Securities and Exchange Commission
450 5th Street, N.W.
Washington, D.C. 20549
RE: CHITTENDEN CORPORATION DEFINITIVE PROXY MATERIAL
REGISTRATION NO. 0-7974
To Whom It May Concern:
Pursuant to the requirements of Rule 14a-6(c) under the Securities
Exchange Act of 1934, as amended, there are as follows the definitive proxy
statement and of the form of proxy to be used by management of Chittenden
Corporation, Two Burlington Square, Burlington, Vermont 05402
(the "Corporation"), in connection with the 1994 Annual Meeting of the
Corporation's stockholders.
Kindly acknowledge receipt of this filing by notifying the sender via
Compuserve.
Very Truly yours,
Eugenie J. Fortin
Assistante Corporate Secretary
NOTICE OF 1994
ANNUAL MEETING
AND
PROXY STATEMENT
Your Vote is Important
ANY STOCKHOLDER WHO DOES NOT EXPECT TO ATTEND THE MEETING IN PERSON
SHOULD COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE PROXY IN THE
ENVELOPE FURNISHED FOR THIS PURPOSE. IT IS NECESSARY THAT ENOUGH
SHARES BE REPRESENTED BY PROXY TO CONSTITUTE, WITH THE SHARES
PRESENT IN PERSON, A LEGAL QUORUM (A MAJORITY OF THE ISSUED AND
OUTSTANDING STOCK) SO THAT A MEETING CAN BE HELD.
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The annual meeting of the Stockholders of Chittenden Corporation
will be held on April 20, 1994 at 4:00 p.m. in Salon 1 of the
Emerald Ballroom of the Sheraton Burlington Hotel and Conference
Center, Burlington, Vermont. The Ballroom is on the second floor
of the Sheraton, which is at the intersection of Rt. 2 (Williston
Road) and Interstate 89, Exit 14W. There are direction signs to
conference parking and an elevator to the second floor. The annual
meeting is for the purpose of considering and acting upon:
1. The election of Directors as provided by the By-Laws.
2. The approval of the appointment of Arthur Andersen & Co.
as independent public accountants for 1994.
3. The approval of the Amended and Restated Articles of
Incorporation.
4. Any other business which may properly come before the
meeting or any adjournment thereof.
By order of the Board of Directors.
F. Sheldon Prentice
Secretary
March 18, 1994
CHITTENDEN CORPORATION
Two Burlington Square
Burlington, Vermont 05401
March 18, 1994
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
APRIL 20, 1994
SOLICITATION AND REVOCATION OF PROXIES
This proxy statement is furnished to the Stockholders of CHITTENDEN
CORPORATION (the "Corporation"), a corporation organized under the
laws of the State of Vermont, in connection with the annual meeting
of the Stockholders of the Corporation to be held on Wednesday,
April 20, 1994, at 4:00 p.m., in Salon 1 of the Emerald Ballroom of
the Sheraton Burlington Hotel and Conference Center, Burlington,
Vermont, at the intersection of Rt. 2 (Williston Road) and
Interstate 89, Exit 14W.
A proxy card is furnished by the Corporation. This proxy is
being solicited by the Board of Directors of the Corporation for
use at the April 20, 1994 annual meeting of its Stockholders and at
any adjournment thereof. A proxy duly executed and returned by a
Stockholder will be voted in accordance with the recommendations of
the Board of Directors contained herein. As to other matters, if
any, to be voted upon, the persons named in the proxy will take
such action as the Board of Directors may deem advisable.
A Stockholder who signs and returns a proxy may revoke it at
any time before it s exercised by notifying the Secretary of the
Corporation in writing or by attending the meeting and voting in
person.
This Proxy Statement and the Corporation's Annual Report,
which contains financial statements, will be mailed on or about
March 18, 1994 to Stockholders of record on March 4, 1994. The
Annual Report is not to be regarded as proxy soliciting material.
All expenses of the solicitation of proxies are being borne by
the Corporation. It is expected that solicitations will be made
primarily by mail, but regular employees or representatives of the
Corporation may also solicit proxies by telephone, telegraph and in
person and arrange for nominees, custodians and fiduciaries to
forward proxies and proxy material to their principals at the
expense of the Corporation. The Corporation also has retained
Kissel-Blake Inc. to assist with the solicitation of proxies for a
fee of $5,000 plus reimbursement of out-of-pocket expenses.
<PAGE>
VOTING SECURITIES
The Board of Directors of the Corporation has fixed the close of
business on March 4, 1994 as the record date for the determination
of Stockholders entitled to notice of and to vote at the annual
meeting. Each share of common stock will be entitled to one vote.
As of February 1, 1994 there were 6,220,458 shares of common
stock outstanding and entitled to vote.
As of February 1, 1994 the Directors and Officers of the
Corporation, including other members of senior management
owned beneficially 486,678 shares, or approximately 7.824 percent,
of the outstanding common stock of the Corporation.
No one is the beneficial owner of more than five percent of
any class of the Corporation's voting securities.
The Corporation's principal subsidiary, Chittenden Trust
Company (the "Bank"), held in a fiduciary or representative
capacity, in the aggregate, approximately 440,466 shares, or 7.08
percent, of the outstanding shares of common stock of the
Corporation as of December 31, 1993. The Corporation and the Bank
disclaim beneficial ownership of these shares.
ELECTION OF DIRECTORS OF CHITTENDEN CORPORATION
(Item 1 on Proxy Card)
CLASSIFIED BOARD OF DIRECTORS
The number of Directors, which is presently set at 12, is
established periodically by the Board. All Directors are elected
for staggered 3 year terms so that approximately one third of the
Directors are elected at each annual meeting. At the annual
meeting 3 Directors will stand for election to serve for a term of
3 years unless their retirement, pursuant to the Corporation's By-
Laws, occurs prior to the expiration of 3 years.
It is the intention of the persons named in the proxy to vote
for the nominees named for the terms indicated.
Election of Directors requires a majority vote. The 3
nominees for Directors and the 9 continuing Directors are listed on
the following pages with brief statements of their principal
occupations and other information. All of the nominees are serving
currently on the Board of Directors of the Corporation. According
to information supplied by them, these persons, as of February 1,
1994, owned beneficially the number of shares of common stock of
the Corporation indicated.
DIRECTOR NOMINEES
THE FOLLOWING PERSONS HAVE BEEN NOMINATED TO SERVE AS DIRECTORS FOR
TERMS TO EXPIRE IN 1997.
