SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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:
|X| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2)
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
GREEN MOUNTAIN POWER CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No Fee Required
|_| 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:
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2. Aggregate number of securities to which transaction applies:
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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):
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4. Proposed maximum aggregate value transaction:
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5. Total fee paid:
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|_| 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 number, or
the Form or Schedule and the date of its filing.
1. Amount previously paid:
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GREEN MOUNTAIN POWER CORPORATION
163 Acorn Lane
Colchester, Vermont 05446
March 30, 2000
To Our Shareholders:
You are cordially invited to attend the 2000 Annual Meeting of
Shareholders. The meeting will be held on Thursday, May 18, 2000, at the
Sheraton Burlington Hotel and Conference Center, 870 Williston Road, South
Burlington, Vermont 05403. 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.
Thank you for your continued interest in Green Mountain Power Corporation.
Sincerely,
Christopher L. Dutton
President and
Chief Executive Officer
<PAGE>
LOGO
GREEN MOUNTAIN POWER CORPORATION
163 Acorn Lane
Colchester, Vermont 05446
March 30, 2000
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 18, 2000 at 10:00 a.m., Eastern Daylight Savings Time. The
meeting's purposes are to:
1. Consider changes to the structure of the Company's Board of
Directors;
2. Elect two Directors;
3. Consider the 2000 Stock Incentive Plan; and
4. 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 23, 2000 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 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.
Nancy Rowden Brock
Secretary
PLEASE VOTE - YOUR VOTE IS IMPORTANT
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PROXY STATEMENT
GREEN MOUNTAIN POWER CORPORATION
163 Acorn Lane
Colchester, Vermont 05446
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ANNUAL MEETING OF SHAREHOLDERS
May 18, 2000
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March 30, 2000
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 18, 2000, 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 March 30, 2000.
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 ChaseMellon Shareholder Services
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 23, 2000, the record date for the Annual Meeting, the Company had
5,434,169 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 to change the structure of the Board of Directors, Item 1;
for the election of Class II Directors, Item 2; and to approve the 2000 Stock
Incentive Plan, Item 3. 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
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instructions are given and the proxy is executed, the shares will be voted FOR
Items 1, 2 and 3. 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.
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table lists, as of March 23, 2000, 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>
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Percentage of
Amount and Nature of Outstanding
Name Position(s) Beneficial Ownership Shares
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<S> <C> <C> <C>
Vice President, Chief Financial
Nancy Rowden Brock Officer, Secretary and Treasurer 1,707 *
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Nordahl L. Brue Director 3,027 (1) *
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William H. Bruett Director 2,100 *
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Merrill O. Burns Director 2,220 *
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Lorraine E. Chickering Director 650 *
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John V. Cleary Director 3,108 *
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David R. Coates Director 5,000 *
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President and Chief Executive
Christopher L. Dutton Officer and Director 4,033 (2) *
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Euclid A. Irving Director 834 *
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Martin L. Johnson Director 1,444 *
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Ruth W. Page Director 1,389 (3) *
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Senior Vice President, Customer
Mary G. Powell and Business Development 737 *
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Thomas P. Salmon Chairman of the Board 1,530 *
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Senior Vice President,
Stephen C. Terry Government and Legal Relations 4,110 (4) *
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Jonathan H. Winer President, Mountain Energy, Inc. 2,480 (5) *
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All Directors and
Executive Officers as a
Group 34,369 *
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</TABLE>
*Less than one percent
(1) Mr. Brue owns 2,827 of these shares directly. The remaining 200 shares are
owned by Mr. Brue's children. Mr. Brue disclaims any other beneficial
interest in the 200 shares owned by his children.
(2) Mr. Dutton owns 3,937 of these shares directly. The remaining 96 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 96 shares owned
by his children.
(3) Mrs. Page owns 1,189 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.
(4) Mr. Terry owns 4,110 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.
(5) Mr. Winer owns 2,472 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.
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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 Exchange. Based on a
review of those reports and written representations from the Directors and
Executive Officers, the Company believes that during 1999, all requirements have
been complied with except that a series of transactions was not timely reported.
David R. Coates, a Class I Director, inadvertently failed to file a report on
Form 4 concerning the purchase of a total of 2,000 shares of Common Stock.
However, the series of transactions has been reported on Form 4 as instructed by
the Securities and Exchange Commission.
ITEM 1. CONSIDER CHANGES TO THE STRUCTURE OF THE BOARD OF DIRECTORS
The Board of Directors of your Company approved an amendment to the
Company's Bylaws that would allow the Board to consist of between seven and ten
members as determined by vote of the Board of Directors from time to time, and
to be elected at the annual meeting of the shareholders or at a special meeting
held in its place thereof. The purpose of the change is to give the Board of
Directors flexibility to adjust the size of the Board to fit the evolving
circumstances of the Company.
Over the course of the last two years, half of the senior management posts
and over 100 other positions have been eliminated in the Company. Also, during
1999 the Board dissolved three of its committees. The Company has sold non-core
businesses, and is in the process of selling the remainder of such businesses.
Unused or underutilized properties have been sold, and subsidiaries that no
longer conduct active business have been liquidated.
In order to streamline the Board of Directors itself, consistent with
these other changes, approval of the shareholders is required under Vermont law,
in addition to the Bylaws change already described. If the shareholders approve
the change in the structure of the Board, the number of directors in each class
will be kept as nearly equal as possible. Also, no sitting Director may lose his
or her position through action of the Board; the Board would, under the Bylaws
change, only be able to eliminate Board seats that were vacated due to
resignation, death, or expiration of term.
The Board has voted that, if the shareholders approve this change, the
number of directors, effective at and from the May 18, 2000 Annual Meeting, will
be reduced from eleven to ten members.
The Board of Directors recommends that the shareholders approve the
proposal to change the structure of the Board of Directors. The persons named in
the accompanying Proxy intend to vote the proxies held by them in favor of such
proposal, unless otherwise directed. Adoption of the change requires a favorable
vote of the holders of at least a majority of the Common Shares present and
entitled to vote.
The Board recommends that you vote FOR the proposed changes to the structure of
the Board of Directors.
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ITEM 2. ELECTION OF DIRECTORS
If Item 1 passes, the Board will have ten 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. Mrs. Ruth W. Page, who has served your
Company as a Class II director since 1985, has decided to retire and will not
stand for reelection. We would like to take this opportunity to thank Mrs. Page
for her many years of service to the Company. The Board of Directors of your
Company approved an amendment to the Company's Bylaws that would allow the Board
to consist of between seven and ten members as determined by vote of the Board
of Directors from time to time, and to be elected at the annual meeting of the
shareholders or at a special meeting held in place thereof. Having adopted this
amendment, the Board has determined that there shall be ten members for the
ensuing year. The directors being nominated to serve as Class II Directors are
Merrill O. Burns and Christopher L. Dutton.
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 2003 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 II
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
(Term Expires at the 2003 Annual Meeting)
CLASS II
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
(Term Expires at the 2003 Annual Meeting)
Director
Since
Merrill O. Burns Group Executive, USWeb/CKS (Internet 1988
Professional Services) since September 1999;
Partner, Mitchell Madison Group (consultants)
since 1996; Senior Vice President and
Executive Corporate Development Officer,
BankAmerica Corporation from 1991 to 1996.
(53)
Christopher L. Dutton President, Chief Executive Officer and 1997
Chairman of the 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. (51)
The Board recommends that you vote FOR the nominees listed above.
