SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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 Rule 14a-11(c) or Rule 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)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)14) and 0-11.
(1) Title of each class of securities to which transaction applies:
N/A
---------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
N/A
---------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
N/A
---------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
---------------------------------------------------------------------------
(5) Total fee paid: N/A
---------------------------------------------------------------------------
[ ] 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:
N/A
---------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
N/A
---------------------------------------------------------------------------
(3) Filing Party:
N/A
---------------------------------------------------------------------------
(4) Date Filed:
N/A
---------------------------------------------------------------------------
<PAGE>
[GRAPHIC OMITTED]
163 ACORN LANE
COLCHESTER, VERMONT 05446
April 15, 1999
To Our Shareholders:
You are cordially invited to attend the 1999 Annual Meeting of
Shareholders. The meeting will be held on Thursday, May 20, 1999, at the
Sheraton Burlington Hotel and Conference Center, 870 Williston Road, South
Burlington, Vermont 05403. For your convenience a map showing the meeting place
is included on the back page of the proxy statement. As the meeting will begin
promptly at 10:00 a.m., please plan to arrive earlier.
The formal notice of the meeting follows on the next page. No admission
ticket will be required for attendance at the meeting, but if you plan to attend
the meeting, please complete and return the enclosed card.
Directors and Officers are expected to be available before and after the
meeting to speak with you. During the meeting, we will answer your questions
regarding our business affairs and will consider the matters explained in the
notice and proxy statement that follow.
Please vote, sign and return the enclosed proxy as soon as possible,
whether or not you plan to attend the meeting. Your vote is important.
PLEASE NOTE THAT THE MEETING SITE HAS CHANGED. THE MEETING WILL BE HELD AT
THE SHERATON BURLINGTON HOTEL AND CONFERENCE CENTER, 870 WILLISTON ROAD, SOUTH
BURLINGTON, VERMONT.
Thank you for your continued interest in Green Mountain Power.
Sincerely,
CHRISTOPHER L. DUTTON
President and
Chief Executive Officer
<PAGE>
[GRAPHIC OMITTED]
163 ACORN LANE
COLCHESTER, VERMONT 05446
April 15, 1999
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of
Green Mountain Power Corporation:
We will hold the Annual Meeting of Shareholders of Green Mountain Power
Corporation, a Vermont corporation, at the Sheraton Burlington Hotel and
Conference Center, 870 Williston Road, South Burlington, Vermont, 05403, on
Thursday, May 20, 1999, at 10:00 a.m., Eastern Daylight Savings Time. The
meeting's purposes are to:
1. Elect four Directors; and
2. Consider any other matters which may properly come before the meeting
and any adjournments thereof.
Only shareholders of record of common stock at the close of business on
March 26, 1999 are entitled to receive notice of and to vote at the meeting. A
list of the shareholders entitled to vote will be available at the meeting for
examination by any shareholder for any purpose germane to the meeting. The list
will also be available on the same basis for ten days prior to the meeting at
our principal executive office, 163 Acorn Lane, Colchester, Vermont 05446.
To assure your representation at the meeting, please vote, sign and mail
the enclosed proxy as soon as possible. We have enclosed a return envelope,
which requires no postage if mailed in the United States. Your proxy is being
solicited by the Board of Directors.
DONNA S. LAFFAN
Secretary
================================================================================
PLEASE VOTE -- YOUR VOTE IS IMPORTANT
================================================================================
<PAGE>
PROXY STATEMENT
GREEN MOUNTAIN POWER CORPORATION
163 ACORN LANE
COLCHESTER, VERMONT 05446
------------------
ANNUAL MEETING OF SHAREHOLDERS
MAY 20, 1999
------------------
APRIL 15, 1999
PROXY AND SOLICITATION
The accompanying proxy is solicited on behalf of the Board of Directors of
Green Mountain Power Corporation (the "Company" or "GMP") for use at the Annual
Meeting of Shareholders of the Company to be held on Thursday, May 20, 1999, 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 15, 1999.
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,
by facsimile, by telegraph, or 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 $5,000, 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 26, 1999, the record date for the Annual Meeting, the Company had
5,315,211 outstanding shares of Common 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.
In addition, the Company holds 15,856 shares of Common Stock as Treasury Stock.
The affirmative vote of a majority of the shares represented at the Annual
Meeting is required for the election of Class I Directors, Item 1. Abstentions
and broker non-votes will not be counted as votes For or Against.
The shares of Common Stock represented by each properly executed proxy will
be voted at the Annual Meeting in accordance with the instructions given. If no
instructions are given and the proxy is executed, the shares will be voted FOR
Item 1. The Board of Directors knows of no other matters for consideration at
the meeting. If any other matters are properly presented, the persons appointed
in the enclosed proxy have discretionary authority to vote in accordance with
their best judgment.
