Registration No. 33-___
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM S-8
and
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
____________________
VERMONT FINANCIAL SERVICES CORP.
(exact name of registrant as specified in its charter)
DELAWARE 03-0284445
(State of Incorporation) (IRS Employer Identification No.)
100 MAIN STREET, BRATTLEBORO, VERMONT 05301
(802) 257-7151
(Address and telephone number of principal executive offices)
John D. Hashagen, Jr., President
Vermont Financial Services Corp.
100 Main Street
Brattleboro, Vermont 05301
(802) 257-7151
(Name, address and telephone number for agent for service)
____________________
Copy to:
Christopher Cabot, Esquire
Sullivan & Worcester
One Post Office Square
Boston, Massachusetts 02109
(617) 338-2800
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than the securities offered only in connection with dividend
or interest reinvestment plans, check the following box. / /
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CALCULATION OF REGISTRATION FEE
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Title of Each Amount Proposed Proposed Amount of
Class of to be Maximum Maximum Registrat
Securities to be Registe Offering Price Aggregate ion Fee
Registered red * Per Unit ** Offering Price
**
Common Stock, Par 323,302 $22.63 $7,316,324 $2,522.89
Value $1.00
/TABLE
<PAGE>
* In the event of a stock split, stock dividend or similar transaction
involving Common Stock of the Company, the number of shares registered
hereby shall automatically be increased to cover such additional shares
in accordance with Rule 416(a).
** Estimated solely for purposes of calculating the registration fee on
the basis of the average of the closing bid and asked prices, as
reported on NASDAQ, of the Common Stock, on March 23, 1995.<PAGE>
VERMONT FINANCIAL SERVICES CORP.
CROSS REFERENCE SHEET SHOWING LOCATION
OF INFORMATION REQUIRED BY ITEMS OF PART I OF FORM S-3
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ITEMS OF PART I OF FORM S-3 HEADINGS IN PROSPECTUS
1. Forepart of Registration Forepart and Outside Front Cover
Statement and Outside Front Page
Cover Page of Prospectus
2. Inside Front and Outside Back Inside Front Cover Page; Available
Cover Pages of Prospectus Information; Incorporation of
Documents by Reference
3. Summary Information; Risk Not Applicable
Factors; and Ratio of Earnings
to Fixed Charges Risk Factors
4. Use of Proceeds Not Applicable - See Cover Page of
Prospectus
5. Determination of Offering Price Cover Page
6. Dilution Not Applicable
7. Selling Security Holders Selling Shareholders
8. Plan of Distribution Selling Shareholders
9. Description of Securities to be Description of Capital Stock
Registered
10. Interests of Named Experts and Not Applicable
Counsel
11. Material Changes Not Applicable
12. Incorporation of Certain Incorporation of Documents
Information by Reference
13. Disclosure of Commission Indemnification of Directors and
Position on Indemnification for Officers
Securities Act Liabilities
</TABLE>
(i)<PAGE>
VERMONT FINANCIAL SERVICES CORP.
RESALE PROSPECTUS
COMMON STOCK
($1.00 Par Value)
This Prospectus relates to an aggregate of 323,302 shares (the
"Shares") of Common Stock, $1.00 par value (the "Common Stock"), of Vermont
Financial Services Corporation (the "Company") that may be offered, from
time to time, by directors and certain officers of the Company and its
subsidiaries (the "Selling Shareholders"). The Common Stock is designated
on the NASDAQ National Market System ("NASDAQ") under the symbol "VFSC".
Shares may be issued to certain current and former directors and officers
upon their exercise of stock options granted pursuant to one or more of the
Company's 1987 Non-Qualified Stock Option Plan, as amended, the Company's
1988 Directors Non-Qualified Stock Option Plan, its 1994 Stock Option Plan,
as well as the Stock Option Plan of West Mass Bankshares, Inc. which merged
into the Company in 1994 (together, the "Plans"). When acquired by the
Selling Shareholders, Shares may be sold, from time to time, in ordinary
brokers' transactions through the NASDAQ at the price prevailing at the
time of such sales. The commission payable will be the regular commission
a broker receives for effecting such sales. Shares may also be offered in
block trades, private transactions or otherwise. The net proceeds to the
Selling Shareholders will be the proceeds received by them upon such sales
less brokerage commissions. The Company will receive no proceeds from the
sale of Shares. Information regarding the Selling Shareholders is set
forth below under the heading "Selling Shareholders and Shares That May Be
Offered." All expenses of registration incurred in connection with this
offering are being borne by the Company, but the selling and other expenses
incurred by individual Selling Shareholders will be borne by them.