<PAGE>
ROBERT E. CUMMINGS, JR. DIRECTOR SINCE
1974
Picture Mr. Cummings, 61, has been a practicing attorney in
(See Pg.5) Bennington, Vermont, since graduation from
Georgetown University Law School in 1960. He is a
former Vermont Commissioner of Banking andInsurance,
a past Trustee of the Vermont Soldiers'Home, and a former State Senator
from Bennington County. He became a Director of the Bank in 1973,
following acquisition of the County National Bank of Bennington. He is
retained from time to time for legal services by the Bennington office
of the Bank.
SHARES OWNED: 3,375
PERCENT: .054
MARVIN B. GAMEROFF DIRECTOR SINCE
1980
Picture Mr. Gameroff, 61, is founder of his family's
(See Pg.5) investment trust which has real estate, hotel and
restaurant holdings in Vermont. He is involved in
financial activities in Canada and the United
Kingdom. He received a law degree from McGill
University in 1957. He was on the President's Council for Business
Administration at the University of Vermont, and he is currently on
the Executive Committee of the McGill University Graduates Society
(Great Britain), the Oxford University Foundation and the Vegetarian
Society of Great Britain. He was a Director of Mountain Trust Company,
Stowe, Vermont, until that company became a subsidiary of the Corporation
in 1980, at which time he became a Director of Chittenden Bank.
Mr. Gameroff is a citizen of Canada. He lives in London, England and
maintains a vacation home in Stowe.
SHARES OWNED: 205,868
PERCENT: 3.310
PAUL A. PERRAULT DIRECTOR SINCE
1990
Picture Paul A. Perrault, 42, is President and Chief
(See Pg.5) Executive Officer of Chittenden Corporation and
Chittenden Bank. Mr. Perrault joined the
Corporation on July 18, 1990. Prior to joining
Chittenden, he was President of Bank of New England-
Old Colony, Providence, Rhode Island. Before becoming President,
Mr. Perrault was Executive Vice President and Senior Loan Officer at Bank of
New England-Old Colony. Prior to that, he served in a variety of commercial
banking positions in Rhode Island and Boston. He is a 1973 graduate of Babson
College and receive his M.B.A. from Boston College School of Management in
1975. He is a member of Vermont Business Roundtable, Director of Lake Champlain
Regional Chamber of Commerce, Director of the Greater Burlington Industrial
Corporation, member of the Advisory Board of Fleming Museum and a Trustee of
Champlain College. Mr. Perrault has been a Director of the Bank since 1990.
SHARES OWNED: 9,258
PERCENT: .149
<PAGE>
CONTINUING DIRECTORS
FREDERIC H. BERTRAND
TERM EXPIRES 1995 DIRECTOR SINCE
1989
Picture Mr. Bertrand, 56, is Chairman of the Board and
(See Pg. 6) Chief Executive Officer of National Life Insurance
Company which he joined in 1970 as an attorney. He is a
graduate of Norwich University and the College of
William and Mary Law School. Mr. Bertrand is a
director and Immediate Past Chairman of the American Council of
Life Insurance. He is a Director and Vice Chairman of the Vermont
Business Roundtable and a Director of Central Vermont Public Service
Corporation, Union Mutual Fire Insurance Company, New England Guaranty
Insurance Company, Central Vermont Economic Development Corporation and
several subsidiaries of National Life Insurance Company. Mr. Bertrand has
been a Director of the Bank since 1989.
SHARES OWNED: 473
PERCENT: .008
DAVID M. BOARDMAN DIRECTOR SINCE
1978
TERM EXPIRES 1995
Picture Mr. Boardman, 59, is Senior Vice President of
(See Pg. 6) Hickok and Boardman, Inc., and President of
Associates in Financial Planning Inc., an
affiliate of Hickok and Boardman Financial Network,
with which he has been associated since 1956. He
has also been a representative of National Life Insurance Company
since 1956. He is a Chartered Life Underwriter, a Life and
Qualifying Member of the Million Dollar Round Table and a Certified
Financial Planner. He is a Trustee of Vermont Catholic Charities
and Past Chairman of the Burlington City Retirement Board and a
member of The Burlington Boys and Girls Club Development Steering
Committee. He is past Chairman of the Board of Champlain College,
where he has been a Trustee since 1974. He is a member of the
American Society of Chartered Life Underwriters, Institute of
Certified Financial Planners and the Association of Advanced Life
Underwriters. He has been a Director of the Bank since 1978.
SHARES OWNED: 16,307
PERCENT: .262
<PAGE>
PAUL J. CARRARA DIRECTOR SINCE
1982
TERM EXPIRES 1996
Picture Mr. Carrara, 57, is President of J. P. Carrara
(See Pg.6) & Sons, Inc., a ready-mixed and precast concrete
supplier located in Middlebury, Vt. He is also
President of Otter Valley Equipment, Inc., an
equipment leasing firm in Rutland. He has been a
Director of the Bank since 1982.
SHARES OWNED: 2,400
PERCENT: .039
EUGENE P. CENCI DIRECTOR SINCE
1980
TERM EXPIRES 1996
Picture Mr. Cenci, 54, has been Co-owner and Executive Vice
(See Pg. 7) President of Sheraton Burlington Hotel and
Conference Center since 1975. In 1987, he also
became Executive Vice President of Ramada Inn
Burlington. From 1963 until 1975 he was associated
with Holiday Inns, Inc., the last ten years as Innkeeper of the
Burlington, Vermont Holiday Inn. In 1990 the Vermont Lodging and
Restaurant Association awarded him the Borden E. Avery Innkeeper of
the Year Award in recognition of outstanding service to the hospitality
industry and displaying the highest standards of innkeeping. In 1992,
he became a director of Wake Robin Corporation, a continuing care
retirement community. Mr. Cenci chairs the Bank's Trust Committee and
has been a Director of the Bank since 1980.
SHARES OWNED: 2,375
PERCENT: .038
PHILIP A. KOLVOORD DIRECTOR SINCE
1977
TERM EXPIRES 1996
Picture Mr. Kolvoord, 61, is a partner in the law firm of
(See Pg. 7) Kolvoord, Overton & Wilson in Essex Junction,
Vermont. He received his law degree from the
University of Virginia and commenced his law
practice in Vermont in 1958. He is a former
President of the Vermont Trial Lawyers Association and the
Chittenden Country Bar Association. He is a past Chairman of the
Judicial Nominating Board and the Professional Conduct Board. He
has been a Director of the Bank since 1977. Mr. Kolvoord and other
members of his firm are retained from time to time for legal
services by the Essex Junction office of the Bank.