<PAGE>
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table lists, as of March 26, 1999, information relating to
the ownership of the Company's Common Stock by each Director and each Executive
Officer named in the Summary Compensation Table and by all Directors and
Executive Officers as a group. Each individual exercises sole voting and
investment power over all of the shares of Common Stock beneficially owned,
except as noted below.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENTAGE OF
BENEFICIAL OUTSTANDING
NAME POSITION(S) OWNERSHIP SHARES
- ------------------------------------ ----------------------------------------- ---------------- --------------
<S> <C> <C> <C>
Nordahl L. Brue .................... Director 3,016 (1) *
William H. Bruett .................. Director 2,100 *
Merrill O. Burns ................... Director 2,119 *
Lorraine E. Chickering ............. Director 621 *
John V. Cleary ..................... Director 2,927 *
David R. Coates .................... Nominee 3,000 *
Christopher L. Dutton .............. President and Chief 3,210 (2) *
Executive Officer and Director
Richard I. Fricke .................. Director 4,000 (3) *
Euclid A. Irving ................... Director 786 *
Martin L. Johnson .................. Director 1,379 *
Ruth W. Page ....................... Director 1,320 (4) *
Thomas P. Salmon ................... Chairman of the Board 1,441 *
Richard B. Hieber(5) ............... Senior Vice President 2,383 *
Stephen C. Terry ................... Senior Vice President 3,255 (6) *
Edwin M. Norse(7) .................. Vice President, Chief Financial Officer 747 *
and Treasurer
Jonathan H. Winer .................. President, Mountain Energy, Inc. 1,868 (8) *
All Directors and
Executive Officers as a Group ..... 42,361 *
</TABLE>
- ----------
* Less than one percent
(1) Mr. Brue owns 2,827 of these shares directly. The remaining 189 shares are
owned by Mr. Brue's children. Mr. Brue disclaims any other beneficial
interest in the 189 shares owned by his children.
(2) Mr. Dutton owns 3,118 of these shares directly. The remaining 92 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 92 shares owned
by his children.
(3) Mr. Fricke owns 3,500 of these shares directly. His wife owns the remaining
500 of these shares; Mr. Fricke disclaims any other beneficial interest in
the 500 shares owned by his wife.
(4) Mrs. Page owns 1,120 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.
(5) Mr. Hieber left the employment of the Company on December 31, 1998.
(6) Mr. Terry owns 3,225 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.
(7) Mr. Norse retired from the Company on December 31, 1998.
(8) Mr. Winer owns 1,860 of these shares directly. The remaining 8 shares are
owned by Mr. Winer's daughter for whom Mr. Winer serves as custodian; Mr.
Winer disclaims any other beneficial interest in the 8 shares owned by his
daughter.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 (Form
5) and changes in ownership (Form 4) of the Company's Common Stock with the
Securities and Exchange Commission and the New York Stock
2
<PAGE>
Exchange. Based on a review of those reports and written representations from
the Directors and Executive Officers, the Company believes that during 1998, all
requirements have been complied with except that one transaction was not timely
reported. Lorraine E. Chickering, a Class III Director, inadvertently failed to
file a report on Form 4 concerning the purchase of 180 shares of Common Stock.
However, the transaction has been reported on her annual Form 5.
ITEM 1. ELECTION OF DIRECTORS
The Board has eleven members divided into three classes. Directors in each
class serve for three year terms and at each annual meeting, the term of one
class expires. Mr. Richard I. Fricke, who has served your Company as a Class I
director since 1984, has decided to retire and will not stand for reelection. We
would like to take this opportunity to thank Mr. Fricke for his many years of
service to the Company. The Board has approved the nomination of David R. Coates
to fill Mr. Fricke's seat on the Board. The directors being nominated to serve
as Class I Directors are William H. Bruett, David R. Coates, Martin L. Johnson
and Thomas P. Salmon.
Directors will be elected by a majority of the votes cast at the Annual
Meeting. If elected, all nominees are expected to serve until the 2002 Annual
Meeting and until their successors are duly elected and qualified.
The following table lists each nominee and each continuing Director, their
principal occupation for the last five years, age and length of service as a
Director.
CLASS I
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
(TERM EXPIRING IN 2002)
<TABLE>
<CAPTION>
DIRECTOR
SINCE
---------
<S> <C> <C>
William H. Bruett Senior Vice President, Group Product Manager of PaineWebber, 1986
Inc. since 1990; Director of PaineWebber Trust Co. and Chairman
of PaineWebber International Bank Ltd., London, subsidiaries of
PaineWebber Group, Inc., since 1990. (55)
David R. Coates Retired Partner, KPMG Peat Marwick; Partner KPMG Peat Marwick
from 1987 to 1993; Business Consultant and Advisor; Chair of
the Key Bank District Board of Directors since 1995; Director
of National Life of Vermont, of Union Mutual Fire Insurance
Company, and of Quebecor Printing (USA) Corporation; Member
of the Governor's Council of Economic Advisors, of the State of
Vermont's Debt Affordability Advisory Committee, and of Vermont
Municipal Bond Bank and Chair of the Vermont Economic Progress
Council. (61)
Martin L. Johnson Chairman and majority owner of The Johnson Company, Inc. 1991
(environmental science and engineering consultants) since 1978;
Secretary of the State of Vermont Agency of Environmental
Conservation from 1973 to 1978. (71)
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR
SINCE
---------
<S> <C> <C>
Thomas P. Salmon Chairman of the Board of the Company since 1983; President of 1978
the University of Vermont from 1993 to 1997; Interim President
of the University of Vermont from 1991 to 1993; Of Counsel,
Salmon and Nostrand, Attorneys, Bellows Falls, Vermont;
Governor of the State of Vermont from 1973 to 1977; Member of
the Governor's Council of Economic Advisors since 1991;
Director of Vermont Electric Power Company, Inc., of National
Life Insurance Company, of Union Mutual Insurance Company, and
of BankNorth Group, Inc., and member of the Board of Trustees
of Middlebury College. (66)
</TABLE>
THE BOARD RECOMMENDS THAT YOU VOTE FOR THE NOMINEES LISTED ABOVE.