No person is authorized to give any information or to make any
representations other than those contained or incorporated by reference in
this Prospectus in connection with the offer contained in this Prospectus
and, if given or made, any such information or representation must not be
relied upon as having been authorized by the Company. This Prospectus does
not constitute an offer to sell or a solicitation of an offer to buy
securities in any state or other jurisdiction where, or to any person to
whom, it is unlawful to make such an offer or solicitation. Neither the
delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that there has been no change in the
affairs of the Company since the date hereof.
On March 23, 1995, the last reported sale price of the Common Stock
on the NASDAQ was $22.63 per share.
____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION
NOR HAS THE COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENCE.
____________________
The date of this Prospectus is March 24, 1995
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AVAILABLE INFORMATION
Vermont Financial Services Corp., a Delaware corporation (the
"Company"), is the successor to Vermont Financial Services Corp., a Vermont
corporation ("VFSC Vermont"), as a result of a merger effective on
April 17, 1990. The Company is subject to the informational requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
and, in accordance therewith, files reports and other information with the
Securities and Exchange Commission (the "Commission"). Proxy statements,
reports and other information concerning the Company can be inspected and
copied at the Commission's office at 450 Fifth Street, N.W., Washington,
D.C. 20549 and the Commission's Regional Offices in New York (75 Park
Place, Room 1228, New York, New York 10007) and Chicago (230 South Dearborn
Street, Room 3190, Chicago, Illinois 60604). Copies of such material can
be obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents heretofore filed with the Commission are
incorporated herein by reference:
(i) The Company's Annual Report on Form 10-K for the year ended
December 31, 1994.
(ii) All other reports filed with the Commission by the Company
pursuant to Section 13(a) or 15(d) of the Exchange Act since
December 31, 1994 and prior to the date of this Prospectus.
All documents filed by the Company pursuant to Sections 13, 14 or
15(d) of the Exchange Act, after the date hereof and before the termination
of the offering shall be deemed incorporated by reference into this
Prospectus and to be a part hereof from the date of filing such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein, or in any subsequently filed document which also is or is
deemed to be incorporated by reference, modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this
Prospectus.
Any person receiving a copy of this Prospectus may obtain without
charge, upon request, a copy of any of the documents incorporated herein by
reference, except for the exhibits to such documents. Written requests
should be mailed to Vermont Financial Services Corp., 100 Main Street,
Brattleboro, Vermont 05301, Attention: Treasurer. Telephone requests may
be directed to (802) 257-7151.
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THE COMPANY
Vermont Financial Services Corp., a Delaware corporation, was
organized in 1990 and became the successor of VFSC Vermont on April 17,
1990 pursuant to a merger of VFSC Vermont into the Company. The merger was
carried out for the purpose of changing the Company's state of
incorporation from Vermont to Delaware. The Company is a bank holding
company and has two wholly-owned subsidiaries, Vermont National Bank, a
national banking association ("VNB") which operates out of 31 branches
throughout the State of Vermont, and United Bank ("UB"), a Massachusetts
chartered bank which operates out of six branches in Western Massachusetts.
The principal offices of the Company and VNB are located at 100 Main
Street, Brattleboro, Vermont 05301. The Company's telephone number is
(802) 257-7151. UB's principal offices are located at 45 Federal Street,
Greenfield, Massachusetts 01301. VNB engages in commercial and retail
banking and in the trust business, including the taking of deposits, the
making of secured and unsecured loans, the financing of commercial
transactions, the performance of corporate, pension and personal trust
services. UB is engaged in the business of attracting deposits from the
general public and originating residential mortgage loans. UB also makes
mortgage loans on commercial real estate and originates consumer loans.