SHARES OWNED: 7,148
PERCENT: .115
<PAGE>
JAMES C. PIZZAGALLI DIRECTOR SINCE
1980
TERM EXPIRES 1996
Picture Mr. Pizzagalli, 49, is Chairman and Chief Executive
(See Pg. 7) Officer of Pizzagalli Construction Company. He
joined the company in 1969 after graduating from
the University of Vermont and Boston University Law
School. He is a Director of the Associated General
Contractors of America and of the AGC Education and Research
Foundation. Mr. Pizzagalli chairs the Bank's Executive Committee.
He has been a Director of the Bank since 1980.
SHARES OWNED: 114,546
PERCENT: 1.841
BARBARA W. SNELLING DIRECTOR SINCE
1974
TERM EXPIRES 1996
Picture Mrs. Snelling, 66, Chair of the Board of both the
(See Pg. 8) Corporation and the Bank since 1990, is Lieutenant
Governor of Vermont and President of Snelling &
Kolb, Inc., fund-raising consultants, located in
South Burlington, Philadelphia and Boston. She was
formerly Vice President for Development and External Affairs at the
University of Vermont. She served a six-year term on the State Board
of Education, was President of the Vermont State School Directors
Association, Chair of the Shelburne and Champlain Valley School Boards,
a Trustee of Champlain College, and President of Chittenden County United
Way. Mrs. Snelling is currently on the Board of the Vermont Community
Foundation, the Shelburne Museum, and Radcliffe College. She has been a
Director of the Bank since 1972.
SHARES OWNED: 43,300
PERCENT: .696
PALL D. SPERA DIRECTOR SINCE
1985
TERM EXPIRES 1995
Picture Mr. Spera, 49, is owner of Pall Spera Company,
(See Pg. 8) Realtors and Pall Spera Company, Investment
Securities of Stowe. He is a Director and past
President of the Vermont Association of Realtors
who named him Realtor of the Year in 1980, and is a
Director of the National Association of Realtors. Mr. Spera is a
member of the American Association of Certified Appraisers,
and Trustee of Vermont Catholic Charities. He serves on the
Advisory Board of the Helen Day Art Center and is a Trustee of
Copley Hospital. Mr. Spera became an Incorporator and a charter
Director of Mountain Trust Company in 1977, was elected Vice
Chairman in 1978, served as Acting President in 1980-1981, and was
Acting Chairman of the Board prior to its merger with Chittenden
Trust Company. Mr. Spera chairs the Bank's Credit Committee. He
has been a Director of the Bank since 1985.
SHARES OWNED: 12,500
PERCENT: .201
<PAGE>
MARTEL D. WILSON, JR. DIRECTOR SINCE
1983
TERM EXPIRES 1995
Picture Mr. Wilson, 57, is Vice President and Chief
(See Pg. 9) Financial Officer and a Director of S-K-I Ltd. Mr.
Wilson is also Vice President and Chief Financial
Officer and Director of Killington Ltd. and Mount
Snow Ltd. which are wholly-owned subsidiaries of
S-K-I Ltd. and which operate the Killington and Mount Snow ski areas,
respectively. He graduated from the University ofColorado and received an
M.B.A. degree from Cornell University. Mr. Wilson is also a Director and
Chairman of the Board of Building Material Distributors, Inc. of
Stockton, California, a building material wholesaler in California
and Nevada. He is a past President and Director of the Rutland
Region Chamber of Commerce, a past Trustee of the College of St. Joseph
the Provider, a past President and Director of the Rutland Regional
Medical Center, a member of the Investment Committee and is a past
Chairman of the Board of Trustees of Comprehensive Health Resources,
a health care holding company. Mr. Wilson chairs the Bank's Audit
Committee. Mr. Wilson has been a Director of the Bank since 1983.
SHARES OWNED: 10,301
PERCENT: .166
<PAGE>
NOTES REGARDING DIRECTORS' STOCK OWNERSHIP
Beneficial ownership is determined in accordance with Rule 13d-3
under the Securities Exchange Act of 1934. Unless otherwise
indicated, the listed persons have sole voting power and sole
investment power with respect to the shares of common stock set
forth.
(1) The share ownership of the following Directors includes shares
owned by spouses or adult children living in their home in the
amounts indicated parenthetically: Mr. Boardman (43); Mr. Cenci
(1,143); Mr. Kolvoord (5263); and Mr. Wilson (913). Beneficial
ownership of these shares is disclaimed.
(2) Mr. Pizzagalli's share ownership includes 288 shares held as
custodian for his minor son. Beneficial ownership of these shares
is disclaimed. Also included are 76,250 shares held by Mr.
Pizzagalli with his brothers in the name of Pizzagalli Brothers
Company and 2,975 shares held by Pizzagalli Construction Company,
a company in which Mr. Pizzagalli holds a minority interest.
(3) Mr. Gameroff's share ownership includes 205,498 shares held by
The GamBros. Trust I. Mr. Gameroff disclaims any beneficial
interest in the Trust. The beneficial owners are S. David Gameroff
and Simon Sperber Gameroff of Montreal, Canada, the adult children
of Mr. Gameroff. Mr. Gameroff has no control (direct or indirect)
of The GamBros. Trust I.
<PAGE>
MEETINGS OF THE BOARD OF DIRECTORS AND ITS AUDIT AND EXECUTIVE
COMMITTEES
The Board of Directors of the Corporation and the Bank held 15
meetings during the calendar year 1993. No Director attended fewer
than 75% of the aggregate of the meetings of the Board and the
total number of meetings held by committees of the Board on which
they served during 1993.
AUDIT COMMITTEE
The Corporation has a standing Audit Committee comprised of Messrs.
Bertrand, Boardman, Perrault, ex officio, Wilson (Chair), and Mrs.
Snelling. The Committee held 3 meetings during 1993 jointly with
the internal auditor, including a meeting with the independent
public accountants of the Corporation and its subsidiaries.
The Audit Committee is charged with determining the adequacy
of controls and with monitoring the reliability of financial
information by consultation with the independent public accountants
and the internal auditors.
EXECUTIVE COMMITTEE
The Corporation has a standing Executive Committee comprised of
Messrs. Gameroff, Perrault, ex officio, Pizzagalli (Chair), Spera,
Wilson and Mrs. Snelling. The Committee held 15 meetings during
1993.
The Executive Committee is responsible for strategic planning,
investments, officer and non-officer compensation and Directors'
succession, among other duties. In this connection, the Executive
Committee considers and recommends nominees for election to the
Board as vacancies occur. Stockholders may make suggestions for
nominees by submitting the nominee's name to the Committee in
writing.