CLASS III
(Term Expires at the 2001 Annual Meeting)
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Nordahl L. Brue Chairman and Chief Executive Officer of 1992
Bruegger's Corporation (quick service
restaurants) since 1997; Principal, Champlain
Management Services, Inc. (real estate
development and management services) since
1985; Stockholder or Partner, Sheehey Brue
Gray & Furlong, P.C., Attorneys, Burlington,
Vermont from 1979 to December 1997; Member of
the Governor's Council of Economic Advisors;
and Trustee of Grinnell College and Shelburne
Museum. (55)
Lorraine E. Chickering President of Public Communications of Bell 1994
Atlantic Corporation from August 1997 to
December 1999; 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. (49)
John V. Cleary Retired President and Chief Executive Officer 1980
of the Company; Chief Executive Officer,
President and Chairman of the Executive
Committee of the Company from 1983 to 1993.
(71)
Euclid A. Irving Partner, Paul, Hastings, Janofsky & Walker, 1993
LLP, Attorneys, New York, New York, since
1990; member of the Board of Trustees of the
University of Virginia Law School Foundation.
(47)
CLASS I
(Term Expires at the 2002 Annual Meeting)
William H. Bruett Senior Vice President, Group Product Manager 1986
of PaineWebber, Inc. since 1990; Director of
PaineWebber Trust Co. and Chairman of
PaineWebber International Bank Ltd., London,
subsidiaries of PaineWebber Group, Inc., since
1990. (56)
David R. Coates Retired Partner, KPMG Peat Marwick; Partner 1999
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. (62)
Martin L. Johnson Chairman and majority owner of The Johnson 1991
Company, Inc. (environmental science and
engineering consultants) since 1978; Secretary
of the State of Vermont Agency of
Environmental Conservation from 1973 to 1978.
(72)
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Thomas P. Salmon Chairman of the Board of the Company since 1978
1983; President of 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 Member of the Board of Trustees of
Middlebury College. (67)
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 an
annual fee of $30,000. Directors also receive $650 for each Board,
committee or other meeting attended in person, or $350 for each
meeting attended by telephone. An additional annual fee of $2,500 paid
to committee chairs was eliminated on October 4, 1999. 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 1999, the Board held a total of eight meetings. Each Director
attended not fewer than 81% 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 1999. Members: Christopher L. Dutton, Chairman,
Nordahl L. Brue, David R. Coates, Martin L. Johnson, Ruth W. Page 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 four meetings in 1999. All members are non-employee
Directors. Members: Euclid A. Irving, Chairman, William H. Bruett,
Merrill O. Burns, David R. Coates 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
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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 1999. Members: William H. Bruett, Chairman, Nordahl L. Brue,
Lorraine E. Chickering, John V. Cleary and Thomas P. Salmon.
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 two meetings in 1999.
All members are non-employee Directors. Members: Merrill O. Burns, Chairman,
Lorraine E. Chickering, John V. Cleary, David R. Coates, Euclid A. Irving and
Martin L. Johnson.
The following committees had been in place prior to January 1, 2000. As
part of the Company's overall streamlining efforts, these committees were
eliminated and their duties were assumed by the remaining four committees listed
above.
The Special Issues Committee addressed unusual, extraordinary or
miscellaneous issues that confront the Company from time to time. The Special
Issues Committee held no meetings in 1999. Members: John V. Cleary, Chairman,
Nordahl L. Brue, Christopher L. Dutton, Euclid A. Irving and Thomas P. Salmon.
The Subsidiaries Oversight Committee oversaw the non-utility operations of
the Company. The Subsidiaries Oversight Committee held three meetings in 1999.
Members: Martin L. Johnson, Chairman, and Euclid A. Irving.
The Strategic Financial Advisory Committee, formed in October 1998,
considered current financial issues confronting the Company and reviewed
appropriate financial strategies presented by management, reporting any
recommendations to the Board. The Strategic Financial Advisory Committee held
four meetings during 1999. Members: William H. Bruett, Chairman, Nordahl L.
Brue, John V. Cleary and Euclid A. Irving.
Other Relationships
Martin L. Johnson, a Class I 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. $22,818.74 to assist with
environmental matters in 1999.
ITEM 3: CONSIDER 2000 STOCK INCENTIVE PLAN
General
On February 7, 2000, the Board of Directors adopted the 2000 Stock
Incentive Plan (the "Incentive Plan"), subject to approval of the Company's
shareholders and of the Vermont Public Service Board ("VPSB"). The Incentive
Plan provides for the grant of stock options, stock appreciation rights,
restricted stock, restricted stock units, other stock grants, other stock-based
awards and performance awards to employees, officers,
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consultants, independent contractors and Directors providing services to the
Company and its subsidiaries.
The following summary of the Incentive Plan is qualified in its entirety
by reference to the full text of the Incentive Plan, which is attached to this
Proxy Statement as Exhibit A.
Summary of the Incentive Plan
Purpose
The purpose of the Incentive Plan is to promote the interests of the
Company and its shareholders by aiding the Company in attracting and retaining
employees, officers, consultants, independent contractors and non-employee
Directors capable of contributing to the future success of the Company, to offer
such persons incentives to put forth maximum efforts for the success of the
Company's business and to afford such persons an additional opportunity to
acquire a proprietary interest in the Company.
Administration
The Compensation Committee has been designated by the Board of Directors
to administer the Incentive Plan. The Compensation Committee will have full
power and authority to determine when and to whom awards will be granted and the
type, amount, form of payment and other terms and conditions of each award,
consistent with the provisions of the Incentive Plan. The Compensation Committee
will have full authority to interpret the Incentive Plan and establish rules and
regulations for the administration of the Incentive Plan. The Compensation
Committee may delegate to one or more Directors or a committee of Directors, or
the Board of Directors may exercise, the Compensation Committee's powers and
duties under the Incentive Plan.
Eligibility
Any employee, officer, consultant, independent contractor or Director
providing services to the Company and its subsidiaries will be eligible to be
selected by the Compensation Committee to receive an award under the Incentive
Plan. As of December 31, 1999, there were approximately 205 persons (not
including consultants and contractors) who were eligible as a class to be
selected by the Compensation Committee to receive an award under the Incentive
Plan.
Number of Shares
The Incentive Plan provides for the issuance of up to 500,000 Common
Shares, subject to adjustment in the event of a stock dividend or other
distribution, recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of Common Shares or other securities of the Company,
issuance of warrants or other rights to purchase Common Shares or other
securities of the Company or other similar changes in the corporate structure or
stock of the Company. Common Shares subject to awards under the Incentive Plan
which are not used or are forfeited because the terms and conditions of the
awards are not met, or because the award terminates without delivery of any
shares, may again be used for awards under the Incentive Plan. Common Shares
used by a participant as full or partial payment to the Company of the purchase
price relating to an award, or in connection with the satisfaction of tax
obligations relating to an award will also be available for awards under the
Incentive Plan. The Common Shares issued under the Incentive Plan may be
authorized but unissued shares or shares acquired on the open market or
otherwise.
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No participant may be granted stock options and any other award, the value
of which is based solely on an increase in the price of the Common Shares,
relating to more than 100,000 shares in the aggregate in any calendar year.
Types of Awards and Certain Terms and Conditions.
The types of awards that may be granted under the Incentive Plan are stock
options, stock appreciation rights, restricted stock, restricted stock units,
performance awards, other stock grants, other stock-based awards and any
combination thereof. The Incentive Plan provides that all awards are to be
evidenced by written agreements containing the terms and conditions of the
awards. The Compensation Committee may not amend or discontinue any outstanding
award without the consent of the holder of the award if such action would
adversely affect the rights of the holder. Except as provided by the Incentive
Plan, awards will not be transferable other than by will or by the laws of
descent and distribution. During the lifetime of a participant, an award may be
exercised only by the participant to whom such award is granted. Awards may be
granted for no cash consideration or for such minimal cash consideration as may
be required by law. Generally, the consideration to be received by the Company
for the grant of awards under the Incentive Plan will be the participant's past,
present or expected future contributions to the Company.
