- -0- 26,350/0 300/0
</TABLE>
- - - ---------------
(1) The dollar values in columns (c) and (e) are calculated by
determining the difference between the fair market value of the
securities underlying the options and the exercise or base price of the
options at exercise or fiscal year end, respectively.
OFFICERS' SUPPLEMENTAL RETIREMENT PLAN
The Officers' Supplemental Retirement Plan (the "SERP") is designed
to supplement the retirement benefits available through the Company's
Pension Plan to the Company's executive officers. The SERP is a part of
the Company's overall strategy for attracting and maintaining top
managerial talent.
The Board of Directors approved a redesign of the Company's SERP
commencing January 1, 1998 ("Redesigned SERP"). The Redesigned SERP
directly coordinates the benefits of the SERP with the Pension Plan
(i.e., the excess of target pension over basic pension equals
supplemental pension). For the Redesigned SERP, the target pension is
based on the same formula as the Pension Plan but also restores any
amounts restricted by Internal Revenue Service limits under the Pension
Plan. The Redesigned SERP also reflects any incentives from the MIP.
When the Board of Directors adopted the Redesigned SERP commencing
January 1, 1998, current executive officers at that time were
grandfathered under the previous SERP provisions ("Grandfathered SERP").
The named executive officers in the Summary Compensation Table are
covered under the Grandfathered SERP. Under the Grandfathered SERP,
each grandfathered executive officer is entitled to receive, upon
retirement at age 65, fifteen annual payments in amounts equal to a
specified percentage of the officer's final year's Base Salary (not
including variable pay, options or other form of remuneration). The
applicable percentages for the named executive officers in the Summary
Compensation Table are as follows: Mr. Young, 44%; Messrs. Boyle, Brown,
Sinclair and Barba, 33%. For grandfathered executive officers, a
reduced benefit is available as early as age 55 with ten years of
service. A death benefit of $100,000, grossed up for taxes, is also
provided to vested retirees covered under the Grandfathered SERP.
Shown below is the estimated Company provided benefit payable under
the Grandfathered SERP for the named executive officers in the Summary
Compensation Table, assuming they were to retire at age 65, and based on
assumed final base pay amounts:
Assumed Final
Annual Base Pay 33% 44%
($) ($) ($)
________________ ________ _________
100,000 33,000 44,000
120,000 39,600 52,800
140,000 46,200 61,600
160,000 52,800 70,400
180,000 59,400 79,200
200,000 66,000 88,000
220,000 72,600 96,800
240,000 79,200 105,600
260,000 85,800 114,400
280,000 92,400 123,200
300,000 99,000 132,000
PENSION PLAN
The Pension Plan of Central Vermont Public Service Corporation and
Its Subsidiaries (the "Pension Plan") is a defined benefit plan which
covers employees, among others, who are officers. The Company pays the
full cost of the Pension Plan.
The table below shows the annual amounts payable under the present
provisions of the Pension Plan as amended through December 31, 1999,
based on Final Average Earnings for various years of service, assuming
the employee would retire at age 65 in 2000.
<TABLE>
<CAPTION>
Assumed
5-Year Final Years of Service
-----------------------------------------------------
Average Earnings 15 20 25 30 35
- - - ----------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$ 80,000 $18,276 $24,315 $30,393 $36,472 $38,472
100,000 23,486 31,315 39,143 47,972 49,472
120,000 28,736 38,315 47,893 57,472 60,472
140,000 33,986 45,315 56,643 67,972 71,472
160,000 (1) 39,236 52,315 65,393 78,472 82,472
</TABLE>
- - - --------------
(1) Internal Revenue Code Section 401(a)(17) limits earnings used to
calculate qualified plan benefits to $150,000 for 1995 and 1996 and
$160,000 for 1997, 1998 and 1999.
Final Average Earnings is the highest five-year average of
consecutive years' compensation over an employee's career with the
Company. In 1999, compensation for this purpose was expanded to include
base salary plus incentive awards from the Management Incentive Plans.
