CHITTENDEN CORP /VT/, DEF 14A, 1997-03-11

CHITTENDEN CORP /VT/
DEF 14A, 1997-03-11
STATE COMMERCIAL BANKS

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March 12, 1997

Securities and Exchange Commission
450 5th Street, N.W.
Washington, D.C. 200549

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
1997 Annual Meeting of the Corporation's stockholders.

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
Senior Vice President, General Counsel
and Secretary

NOTICE OF 1997

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 16, 1997 at 4:00 p.m. in the Emerald Ballroom in the Sheraton
Burlington Hotel and Conference Center, located at 870 Williston Road, South
Burlington, Vermont. The annual meeting is for the purpose of considering and
acting upon:

1. The election of Directors as provided by the By-Laws.

2. Ratification of the Amendment to the 1993 Stock Incentive
Plan.

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 14, 1997

CHITTENDEN CORPORATION
Two Burlington Square
Burlington, Vermont 05401
March 14, 1997

Proxy Statement
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
APRIL 16, 1997

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 16, 1997, at 4:00 p.m., in the
Emerald Ballroom in the Sheraton Burlington Hotel and Conference Center,
located at 870 Williston Road, South 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
16, 1997 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 14, 1997 to
Stockholders of record on February 28, 1997. 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 4>
Voting Securities

The Board of Directors of the Corporation has fixed the close of business on
February 28, 1997 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. There are no rights of appraisal or
similar rights of dissenters with respect to any matter to be acted upon.

As of January 31, 1997 there were 12,284,130 shares of common stock
outstanding and entitled to vote.

Security ownership of the Corporation's Directors and Executive Officers is
provided below in tabular form.
______________________________________________________________________________
(1) Title (2) Name of (3) Amount and nature of (4)Percent
of Class beneficial owner beneficial ownership of class
______________________________________________________________________________
Common Stock Bertrand, Frederic H. 796 Direct .006
______________________________________________________________________________
Common Stock Boardman, David M. 25,720 Direct
64 Indirect Son .210
______________________________________________________________________________
Common Stock Carrara, Paul J. 3,752 Direct .031
______________________________________________________________________________
Common Stock Hutton, Lyn 260 Direct .002
______________________________________________________________________________
Common Stock Kolvoord, Philip A. 3,180 Direct
1,215 Indirect Spouse .036
______________________________________________________________________________
Common Stock Perrault, Paul A. 35,618 Direct .290
______________________________________________________________________________
Common Stock Pizzagalli, James C. 179,327 shares. 1.460
457/shs James Pizzagalli as custodian for
son; beneficial ownership of these shares
is disclaimed. 4,991/shs held by
Pizzagalli Construction, an entity
controlled by James Pizzagalli.
119,140/shs held by Pizzagalli Brothers
Company, an entity controlled by James
Pizzagalli.
________________________________________________________________________________
Common Stock Snelling, Barbara W. 67,657 Direct .551
________________________________________________________________________________
Common Stock Spera, Pall D. 19,895 Direct .162
_______________________________________________________________________________
Common Stock Wilson, Martel D., Jr. 14,793 Direct
1,425 Indirect S/D IRA .132
Spouse
________________________________________________________________________________
Common Stock DeShaw, Lawrence W. 16,476 Direct .134
________________________________________________________________________________
Common Stock Kelly, John W. 8,899 Direct .072
________________________________________________________________________________
Common Stock O'Brien, Danny H. 6,004 Direct .049
________________________________________________________________________________
Common Stock Walters, Kirk W. 4,000 Direct .033
________________________________________________________________________________
Common Stock Directors, Officers of
the Corporation,
Senior Management
(the "Officer Group") 423,868 3.450
________________________________________________________________________________
<PAGE 5>

Notes Regarding Directors' Stock Ownership

Beneficial ownership is determined in accordance with Rule 13(d)(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.

No one is the beneficial owner of more than five percent of any class of
the Corporation's voting securities, except Private Capital Management, Inc.,
which is the beneficial owner of 790,924 shares or 6.5 percent of Chittenden
Corporation common stock. The reporting person is filing as an Investment
Advisor registered under Section 203 of the Investment Advisers Act of 1940.
Bruce S. Sherman is President of Private Capital Management, Inc. ("PCM") and
exercises shared dispositive power with respect to shares held by it on behalf
of its clients. This information was supplied to the Corporation on Schedule
13G pursuant to the Securities Exchange Act of 1934.

___________________________________________________________________________
(1) Title of (2) Name and address of (3) Amount and (4) Percent
Class beneficial owner nature of of Class
beneficial
ownership
____________________________________________________________________________
Common Stock PCM 790,924 6.500
3003 Tamiami Trail North
Naples, FL 34103
____________________________________________________________________________

The Corporation's principal subsidiary, Chittenden Trust Company (the
"Bank"), held in a fiduciary or representative capacity, in the aggregate,
approximately 785,459 shares, or 6.4 percent, of the outstanding shares of
common stock of the Corporation as of December 31, 1996. 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 eleven, 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 three Directors will stand for election
to serve for a term of three 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 three nominees for
Directors and the eight continuing Directors are listed on the following pages
with brief statements of their principal occupations and other information.
All of the nominees, except Mr. Driscoll, are serving currently on the Board
of Directors of the Corporation. According to information supplied by them,
these persons, as of January 31, 1997, 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 2000.