CONTINUING DIRECTORS
CLASS II
(TERM EXPIRES AT THE 2000 ANNUAL MEETING)
<TABLE>
<S> <C> <C>
Merrill O. Burns Partner, Mitchell Madison Group (consultants) since 1996; 1988
Senior Vice President and Executive Corporate Development
Officer, BankAmerica Corporation from 1991 to 1996. (52)
Christopher L. Dutton President, Chief Executive Officer and Chairman of the 1997
Executive Committee of the Company since August 1997; Vice
President, Finance and Administration, Chief Financial Officer
and Treasurer from 1995 to 1997; Vice President and General
Counsel from 1993 to 1995; Vice President, General Counsel and
Corporate Secretary from 1989 to 1993; Director of Vermont
Yankee Nuclear Power Corporation, and of Vermont Electric Power
Company, Inc.; Member of Vermont Business Roundtable. (50)
Ruth W. Page Writer, Editor and Radio Commentator; past member of the 1985
Northeast Energy Council of the United States Department of
Energy. (78)
</TABLE>
CLASS III
(TERM EXPIRES AT THE 2001 ANNUAL MEETING)
<TABLE>
<S> <C> <C>
Nordahl L. Brue Chairman and Chief Executive Officer of Bruegger's Corporation 1992
(quick service restaurants) since 1997; Principal, Champlain
Management Services, Inc. (real estate development and
management services) from 1985 to 1997; Of Counsel, Sheehey
Brue Gray & Furlong, P.C., from January 1998 to December 1998;
Stockholder or Partner, Sheehey Brue Gray & Furlong, P.C.,
Attorneys, Burlington, Vermont from 1979 to December 1997;
Member of Vermont Business Roundtable and of the Governor's
Council of Economic Advisors. (54)
</TABLE>
4
<PAGE>
<TABLE>
<S> <C> <C>
Lorraine E. Chickering President of Public Communications of Bell Atlantic Corporation 1994
since August 1997; President of Public and Operator
Services of Bell Atlantic Corporation from 1993 to
1997; Vice President, Quality, 1993 and Vice
President, Operations and Engineering of Chesapeake
and Potomac Telephone Company, a subsidiary of Bell
Atlantic Corporation, from 1991 to 1993. (48)
John V. Cleary Retired President and Chief Executive Officer of the Company; 1980
Chief Executive Officer, President and Chairman of the Executive
Committee of the Company from 1983 to 1993. (70)
Euclid A. Irving Partner, Paul, Hastings, Janofsky & Walker, LLP, Attorneys, New 1993
York, New York, since 1990; member of the Board of Trustees of
the University of Virginia Law School Foundation. (46)
</TABLE>
BOARD COMPENSATION, MEETINGS,
COMMITTEES AND OTHER RELATIONSHIPS
COMPENSATION
Non-employee Directors receive an annual fee of $9,500. In addition to the
annual fee, the Chairman of the Board receives $40,000, the Chairmen of the
Audit, Compensation, Governance, Special Issues and Subsidiaries Oversight
Committees receive $2,500. Directors also receive $650 for each Board, committee
or other meeting attended in person or $350 for each meeting attended by
telephone or meeting that is held on the same day as another meeting. We
reimburse directors for reasonable expenses related to their Board service.
Directors may defer all or part of their annual fee and meeting fees under the
Director's Deferred Compensation Plan. Deferred amounts earn interest and the
Director may determine at the time of the deferral or, in limited instances
thereafter, when the funds are to be paid.
BOARD MEETINGS
In 1998, the Board held a total of nine meetings. Each Director attended
not less than 86% of his or her Board and committee meetings.
BOARD COMMITTEES
THE EXECUTIVE COMMITTEE exercises all the powers of the Board in the
management of the current and ordinary business of the Company, except as
otherwise provided by law. The Executive Committee held no meetings during 1998.
Members: Christopher L. Dutton, Chairman, William H. Bruett, Merrill O. Burns,
John V. Cleary, Richard I. Fricke and Thomas P. Salmon.
THE AUDIT COMMITTEE annually recommends to the Board the appointment of
independent auditors. It also 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 held two meetings in 1998. All members
are non-employee Directors. Members: Richard I. Fricke, Chairman, William H.
Bruett, Merrill O. Burns, Lorraine E. Chickering, Euclid A. Irving, Martin L.
Johnson and Ruth W. Page.
THE GOVERNANCE COMMITTEE recommends to the Board persons selected by the
Committee for nomination to the Board. It also reviews organizational plans and
activities to assure the development and continuity of management leadership and
oversees the proper governance of the Company. The Governance Committee held two
meetings in 1998. Members: William H. Bruett, Chairman, Nordahl L. Brue, John V.
Cleary, Christopher L. Dutton, Martin L. Johnson, Ruth W. Page and Thomas P.
Salmon. The Governance Committee will consider nominees recommended by
shareholders. Names should be forwarded to the Corporate Secretary, Green
Mountain Power Corporation, 163 Acorn Lane, Colchester, Vermont, 05446, who will
submit them to the Governance Committee for its consideration.