Previously, compensation was defined as base salary only.
The amounts above are payable for the life of the retiree only, and
would be reduced on an actuarial basis if survivor options were chosen.
In addition, no Social Security offset applies to amounts above.
The credited years of service at December 31, 1999, under the
Pension Plan for the named executive officers in the Summary
Compensation Table were as follows: Mr. Young, 12.5 years; Mr. Boyle,
4.2 years; Mr. Brown, 3.3 years; Mr. Sinclair, 2.7 years; and, Mr.
Barba, 7.3 years.
CONTRACTS WITH MANAGEMENT
The Company has entered into severance compensation agreements with
Messrs. Young, Boyle, Brown, Sinclair, and Barba. The agreements were
entered into on January 1, 1998 and continue in effect until the earlier
of (i) the fifth anniversary of such date or (ii) the executive's normal
retirement date under the Pension Plan. Commencing on the third
anniversary of the date of the agreement, and on each anniversary
thereafter, the term of the agreement is automatically extended, absent
60 days prior written notice by the Company, until the earlier of (x)
three years from such renewal date or (y) the executive's normal
retirement date. The agreements provide that in the event of
termination of employment, or a significant change in employment status
as defined in the agreement, within three years following a Change in
Control of the Company, Messrs. Young, Boyle, Brown, Sinclair, and Barba
will receive 2.999 times their average annual compensation for the
preceding five or fewer years of service and certain legal fees and
expenses incurred as a result of termination of employment.
The provisions of the agreement do not apply if the executive
officer retires, dies, is disabled, voluntarily resigns, or is dismissed
for cause following a Change in Control. In exchange for agreeing to
provide consulting services as requested by the Company for one year and
refraining from working in competition with, or for a competitor of the
Company for one year, the agreement permits continued participation in
and retention of benefits under the Deferred Compensation Plan,
Officers' Supplemental Retirement Plan, and health and disability plans.
The extent of these provisions depends on an individual's participation
and circumstances, and is specified in each agreement. For the
Grandfathered SERP, the executive officers with less than ten years of
service would receive a payment actuarially equivalent to benefits
received under the Pension Plan at age 65 with ten years of service,
less any benefit paid under the Pension Plan. For the Redesigned SERP,
upon a Change of Control event, the target pension is increased to
reflect an additional three years of service and an executive officer is
fully vested. The agreements also provide for the payment to executive
officers of an amount sufficient to offset any federal excise tax on the
termination payments under Section 4999 of the Internal Revenue Code as
well as, an additional amount to offset any additional taxes incurred by
an executive officer as a result of the payments described in this
sentence. Non-qualified stock options and restricted stock not
immediately exercisable will become exercisable in the event of a Change
of Control of the Company.
A Change of Control under the agreements is deemed to occur if:
(1) any person, corporation, partnership or group acquires 20% or more
of the combined voting power of the Company's outstanding securities;
(2) there is a change in the membership of the Board of Directors over a
period of two consecutive years in which the members of the Board at the
beginning of the period cease for any reason to be at least two-thirds
of the Board at the end of the period provided. This section does not
apply, however, if the nomination of each new director was approved by a
vote of at least two thirds of the directors then still in office who
were directors at the beginning of the period; or (3) if a third party
acquires ownership or voting power of 10% or more of the outstanding
voting securities of the Company, and subsequently is a "public utility
holding company" within the meaning of the Public Utility Holding
Company Act of 1935, or the Company loses its exemption from or is
required to register under that Act. Mr. Barba's Change of Control also
encompasses a Change of Control of Catamount.
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Arthur Andersen LLP, independent public accountants,
has audited the accounts of CVPS for 1999. They have served as the
Company's independent public accountants since 1985. Representatives of
Arthur Andersen LLP are expected to be present at the Annual Meeting, to
be available to respond to appropriate questions, and to have the
opportunity to make a statement if they so desire.
