March 13, 1996
Securities and Exchange Commission
450 5th Street
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 "Company"), in connection with the 1996
Annual Meeting of the Corporation's stockholders.
The Company has transmitted the filing fee of $125.00 via Fedwire.
Should you have any questions concerning this Proxy Statement, please telephone
the undersigned at (802) 660-1412.
Kindly acknowledge receipt of this filing by notifying the sender via Compuserve
EMAIL.
Very truly yours,
s/F. Sheldon Prentice
Secretary
NOTICE OF 1996
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.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The annual meeting of the Stockholders of Chittenden Corporation will be held on
April 17, 1996 at 4:00 p.m. in the Adirondack Ballroom (A & B) at the Radisson
Hotel Burlington, located at 60 Battery Street, Burlington, Vermont. The
Ballroom is on the first level of the Radisson. The annual meeting is for the
purpose of considering and acting upon:
1. The election of Directors as provided by the By-Laws.
2. 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 15, 1996
CHITTENDEN CORPORATION
Two Burlington Square
Burlington, Vermont 05401
March 15, 1996
Proxy Statement
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
APRIL 17, 1996
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 17, 1996, at 4:00 p.m., in the
Adirondack Ballroom (A & B) at the Radisson Hotel Burlington, located at 60
Battery Street, Burlington, Vermont.
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 17,
1996 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 is 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 15, 1996 to Stockholders
of record on March 1, 1996. 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 1, 1996 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, 1996 there were 8,282,452 shares of common stock
outstanding and entitled to vote.
As of February 1, 1996 the Directors and Officers of the Corporation,
including other members of senior management (the "Officer Group"), owned
beneficially 346,926 shares, or approximately 4.189 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 515,899 shares, or 6.229 percent, of the outstanding shares of
common stock of the Corporation as of December 31, 1995. 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 ten, is established
periodically by the Board. All Directors are elected for staggered three-year
terms so that approximately one third of the Directors are elected at each
annual meeting. At the annual meeting four Directors will stand for election to
serve for a term of three years unless their retirement, pursuant to the
Corporation's By-Laws, occurs prior to the expiration of three years. Ms.
Hutton will stand for election to serve for a term of one year and at that time
stand for election to a three-year term.
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 five nominees for
Directors and the five 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, 1996, 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 1999.
PAUL J. CARRARA Director since 1982
Mr. Carrara, 59, is President of J. P. Carrara & Sons, Inc., a ready-mixed and
precast concrete supplier located in Middlebury, Vermont. 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: 3,001
Percent: .036
PHILIP A. KOLVOORD Director since 1977
Mr. Kolvoord, 63, is of counsel 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. Mr.
Kolvoord is also President of The Discovery Museum for Children in Essex
Junction, Vermont. 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: 3,441
Percent: .042
JAMES C. PIZZAGALLI Director since 1980
Mr. Pizzagalli, 51, 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
Corporation's Executive Committee. He has been a Director of the Bank since
1980.
Shares owned: 143,343
Percent: 1.731
BARBARA W. SNELLING Director since 1974
Mrs. Snelling, 68, Chair of the Board of both the Corporation and the Bank since
1990, is Lieutenant Governor of Vermont and former President of Snelling & Kolb,
Inc., fund-raising consultants. 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 and Radcliffe Colleges, 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 Board. She has
been a Director of the Bank since 1972.
Shares owned: 54,125
Percent: .653
The following person has been nominated to serve as a Director for a term to
expire in 1997.
LYN HUTTON Director since 1995
Ms. Hutton has served as Vice President and Treasurer of Dartmouth College since
1990. From 1982 to 1990 she was associated with the University of Southern
California, first as Treasurer and then as Senior Vice President for Finance and
Administration. In 1994, the National Association for College and University
Business Officers awarded Ms. Hutton the Rodney Adams prize in recognition of
her contributions to professional development and research activities in the
field of college and university endowment and investment management. Both a
Certified Public Accountant and a Chartered Financial Analyst, Ms. Hutton serves
on the Boards of Trustees of the Common Fund, of Endowment Advisors Inc., and of
the University Corporation for Atmospheric Research. She has previously served
on the Board of Directors of First Interstate Bank of California. She has been
a Director of the Bank since November, 1995.
