<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Green Mountain Power Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Green Mountain Power Corporation
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/X/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[LOGO - GREEN]
25 GREEN MOUNTAIN DRIVE
P.O. BOX 850
SOUTH BURLINGTON, VERMONT 05402
April 12, 1995
TO OUR SHAREHOLDERS:
You are cordially invited to attend the Annual Meeting of Shareholders of
Green Mountain Power Corporation, which will be held at the headquarters
building, 25 Green Mountain Drive, South Burlington, Vermont, on Thursday, May
18, 1995, at 10:00 a.m., EDST. The accompanying Notice of Meeting and Proxy
Statement describe the matters to be acted on at the Meeting.
For your convenience, a map showing the location of the corporate
headquarters is printed on the reverse side of this letter.
Regardless of the number of shares you own, it is important that your shares
be represented at the Meeting. We hope that you will be able to attend
personally and urge you to do so if it is at all possible. In any event, we ask
that you sign and complete the enclosed proxy and return it to us promptly. If
you are able to attend the Meeting, you may revoke the proxy at that time and
vote your shares personally. If for any reason you are not able to attend the
Meeting, your signed proxy will assure proper representation of your ownership
interests in Green Mountain Power Corporation.
This year, in addition to electing the Board of Directors, you are being
asked to approve an amendment to the Company's By-laws which provides for the
division of the Board of Directors into three classes wherein the terms of
office would result in the election of one-third of the Directors each year. If
approved, election of the classified Board of Directors will begin with this
Annual Meeting. You are also being asked to approve the Compensation Program for
Officers and Certain Key Management Personnel that was adopted by the Board of
Directors.
We urge you to read the accompanying materials carefully before voting on
the matters to be considered at the Meeting. These matters have been given
thorough consideration by your Board of Directors. They are of importance to the
well-being of your Company, and the Directors recommend that you vote in favor
of each of the items on which a vote is requested from you on the proxy.
Affirmative vote of a majority of the shares outstanding is required to
effectuate these proposals.
Commencing at 9:00 a.m., prior to the Meeting, refreshments will be served.
You are encouraged to arrive in sufficient time to complete registration before
the Meeting convenes at 10:00 a.m. Following the Meeting, you are invited to
attend a picnic lunch to be served on the lawn at the headquarters building.
To help us to plan for the Meeting and lunch, we would appreciate your
completing the enclosed reply card and returning it to us.
Thank you for your continued interest in the Company.
Sincerely,
DOUGLAS G. HYDE
President and
Chief Executive Officer
<PAGE>
[MAP]
<PAGE>
[LOGO -- BLACK]
25 GREEN MOUNTAIN DRIVE
P.O. BOX 850
SOUTH BURLINGTON, VERMONT 05402
NOTICE OF MEETING
To the Shareholders of
GREEN MOUNTAIN POWER CORPORATION:
Notice is hereby given that the Annual Meeting of the Shareholders of Green
Mountain Power Corporation will be held at the headquarters building, 25 Green
Mountain Drive, South Burlington, Vermont, on Thursday, May 18, 1995, at 10:00
o'clock in the forenoon (Eastern Daylight Savings Time), for the following
purposes:
Item 1. To approve an amendment to the By-laws regarding classification
of the Board of Directors;
Item 2. To elect a Board of Directors;
Item 3. To approve the Compensation Program for Officers and Certain Key
Management Personnel; and
Item 4. To vote on such other matters as may properly come before the
Meeting and any and all adjournments thereof;
all as set forth in the Proxy Statement accompanying this notice.
Only holders of record of Common Stock as shown on the stock transfer books
of the Company at the close of business on March 30, 1995, will be entitled to
vote at the Meeting or any adjournments thereof.
By Order of the Board of Directors,
DONNA S. LAFFAN
SECRETARY
Date: April 12, 1995
IMPORTANT
IF YOU CANNOT BE PRESENT AND DESIRE TO HAVE YOUR STOCK VOTED AT THE MEETING,
PLEASE MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED.
<PAGE>
PROXY STATEMENT
GREEN MOUNTAIN POWER CORPORATION
25 GREEN MOUNTAIN DRIVE
P.O. BOX 850
SOUTH BURLINGTON, VERMONT 05402
------------------------
ANNUAL MEETING OF SHAREHOLDERS
MAY 18, 1995
------------------------
APRIL 12, 1995
PROXY AND SOLICITATION
The accompanying proxy is solicited on behalf of the Board of Directors of
Green Mountain Power Corporation (the "Company") for use at the Annual Meeting
of Shareholders of the Company to be held on Thursday, May 18, 1995, and at any
and all adjournments thereof. This proxy statement and the accompanying form of
proxy are being sent to the shareholders on or about April 12, 1995.
The cost of soliciting proxies by the Board of Directors will be borne by
the Company, including the charges and expenses of brokers and others for
sending proxy materials to beneficial owners of Common Stock. In addition to the
use of the mails, proxies may be solicited by personal interview, by telephone
or by telegraph by certain of the Company's employees without compensation
therefor. The Company has retained Morrow & Co. to assist in the solicitation of
proxies at an estimated cost of $15,000, plus reimbursement of reasonable
out-of-pocket expenses.
Shareholders who execute proxies retain the right to revoke them by
notifying the Corporate Secretary by mail at the above address or in person at
the Annual Meeting before they are voted. A proxy in the accompanying form when
it is returned properly executed will be voted at the Annual Meeting in
accordance with the instructions given, and if no instructions are given, the
proxy will be voted in accordance with the recommendation of the Board of
Directors.
STOCK OUTSTANDING AND VOTING RIGHTS
On March 30, 1995, the record date for the Annual Meeting, the Company had
outstanding 4,672,340 shares of Common Stock (excluding 15,856 of such shares
held by the Company as Treasury Stock), which is the only class of stock
entitled to vote at the Annual Meeting. Each holder of record of Common Stock on
the record date is entitled to one vote for each share of Common Stock so held.
The affirmative vote by the holders of a majority of the shares represented
at the Annual Meeting is required for the amendment to the By-laws regarding the
reclassification of the Board of Directors (Item 1 herein) (the "Board
Classification Amendment"), the election of directors (Item 2 herein), and the
approval of the Compensation Program for Officers and Certain Key Management
Personnel (Item 3 herein).
Abstentions and broker non-votes (when shares are represented at the Annual
Meeting by a proxy specifically conferring only limited authority to vote on
particular matters) will not be counted as votes in favor of Item 1, Item 2 or
Item 3 herein.
1
<PAGE>
The shares of Common Stock represented by each properly executed proxy
received by the Board of Directors will be voted at the Annual Meeting in
accordance with the instructions specified therein. If no instructions are
specified, such shares of Common Stock will be voted FOR the Board
Classification Amendment (Item 1 herein), FOR the election of nominees for
Directors (Item 2 herein), and FOR the Compensation Program for Officers and
Certain Key Management Personnel (Item 3 herein). The Board of Directors knows
of no other business to come before the Annual Meeting. However, if any other
matters are properly presented at the Annual Meeting, or any adjournment
thereof, the persons voting the proxies will vote them in accordance with their
best judgment. Any proxy may be revoked by notifying the Secretary of the
Company in writing at any time prior to the voting of the proxy.
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
To the knowledge of the Company, no person owned beneficially more than 5%
of the outstanding Common Stock of the Company on March 30, 1995.
The following table sets forth, as of January 31, 1995, information relating
to the ownership of the Company's Common Stock by each nominee for Director, by
each of the Executive Officers named in the Summary Compensation Table and by
all Directors and Executive Officers as a group.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED(1)
---------------------
<S> <C>
Robert E. Boardman................................................... 1,328
Nordahl L. Brue...................................................... 2,892(2)
William H. Bruett.................................................... 1,500
Merrill O. Burns..................................................... 1,673
Lorraine E. Chickering............................................... 150
John V. Cleary....................................................... 2,120
Richard I. Fricke.................................................... 2,900(3)
Douglas G. Hyde...................................................... 6,114(4)
Euclid A. Irving..................................................... 342
Martin L. Johnson.................................................... 1,089
Ruth W. Page......................................................... 1,100(5)
Thomas P. Salmon..................................................... 1,044
Christopher L. Dutton................................................ 1,564(6)
Edwin M. Norse....................................................... 961
A. Norman Terreri.................................................... 2,784(7)
Stephen C. Terry..................................................... 1,400(8)
All directors and Executive
Officers as a group (26 persons)................................... 37,395
<FN>
- ------------
(1) Each listed individual exercises sole voting and investment power over all
of the shares of Common Stock beneficially owned, except as noted herein
below. As of January 31, 1995, no Director, nominee or listed Executive
Officer owned beneficially as much as 1% of the Company's outstanding
Common Stock.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
(2) Mr. Brue owns 2,755 of these shares directly. The remaining 137 of these
shares are owned by Mr. Brue's children for whom Mr. Brue serves as
custodian; Mr. Brue disclaims any other beneficial interest in the 137
shares owned by his children.
(3) Mr. Fricke owns 2,500 of these shares directly. His wife owns the remaining
400 of these shares; Mr. Fricke disclaims any other beneficial interest in
the 400 shares owned by his wife.
(4) Mr. Hyde owns 5,714 of these shares directly. His wife owns the remaining
400 of these shares; Mr. Hyde disclaims any other beneficial interest in
the 400 shares owned by his wife.
(5) Mrs. Page owns 900 of these shares directly. Her husband owns the remaining
200 of these shares; Mrs. Page disclaims any other beneficial interest in
the 200 shares owned by her husband.
(6) Mr. Dutton owns 1,498 of these shares directly. The remaining 66 of these
shares are owned by Mr. Dutton's children for whom Mr. Dutton's wife serves
as custodian; Mr. Dutton disclaims any other beneficial interest in the 66
of these shares shares owned by his children.