2001 ANNUAL MEETING
DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
A stockholder desiring to present a proposal at the Company's 2001
Annual Meeting of Stockholders and to have such proposal considered for
inclusion in the proxy materials for such meeting should submit such
proposal addressed to the Secretary, Joseph M. Kraus, no later than
November 28, 2000. Any such proposal must comply with Rule 14a-8 of
Regulation 14A of the proxy rules of the SEC and will be omitted from or
included in the proxy material at the discretion of the Board of
Directors of the Company in accordance with such applicable laws and
regulations.
OTHER MATTERS
The only business to be presented to the meeting, by any persons,
of which the Company is aware is that which is specified in said Notice
of Meeting, and any action in connection with or for the purpose of
effecting the same. If any other matters properly and legally come
before the meeting, the persons named as Proxies will vote upon them in
accordance with their best judgement. The Proxies have no knowledge of
any such other matters which may be so presented for action at the
meeting.
By Order of the Board of Directors
ROBERT H. YOUNG
President and Chief Executive Officer
It is hoped that all of the Common Stockholders will be represented in
person or by proxy at the Annual Meeting. The Board of Directors
earnestly urges that you VOTE, SIGN AND DATE the enclosed proxy, whether
or not you are able to attend the meeting in person. PROXIES SHOULD BE
MAILED IN THE ADDRESSED RETURN ENVELOPE ENCLOSED FOR THAT PURPOSE IN
ORDER TO REACH THE OFFICE OF THE COMPANY NOT LATER THAN MAY 2, 2000. The
giving of such proxy will not affect your right to vote in person should
it later be found convenient for you to attend. Any proxy given is
revocable at any time prior to the voting of the share or shares
represented thereby.
Schedule A
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
STOCK OPTION PLAN FOR KEY EMPLOYEES
ARTICLE 1
Purpose and Establishment of the Plan
Section 1.1 Central Vermont Public Service Corporation (the
"Company") establishes this Stock Option Plan for Key Employees (the
"Plan") with the intent of advancing the best interests of the Company
and its wholly-owned subsidiaries by providing key employees who have
substantial responsibility for corporate management and growth with
additional incentives through the grant of options to purchase shares of
the Company's Common Stock, $6.00 par value, (the "Common Stock"),
thereby increasing the personal stake of such key employees in the
continued success and growth of the Company and encouraging them to
remain in the employ of the Company.
Section 1.2 Effective May 2, 2000, the Company establishes a Plan
as described herein. The Plan provides for the grant of stock options
which are not intended to satisfy the requirements of Section 422 of the
Internal Revenue Code of 1986, as amended from time to time (the
"Code").
ARTICLE 2
Definitions
For the purposes of the Plan, the following terms shall have the
meanings provided herein:
Section 2.1 "Board" means the Board of Directors of the Company.
Section 2.2 "Code" means the Internal Revenue Code of 1986 as
amended from time to time, and regulations and rulings under the Code.
Section 2.3 "Committee" means the Compensation Committee of the
Board or such other committee as may be appointed by the Board to
administer the Plan; provided that the Committee shall consist of all
non-employee directors as contemplated by Rule 16b-3 under the Exchange
Act and outside directors under Section 162(m) of the Code.
Section 2.4 "Company" means the Central Vermont Public Service
Company and its wholly-owned subsidiaries or any successor thereto.
Section 2.5 "Disability" means permanent and total disability as
defined by the Company's benefits program for disability insurance
coverage.
Section 2.6 "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time.
Section 2.7 "Fair Market Value" means the average of the high and
low quoted selling price for a share of Common Stock as of any
particular date as quoted in the Eastern Edition of the Wall Street
Journal or in a similarly readily available public source on such date
(or, if such date shall not be a business day, then the next preceding
day which shall be a business day); or if no sale takes place, then the
average of the bid and asked prices on such date.