5
<PAGE>
THE COMPENSATION COMMITTEE is charged with the responsibility of reviewing
and making recommendations to the Board regarding the annual salaries of
officers and incentive awards to officers and key management personnel. It also
recommends to the Board any needed revisions to the compensation of officers and
assists the Board in discharging its responsibilities in connection with the
compensation of officers. The Compensation Committee held three meetings in
1998. All members are non-employee Directors. Members: Merrill O. Burns,
Chairman, William H. Bruett, Lorraine E. Chickering, Richard I. Fricke, Euclid
A. Irving and Thomas P. Salmon.
THE SPECIAL ISSUES COMMITTEE addresses unusual, extraordinary or
miscellaneous issues that confront the Company from time to time. The Special
Issues Committee held four meetings in 1998. Members: John V. Cleary, Chairman,
Nordahl L. Brue, Christopher L. Dutton, Euclid A. Irving and Thomas P. Salmon.
THE SUBSIDIARIES OVERSIGHT COMMITTEE oversees the non-utility operations of
the Company. The Subsidiaries Oversight Committee held seven meetings in 1998.
Members: Martin L. Johnson, Chairman, and Euclid A. Irving.
THE STRATEGIC FINANCIAL ADVISORY COMMITTEE, formed in October 1998,
considers the current acute financial issues confronting the Company and reviews
appropriate financial strategies presented by management, reporting any
recommendations to the Board. The Strategic Financial Advisory Committee held
two meetings in 1998. Members: William H. Bruett, Chairman, Nordahl L. Brue,
John V. Cleary, and Euclid A. Irving.
OTHER RELATIONSHIPS
Nordahl L. Brue, a Class III Director, was of counsel to the law firm of
Sheehey Brue Gray & Furlong, P.C. until December 1998. In 1998 and prior years,
we have retained the services of Sheehey Brue Gray & Furlong, P.C. as special
counsel and have continued to retain the newly renamed firm of Sheehey Furlong
Rendall & Behm, P.C. to represent the Company in certain matters during 1999.
The Company paid Sheehey Brue Gray & Furlong, P.C. $519,832 for legal services
rendered in 1998.
Martin L. Johnson, a nominee for Director, is Chairman and majority owner
of The Johnson Company, Inc., an environmental science and engineering
consulting firm. The Company paid The Johnson Company, Inc. $35,368 to assist
with environmental matters in 1998.
6
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table summarizes the compensation the Company paid the
President and Chief Executive Officer and each of the four other most highly
compensated executive officers as of the end of 1998, 1997, and 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION (1) AWARDS
----------------------------------------- -------------
OTHER RESTRICTED
INCENTIVE ANNUAL STOCK ALL OTHER
AWARDS COMPENSATION AWARD(S) COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY (2) (3) (4) (5)
- ----------------------------------- ------ ----------- ---------- -------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Christopher L. Dutton 1998 $ 213,231 0 $ 1,384 0 $5,649
President and Chief Executive 1997 $ 160,525 0 $ 2,001 0 $5,392
Officer 1996 $ 129,654 $21,340 $ 1,774 $ 10,670 $4,466
Richard B. Hieber(6) 1998 $ 197,615 0 $ 425 0 $4,540
Senior Vice President and 1997 $ 155,138 0 $ 186 0 $4,124
Chief Operating Officer 1996 $ 44,615 $67,798 $10,478 $ 3,899 0
Stephen C. Terry 1998 $ 152,308 0 $ 1,305 0 $4,110
Senior Vice President, 1997 $ 138,578 0 $ 1,931 0 $4,663
Corporate Development 1996 $ 130,539 $21,494 $ 1,682 $ 10,747 $4,422
Edwin M. Norse(7) 1998 $ 139,635 0 $ 1,315 0 $ 596
Vice President, Chief Financial 1997 $ 141,039 0 $ 2,011 0 $4,564
Officer and Treasurer 1996 $ 146,865 $16,120 $ 1,932 $ 8,060 $4,900
Jonathan H. Winer 1998 $ 127,404 0 $ 321 0 $3,151
President, Mountain Energy, 1997 $ 117,229 0 $ 446 0 $3,713
Inc. 1996 $ 100,481 $25,460 $ 531 $ 5,092 $3,176
</TABLE>
- ----------
(1) Amounts shown include base salary and variable compensation awards earned
by the Officers on the basis of the Company's operating results in 1996 and
1997, as well as amounts earned but deferred at the election of those
Officers. No variable compensation awards were made in 1997. We anticipate
that no variable compensation awards will be given for 1998 based on the
Company's 1998 financial performance. See Compensation Committee Report on
Executive Compensation.
(2) In 1994, the Company adopted the Compensation Program for Officers and
Certain Key Management Personnel (the "Compensation Program"). Payments
made in the last three years under the Compensation Program based on the
Company's and the participants' performance in those years, and certain
other payments, are set forth in the Incentive Awards column of this
Summary Compensation Table. In 1996, the amount in the incentive awards
column for Mr. Hieber includes a signing bonus of $60,000. No variable
compensation awards were made in 1997 nor do we expect any variable
compensation awards to be made for 1998. See Compensation Committee Report
on Executive Compensation.
(3) The 1996, 1997 and 1998 amounts shown in this column represent dividends
paid on restricted shares awarded under the Compensation Program. The 1996
total for Mr. Hieber is reimbursement of moving expenses. The 1998 amounts
for Messrs. Dutton and Hieber include interest on deferred compensation for
amounts above 120% of the applicable federal long-term interest rate.