(7) Mr. Terreri owns 2,439 of these shares directly. His wife owns the
remaining 345 of these shares; Mr. Terreri disclaims any other beneficial
interest in the 345 shares owned by his wife.
(8) Mr. Terry owns 1,370 of these shares directly. His wife owns the remaining
30 of these shares; Mr. Terry disclaims any other beneficial interest in
the 30 shares owned by his wife.
</TABLE>
As of January 31, 1995, all Directors and Executive Officers of the Company
as a group (consisting of 26 persons) beneficially owned an aggregate of 37,395
shares (or approximately 0.8% of the outstanding shares) of Common Stock.
ITEM 1. PROPOSED BOARD CLASSIFICATION AMENDMENT
To enhance continuity and stability of the Board of Directors and the
policies formulated by the Board, the Board has unanimously approved and is
proposing an amendment to the By-laws, as amended, to provide for classification
of the Board of Directors. The Board Classification Amendment will divide the
Board of Directors into three classes, as nearly equal in number as possible.
After a transitional arrangement, Directors will serve for three years, with one
class being elected each year.
In the opinion of the Board of Directors, the Board Classification Amendment
is desirable to help ensure stability and continuity in the management of the
Company's business and affairs. Although there have been no problems with
respect to stability or continuity of the Board of Directors in the past, the
Board believes that the longer time required to elect a majority of a classified
board will help to prevent the occurrence of such problems in the future. The
Board of Directors also believes that the proposed amendment is desirable to
help discourage hostile attempts to take control of the Company.
POTENTIAL EFFECTS OF THE PROVISIONS
The provisions for classification of Directors will apply in all years, even
when no takeover or proxy contest is being proposed or when no change in control
has occurred. Change in the composition of the whole Board would take up to
three years and change of a majority of the Directors would require two
successive annual meetings. Therefore, the Board Classification Amendment could
make more difficult or
3
<PAGE>
discourage a merger, tender offer, proxy contest or the assumption of control by
a holder of a substantial block of the Company stock or the removal of the
incumbent Board, irrespective of whether such action might be perceived by
shareholders holding a majority of the voting power to be beneficial to the
Company and its shareholders. The Board Classification Amendment could also
discourage a third party from acquiring a substantial block of stock in the
first instance, with a view to a subsequent bid for control of the Company,
irrespective of whether an initial acquisition might be viewed as beneficial to
the Company and its shareholders. Thus, shareholders might not have the
opportunity to dispose of their shares at a price which may be substantially
higher than the prevailing market price. To the extent that the Board
Classification Amendment delays a change in control of the Board, the position
of current management may be strengthened, thereby assisting management
personnel in retaining their positions, even when the only reason for the change
is the performance of the directors.
At the 1987 annual meeting, shareholders approved "anti-takeover" amendments
to the Company's Articles of Association. In essence, the amendments provide as
follows:
- The Company may not, without special shareholder approval, pay a premium
price for any shares held by a substantial shareholder (5% or more of the
outstanding shares) for less than two years. This provision is designed to
discourage "greenmail", a practice in which a corporate "raider" would buy
a large number of shares of stock and then threaten to disrupt the
Company's business unless the Company repurchased the shares at a premium.
- The "fair-price" provision requires a special shareholder approval for any
merger or business combination between the Company and a substantial
shareholder that has not been approved by the Board of Directors. In
addition, such a merger or business combination must satisfy certain
minimum price provisions and must ensure that all shareholders receive the
same price for the shares purchased in the merger or business combination.
- The Board of Directors, in evaluating any proposed merger, would be
required to consider other factors in addition to the current market value
of the stock. Under the "business judgment" provision, factors that must
be considered by the Directors in evaluating a merger include the impact
of the transaction on customers, suppliers, employees, and the community
served by the Company. The Directors must also consider the future market
potential of the Company.
The provisions are intended to give the Board of Directors the time needed
to consider carefully the merits of a takeover proposal and some additional
bargaining leverage in negotiating with a takeover proponent.
The Board of Directors of the Company has carefully considered the potential
adverse effects of the Board Classification Amendment, and has unanimously
concluded that any risk of such consequences is substantially outweighed by the
increased protection which the Board Classification Amendment will afford the
Company and its shareholders, employees and ratepayers.
The Board Classification Amendment requires the affirmative vote of at least
a majority of the outstanding shares of the Company's Common Stock.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADOPTION OF THIS ITEM 1.
4
<PAGE>
ITEM 2. NOMINEES FOR ELECTION AS DIRECTOR
The shares of Common Stock represented by the proxies that are executed and
returned in the accompanying form will be voted at the Annual Meeting (unless
authority is withheld) to elect as Directors the nominees listed below to serve
until the next Annual Meeting of Shareholders (except as described below with
respect to the Board Classification Amendment) and until their successors shall
have been elected and qualified. Should any of the nominees become unavailable
for election for any reason, the proxies will be voted for the election of such
other person or persons as may be designated by the Board of Directors.
The Board of Directors of the Company is currently composed of twelve
members. All of the current Directors have been nominated for re-election at
this meeting of shareholders. If the Board Classification Amendment is approved
by shareholders and each of the nominees is elected, William H. Bruett, Richard
I. Fricke, Martin L. Johnson and Thomas P. Salmon will be elected for an initial
term expiring at the 1996 Annual Meeting (Class I); Robert E. Boardman, Merrill
O. Burns, Douglas G. Hyde and Ruth W. Page will be elected for an initial term
expiring at the 1997 Annual Meeting (Class II); and Nordahl L. Brue, Lorraine E.
Chickering, John V. Cleary and Euclid A. Irving will be elected for an initial
term expiring at the 1998 Annual Meeting (Class III); and in all cases until
their respective successors have been duly elected and qualified. If the Board
Classification Amendment is not approved, all nominees elected as Directors will
serve until the 1996 Annual Meeting and until their respective successors have
been duly elected and qualified.
NOMINEES FOR DIRECTOR
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE FOR THE PAST FIVE DIRECTOR
NAME YEARS AND OTHER INFORMATION (AGE) SINCE
- -------------------------- ---------------------------------------------------------------------------- ---------
<S> <C> <C>
CLASS I (*) NOMINEES WHOSE TERMS WILL EXPIRE IN 1996.
William H. Bruett Senior Vice President, Group Product Manager of PaineWebber, Inc.; Director 1986
(A)(B)(C)(D) of PaineWebber Trust Co. and Chairman of PaineWebber International Bank
Ltd., London, subsidiaries of PaineWebber Group, Inc., since 1990;
President, Chief Executive Officer and Director of Chittenden Corporation
and of Chittenden Trust Company from 1984 to 1990. (51)
Richard I. Fricke Director Emeritus of National Life Insurance Company; Director of Sentinel 1984
(A)(B)(D) Group Funds, Inc. and of Sentinel Pennsylvania Tax-Free Fund, Inc.;
President and Chief Executive Officer of the Bank of Vermont from 1987 to
1989; Retired Chairman of the Board and Chief Executive Officer of National
Life Insurance Company; Fellow of the American Bar Foundation; Member of the
Board of Overseers, Middlebury College, of the Cornell University Council
and of the Cornell Law School Advisory Council. (73)
Martin L. Johnson President of The Johnson Company (environmental and engineering consultants) 1991
(B)(C)(F) since 1978; Secretary of the State of Vermont Agency of Environmental
Conservation from 1973 to 1978. (67)
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE FOR THE PAST FIVE DIRECTOR
NAME YEARS AND OTHER INFORMATION (AGE) SINCE
- -------------------------- ---------------------------------------------------------------------------- ---------
<S> <C> <C>
Thomas P. Salmon Chairman of the Board of the Company since 1983; President of the University 1978
(A)(C)(D)(E) of Vermont since February 4, 1993; Interim President of the University of
Vermont from 1991 to 1993; On leave from Salmon and Nostrand, Attorneys,
Bellows Falls, Vermont; Governor of the State of Vermont from 1973 to 1977;
Director of Vermont Electric Power Company, Inc., of National Life Insurance
Company, of Union Mutual Insurance Company and of BankNorth Group, Inc. (62)
CLASS II (*) NOMINEES WHOSE TERMS WILL EXPIRE IN 1997.
Robert E. Boardman Chairman of Hickok and Boardman, Inc. (insurance agency); President of 1974
(D) Hickok & Boardman Realty, Inc.; Director of Bank of Vermont, of National
Life Insurance Company and of Mount Mansfield Corporation (recreation);
Trustee of Lake Champlain Maritime Museum. (62)
Merrill O. Burns Senior Vice President and Executive Corporate Development Officer, 1988
(A)(B)(D) BankAmerica Corporation since 1991; President and Managing Director of
BankAmerica International from 1988 to 1991. (48)
Douglas G. Hyde President, Chief Executive Officer and Chairman of the Executive Committee 1986
(A)(C)(E) of the Company since 1993; Executive Vice President and Chief Operating
Officer of the Company from 1989 to 1993; Executive Vice President from 1986
to 1989; Director of Vermont Yankee Nuclear Power Corporation, of Vermont
Electric Power Company, Inc., of Edison Electric Institute, of Associated
Edison Illuminating Companies, of Vermont Business Roundtable, and of the
Howard Bank; Member of the Board of Trustees of Fletcher Allen Health Care.
(52)
Ruth W. Page Writer, Editor and Radio Commentator; past member of the Northeast Energy 1985
(B)(C) Council of the United States Department of Energy. (74)
CLASS III (*) NOMINEES WHOSE TERMS WILL EXPIRE IN 1998.