Section 2.8 "Option" means Stock Option.
Section 2.9 "Optionee" means the person or persons who have the
right to exercise the Option granted under this Plan.
Section 2.10 "Participant" means the key employee covered under
this Plan.
Section 2.11 "Retirement" means attaining the same age as defined
in the Pension Plan of Central Vermont Public Service Corporation and
Its Subsidiaries.
Section 2.12 "Share(s)" means the shares of the Company's Common
Stock, $6.00 par value.
Section 2.13 "Stock Option" means an option granted under the
Plan to purchase Shares and which is intended not to qualify as an
incentive stock option under Section 422 of the Code.
ARTICLE 3
Administration
Section 3.1 (a) The Plan shall be administered by the Committee.
The Committee shall have authority in its sole discretion, subject to
and not inconsistent with the express provisions of the Plan, to
administer the Plan and to exercise all the powers and authorities
either specifically granted to it under the Plan or necessary or
advisable in the administration of the Plan, including without
limitation, authority to select the Participants to be granted Options,
to determine the size and terms of the Options to be granted to each
participant selected, to accelerate the vesting of any or all options,
to waive any term or condition with respect to any or all options, to
determine the time or times when the Options will be granted, the period
or periods during which Options will be exercisable, and to prescribe
the form of the agreements embodying Options granted under the Plan.
(b) The Committee shall be authorized to interpret the Plan and
establish, amend and rescind any rules and regulations relating to the
Plan, and to make any other determinations which it believes necessary
or advisable for the administration of the Plan. The Committee may
correct any defect, supply any omission or reconcile any inconsistency
in the Plan or in any Option in the manner and to the extent the
Committee deems necessary or desirable to carry it into effect.
(c) In no event, however, shall the Committee have the right to
grant dividend equivalents in respect of Options or to cancel
outstanding Options for the purpose of replacing or regranting such
Options with a purchase price that is less than the purchase price of
the original Option.
(d) The Committee shall maintain a written record of its
proceedings. The Committee's determinations under the Plan need not be
uniform and may be made selectively among Participants, whether or not
such Participants are similarly situated. Any decision of the Committee
in the administration of the Plan, as described herein, shall be final
and conclusive and binding on all persons affected by the decision,
including the Company, any Participant or Optionee or any person
claiming any rights under the Plan from or through any Participant or
Optionee. The Committee may delegate to one or more of its members or
to any officer or officers of the Company such administrative duties
under the Plan as the Committee may deem advisable.
ARTICLE 4
Eligibility and Participation
Section 4.1 Options may be granted to key employees as the
Committee may from time to time select. Any Participant shall be
eligible to receive one or more Options subject to the limitation set
forth in Article 5. In determining the persons to whom Options are to
be granted and the number of Shares subject to each Option grant, the
Committee shall take into consideration the person's present and
potential contribution to the success of the Company and such other
factors as the Committee may deem proper and relevant. For purposes of
participation in the Plan, the term Company shall include any entity
that is directly or indirectly controlled by the Company or any entity,
including an acquired entity, in which the Company has a significant
equity interest, as determined by the Committee.
ARTICLE 5
Limitations on Grants
Section 5.1 There may be delivered under the Plan an aggregate
number of Shares of not more than 350,000 Shares, subject to adjustment
as provided in Section 5.2. The aggregate number of Shares that may be
covered by Options granted to a single individual under the Plan shall
not exceed 350,000 Shares. Shares delivered pursuant to the Plan may
consist in whole or in part of authorized and unissued Shares or
reacquired Shares and no fractional Shares shall be delivered under the
Plan. Cash may be paid in lieu of any fractional Shares in the exercise
of Options under the Plan. In the event that Options shall be forfeited
or canceled, or Options shall terminate or expire without being
exercised in whole or in part, new Options may be granted covering the
Shares that were either not purchased and as such forfeited, canceled,
terminated or expired. For purposes of this Section, the number of
Shares deemed to be delivered under the Plan upon the exercise of an
Option shall equal the number of Shares as to which the Option is
exercised less the number of Shares tendered, if any, pursuant to
Section 6.6. However, the number of Shares deemed exercised by the
Optionee under the applicable Options(s) shall be the full number of
Shares specified in the exercise notice required under Section 6.6.