(4) The restricted share awards for 1996 were made in accordance with the
Compensation Program and are reflected at the fair market value of the
shares on the date of grant, without consideration of restrictions on the
shares. No restricted share awards were made for 1997, and we anticipate
that no variable compensation awards will be made based on the Company's
1998 financial performance. See Compensation Committee Report on Executive
Compensation. Quarterly dividends are paid on the shares and reported as
part of Other Annual Compensation. At December 31, 1998, the aggregate
number of shares and the value of all restricted stock holdings, based on
the market value of the shares at December 31, 1998, without giving effect
to the diminution of value attributed to the restrictions on such stock, of
Messrs. Dutton, Terry, and Winer, respectively, were 1,398 shares, $14,679;
1,356 shares, $14,238; and 334 shares, $3,507. Messrs. Hieber and Norse had
no restricted shares at December 31, 1998.
(5) The total amounts shown in this column for the last fiscal year consist of
the following:
(i) Premiums attributable to Company-owned life insurance policies: Mr.
Dutton $924; Mr. Hieber $1,265; Mr. Norse $596; Mr. Terry $752; and
Mr. Winer $338.
(ii) Company matching contributions to the Employee Savings and Investment
Plan: Mr. Dutton $4,725; Mr. Hieber $3,275; Mr. Norse $0; Mr. Terry
$3,358; and Mr. Winer $2,813.
(6) Mr. Hieber left the employment of the Company on December 31, 1998.
(7) Mr. Norse retired from the Company on December 31, 1998.
7
<PAGE>
VARIABLE COMPENSATION AWARDS FOR 1998 PERFORMANCE
As of the date hereof, the Compensation Committee of the Board has not made
a formal recommendation to the Board of Directors for variable compensation
awards based on 1998 performance. However, we anticipate that no variable
compensation awards will be paid to the Officers under the Compensation Program
for 1998 based on the Company's 1998 financial performance. See Compensation
Committee Report on Executive Compensation.
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") of the Board is comprised only
of non-employee Directors. The Committee is responsible for:
o recommending executive compensation plans to the Board;
o administering executive compensation plans as authorized by the Board;
o recommending compensation levels for the Officers of the Company,
including the Chief Executive Officer;
o reviewing and making recommendations to the Board regarding incentive
awards pursuant to the Compensation Program for Officers and Certain
Key Management Personnel; and
o considering all executive compensation issues and recommending such
issues to the Board for approval.
This is the report of the Committee describing the Compensation Program and
the basis upon which the 1998 compensation determinations were made. We have not
made any recommendations as of this date regarding variable compensation to be
awarded for 1998. However, we anticipate that no variable compensation awards
will be made under the Compensation Program based on the Company's 1998
financial performance.
COMPENSATION PHILOSOPHY
It is our philosophy that executive compensation should be competitive in
the marketplace, aligned with corporate performance, and promote the strategic
objectives of the Company. Specifically, base compensation for executives should
compare favorably with organizations competing for similar talent. Variable
compensation should provide an opportunity for officers and other key management
personnel to share in the success of the Company by tying a portion of
compensation to corporate performance results; should 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 should
foster and reinforce teamwork among officers and other key management personnel.
The Compensation Program for Officers and Certain Key Management Personnel is
designed to meet these objectives. It is comprised of two components: base
salary and variable compensation, which are described below.
BASE SALARY
Base salaries under the Compensation Program are intended to provide a
competitive rate of fixed compensation. Base salary levels are assessed by
compiling and analyzing salary information from various survey sources. Survey
sources include the Mercer Finance, Accounting & Legal Compensation Survey, the
Watson Wyatt World Wide Top Management Report, and the Edison Electric Executive
Compensation Survey. We select companies from the surveys which are of similar
size or have other operating characteristics similar to the Company. We believe
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 Edison Electric Institute 100 and
the S&P 500 Composite Index used for the Performance Graph.
8
<PAGE>
Base salaries are intended to be managed within a plus or minus 10% range
around the market mean of base salaries for similar positions, as determined
from the survey analysis. The market mean and the range may or may not change
from year to year depending on movement in the market and, therefore, base
salaries may not be increased annually. Actual base compensation within the
market range depends on internal equity, overall scope of responsibilities of
the position, recruitment needs, and significant individual performance
variations.
The market ranges have been grouped into three organization bands (in lieu
of job grades). These bands may be modified from time to time by direction of
the Board or the Chief Executive Officer. These bands reflect functional
similarities of the positions and their impact on the organization. The band
assignments are determined on the basis of survey data and the functions of the
position. During 1998, Band A consisted of the President and Chief Executive
Officer; Band B consisted of Senior Vice Presidents, Vice Presidents and the
General Counsel; and Band C consisted of all other Executive Officers and key
management personnel.
VARIABLE COMPENSATION
Subject to certain limitations related to earnings, the level of total
shareholder return achieved, and payment of dividends, each Executive Officer
and other key management personnel covered by the Compensation Program are
eligible to earn additional compensation under the Compensation Program when the
Company's performance meets or exceeds various objectives. The purpose of the
variable compensation component is to tie compensation directly to the
achievement of key corporate-wide objectives. Awards earned are paid in cash,
stock grants and restricted stock grants. Each organization band has a different
variable compensation opportunity with threshold, target and maximum percentage
requirements, as set forth below.