Stock Options
Incentive stock options meeting the requirements of Section 422 of the
Internal Revenue Code ("Incentive Stock Options") and non-qualified options may
be granted under the Incentive Plan. The Compensation Committee will determine
the exercise price of any stock option granted under the Incentive Plan, but in
no event will the exercise price be less than 100% of the fair market value of
the Common Shares on the date of grant. Stock options will be exercisable at
such times as the Compensation Committee determines. Stock options may be
exercised in whole or in part by payment in full of the exercise price in cash
or such other form of consideration as the Compensation Committee may specify,
including delivery of Common Shares having a fair market value on the date of
exercise equal to the exercise price. The Compensation Committee may grant
reload options when a participant pays the exercise price or tax withholding
upon exercise of an option by using Common Shares. The reload option will
entitle the participant to acquire Common Shares equal to the number of Common
Shares surrendered or withheld.
Stock Appreciation Rights
The Compensation Committee may grant stock appreciation rights exercisable
at such times and subject to such conditions or restrictions as the Compensation
Committee may determine. Upon exercise of a stock appreciation right by a
holder, the holder is entitled to receive the excess of the fair market value of
one Common Share on the date of exercise over the fair market value of one
Common Share on the date of grant. The payment may be made in cash or Common
Shares, or other form of payment, as determined by the Compensation Committee.
The grant price for Stock Appreciation Rights will be not less than the fair
market value of the Common Shares on the date of grant.
Restricted Stock and Restricted Stock Units
The Compensation Committee may grant shares of restricted stock and
restricted stock units subject to such restrictions and terms and conditions as
the Compensation Committee may impose. Shares of restricted stock granted under
the Incentive Plan will be evidenced by stock certificates, which will be held
by the Company, and the Compensation Committee may, in its discretion, grant
voting and dividend rights with
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respect to such shares. No shares of stock will be issued at the time of award
of restricted stock units. A restricted stock unit will have a value equal to
the fair market value of one Common Share and may include, if so determined by
the Compensation Committee, the value of any dividends or other rights or
property received by shareholders after the date of grant of the restricted
stock unit. The Compensation Committee has the right to waive any vesting
requirements or to accelerate the vesting of restricted stock or restricted
stock units.
Performance Awards
A performance award will entitle the holder to receive payments upon the
achievement of specified performance goals. The Compensation Committee will
determine the terms and conditions of a performance award, including the
performance goals to be achieved during the performance period, the length of
the performance period and the amount and form of payment of the performance
award. A performance award may be denominated or payable in cash, Common Shares
or other securities, or other awards or property.
Other Stock Grants
The Compensation Committee may otherwise grant Common Shares as are deemed
by the Compensation Committee to be consistent with the purpose of the Incentive
Plan. The Compensation Committee will determine the terms and conditions of such
other stock grant.
Other Stock-Based Awards
The Compensation Committee may grant other awards denominated or payable
in, valued by reference to, or otherwise based on or related to Common Shares as
are deemed by the Compensation Committee to be consistent with the purpose of
the Incentive Plan. The Compensation Committee will determine the terms and
conditions of such other stock-based award, including the consideration to be
paid for Common Shares or other securities delivered pursuant to a purchase
right granted under such award. The value of such consideration shall not be
less than 100% of the fair market value of such shares or other securities as of
the date such purchase right is granted.
Change in Control Provisions
The Incentive Plan provides that in the event of a "Change in Control"
(as defined in the Incentive Plan), all stock options and stock appreciation
rights will become immediately exercisable, the restrictions applicable to
outstanding restricted stock and restricted stock units, other stock grants and
other stock-based awards will lapse and become exercisable, and unless otherwise
determined by the Compensation Committee, the value of outstanding stock
options, stock appreciation rights, restricted stock, restricted stock units,
other stock grants and other stock-based awards will be cashed out on the basis
of the highest price paid (or offered) during the preceding 60-day period. In
addition, outstanding performance awards will be vested and paid out on a
prorated basis.
Duration, Termination and Amendment
The Inventive Plan, if approved by shareholders, will commence upon filing
with and approval by the VPSB. Unless earlier discontinued or terminated by the
Board of Directors, no awards may be granted under the Incentive Plan after
February 7, 2005. The Incentive Plan permits the Board of Directors to amend,
alter, suspend, discontinue or terminate the Incentive Plan at any time, except
that prior shareholder approval will be required for any amendment to the
Incentive Plan that requires shareholder approval under the rules or regulations
of the New York Stock Exchange or any securities exchange that are applicable to
the Company or that would cause the Company to be
12
<PAGE>
unable, under the Internal Revenue Code, to grant Incentive Stock Options under
the Incentive Plan, or that would decrease the grant or exercise price of any
option, stock appreciation right, other stock grant or other stock-based award
to less than fair market value on the date of grant.
Federal Tax Consequences
The following is a summary of the principal federal income tax
consequences generally applicable to awards under the Incentive Plan.
Stock Options and Stock Appreciation Rights
The grant of an option or stock appreciation right will not result in any
taxable income for the recipient. The holder of an Incentive Stock Option
generally will recognize taxable income for ordinary income tax purposes upon
exercising the Incentive Stock Option; however, the amount by which the fair
market value of the Common Shares on the exercise date exceeds the exercise
price is an adjustment in computing the participant's alternative minimum tax in
the year of exercise. The Company will not be entitled to a tax deduction when
an Incentive Stock Option is exercised.
Upon exercising a non-qualified stock option, the optionee must recognize
ordinary income equal to the excess of the fair market value of the Common
Shares acquired on the date of exercise over the exercise price, and the Company
will be entitled at that time to a tax deduction for the same amount. Upon
exercising a stock appreciation right, the amount of any cash received and the
fair market value on the exercise date of any Common Shares received are taxable
to the recipient as ordinary income and deductible by the Company.
The tax consequence to an optionee upon a disposition of shares acquired
through the exercise of an option will depend on how long the shares have been
held and upon whether such shares were acquired by exercising an Incentive Stock
Option or by exercising a non-qualified stock option or stock appreciation
right. Generally, there will be no tax consequence to the Company in connection
with disposition of shares acquired under an option, except that the Company may
be entitled to a tax deduction in the case of a "qualifying disposition" of
Common Shares acquired under an Incentive Stock Option before the applicable
Incentive Stock Option holding periods set forth in the Internal Revenue Code
have been satisfied.
Other Awards:
With respect to other awards granted under the Incentive Plan that are
payable either in cash or Common Shares that are either transferable or not
subject to substantial risk of forfeiture, the holder of such an award must
recognize ordinary income equal to the excess of (a) the cash or the fair market
value of the Common Shares received (determined as of the date of such receipt)
over (b) the amount (if any) paid for such Common Shares by the holder of the
award, and the Company will be entitled at that time to a deduction for the same
amount. With respect to an award that is payable in Common Shares that are
restricted as to transferability and subject to substantial risk of forfeiture,
unless a special election is made pursuant to the Internal Revenue Code, the
holder of the award must recognize ordinary income equal to the excess of (i)
the fair market value of the Common Shares received (determined as of the first
time the shares become transferable or not subject to substantial risk of
forfeiture, whichever occurs earlier) over (ii) the amount (if any) paid for
such Common Shares by the holder, and the Company will be entitled at that time
to a tax deduction for the same amount.
Satisfaction of Tax Obligations
13
<PAGE>
Under the Incentive Plan, the Compensation Committee may permit
participants receiving or exercising awards, subject to the discretion of the
Compensation Committee and upon such terms and conditions as it may impose, to
surrender Common Shares (either shares received upon the receipt or exercise of
the award or shares previously owned by the participant) to the Company to
satisfy federal and state tax obligations. In addition, the Compensation
Committee may grant, subject to its discretion, a cash bonus to a participant in
order to provide funds to pay all or a portion of federal and state taxes due as
a result of the exercise or receipt of (or lapse of restrictions relating to) an
award. The amount of any such bonus will be taxable to the participant as
ordinary income, and the Company will have a corresponding deduction equal to
such amount (subject to the usual rules concerning reasonable compensation).