Section 5.2 In the event of any stock split, stock dividend,
recapitalization, merger, consolidation, reorganization, combination or
exchange of equity securities or other distribution (other than normal
cash dividends) of the Company assets to stockholders, or any other
similar change, any adjustment deemed appropriate by the Committee may
be made by the Committee, including, but not limited to, the number of
Shares which may be granted under the Plan, the number of Shares covered
by an Option, the exercise price of an Option, or the type of security
or other property covered by an Option. Any such adjustments shall be
conclusive and binding for all purposes of the Plan. In the event of
any merger, recapitalization, consolidation, reorganization,
combination, or exchange of equity securities, the Committee may cancel
any or all outstanding Options in exchange for a payment to the
Optionee(s) equal to the excess of Fair Market Value of the Shares
covered by each such Option over the aggregate exercise price of such
Option.
ARTICLE 6
Terms and Conditions of Stock Options
Section 6.1 An Option under the Plan shall be in such form as the
Committee may from time to time approve. Each Option shall be subject
to the terms and conditions provided in this Article 6 and shall contain
such other or additional terms and conditions as the Committee may deem
desirable, but in no event shall such terms and conditions be
inconsistent with the Plan or require Options to comply with the
provisions of the Code applicable to incentive stock options as
described in Section 422 of the Code.
Section 6.2 The purchase price per Share under an Option shall be
determined by the Committee, but may not be less than 100 percent of the
Fair Market Value of a Share on the date the Option is granted; provided
however, that in the case of any Option granted hereunder prior to both
shareholder approval and authorization by the Vermont Public Service
Board contemplated by Article 8 hereof, for the purpose of determining
the purchase price per Share, such Option shall be deemed to have been
granted on the date of the earlier to occur of such approval and
authorization. In the event any awards are granted hereunder following
shareholder approval, but prior to authorization by the Vermont Public
Service Board, for the purposes of determining the purchase price per
Share such Option will be determined to have been granted on the date
the Option shall be deemed to have been granted by the Committee.
Section 6.3 The period during which an Option may be exercised
shall be fixed by the Committee; provided, that no Option shall be
exercisable after the expiration of ten years from the date such Option
is granted.
Section 6.4 An Optionee's Options shall expire three months after
the termination of the Optionee's employment for any reason other than
death, Disability, or Retirement and shall be limited to the Shares
which could have been purchased by the Optionee at the date of
termination of employment.
Section 6.5 (a) Upon the termination of an Optionee's employment
by reason of death, Disability, or Retirement, Options held on the
termination date by such Optionee shall be exercisable, irrespective of
whether the Options were fully exercisable on that date. The Optionee's
Options shall expire unless exercised within one year from the date of
such termination of employment.
(b) The Committee may, at any time on or before the termination of
the exercise period of an Optionee's Options, extend the exercise period
for any Optionee whose employment has terminated due to death,
Disability, Retirement, or other good cause. If so extended, the term
of the exercise period shall expire on the date specified by the
Committee, which date shall be no later than the date which is ten years
following the date of the Participant's termination of employment. In
no event may the term of an Option including extensions, exceed the term
set forth in Section 6.3 above.
Section 6.6 An Option may be exercised in whole or in part from
time to time during the Option period (or, if determined by the
Committee, in specified installments during the Option period) by giving
written notice of exercise to the Secretary of the Company specifying
the number of Shares to be purchased. Notice of exercise of an Option
must be accompanied by payment in full of the purchase price either by
cash or such other method as may be permitted by the Committee,
including but not limited to (i) personal check, (ii) tendering (either
actually or by attestation) Shares owned by the Optionee at least six
months having a Fair Market Value at the date of exercise equal to such
purchase price, (iii) a third-party exercise procedure, or (iv) in a
combination of the foregoing. An Optionee shall have the rights of a
shareholder only with respect to Shares for which certificates have been
issued to such person.