Nordahl L. Brue Chairman of Bruegger's Corporation (quick-service restaurants); Chairman of 1992
(C)(E) Executive Committee of Franklin County Cheese and Frank Hahn, Inc. (dairy
manufacturing and distribution business); Principal of Champlain Management
Services, Inc. (real estate development and management enterprises);
Director of BankNorth Group, Inc.; Stockholder, Sheehey Brue Gray & Furlong,
P.C., Attorneys, Burlington, Vermont; Director and Officer of the Vermont
Business Roundtable; Member of the Governor's Council of Economic Advisors.
(50)
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE FOR THE PAST FIVE DIRECTOR
NAME YEARS AND OTHER INFORMATION (AGE) SINCE
- -------------------------- ---------------------------------------------------------------------------- ---------
<S> <C> <C>
Lorraine E. Chickering President of Public and Operator Services of Bell Atlantic Corporation since 1994
(B)(D) 1993; Vice President, Quality, 1993; Vice President, Operations and
Engineering of Chesapeake and Potomac Telephone Company, a subsidiary of
Bell Atlantic Corporation, from 1991 to 1993; Assistant Vice President,
Marketing Operations of Bell Atlantic Corporation from 1989 to 1991. (44)
John V. Cleary Retired Chief Executive Officer and President of the Company; Chief 1980
(A)(C)(E) Executive Officer, President and Chairman of the Executive Committee of the
Company from 1983 to 1993. (66)
Euclid A. Irving Partner, Paul, Hastings, Janofsky & Walker, Attorneys, New York, New York, 1993
(B)(D)(E)(F) since 1990; Partner, Mudge Rose Guthrie Alexander & Ferdon, Attorneys, New
York, New York from 1984 to 1990. (42)
<FN>
- ------------
(A) Member of Executive Committee
(B) Member of Audit Committee
(C) Member of Nominating Committee
(D) Member of Compensation Committee
(E) Member of Special Issues Committee
(F) Member of Subsidiaries Oversight Committee
(*) Classification assumes that the amendment to the By-laws is approved and
becomes effective before the Annual Meeting is adjourned and proxies are
voted in accordance with Item 1 of the Proxy card.
</TABLE>
BOARD COMPENSATION, OTHER RELATIONSHIPS,
MEETINGS AND COMMITTEES
COMPENSATION AND OTHER RELATIONSHIPS
During 1994, each Director of the Company, except the President earned an
annual fee of $9,500 for service as a Director. In addition to the annual fee,
the Chairman of the Board earned $22,500 for service as Chairman of the Board in
1994. The President was not paid any fees for service as a Director. The
Chairmen of the Audit, Compensation, Nominating and Special Issues Committees
earned annual fees of $2,500 each for service in such capacity. The President,
who is Chairman of the Executive Committee, was not paid any fee for service in
such capacity. For attendance at meetings of the Board of Directors and of all
committees of the Board, Directors other than the President earned $650 for each
meeting attended in person (plus $350 for any meeting that occurred on the same
day as another meeting) and $350 for participation by means of conference
telephone. Travel and lodging expenses incurred by Directors attending Board or
committee
7
<PAGE>
meetings are paid by the Company. The Company also maintains a Deferred
Compensation Plan for Directors pursuant to which Directors may defer receipt of
all or part of the fees otherwise payable to them for service as Directors.
Mr. Nordahl L. Brue, a Director of the Company, is a stockholder in the law
firm of Sheehey Brue Gray & Furlong, P.C. In prior years, the Company has
retained the services of Sheehey Brue Gray & Furlong, P.C. as special counsel
and has retained Sheehey Brue Gray & Furlong, P.C. to represent the Company in
certain matters during 1995. The Company paid Sheehey Brue Gray & Furlong, P.C.
$264,372 for legal services rendered in 1994.
Mr. Martin L. Johnson, a Director of the Company, is the President of The
Johnson Company, an environmental and engineering consulting firm. In 1994, the
Company retained the services of The Johnson Company to assist with
environmental matters and has retained The Johnson Company to provide expert
advice and analysis regarding these matters in 1995. The Company paid The
Johnson Company $801,570 for services rendered in 1994.
MEETINGS
During 1994, the Board of Directors held seven regular meetings and one
special meeting, which was held by conference telephone. During such year, no
Director attended less than 75% of the aggregate number of meetings of the Board
of Directors and the committees on which such Director served.
COMMITTEES
The committees of the Board of Directors include an Executive Committee, an
Audit Committee, a Nominating Committee, a Compensation Committee, a Special
Issues Committee and a Subsidiaries Oversight Committee, the members of which
are identified on the foregoing table.
The Executive Committee is vested with the powers of the Board of Directors
in the management of the current and ordinary business of the Company, except as
otherwise provided by law. During 1994, the Executive Committee held one
meeting.
The Audit Committee annually recommends to the Board of Directors the
appointment of independent public accountants of the Company, reviews the scope
of audits and receives, reviews and takes action deemed appropriate with respect
to audit reports submitted and other audit matters. The Audit Committee met
twice during 1994; one of such meetings was held by conference telephone.
The function of the Nominating Committee is to recommend to the Board of
Directors persons selected by the Committee for nomination to the Board of
Directors. The Committee also reviews the Company's organizational plans and
activities to assure the development and continuity of management leadership.
This Committee met twice during 1994; one of such meetings was held by
conference telephone. The Nominating Committee will consider nominees
recommended by shareholders. The names of any such nominees should be forwarded
to the Corporate Secretary, Green Mountain Power Corporation, 25 Green Mountain
Drive, P.O. Box 850, South Burlington, Vermont 05402, who will submit them to
the Nominating Committee for its consideration.
The Compensation Committee is charged with the responsibility of reviewing
and making recommendations to the Board of Directors regarding the annual
salaries of Officers and incentive awards of Officers
8
<PAGE>
and key management personnel of the Company, recommending to the Board any
needed revisions to the compensation of Officers and of otherwise assisting the
Board in discharging its responsibilities in connection with the compensation of
Officers. The Compensation Committee met five times during 1994; one of such
meetings was held by conference telephone.
The Special Issues Committee addresses unusual, extraordinary or
miscellaneous issues that confront the Company from time to time. The Special
Issues Committee met three times during 1994.
The Subsidiaries Oversight Committee, a newly formed committee of the Board,
will oversee the non-utility operations of the Company. The Committee did not
meet during 1994.
ITEM 3. COMPENSATION PROGRAM FOR OFFICERS AND
CERTAIN KEY MANAGEMENT PERSONNEL
The Board of Directors has adopted a Compensation Program for Officers and
Certain Key Management Personnel (the "Compensation Program" or the "Program").
The Company is now seeking approval of the Program from Shareholders. The
Program document is set forth in Exhibit B hereto.
The Compensation Program is intended to ensure that total compensation,
composed of base and variable compensation components, is competitive in the
marketplace and promotes the Company's strategic objectives. More specifically,
the purposes of the Compensation Program are to: ensure that base compensation
compares favorably with regard to organizations competing for similar talent;
provide an opportunity for officers and other key management personnel to share
in the success of the Company by linking a portion of compensation (variable
compensation) to corporate performance results; encourage a longer-term view by
paying part of an earned variable compensation award in common stock that is
subject to five-year restriction and forfeiture provisions; and foster and
reinforce teamwork among officers and other key management personnel.
The Company is asking Shareholders to approve the Compensation Program. A
reserve of 50,000 shares of the Common Stock of the Company from the authorized
but unissued shares that have been previously approved by shareholders will be
established for this purpose; the Company may also use previously-issued shares
held as Treasury Stock or shares purchased on the market.
ELIGIBILITY
Participants in the Program are the senior officers of the Company and other
key management personnel who are in positions to make a substantial contribution
to the management, growth and success of the Company and have been designated by
the Board of Directors as eligible. At present, 16 persons are eligible to
participate in the Compensation Program. The Board of Directors has the power to
otherwise modify the eligibility requirements of the Compensation Program. The
eligible participants are listed in Appendix I to the Program document (see
Exhibit B hereto).
PROGRAM ADMINISTRATION
The Program will be administered by the Chief Executive Officer ("CEO") with
the approval of the Compensation Committee. The Compensation Committee will
review the operation of the Program no less frequently than annually and, as it
deems necessary, recommend appropriate actions to the Board of
9
<PAGE>
Directors. The Board of Directors will have the full power and authority to:
interpret the Program; designate the participants; act on the CEO's
recommendations; amend or terminate the Program, subject to required shareholder
and regulatory approval; and approve the CEO's base and variable compensation.
COMPENSATION COMPONENTS
Under the Program, BASE SALARIES are intended to provide a competitive rate
of fixed compensation. Base salary levels will be assessed by compiling and
analyzing salary information from various published survey sources on an annual
basis, and are intended to be managed to the market average (in any event,
within a plus or minus 10% range around the market average) as determined from
the survey analysis. Actual base compensation within the market range will
depend on internal equity, overall scope of responsibilities of the position,
recruitment needs, and significant individual performance variations.
The VARIABLE COMPENSATION component of the Program will tie compensation
directly to the achievement of key corporate-wide objectives. Awards earned will
be paid in cash, stock grants, and restricted stock. (The Company will impose
two restrictions of a five year duration: no transferability and forfeiture of
the stock upon termination of employment with the Company, except for
retirement, death or disability.) The stock award provisions are effective only
upon shareholder and other required regulatory approval.
Opportunities for variable compensation awards for officers or key
management employees will vary depending upon the "band" in which they fall --
Band A, B or C -- such "bands" signifying differences in the nature of the
positions and their impact on the organization. At present, sixteen persons are
eligible to participate in the Program; two in Band A, five in Band B and nine
in Band C. The Board of Directors is authorized to increase or decrease the size
of each band. Depending on the extent to which the Company's objectives are met
or exceeded on appropriate performance measures, the awards can range from a
threshold of 12.5% to a maximum of 75% of base salary. The award delivery
feature is intended to motivate officers and other key management employees
toward the annual attainment of critical corporate objectives consistent with
the need to manage the Company to achieve longer-term success.