<PAGE>
REMUNERATION OF DIRECTORS AND OFFICERS
The Corporation does not presently remunerate its officers, nor
does it provide retirement benefits. The Corporation compensates
its Directors, other than Mr. Perrault, in the amount of $450
quarterly and $100 per telephone conference meeting.
All of the officers of the Corporation serve and are
remunerated as officers of the Bank. Directors of the Bank, other
than Mr. Perrault, are paid an annual retainer of $3,000 without
regard to attendance and $400 per meeting attended for monthly
meetings and $100 per telephone conference meeting of the Board.
Seven Directors of the Bank also serve as members of one of
the Branch Advisory Boards of the Bank. These Directors receive
additional fees of $150 per meeting for attendance at monthly
meetings and $300 per meeting for attendance at quarterly meetings
of their respective Branch Advisory Boards.
Directors serving on the various Bank committees receive a
meeting fee of $300 if the committee meeting is held on a Board
meeting day and $400 if the committee meeting is held on a day
other than a Board meeting day.
The Chair of the Board of the Bank receives an annual retainer
of $5,000. The Chair of the Executive Committee receives an annual
retainer of $2,000 and the Chair of other Committees each receive
an annual retainer of $1,000.
The payment of Directors' fees by the Corporation and the Bank
may be deferred by a Director pursuant to a Deferred Compensation
Plan, adopted April, 1972, and amended December, 1976, August,
1980, March 1983, May, 1986, April, 1987, December, 1989 and
January, 1992.
<PAGE>
REPORT OF COMMITTEE RESPONSIBLE FOR COMPENSATION
The Corporation's executive compensation program continues to be
administered by the Executive Committee of the Board with all
recommendations receiving approval by the full Board. Executive
Committe members are: Messrs. Pizzagalli (Chair), Gameroff, Spera,
Wilson and Mrs. Snelling.
The compensation philosophy which governs the actions of the
Committee continues to be one which emphasizes a strong tie between
performance and compensation. Additionally, in designing
compensation programs, the committee strives to balance rewards for
short-term and long-term performance of the individual, the Bank
and the Corporation and to encourage executive ownership of company
stock.
Awards under the Executive Management Incentive Compensation Plan
(EMICP) are primarily contingent upon the Corporation meeting goals
which are established at the beginning of each calendar year.
Specific awards are then determined based upon the performance of
each executive. Additionally, as was reported in the 1992 report,
awards are paid out over a four-year period and are a combination
of cash and stock. Currently awards are comprised of 25%
corporation stock and 75% cash. In order for awards to be realized
in succeeding years, individual and corporate performance goals
which are established in January of each year must be met.
Adjustments to base salaries continue to be driven by market
comparisons with adjustments made only as markets dictate in order
to fairly and competitively remunerate executive management.
In keeping with this philosophy, the Executive Committee, using
comparative information on CEO compensation in banks of similar
size locally and regionally, and other publicly-held corporations,
recommended a base adjustment of $15,000/year to Mr. Perrault's
compensation in 1993, bringing his base salary from $175,000/year
to $190,000/year.
As a participant in the EMICP, Mr Perrault's award level was set at
60% of salary based upon profits of $10MM or greater. Therefore,
in February 1994, upon the Corporation meeting such goal, Mr.
Perrault received a payment of $42,750 cash and 1,040 shares of
corporation stock. This payment follows plan guidelines which
allow for 50% of payment to be made in the first year.
Additionally, Mr. Perrault earned and received payment under
guidelines established in 1991 and 1992 of $10,500 and $8,750 plus
810 shares; representing 15% and 25%, respectively, of the awards
established in those years, payable upon attainment of 1993 goals.
<PAGE>
Additionally, in response to changes in regulations governing th
level of benefit payable under a qualified retirement plan, and to
establish an additional performance based incentive, the Board
approved the establishment of a Supplemental Executive Retirement
Plan (SERP) for Mr. Perrault. This plan was established as a
defined contribution SERP where contributions are accrued based
upon the Bank's Return on Equity (ROE) in accordance with a
schedule which establishes an ROE of 10% as the minimum threshold
at which any contribution will be made. Mr. Perrault is not
eligible to receive any benefit from this plan should he terminate
his employment with the Corporation, except in the event of death
or disability, prior to attaining the age of 55. The Corporation's
ROE for 1993 was 11.88%. In accordance with the terms of the
SERP, an expense of $36,169.50 was incurred by the Corporation.
<PAGE>
<TABLE>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
LONG TERM COMPENSATION
<CAPTION>
<S>
(a) (b) (c) (d) (e)
Other
Name Annual
and Compen-
Principal sation
Position Year Salary($) Bonus($) ($)
<C> <C> <C> <C>
Paul A. Perrault 1993 $182,038 -0- -0-
President/CEO 1992 $175,000 -0-
1991 $175,000 -0-
Jerry R. Condon 1993 $110,000 -0- $7,675.74(1)
Chief Investment 1992 $ 12,692 -0-
Officer 1991 -0- -0-
Lawrence W. DeShaw 1993 $109,615 $6,562.50 -0-
Executive Vice President 1992 $105,000 -0-
1991 $102,000 $10,795.00
John W. Kelly 1993 $105,000 $6,562.00 -0-
Executive Vice 1992 $105,000 -0-
President 1991 $105,000 -0-
William R. Heaslip 1993 $102,600 -0- -0-
Executive Vice 1992 $102,600 -0-
President 1991 $102,600 -0-
Awards PAYOUTS
(f) (g) (h)
Restricted Securities Long-Term
Stock Underlying Incentive
Year Award(s) Options (#) Plan
(LTIP)
($)(2) Payouts
($)(3)
Name
and
Principal
Position
Paul A. Perrault 1993 -0- -0- $85,000.00
President/CEO 1992 -0- 125,000 $52,500.00
1991 -0- 1,875 $35,000.00
Jerry R. Condon 1993 -0- -0- -0-
Chief Investment 1992 -0- 1,875 -0-
Officer 1991 -0- -0- -0-
Lawrence W. DeShaw 1993 -0- -0- $38,787.50
Executive Vice 1992 -0- 6,250 $21,000.00
President 1991 -0- 1,875 $15,750.00
John W. Kelly 1993 -0- -0- $33,337.50
Executive Vice 1992 -0- -0- $18,375.00
President 1991 -0- -0- $10,500.00
William R. Heaslip 1993 -0- -0- $19,750.50
Executive Vice 1992 -0- -0- $17,955.00
President 1991 -0- 1,250 $13,660.00
(i)
All
other
Compensation
($)(4)
Paul A. Perrault 1993 $14,293.41
President/CEO 1992
1991
Jerry R. Condon 1993 -0-
Chief Investment 1992
Officer 1991
Lawrence W. DeShaw 1993 $8,233.40
Executive Vice 1992
President 1991
John W. Kelly 1993 $7,725.02
Executive Vice 1992
President 1991
William R. Heaslip 1993 $8,233.40
Executive Vice 1992
President 1991
</TABLE>
<PAGE>
[FN]
SUMMARY COMPENSATION TABLE FOOTNOTES
(1) The executive received $7,675.74 to cover taxes on moving
expenses incurred in 1993.
