March 17, 1995
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 the
Form of Proxy to be used by management of Chittenden Corporation, Two Burlington
Square, Burlington, Vermont 05401 (the "Corporation"), in connection with the
1995 Annual Meeting of the Corporation's stockholders.
The Corporation will wire the filing fee of $125.00 via Fedwire.
Should you have any questions concerning this Proxy Statement, please telephone
the undersigned at (802) 660-1410.
Kindly acknowledge receipt of this filing by notifying the sender via Compuserve
EMAIL.
Very truly yours,
F. Sheldon Prentice
Secretary
<PAGE>
NOTICE OF 1995
ANNUAL MEETING
AND
PROXY STATEMENT
Your Vote is Important
Every Stockholder 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 19, 1995 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 LLP as independent
public accountants for 1995.
3. 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 17, 1995
CHITTENDEN CORPORATION
Two Burlington Square
Burlington, Vermont 05401
March 17, 1995
<PAGE>
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
APRIL 19, 1995
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 19, 1995, 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 19, 1995
annual meeting of its Stockholders and at any adjournment thereof. A proxy duly
executed and returned by a Stockholder will be voted as directed by the proxy,
and, if no choice is specified, the proxy 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 17, 1995 to Stockholders
of record on March 3, 1995. 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.
VOTING SECURITIES
The Board of Directors of the Corporation has fixed the close of business on
March 3, 1995 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, 1995 there were 5,914,966 shares of common stock
outstanding and entitled to vote.
As of February 1, 1995 the Directors and Officers of the Corporation,
including other members of senior management (the "Officer Group"), owned
beneficially 497,446 shares, or approximately 8.41 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 399,489 shares, or 6.76 percent, of the outstanding shares of
common stock of the Corporation as of December 31, 1994. 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 4 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 4 nominees for Directors
and the 8 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, 1995
, 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 1998.
FREDERIC H. BERTRAND Director since 1989
Mr. Bertrand, 58, is Chairman of the Board and 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 Past Chairman of the American Council of Life
Insurance. He is 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: 483
Percent: .008
DAVID M. BOARDMAN Director since 1978
Mr. Boardman, 60, is Senior Vice President of 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: 16,364
Percent: .277
PALL D. SPERA Director since 1985
Mr. Spera, 50, is owner of Pall Spera Company, 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 Trustee
of Vermont Catholic Charities and a Director of the Lake Mansfield Trout Club.
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: .211
MARTEL D. WILSON, JR. Director since 1983
Mr. Wilson, 58, is Vice President and Chief 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 of Colorado 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 past Chairman of the Board of Trustees of Comprehensive Health
Resources, a health care holding company. Mr. Wilson chairs the Corporation's
Audit Committee. Mr. Wilson has been a Director of the Bank since 1983.
Shares owned: 10,332
Percent: .175
CONTINUING DIRECTORS
PAUL J. CARRARA Director since 1982
Term expires 1996
Mr. Carrara, 58, is President of J. P. Carrara & 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: .041
EUGENE P. CENCI Director since 1980
Term expires 1996
Mr. Cenci, 55, has been Co-owner and Executive Vice 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. In 1994 Mr. Cenci
was honored with the Good Scout Award by The Green Mountain Council, Boy Scouts
of America. Recently Mr. Cenci was named Vermont Travel Person of the Year for
1994. Mr. Cenci chairs the Bank's Trust Committee and has been a Director of
the Bank since 1980.
Shares owned: 2,420
Percent: .041
ROBERT E. CUMMINGS, JR. Director since 1974
Term Expires 1997
Mr. Cummings, 62, has been a practicing attorney in Bennington, Vermont, since
graduation from Georgetown University Law School in 1960. He is a former
Vermont Commissioner of Banking and Insurance, 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: .057
MARVIN B. GAMEROFF Director since 1980
Term Expires 1997
Mr. Gameroff, 62, is founder of his family's investment trust which has
financial and real estate holdings in Vermont. He is involved in investment
activities in Canada and the United Kingdom. He received a law degree from
McGill University and was admitted to the Quebec Bar in 1957. He was formerly
a member of 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). He is a very active
member of the Oxford University Foundation (U.K.), and the Vegetarian Society
of Great Britain. He was a Director, and major shareholder of Mountain Trust
Company, Stowe, Vermont. Mr. Gameroff is a citizen of Canada. He lives in
London, England and maintains a vacation home in Stowe, Vermont.