Appropriate corporate performance measures and the performance objectives
associated with them will be determined annually but are expected to remain in
substantially the same form year-to-year. The performance measures will be
weighted to reflect the Company's strategic plan and the impact each
organization band/officer position has on performance; the extent to which
variable compensation is paid will be a function of the Company's performance
against the objectives on EACH of the performance measures. The performance
measures, their weighting and the performance objectives for the first year of
the Program, 1994, are set forth in Appendix II to the Program document.
After the close of each year, the Compensation Committee, with input from
the CEO, will ascertain the degree to which these performance objectives were
accomplished to determine if variable awards are to be paid. If the threshold
level of performance is not met, an award will NOT be paid with respect to that
specific performance measure.
In addition, the Program incorporates a circuit breaker to protect
shareholder investment. The circuit breaker ensures that awards will not be paid
unless earnings, after subtracting the variable awards, are greater than
dividends paid in the year for which variable compensation is to be awarded.
10
<PAGE>
Participants must be employed on the date the award is paid in order to
receive an award unless the participant has retired, is disabled or is deceased,
or the Compensation Committee determines that the circumstances under which the
participant terminated employment warrant special consideration.
The Company presently is seeking regulatory approvals to reserve for
issuance and to use 50,000 shares of common stock for awards in the Program. The
50,000 shares are expected to be used over the course of five years. The Company
also may use previously-issued shares held as Treasury Stock or shares purchased
on the market. At the Compensation Committee's discretion, participants may be
granted Restricted Shares, Stock Grants or any combination of these provided
that the combined total numbers of shares granted does not exceed the overall
share authorization described above.
Restricted Shares that are forfeited in accordance with the Program shall
again be available for award under the Program.
In the event of stock dividends, stock splits, recapitalizations, mergers,
consolidations, combinations, exchanges of shares, spin-offs, liquidations,
reclassifications or other similar changes in the capitalization of the Company,
the number of shares of Common Stock available for grant under the Program shall
be adjusted proportionately or otherwise by the Board, and where deemed
appropriate, the number of shares covered by Restricted Shares outstanding. In
the event of any other changes affecting the Common Stock reserved under the
Program, such adjustments, if any, as may be deemed equitable by the Board,
shall be made to give proper effect to such event.
EFFECTIVE DATES
The Program, except for the stock award provisions, became effective as of
January 1, 1994. The stock award provisions of the Program will become effective
upon approval by shareholders of the Company and any required approval of the
issuance of shares by the Vermont Public Service Board. The Program and all
outstanding awards shall remain in effect until all outstanding awards have been
earned, have been exercised or repurchased, have expired or have been canceled.
The Board of Directors believes that the Program is designed to improve the
performance of the Company and to serve the best interest of the shareholders.
By encouraging ownership of the Company's stock among those who play significant
roles in the Company's success, implementation of the Program will more closely
align the interests of Executive Officers and key management employees with
those of its shareholders. The Program will also have a positive effect on the
Company's ability to attract, motivate and retain employees of outstanding
leadership and management ability.
The affirmative vote of a majority of the outstanding shares is required for
the approval of the Compensation Program for Officers and Certain Key Management
Personnel.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADOPTION OF THIS ITEM 3.
11
<PAGE>
EXECUTIVE COMPENSATION
The following Summary Compensation Table shows compensation earned by the
Executive Officers named in the table (the "Named Executive Officers") for
services rendered to the Company during fiscal years 1994, 1993 and 1992.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION(1)
---------------------------------- ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY INCENTIVE(2) OTHER(3) COMPENSATION(4)
- ---------------------------------------------------- --------- ---------- ----------- --------- -----------------
<S> <C> <C> <C> <C> <C>
Douglas G. Hyde..................................... 1994 $ 206,468 $ -- $ 21,337 $ 6,144
President and Chief 1993 $ 179,243 $ 0 $ 0 $ 5,681
Executive Officer 1992 $ 149,046 $ 37,200 $ 0 $ 4,434
A. Norman Terreri................................... 1994 $ 153,839 $ -- $ 20,837 $ 5,211
Executive Vice President and 1993 $ 144,023 $ 0 $ 0 $ 5,207
Chief Operating Officer 1992 $ 135,600 $ 29,800 $ 0 $ 4,509
Edwin M. Norse...................................... 1994 $ 120,247 $ -- $ 20,837 $ 4,192
Vice President and General 1993 $ 110,373 $ 0 $ 0 $ 3,679
Manager, Energy Resources and Sales 1992 $ 106,508 $ 21,300 $ 0 $ 3,098
Christopher L. Dutton............................... 1994 $ 112,102 $ -- $ 20,837 $ 3,543
Vice President, Finance and 1993 $ 103,268 $ 0 $ 0 $ 3,351
Administration, Chief Financial Officer 1992 $ 98,481 $ 19,700 $ 0 $ 2,796
and Treasurer
Stephen C. Terry.................................... 1994 $ 103,717 $ -- $ 21,337 $ 3,731
Vice President and General 1993 $ 94,814 $ 0 $ 0 $ 3,040
Manager, Retail Energy Services 1992 $ 91,092 $ 18,200 $ 0 $ 2,598
<FN>
- ------------
(1) Amounts shown include salary and incentive earned by the Executive Officers
on the basis of the Company's operating results in 1992 and 1993, as well
as amounts earned but deferred at the election of those officers. The
amount of the incentive to be awarded for 1994 has not yet been determined.
(2) Certain of the Company's officers, including the Named Executive Officers,
were designated to participate in the Company's Management Incentive Plan,
adopted in December 1985 and amended in December 1990. Annual awards could
have amounted to a maximum of 10% to 30% of a participant's salary
depending on such participant's position and certain corporate performance
standards. Distributions to participants could have been made in three
annual installments, depending on the amount of the award. The Management
Incentive Plan as it applied to officers was superseded in 1994 by the
Compensation Program for Officers and Certain Key Management Personnel.
Payments made in the last three years under the Management Incentive Plan,
based on the Company's and the participants' performance in those years,
are set forth in the Incentive column of this Summary Compensation Table.
</TABLE>
12
<PAGE>
<TABLE>
<S> <C>
(3) The total amounts shown in this column represent a one-time payment to each
of the Named Executive Officers for purchase of their Company assigned
vehicle in conjunction with the elimination of Company provided vehicles.
(4) The total amounts shown in this column for the last fiscal year consist of
the following:
(i) Benefits attributable to Company-owned life insurance policy: Mr. Hyde
$1,643, Mr. Terreri $1,601, Mr. Norse $584, Mr. Dutton $420, and Mr. Terry
$619.
(ii) Company matching contributions to the Employee Savings and Investment
Plan: Mr. Hyde $4,501, Mr. Terreri $3,610, Mr. Norse $3,608, Mr. Dutton
$3,123, and Mr. Terry $3,112.
</TABLE>
VARIABLE COMPENSATION PLAN AWARDS FOR 1994 PERFORMANCE
As of April 1995, the Compensation Committee of the Board of Directors has
not determined the amounts of any incentive awards to be paid to the Named
Executive Officers under the Compensation Program on the basis of 1994 operating
results. See Compensation Committee Report.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors (the "Compensation
Committee") is charged with the responsibility of reviewing and making
recommendations to the Board of Directors regarding the annual salaries and
incentive awards paid to the Executive Officers of the Company. The process
involved in determining the executive compensation for fiscal 1994 is summarized
below.
- In March and April 1994, an independent compensation consultant compiled
information regarding executive compensation from a number of nationwide
surveys of similarly-sized utility companies and from surveys of other
businesses. The companies in such surveys operate in the Northeast United
States, or are of a similar size, or have other operating characteristics
similar to the Company. The Compensation Committee believes these
companies are representative of the Company's main competition for
executive talent. Consequently, the compensation survey groups include
companies that are different from the companies in the S&P Electric
Companies Index and the S&P 500 Composite Index used for the Performance
Graphs.
- In April 1994, the consultant provided a report to the Compensation
Committee recommending changes in salary ranges as well as salary increase
percentages reflecting meritorious job performance and cost of living
factors. The report discussed how marketplace data was used to prepare the
recommendations. Through regression analysis, with adjustments to maintain
internal equity, the market data were used to derive a salary range
midpoint, which was the average for each Executive Officer position salary
range. The recommended salary ranges were then established from these
midpoints.
- The competitive market data were reviewed with the Company's Chief
Executive Officer for each Executive Officer position except that of the
Chief Executive Officer. In addition, each position, except that of the
Chief Executive Officer, was reviewed together with each Executive
Officer's individual performance for 1993 and objectives for the year
1994. The Company's performance for 1993 and performance targets for 1994
were also reviewed.
13
<PAGE>
- Based on the foregoing, the Chief Executive Officer recommended to the
Compensation Committee a base salary for each executive level position
excluding the Chief Executive Officer.
- The Compensation Committee reviewed the salary of the Chief Executive
Officer and compared it to salaries paid to chief executives of utility
companies of similar size and to other companies. After discussion, the
Compensation Committee recommended a base salary, which was approved by
the Board of Directors. Specifically, the Compensation Committee
considered, among other factors, the following matters (in descending
order of importance without any specific weight being assigned to any of
such factors) in establishing the Chief Executive Officer's base salary:
the Company's achievement in 1993 of the return on equity target set by
the Vermont Public Service Board; the Company's continuing to have the
lowest retail electricity rates among the major investor-owned utilities
in New England; the Company's maintenance in 1993 of its standing as
having the second highest credit rating among New England's investor-owned
utilities; and the continued favorable assessment of the Company by its
customers in 1993 as reflected in an independent professional survey.
These factors were also considered with respect to the Compensation
Committee's deliberations on the base salaries for the other Executive
Officers. The base salary of the Chief Executive Officer in 1994 was
within the second quartile of the base salary paid by the surveyed
companies.