The Company, VNB and UB are subject to federal, state and local laws
applicable to banks and bank holding companies and to the regulations of
the Board of Governors of the Federal Reserve System, the Federal Deposit
Insurance Corporation, the Comptroller of the Currency (in the case of VNB)
and the Massachusetts Board of Bank Incorporation (in the case of UB).
SELLING SHAREHOLDERS AND SHARES THAT MAY BE OFFERED
Shares acquired and offered by Selling Shareholders upon the exercise
of stock options under one or more of the Plans may be authorized and
unissued shares, treasury shares or shares acquired on the open market,
although it is anticipated that most of such Shares will be acquired from
treasury.
The following table sets forth the name of each Selling Shareholder,
his or her position with the Company, VNB or UB during the past three
years, the amount of Common Stock (including stock options under the Plans)
owned by him or her as of December 31, 1994, the maximum amount of Common
Stock that may be offered by him or her pursuant to this Prospectus upon
the exercise of stock options under the Plans, and the amount of Common
Stock owned by him or her assuming sale of the maximum number of Shares
offered. No Selling Shareholder will own more that 1% of the outstanding
Common Stock after completion of the offering contemplated hereby. In
addition to the Selling Shareholders named below, certain unnamed non-
affiliates of the Company may use this Resale Prospectus each to sell up to
the lesser of 1,000 Shares of Common Stock or 1% of the Shares issuable
under the Plans.
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Name and Position Common Stock Common Common Stock
with Company Owned on Stock to be Owned
December 31, Under after any
19941 Options2 Offering3
A.F. Abatiell, Dir. 60,669 1,500 59,169
Z.V. Akins, Dir. 2,884 1,500 1,384
C.A. Cairns, Dir. 5,527 1,500 4,027
R.C. Cody, Dir. 16,696 1,500 15,196
A.W. Coombs, Dir. 8,570 500 8,070
B.G. Davidson, Dir. 3,917 1,500 2,417
J.E. Griffin, Dir. 4,079 1,500 2,579
F.L. Lemay, Dir. 108,831 35,667 73,164
D.C. Lyons, Dir. 11,212 1,500 9,712
K.E. Mann, Dir. 12,513 1,500 11,013
S.A. Morse, Dir. 6,348 1,500 4,848
D.E. O'Brien, Dir. 6,086 1,500 4,586
R.W. Pike, Dir. 8,235 1,500 6,735
M.W. Richards, Dir. 26,329 1,500 24,829
J.D. Hashagen, 29,863 17,300 12,563
Dir., CEO, Pres.
R.O. Madden, EVP 12,785 10,600 2,185
R.G. Soucy, EVP 19,895 11,100 8,795
Vermont National
Bank
L.J. Dunham, EVP 11,508 8,700 2,808
W.H. George, EVP 15,521 9,700 5,821
W.B. Fenn, EVP 18,192 10,600 7,592
J.R. Davidson, SVP 4,149 3,000 1,149
P.G. Gibson, SVP 4,468 3,000 1,468
M.J. McQuaide, SVP 9,854 3,000 6,854
T.P. Johnson, SVP 14,258 3,000 11,258
S.A. Johnson, VP 2,998 2,000 998
G.C. Runge, Retired 6,734 2,000 4,734
United Bank
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<S> <C> <C> <C>
K.R. Cole, Pres. 17,936 0 17,936
J. Neill, SVP 19,157 0 19,157
R. Phillips, SVP 17,774 0 17,774
R. Ryan-Killeen, Off. 4,271 4,140 131
C. Demerski, Off. 4,348 2,760 1,588
E. Morton, Off. 4,378 2,760 1,618
S. Ball, Off. 2,807 600 2,207
S. Bruso, Off 1,635 525 1,110
L. Cantell, Off. 1,882 650 1,232
K. Guy, Off. 1,207 400 807
P. Harris, Off. 1,388 0 1,388
L. Lefebvre, Off. 1,129 400 729
J. Martin, Off. 1,707 600 1,107
M. Noska, VP 2,111 725 1,386
R. Perkins, Off. 2,262 525 1,737
M. Shippee, Off. 1,201 0 1,201
M. Turley, Controller 1,678 550 1,128
UNALLOCATED, UNGRANTED 170,500 170,500 0
TOTALS: 689,492 323,302 366,190
</TABLE>
______________
1 Includes shares which the Selling Shareholder has the right to acquire
pursuant to stock options currently exercisable under the Plans.