RICHARD D. DRISCOLL Newly Nominated Director

Mr. Driscoll, 66, is the immediate past President and C.E.O. of the
Massachusetts Bankers Association since 1990. From 1957 to 1990, Mr. Driscoll
was employed by the Bank of New England, N.A., in Boston, Massachusetts in
many capacities, culminating in the position of Chairman and C.E.O. where he
was responsible for all activities of the Boston Bank and affiliate banks in
eastern New England, including affiliates in Maine and Rhode Island,
representing approximately $20 billion in assets. Mr. Driscoll is a
graduate of Boston College and holds an MBA from Harvard Business School.
Mr. Driscoll serves on the Board of the American Ireland Fund, Charlesbank
Homes, Child Care Investment Fund, Greater Boston YMCA, the Massachusetts
Business Development Corp., and the Morgan Memorial, Goodwill Industries.

LYN HUTTON Director since 1995

Ms. Hutton, 47, 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 Board of Trustees of Endowment Advisors Inc.
of Endowment Realty Inc., the University Corporation for Atmospheric Research,
and Montshire Museum of Science. She has previously served on the Board of
Directors of First Interstate Bank of California. She has been a Director of
the Bank since 1995.

Shares owned: 260
Percent: .002

PAUL A. PERRAULT Director since 1990

Mr. Perrault, 45, 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
received 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: 35,618
Percent: .290

Continuing Directors

FREDERIC H. BERTRAND Director since 1989
Term Expires 1998

Mr. Bertrand, 60, is Past 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, and of the Vermont Business Roundtable. Mr. Bertrand is a Director
of Central Vermont Public Service Corporation, Union Mutual Fire Insurance
Company, New England Guaranty Insurance Company, and Central Vermont Economic
Development Corporation. Mr. Bertrand chairs the Corporation's Audit
Committee. Mr. Bertrand has been a Director of the Bank since 1989.

Shares owned: 796
Percent: .006

DAVID M. BOARDMAN Director since 1978
Term Expires 1998

Mr. Boardman, 62, 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 Past 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: 25,784
Percent: .210

PAUL J. CARRARA Director since 1982
Term Expires 1999

Mr. Carrara, 60, 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: 3,752
Percent: .031

PHILIP A. KOLVOORD Director since 1977
Term Expires 1999

Mr. Kolvoord, 64, 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. 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.
He has been a Director of the Bank since 1977.

Shares owned: 4,395
Percent: .036

JAMES C. PIZZAGALLI Director since 1980
Term expires 1999

Mr. Pizzagalli, 52, 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: 179,327
Percent: 1.460

BARBARA W. SNELLING Director since 1974
Term Expires 1998

Mrs. Snelling, 69, Chair of the Board of both the Corporation and the Bank
since 1990, is currently a State Senator, representing Chittenden District.
She is immediate past Lieutenant Governor of Vermont and former President of
Snelling & Kolb, Inc., fund-raising consultants. Prior to that she was 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: 67,657
Percent: .551

PALL D. SPERA Director since 1985
Term Expires 1998

Mr. Spera, 52, 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 is also 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: 19,895
Percent: .162

MARTEL D. WILSON, JR.* Director since 1983
Term Expires 1998

Mr. Wilson, 60, is the former Vice President, Chief Financial Officer and
Director of S-K-I Ltd. 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 has
been a Director of the Bank since 1983.

Shares owned: 16,218
Percent: .132

*Mr. Wilson has been granted an unpaid leave of absence from the Board for
approximately one year.

Meetings of the Board of Directors and Its Audit and Executive Committees

The Board of Directors of the Corporation and the Bank held twelve meetings
during the calendar year 1996. 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 1996.

Audit Committee

The Corporation has a standing Audit Committee comprised of Messrs. Bertrand
(Chair), Boardman, Perrault, ex officio, Wilson, Ms. Hutton and Mrs. Snelling.
The Committee held three meetings during 1996 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 twelve meetings during 1996.

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. Fifty percent 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. Fifty
percent 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 1996, Executive Committee members were:
Messrs. Pizzagalli (Chair), Perrault, ex officio, Spera, Wilson and Mrs.
Snelling.

Chittenden's compensation programs are based on the tenets of equitable and
competitive base salaries balanced with rewards for individual and Bank
performance. Base salaries and salary ranges are reviewed on an annual basis
against local and regional survey information. As in past years, structured
incentive programs exist on many levels throughout the organization, including
the Executive Management Incentive Compensation Plan (EMICP) and several
department-and division-specific incentive awards. Performance targets for
the EMICP payments are set in January of each year based on specific earnings
and return ratios. All payments are made in the following year predicated
upon attainment of these targets.

Based upon the results of a review of executive compensation and benefits
completed by an independent consultant for Chittenden in late 1995, base
salaries for executive management were targeted to fall within the first
quartile of a selected peer group, with total compensation falling in the
third quartile when performance targets are met and thus, incentive payments
are made. Comparing 1995 base salaries of executive management against this
target, it was determined that salary adjustments were necessary. Appropriate
adjustments were implemented in January 1996.

CEO compensation was included in the consultant's review, and the same
comparative targets were established. As a result of this comparison, Mr.
Perrault's base salary was adjusted to $250,000 effective April l, l996.

Mr. Perrault's 1997 EMICP payment of $155,661, which was based upon 1996
performance, is comprised of 50% of his 1996 award and 25%, 15% and 10% of
1995, 1994 and 1993 awards, respectively, or $81,250, $36,250, $22,419 and
$15,742, respectively.

Additionally, the Corporation granted a supplemental cash award to Mr.
Perrault based upon the Corporation's achieving at least a 10% growth in
earnings per share (EPS) and a return on equity (ROE) in excess of 15 percent.
In 1996, the Corporation's EPS of $2.14 and an ROE of 16.41% resulted in an
award of $45,916 to Mr. Perrault.

Mr. Perrault was also granted options to purchase 150,000 shares of stock
scheduled to vest in three equal installments in 1997, 1998 and 1999 at a
price per share of $22.25, $26.70 and $28.93, respectively. Options must be
exercised within five years of the date of vesting.