- In May 1994, the Compensation Committee reviewed the consultant's
recommendations, performance evaluations and survey data. After
discussion, the Compensation Committee recommended a base salary which was
approved by the Board of Directors.
- In March 1994, the Compensation Committee considered the incentive awards
to be made in 1994 to the Named Executive Officers listed in the Summary
Compensation Table pursuant to the Management Incentive Plan, as amended,
in light of the Company's performance in 1993. Because the Company's
earned return on equity in 1993 did not materially exceed the minimum
level of performance allowing for incentive awards to be made under the
Management Incentive Plan, as amended, the Compensation Committee
concluded that no incentive awards should be paid in 1994 to the Named
Executive Officers on the basis of the Company's performance in 1993.
- In April 1994, the Company reviewed its policy of providing Company-owned
vehicles to several dozen employees, including the Named Executive
Officers. The Compensation Committee determined that it was appropriate to
provide a one-time payment to the affected employees in light of the
elimination of the Company-owned vehicle benefit. The one-time payment
provided to the Named Executive Officers is shown in the Summary
Compensation Table.
- In May 1994, the Compensation Committee presented its report and
recommendations to the Board of Directors for approval.
- In April 1995, the Compensation Committee will consider the base salaries
and the variable awards that the Committee will recommend be paid to the
Named Executive Officers as of May 1995. The recommendations of the
Compensation Committee to the Board of Directors in this respect will be
based on a new report by a compensation consultant, new market survey
data, and the Company's goals and objectives.
14
<PAGE>
- A new Section 162(m) was added to the Internal Revenue Code when Congress
enacted the Omnibus Budget Reconciliation Act of 1993 on August 10, 1993.
The Company has reviewed its compensation policies with respect to
executive officers and determined that Section 162(m) should have no
impact on its executive compensation policies in 1994 because no executive
officer will receive compensation in such year in excess of the $1 million
threshold.
COMPENSATION COMMITTEE
<TABLE>
<S> <C>
Robert E. Boardman Richard I. Fricke
William H. Bruett Euclid A. Irving
Merrill O. Burns,
Chairman Thomas P. Salmon
Lorraine E. Chickering
</TABLE>
PERFORMANCE GRAPHS
The following graphs compare the total return on investment (change in stock
price plus reinvested dividends) performance of the Company with that of Duff &
Phelps Electric Utility Index as calculated by Duff & Phelps, the S&P 500
Composite Index and the S&P Electric Companies Index calculated by Standard &
Poor's Corporation. For this proxy statement and subsequent statements, the
Company has elected to change the comparative peer group from the S&P Electric
Companies Index to that of the Duff & Phelps Electric Utility Index. The Duff &
Phelps Electric Utility Index is comprised of 89 electric utility companies.
Company performance as compared to this index is used to determine a portion of
awards under the Company's Compensation Program for Officers and key management
personnel. The comparison of total return on investment for each of the periods
assumes $100 was invested on December 31, 1989 (for the five-year graph) or
December 31, 1984 (for the 10-year graph) in each of: the Company; the Duff &
Phelps Electrics; the S&P 500 Composite Index; and the S&P Electric Companies
Index. The performances of the compared investments on a total return basis are
quite sensitive to the market price prevailing on the date when the periods that
are depicted on the graphs begin.
15
<PAGE>
FIVE-YEAR COMPARISON OF RETURN
ASSUMING QUARTERLY REINVESTMENT OF DIVIDENDS
[CHART]
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
GMP............................................. $ 100.00 $ 93.09 $ 134.61 $ 159.45 $ 158.72 $ 154.55
D&P Electrics................................... $ 100.00 $ 99.10 $ 127.53 $ 138.40 $ 151.69 $ 135.37
S&P 500......................................... $ 100.00 $ 96.81 $ 126.37 $ 135.92 $ 149.59 $ 151.55
S&P Electric Cos................................ $ 100.00 $ 102.61 $ 133.58 $ 141.43 $ 159.25 $ 138.44
</TABLE>
16
<PAGE>
TEN-YEAR COMPARISON OF RETURN
ASSUMING QUARTERLY REINVESTMENT OF DIVIDENDS
[CHART]
<TABLE>
<CAPTION>
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GMP...................... $ 100.00 145.74 209.67 219.38 207.39 256.46 238.75 345.22 408.92 407.05 396.35
D&P Electrics............ $ 100.00 135.62 178.71 162.14 191.66 242.39 240.21 309.11 335.47 367.67 328.13
S&P 500.................. $ 100.00 131.64 156.23 164.43 191.65 252.32 244.27 318.85 342.95 377.45 382.40
S&P Electric Cos......... $ 100.00 126.46 162.68 150.41 176.91 235.60 241.75 314.71 333.21 375.19 326.16
</TABLE>
17
<PAGE>
PENSION PLAN INFORMATION
The following table shows annual pension benefits payable pursuant to the
Company's Retirement Plan to all covered employees, including Executive
Officers, upon retirement at age 65, in various compensation and
years-of-service classifications, assuming the election of a retirement
allowance payable as a life annuity. The retirement benefits in connection with
the separate life insurance plan referred to below are in addition to those
described in the following table.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
ESTIMATED ANNUAL RETIREMENT BENEFITS AT NORMAL
RETIREMENT AGE OF 65 YEARS CREDITED YEARS OF SERVICE*
ANNUAL AVERAGE BASE COMPENSATION IN 3 CONSECUTIVE HIGHEST PAID -------------------------------------------------------
YEARS OUT OF LAST 10 YEARS PRECEDING RETIREMENT 15 20 25 30 35 & OVER
- --------------------------------------------------------------- --------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
$ 75,000....................................................... 16,155 21,540 26,925 32,310 37,695
$100,000....................................................... 22,155 29,540 36,925 44,310 51,695
$125,000....................................................... 28,155 37,540 46,925 56,310 65,695
$150,000....................................................... 34,155 45,540 56,925 68,310 79,695
$200,000**..................................................... 42,155 56,207 70,258 84,310 98,362
<FN>
- ------------
* Credited years of service (including service credited with other
companies), as of December 31, 1994, for each of the following Executive
Officers were as follows: D. G. Hyde 16.9 years; A. N. Terreri 32.5 years;
E. M. Norse 24.6 years; C. L. Dutton 9.8 years; and S. C. Terry 8.8 years.
** Compensation cap for 1992 is $228,860; for 1993 is $235,840; and for 1994
is $150,000.
</TABLE>
All employees, including Executive Officers of the Company are covered by
the Company's Retirement Plan if they have been employed for more than a year.
This Plan is a defined benefit plan providing for normal retirement at age 65.
Early retirement may be taken commencing with the first of any month following
the attainment of age 55, provided at least five years of credited service have
been completed. For employees with at least 10 years of credited service, the
accrued benefits are reduced as follows if retirement occurs prior to age 62:
<TABLE>
<CAPTION>
AGE AT RETIREMENT REDUCTION OF BENEFITS
- ----------------------------------------- -----------------------------------------
<S> <C>
61 5%
60 10%
59 15%
58 20%
57 25%
56 32%
55 37%
</TABLE>
For employees with less than 10 years of credited service who retire before age
65, benefits are actuarially reduced. If retirement occurs after age 62 and
completion of at least 10 years of credited service, the full accrued benefit is
payable. Retirement benefits are not subject to any deductions for Social
Security or other offset amounts.
18
<PAGE>
Retirement benefits are based on final average base compensation and length
of service. Final average compensation is the average of the compensation
(limited to base salary for Executive Officers, which is shown in the Salary
column of the Summary Compensation Table for the Named Executive Officers, and
straight-time payroll wages for other employees) for the three highest
consecutive years out of the final 10 years of employment. Effective January 1,
1989, the normal retirement benefit is equal to 1.1% of the final average
compensation up to covered compensation plus 1.6% of final average compensation
over covered compensation multiplied by each year of credited service up to 35
years.
For 1994, the percentage which the cost to maintain the retirement fund bore
to the total participant covered compensation equaled 4.6%.
Executive Officers and key management personnel of the Company, including
the Named Executive Officers, participate in a separate life insurance plan.
Under this separate plan, the Company has purchased life insurance on the lives
of the Executive Officers and key management personnel to provide life insurance
benefits to them in an amount equal to four times salary for the most senior
Executive Officer (President and Chief Executive Officer), three times salary
for the next most senior Executive Officers (Executive Vice President and Chief
Operating Officer, and Vice Presidents) and two times salary for the third most
senior Executive Officers and key management personnel (General Counsel,
Assistant Vice Presidents, Assistant General Counsel, Assistant Treasurer,
Controller and General Manager, Administrative Service). The plan also provides
retirement and survivor's benefits for a period of fifteen years following
retirement as a supplement to the Company's Retirement Plan in an amount equal
to 44% of final salary for the most senior Executive Officer, 33% of final
salary for the next most senior Executive Officers and 22% of final salary for
the third most senior Executive Officers and key management personnel.
Retirement benefits will be paid out of the Company's general assets. The life
insurance benefits are designed so that the Company does not expect to incur any
significant net expense in implementing this part of the plan. The retirement
benefits are partially covered by the life insurance coverage obtained by the
Company. These costs cannot be properly allocated or determined for any one plan
participant because of the overall plan assumptions. The Company is recording
the estimated cost of this plan on a current basis and will record as income
life insurance benefits when they occur.
The Company has adopted a Deferred Compensation Plan pursuant to which
Executive Officers and key management personnel may elect to defer a portion of
their salaries. Amounts deferred are credited to a separate account for each
participant. The balance in a participant's account will be paid to him or her
or his or her beneficiary according to their election form.