Section 6.7 (a) As a condition to the delivery of any Shares
pursuant to the exercise of an Option, the Committee may require that
the Optionee, at the time of such exercise, pay to the Company an amount
to satisfy any applicable tax withholding obligation or such greater
amount of withholding as the Committee shall determine from time to
time, or the Committee may take such other action as it may deem
necessary to satisfy any such withholding obligations.
(b) The Committee, in its sole discretion, may permit or require
an Optionee to satisfy all or a part of the tax withholding obligations
incident to the exercise of an Option by having the Company withhold a
portion of the Shares that would otherwise be issuable to the Optionee.
Such Shares shall be valued based on their Fair Market Value on the date
the tax withholding is required to be made. Any such Share withholding
with respect to an Optionee subject to Section 16(a) of the Exchange Act
shall be subject to such limitations as the Committee may impose to
comply with the requirements of Section 16 of the Exchange Act.
ARTICLE 7
General Provisions
Section 7.1 Each grant under the Plan shall be subject to the
requirement that if the Committee shall determine, at any time, that:
(a) the listing, registration or qualification of the Shares subject or
related thereto upon any securities exchange or under any state or
federal law, or (b) the consent or approval of any governmental
regulatory body, or (c) an agreement by the Participant with respect to
the disposition of Shares is necessary or desirable as a condition of,
or in connection with, the granting or the issuance or purchase of
Shares thereunder, such grant may not be consummated in whole or in part
unless such listing, registration, qualification, consent, approval or
agreement shall have been effected or obtained free of any conditions
not acceptable to the Committee.
Section 7.2 Subject to the terms of the Plan, the Committee may
modify outstanding grants under the Plan or accept the surrender of
outstanding grants and make new grants in substitution for them.
Notwithstanding the foregoing, no modification of any grant shall
adversely alter or impair any rights or obligations of the Participant
without the Participant's consent.
Section 7.3 Any grant under the Plan may be canceled at any time
with the consent of the Participant and a new grant may be provided to
such Participant in lieu thereof.
Section 7.4 Shares distributed pursuant to the Plan shall be made
available from authorized but unissued shares or from shares purchased
or otherwise acquired by the Company, as shall be determined from time
to time by the Committee.
Section 7.5 Unless the Committee determines otherwise pursuant to
Section 5.2, Participants under the Plan, unless otherwise provided by
the Plan, shall have no rights as shareholders by reason thereof unless
and until certificates for shares of stock are issued to them.
Section 7.6 Except as expressly provided in the Plan, no grant of
Options shall be transferable except by will or the laws of descent and
distribution. During the lifetime of the Optionee, except as expressly
provided in the Plan, grants under the Plan shall be exercisable only by
such Optionee or by the guardian or legal representative of such
Optionee.
Section 7.7 Determinations by the Committee under the Plan
(including without limitation, determinations of the persons to receive
grants, the form, amount and timing of such grants, and the terms,
conditions and provisions of such grants and the agreements evidencing
the same) need not be uniform and may be made by it selectively among
persons who receive or are eligible to receive grants under the Plan,
whether or not such persons are similarly situated.
Section 7.8 No employee or other person shall have any claim or
right to be granted Options under the Plan. Neither the Plan nor any
action taken hereunder shall be construed as giving any Participant any
right to be retained in the employ of the Company or any subsidiary or
affect any right of the Company or any subsidiary to terminate any
Participant's employment.
Section 7.9 At the time of grant and by accepting any grant of
Options under the Plan, each Participant and each person claiming
through such Participant shall be conclusively deemed to have indicated
such Participant's acceptance and ratification of, and consent to, any
action taken under the Plan by the Company, the Board, or the Committee.