Shares owned: 200
Percent: .002
Continuing Directors
FREDERIC H. BERTRAND Director since 1989
Term Expires 1998
Mr. Bertrand, 59, 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: 619
Percent: .007
DAVID M. BOARDMAN Director since 1978
Term Expires 1998
Mr. Boardman, 61, is Senior Vice President of Hickok and Boardman, Inc.,
President of Associates in Financial Planning Inc., and Coldwell Banker Hickok &
Boardman, Inc., affiliates 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, 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, the Institute of Certified
Financial Planners and the Association of Advanced Life Underwriters. He has
been a Director of the Bank since 1978.
Shares owned: 20,531
Percent: .248
PAUL A. PERRAULT Director since 1990
Term Expires 1997
Mr. Perrault, 44, 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 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: 17,514
Percent: .211
PALL D. SPERA Director since 1985
Term Expires 1998
Mr. Spera, 51, 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 the
merger of Mountain Trust Company with Chittenden Trust Company. He has been a
Director of the Bank since 1985.
Shares owned: 15,626
Percent: .189
MARTEL D. WILSON, JR. Director since 1983
Term Expires 1998
Mr. Wilson, 59, 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
Treasurer of Killington Ltd., Mount Snow Ltd., Bear Mountain Ltd. and Waterville
Valley Ski Area Ltd. which are wholly-owned subsidiaries of S-K-I Ltd. He is
also a Director of Sugarloaf Mountain Corporation. He graduated from the
University of Colorado and received an M.B.A. from Cornell University. Mr.
Wilson is 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,
and 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: 12,939
Percent: .156
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 55; and Mr. Wilson 1,140. Beneficial
ownership of these shares is disclaimed.
(2) Mr. Pizzagalli's share ownership includes 366 shares held as custodian for
his minor son. Beneficial ownership of these shares is disclaimed. Also
included are 95,312 shares held by Mr. Pizzagalli with his brothers in the
name of Pizzagalli Brothers Company and 3,874 shares held by Pizzagalli
Construction Company, a company controlled by Mr. Pizzagalli.
MEETINGS OF THE BOARD OF DIRECTORS AND ITS AUDIT AND EXECUTIVE COMMITTEES
The Board of Directors of the Corporation and the Bank held thirteen meetings
during the calendar year 1995. No Director attended fewer than seventy-five
percent 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 1995.
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 three meetings during 1995 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.
Perrault, ex officio, Pizzagalli (Chair), Spera, Wilson and Mrs. Snelling. The
Committee held thirteen meetings during 1995.
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 quarterly retainer fees of $500 of which 50% is paid in the form of
Corporation stock.
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, $1,000 per meeting
attended for monthly meetings, and $500 per telephone conference meeting of the
Board. 50% of retainers and fees is paid in the form of Corporation stock.
Directors serving on the Bank's Audit and Executive Committees receive a
meeting fee of $500 per meeting attended and $250 per telephone conference
meetings, 50% of which is paid in the form of Corporation stock.
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 $3,000 and
the Chair of the Audit Committee receives an annual retainer of $1,000. 50% of
retainers is paid in the form of Corporation stock.
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 most recently 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 1995, Executive Committee members were: Messrs.
Pizzagalli (Chair), Perrault, ex officio, Spera, Wilson and Mrs. Snelling.
Compensation practice continues to be guided by the philosophy that executive
remuneration should be directly tied to individual and Bank performance. Based
on this philosophy, base salary adjustments occur only when indicated by market
comparisons. Thus, "increases" in total compensation occur in the form of
variable annual performance-based bonuses, not fixed salary increases.
In late 1994 a comparison of regional banks with similar records of performance
indicated that base salaries of the executive management team were lagging
behind this peer group. Therefore, for the first time since 1989, uniform
adjustments were made to the base salaries of this group effective January 1,
1995.