2 Includes shares subject to options listed in the first column as well as
the maximum number of shares which the Selling Shareholder may acquire
under the Plans pursuant to yet-ungranted options, if such number is
ascertainable. The maximum amount of options which may be granted under
the Plans which have not been allocated to any Selling Shareholder are
listed as "UNALLOCATED".
3 Assumes exercise of all options and offering of all shares issued on
such exercise.
_________________________________
Shares may be sold in ordinary brokerage transactions through the
NASDAQ at the prices prevailing at the time of such sales. The commissions
payable will be the regular commissions of brokers for affecting such
-6-<PAGE>
sales. Sales may also be offered in block trades, private transactions or
otherwise. The Company will pay all expenses in preparing and reproducing
this Prospectus, but will not receive any part of the proceeds of the sale
of any Shares. The Selling Shareholders will pay all brokerage
commissions.
The Company will supply the Selling Shareholders with reasonable
quantities of prospectuses. There can be no assurances that any of the
Selling Shareholders will exercise their options to purchase any Shares or
that, if purchased, the Selling Shareholders will sell any or all of the
Shares offered by them hereunder. Under the 1987 Officers Non-Qualified
Stock Option Plan, options are exercisable at a price per share of $19.00
and expire on October 13, 1998. Under the 1988 Directors Non-Qualified
Stock Option Plan, options are exercisable at a price per share of $19.00
and expire on October 13, 1998. No further options are available for grant
under the 1987 and 1988 plans. Under the 1994 Stock Option Plan, the
options granted to date are exercisable at a price per share of $19.00 and
expire on July 13, 2004. The options granted under the West Mass
Bankshares, Inc. Stock Option Plan, which were converted into options to
acquire Company Stock, are exercisable at a price per share of $7.50 and
10.25 and expire on November 6, 1996 and June 9, 2003, respectively. No
further options are available for grant under the West Mass Plan.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 20,000,000 shares of
common stock, $1.00 par value, and 5,000,000 shares of preferred stock,
$1.00 par value. As of December 31, 1994 there were 4,685,219 shares of
Common Stock outstanding and no shares of Preferred Stock outstanding.
Each holder of Common Stock is entitled to one vote per share for the
election of directors and for all other matters to be voted on by the
Company's stockholders. With respect to the election of directors, the
Company has a classified Board, consisting of three classes, each of which
serves a three-year term. Thus, holders of the Common Stock vote on the
election of only one class, or approximately one-third, of the Board at
each annual meeting of shareholders. The holders of Common Stock are
entitled to receive such dividends, if any, as may be declared from time to
time by the Board of Directors from funds legally available therefor.
Upon liquidation or dissolution of the Company, the holders of Common
Stock are entitled to receive pro rata the net assets available for
distribution to stockholders so long as no preferred stock has been issued.
The shares of outstanding Common Stock have no preemptive or other
subscription rights with respect to the issue of additional shares of
capital stock by the Company. All of the outstanding shares of Common
Stock are fully paid and nonassessable, and the shares of Common Stock
which are the subject of this Prospectus will, upon their distribution in
accordance with the Plan, be fully paid and nonassessable.
The Company has an authorized class of preferred stock issuable in
series, no shares of which have been issued. The Board of Directors is
authorized to determine preferences as to dividends and liquidation nd the
voting, redemption, conversion or other rights of any series of preferred
stock. Such preferences and rights may be superior to or may dilute the
rights of holders of the Common Stock.
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The transfer agent and registrar for the Common Stock is Vermont
National Bank.