Section 162(m) Requirements
Section 162(m) of the Internal Revenue Code places a $1,000,000 annual
limit on the compensation deductible by the Company paid to certain of its
executives. The limit, however, does not apply to "qualified performance-based
compensation". The Company believes that awards of stock options, stock
appreciation rights and certain other "performance-based compensation" awards
under the Incentive Plan will qualify for the performance-based exception to the
deductibility limit.
The Board of Directors recommends that the shareholders approve the
proposal to approve the Incentive Plan. If approved by the shareholders and
VPSB, the Plan will be effective as of February 7, 2000 and no awards will be
made after February 7, 2005. The persons named in the accompanying Proxy intend
to vote the Proxies held by them in favor of such proposal, unless otherwise
directed. Adoption of the Incentive Plan requires a favorable vote of the
holders of at least a majority of the Common Shares present and entitled to
vote.
The Board recommends that you vote FOR the proposed 2000 Stock Incentive Plan.
14
<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 1999, 1998, and 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Long-Term
Annual Compensation(1) Compensation
Awards
-----------------------------------------------------------------
Other Restricted
Name and Principal Incentive Annual Stock All Other
Position Year Salary Awards Compensation Award(s) Compensation
(2) (3) (4) (5)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Christopher L. Dutton 1999 $210,000 0 $ 854 0 $6,979
President and Chief 1998 $213,231 0 $ 1,384 0 $5,649
Executive Officer 1997 $160,525 0 $ 2,001 0 $5,392
- -------------------------------------------------------------------------------------------------------
Stephen C. Terry 1999 $150,000 0 $ 746 0 $6,134
Senior Vice President, 1998 $152,308 0 $ 1,305 0 $4,110
Government and Legal 1997 $138,578 0 $ 1,931 0 $4,663
Relations
- -------------------------------------------------------------------------------------------------------
Mary G. Powell (6) 1999 $130,690 0 0 0 $4,814
Senior Vice President, 1998 $ 96,154 0 0 0 $ 997
Customer and Business 1997 0 0 0 0 0
Development
- -------------------------------------------------------------------------------------------------------
Nancy Rowden Brock (6) 1999 $125,000 0 0 0 $4,648
Vice President, Chief 1998 $ 80,435 0 0 0 $1,370
Financial Officer, Secretary 1997 0 0 0 0 0
and Treasurer
- -------------------------------------------------------------------------------------------------------
Jonathan H. Winer 1999 $125,000 0 $184 0 $4,903
President, Mountain Energy, 1998 $127,404 0 $321 0 $3,151
Inc. 1997 $117,229 0 $446 0 $3,713
- -------------------------------------------------------------------------------------------------------
</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 1997
and 1998, as well as amounts earned but deferred at the election of those
Officers. No variable compensation awards were made in 1997 or 1998. We
anticipate that no variable compensation awards will be given for 1999
based on the Company's 1999 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"). No payments
were made in the last three years under the Compensation Program based on
the Company's and the participants performance in those years, as
indicated in the Incentive Awards column of this Summary Compensation
Table. See Compensation Committee Report on Executive Compensation.
(3) The amounts shown in this column represent dividends paid on restricted
shares awarded under the Compensation Program and interest on deferred
compensation for amounts above 120% of the applicable federal long-term
rate.
(4) The restricted share awards are made in accordance with the Compensation
Program. No restricted share awards were made for 1997 or 1998, and we
anticipate that no variable compensation awards will be made based on the
Company's 1999 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, 1999, the
aggregate number of shares and the value of all restricted stock holdings,
based on the market
15
<PAGE>
value of the shares at December 31, 1999, 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,
$10,398; 1,356 shares, $10,085; and 334 shares, $2,484. Ms. Powell and Ms.
Brock had no restricted shares at December 31, 1999.
(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 $992, Mr. Terry $837, Ms. Powell $216, Ms. Brock $278
and Mr. Winer $360. (ii) Company matching contributions to the Employee
Savings and Investment Plan: Mr. Dutton $5,987, Mr. Terry $5,297, Ms.
Powell $4,597, Ms. Brock $4,370 and Mr. Winer $4,543.
(6) Ms. Brock and Ms. Powell joined the Company in March 1998. Therefore, the
1998 totals representonly a partial year.
Compensation Awards for 1999 Performance
As of the date hereof, the Compensation Committee of the Board has not
made a formal recommendation to the Board of Directors for compensation awards
based on 1999 performance. However, we anticipate that no variable compensation
awards will be paid to the Officers under the Compensation Program for 1999
based on the Company's 1999 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 1999 compensation determinations were made. We have
not made any recommendations as of this date regarding compensation to be
awarded for 1999. However, we anticipate that no variable compensation awards
will be made under the Compensation Program based on the Company's 1999
financial performance. In addition, we are recommending the termination of the
existing variable compensation provisions of the Compensation Program for
Officers and Certain Key Management Personnel and are recommending replacing
such provisions with a stock incentive stock plan which we believe is more
consistent with creating shareholder value and attracting and retaining
employees and rewarding appropriate employees for creating such value.
Compensation Philosophy
It is our philosophy that executive compensation should be competitive in
the marketplace, be aligned with corporate performance, and promote the
strategic objectives of the
16
<PAGE>
Company. Specifically, base compensation for executives should compare favorably
with organizations competing for similar talent. The new Compensation Program
for Officers and Certain Key Management Personnel is designed to meet these
objectives. It is comprised of two components: base salary; and; a new variable
compensation approach, which is outlined in Item 3 for shareholder approval.
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,
including 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.
New Variable Compensation Approach
1999 was a year of dramatic change for the Company and its employees. The
Company restructured its entire operations to reduce costs and improve
operational and management effectiveness (a project called "GMPworks"). The
result of this project was an approximate reduction of 33% in overall headcount
and a 50% reduction in officers. In May 1999, we considered base salary
adjustments and ultimately we recommended to the Board that, given the overall
financial performance of the Company, base salary increases should not be given
at that 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 1998, no variable compensation awards would be made
in 1999.
In August 1999, based on the recommendation of the Chief Executive
Officer, we approved a salary increase for one of the Company's Vice Presidents
who had assumed increased duties and a promotion from Assistant Vice President,
as part of the Company restructuring.
In December 1999, we commissioned the firm of Watson Wyatt (an independent
third party) to assist in the development of a Stock Incentive Plan for the
Company's officers and general employee population. The Compensation Committee
recommended to the Board in January 2000 a specific plan that better aligns
incentives with the objectives of the Company. As part of the Watson Wyatt
review, an analysis of base and total compensation for senior officers was
conducted. Watson Wyatt has advised the Compensation Committee that the total
direct compensation of the Company's current management is substantially below
that of its peer group. The independent study demonstrated to the Compensation
Committee that it is necessary to establish the new incentive compensation plan
in order to put the Company's current management in line with its peer group,
retain current management and attract future talented management in the upcoming
years.
In December 1999, the Compensation Committee recommended, and the Board
approved, base salary adjustments for the Chief Executive Officer and three
senior officers effective January 1, 2000. The Chief Executive Officer and one
Senior Vice President had not received a compensation adjustment in over 2.5
years. One of the Company's Senior Vice Presidents had assumed increased duties
and was promoted from Vice President, and the Chief Financial Officer assumed
additional responsibilities as part of the Company restructuring.
17
<PAGE>
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 1999 because
no Executive Officer will receive compensation for such year in excess of the $1
million threshold.
Chief Executive Officer Compensation
For the reasons stated above, the Chief Executive Officer did not receive
an increase in base salary in 1999 nor did he receive a variable compensation
award based on the 1998 financial performance of the Company.
Conclusion
We believe the Company's executive compensation program, as proposed,
appropriately aligns executive compensation to individual and corporate
performance and increases in shareholder value, is competitive with the market
and is sensitive to the concerns of customers, shareholders, and other
constituencies.