Shares owned: 205,868
Percent: 3.480
PHILIP A. KOLVOORD Director since 1977
Term expires 1996
Mr. Kolvoord, 62, is a partner in the law firm of 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. Mr. Kolvoord is a
member of the Discovery Museum Board of Directors, and Lake Champlain Aquarium
Board of Directors. 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: 7,195
Percent: .122
PAUL A. PERRAULT Director since 1990
Term Expires 1997
Paul A. Perrault, 43, is President and Chief Executive Officer of Chittenden
Corporation and Chittenden Bank. Mr. Perrault joined the Corporation in 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: 11,617
Percent: .196
JAMES C. PIZZAGALLI Director since 1980
Term expires 1996
Mr. Pizzagalli, 50, is Chairman and Chief Executive 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.
Shares owned: 114,602
Percent: 1.937
BARBARA W. SNELLING Director since 1974
Term expires 1996
Mrs. Snelling, 67, Chair of the Board of both the 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, President of Chittenden County United Way, and a founding
Director of the Board of the Vermont Community Foundation. Mrs. Snelling is
currently on the Shelburne Museum and Radcliffe College Boards. She has been a
Director of the Bank since 1972.
Shares owned: 43,300
Percent: .732
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 (44); Mr. Cenci (1,169); Mr. Kolvoord
(5,280); and Mr. Wilson (913). Beneficial ownership of these shares is
disclaimed.
(2) Mr. Pizzagalli's share ownership includes 293 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 3,026 shares held by Pizzagalli
Construction Company, a company controlled by Mr. Pizzagalli.
(3) Mr. Gameroff's share ownership includes 205,645 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.
MEETINGS OF THE BOARD OF DIRECTORS AND ITS AUDIT AND EXECUTIVE COMMITTEES
The Board of Directors of the Corporation and the Bank held 13 meetings during
the calendar year 1994. 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 1994.
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 2 meetings during 1994 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 14 meetings during 1994.
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.
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.
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 Director's Deferred Compensation Plan,
adopted April, 1972, and amended January 1, 1992.
REPORT OF THE 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. During 1994, Executive Committee members were:
Messrs. Pizzagalli (Chair), Gameroff, Perrault, ex officio, Spera, Wilson and
Mrs. Snelling.
Compensation policies are designed to ensure competitive levels of
compensation for the senior management group. The philosophy governing these
policies is to create a balance which rewards senior management based upon
individual and Bank performance as measured against both short-term and long-
term goals. Consequently, adjustments to base salaries continue to be driven
by market comparisons with adjustments made only as the market dictates.
Individual reward, on an annual basis, continues to be focused on the
Executive Management Incentive Compensation Plan (EMICP). As has been
described in the past, awards under the EMICP are initially 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 and are paid out over a four-year period in a combination of
cash and stock. Currently, awards are comprised of 25% corporation stock and
75% cash.
CEO compensation is evaluated using this same philosophy. The Executive
Committee, using comparative information on CEO compensation in banks of
similar size locally and regionally, and other publicly-held corporations,
recommended an adjustment of $15,000/year to Mr. Perrault's compensation,
bringing his base salary from $190,000/year to $205,000/year.
As a participant in the EMICP, Mr. Perrault's award level was set at 59.5%
of salary based upon profits of $15MM or greater. Therefore, in February 1995,
upon the Corporation meeting such goal, Mr. Perrault received a payment of
$45,740.62 cash and 835 shares of corporation stock. This payment follows plan
guidelines which provide for 50% of the payment to be made in the first year,
and 25%, 15% and 10%, respectively, in the succeeding three years.
Additionally, Mr. Perrault earned and received payment of $33,625 and 1,007
shares of stock based upon awards initially established in 1991, 1992 and 1993
which were triggered by the attainment of the 1994 goal. These payments
represent the 10%, 15% and 25% portions, respectively, of the earlier awards.
Additionally, a payment of $79,955.64 was accrued pursuant to the
Supplemental Executive Retirement Plan (SERP) which was established for Mr.
Perrault in 1993. This accrual was made in accordance with plan guidelines
based upon the Bank's Return on Equity (ROE) for 1994 of 15.44%.