In September 1995, The Segal Company, compensation consultants, was engaged to
conduct a complete review of all aspects of compensation for the executive
group. In establishing the parameters for this evaluation, the basic tenet of
"pay for performance" was clearly articulated. The recommendations of this
study are being reviewed and will be implemented as appropriate during 1996.
CEO compensation is evaluated using this same philosophy. In April 1995, 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 $10,000/year to Mr. Perrault's compensation. This
brought his base salary from $205,000/year to $215,000/year.
The Executive Management Incentive Compensation Plan (EMICP) remains a key
component of the compensation package for senior officers. 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.
As a participant in the EMICP, Mr. Perrault's 1995 award level was set at 60% of
salary based upon attainment of the corporate profit goal of $18MM or greater.
Upon the Corporation meeting such goal in 1995, Mr. Perrault received a payment
in 1996 of $48,375.00 cash and 872 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 in 1996 of $39,195.31
cash and 1,320 shares of stock based upon awards initially established in 1992,
1993 and 1994 which were triggered by the attainment of the 1995 goal. These
payments represent the 10%, 15% and 25% portions, respectively, of the earlier
awards.
In 1996, Mr. Perrault also received a cash bonus of $120,000 calculated at the
rate of five percent of net income in excess of a corporate profit goal which,
for the purposes of this plan, was set at $18.5 million. A payment of
$106,066.88 was accrued pursuant to the Supplemental Executive Retirement Plan
(SERP) which was established for Mr. Perrault in 1993. This accrual was made in
accordance with plan guidelines based upon the Bank's Return on Equity (ROE) for
1995 of 17.16%.
Stock options granted in 1992 at a price exceeding the then-current market price
were exercised and sold in 1995 constituting a significant portion of Mr.
Perrault's reported earnings. This gain is consistent with the Board's belief
that Mr. Perrault's total compensation should be based in large measure on
corporate profitability and enhanced shareholder value.
<TABLE>
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
<CAPTION>
<S> <C> <S> <C> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Re-
strict- Securit- Long-Term
Other ed ies Un- Incentive All other
Annual Stock derlying Plan (LTIP) Compens-
Name and Principal Compens- Award(s) Options Payouts ($) ation
Position Year Salary($) Bonus ($) ation($) ($)1 (#)2 ($)3 ($)4
- - - - ----------------------------------------------------------------------------------------------------------
Paul A. Perrault 1995 $215,000 -0- -0- -0- -0- $119,093.75 $43,719.76
President/CEO 1994 $199,980 -0- -0- -0- -0- $108,300.99
1993 $182,038 -0- -0- -0- -0- $ 85,000.00
Lawrence W. DeShaw 1995 $125,000 -0- -0- -0- 18,750 $ 62,675.00 $24,579.04
Executive Vice 1994 $110,000 -0- -0- $18,250 -0- $ 49,943.45
President 1993 $109,615 $6,562.50 -0- -0- -0- $ 38,787.50
John W. Kelly 1995 $125,000 -0- -0- -0- 18,750 $ 60,862.50 $24,325.01
Executive Vice 1994 $105,000 -0- -0- -0- -0- $ 45,657.46
President 1993 $105,000 $6,562.50 -0- -0- -0- $ 33,337.50
Danny H. O'Brien 1995 $115,000 -0- -0- -0- 18,750 $ 54,150.00 $21,544.04
Senior Vice 1994 $ 95,000 -0- -0- -0- -0- $ 38,900.10
President 1993 $ 95,000 -0- -0- -0- -0- $ 22,002.51
Jerry R. Condon 1995 $111,500 $8,500.00 -0- -0- -0- -0- $ 5,100.61
Chief Investment 1994 $110,196 $6,500.00 $12,400.00 -0- -0- -0-
Officer 1993 $110,000 -0- $ 7,675.74 -0- -0- -0-
- - - - ----------------------------------------------------------------------------------------------------------
(1) At fiscal year-end 1995, Mr. DeShaw had 1,250 shares valued at $39,062.50. Dividends are payable during the restriction
period.
(2) The options for Mr. DeShaw, Mr. Kelly and Mr. O'Brien vest in 4 equal installments of 25% beginning from date of award.