EXPERTS
The consolidated balance sheets of the Company as of December 31, 1994
and 1993 and the related consolidated statements of income, changes in
stockholders' equity, and cash flow for each of the years in the three-year
period ended December 31, 1994, incorporated by reference in this
Registration Statement, have been incorporated herein in reliance on the
report, which includes explanatory paragraphs regarding (i) Coopers &
Lybrand L.L.P.'s responsibility related to the Company's consolidated
balance sheet as of December 31, 1993 and the related consolidated
statements of income, changes in stockholders' equity and cash flow for
each of the two years in the period ended December 31, 1993; (ii) the
Company's change in its method of accounting for certain investments in
debt and equity securities and accounting for postretirement benefits other
than pensions in 1993; and (iii) the Company's change in its method of
accounting for income taxes in 1992; of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be
passed upon for the Company by Sullivan & Worcester, One Post Office
Square, Boston, Massachusetts 02109.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Certificate of Incorporation and By-Laws of the Company provide, in
general, that, under the circumstances permitted by the General Corporation
Law of Delaware, and to the fullest extent thereof, the Company shall
indemnify any person who was or is a party or is threatened to be made a
party to any action, suit or proceeding of the type described above by
reason of the fact that he or she is or was a director, officer, employee
or agent of the Company or is or was serving at the request of the Company
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise. The Company carries directors and officers liability insurance
in connection with the foregoing.
- End of Prospectus -
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by the Company with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934
("Exchange Act") are incorporated in this Registration Statement by
reference:
(i) The Company's Annual Report on Form 10-K for the year ended
December 31, 1994.
All documents subsequently filed by the Company pursuant to Section 13,
14 or 15(d) of the Exchange Act prior the filing by the Company of a post-
effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this Registration Statement
and to be a part hereof from the date of filing such documents. Any
statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for
purposes of this Registration Statement to the extent that a statement
contained herein or any other subsequently filed document which also is or
is deemed to be incorporated by reference herein modifies or supersedes
such statement. Any such statements so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interest of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The General Corporation Law of Delaware empowers a corporation to
indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative by reason of the
fact that he or she is or was a director, officer, employee or agent of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise. A corporation may indemnify
against expenses (including attorneys' fees) and, other than in respect of
any action by or in the right of the corporation, against judgments, fines
and amounts paid in settlement actually and reasonably incurred in
connection with such action, suit or proceeding if the person indemnified
acted in good faith and in a manner he or she reasonably believed to be in
or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe
his or her conduct was unlawful. In the case of any action by or in the
II-1<PAGE>
right of the corporation, no indemnification may be made in respect to any
claim, issue or matter as to which such person shall have been adjudged to
be liable to the corporation unless and only to the extent that the Court
of Chancery or the court in which such action was brought shall determine
that despite the adjudication of liability such person is fairly and
reasonably entitled to indemnity for such expenses which the court shall
deem proper. The Delaware General Corporation Law further provides that to
the extent a director, officer, employee or agent of a corporation has been
successful in the defense of any action, suit or proceeding referred to
above or in the defense of any claim, issue or matter therein, he or she
shall be indemnified against expenses (including attorneys' fees) actually
and reasonably incurred by him or her in connection therewith.
The Certificate of Incorporation and By-Laws of registrant provide, in
general, that, under the circumstances permitted by the General Corporation
Law of the State of Delaware, and to the fullest extent thereof, the
registrant shall indemnify any person who was or is a party or is
threatened to be made a party to any action, suit or proceeding of the type
described above by reason of the fact that he or she is or was a director,
officer, employee or agent of registrant or is or was serving at the
request of registrant as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise.
The registrant carries Directors and Officers Liability Insurance in
connection with the foregoing.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit
4.1.a Company's 1987 Non-Qualified Stock Option Plan,
as amended.
4.1.b Company's 1988 Directors Non-Qualified Stock
Option Plan.
4.1.c Company's 1994 Stock Option Plan.
4.1.d West Mass Bankshares, Inc. Stock Option Plan.
5.1 Opinion of Sullivan & Worcester.
24.1 Consent of Coopers & Lybrand.
24.2 Consent of Sullivan & Worcester (included in
Exhibit 5).