<TABLE>
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Re-
strict- Securit- Long-Term
Other ed ies Un- Incentive All other
Annual Stock derlying Plan (LTIP) Compens-
Name and Principal Compens- Award(s) Options Payouts ($) ation ($)
Position Year Salary ($) Bonus ($) ation($) ($) <F2> (#) <F3> <F4>
------------------ ---- ---------- --------- -------- -------- -------- ------------ ----------
Paul A. Perrault 1994 $199,980 -0- -0- -0- -0- $108,300.99 $14,296.89
President/CEO 1993 $182,038 -0- -0- -0- -0- $ 85,000.00
1992 $175,000 -0- -0- -0- 125,000 $ 52,500.00
Jerry R. Condon 1994 $110,196 $6,500.00 $12,400<F1> -0- -0- -0- $ 5,834.84
Chief Investment 1993 $110,000 -0- 7,675.74 -0- -0- -0-
Officer 1992 $ 12,692 -0- -0- -0- 1,875 -0-
Lawrence W. DeShaw 1994 $110,000 -0- -0- $18,250 -0- $49,943.45 $ 8,945.02
Executive Vice 1993 $109,615 $6,562.50 -0- -0- -0- $38,787.50
President 1992 $105,000 -0- -0- -0- 6,250 $21,000.00
John W. Kelly 1994 $105,000 -0- -0- -0- -0- $45,657.46 $ 8,532.78
Executive Vice 1993 $105,000 $6,562.50 -0- -0- -0- $33,337.50
President 1992 $105,000 -0- -0- -0- -0- $18,375.00
William R. Heaslip 1994 $102,600 -0- -0- -0- -0- $21,795.42 $ 8,744.12
Executive Vice 1993 $102,600 -0- -0- -0- -0- $19,750.50
President 1992 $102,600 -0- -0- -0- -0- $17,955.00
<F1> This executive received $12,400.00 to cover moving expenses incurred in 1993.
<F2> At fiscal year-end 1994, Mr. Perrault had 3,125 shares valued at $65,234.38; Mr. DeShaw had 1,625
shares valued at $33,921.88; Mr. Kelly had 1,875 shares valued at $39,140.63 and Mr. Heaslip had 938
shares valued at $19,580.75. Dividends are payable during the restriction period.
<F3> The 1994 Long-Term (LTIP) payout reflects 50% of the 1994 award that was earned in 1994, 25%
of the 1993 award that was earned in 1994, 15% of the 1992 award that was earned in 1994 and
10% of the 1991 award that was earned in 1994. The 1993 LTIP payout reflects 50% of the 1993
award earned in 1993, 25% of the 1992 award that was earned in 1993 and 15% of the 1991 award that
was earned in 1993. The 1992 LTIP payout reflects 50% of the 1992 award that was earned in 1992 and
25% of the 1991 award that was earned in 1992. A portion of all awards earned and paid in
1992, 1993 and 1994 are in stock of the Company.
<F4> Totals in this column are comprised of: 401(k) corporate match of 35% and additional profit
sharing match of 25% shown as one total and appreciation on stock awards from the LTIP that
were earned in 1994. The figures, respectively, are as follows; Mr. Perrault $4,777.37 and $9,519.52;
Mr. Condon $3,500.90; Mr. DeShaw $4,762.95 and $4,182.07; Mr. Kelly $4,649.44 and $3,883.34
and Mr. Heaslip $4,196.87 and $4,547.25.
Option Grants in Last Fiscal Year
Individual Grants Potential
Realizable
Value at
Assumed Annual
Rates of Stock
Price
Appreciation
for Option Term
(a) (b) (c) (d) (e) (f) (g) (h)
% of
Total
Options
Number of Granted
Securities to Exercise
Underlying Employees or Base
Options in Fiscal Price Expirat-
Name Granted Year ($/sh) ion Date 0%($) 5%($) 10%($)
Paul A. Perrault -0- -0- -0- -0- -0- -0- -0-
Jerry R. Condon -0- -0- -0- -0- -0- -0- -0-
Lawrence W. DeShaw -0- -0- -0- -0- -0- -0- -0-
John W. Kelly -0- -0- -0- -0- -0- -0- -0-
William R. Heaslip -0- -0- -0- -0- -0- -0- -0-
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
(a) (b) (c) (d) (e)
Number of Value of
Unexercised Unexercised In-the-
Shares Acquired on Options at Fiscal Money Options at
Name Exercise (#) Value Realized ($) Year-End (#) Fiscal Year-End ($)
Paul A. Perrault -0- -0- 133,125 $729,265.63
Jerry R. Condon -0- -0- 1,875 $ 17,015.63
Lawrence W. DeShaw 1,875 $28,218.75 9,375 $100,703.12
John W. Kelly -0- -0- 3,125 $ 49,609.38
William R. Heaslip -0- -0- 9,375 $ 97,140.63
Long-Term Incentive Plans - Awards in Last Fiscal Year
Estimated Future Payouts
<F2>
Under Non-Stock Price Based Plan
(a) (b) (c) (d) (e) (f)
Performance
or Other
Number of Shares, Period Until
and Other <F1> Maturation
Name Rights (#/$) or Payout Threshold ($) Target ($) Maximum ($)
Paul A. Perrault 835 sh/$45,740.62 3 years -0- $60,987.50 $60,987.50
Jerry R. Condon 0 sh/$ 0.00 3 years -0- $ 0 00 $ 0.00
Lawrence W. DeShaw 392 sh/$21,450.00 3 years -0- $28,600.00 $28,600.00
John W. Kelly 374 sh/$20,475.00 3 years -0- $27,300.00 $27,300.00
William R. Heaslip 141 sh/ $7,695.00 3 years -0- $10,260.00 $10,260.00
<F1>) Figures shown represent unearned portion of 1994 Executive Management Incentive Compensation Plan
(EMICP) awards. 50% of 1994 awards were earned in 1994 based upon Bank profitibility 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.