Compensation Committee
Merrill O. Burns, Chairman David R. Coates
Lorraine E. Chickering Euclid A. Irving
John V. Cleary Martin L. Johnson
18
<PAGE>
PERFORMANCE GRAPH
Comparison of Cumulative Total Return Among
Green Mountain Power Corporation, EEI 100 Index (utilities) and S&P 500 Index*
[THE FOLLOWING WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
($) ($) ($) ($) ($) ($)
--- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C>
GMP 100.00 107.87 100.98 83.41 51.30 38.50
EEI 100 100.00 131.02 132.59 168.88 192.34 156.57
S&P 500 100.00 137.44 169.00 225.37 289.79 350.76
</TABLE>
*Assumes $100.00 invested on December 31, 1994 and dividends reinvested.
Historical performance does not necessarily predict future results.
19
<PAGE>
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.
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
Annual Average Base Estimated Annual Retirement Benefits
Compensation Highest 36 At Normal Retirement Age of 65 Years
Consecutive Fiscal Credited Years of Service*
Months of the Last 10
Years Preceding
Retirement
----------
15 20 25 30 35 & Over
-- -- -- -- ---------
($) ($) ($) ($) ($) ($)
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 41,680 52,100 62,520 72,940
160,000** 36,060 48,080 60,100 72,120 84,140
20
<PAGE>
Credited years of service (including service credited with other
companies), as of December 31, 1999, for each of the Officers named in
this proxy statement were as follows: C. L. Dutton 14.8 years; N.R. Brock
.83; M.G. Powell .75; S. C. Terry 13.8 years; J. H. Winer 15.5 years.
** Compensation cap for 1997, 1998 and 1999 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 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 seven members of
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;
21
<PAGE>
2. Continuation for 36 months of health, medical and other insurance
programs;
3. Payment of an amount equal to the actuarial value of up to 36 months
of additional credited service under the Retirement Plan: and
4. Full vesting and payment in a lump sum of any Supplemental
Retirement benefits that the individual is otherwise entitled to
upon termination.
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 occurs 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.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
On December 6, 1999, the Board appointed the firm of Arthur Andersen LLP
to serve as independent certified public accountants for the calendar year 2000.
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 2001 annual meeting which is expected to take place on
Thursday, May 17, 2001, no later than December 14, 2000. In addition, if we
receive notice of a shareholder proposal after February 15, 2000, the persons
named as proxies in the proxy statement for the 2000 Annual Meeting will
22
<PAGE>
have discretionary voting authority to vote on such proposal at the 2000 Annual
Meeting. 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
NANCY ROWDEN BROCK
Secretary
PLEASE VOTE - YOUR VOTE IS IMPORTANT
<PAGE>
GREEN MOUNTAIN POWER CORPORATION
2000 STOCK INCENTIVE PLAN
"APPENDIX A"
Section 1. Purpose.
The purpose of the Plan is to promote the interests of the Company and its
shareholders by aiding the Company in attracting and retaining employees,
officers, consultants, independent contractors and non-employee directors
capable of contributing to the future success of the Company, to offer such
persons incentives to put forth maximum efforts for the success of the Company's
business and to afford such persons an opportunity to acquire a proprietary
interest in the Company.
Section 2. Definitions.
As used in the Plan, the following terms shall have the meanings set forth
below:
(a) "Affiliate" shall mean (i) any entity that, directly or indirectly through
one or more intermediaries, is controlled by the Company and (ii) any entity in
which the Company has a significant equity interest, in each case as determined
by the Committee.
(b) "Award" shall mean any Option, Stock Appreciation Right, Restricted Stock,
Restricted Stock Unit, Performance Award, Other Stock Grant or Other Stock-Based
Award granted under the Plan.
(c) "Award Agreement" shall mean any written agreement, contract or other
instrument or document evidencing any Award granted under the Plan.
(d) "Board" shall mean the Board of Directors of the Company.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to
time, and any regulations promulgated thereunder.
(f) "Committee" shall mean a committee of Directors designated by the Board to
administer the Plan. The Committee shall be comprised of not less than such
number of Directors as shall be required to permit Awards granted under the Plan
to qualify under Rule 16b-3, and each member of the Committee shall be a
"non-employee director" within the meaning of Rule 16b-3 and an "outside
director" within the meaning of Section 162(m) of the Code. The Company expects
to administer the Plan to the extent feasible in accordance with the
requirements for the award of "qualified performance-based compensation" within
the meaning of Section 162(m) of the Code.
(g) "Company" shall mean Green Mountain Power Corporation, a Vermont
corporation, and any successor corporation.
(h) "Director" shall mean a member of the Board.
23
<PAGE>
(i) "Eligible Person" shall mean any employee, officer, consultant, independent
contractor or Director providing services to the Company or any Affiliate whom
the Committee determines to be an Eligible Person.
(j) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
(k) "Fair Market Value" shall mean, with respect to any property (including,
without limitation, any Shares or other securities), the fair market value of
such property determined by such methods or procedures as shall be established
from time to time by the Committee. Notwithstanding the foregoing, unless
otherwise determined by the Committee, the Fair Market Value of Shares as of a
given date shall be, if the Shares are then quoted on the New York Stock
Exchange, the average of the high and low sales price as reported on the New
York Stock Exchange on such date or, if the New York Stock Exchange is not open
for trading on such date, on the most recent preceding date when it is open for
trading; provided, however, that the Committee may in its discretion designate
the actual sales price as Fair Market Value in the case of disposition of Shares
under the Plan.
(l) "Incentive Stock Option" shall mean an option granted under Section 6(a) of
the Plan that is intended to meet the requirements of Section 422 of the Code or
any successor provision.
(m) "Non-Qualified Stock Option" shall mean an option granted under Section 6(a)
of the Plan that is not intended to be an Incentive Stock Option.
(n) "Option" shall mean an Incentive Stock Option or a Non-Qualified Stock
Option, and shall include Reload Options.
(o) "Other Stock Grant" shall mean any right granted under Section 6(e) of the
Plan.
(p) "Other Stock-Based Award" shall mean any right granted under Section 6(f) of
the Plan.
(q) "Participant" shall mean an Eligible Person designated to be granted an
Award under the Plan. A Participant shall cease to be such under the Plan after
all Awards granted to him or her are no longer exercisable.
(r) "Performance Award" shall mean any right granted under Section 6(d) of the
Plan.
(s) "Person" shall mean any individual, corporation, partnership, association or
trust.
(t) "Plan" shall mean the Green Mountain Power Corporation 2000 Stock Incentive
Plan, as amended from time to time, the provisions of which are set forth
herein.
(u) "Reload Option" shall mean any Option granted under Section 6(a)(iv) of the
Plan.
(v) "Restricted Stock" shall mean any Shares granted under Section 6(c) of the
Plan.
(w) "Restricted Stock Unit" shall mean any unit granted under Section 6(c) of
the Plan evidencing the right to receive a Share (or a cash payment equal to the
Fair Market Value of a Share) at some future date.
(x) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Exchange Act or any successor rule or regulation.
(y) "Shares" shall mean shares of Common Stock, $5 par value per share, of the
Company or such other securities or property as may become subject to Awards
pursuant to an adjustment made under Section 4(c) of the Plan.
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(z) "Stock Appreciation Right" shall mean any right granted under Section 6(b)
of the Plan.
Section 3. Administration.