AWARD TABLE
VARIABLE COMPENSATION OPPORTUNITIES
BAND AS A PERCENTAGE OF BASE SALARY
----------- -----------------------------------
THRESHOLD TARGET MAXIMUM
----------- -------- ----------
A ......... 25.0% 50% 75.0%
B ......... 17.5% 35% 52.5%
C ......... 12.5% 25% 37.5%
Corporate performance measures have been established for purposes of
generating the variable compensation award. The measures used to determine
variable compensation are: Return on Equity; Total Shareholder Return; Rates;
Customer Satisfaction; and Reliability. These measures are expected to remain
substantially the same from year-to-year. They may change, however, as the
Company revisits its strategic and operational plans. Performance objectives
associated with these measures are established by the Committee for each fiscal
year with set threshold, target and maximum limits and reviewed by the Board.
After the close of each year, the Committee, with input from the Chief
Executive Officer, determines the degree to which these performance objectives
were accomplished, to ascertain if variable compensation 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. Individual performance may be
taken into consideration in determining the final award.
An award earned for Band A individuals is paid as follows: one-fourth in
cash, one-fourth in stock grants and one-half in restricted stock grants. For
Band B and C individuals, the award is paid one-third in cash, one-third in
stock grants and one-third in restricted stock grants.
COMPENSATION ACTION
As described in the 1998 proxy statement, the Company underwent significant
management change in late 1997. The senior officers who assumed new and greater
levels of responsibility were given salary increases at that time. At our
February 1998 meeting, we approved the employment of two additional officers to
fill positions that were vacated in late 1997. Base salaries were set using data
gathered from the surveys described above and the recommendations provided by
the Chief Executive Officer.
9
<PAGE>
In May 1998, we considered base salary adjustments and ultimately we
recommended to the Board that given the financial performance of the Company,
base salary increases should not be given at this time. The Board accepted our
recommendations and no increases were given to the officers named in this proxy
statement. We also determined that based on the Company's performance in 1997,
no variable compensation awards would be made for 1997 and we anticipate that
there will be no awards made for 1998 under the Compensation Program based on
the Company's 1998 financial performance.
In February 1999, based on the recommendation of the Chief Executive
Officer, we approved an increase in the salary of one of the Company's Vice
Presidents who had assumed increased duties in light of the departure of other
executive management.
The Company has reviewed its compensation policies and programs in light of
Section 162(m) of the Internal Revenue Code and has determined that Section
162(m) will have no impact on its executive compensation program in 1998 because
no Executive Officer will receive compensation for such year in excess of the $1
million threshold.
CHIEF EXECUTIVE OFFICER COMPENSATION
For the reasons stated above, the Chief Executive Officer did not receive
an increase in base salary in 1998 nor did he receive a variable compensation
award based on the 1997 financial performance of the Company. We anticipate that
there will be no award made for 1998 under the Compensation Program based on the
Company's 1998 financial performance.
CONCLUSION
We believe the Company's executive compensation program appropriately
aligns executive compensation to individual and corporate performance and
shareholder value, is competitive with the market and is sensitive to the
concerns of customers, shareholders, and other constituencies.
COMPENSATION COMMITTEE
- -----------------------------------------------------------
William H. Bruett Richard I. Fricke
Merrill O. Burns, Chairman Euclid A. Irving
Lorraine E. Chickering Thomas P. Salmon
10
<PAGE>
PERFORMANCE GRAPH
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG
GREEN MOUNTAIN POWER CORPORATION, EEI 100 INDEX (UTILITIES) AND S&P 500 INDEX*
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
($) ($) ($) ($) ($) ($)
----------- ---------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
GMP 100.00 97.37 105.03 98.32 81.21 49.95
EEI 100 100.00 88.43 115.86 117.25 149.34 170.09
S&P 500 100.00 101.36 139.31 171.29 228.44 293.73
</TABLE>
*Assumes $100.00 invested on December 31, 1993 and dividends reinvested.
Historical performance does not necessarily predict future results.
PENSION PLAN INFORMATION AND OTHER BENEFITS
PENSION PLAN INFORMATION
All employees are covered by the Employees' Retirement Plan of Green
Mountain Power Corporation (the "Retirement Plan") if they have been employed
for more than one year. The Retirement Plan is a defined benefit plan providing
for normal retirement at age 65. Provided that a participant has at least ten
years of continuous service, early retirement may be taken beginning the first
day of any month following the attainment of age 55. If retirement occurs prior
to age 60, benefits are reduced as shown in the table below:
AGE AT RETIREMENT REDUCTION OF BENEFITS
------------------- ----------------------
59 8%
58 16%
57 23%
56 30%
55 37%
For employees with at least five but less than ten years of continuous
service who commence benefits before age 65, benefits are actuarially reduced.
If retirement occurs after age 60 and completion of at least 10 years of
credited service, the full accrued benefit is payable.
11
<PAGE>
Retirement benefits are based on final average base compensation and length
of service. Final average base compensation is the average of the compensation
(limited to base salary for Officers, as shown in the Salary column of the
Summary Compensation Table for the Officers named in this proxy statement, and
straight-time payroll wages for other employees) for the highest 36 consecutive
fiscal months out of the final ten years of employment. The normal retirement
benefit is equal to 1.1% of the final average compensation up to the covered
compensation amount plus 1.6% of final average base compensation over covered
compensation multiplied by each year of credited service up to 35 years.