(2) At fiscal year-end 1993, Mr. Perrault had 3,125 restricted
shares valued at $56,640.63; Mr. DeShaw had 1,250 restricted
shares valued at $22,656.25; Mr. Kelly had 1,875 restricted
shares valued at $33,984.38, and Mr. Heaslip had 1,251
restricted shares valued at $22,674.38. Dividends are payable
during the restriction period.
(3) The 1993 Long-Term (LTIP) payout reflects 50% of the 1993
award that was earned in 1993, 25% of the 1992 award that was
earned in 1993 and 15% of the 1991 award that was earned in
1993. A portion of the 1993 award will be in stock of the
company. The 1992 LTIP payout reflects 50% of the 1992 award
earned in 1992 and 25% of the 1991 award that was earned in
1992. The 1991 LTIP payout reflects 50% of the 1991 award
that was earned in 1991; except in the case of Mr. Heaslip's
whose 1991 payout also represented 10% payment for his award
granted in 1988 and earned in 1991.
(4) Totals in this column are comprised of: 401(k) corporate match
of 35% and additional profit sharing match of 35% shown as one
total and appreciation on stock awards from the LTIP that were
earned in 1993. The figures, respectively, are as follows:
Mr. Perrault $5,941 and $8,352.41; Mr. DeShaw $4,604.04 and
$3,629.36; Mr. Kelly $4,410.12 and $3,314.90; and Mr. Heaslip
$4,309.24 and $2,201.65.Footnotes of Compensation Table
<PAGE>
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
<S> <C> <C> <C> <C>
(a) (b) (c) (d) (e)
Individual Grants
Number of % of Total
Securities Options
Underlying Granted to
Options Employees Exercise
Granted(#) in Fiscal or Base Expiration
Year Price($/Sh) Date
Name
Paul A. Perrault -0- -0- -0- -0-
Jerry R. Condon -0- -0- -0- -0-
Lawrence W. DeShaw -0- -0- -0- -0-
John W. Kelly -0- -0- -0- -0-
William R. Heaslip -0- -0- -0- -0-
Potential
Realizable Value at
Assumed Annual
Rates of Stock Price Appreciation
for Option Term
---------------------------------
(f) (g) (h)
0%($) 5%($) 10%($)
Name
Paul A. Perrault -0- -0- -0-
Jerry R. Condon -0- -0- -0-
Lawrence W. DeShaw -0- -0- -0-
John W. Kelly -0- -0- -0-
William R. Heaslip -0- -0- -0-
</TABLE>
<PAGE>
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
(a) (b) (c) (d) (e)
Value of
Number of Unexercised
Unexercised In-the-Money
Shares Options at Options at
Acquired Value ($)Fiscal Fiscal Year-
On Exercise(#) Realized Year-End(#) End($)
Name
<S> <C> <C> <C> <C>
Paul A. Perrault -0- -0- 133,125 $363,171.88
Jerry R. Condon -0- -0- 1,875 $11,859.38
Lawrence W. DeShaw -0- -0- 11,250 $97,281.26
John W. Kelly -0- -0- 3,125 $41,015.63
William R. Heaslip -0- -0- 9,375 $71,359.38
</TABLE>
<PAGE>
<TABLE>
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
<CAPTION>
(a) (b) (c)
Performance
Number of or Other
Shares, and Period Until
Other Maturation or
Name Rights(#/$)(1) Payout
<S> <C> <C> <C>
Paul A. Perrault 1,041 sh/$42,750 3 years
Jerry R. Condon -0- sh/$0
Lawrence W. DeShaw 502 sh/$20,625.00 3 years
John W. Kelly 431 sh/$17,718.75 3 years
William R. Heaslip 187 sh/$7,695.00 3 years
Estimated Future Payouts(2)
Under Non-Stock Price Based Plan
-----------------------------------
(a) (d) (e) (f)
Threshold Target Maximum
($) ($) ($)
Name
Paul A. Perrault -0- $57,000.00
$57,000.00
Jerry R. Condon -0- $0.00 $0.00
Lawrence W. DeShaw -0- $27,500.00
$27,500.00
John W. Kelly -0- $23,625.00
$23,625.00
William R. Heaslip -0- $10,260.00
$10,260.00
<FN>
(1)Figures shown represent unearned portion of 1993 Executive
Management Incentive Compensation Plan (EMICP) awards. 50% of 1993
awards were earned in 1993 based upon Bank profitability levels and
are reported in Table 1, column h. The remaining portion will be
earned on a schedule of 25%, 15% and 10% per year for each of the
next three years contingent upon Chittenden meeting profit goals
established by the Board in January of each year.
(2) Award levels are established in the first year of each four-
year performance cycle. Payouts are based upon Chittenden meeting
profit goals which are established annually. Payout levels do not
vary once established at the beginning of each four-year cycle. A
portion of the estimated future payouts will be in stock of the
Company.
<PAGE>
CHANGE OF CONTROL AGREEMENT
The Corporation has entered into severance agreements with Mr. Perrault
as well as Messrs. Condon, DeShaw, Kelly and Heaslip. These agreements are
triggered by a change of control and a subsequent termination of employment
under certain circumstances. Payments are equal to a multiple of annual
salary. For Mr. Perrault such payments would equal 2.99 times annual salary,
and for Messrs. Condon, DeShaw, Kelly and Heaslip 1, 1.5, and 2 times,
respectively.
EMPLOYEES' PENSION PLAN
The Chittenden Corporation Pension Plan (the "Plan") covers
employees of the Bank who work 1,000 hours per year and have
attained age 21.
The following table illustrates the annual pension benefits
payable under the Plan for various representative combinations of
preretirement remuneration and years-of-service classifications
(assuming retirement at age 65.)