(a) Power and Authority of the Committee. The Plan shall be administered by the
Committee. Subject to the express provisions of the Plan and to applicable law,
the Committee shall have full power and authority to: (i) designate those
Eligible Persons who are to be Participants; (ii) determine the type or types of
Awards to be granted to each Participant under the Plan; (iii) determine the
number of Shares to be covered by (or with respect to which payments, rights or
other matters are to be calculated in connection with) each Award; (iv)
determine the terms and conditions of any Award or Award Agreement; (v) amend
the terms and conditions of any Award or Award Agreement and accelerate the
exercisability of Options or the lapse of restrictions relating to Restricted
Stock, Restricted Stock Units or other Awards; (vi) determine whether, to what
extent and under what circumstances Awards may be exercised in cash, Shares,
other securities, other Awards or other property, or canceled, forfeited or
suspended; (vii) determine whether, to what extent and under what circumstances
cash, Shares, promissory notes, other securities, other Awards, other property
and other amounts payable with respect to an Award under the Plan shall be
deferred either automatically or at the election of the holder thereof or the
Committee; (viii) interpret and administer the Plan and any instrument or
agreement, including an Award Agreement, relating to the Plan; (ix) establish,
amend, suspend or waive such rules and regulations and appoint such agents as it
shall deem appropriate for the proper administration of the Plan; and (x) make
any other determination and take any other action that the Committee deems
necessary or desirable for the administration of the Plan. Unless otherwise
expressly provided in the Plan, all designations, determinations,
interpretations and other decisions under or with respect to the Plan or any
Award shall be within the sole discretion of the Committee, may be made at any
time and shall be final, conclusive and binding upon any Participant, any holder
or beneficiary of any Award and any employee of the Company or any Affiliate.
(b) Delegation. The Committee may delegate its powers and duties under the Plan
to one or more Directors or a committee of Directors, subject to such terms,
conditions and limitations as the Committee may establish in its sole
discretion.
(c) Power and Authority of the Board of Directors. Notwithstanding anything to
the contrary contained herein, the Board may, at any time and from time to time,
without any further action of the Committee, exercise the powers and duties of
the Committee under the Plan.
Section 4. Shares Available for Awards.
(a) Shares Available. Subject to adjustment as provided in Section 4(c) of the
Plan, the aggregate number of Shares that may be issued under all Awards under
the Plan shall be 500,000. Shares to be issued under the Plan may be either
authorized but unissued Shares or Shares acquired in the open market or
otherwise. Any Shares that are used by a Participant as full or partial payment
to the Company of the purchase price relating to an Award, or in connection with
the satisfaction of tax obligations relating to an Award, shall again be
available for granting Awards (other than Incentive Stock Options) under the
Plan. In addition, if any Shares covered by an Award or to which an Award
relates are not purchased or are forfeited, or if an Award otherwise terminates
without delivery of any Shares, then the number of Shares counted against the
aggregate number of Shares available under the Plan with respect to such Award,
to the extent of any such forfeiture or termination, shall again be available
for granting Awards under the Plan.
(b) Accounting for Awards. For purposes of this Section 4, if an Award entitles
the holder thereof to receive or purchase Shares, the number of Shares covered
by such Award or to which such Award relates shall be counted on the date of
grant of such Award against the aggregate number of Shares available for
granting Awards under the Plan.
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(c) Adjustments. In the event that the Committee shall determine that any
dividend or other distribution (whether in the form of cash, Shares, other
securities or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of Shares or other securities of the Company, issuance of
warrants or other rights to purchase Shares or other securities of the Company
or other similar corporate transaction or event affects the Shares such that an
adjustment is determined by the Committee to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan, then the Committee shall, in such manner as it
may deem equitable, adjust any or all of (i) the number and type of Shares (or
other securities or other property) that thereafter may be made the subject of
Awards, (ii) the number and type of Shares (or other securities or other
property) subject to outstanding Awards and (iii) the purchase or exercise price
with respect to any Award; provided, however, that the number of Shares covered
by any Award or to which such Award relates shall always be a whole number.
(d) Award Limitations Under the Plan. No Eligible Person may be granted any
Award or Awards under the Plan, the value of which Award or Awards is based
solely on an increase in the value of the Shares after the date of grant of such
Award or Awards, for more than 100,000 Shares (subject to adjustment as provided
for in Section 4(c) of the Plan), in the aggregate in any calendar year. The
foregoing annual limitation specifically includes the grant of any Award or
Awards representing "qualified performance-based compensation" within the
meaning of Section 162(m) of the Code.
Section 5. Eligibility.
Any Eligible Person shall be eligible to be designated a Participant. An
Incentive Stock Option may only be granted to full or part-time employees (which
term as used herein includes, without limitation, officers and Directors who are
also employees), and an Incentive Stock Option shall not be granted to an
employee of an Affiliate unless such Affiliate is also a "subsidiary
corporation" of the Company within the meaning of Section 424(f) of the Code or
any successor provision.
Section 6. Awards.
(a) Options. The Committee is hereby authorized to grant Options to Participants
with the following terms and conditions and with such additional terms and
conditions not inconsistent with the provisions of the Plan as the Committee
shall determine:
(i) Exercise Price. The purchase price per Share purchasable under an
Option shall be determined by the Committee; provided, however, that such
purchase price shall not be less than 100% of the Fair Market Value of a Share
on the date of grant of such Option.
(ii) Option Term. The term of each Option shall be fixed by the Committee
but no Option shall be exercisable more than ten years after the grant date.
(iii) Time and Method of Exercise. The Committee shall determine the time
or times at which an Option may be exercised in whole or in part and the method
or methods by which, and the form or forms (including, without limitation, cash,
Shares, promissory notes, other securities, other Awards or other property, or
any combination thereof, having a Fair Market Value on the exercise date equal
to the relevant exercise price) in which, payment of the exercise price with
respect thereto may be made or deemed to have been made.
(iv) Reload Options. The Committee is hereby authorized to grant Reload
Options, separately or together with another Option, pursuant to which, subject
to the terms and conditions established by the Committee, the Participant will
be granted a new Option (the Reload Option) when payment of all or a portion of
the exercise price of a previously granted
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option is made by the delivery of Shares owned by the Participant, and/or when
Shares are tendered or withheld as payment of all or a portion of the amount to
be withheld under applicable income tax laws in connection with the exercise of
an option. The Reload Option will be an Option to purchase that number of Shares
not exceeding the sum of (A) the number of Shares used for payment of the
exercise price of the previously granted option to which such Reload Option
relates and (B) the number of Shares tendered or withheld as payment of the
amount to be withheld under applicable tax laws in connection with the exercise
of the option to which such Reload Option relates. Reload Options may be granted
with respect to Options previously granted under the Plan or with respect to
options under any other stock option plan of the Company or may be granted in
connection with any Option granted under the Plan or under any other stock
option plan of the Company at the time of such grant. Such Reload Options shall
have a per share exercise price equal to the Fair Market Value of one Share as
of the date of grant of the new Reload Option.
(b) Stock Appreciation Rights. The Committee is hereby authorized to grant Stock
Appreciation Rights to Participants subject to the terms of the Plan and any
applicable Award Agreement. A Stock Appreciation Right granted under the Plan
shall confer on the holder thereof a right to receive upon exercise thereof the
excess of (i) the Fair Market Value of one Share on the date of exercise (or, if
the Committee shall determine, at any time during a specified period before or
after the date of exercise) over (ii) the grant price of the Stock Appreciation
Right as specified by the Committee, which price shall not be less than 100% of
the Fair Market Value of one Share on the date of grant of the Stock
Appreciation Right. Subject to the terms of the Plan and any applicable Award
Agreement, the grant price, term, methods of exercise, dates of exercise,
methods of settlement and any other terms and conditions of any Stock
Appreciation Right shall be as determined by the Committee. The Committee may
impose such conditions or restrictions on the exercise of any Stock Appreciation
Right as it may deem appropriate.
(c) Restricted Stock and Restricted Stock Units. The Committee is hereby
authorized to grant Restricted Stock and Restricted Stock Units to Participants
with the following terms and conditions and with such additional terms and
conditions not inconsistent with the provisions of the Plan as the Committee
shall determine:
(i) Restrictions. Shares of Restricted Stock and Restricted Stock Units
shall be subject to such restrictions as the Committee may impose (including,
without limitation, a waiver by the Participant of the right to vote or to
receive any dividend or other right or property with respect thereto), which
restrictions may lapse separately or in combination at such time or times, in
such installments or otherwise as the Committee may deem appropriate.