<F2> 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.
CHANGE OF CONTROL AGREEMENTS
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 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, 1.99, and t 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.)
(1)
ESTIMATED ANNUAL PENSION BENEFITS
Final Five-Year
Average Annual Years of Service at Age 65
Compensation 10 15 20 25+
$ 50,000 $ 8,788 $13,182 $17,576 $ 21,970
$ 75,000 14,198 21,297 28,396 35,495
$100,000 19,698 29,547 39,396 49,245
$150,000 30,698 46,047 61,396 76,745
$200,000 41,698 62,547 83,396 104,245
(1) For a participant turning age 65 in 1995.
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, 1994 for
those individuals named in the Summary Compensation Table were as follows: Mr. Perrault, 4.452 years;
Mr. Condon, 2.0195 years; Mr. DeShaw, 24 years; Mr. Kelly, 4.044 years and Mr. Heaslip, 6.760 years.
STOCK PERFORMANCE GRAPH
In defining an appropriate peer group, publicly traded stocks of banking
companies operating in Chittenden's trading area were selected. The group
consists of: Marble Financial Corporation, Merchants Bancshares Incorporated,
Vermont Financial Services Corporation, Arrow Financial Corporation, and Eastern
Bancorp.
CHITTENDEN CORPORATION
STOCK PRICE PERFORMANCE
FIVE YEAR TOTAL RETURN*
PERIOD ENDING
12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94
Chittenden Peers 100.00 58.44 61.58 98.00 114.55 125.31
Chittenden Corp-VT 100.00 51.93 82.62 152.81 223.59 256.62
All NASDAQ US Stocks 100.00 84.92 136.28 158.58 180.93 176.92
BASE = 12-31-89
*DIVIDENDS REINVESTED
</TABLE>
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, 1994, the aggregate of loans by the Bank outstanding to the
Corporation's officers, Directors and their associates amounted to $7,931,282.
During 1994, 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 1994 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 LLP as independent public accountants of the
Corporation for the year ending December 31, 1995, subject to ratification by
the stockholders at the annual meeting. The Corporation has been advised by
Arthur Andersen LLP 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 LLP 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 1996 Annual Meeting
of Stockholders shall be subject to approval by the Stockholders at that
meeting.
Arthur Andersen LLP, independent public accountants of the Corporation for the
year ended December 31, 1994, 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 1994, Arthur Andersen LLP 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 LLP AS INDEPENDENT PUBLIC ACCOUNTANTS FOR THE YEAR ENDING
DECEMBER 31, 1995.
DEADLINE FOR STOCKHOLDER PROPOSALS
In order to be included in the Corporation's proxy statement and proxy card for
the 1996 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 10, 1995.
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.
A copy of the Corporation's Annual Report for 1994 (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, Secretary
Eugenie J. Fortin, Assistant Secretary
Chittenden Corporation
P.O. Box 820
Burlington, Vermont 05402-0820
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.
FORM OF PROXY
CHITTENDEN CORPORATION
Two Burlington Square, Burlington, Vermont 05402
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Paul J. Carrara, Eugene P. Cenci and James C.
Pizzagalli as Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated on the reverse side, all
the shares of common stock of Chittenden Corporation held of record by the
undersigned on March 3, 1995 at the annual meeting of stockholders to be held on
April 19, 1995 or any adjournment.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2.
Management recommends a vote FOR proposals 1 and 2. Information about these
proposals is contained in the accompanying proxy statement.
____________________________________________________
1. ELECTION OF DIRECTORS.
Nominees: Frederic H. Bertrand, David M. Boardman, Pall D. Spera and
Martel D. Wilson, Jr.
2. Appoint Arthur Andersen LLP as independent public accountants for 1995.