The Company has entered into severance contracts with 17 of its Executive
Officers and key management personnel, including the Named Executive Officers,
under which the Company has certain obligations to each affected Executive
Officer if there is a change in control of the Company (as defined below), and
if the Executive Officer's employment is involuntarily terminated without cause
or is voluntarily terminated by the Executive Officer with good reason (as
defined below) within two years after such change in control. The severance
contracts provide for payments of 2.99 times the base salaries of the affected
Executive Officers, for continuation of health, medical and other insurance
programs for such Executive Officers for twenty-four months after the
termination of employment of such Executive Officers following a "change in
control" of the Company and for payment of an amount equal to the actuarial
value of up to twenty-four additional months of credited service under the
Company's Retirement Plan after such termination. A "change in
19
<PAGE>
control of the Company" will be deemed to have occurred under the severance
contracts when a person secures the beneficial ownership of 25% or more of the
voting power of the Company's then outstanding securities, when there has been a
new majority of members serving on the Board of Directors for two consecutive
years or when the Company's shareholders approve a merger or consolidation of
the Company with another corporation where the outstanding voting securities of
the Company do not continue to represent at least 80% of the combined voting
power of the Company or the surviving entity. Under the severance contracts, the
Board of Directors has limited discretion to determine whether a change of
control of the Company has, in fact, taken place. An Executive Officer may
terminate his or her employment "with good reason" following a change in control
if the Executive Officer is assigned duties inconsistent with his or her
responsibilities before the change in control occurred, if the Company's
headquarters are relocated more than 50 miles from the present location, if the
Executive Officer is required to relocate more than 50 miles from his or her
present location, if the Executive Officer's compensation or benefits are
reduced or adversely affected (other than as part of an overall adjustment of
executive compensation or benefits) or if the Company does not obtain an
agreement from its successor to perform under the severance contracts.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors on November 14, 1994, appointed the firm of Arthur
Andersen LLP to serve as independent certified public accountants for the
calendar year 1995. The appointment was made upon the recommendation of the
Audit Committee. Arthur Andersen LLP has served the Company in this capacity
continuously since 1988. Representatives of the firm are expected to attend the
Annual Meeting to make statements if they desire and to respond to appropriate
questions.
COMPLIANCE WITH THE SECURITIES EXCHANGE ACT
The Company's Directors and Executive Officers are required under Section
16(a) of the Securities Exchange Act of 1934 to file reports of ownership and
reports of changes in ownership with the Securities and Exchange Commission and
the New York Stock Exchange. Copies of those reports must also be furnished to
the Company.
Based solely on a review of those reports and written representations from
the Directors and Executive Officers, the Company believes that during 1994 all
requirements applicable to Directors and Executive Officers have been complied
with.
1996 SHAREHOLDER PROPOSALS
A shareholder proposal must be received by the Secretary of the Company no
later than December 15, 1995, to be included in the proxy materials for the
Company's next Annual Meeting.
20
<PAGE>
DISCRETIONARY AUTHORITY
While the Notice of Annual Meeting of Shareholders refers to such other
matters as may properly come before the Meeting, the only matters which the
Management intends to present or knows will be presented at the Meeting are
those matters set forth in the Notice of the Meeting. However, the enclosed
proxy gives discretionary authority to the persons named therein to act in
accordance with their best judgment in the event any additional matters should
be presented at the Meeting.
By Order of the Board of Directors
Donna S. Laffan
SECRETARY
South Burlington, Vermont
April 12, 1995
21
<PAGE>
EXHIBIT A
PROPOSED AMENDMENT TO THE BY-LAWS TO ESTABLISH
A CLASSIFIED BOARD OF DIRECTORS
Section 2 of Article II of the By-laws is amended to provide as follows:
SECTION 2. ELECTION. The board of directors shall consist of twelve members
and shall be elected at the annual meeting of the stockholders or at a special
meeting held in place thereof. Subject to law, to the articles of association
and to the other provisions of these by-laws, each director shall hold office
until his or her term of office expires and until his or her successor shall
have been elected and qualified. The directors shall be divided, with respect to
the terms for which they severally hold office, into three classes, hereby
designated as Class I, Class II and Class III. Each class shall have at least
three directors and the three classes shall be as nearly equal in number as
possible. The initial terms of office of the Class I, Class II and Class III
directors, elected at the 1995 annual meeting of shareholders, shall expire at
the next succeeding annual meeting of shareholders, the second succeeding annual
meeting of shareholders and the third succeeding annual meeting of shareholders,
respectively. At each annual meeting of shareholders after 1995, the successors
of the class of directors whose term expires at that meeting shall be elected to
hold office for a term expiring at the annual meeting of shareholders to be held
in the third year following the year of their election. No director may be
removed from office prior to the expiration of his or her term of office except
for cause. For purposes of this Section, the term "cause" means a willful and
continued failure to perform the duties of a director (other than failure
resulting from incapacity due to physical or mental illness) or conduct which is
demonstrably and materially injurious to the corporation, monetarily or
otherwise. Such removal from office can be effected only upon the affirmative
vote of three quarters of the remaining membership of the board of directors.
The board of directors shall elect from its members a chairman of the board of
directors who will serve as such for one year or during the balance of his or
her term as a director, whichever is less, and until a successor is elected and
qualified.
<PAGE>
EXHIBIT B
- --------------------------------------------------------------------------------
GREEN MOUNTAIN POWER CORPORATION
COMPENSATION PROGRAM FOR OFFICERS
AND CERTAIN KEY MANAGEMENT PERSONNEL
HIGHLIGHTS BROCHURE/PROGRAM DOCUMENT
<PAGE>
GREEN MOUNTAIN POWER CORPORATION
COMPENSATION PROGRAM FOR OFFICERS
AND CERTAIN KEY MANAGEMENT PERSONNEL
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Preamble................................................................................................... 1
Purpose of Program......................................................................................... 1
Participants............................................................................................... 1
Effective Date............................................................................................. 1
Definitions................................................................................................ 1
Program Components......................................................................................... 3
Base Salary................................................................................................ 3
Variable Compensation...................................................................................... 3
Determination of Award..................................................................................... 5
Variable Compensation Award Payment........................................................................ 6
Program Administration..................................................................................... 6
Appendix I
Appendix II
</TABLE>
<PAGE>
GREEN MOUNTAIN POWER CORPORATION
COMPENSATION PROGRAM FOR OFFICERS
AND CERTAIN KEY MANAGEMENT PERSONNEL (CONTINUED)
- --------------------------------------------------------------------------------
PREAMBLE
This document describes and governs the Compensation Program for Officers
and Certain Key Management Personnel for Green Mountain Power Corporation ("GMP"
or "the Company"). The program is intended to assure that total compensation is
competitive in the marketplace and promotes the Company's strategic objectives.
PURPOSE OF PROGRAM
The purpose of the Compensation Program is to:
- ensure that base compensation compares favorably with regard to
organizations competing for similar talent;
- provide an opportunity for officers and other key management personnel to
share in the success of GMP by linking a portion of compensation (variable
compensation) to corporate performance results;
- encourage a longer-term view by paying part of an earned variable
compensation award in deferred/ restricted stock; and
- foster and reinforce teamwork among officers and other key management
personnel.
PARTICIPANTS
Senior officers of GMP and other key management personnel, as designated
from time to time by the Board of Directors are eligible to participate in this
program. Appendix I to this document, as amended from time to time, will list
eligible participants so designated.
EFFECTIVE DATE
The stock award provisions contained herein shall be effective upon
shareholder and other required regulatory approval. The program is otherwise
effective January 1, 1994.
DEFINITIONS
The following definitions pertain to the program.
CIRCUIT BREAKER -- a performance level below which no variable compensation
will be paid regardless of performance against the corporate measures. For this
program, no awards will be paid unless earnings, less provision for awards, are
greater than dividends paid in the year for which variable compensation is to be
awarded.
COMPENSATION COMMITTEE -- the Compensation Committee of the Board of
Directors.
MARKET AVERAGE -- the average of salaries paid in the marketplace for
positions similar to those at GMP.
MARKET RANGE -- a range running from 10% below to 10% above the market
average.
1
<PAGE>
GREEN MOUNTAIN POWER CORPORATION
COMPENSATION PROGRAM FOR OFFICERS
AND CERTAIN KEY MANAGEMENT PERSONNEL (CONTINUED)
- --------------------------------------------------------------------------------
MARKETPLACE -- Companies that are determined by GMP to be those competing
for similar talent. Depending on the position within GMP, marketplace companies
can be utilities, general industry -- local, regional, national, or any
combination thereof.
MAXIMUM -- the maximum or optimal level of corporate performance with
respect to a corporate performance measure. This determination will be applied
separately to each performance measure. No variable compensation with respect to
a performance measure will be paid in excess of the maximum level indicated.
COMPENSATION PROGRAM -- the compensation program, which consists of base
salary and the opportunity to earn variable compensation.
ORGANIZATION BANDS -- tiers within which management positions are clustered,
to reflect the nature and scope of the jobs, reporting relationships, and the
like.
PEER COMPANIES -- a select group of utilities against which GMP's
performance will be measured.
PERFORMANCE MEASURE -- a critical factor used to measure the success of the
business.
PROGRAM YEAR -- GMP's fiscal year.
RESTRICTED STOCK GRANTS -- the portion of the variable compensation award
paid to participants in this program in the form of GMP common stock that will
be subject to two restrictions of a five (5) year duration: (1) no
transferability; and (2) forfeiture of the stock upon termination of employment
with the Company (except for retirement, death or disability). During the
five-year restriction period, dividends will be paid and recipients will have
voting rights. The value of restricted stock is taxable when the restrictions
lapse (after five years, or earlier in the case of the participant's retirement,
disability or death). The restriction period begins on the date the awards are
granted.