Effective January 1, 1996, the Corporation established a supplemental
executive retirement plan (SERP) for members of the executive management
group. This plan is intended to emcompass only those benefits excluded from
coverage under the Bank's qualified defined benefit pension plan as a result
of IRS regulations. The design elements of this SERP mirror those of the
Bank's qualified plan. In addition to the SERP, Mr. Perrault has a separate
arrangement under which an additional award can be granted based upon the
current year's result's exceeding certain ROE targets. In 1996, the sum of
$154,528 was accrued for Mr. Perrault under the SERP and his separate
arrangement.

Mr. Perrault is eligible to participate in the Corporation's broad-based
employee benefit plans under the same guidelines as non-executive officers.
These benefits include group medical insurance, group life and disability
insurance coverages and pension and 401(k) retirement plans. In addition to
the benefit plans outlined above, effective January 1, 1996, the Corporation
established a supplemental long-term disability (LTD) plan for Mr. Perrault.
The plan is integrated with the Bank's existing LTD benefit by providing an
equal benefit on that portion of Mr. Perrault's salary which exceeds the cap
covered by the standard plan.

The following table sets forth the cash and non-cash compensation for each of
the last three fiscal years awarded to or earned by the Chief Executive
Officer of the Corporation and the four highest paid Executive Officers of the
Corporation whose salary and bonus earned in 1996 exceeded $100,000.

<TABLE>

SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
<CAPTION> Awards Payouts
<C> <C> <C> <C> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name and Annual Restricted Securities Long-term All other
Principal Compen- Stock Underlying Incentive Plan Compensation
Position Year Salary($) Bonus($) sation($) Awards($)3 Options(#)4 (LTP) Payouts($)5 ($)6
- ----------------------------------------------------------------------------------------------------------------
Paul A. Perrault 1996 $237,884 $45,9162 -0- -0- 150,000 $155,661 $114,961
President/CEO 1995 $211,615 $119,260 -0- -0- -0- $119,093 $149,785
1994 $199,980 -0- -0- -0- -0- $108,300 $ 94,251

Lawrence W. DeShaw 1996 $144,230 -0- -0- -0- -0- $ 86,353 $ 5,313
Executive Vice 1995 $125,000 $20,000 -0- -0- 23,438 $ 62,675 $ 24,579
President 1994 $110,000 -0- -0- $18,250 -0- $ 49,943 $ 8,945

John W. Kelly 1996 $143,384 -0- -0- -0- -0- $ 84,772 $ 5,299
Executive Vice 1995 $124,230 $20,000 -0- -0- 23,438 $ 60,862 $ 24,325
President 1994 $105,000 -0- -0- -0- -0- $ 45,657 $ 8,532

Kirk W. Walters 1996 $ 2,230(1) -0- -0- -0- 12,000 -0- -0-
Executive Vice 1995 N/A N/A N/A N/A N/A N/A N/A
President 1994 N/A N/A N/A N/A N/A N/A N/A

Danny H. O'Brien 1996 $124,192 -0- -0- -0- -0- $ 74,407 $ 5,861
Executive Vice 1995 $114,230 $15,000 -0- -0- 23,438 $ 54,150 $ 21,544
President 1994 $ 95,000 -0- -0- -0- -0- $ 38,900 $ 7,365

<PAGE 14>
SUMMARY COMPENSATION TABLE GUIDE

(1)Mr. Walters joined the Corporation on December 10, 1996 and his 1996 annual salary was $145,000.
(2)Based on a return on equity (ROE) of 16.41% and an earnings per share (EPS) of $2.14, Mr. Perrault
was paid a bonus of 2% of those earnings in excess of a 15% ROE.
(3) At fiscal year-end 1996, Mr. DeShaw had 1,563 shares valued at $37,707.38. Dividends are payable
during the restriction period.
(4) The options for Mr. Perrault vest in 3 equal installments of 50,000 shares on 6/1/97, 6/1/98 and
6/1/99. The options for Mr. Walters vest in two equal installments of 6,000 shares beginning on
12/10/97 and 12/10/98 respectively.
(5) The 1996 Long-Term Incentive Plan (LTIP) payout from the EMICP reflects 50% of the 1996 award that
was earned in 1996, 25% of the 1995 award that was earned in 1996, 15% of the 1994 award that was
earned in 1996 and 10% of the 1993 award that was earned in 1996. The 1995 LTIP payout from the EMICP
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 EMICP payout reflects 50% of the 1994 award 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.
(6) Totals in this column are comprised of: 401(k) Corporation match of 35% and an additional profit-
sharing match of 30% shown as one total, and that piece of Mr. Perrault's supplemental executive
retirement plan (SERP) benefit which may be granted based on the Corporation's annual results as
measured by ROE. Benefits which accrue under this arrangement are payable contingent upon Mr.
Perrault's employment with the Corporation at age 55. The figures, respectively, are as follows: Mr.
Perrault - $5,850, and $109,111, Mr. DeShaw - $5,313, Mr. Kelly - $5,299, Mr. Walters - 0 and Mr.
O'Brien - $5,861.

The following table summarizes option grants during 1996 to the Executive Officers named in the
Summary Compensation Table.

<PAGE 15>
Option Grants in Last Fiscal Year

Potential Realizable Value
At Assumed Annual Rates of
Individual Stock Price Appreciation
Grants for Option Term(1)
------------- ------------------------------
(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%(1)
- ---------------------------------------------------------------------------------------
Paul A. 50,000 28.82% $22.25 6/1/02 -0- $307,500 $679,000
Perrault 50,000 28.82% $26.70 6/1/03 -0- $369,000 $815,000
50,000 28.82% $28.93 6/1/04 -0- $399,500 $883,000

Lawrence
W. DeShaw -0- 0% -0- N/A -0- -0- -0-

John W.
Kelly -0- 0% -0- N/A -0- -0- -0-

Kirk W.
Walters 12,000 6.92% $24.56 12/10/07 -0- $185,376 $469,776

Danny H.
O'Brien -0- 0% -0- N/A -0- -0- -0-

(1)Potential realizable values are based on annual gains in stock price of 5% and 10% over the terms
of the options multiplied by number of options.