(ii) Stock Certificates. Any Restricted Stock granted under the Plan shall
be registered in the name of the Participant and shall bear an appropriate
legend referring to the terms, conditions and restrictions applicable to such
Restricted Stock. In the case of Restricted Stock Units, no Shares shall be
issued at the time such Awards are granted.
(iii) Forfeiture. Except as otherwise determined by the Committee, upon
termination of employment (as determined under criteria established by the
Committee) during the applicable restriction period, all Shares of Restricted
Stock and all Restricted Stock Units at such time subject to restriction shall
be forfeited and reacquired by the Company; provided, however, that the
Committee may waive in whole or in part any or all remaining restrictions with
respect to Shares of Restricted Stock or Restricted Stock Units. Upon the lapse
or waiver of restrictions and the restricted period relating to Restricted Stock
Units evidencing the right to receive Shares, such Shares shall be issued and
delivered to the holders of the Restricted Stock Units.
(d) Performance Awards. The Committee is hereby authorized to grant Performance
Awards to Participants subject to the terms of the Plan and any applicable Award
Agreement. A Performance Award granted under the Plan (i) may be denominated or
payable in cash, Shares (including, without limitation, Restricted Stock and
Restricted Stock Units), other securities,
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other Awards or other property and (ii) shall confer on the holder thereof the
right to receive payments, in whole or in part, upon the achievement of such
performance goals during such performance periods as the Committee shall
establish. Subject to the terms of the Plan and any applicable Award Agreement,
the performance goals to be achieved during any performance period, the length
of any performance period, the amount of any Performance Award granted, the
amount of any payment or transfer to be made pursuant to any Performance Award
and any other terms and conditions of any Performance Award shall be determined
by the Committee.
(e) Other Stock Grants. The Committee is hereby authorized, subject to the terms
of the Plan and any applicable Award Agreement, to grant to Participants Shares
without restrictions thereon as are deemed by the Committee to be consistent
with the purpose of the Plan.
(f) Other Stock-Based Awards. The Committee is hereby authorized to grant to
Participants subject to the terms of the Plan and any applicable Award
Agreement, such other Awards that are denominated or payable in, valued in whole
or in part by reference to, or otherwise based on or related to, Shares
(including, without limitation, securities convertible into Shares), as are
deemed by the Committee to be consistent with the purpose of the Plan. Shares or
other securities delivered pursuant to a purchase right granted under this
Section 6(f) shall be purchased for such consideration, which may be paid by
such method or methods and in form or forms (including, without limitation,
cash, Shares, promissory notes, other securities, other Awards or other property
or any combination thereof), as the Committee shall determine, the value of
which consideration, as established by the Committee, shall not be less than
100% of the Fair Market Value of such Shares or other securities as of the date
such purchase right is granted.
(g) General.
(i) No Cash Consideration for Awards. Awards shall be granted for no cash
consideration or for such minimal cash consideration as may be required by
applicable law.
(ii) Awards May Be Granted Separately or Together. Awards may, in the
discretion of the Committee, be granted either alone or in addition to, in
tandem with or in substitution for any other Award or any award granted under
any plan of the Company or any Affiliate other than the Plan. Awards granted in
addition to or in tandem with other Awards or in addition to or in tandem with
awards granted under any such other plan of the Company or any Affiliate may be
granted either at the same time as or at a different time from the grant of such
other Awards or awards.
(iii) Forms of Payment under Awards. Subject to the terms of the Plan and
of any applicable Award Agreement, payments or transfers to be made by the
Company or an Affiliate upon the grant, exercise or payment of an Award may be
made in such form or forms as the Committee shall determine (including, without
limitation, cash, Shares, promissory notes, other securities, other Awards or
other property or any combination thereof), and may be made in a single payment
or transfer, in installments or on a deferred basis, in each case in accordance
with rules and procedures established by the Committee. Such rules and
procedures may include, without limitation, provisions for the payment or
crediting of reasonable interest on installment or deferred payments or the
grant or crediting of dividend equivalents with respect to installment or
deferred payments.
(iv) Limits on Transfer of Awards. No Award (other than Other Stock
Grants) and no right under any such Award shall be transferable by a Participant
otherwise than by will or by the laws of descent and distribution; provided,
however, that, if so determined by the Committee, a Participant may, in the
manner established by the Committee, transfer Options (other than Incentive
Stock Options) or designate a beneficiary or beneficiaries to exercise the
rights of the Participant and receive any property distributable with respect to
any Award upon the death of the Participant. Each Award or right under any Award
shall be exercisable during the Participant's lifetime only by the Participant
or, if permissible under applicable law, by the
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Participant's guardian or legal representative. No Award or right under any such
Award may be pledged, alienated, attached or otherwise encumbered, and any
purported pledge, alienation, attachment or encumbrance thereof shall be void
and unenforceable against the Company or any Affiliate.
(v) Term of Awards. The term of each Award shall be for such period as may
be determined by the Committee, but in no event more than ten years.
(vi) Restrictions; Securities Exchange Listing. All Shares or other
securities delivered under the Plan pursuant to any Award or the exercise
thereof shall be subject to such restrictions as the Committee may deem
advisable under the Plan, applicable federal or state securities laws and
regulatory requirements, and the Committee may cause appropriate entries to be
made or legends to be affixed to reflect such restrictions. If any securities of
the Company are traded on a securities exchange, the Company shall not be
required to deliver any Shares or other securities covered by an Award unless
and until such Shares or other securities have been admitted for trading on such
securities exchange.
Section 7. Change in Control Provisions.
(a) Impact of Event. Notwithstanding any other provision of the Plan to the
contrary, in the event of a Change in Control:
All Options and Stock Appreciation Rights outstanding as of the date such
Change in Control occurs shall become fully vested and exercisable.
The restrictions and other conditions applicable to any Restricted Stock,
Restricted Stock Unit, Other Stock Grant or Other Stock-Based Awards,
including vesting requirements, shall lapse, and such Awards shall become
free of all restrictions and fully vested.
The value of all outstanding Options, Stock Appreciation Rights,
Restricted Stock, Restricted Stock Units, Other Stock Grants and Other
Stock-Based Awards shall, unless otherwise determined by the Committee at
or after grant, be cashed out on the basis of the "Change in Control
Price," as defined in Section 7(c), as of the date such Change in Control
occurs or such other date as the Committee may determine prior to the
Change in Control.
Any Performance Award that has been earned but not paid shall become
immediately payable in cash.
(b) Definition of Change in Control. A "Change in Control" means the happening
of any of the following events:
if (A) any "person" (as such term is used in sections 13(d) and 14(d) of
the Exchange Act other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or a corporation owned, directly
or indirectly, by the shareholders of the Company in substantially the same
proportions as their ownership of stock of the Company, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 20% or more of the
combined voting power of the Company's then outstanding securities (a "20%
Holder"); or (B) during any period of two consecutive years (not including any
period prior to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board and any new Director (other than a
Director designated by a person who has entered into an agreement with the
Company to effect a transaction described in clauses (A) or (C) of this
subsection) whose election by the Board or nomination for election by the
Company's shareholders was approved by a vote of at least three-fourths (3/4) of
the Directors then still in office who either were Directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any
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reason to constitute a majority of the Directors of the Company; or (C) the
shareholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 80% of the
combined voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation, or the
shareholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all the Company's assets; provided, however, that a Change of
Control shall not be deemed to have occurred under clauses (A) or (C) above if a
majority of the Continuing Directors (as defined below) determine within five
business days after the occurrence of any event specified in clauses (A) or (C)
above that control of the Company has not in fact changed and it is reasonably
expected that such control of the Company in fact will not change.