STOCK GRANTS -- the portion of the variable compensation award paid to
participants in the form of shares of GMP common stock. These shares are the
property of the participant upon grant and may be retained or sold. Upon grant,
shares are subject to current taxation.
TARGET -- the desired level of corporate performance with respect to a
performance measure. This determination will be applied separately for each
performance measure.
THRESHOLD -- the acceptable level of corporate performance with respect to a
performance measure. This determination will be applied separately to each
performance measure. No variable compensation with respect to a performance
measure will be paid unless the threshold level is attained.
TOTAL COMPENSATION -- an amount comprised of base salary and variable
compensation.
VARIABLE COMPENSATION -- compensation that is earned based on the
achievement of corporate performance objectives and that may be paid in cash,
stock grants, or restricted stock grants.
2
<PAGE>
GREEN MOUNTAIN POWER CORPORATION
COMPENSATION PROGRAM FOR OFFICERS
AND CERTAIN KEY MANAGEMENT PERSONNEL (CONTINUED)
- --------------------------------------------------------------------------------
PROGRAM COMPONENTS
The Compensation Program is comprised of two compensation components:
- Base Salary
- Variable Compensation
BASE SALARY
Each officer or other key management employee is paid a base salary intended
to be competitive with base compensation paid for similar positions in the
marketplace.
VARIABLE COMPENSATION
Each officer or other key management employee is eligible to earn additional
compensation when GMP's performance meets or exceeds various performance
objectives.
BASE SALARY
Base salaries are intended to provide a competitive rate of fixed
compensation. Base salary levels will be assessed by compiling and analyzing
salary information from various published survey sources on an annual basis.
Survey sources include:
- Mercer Finance, Accounting & Legal Compensation Survey
- Wyatt Top Management Report
- Edison Electric Executive Compensation Survey
Within one year after the adoption of the program, base salaries are
intended to be managed to the market average (in any event, within a plus or
minus 10% range around the market average) as determined from the survey
analysis. The average and the range may or may not change from year to year
depending on movement in the market and, therefore, it is possible that base
salaries may not be increased annually. Appropriate adjustments will be made in
May of each year.
Actual base compensation within the market range will depend on internal
equity, overall scope of responsibilities of the position, recruitment needs,
and significant individual performance variations.
The market ranges have been incorporated into three organization bands (in
lieu of job grades), as set forth in Appendix I, which may be modified from time
to time by direction of the Board or the Chief Executive Officer. These bands
reflect the nature of the positions and their impact on the organization.
Additionally, these bands signify varying levels of participation in the
variable compensation component of the program. The band assignments are
determined on the basis of survey data and the role of the position.
VARIABLE COMPENSATION
The purpose of the variable compensation component of this program is to tie
compensation directly to the achievement of key corporate-wide objectives.
Awards earned will be paid in cash, stock grants, and
3
<PAGE>
GREEN MOUNTAIN POWER CORPORATION
COMPENSATION PROGRAM FOR OFFICERS
AND CERTAIN KEY MANAGEMENT PERSONNEL (CONTINUED)
- --------------------------------------------------------------------------------
restricted stock as deemed appropriate by the Compensation Committee of the
Board of Directors. The initial variable award payments will be made as set
forth below. This award delivery feature is intended to motivate participants
toward the annual attainment of critical corporate objectives consistent with
the need to manage GMP to achieve longer-term success.
VARIABLE COMPENSATION AWARD OPPORTUNITIES
Each band has a different variable compensation opportunity as noted in the
following table.
AWARD TABLE (AT)
<TABLE>
<CAPTION>
VARIABLE CASH OPPORTUNITIES AS A % OF BASE
SALARY
------------------------------------------
BAND THRESHOLD TARGET MAXIMUM
- ---------------------------------------------------- ------------- ------ -------------
<S> <C> <C> <C>
A................................................... 25% 50% 75%
B................................................... 17.5% 35% 52.5%
C................................................... 12.5% 25% 37.5%
</TABLE>
PERFORMANCE MEASURES -- ESTABLISHMENT
At the beginning of each year, appropriate corporate performance measures
will be determined for purposes of generating the variable compensation award.
These measures are expected to remain in substantially the same form
year-to-year. They may change, however, as GMP revisits its strategic and
operational plans.
The measures are:
- Return on Equity
- Total Shareholder Return
- Rates
- Customer Satisfaction; and
- Reliability
Performance objectives associated with these measures are established for
each fiscal year by the Compensation Committee and reviewed by the Board of
Directors. (See Appendix II for measures and specific objectives for 1994, and
years following, as indicated.)
After the close of each year, the Compensation Committee, with input from
the CEO, will determine the degree to which these performance objectives were
accomplished to determine if variable cash awards are to be paid. If the
threshold level of performance is not met, an award will not be paid with
respect to that specific performance measure.
4
<PAGE>
GREEN MOUNTAIN POWER CORPORATION
COMPENSATION PROGRAM FOR OFFICERS
AND CERTAIN KEY MANAGEMENT PERSONNEL (CONTINUED)
- --------------------------------------------------------------------------------
In addition, the program incorporates a circuit breaker to protect
shareholder investment. The circuit breaker ensures that awards will not be paid
unless earnings, after subtracting the variable awards, are greater than
dividends paid in the year for which variable compensation is to be awarded.
PERFORMANCE MEASURES -- INDIVIDUAL PERFORMANCE ASSESSMENT
Individual performance may, on an exceptions basis, be taken into
consideration in determining the final award. However, the maximum shown in the
Award Table cannot be exceeded.
PERFORMANCE MEASURES -- WEIGHTING
The performance measures will be weighted each year to reflect the strategic
plan and the impact each organization band/position has on performance. The
number of measures used will be limited to ensure that the significance of the
measures will not be diluted (weights less than 10% cannot be used).
The performance measures will be weighted as noted in Appendix II.
DETERMINATION OF AWARD
An award will be determined in accordance with the following example.
Assume:
- Participant is in Band B
- Base Salary = $100,000
- Individual Performance = meets expectations
- Circuit Breaker = achieved required level
<TABLE>
<CAPTION>
PERFORMANCE AWARD % ADJUSTED AWARD %
PERFORMANCE MEASURE WEIGHT RESULTS (FROM AT) WEIGHT TIME %
- --------------------------------------------------------- ----------- -------------- ------------- -------------------
<S> <C> <C> <C> <C>
ROE...................................................... 30% 75% ile 35% 10.5%
TSR
-D&P................................................... 15% Threshold 17.5% 2.625%
-Select................................................ 15% Threshold 17.5% 2.625%
Rates.................................................... 20% 80% ile 35% 7.0%
Customer Satisfaction.................................... 10% 80% 35% 3.5%
Reliability
-SAII.................................................. 3.3% Threshold 17.5% .583%
-SAIFI................................................. 3.3% Threshold 17.5% .583%
-CAIDI................................................. 3.3% Threshold 17.5% .583%
TOTAL AWARD % = 28%
AWARD = $28,000
</TABLE>
5
<PAGE>
GREEN MOUNTAIN POWER CORPORATION
COMPENSATION PROGRAM FOR OFFICERS
AND CERTAIN KEY MANAGEMENT PERSONNEL (CONTINUED)
- --------------------------------------------------------------------------------
VARIABLE COMPENSATION AWARD PAYMENT
An award earned will be paid in cash and, subject to shareholder and
required regulatory approval, stock grant and restricted stock grant in
accordance with the following schedule:
<TABLE>
<CAPTION>
RESTRICTED
BAND CASH STOCK GRANT STOCK
- --------- --------- ----------- ---------------
<S> <C> <C> <C>
A 1/4 1/4 1/2
B&C 1/3 1/3 1/3
</TABLE>
The Compensation Committee may make changes in this schedule, subject to review
by the Board of
Directors.
CASH
The cash portion of the award will be paid in a separate check.
STOCK GRANTS
The stock grant portion of the award will be paid in shares of GMP common
stock. The number of shares will be determined by dividing the portion of the
award to be paid in stock by the closing stock price on the day the Board of
Directors authorizes variable compensation payments (I.E., the annual meeting).
The number of shares so determined will be rounded up to the nearest full share.
Relevant taxes (E.G., federal, FICA, State), based on the cash and stock
grant portions of the award, will be withheld.
RESTRICTED STOCK
The grant of restricted stock will be made upon execution of an agreement
between the participant and the Company that will provide, for a period of five
(5) years from the date of the grant, that: (a) the shares will not be
transferable; and (b) the shares will be forfeited upon termination of
employment with GMP, except where the termination of employment results from
retirement, disability or death.
The number of restricted stock shares to be awarded will be determined as
described immediately above with respect to stock grants.
PROGRAM ADMINISTRATION
The program will be administered by the Chief Executive Officer with
approval of the Compensation Committee.
The Compensation Committee will review the operation of the program no less
frequently than annually and, as it deems necessary, recommend appropriate
actions to the Board of Directors.
6
<PAGE>
GREEN MOUNTAIN POWER CORPORATION
COMPENSATION PROGRAM FOR OFFICERS
AND CERTAIN KEY MANAGEMENT PERSONNEL (CONTINUED)
- --------------------------------------------------------------------------------
The Board of Directors will have the full power and authority to:
- Interpret the program
- Approve participants
- Act on the CEO's recommendations
- Amend or terminate the Program, subject to required shareholder and
regulatory approval
- Approve the CEO's award
Participation in the program does not confer any right or privilege
regarding continued employment with GMP upon a participant.
Payment of the cash and, subject to required shareholder and regulatory
approval, the stock grant portions, will be made during the second quarter
following the end of the program year.
Participants must be employed on the date the award is paid in order to
receive an award unless the participant has retired, is disabled or is deceased,
or the Compensation Committee determines that the circumstances under which the
participant terminated employment warrant special consideration.
Payments of variable compensation awards will not affect a participant's
levels of entitlement to participate in other benefit plans unless expressly
stated in documentation for such plans existing as of January 1, 1994.