(PAGE 16)

The following table provides information on the value realized on options exercised and outstanding
options held by the Chief Executive Officer or the Executive Officers named in the Summary
Compensation Table, and their year-end value.

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 ($) Year-End (#) Fiscal Year-End ($)
- ----------------------------------------------------------------------------------------------------------------------
Exercisable Unexcercisable Exercisable Unexercisable
----------- -------------- ----------- -------------
Paul A. Perrault 101,562 $1,100,685 62,697 100,000 $256,590 $ 93,750
Lawrence W. DeShaw -0- -0- 21,486 11,719 $275,524 $109,280
John W. Kelly -0- -0- 16,603 11,719 $211,477 $109,280
Kirk W. Walters -0- -0- -0- 12,000 -0- -0-
Danny H. O'Brien 3,908 $ 57,690 21,486 11,719 $275,524 $109,280

The following table provides information on the EMICP awards for the Executive Officers named in the
Summary Compensation Table.

Long-Term Incentive Plans - Awards in Last Fiscal Year

Estimated Future Payouts
Under Non-Stock Price Based Plan(1)
-----------------------------------
(a) (b) (c) (d) (e) (f)
Performance
or Other
Number of Shares, Period Until
Units or Other Maturation Threshold Target Maximum
Name Rights (#) or Payout ($)(2) ($) ($)
- ---------------------------------------------------------------------------------------------
Paul A. Perrault N/A 4 years $81,250 $81,250 $81,250
Lawrence W. DeShaw N/A 4 years $47,125 $47,125 $47,125
John W. Kelly N/A 4 years $47,125 $47,125 $47,125
Danny O'Brien N/A 4 years $40,625 $40,625 $40,625
Kirk Walters N/A -0- -0- -0- -0-

(1) Figures shown represent unearned portion of 1996 EMICP awards. Fifty percent of 1996 awards were
earned and paid based upon 1996 Corporate profitability levels. 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 the Corporation
meeting profit goals established by the Board in January of each year.

(2) Threshold payout is based on the achievement of an EPS in each of the subsequent three years which
is at least equal to that of the previous year. If these targets are not met, minimum payment could
equal $0 in any of the remaining three years.

</TABLE>

Change of Control Agreements

The Corporation has entered into severance agreements with Mr. Perrault as
well as Messrs. DeShaw, Kelly, Walters and O'Brien. 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, Walters, and O'Brien 1.5, 1.99, 1.5 and 1.5
times, respectively.

Chittenden Corporation Retirement Plan

Substantially all full-time employees of Chittenden Bank who are age 21 with
one year of service participate in the Chittenden Pension Account Plan (the
"Pension Plan"), a defined benefit pension plan intended to qualify under
Section 401(a) of the Internal Revenue Code (the "Code"). The Pension Plan is
a cash balance plan whereby each participant's benefit is determined based on
annual pay credits and interest credits made to each participant's notional
account.

Pay credits range from 2.5% to 11.0% of compensation up to the Wage Base
and from 5.0% to 16.0% of compensation over the Wage Base, depending on the
participant's age and length of service with the Bank. Participants whose age
plus service as of December 31, 1995 equaled 70 or more are eligible for an
additional pay credit of 8% of compensation for plan years worked between 1996
and 2005. Compensation refers to pension eligible earnings of the participant
under the Pension Plan including the entire amount of salaries, wages,
overtime pay, commissions, bonuses, pre-tax deferrals and similar payments
reported on Form W-2, excluding employer contributions to this or any other
benefit plan, severance amounts, and taxable income attributable to stock
options. Compensation under the Pension Plan is limited to $150,000 for 1996
(as indexed under section 401(a)(17) of the Code).

Interest credits are based on the notional account balance on the last day
of the prior plan year and the Pension Plan's interest credit rate. This
interest credit rate equals the average 12-month Treasury Bill rate during
December of the preceding plan year plus 0.5%, subject to a 5.0% minimum and a
8.0% maximum rate.

No pay or interest credits were granted under the Pension Plan for periods
of employment prior to January 1, 1996. Benefits accrued as of December 31,
1995 under the prior formula were converted to an opening account balance.
Service is calculated from the date of hire for purposes of determining the
level of pay credit for the plan year. The normal retirement age under the
Pension Plan is age 65. Benefits are computed on a straight life basis.
Participants under this plan are entitled to a minimum benefit equal to the
amount accrued under the prior plan formula as of December 31, 1995.

In addition, the Corporation maintains a non-qualified, supplemental plan
which provides benefits that would be paid by the Pension Plan except for
limitations on pensionable pay and benefit amounts currently imposed by the
Code.

The estimated annual benefits payable from the Pension Plan and
Supplemental Plan to Messrs. Perrault, DeShaw, Kelly, and O'Brien, upon
normal retirement, are $207,000, $128,000, $79,000, 0, and $73,000,
respectively. As of December 31, 1996, Messrs. Perrault, DeShaw, Kelly,
Walters, and O'Brien had approximately 6, 26, 6, 0 and 9 years of credited
service, respectively, under the Pension Plan.

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
Total Return Performance

Period Ending
---------------------------------------------------------------
Index 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
- --------------------------------------------------------------------------------
Chittenden
Corporation 100.00 185.23 271.08 311.04 614.80 590.84
NASDAQ -
Total US 100.00 116.38 133.59 130.59 184.67 227.16
Chittenden
Peers 100.00 142.61 182.65 202.03 308.69 375.08

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, 1996, the aggregate of loans by the Bank outstanding to the
Corporation's officers, Directors and their associates amounted to $2,110,508.