Section 7.10 The Plan shall become effective as of May 2, 2000
subject to approval by stockholders at the Company's Annual Meeting of
Stockholders. No grant may be given under the Plan after May 2, 2005,
but grants theretofore granted may extend beyond such date.
Section 7.11 The Plan may be amended at any time and from time to
time by the Board and without the approval of shareholders of the
Company, except that no amendment which increases the aggregate number
of shares which may be delivered pursuant to the Plan or which, in the
absence of shareholder approval, would cause the Plan not to comply with
the Exchange Act or Section 162(m) of the Code shall be effective unless
and until the same is approved by the shareholders of the Company. No
amendment of the Plan shall materially adversely affect any of the
rights or obligations of any person, without such person's written
consent under an Option granted under the Plan.
Section 7.12 The Plan shall terminate upon the earlier of the
following dates or events to occur:
(a) upon the adoption of a resolution of the Board terminating the
Plan; or
(b) May 2, 2005.
After termination of the Plan, no Options may be granted. No
termination of the Plan shall materially adversely affect any of the
rights or obligations of any person, without such person's written
consent, under any Option theretofore granted under the Plan.
Section 7.13 The Plan shall be submitted to the shareholders of
the Company for approval. Shares may not be delivered under the Plan
unless and until such delivery is authorized by the Vermont Public
Service Board. Options may be granted hereunder prior to such approval
and authorization but shall be contingent upon obtaining such approval
and authorization. The shareholders of the Company shall be deemed to
have approved the Plan only if it is approved at a meeting of the
shareholders duly held by vote taken in the manner required by the laws
of the State of Vermont.
Section 7.14 The provisions of the Plan shall take precedence over
any conflicting provision contained in an Option. The Plan shall be
governed by and construed in accordance with the laws of the State of
Vermont. If any term or provision of the Plan is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the
remainder of the term and provisions will remain in full force and
effect and will in no way be affected, impaired or invalidated.
ARTICLE 8
Change in Control
Section 8.1 Notwithstanding anything herein to the contrary, if a
Change in Control of the Company occurs, then all Stock Options (other
than those held by Optionees whose employment has terminated) shall
become fully exercisable as of the date such Change in Control occurred.
For purposes of the Plan, a Change in Control of the Company shall
be deemed to have occurred if the conditions set forth in any one of the
following paragraphs shall have been satisfied:
(i) the acquisition, directly or indirectly, of securities of the
Company representing 20% or more of the combined voting power of the
Company's then outstanding securities by any third person including a
"Group" as that term is used in Section 13(d)(3) of the Securities
Exchange Act of 1934; or
(ii) a change in the membership of the Board of Directors over a
period of two consecutive years in which the members of the Board at the
beginning of the period cease for any reason to be at least two-thirds
of the Board at the end of the period provided, however, that any new
director (other than a new director who was nominated by a person who
has expressed an intent to effect a Change in Control or engage in a
proxy or other control contest) whose appointment or nomination for
election was approved or recommended by a majority of the directors in
office at the beginning of such two-year period shall be deemed to have
been a director at the beginning of the two-year period; or
(iii) the acquisition by a third person either directly or
indirectly, of the right to own, control or hold with power to vote 10%
or more of the outstanding voting securities of the Company, if
immediately subsequent to the acquisition of the Company's voting
securities by such third person: (a) such third person shall be a
"public utility holding company" within the meaning of the 1935 Act,
whether or not exempt from registration thereunder, or (b) the Company
shall be in danger of losing its exemption under the 1935 Act or shall
otherwise be required to register under the 1935 Act; or
(iv) the consummation of a reorganization, merger or consolidation,
other than a reorganization, merger or consolidation following which the
individuals and entities that were the beneficial owners of the
outstanding voting securities of the Company immediately prior to such
reorganization, merger or consolidation, beneficially own, directly or
indirectly, more than 60% of the outstanding voting securities of the
Company resulting from such reorganization, merger or consolidation, in
substantially the same proportions as their ownership immediately prior
to such reorganization, merger or consolidation; or
(v) the consummation of (i) a complete liquidation or dissolution
of the Company or (ii) the sale or other disposition in one transaction
or a series of related transactions of all or substantially all of the
assets of the Company, as determined by the Board of Directors, other
than a sale or other disposition to a company, which following such sale
or other disposition, the individuals and entities that were the
beneficial owners of the outstanding voting securities of the Company
immediately prior to such sale or other disposition, beneficially own,
directly or indirectly, more than 60% of the outstanding voting
securities of such company in substantially the same proportions as
their ownership in the Company, immediately prior to such sale or other
disposition.