(3) The 1995 Long-Term Incentive Plan (LTIP) payout reflects 50% of the 1995 award that was earned in 1995, 25% of the 1994
award that was earned in 1995, 15% of the 1993 award that was earned in 1995 and 10% of the 1992 award that was earned in
1995. The 1994 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. A portion of all awards earned and paid in 1993, 1994 and 1995 are in stock of the Company.
(4) Totals in this column are comprised of: 401(k) Corporation match of 35% and additional profit sharing match of 50% shown
as one total and appreciation on stock awards from the LTIP that were earned in 1995. The figures, respectively, are as
follows, Mr. Perrault $6,777.27 and $36,942.49; Mr. DeShaw $6,764.01 and $17,815.03; Mr. Kelly $7,240.96 and $17,084.05; Mr.
O'Brien $7,296.95 and $14,247.09 and Mr. Condon $5,100.61. <PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
Potential
Realizable
Value at
Assumed Annual
Rates of Stock
Price
Appreciation
Individual Grants for Option Term
----------------- ------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
% of
Total
Options
Number of Granted
Securities to Market Exercise
Underlying Employees Price on or Base
Options in Fiscal Date of Price Expirat-
Name Granted Year Grant($) ($/sh) ion Date 0%($) 5%($) 10%($)
- - - - -------------------------------------------------------------------------------------------------
Paul A.
Perrault -0- -0- -0- -0- -0- -0- -0- -0-
Lawrence
W. DeShaw 18,750 14.89% $23.125 $18.50/sh 4/3/2005 $18.50 $30.13 $47.98
John W.
Kelly 18,750 14.89% $23.125 $18.50/sh 4/3/2005 $18.50 $30.13 $47.98
Danny H.
O'Brien 18,750 14.89% $23.125 $18.50/sh 4/3/2005 $18.50 $30.13 $47.98
Jerry R.
Condon -0- -0- -0- -0- -0- -0- -0- -0-
- - - - -------------------------------------------------------------------------------------------------
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR ANF FISCAL YEAR-END OPTION VALUES
(a) (b) (c) (d) (e)
Number of Value of
Unexercised Unexercised In-the-
Shares Acquired on Options at Fiscal Money Options at
Name Exercise (#) Value Realized ($) Year-End (#) Fiscal Year-End ($)
- - - - --------------------------------------------------------------------------------------------------------
Paul A. Perrault 75,000 $885,312.50 91,407 $1,766,746.35
Lawrence W. DeShaw 3,907 $ 85,719.58 26,563 $ 413,839.31
John W. Kelly -0- -0- 22,657 $ 345,528.25
Danny H. O'Brien -0- -0- 29,689 $ 486,768.89
Jerry R. Condon -0- -0- 2,344 $ 51,122.64
- - - - ----------------------------------------------------------------------------------------------------
LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR
Estimated Future Payouts
Under Non-Stock Price Based Plan 2
-----------------------------------
(a) (b) (c) (d) (e) (f)
Performance
or Other
Number of Shares, Period Until
and Other Maturation
Name Rights (#/$)1 or Payout Threshold ($) Target ($) Maximum ($)
- - - - ---------------------------------------------------------------------------------------------------
Paul A. Perrault 872/$48,375.00 3 years -0- $129,000.00 $129,000.00
Lawrence W. DeShaw 507/$28,125.00 3 years -0- $ 75,000.00 $ 75,000.00
John W. Kelly 507/$28,125.00 3 years -0- $ 75,000.00 $ 75,000.00
Danny H. O'Brien 467/$25,875.00 3 years -0- $ 69,000.00 $ 69,000.00
Jerry R. Condon -0- -0- -0- -0- -0-
- - - - ---------------------------------------------------------------------------------------------------
(1) Figures shown represent unearned portion of 1995 Executive Management Incentive Compensation Plan
(EMICP) awards. 50% of 1995 awards were earned in 1995 based upon Bank profitability levels and are
reported in Table 1, column (i). 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.