During 1996, loans by the Bank 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 1996 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.

Availability 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, appointed Arthur Andersen LLP as independent public accountants
of the Corporation for the year ending December 31, 1996. The Corporation was
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. Arthur Andersen LLP 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 1996, 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 of periodic financial
statements. In addition, Arthur Andersen LLP provided tax and consulting
services to the Corporation and certain of its subsidiaries.

1993 STOCK INCENTIVE PLAN
(As restated and amended January 1, 1997)

(Item 2 on Proxy Card)

The Corporation's 1993 Stock Incentive Plan ("SIP") was restated and amended
by the Corporation's Board of Directors on February 19, 1997 to bring the SIP
into conformity with current practices, laws and regulations concerning these
types of plans, including the performance-based compensation exception to the
$1 million cap on the Corporation's tax deduction imposed by Section 162(m) of
the Internal Revenue Code of 1986, as amended (the "Code"). The amendments to
the SIP will be effective upon the affirmative vote of the holders of at least
a majority of the shares of Common Stock present or represented and entitled
to vote at the annual meeting. In addition, because most of the shares
allocated in the original SIP have been distributed, 500,000 new shares of the
Corporation's Common Stock will be assigned to the SIP which is administered
by the Executive Committee of the Corporation's Board of Directors. Options
and awards under the SIP may be granted until April 16, 2002. The restated
and amended SIP is reproduced in its entirety and attached to this Proxy as
Exhibit A.

Section 162(m) of the Code and the regulations thereunder generally would
disallow the Corporation a federal income tax deduction for compensation in
excess of $1 million paid in any year to any of those Executive Officers
included in the Summary Compensation Table who are employed by the Corporation
on the last day of the taxable year. This deduction cap does not apply to
payments of "performance-based compensation", the material terms of which have
been approved by shareholders. Payments under the SIP are intended to be
"performance-based compensation" for this purpose to the extent they are based
on the achievement of individual or Corporation performance goals (corporate
profitability, return on equity ("ROE"), or earnings per share ("EPS").
Individual awards granted under the SIP cannot exceed 200,000 shares per
participant per year.

The purpose of the SIP is to provide executive management and the Board
with additional tools with which to attract and retain the best available
personnel for positions of significant responsibility. In addition, and of
equal importance, the SIP ties these rewards to the long-term performance of
the Corporation as measured by stock price.

Certain Key employees of the Corporation and its affiliates, who are in
positions of substantial responsibility, will be eligible to receive various
types of stock incentives; namely: (1) Stock Options to purchase a set number
of shares of stock at a set price (including incentive stock options and non-
qualified stock options); (ii) Restricted Stock which vests after a set period
of time (awards are, typically, smaller in size than stock options and
designed to encourage Key employees to remain with the Corporation); and (iii)
Performance Shares which shall be issued in the event that performance targets
measured by profitability, EPS or ROE, are met.

As was stated above, based upon the goals of the SIP, participation will be
limited to approximately fifty Key employees.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR RATIFICATION OF THE
AMENDMENT TO THE 1993 STOCK INCENTIVE PLAN.

Deadline for Stockholder Proposals

In order to be included in the Corporation's proxy statement and proxy card
for the 1998 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 7, 1997.

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
CHITTENDEN CORPORATION
1993 STOCK INCENTIVE PLAN
(As restated and amended January 1, 1997)

1. NAME OF PLAN

The plan shall be known as the 1993 Chittenden Corporation Stock Incentive
Plan (the "Plan").

2. PURPOSE OF THE PLAN

The purpose of the Plan is to attract and retain the best available
personnel for positions of substantial responsibility and to provide
additional incentive to those employees of Chittenden Corporation or any
Affiliated Corporation to promote the success of the Company.

3. DEFINITIONS

As used herein, the following definitions shall apply:

(a) "Affiliated Corporations" shall include members of the controlled
group of corporations within the meaning of Section 1563 of the
Internal Revenue Code. Those Affiliated Corporations at the time
of the adoption of the Amendment to the Plan include Chittenden
Trust Company, Bank of Western Massachusetts, Flagship Bank and
Trust, and Chittenden Connecticut Corporation.

(b) "Award" means a grant or award under Section 7, 8, or 9 of the
Plan.

(d) "Board" means the Board of Directors of the Company.

(e) "Common Stock" means common stock, par value $1.00 per share, of
the Company.

(f) "Code" means the Internal Revenue Code of 1986, as amended.

(g) "Committee" means the Executive Committee appointed by the Board
in accordance with Section 5(a) hereof.

(h) "Continuous Employment" or "Continuous Status as an Employee"
means the absence of any interruption or termination of employment
with the Company or with an Affiliated Corporation.

Employment shall not be considered interrupted in the case of sick
leave, military leave or any other leave of absence approved by
the Company, while such approval continues, or in the case of
transfers between payroll locations of the Company or between the
Company and an Affiliated Corporation.

(i) "Effective Date" means the date specified in Section 12 hereof.

(j) "Employee" means any person employed by the Company or an
Affiliated Corporation.

(k) "Fair Market Value" means the price per share determined by
averaging the high and low stock price on the date specified.

(l) "Incentive Stock Option" means a stock option grant that is
intended to meet the requirements of Section 422A of the Code.

(m) "Non-Qualified Stock Option" means a stock option grant that is not
intended to be an Incentive Stock Option.

(n) "Option" means an Incentive Stock Option or a Non-Qualified Stock
Option granted pursuant to this Plan.