</TABLE>
<TABLE>
ESTIMATED ANNUAL PENSION BENEFITS (1)
<CAPTION>
Final Five-Year
Average Annual Years of Service at Age 65
Compensation 10 15 20 25+
<S> <C> <C> <C> <C> <C>
$ 50,000 $8,861 $13,292 $17,722 $22,153
$ 75,000 $14,298 $21,447 $28,596 $35,744
$100,000 $19,798 $29,697 $39,596 $49,494
$150,000 $30,798 $46,197 $61,596 $76,994
$200,000 $41,798 $62,697 $83,596 $104,494
<FN>
(1) For a participant turning age 65 in 1994.
Final average earnings is the highest 60 consecutive months of
compensation (item (c,d,f and h) from the Summary Compensation
Table) during the 10-year period preceding an employee's retirement
(up to age 65), and the employee's years of credited service (up to
25 years).
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.
With respect to the Pension Plan described above, the credited
years of service at December 31, 1993 for those individuals named
in the Summary Compensation Table were as follows: Mr. Perrault,
3.452 years; Mr. Condon, 1.0195 years; Mr. DeShaw, 23 years; Mr.
Kelly, 3.044 years and Mr. Heaslip, 5.760 years.
<PAGE>
Stock Performance Graph
This will be filed on Form SE.
<PAGE>
INTERESTS IN CERTAIN TRANSACTIONS
The Corporation's officers, its Directors and their associates have
had, and can be expected to have in the future, financial
transactions with the Bank. As of December 31, 1993, the aggregate
of loans by the Bank outstanding to the Corporation's officers,
Directors and their associates amounted to $14,710,132.
During 1993, loans by the Bank to its officers and Directors
and their associates and to the officers, Directors of the
Corporation, and their associates, were made in the ordinary course
of business on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for
comparable transactions with other persons.
Material transactions during 1993 between the Bank and the
Corporation's officers, its Directors, and their associates
occurred in the ordinary course of business and were on terms
equivalent to those prevailing at the time for comparable
transactions with other, unrelated persons.
SELECTION OF INDEPENDENT PUBLIC ACCOUNTS
(Item 2 on Proxy Card)
The Board of Directors of the Corporation, in accordance with the
recommendation of its Audit Committee, none of whom is an employee
of the Corporation, has appointed Arthur Andersen & Co. as
independent public accountants of the Corporation for the year
ending December 31, 1994, subject to ratification by the
stockholders at the annual meeting. The Corporation has been
advised by Arthur Andersen & Co. that neither the firm nor any of
their associates has any relationship with the Corporation or any
affiliate of the Corporation. If the foregoing appointment is
rejected, or if Arthur Andersen & Co. shall decline to act or
otherwise become incapable of acting, or if their appointment is
otherwise discontinued, the Board of Directors will appoint other
independent auditors whose appointment for any period subsequent to
the 1995 Annual Meeting of Stockholders shall be subject to
approval by the Stockholders at that meeting.
Arthur Andersen & Co., independent public accountants of the
Corporation for the year ended December 31, 1993, will have
representatives at the meeting who will have an opportunity to make
a statement and will be available to respond to appropriate
questions.
During 1993, ARTHUR ANDERSEN & CO. examined the consolidated
financial statements of the Corporation and its subsidiaries and
also provided other audit services to the Corporation and to
certain of its subsidiaries in connection with Securities and
Exchange Commission filings and review of periodic financial
statements.
RECOMMENDATION
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR OF
THE SELECTION OF ARTHUR ANDERSEN & CO. AS INDEPENDENT PUBLIC
ACCOUNTANTS FOR THE YEAR ENDING DECEMBER 31, 1994.
Approval of the Amended and Restated Articles of Incorporation
(Item 3 on Proxy Card)
Introduction
The Board of Directors of the Corporation has approved and
recommends adoption of a proposal to amend and restate the
Corporation's Articles of Incorporation as set forth in the
Articles of Amendment and Restatement, a copy of which is attached
to this Proxy Statement as Exhibit A (the "Restated Articles").
The Restated Articles would amend the existing Articles of
Incorporation in the following respects: (1) to increase the
authorized common stock of the Corporation from 10,000,000 to
30,000,000 shares; (2) to delete from the Articles of Incorporation
the initial series of preferred stock designated as Cumulative,
Adjustable Rate Preferred Stock, Series A; (3) to provide for a
classified Board of Directors with staggered three-year terms, as
currently authorized by the Corporation's By-Laws; (4) to delete
the 20% quorum requirement in the Articles of Incorporation. As
set forth below, the Board of Directors believes that the best
interests of the Corporation and its stockholders will be served by
adopting these amendments and restating the Articles of
Incorporation, as indicated. Under Vermont law, the affirmative
vote of at least the majority of the outstanding shares of common
stock of a Corporation is required for approval of the Restated
Articles. The Restated Articles have been approved by the
Corporation's Board of Directors, which unanimously recommends a
vote in favor of the proposal. If approved by the stockholders at
the annual meeting, the Restated Articles will become effective
upon filing with the Vermont Secretary of State.
EXPLANATION OF THE PROPOSED AMENDMENTS
A discussion of the principal reasons that the Board of Directors
has recommended each of the proposed amendments is set forth below.
1. Increase in Authorized Common Stock. Under the Restated
Articles, the authorized common stock of the Corporation
would be increased from 10,000,000 to 30,000,000 shares.
At February 1, 1994, there were 6,220,458 shares of the
Corporation's common stock issued and outstanding. The
proposed increase would give the Corporation flexibility
to issue additional shares of common stock, when
considered by the Board of Directors to be in the
Corporation's best interests.
2. Deletion of Series A Preferred Stock. Under the
existing Articles of Incorporation, the Corporation has
the authority to issue 200,000 shares of preferred stock,
and the Board of Directors is authorized to divide the
preferred stock into series and, within the limitations
provided by law, to fix and determine by resolution the
designation, the number of shares, and the relative
rights and preferences of any series so established. On
December 21, 1983, following approval by the Board of
Directors, the Corporation filed a Statement and
Resolution with the Vermont Secretary of State
establishing an initial series of preferred stock
designated as the Cumulative Adjustable Rate Preferred
Stock, Series A (the "Series A Preferred Stock"). The
Corporation subsequently issued 60,000 shares of the
Series A Preferred Stock, but all of the Series A
Preferred Stock has since been redeemed and canceled on
the books of the Corporation. Because none of the Series
A preferred Stock remains outstanding, and the
Corporation has no intention of issuing additional shares
of Series A Preferred Stock, the Board of Directors
desires to simplify the Restated Articles by deleting
reference to the Series A Preferred Stock in the Articles
of Incorporation.