</TABLE>
CHANGE OF CONTROL AGREEMENTS
The Corporation has entered into severance agreements with Mr. Perrault as well
as Messrs. DeShaw, Kelly, O'Brien and Condon. 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.
DeShaw, Kelly, O'Brien and Condon 1.5, 1.99, 1.5, and 1 times, respectively.
EMPLOYEE'S 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 pre-retirement remuneration and
years-of-service classifications (assuming retirement at age 65).
CHITTENDEN CORPORATION
PENSION
Estimated Annual Pension Benefits (1)
- - - - -------------------------------------------------------------------------------
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
- - - - --------------------------------------------------------------------------------
(1) For a participant turning age 65 in 1996
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, 1995 for those individuals named in the Summary
Compensation Table were as follows: Mr. Perrault, 5.55 years; Mr. DeShaw
25.08 years; Mr. Kelly 5.16 years; Mr. O'Brien 7.94 years; Mr. Condon, 3.26
years.
STOCK PERFORMANCE GRAPH
In defining an appropriate peer group, publicly traded stocks of similar
sized banking companies operating in Chittenden's general trading area were
selected. The group consists of: Arrow Financial Corporation, Banknorth
Group, Inc., Eastern Bancorp, Evergreen Bancorp, Inc., Independent Bank
Corp., Merchants Bancshares, Inc., TrustCo Bank Corp NY, and Vermont
Financial Services Corporation.
CHITTENDEN CORPORATION
Stock Price Performance
FIVE YEAR TOTAL RETURN*
PERIOD ENDING
12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
-----------------------------------------------------------------
Chittenden
Peers 100.00 117.41 167.59 214.65 234.90 358.91
Chittenden
Corp-VT 100.00 159.09 294.68 431.27 494.85 978.10
Nasdaq Total
Return 100.00 160.56 186.86 214.51 209.68 296.30
- - - - -------------------------------------------------------------------------------
BASE = 12/31/90
NOTE: The peer group shown in the above graph has been expanded from that
shown in prior years' proxy statements. This change did not
materially affect the performance index value.
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 Banks.
As of December 31, 1995, the aggregate of loans by the Banks outstanding to the
Corporation's officers, Directors and their associates amounted to 6,954,000.
During 1995, loans by the Banks to their officers and Directors, and their
associates, and to the officers and 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 1995 between the Bank's 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 ACCOUNTANTS
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, 1996. 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 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.
Arthur Andersen LLP, independent public accountants of the Corporation for
the year ended December 31, 1995, will have a representative at the meeting who
will have an opportunity to make a statement and will be available to respond
to appropriate questions.
During 1995, Arthur Andersen LLP examined the consolidated financial
statements of the Corporation and its subsidiaries, provided other audit
services to the Corporation and to certain of its subsidiaries in connection
with Securities and Exchange Commission filings and reviewed periodic financial
statements.
DEADLINE FOR STOCKHOLDER PROPOSALS
In order to be included in the Corporation's proxy statement and proxy card for
the 1997 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 8, 1996.
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 1995 (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.
PROXY CARD
CHITTENDEN CORPORATION
Two Burlington Square, Burlington, Vermont 05401
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS
The undersigned hereby appoints David M. Boardman, Paul A. Perrault and Pall D.
Spera 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 1, 1996 at the annual meeting of stockholders to be held
on April 17, 1996 or any adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
AND AUTHORIZES THE PROXIES TO TAKE ACTION IN THEIR DISCRETION UPON OTHER
MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES.
CONTINUED, AND TO BE SIGNED ON REVERSE SIDE
[X] Please mark
votes as in
this example.
Management recommends a vote FOR the election of all nominees for director.
Information about each director is contained in the accompanying proxy
statement.
1. Election of Directors
Nominees: Paul J. Carrara, Lyn Hutton, Philip A. Kolvoord, James C.
Pizzagalli and Barbara W. Snelling.
[ ] For all Nominees [ ] Withheld from all Nominees
[ ]
-------------------------------
For all nominees except as noted above
MARK HERE
FOR ADDRESS [ ]
CHANGE AND
NOTE AT LEFT
Signature: Date: Signature: Date:
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