<PAGE>
EXHIBIT A
Central Vermont Public Service Corporation
c/o EquiServe
P.O. Box 9398
Boston, MA 02205-9398
IMPORTANT
Please send in your proxy today.
Please vote, sign, date and return the proxy card below in the envelope
provided. If you do so now, the Company will avoid the expense of
follow-up solicitations.
Detach here
- - - ------------------------------------------------------------------------
PROXY
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
Proxy for Annual Meeting of Stockholders, May 2, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints RHONDA L. BROOKS, JANICE L. SCITES and
LUTHER F. HACKETT as proxies, each with the power of substitution, and
hereby authorizes them to represent and to vote, as designated on
reverse side, all shares of Common Stock of Central Vermont Public
Service Corporation held of record by the undersigned on February 24,
2000 at the Annual Meeting of Stockholders to be held May 2, 2000, at
the Killington Grand Hotel Conference Center, Killington, Vermont, or
at any and all adjournments thereof.
This proxy when properly executed will be voted in the manner
indicated herein by the undersigned stockholder. If no direction is
made, this proxy will be voted FOR Article 1 and Article 2.
SEE REVERSE SEE REVERSE
SIDE (Continued, and to be signed on reverse side) SIDE
<PAGE>
Central Vermont Public Service Corporation
c/o EquiServe
P.O. Box 9398
Boston, MA 02205-9398
IMPORTANT
Please send in your proxy today.
Please vote, sign, date and return the proxy card below in the envelope
provided. If you do so now, the Company will avoid the expense of
follow-up solicitations.
Detach here
- - - ------------------------------------------------------------------------
[X] Please mark
votes as in
this example
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ARTICLES 1 AND 2.
(1) APPROVAL OF STOCK OPTION PLAN FOR KEY EMPLOYEES.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(2) ELECTION OF DIRECTORS.
NOMINEES FOR TERM EXPIRING IN YEAR 2003:
Robert L. Barnett, Frederic H. Bertrand, Robert G. Clarke,
Mary Alice McKenzie
NOMINEE FOR TERM EXPIRING IN YEAR 2001:
Timothy S. Cobb
[ ] FOR ALL NOMINEES [ ] WITHHOLD FROM ALL NOMINEES
[ ] ___________________________________________________________
To withhold vote for any nominee, write that nominee's name
above.
(3) In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting. IF ANY SUCH
OTHER BUSINESS IS PRESENTED FOR ACTION AT THE MEETING, IT IS THE
INTENTION OF THE PROXIES TO VOTE ALL SUCH MATTERS IN ACCORDANCE WITH
THEIR BEST JUDGMENT.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Please vote, sign, date and return the proxy card promptly using the
enclosed envelope.
Please sign exactly as your name(s) appear. Joint owners each must
sign. When signing as attorney, trustee, executor, administrator or
guardian, please give full title as such. If a corporation, please sign
in full corporate name and indicate the signer's office. If a
partnership, please sign in partnership name by authorized person.
Signature:_______________________Date:_______
Signature:______________________ Date:_______