Retirement benefits are not subject to any deductions for Social Security or
other offset amounts.
The following table shows the estimated annual pension benefit payable
pursuant to the Retirement Plan to all covered employees, including the Officers
named in this proxy statement, for the average compensation and years of service
indicated. It assumes retirement at age 65 and an 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 table.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
ESTIMATED ANNUAL RETIREMENT BENEFITS
ANNUAL AVERAGE BASE AT NORMAL RETIREMENT AGE OF 65 YEARS
COMPENSATION HIGHEST CREDITED YEARS OF SERVICE*
36 CONSECUTIVE FISCAL -------------------------------------------------------------
MONTHS OF THE LAST 10 YEARS
PRECEDING RETIREMENT 15 20 25 30 35 & OVER
- ----------------------------- --------- --------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
($) ($) ($) ($) ($) ($)
80,000 .................... 16,860 22,480 28,100 33,720 39,340
100,000 ................... 21,660 28,880 36,100 43,320 50,540
120,000 ................... 26,460 35,280 44,100 52,920 61,740
140,000 ................... 31,260 41,860 52,100 62,520 72,940
160,000** ................. 36,060 48,080 60,100 72,120 84,140
</TABLE>
- ----------
* Credited years of service (including service credited with other
companies), as of December 31, 1998, for each of the Officers named in this
proxy statement were as follows: C. L. Dutton 13.8 years; R. B. Hieber 1.3
years; E. M. Norse, 27.0 years; S. C. Terry 12.8 years; and J. H. Winer
14.5 years. Mr. Norse retired from the Company on December 31, 1998. Mr.
Hieber left the employment of the Company on December 31, 1998.
** Compensation cap for 1996 is $150,000; and for 1997 and 1998 is $160,000.
OTHER BENEFITS
SUPPLEMENTAL RETIREMENT PLAN
In addition to the Retirement Plan described above, all the Officers
including the Officers named in this proxy statement participate in a
Supplemental Retirement Plan. The plan provides retirement and survivor's
benefits for a period of fifteen years following retirement. The benefits are a
percentage of the Officer's final salary:
44% for the most senior Officer;
33% for the next most senior Officers; and
22% for the third most senior Officers.
The retirement benefits are partially covered by the life insurance
coverage that we have obtained (see below). The cost of this plan cannot be
properly allocated or determined for any one plan participant because of the
overall retirement plan assumptions. We are recording the estimated cost of the
supplemental retirement plan benefits on a current basis and the income from the
life insurance coverage as it is earned.
LIFE INSURANCE PLAN
The Officers participate in a related life insurance plan. Under this plan,
we have purchased insurance on the lives of the Officers to provide
preretirement life insurance benefits to them in an amount equal to four times
salary for the most senior Officer, three times salary for the next most senior
Officers, and two times
12
<PAGE>
salary for the third most senior Officers. The life insurance benefits are
designed so that the Company does not expect to incur any significant net
expense in providing the preretirement insurance plan. The life insurance
policies also are intended to cover in part the supplemental retirement benefits
described above.
DEFERRED COMPENSATION PLAN
Officers may participate in a Deferred Compensation Plan under which they
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,
plus accrued interest, will be paid to him or her, or to his or her beneficiary
according to their election form.
CHANGE OF CONTROL AGREEMENTS
Change of Control agreements have been executed with ten members of our
senior management, including the Officers named in this proxy statement. If
within three years following a change of control of GMP, the Officer's
employment is involuntarily terminated without cause or is voluntarily
terminated by the Officer with good reason, the agreements provide affected
individuals with:
1. Payments of 1.0 or 2.99 times the base salary of the individual;
2. Continuation for 36 months of health, medical and other insurance
programs; and
3. Payment of an amount equal to the actuarial value of up 36 months of
additional credited service under the Retirement Plan.
As defined in the agreements, "change of control of the Company" will have
occurred when:
1. A person secures ownership of 20% or more of the voting power of the
outstanding stock of GMP;
2. A change in the majority of the Board for two consecutive years, which
has not been approved by the Directors in office at the beginning of the period;
or
3. Shareholders approve a merger or consolidation of GMP with another
company where the outstanding voting stock of GMP does not continue to represent
at least 80% of the combined voting power of GMP or the surviving company.
Individuals may terminate employment following a change in control "with
good reason"if:
1. The individual is assigned duties inconsistent with the duties before
the change in control;
2. The headquarters are relocated more the 50 miles from the present
location;
3. The individual is required to relocate more than 50 miles from the
present location;
4. Compensation or benefits are reduced or adversely affected other than as
part of an overall adjustment of executive compensation or benefits;
5. GMP fails to obtain an agreement from its successor to perform under the
change of control agreements;
6. GMP fails to offer the individual any compensation plan provided to
other executives of similar responsibility;
7. GMP eliminates or materially reduces or jeopardizes the ability of the
Company to fulfill its obligations under certain executive benefit plans; or
8. The executive resigns within the thirty days immediately after the first
12 months following a change of control.
The Board has limited discretion to determine whether a change of control
of GMP has taken place.
13
<PAGE>
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
On November 23, 1998, the Board appointed the firm of Arthur Andersen LLP
to serve as independent certified public accountants for the calendar year 1999.