(o) "Optioned Stock" means the Common Stock of an Employee who
receives an Option.

(p) "Optionee" means an Employee who receives an Option.

(q) "Plan" means the 1993 Chittenden Corporation Stock Incentive Plan.

(r) "Share" means one share of the Common Stock of the Company.

(s) "Restricted Stock" means shares of Common Stock contingently
granted to an employee under Section 8 of the Plan.

4. SHARES SUBJECT TO THE PLAN

As originally approved in 1993, 375,000 shares of Common Stock were
allocated for use as defined by the Plan. As a result of subsequent stock
splits that number totalled 732,422 shares.

Except as otherwise required by the provisions of Section 11 hereof, the
aggregate number of shares of Common Stock in respect of which Awards may be
made shall not exceed an additional 500,000 shares. Such shares may either
be authorized but unissued or treasury shares.

Individual awards granted under this Plan shall not exceed 200,000 shares
per participant per year.

If an Option should expire or become unexercisable for any reason without
having been exercised in full or any Award is forfeited for any reason, the
shares which were subject thereto shall, unless the Plan shall have been
terminated, be available for the grant of other Awards under the Plan.

5. ADMINISTRATION OF THE PLAN

(a) Composition of Executive Committee. The Plan shall be
administered by the Executive Committee of the Board of Directors
of the Company. Employees who are designated by the Committee
shall be eligible to receive Awards under the Plan. All persons
designated as members of the Committee shall be non-employee
directors of the Corporation within the meaning of Rule 16b-
3(b)(3)(i) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and outside directors within the meaning of
Section 162(m) of the Code.

(b) Powers of the Committee. The Committee is authorized (but only to
the extent not contrary to the express provisions of the Plan or
to resolutions adopted by the Board) (i) to interpret the Plan,
(ii) to prescribe, amend and rescind rules and regulations
relating to the Plan, (iii) to recommend to the Board the
Employees to whom Awards shall be granted under the Plan, the
amount and terms of such Awards and the time when Awards will be
granted, and (iv) to make other determinations necessary or
advisable for the administration of the Plan, and shall have and
may exercise such other power and authority as may be delegated to
it by the Board from time to time. A majority of the entire
Committee shall constitute a quorum and the action of a majority
of the members present at any meeting at which a quorum is present
shall be deemed the action of the Committee.

The President of the Company is hereby authorized to assist the
Committee in the administration of the Plan and to execute
instruments evidencing Awards on behalf of the Company and to cause
them to be delivered to the Employees.

(c) Effect of Committee's Decision. All decisions, determinations and
interpretations of the Committee shall be final and conclusive on
all persons affected thereby.

6. ELIGIBILITY

Awards may be granted by the Board only to those officers and key Employees
of the Company and of any Affiliated Corporation who are in positions in
which their decisions, actions and counsel significantly impact upon the
profitability of the Company, and only in accordance with the recommendation
of the Committee. An Employee who has been granted an Award may, if
otherwise eligible, be granted an additional Award or Awards.

7. STOCK OPTIONS

(a) Grant. Subject to the provisions of the Plan, the Committee shall
have sole and complete authority to determine the Employee to whom
Options shall be granted, the number of shares to be covered by
each Option, the option price therefor and the conditions and
limitations applicable to the exercise of the Option. The
Committee shall have the authority to grant Incentive Stock
Options, or to grant Non-Qualified Stock Options, or to grant both
types of options. In the case of Incentive Stock Options, the
terms and conditions of such grants shall be subject to and comply
with such rules as may be prescribed by Section 422A of the Code,
as from time to time amended, and any regulations implementing
Section 422A.

(b) Option Price. The price per share at which each Incentive Stock
Option granted under the Plan may be exercised shall not, as to
any particular Incentive Stock Option, be less than 100% of the
Fair Market Value of the Stock at the time such Incentive Stock
Option is granted.

(c) Exercise of Option. An Option shall be exercisable at such times
and under such conditions as shall be permissible under the terms
of the Plan and of the Option granted to an Optionee; however, in
no event may any Option granted hereunder be exercisable after
expiration of 10 years from the date of such grant. The Committee
shall have the power to permit in its discretion an acceleration
of previously determined exercise terms, under such circumstances
and upon such terms as it deems appropriate. An Option may not be
exercised for a fractional Share.

An Option may be exercised, subject to the provisions hereof
relative to its termination and limitations on its exercise, from
time to time only by (i) written notice of intent to exercise the
Option with respect to a specified number of Shares, and (ii)
payment to the Company (contemporaneously with delivery of each
such notice), either in cash, of the amount of the Option price
of the number of Shares with respect to which the Option is then
being exercised or by the surrender and delivery to the Company of
Shares of the same class as the Shares to be acquired by exercise
of the Option with a Fair Market Value equal to or less than
the total Option price plus cash for any difference.

Each such notice and payment shall be delivered, or mailed by
prepaid registered or certified mail, addressed to the Secretary
of the Company at the Company's executive offices, until the total
number of Shares then subject to the Option have been purchased.

(d) TERMINATION OF EMPLOYMENT

(1) If an Optionee ceases to be an employee of the Company or any
subsidiary other than by reason of death, retirement or
disability, absent a determination by the Committee to the
contrary, any options which were exercisable by the Optionee on
the date of termination of employment may be exercised any time
before their expiration date or within three months after the date
of termination, whichever is earlier, but only to the extent that
the options were exercisable when employment ceased.

(2) If an Optionee's employment terminates because of death or
disability, all stock options previously granted to the Optionee
will become exercisable. In the case of death of the Optionee,
options may be exercised at any time before their expiration date
or within one year after the date of death, whichever is earlier.
In the case of permanent disability, options may be exercised at
any time before their expiration date.