3. Staggered Board of Directors. On January 16, 1985, the
Board of Directors adopted amendments to the
Corporation's By-Laws authorizing a classified Board of
Directors with staggered three-year terms. As a result
of these By-Law Amendments, since the annual meeting of
the Corporation in 1985 the Board of Directors has been
divided into three categories: Category I consisting of
four Directors; Category II consisting of four Directors;
and Category III consisting of five Directors. Directors
in all three categories are elected to hold office for
terms of three years, or until his or her successor is
elected and qualified or until his or her earlier death,
resignation or removal, and only one category of
Directors stands for election at each annual meeting of
the stockholders.
The classified Board of Directors authorized by the
Corporation's By-Laws makes it more difficult for any
stockholders, including those holding a majority of the
stock, to force an immediate change in the composition of
a majority of the Board of Directors. Since the terms of
only approximately one-third of the incumbent Directors
expire each year, it requires at least two annual
elections for the stockholders to change a majority of
the Directors. This may have the effect of discouraging
an unsolicited tender offer for the Corporation's stock
or other unsolicited takeover bids which, in the opinion
of the Board of Directors, might not be in the best
interests of the Corporation and its stockholders. In
the alternative, it may encourage persons desiring to
take over or control the Corporation to initiate such
action through negotiations with the then-existing Board
of Directors.
Although the Corporation has not encountered difficulties
in the past due to lack of continuity of management, the
Board of Directors believes that the staggered election
of Directors tends to promote such continuity in the
future, because only about one-third of the Board of
Directors is subject to election each year. Staggered
terms guarantee that approximately two-thirds of the
Directors, or more, at any one time, have had at least
one year's experience as Directors of the Corporation.
Staggered terms for members of the Board of Directors
also moderate the pace of changes in the Board of
Directors by extending the time required to elect a
majority of Directors from one to two years.
Under the Vermont Business Corporation Act (the "Vermont
Act"), which became effective January 1, 1994, the
Corporation believes that a continuation of the
classified Board of Directors will require an amendment
to the Corporation's Articles of Incorporation. The
Board of Directors believes that such an amendment is in
the best interests of the Corporation and its
stockholders. The staggered election of Directors will
continue to promote the continuity of management and the
stability of the Corporation's traditional policies. The
Board also believes that continued authorization of the
staggered election of Directors will enhance the
Corporation's present ability to attract competent and
qualified officers and employees to carry out its long-
term plans.
4. Deletion of 20% Quorum Requirement. The existing
Articles of Incorporation provide that not less than 20%
of the outstanding shares of the stock of the Corporation
shall constitute a quorum for taking action at regular
and special meetings of the stockholders. Under the
Vermont Act, however, at least a majority of the
outstanding shares of the Corporation's common stock are
required to constitute a quorum for action at a regular
or special meeting. The proposed amendment is intended
to conform to the requirements of the Vermont Act, which
became effective January 1, 1994.
Vote Required for the Proposal
Approval of the proposed Amended and Restated Articles will require
the affirmative vote of holders of at least 50% of the outstanding
shares of the Corporation's common stock.
Recommendation
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR OF
THE PROPOSAL TO AMEND AND RESTATE THE ARTICLES OF INCORPORATION.
DEADLINE FOR STOCKHOLDER PROPOSALS
In order to be included in the Corporation's proxy statement and
proxy card for the 1995 annual meeting, proposals which
stockholders intend to present at that meeting must be submitted in
writing to the Secretary of the Corporation on or before November
11, 1994.
OTHER BUSINESS
The Board of Directors of the Corporation knows of no other matters
which may come before the meeting. However, if any other business
should properly come before the meeting, the proxies relating to
such meeting will be voted with respect thereto in accordance with
the best judgment of the Board of Directors.
Exhibit A
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
of CHITTENDEN CORPORATION
ARTICLE I. NAME
The name of the Corporation is Chittenden Corporation
ARTICLE II. REGISTERED OFFICE AND AGENT
The Registered Office of the Corporation is located at Two
Burlington Square, Burlington, Vermont 05401, and the Registered
Agent at that office is the Secretary.
ARTICLE III. PERIOD OF DURATION
The period of duration of the Corporation shall be perpetual.
ARTICLE IV. PURPOSES
The Corporation is organized for the purposes of (i) buying,
selling, investing in, holding and dealing in property of every
nature and description, real and personal, tangible and intangible;
(ii) acquiring, investing in or holding stock of any subsidiary
enterprise permitted under the Bank Holding Company Act of 1956,
and subsequent amendments thereto; and (iii) otherwise engaging in
any other business which may be lawfully carried on by a
corporation organized under the laws of the State of Vermont.
ARTICLE V. QUORUM REQUIREMENT FOR STOCKHOLDER MEETINGS
Not less than 50% of the outstanding shares of the stock of the
Corporation shall constitute a quorum for the transaction of
business at any regular or special meeting of the stockholders of
the Corporation.
ARTICLE VI. AUTHORIZED CAPITAL
The aggregate number of shares which the Corporation shall have
authority to issue is 200,000 shares, preferred, with a par value
of $100.00, and 30,000,000 shares, common, with a par value of
$1.00. The Board of Directors of the Corporation is hereby
expressly authorized to divide the preferred stock into series,
and, within the limitations provided by law, to fix and determine
by resolution the designation, the number of shares, and the
relative rights and preferences of any series so established.
ARTICLE VII. NUMBER AND TERM OF DIRECTORS
The authorized number of directors of the Corporation (exclusive of
directors, if any, to be elected by holders of preferred stock of
the Corporation) shall be determined by resolution duly adopted by
the Board of Directors, and may be increased or decreased, within
the limitations specified herein, from time to time by resolution,
duly adopted by the Board of Directors; provided, however, that no
decrease in the number of directors shall have the effect of
shortening the term of any incumbent director. The President of
the Corporation shall serve EX OFFICIO as a director.
The Board of Directors shall be divided into three categories,
designated Category I, Category II, and Category III, as nearly
equal in number as possible, and the term of office of directors of
one category shall expire at each annual meeting of the
stockholders, and in all cases as to each director, until a
successor shall be elected and shall qualify, or until an earlier
resignation, removal from office, death or incapacity.
Notwithstanding the foregoing, the President shall serve as a
director during his term of office as President and shall not be
assigned to any category of directors. Additional directors
resulting from an increase in the number of directors shall be
apportioned among the categories as equally as possible. At each
annual meeting of stockholders following the adoption of this
provision, the number of directors equal to the number of directors
of the category whose terms expire at the time of such meeting (or,
if less, the number of directors properly nominated and qualified
for election) shall be elected to hold office until the third
succeeding annual meeting of stockholders after their election.