The appointment was made upon the recommendation of the Audit Committee. Arthur
Andersen LLP has audited our accounts continuously since 1988. We expect a
representative of Arthur Andersen LLP to attend the meeting, respond to
appropriate questions and be given an opportunity to speak if he or she desires.
SUBMISSION OF SHAREHOLDER PROPOSALS
From time to time, shareholders seek to nominate Directors or present
proposals for inclusion in the proxy statement and form of proxy for
consideration at the annual meeting. To be included in the proxy statement or
considered at an annual or any special meeting, you must submit nominations of
Directors or proposals, at the appropriate time, in addition to meeting other
legal requirements. We must receive proposals for inclusion in the proxy
statement for the 2000 annual meeting which is expected to take place on
Thursday, May 18, 2000, no later than December 14, 1999. Direct any proposals to
the undersigned.
OTHER BUSINESS
The Board of Directors knows of no other matters for consideration at the
meeting. If any other business should properly arise, the persons appointed in
the enclosed proxy have discretionary authority to vote in accordance with their
best judgment.
By Order of the Board of Directors
DONNA S. LAFFAN
Secretary
PLEASE VOTE -- YOUR VOTE IS IMPORTANT
14
<PAGE>
MAP
<PAGE>
================================================================================
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
GREEN MOUNTAIN POWER CORPORATION
163 ACORN LANE
COLCHESTER, VERMONT 05446
The undersigned hereby appoints Christopher L. Dutton, Michael H. Lipson 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 26, 1999, at the Annual Meeting of
Shareholders to be held on May 20, 1999, or any adjournment thereof.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
================================================================================
================================================================================
Please mark
your choices X
like this
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder or absent instruction will be vote FOR item 1.
Unless authority to vote for any director is withheld, authority to vote for
such nominee will be deemed granted.
ITEM 1 -- Election of the following nominees as Directors: Class I: William H.
Bruett, David R. Coates, Martin L. Johnson, Thomas P. Salmon, to serve until the
2002 Annual Meeting. Withheld for the following nominee(s) only; print name(s)
WITHHELD
FOR FOR ALL
[ ] [ ]
- ------------------------------------------------------------
ITEM 2 -- To vote on such other matters as may properly come before the Annual
Meeting and any and all adjournments thereof. Management of no other matters to
be brought before the Annual Meeting; however, the persons named as proxy
holders or their substitutes will vote in accordance with their best judgment if
any other matters are properly brought before the Annual Meeting.
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>
================================================================================
P R O X Y UMB BANK
AS TRUSTEE UNDER THE GREEN MOUNTAIN POWER CORPORATION ESIP PLAN
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING ON MAY 20, 1999. The undersigned hereby appoints Christopher L. Dutton,
Michael H. Lipson 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 26, 1999, at the Annual
Meeting of Shareholders to be held on May 20, 1999, or any adjournment thereof.
WITHHELD
FOR FOR ALL
----- --------
ITEM 1 -- Election of the following nominees as Directors: [ ] [ ]
Class 1: William H. Bruett, David R. Coates, Martin L. Johnson, Thomas P.
Salmon, to serve until the 2002 Annual Meeting.
Withheld for the following nominees(s) only; print names:
- ---------------------------------------------
ITEM 2 -- To vote on such other matters as may properly come before the meeting
and any and all adjournments thereof.
(TO BE SIGNED ON OTHER SIDE)
================================================================================
================================================================================
Management knows of no other matters to be brought before the Annual
Meeting; however, the persons named as proxy holders or their substitutes will
vote in accordance with their best judgment if any other matters are properly
brought before the Annual Meeting. This proxy, when properly executed, will be
voted in the manner directed herein by the undersigned shareholder or absent
instruction will be voted FOR Item 1. Unless authority to vote for any director
nominee is withheld, authority to vote for such nominee will be deemed granted.
-------------------------------------
PLEASE SIGNATURE
SIGN
HERE
-------------------------------------
SIGNATURE
Please sign exactly as name appears. If shares
are held jointly, any one of the joint owners
may sign, Attorneys-in-fact, executors,
administrators, trustees, guardians or
corporation officers should indicate the
capacity in which they are signing.
PLEASE SIGN, DATE, AND MAIL THIS PROXY
PROMPTLY WHETHER OR NOT YOU EXPECT TO ATTEND
THE MEETING.
DATE: __________________________________, 1999
================================================================================
<PAGE>
--------------
NO POSTAGE
NECESSARY
IF MAILED
IN THE
UNITED STATES
--------------
----------------------------------------------------
BUSINESS REPLY MAIL
FIRST CLASS MAIL PERMIT NO. 286 BURLINGTON, VT
----------------------------------------------------
POSTAGE WILL BE PAID BY ADDRESSEE
MARSHA LAMORE
GREEN MOUNTAIN POWER CORPORATION
P.O. BOX 850
BURLINGTON, VT 05402-9917
<PAGE>
You are invited to join us on May 20, 1999 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 it
will assist us in making the appropriate arrangements.
Refreshments will be served prior to the Meeting.
------------------------------------------------------------------
Shareholder Name (Please Print)
------------------------------------------------------------------
Shareholder Name (Please Print)
------------------------------------------------------------------
Guest (Please Print)
------------------------------------------------------------------
Guest (Please Print)
PLEASE RETURN BY MAY 11, 1999. THANK YOU.