(3) If an Optionee's employment terminates because of retirement, any
options which were exercisable by the Optionee on the date of
termination of employment may be exercised any time before their
expiration date or within one year after the date of termination,
whichever is earlier, but only to the extent that the options were
exercisable when employment ceased absent a determination by the
Committee to the contrary.

8. RESTRICTED STOCK

(a) Subject to the provisions of the Plan, the Committee shall have
sole and complete authority to determine the Employees to whom
shares of Restricted Stock shall be granted, the number of shares
of Restricted Stock to be granted to each Employee, the duration
of the Restricted Period during which and the conditions under
which, the Restricted Stock may be forfeited to the Company, and
the other terms and conditions of such Awards. The Committee may
determine that the Restricted Period applicable to a particular
grant may vary depending upon specific performance targets. These
targets will be measured by one or more of the following:
Corporate profitability, ROE or EPS. The Committee shall
determine the Awards to be granted hereunder and the targets to be
used for any Award by such date as is permitted under Section
162(m) of the Code for the establishment of performance goals
pursuant to which performance-based compensation is to be payable
for a particular period.

(b) Shares of Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered, except as herein provided, during
the Restricted Period. Certificates issued in respect of shares
of Restricted Stock shall be registered in the name of the
Employee and deposited by such Employee, with the Company. During
this period the Employee shall have voting rights on such shares
and shall receive applicable dividends. At the expiration of the
Restricted Period, the Company shall deliver such certificates to
the Employee or the Employee's legal representative.

(c) If an Employee's employment terminates by reasons of permanent
disability or death, any Restricted Stock held by such Employee
shall thereafter vest or any restriction lapse, to the extent such
Restricted Stock would have become vested or no longer subject to
restriction within one year from the time of termination had the
Employee continued to fulfill all of the conditions of the
Restricted Stock during such period (or on such accelerated basis
as the Committee may determine at or after grant). Unless
otherwise determined by the Committee, subject to (j) below, if an
Employee's employment terminates for any reasons other than
permanent disability or death, the Restricted Stock which is
unvested or subject to restriction shall thereupon be forfeited.

9. PERFORMANCE AWARDS

(a) Performance Awards shall consist of shares of Common Stock of the
Company to be issued in the event that Profit Goals as measured by
one or more of the following: Corporate profitability, EPS or ROE
are met. The Committee shall determine the Awards to be granted
hereunder and the targets to be used for any Award by such date as
is permitted under Section 162(m) of the Code for the
establishment of performance goals pursuant to which performance-
based compensation is to be payable for a particular period.

(b) Actual payments of Performance Awards earned shall be in cash or
in Common Stock or in a combination of both, as the Committee in
its sole discretion determines.

(c) If Common Stock of the Company is used, the Employee shall not
have the right to vote and receive dividends until the Profit
Goals are achieved and the actual shares are issued.

(d) The number of shares of Common Stock to be issued to an Employee
will be determined by dividing the dollar value of the portion of
the incentive award that is to be paid in stock by the per share
Fair Market Dollar Value of the Common Stock on the date that the
Employee's award value is calculated.

10. CHANGE IN CONTROL

Notwithstanding anything to the contrary contained herein, and
notwithstanding any contrary waiting period or installment period in any
option agreement or in the Plan, each outstanding Option and Right granted
under the Plan shall become exercisable in full for the aggregate number of
shares covered thereby, and any restriction or deferral limitation
applicable to any Restricted Stock, shall lapse and such shares and awards
shall be deemed fully vested, in the event of a Change in Control (as
hereinafter defined).

For purposes of this Plan, a Change in Control shall be deemed to have
occurred upon the first to occur of the following events:

(i) any "person", as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act") (other than the Company or any corporation owned, directly
or indirectly, by the stockholders of the Company in substantially

<PAGE 28>
the same proportions as their ownership of stock of the Company),
is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of
the Company representing more than 25% of the number of the
Company's then outstanding securities;

(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board, and any new
director (other than a director designated by a person who has
entered into an agreement with the Company to effect a transaction
described in Subsection 12(i), (iii) or (iv) of this Section 12)
whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of at least two-
thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease by any
reason to constitute at least one half thereof;

(iii) the stockholders of the Company approve a merger or consolidation of
the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or being converted into voting
securities of the surviving entity) more than 60% of the number of
outstanding securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; or

(iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets.

11. GENERAL PROVISIONS

(a) Withholding. The Employer shall have the right to deduct from all
amounts paid to an Employee in cash (whether under this plan or
otherwise) any taxes required by law to be withheld in respect of
Awards under this Plan. In the case of payments of Awards in the
form of Common Stock, at the Committee's discretion the
Participant may be required to pay to the Employer the amount of
any taxes required to be withheld with respect to such Common
Stock, or, in lieu thereof, the Employer shall have the right to
retain (or the Participant may be offered the opportunity to elect
to tender) the number of shares of Common Stock whose Fair Market
Value equals the amount required to be withheld.

(b) Nontransferability. No Award shall be assignable or transferable,
and no right or interest of any Participant shall be subject to
any lien, obligation or liability of the Participant, except by
will or the laws of descent and distribution.

(c) No Right to Employment. No person shall have any claim or right
to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to be retained in the
employ of the Employer. Further, the Employer expressly reserves
the right at any time to dismiss a Participant. Such event will
relieve the Employer from any liability, and eliminates the
Employee's claim under the Plan, except as provided herein or in
any agreement entered into with respect to an Award.

(d) No Rights as Stockholder. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall
have any rights as a stockholder with respect to any shares of
Common Stock to be distributed under the Plan until he or she has
become the holder thereof. Notwithstanding the foregoing, in
connection with each grant of Restricted Stock hereunder, the
applicable Award shall specify if and to what extent the
Participant shall not be entitled to the rights of a stockholder
in respect of such Restricted Stock.