ARTICLE VIII. BUSINESS COMBINATIONS
SECTION 1. The affirmative vote of at least two-thirds (66 2/3%)
of the Continuing Directors, together with the affirmative vote of
the holders of at least two-thirds (66 2/3%) of the outstanding
shares entitled to vote thereon (as well as the affirmative vote of
the holders of at least two-thirds (66 2/3%) of the shares of any
class or series of shares entitled to vote thereon as a class),
shall be required for any of the following Business Combinations:
(a) any merger or consolidation of the Corporation or any
Subsidiary into or with a Related Person or its
Affiliate, or any other corporation which, after such
merger or consolidation, would be an Affiliate of a
Related Person, or
(b) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition by the Corporation, in one or a series
of transactions, to or with any Related Person or its
Affiliate of all, or substantially all, of the assets of
the Corporation or any Subsidiary, or
(c) the issuance or transfer by the Corporation or any
subsidiary, in one or a series of transactions, of a
majority of its voting shares to a Related Person or its
Affiliate, or
(d) the adoption of any plan or proposal for the liquidation
or dissolution of the Corporation, or
(e) any reclassification of securities, recapitalization,
reorganization, merger or consolidation of the
Corporation with any of its Subsidiaries or any
transaction that has the effect, directly or indirectly,
of increasing the proportionate share of the outstanding
shares of any class of equity or convertible securities
of the Corporation or any Subsidiary that is directly or
indirectly owned by any Related Person.
SECTION 2. The two-thirds (66 2/3%) vote of the Continuing
Directors required by Section 1 of this Article shall not be
applicable to any Business Combination not with or involving any
Related Person or its Affiliate, in which event such Business
Combination shall require only such affirmative vote as is required
by law and any other provision of the Articles of Incorporation and
the By-Laws of the Corporation.
SECTION 3. A majority of the Continuing Directors of the
Corporation, on the basis of information known to them, shall have
the power and duty to determine for the purposes of this Article
all questions arising hereunder, including whether a Person is a
Related Person or an Affiliate or Associate of another, the number
of voting shares beneficially owned by any Person, the fair market
value of consideration per share offered holders of the
Corporation's Common Stock and the aggregate value of the
securities or assets of the Corporation or any Subsidiary. The
calculation of a minimum price per share to be received by
stockholders shall require appropriate adjustments for capital
changes, including without imitation, stock splits, stock dividends
and reverse stock splits.
SECTION 4. Nothing contained in this Article shall be
construed to relieve any Related Person of any fiduciary obligation imposed
by law.
SECTION 5. For the purpose of this Article and other articles
using similar terminology, the following definitions shall apply:
(a) "Person" means any individual, firm, partnership,
corporation or other entity, or any combination of them
acting together.
(b) "Related Person:, in respect of any Business
Combination, means any Person (other than the Corporation or any
Subsidiary) which, together with its Affiliates or
Associates, owns of record or beneficially, directly or
indirectly, more than fifteen percent (15%) of the
outstanding voting stock of the Corporation, or is an
Affiliate of the Corporation and at any time within the
two-year period immediately prior to the date in
question was the owner, of record or beneficially, directly or
indirectly, of more than fifteen percent (15%) of the
outstanding voting stock of the Corporation.
For the purpose of determining whether a Person is a
Related Person, "beneficial ownership" of voting stock
shall include (i) all shares of stock which such Person
has the capability to control or influence the voting
power thereof and (ii) all shares of stock which such
Person has the immediate or future right to acquire,
pursuant to any agreement or understanding, or upon the
exercise of conversion rights, exchange rights,
warrants, options or otherwise.
(c) "Affiliate" means any Person that directly or indirectly
controls, or is controlled by, or is under common
control with another Person.
(d) "Associate" means any officer, trustee, partner or
director, or beneficial owner of more than fifteen
percent (15%) of any class of equity security, of a
Related Person or its Affiliates.
(e) "Continuing Director" means a member of the Board of
Directors who was either elected prior to the date a
Related Person became a Related Person, or was
recommended to succeed a Continuing Director by a
majority of the then Continuing Directors.
(f) "Subsidiary" means any corporation of which a majority
of any class of equity security is owned, directly or
indirectly, by the Corporation, provided, however, that
for the purposes of the definition of "Related Person"
set forth in subsection (b) of this Section 5, the term
"Subsidiary" shall mean only a corporation of which a
majority of each class of equity security is owned,
directly or indirectly, by the Corporation.
SECTION 6. Unless an affirmative vote of at least 80% of the
outstanding shares entitled to vote thereon, exclusive of the
shares owned by any Related Person, determine otherwise,
notwithstanding any approval received for a proposed Business
Combination under the provisions of ARTICLE VIII, the Corporation
shall not enter into any Business Combination with a Related Person
or its Affiliates or Associates, unless the following condition
shall be met:
The aggregate amount of cash and the fair market value of
consideration other than cash (as of the date of a binding
agreement for the consummation of said Business Combination)
to be received per share by holders of Common Stock of the
Corporation shall be at least equal to the higher of:
(i) the highest per share price (including brokerage
commissions, transfer taxes and soliciting dealers'
fees) paid by the Related Person or its Affiliates or
Associates in purchasing any of the Corporation's Common
Stock (a) within the two-year period immediately prior
to the date of the proposal of the Business Combination
(the "Proposal Date") or (b) in the transaction in which it
became a Related Person, whichever is higher; OR
(ii) the fair market value per share of the Corporation's
Common Stock on the Proposal Date.
SECTION 7. Any amendment, alteration or repeal of ARTICLE VIII, of
these Articles of Incorporation shall require the affirmative vote
of at least two-thirds (66 2/3% of the Continuing Directors,
together with the affirmative vote of the holders of at least two-
thirds (66 2/3%) of the outstanding shares entitled to vote thereon
(as well as the affirmative vote of the holders of at least two-
thirds (66 2/3%) of the shares of any class or series of shares
entitled to vote thereon as a class).
A COPY OF THE CORPORATION'S ANNUAL REPORT FOR 1993 (ON FORM 10-K),
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934, WILL BE
FURNISHED FREE OF CHARGE TO BENEFICIAL OWNERS OF THE
Corporation's stock upon written request to:
F. Sheldon Prentice
Chittenden Corporation
P.O. Box 820
Burlington, Vermont 05402
Any person requesting a copy of the report must set forth in
his/her written request a good faith representation that he/she was
in fact a beneficial owner of stock of the Corporation on the
record date for the annual meeting.
It takes one minute to fill out the Proxy Card. Please help assure
that there will be a quorum (AT THE ANNUAL MEETING BY RETURNING YOUR
PROXY.)
</TABLE>