Notwithstanding that, in the case of clause (A) above, the Board shall have made
a determination of the nature described in the preceding sentence, if there
shall thereafter occur any material change in facts involving, or relating to,
the 20% Holder or to the 20% Holder's relationship to the Company, including,
without limitation, the acquisition by the 20% Holder of l% or more additional
outstanding voting stock of the Company, the occurrence of such material change
in facts shall result in a new Change of Control for the purpose of this
Agreement. In such event, the second immediately preceding sentence hereof shall
be effective. As used herein, the term "Continuing Director" shall mean any
member of the Board on the date of the adoption of this Plan and any successor
of a Continuing Director who is recommended to succeed the Continuing Director
by a majority of Continuing Directors
(c) Change in Control Price. "Change in Control Price" means the highest price
per share paid in any transaction reported on the New York Stock
Exchange-Composite Transactions or paid or offered in any bona fide
transaction related to a change in control of the Company at any time
during the preceding 60-day period as determined by the Committee, except
that, in the case of Incentive Stock Options, such price shall be based
only on transactions reported for the date on which such Incentive Stock
Options are cashed out.
Notwithstanding any other provision of the Plan, upon a Change in Control,
unless the Committee shall determine otherwise at grant, an Award recipient
shall have the right, by giving notice to the Company within the exercise
period, to elect to surrender all or part of the Option, Stock Appreciation
Right, Restricted Stock, Restricted Stock Unit, Other Stock Grant or Other
Stock-Based Award to the Company and to receive in cash, within 30 days of such
notice, an amount equal to the amount by which the "Change in Control Price" on
the date of such notice shall exceed the exercise or grant price under such
Award, multiplied by the number of Shares as to which the right granted under
this Section 7 shall have been exercised.
Section 8. Amendment and Termination; Adjustments.
(a) Amendments to the Plan. The Board may amend, alter, suspend, discontinue or
terminate the Plan at any time; provided, however, that, notwithstanding any
other provision of the Plan or any Award Agreement, without the approval of the
shareholders of the Company, no such amendment, alteration, suspension,
discontinuation or termination shall be made that, absent such approval:
(i) would violate the rules or regulations of the New York Stock
Exchange or any securities exchange upon which the Shares are
listed;
(ii) would cause the Company to be unable, under the Code, to grant
Incentive Stock Options under the Plan; or
(iii) would decrease the grant or exercise price of any Option, Stock
Appreciation Right, Other Stock Grant or Other Stock Based Award to
less than the Fair Market Value on the date of grant.
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(b) Amendments to Awards. The Committee may waive any conditions of or rights of
the Company under any outstanding Award, prospectively or retroactively. Except
as otherwise provided herein or in the Award Agreement, the Committee may not
amend, alter, suspend, discontinue or terminate any outstanding Award,
prospectively or retroactively, if such action would adversely affect the rights
of the holder of such Award, without the consent of the Participant or holder or
beneficiary thereof.
(c) Correction of Defects, Omissions and Inconsistencies. The Committee may
correct any defect, supply any omission or reconcile any inconsistency in the
Plan or any Award in the manner and to the extent it shall deem desirable to
carry the Plan into effect.
Section 9. Income Tax Withholding; Tax Bonuses.
(a) Withholding. In order to comply with all applicable federal or state income
tax laws or regulations, the Company may take such action as it deems
appropriate to ensure that all applicable federal or state payroll, withholding,
income or other taxes, which are the sole and absolute responsibility of a
Participant, are withheld or collected from such Participant. In order to assist
a Participant in paying all or a portion of the federal and state taxes required
to be withheld or collected upon exercise or receipt of (or the lapse of
restrictions relating to) an Award, the Committee, in its discretion and subject
to such additional terms and conditions as it may adopt, may permit the
Participant to satisfy such required tax obligation by (i) electing to have the
Company withhold a portion of the Shares otherwise to be delivered upon exercise
or receipt of (or the lapse of restrictions relating to) such Award with a Fair
Market Value equal to the amount of such taxes or (ii) delivering to the Company
Shares other than Shares issuable upon exercise or receipt of (or the lapse of
restrictions relating to) such Award with a Fair Market Value equal to the
amount of such taxes. The election, if any, must be made on or before the date
that the amount of tax to be withheld is determined.
(b) Tax Bonuses. The Committee, in its discretion, shall have the authority, at
the time of grant of any Award under this Plan or at any time thereafter, to
approve cash bonuses to designated Participants to be paid upon their exercise
or receipt of (or the lapse of restrictions relating to) Awards in order to
provide funds to pay all or a portion of federal and state taxes due as a result
of such exercise or receipt (or the lapse of such restrictions). The Committee
shall have full authority in its discretion to determine the amount of any such
tax bonus.
Section 10. General Provisions.
(a) No Rights to Awards. No Eligible Person, Participant or other Person shall
have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Eligible Persons, Participants or
holders or beneficiaries of Awards under the Plan. The terms and conditions of
Awards need not be the same with respect to any Participant or with respect to
different Participants.
(b) Award Agreements. No Participant will have rights under an Award granted to
such Participant unless and until an Award Agreement shall have been duly
executed on behalf of the Company and, if requested by the Company, signed by
the Participant.
(c) No Limit on Other Compensation Arrangements. Nothing contained in the Plan
shall prevent the Company or any Affiliate from adopting or continuing in effect
other or additional compensation arrangements, and such arrangements may be
either generally applicable or applicable only in specific cases.
(d) No Right to Employment. The grant of an Award shall not be construed as
giving a Participant the right to be retained in the employ of the Company or
any Affiliate, nor will it affect in any way the right of the Company or an
Affiliate to terminate such employment at any time, with or without cause. In
addition, the Company or an Affiliate may at any time dismiss a
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Participant from employment free from any liability or any claim under the Plan
or any Award, unless otherwise expressly provided in the Plan or in any Award
Agreement.
(e) Governing Law. The validity, construction and effect of the Plan or any
Award, and any rules and regulations relating to the Plan or any Award, shall be
determined in accordance with the laws of the State of Vermont.
(f) Severability. If any provision of the Plan or any Award is or becomes or is
deemed to be invalid, illegal or unenforceable in any jurisdiction or would
disqualify the Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform to
applicable laws, or if it cannot be so construed or deemed amended without, in
the determination of the Committee, materially altering the purpose or intent of
the Plan or the Award, such provision shall be stricken as to such jurisdiction
or Award, and the remainder of the Plan or any such Award shall remain in full
force and effect.
(g) No Trust or Fund Created. Neither the Plan nor any Award shall create or be
construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Affiliate and a Participant or any other
Person. To the extent that any Person acquires a right to receive payments from
the Company or any Affiliate pursuant to an Award, such right shall be no
greater than the right of any unsecured general creditor of the Company or any
Affiliate.
(h) No Fractional Shares. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award, and the Committee shall determine whether
cash shall be paid in lieu of any fractional Shares or whether such fractional
Shares or any rights thereto shall be canceled, terminated or otherwise
eliminated.
(i) Headings. Headings are given to the Sections and subsections of the Plan
solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.
Section 11. Effective Date of the Plan.
The Plan was approved by the Board on February 7, 2000, subject to approval by
the shareholders of the Company and the Vermont Public Service Board within
twelve (12) months theretofore. Any Award granted under the Plan prior to
shareholder and Vermont Public Service Board approval of the Plan shall be
subject to shareholder and Vermont Public Service Board approval of the Plan.
Section 12. Term of the Plan.
No Award shall be granted under the Plan after February 7, 2005 or any earlier
date of discontinuation or termination established pursuant to Section 7(a) of
the Plan. However, unless otherwise expressly provided in the Plan or in an
applicable Award Agreement, any Award theretofore granted may extend beyond such
date.