The program will be administered in accordance with the laws of the State of
Vermont.
7
<PAGE>
GREEN MOUNTAIN POWER CORPORATION
COMPENSATION PROGRAM FOR OFFICERS
AND CERTAIN KEY MANAGEMENT PERSONNEL
- --------------------------------------------------------------------------------
APPENDIX I
<TABLE>
<CAPTION>
BAND* POSITION ROLE
- --------- ----------------------------------------------------------------- -------------------
<C> <S> <C>
A President and CEO Strategic
Senior VP & COO
B VP Finance & CFO Strategic
VP Law & Administration
VP External Affairs & Customer Service
VP Planning
General Counsel
C Controller Strategic/Tactical
AVP Engineering
AVP for Organizational Development
AVP Customer Operations Central & Southern Divisions
AVP Customer Operations Western Division
Assistant General Counsel
Assistant Treasurer
General Manager, Administrative Services
<FN>
- ------------
*Band A applies generally to the CEO and COO; Band B applies generally to Vice
Presidents and General Counsel; and Band C applies generally to Assistant Vice
Presidents and other key management personnel.
</TABLE>
I-1
<PAGE>
GREEN MOUNTAIN POWER CORPORATION
COMPENSATION PROGRAM FOR OFFICERS
AND CERTAIN KEY MANAGEMENT PERSONNEL (CONTINUED)
- --------------------------------------------------------------------------------
APPENDIX II
PERFORMANCE MEASURES -- WEIGHTS
<TABLE>
<S> <C> <C>
- - Return on Equity 30%
Total Shareholder
- - Return 30%
- - Rates 20%
- - Customer Satisfaction 10%
- - Reliability 10%
</TABLE>
PERFORMANCE MEASURES -- OBJECTIVES
The objectives for 1994 for each of the performance measures are:
- - Return on Equity
-- The peer group is the Duff & Phelps 90
-- To achieve threshold performance, GMP's ROE for electric operations must
be equal to or greater than the allowed ROE level, or equal to or greater
than 60% of the peer group
-- Target level is equal to or greater than 75% of the peer group
-- Maximum performance is equal to or greater than 90% of the peer group
- - Total Shareholder Return
-- Performance is measured using two different peer groups: the Duff &
Phelps 90, and a select peer group. The select group includes:
` Atlantic Energy
` Bangor-Hydro
` Black Hills
` Central Hudson
` Central Vermont Public Service
` Eastern Utilities Associates
` Empire District
` Idaho Power
` Minnesota Power & Light
` Otter Tail Power
-- Total Shareholder Return (TSR) is defined as dividends plus capital
appreciation using a three-year rolling average
-- To achieve threshold performance, GMP's TSR must be in the top half of
the peer group
-- Target performance is equal to or greater than 60% of the peer group
-- Maximum performance is equal to or greater than 70% of the peer group
II-1
<PAGE>
GREEN MOUNTAIN POWER CORPORATION
COMPENSATION PROGRAM FOR OFFICERS
AND CERTAIN KEY MANAGEMENT PERSONNEL (CONTINUED)
- --------------------------------------------------------------------------------
- - Rates
-- Performance is measured against 10 New England utilities. They are:
` Central Maine Power
` Bangor-Hydro
` Public Service of New Hampshire
` Central Vermont
` Boston Edison
` Commonwealth Energy
` Massachusetts Electric
` Connecticut Power & Light
` United Illuminating
` Narragansett Electric
-- To achieve threshold performance, GMP's rates must be equal to or lower
than 70% of the peer group
-- Target performance is achieved when GMP's rates are equal to or lower
than 80% of peer group
-- Maximum performance is reached when GMP's rates are lowest or second
lowest among the peer group
- - Customer Satisfaction
-- Performance is measured using two surveys (i.e., Commercial/Industrial,
Residential) with respect to the following aspects of customer
satisfaction: reliability of service, responsiveness to trouble calls,
responsiveness to customer inquiries, accuracy of customers' bills,
effectiveness of telephone communications, effective delivery of DSM
services.
-- To achieve threshold performance, 70% or more of customers must indicate
satisfaction
-- Target performance is achieved when 80% or more of customers indicate
satisfaction
-- Maximum performance is reached when 90% or more indicate satisfaction
- - Reliability
-- Performance is measured using three indices:
` System average interruption index
` System average interruption frequency index
` Customer average interruption duration index
-- To reach threshold performance, GMP's performance must improve 5% or more
from that achieved in the previous year
-- Target performance is 10% or greater improvement from the previous year
-- Maximum performance is 12% or greater improvement from the previous year
II-2
<PAGE>
PROXY
GREEN MOUNTAIN POWER CORPORATION
25 GREEN MOUNTAIN DRIVE
SOUTH BURLINGTON, VERMONT
The undersigned hereby appoints Douglas G. Hyde, A. Norman Terreri and
Donna S. Laffan as Proxies, each with the power to appoint a substitute, and
hereby authorizes them to represent and to vote, as designated on the reverse
side, all the shares of Common Stock of Green Mountain Power Corporation held of
record by the undersigned on March 30, 1995, at the Annual Meeting of
Shareholders to be held on May 18, 1995, or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
(PLEASE DATE AND SIGN ON REVERSE SIDE)
<PAGE>
/x/ Please mark your choices like this
This proxy will be voted as directed or, in the absence of specific directions,
FOR Item 1, FOR Item 2, FOR Item 3, and FOR Item 4.
------ ----------------------------
Common Dividend Reinvestment Shares
Item 1 - To approve an amendment to the By-laws regarding classification of the
Board of Directors.
The Board of Directors recommends a vote FOR this item.
FOR AGAINST ABSTAIN
/ / / / / /
Item 2 - Election of the following nominees as Directors: Class I: William H.
Bruett, Richard I. Fricke, Martin L. Johnson, Thomas P. Salmon; Class II: Robert
E. Boardman, Merrill O. Burns, Douglas G. Hyde, Ruth W. Page; and Class III:
Nordahl L. Brue, Lorraine E. Chickering, John V. Cleary, Euclid A. Irving.
Withheld for the following nominee(s) only: print name(s)
- --------------------------------------------------------------------------------
FOR WITHHELD FOR ALL
/ / / /
Item 3 -To approve the Compensation Program for Officers and Certain Key
Management Personnel.
The Board of Directors recommends a vote FOR this item.
FOR AGAINST ABSTAIN
/ / / / / /
Item 4 -To vote on such other matters as may properly come before the Meeting
and any and all adjournments thereof.
Signature(s) Date
----------------------------------------------------- ---------
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
<PAGE>
The Trustee will vote as directed or, in the absence of specific directions,
FOR Item 1, FOR Item 2, FOR Item 3, and FOR Item 4.
GREEN MOUNTAIN POWER CORPORATION
ESIP
Please mark your votes as this /X/
CONFIDENTIAL VOTING INSTRUCTIONS TO
CHITTENDEN CORPORATION
AS TRUSTEE UNDER THE GREEN MOUNTAIN POWER CORPORATION
ESIP PLAN
I hereby direct that the voting rights pertaining to shares of stock of Green
Mountain Power Corporation held by the Trustee and allocated to my account
shall be exercised at the Annual Meeting of Shareholders of Green Mountain
Power Corporation, to be held on May 18, 1995, and all adjournments thereof:
Item 1 -- To approve an amendment to the By-laws regarding classification of
the Board of Directors. The Board of Directors recommends a vote FOR this item.
FOR / / AGAINST / / ABSTAIN / /
Item 2 -- Election of the following nominees as Directors: Class I: William
H. Bruett, Richard I. Fricke, Martin L. Johnson, Thomas P. Salmon; Class II:
Robert E. Boardman, Merrill O. Burns, Douglas G. Hyde, Ruth W. Page; and Class
III: Nordahl L. Brue, Lorraine E. Chickering, John V. Cleary, Euclid A. Irving.
WITHHELD
FOR / / FOR ALL / /
Withheld for the following nominee(s) only; print name(s)
- -----------------------------------------------------------------------
Item 3 -- To approve the Compensation Program for Officers and Certain Key
Management Personnel. The Board of Directors recommends a vote FOR this item.
FOR / / AGAINST / / ABSTAIN / /
Item 4 -- To vote on such other matters as may properly come before the
Meeting and any and all adjournments thereof.
-----------------------------
Date
-----------------------------
Signature of Participant
<PAGE>
You are invited to join us on May 18, 1995 for Green Mountain Power
Corporation's Annual Meeting of Shareholders. Each shareholder is welcome to
bring a guest. Please complete and return this card ONLY IF YOU PLAN TO ATTEND.
The return of this card is not required for attendance at the meeting, but will
assist us in making appropriate arrangements for you and your guest.
(If you or your guest need special accommodations, please let us know.)
<TABLE>
<CAPTION>
(PLEASE CHECK BOX)
MEETING LUNCH
<S> <C> <C>
/ / / /
- ------------------------------------------------------------
Your Name (Please Print)
/ / / /
- ------------------------------------------------------------
Spouse (Please Print)
/ / / /
- ------------------------------------------------------------
Guest (Please Print)
/ / / /
- ------------------------------------------------------------
Guest (Please Print)
</TABLE>
PLEASE RETURN BY MAY 5, 1995. THANK YOU.
<PAGE>
<TABLE>
<S> <C>
No Postage
Necessary
If Mailed
In The
United States
</TABLE>
<TABLE>
<S> <C>
BUSINESS REPLY MAIL
FIRST CLASS
MAIL PERMIT NO.
286 BURLINGTON, VT
Postage will be paid by
addressee
BONNIE V. FAIRBANKS
GREEN MOUNTAIN POWER
CORPORATION
P. O. BOX 850
BURLINGTON VT 05402-0850
</TABLE>