(e) Construction of the Plan. The validity, construction,
interpretation, administration and effect of the Plan and of its
rules and regulations, and rights relating to the Plan, shall be
determined solely in accordance with the laws of Vermont.

(f) Effective Date. Subject to the approval of the stockholders of
the Company, the Plan shall be effective on January 1, 1993. No
Options or Awards may be granted under the Plan after April 16,
2002.

(g) Amendment of Plan. The Board of Directors may amend, suspend or
terminate the Plan or any portion thereof at any time, provided
that no amendment shall be made without stockholder approval if
such approval is necessary to comply with any tax or regulatory
requirement, including for these purposes any approval requirement
which is a prerequisite for exemptive relief under Section 162(m)
of the Code. Notwithstanding anything to the contrary contained
herein, the Committee may amend the Plan in such manner as may be
necessary so as to have the Plan conform with local rules and
regulations. The President shall be authorized to make minor or
administrative modifications to the Plan as well as modification
to the Plan which may be dictated by requirements of federal or
state statutes applicable to the Company or authorized or made
desirable by such statutes. No modification or termination of the
Plan shall, without the Optionee's consent, alter or impair any of
their rights or obligations under any Option or Right theretofore
granted to him or her under the Plan.

(h) Amendment of Award. Unless otherwise provided by the Committee in
granting an award, but subject to (j) below, the Committee may
amend, modify or terminate any outstanding Award with the
Participant's consent at any time prior to payment or exercise in
any manner not inconsistent with the terms of the Plan, including
without limitation, (i) to change the date or dates as of which
(A) an Option or Right becomes exercisable; (B) Restricted Stock
becomes nonforfeitable; or (ii) to cancel and reissue an Award
under such different terms and conditions as it determines

<PAGE 30>
appropriate. The Option agreement evidencing an Option granted
under the Plan may contain such provisions limiting the
acceleration of the exercise of Options as the Committee deems
appropriate to ensure that the penalty provisions of Section 4999
of the Code, or any successor thereto in effect at the time of
such acceleration, will not apply to any stock or cash received by
the holder from the Company.

(i) Adjustments and Assumptions. In the event of a reorganization,
recapitalization, stock split, stock dividend, combination of
shares, merger, consolidation, distribution of assets, or any
other change in the corporate structure or shares of the Company,
the Committee shall make such adjustments as it deems appropriate
in the number and kind of shares authorized by the Plan, in the
number and kind of shares covered by the Awards granted, and in
the purchase price of outstanding Options. In the event of any
merger, consolidation or other reorganization in which the Company
is not the surviving or continuing corporation, all Awards granted
hereunder and outstanding on the date of such event shall be
assumed by the surviving or continuing corporation with
appropriate adjustment as to the number and kind of shares and
purchase price of the shares.

(j) Committee Certification and Discretion. No Employee shall receive
any shares of Restricted Stock or Performance Awards under this
Plan unless the Committee has certified, by resolution or other
appropriate action in writing, that the relevant performance
targets have in fact been satisfied. Notwithstanding any other
provision of the Plan to the contrary, the Committee shall have
the discretion to reduce the size of any individual Award under
Section 8 or 9, but neither the Committee nor any other person may
take any action which would result in the increase of the Award to
be paid to any Employee under the terms of the Plan or authorize
the payment of shares of Restricted Stock or Performance Awards
under this Plan if the performance targets have not been
satisfied.

(k) Section 162(m) Conditions: Bifurcation of Plan. It is the intent
of the Company that the Plan and the shares of Restricted Stock
and Performance Awards hereunder satisfy and be interpreted in a
manner, that, in the case of Employees who are or may be persons
whose compensation is subject to Section 162(m) of the Code,
satisfies any applicable requirements as performance-based
compensation. Any provision, application or interpretation of the
Plan inconsistent with this intent to satisfy the standards in
Section 162(m) of the Code shall be disregarded. Notwithstanding
anything to the contrary in the Plan, the provisions of the Plan
may at any time be bifurcated by the Committee in any manner so
that certain provisions of the Plan intended (or required in
order) to satisfy the applicable requirements of Section 162(m)
are only applicable to persons whose compensation is subject to
Section 162(m) of the Code.

To record the adoption of the restated and amended Chittenden Corporation 1993
Stock Incentive Plan, the Company has caused its appropriate officers to affix
its corporate name and seal hereto this 19th day of February, 1997.

ATTEST:

CHITTENDEN CORPORATION
Witnessed
By s/F. Sheldon Prentice By s/Mary Beth Stanley

Official
Title SVP, General Counsel and Secretary

A copy of the Corporation's Annual Report for 1996 (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.

CHITTENDEN CORPORATION
Two Burlington Square, Burlington, Vermont 05401

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigend hereby appoints David M. Boardman, Barbara W. Snelling and
Pall D. Spera as Proxies, each with the power to appoint his/her 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 February 28, 1997 at the annual meeting of
stockholders to be held on April 16, 1997 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 PROPOSALS
1 AND 2.

CONTINUED, AND TO BE SIGNED ON REVERSE SIDE

[X] Please mark
votes as in
this example.

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: Richard D. Driscoll, Lyn Hutton, and
Paul A. Perrault.

[ ] FOR ALL NOMINEES [ ] WITHHELD FROM ALL NOMINEES

[ ] ________________________________________
For all nominees except as noted above.

2. RATIFICATION OF THE AMENDMENT [ ] FOR [ ] AGAINST [ ] ABSTAIN
TO THE 1993 STOCK INCENTIVE PLAN.

MARK HERE
FOR ADDRESS [ ]
CHANGE AND
NOTE AT LEFT

Signature:_________________Date:_______Signature:________________Date:________