25.1 Power of Attorney (included on the Signature
Page attached hereto).
Item 9. Undertakings.
The undersigned registrant hereby undertakes:
II-2<PAGE>
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director,
officer of controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer of controlling person in connection with the
securities being registered, the registrant will submit to a court
of appropriate jurisdiction the question of whether such
II-3<PAGE>
indemnification by it is against public policy as expressed in the
act and will be governed by the final adjudication of such issue.
II-4<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and Form S-8 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Town of Brattleboro, State
of Vermont, on March 22, 1995.
VERMONT FINANCIAL SERVICES CORP.
By: /s/John D. Hashagen, Jr.
John D. Hashagen, Jr., President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
By so signing, each of the undersigned in his or her capacity as a
director or officer, or both, as the case may be, of the Company, does
hereby appoint John D. Hashagen, Jr., and Richard O. Madden, and each of
them, with full power of substitution, his or her true and lawful attorneys
or attorney in-fact and agent to execute in his or her name, place or
stead, in his or her capacity as a director or officer or both, as the case
may be, of the Company, any and all amendments thereto and all instruments
necessary or incidental in connection therewith, and to file the same with
the Securities and Exchange Commission. Each of said attorneys shall have
full power and authority to do and perform in the name and on behalf of
each of the undersigned, in any and all capacities, every act whatsoever
requisite or necessary to be done in the premises as fully and to all
intents and purposes as each of the undersigned might or could do in
person, hereby ratifying and approving the acts of said attorney and each
of them.
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<S> <C> <C>
Signature Title Date
/s/John D. Hashagen, Jr. President and Director
John D. Hashagen, Jr. (Principal Executive Officer) March 22, 1995
/s/Richard O. Madden Treasurer (Chief Financial
Richard O. Madden and Accounting Officer) March 22, 1995
/s/Anthony F. Abatiell Director March 22, 1995
Anthony F. Abatiell
/s/Zane V. Akins Director March 22, 1995
Zane V. Akins
II-5<PAGE>
/s/Charles A. Cairns Director March 22, 1995
Charles A. Cairns
/s/Robert C. Cody Director March 22, 1995
Robert C. Cody
/s/Allyn W. Coombs Director March 22, 1995
Allyn W. Coombs
/s/Beverly G. Davidson Director March 22, 1995
Beverly G. Davidson
/s/James E. Griffin Director March 22, 1995
James E. Griffin
/s/Francis L. Lemay Director March 22, 1995
Francis L. Lemay
/s/Daniel C. Lyons Director March 22, 1995
Daniel C. Lyons
/s/Kimball E. Mann Director March 22, 1995
Kimball E. Mann
/s/Stephen A. Morse Director March 22, 1995
Stephen A. Morse
/s/ Donald E. O'Brien Director March 22, 1995
Donald E. O'Brien
/s/Roger M. Pike Director March 22, 1995
Roger M. Pike
/s/Mark W. Richards Director March 22, 1995
Mark W. Richards
</TABLE>
II-6<PAGE>
Exhibit 4.1.a
VERMONT FINANCIAL SERVICES CORP.
Non-Qualified Stock Option Plan
1987
1. PURPOSE
The purpose of this Non-Qualified Stock Option Plan (the "Plan") is
to encourage certain officers of Vermont Financial Services Corp. (the
"Company") and its subsidiary, Vermont National Bank (the "Bank") to
continue their association with the Company and to acknowledge their
years of service to the Company and/or the Bank by providing favorable
opportunities for them to participate in the ownership of the Company
and in its future growth.
2. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board of Directors of the
Company (the "Board"). The Board shall have the authority to adopt,
amend and rescind such rules and regulations as, in its opinion, may be
advisable in the administration of the Plan. All questions of
interpretation and application of such rules and regulations, of the
Plan or of options granted thereunder (the "Options") shall be subject
to the determination, which shall be final and binding, of a majority of
the whole Board.
3. OPTION SHARES
The stock subject to Options under the Plan shall be shares of the
Company's Common Stock, $1.00 par value (the "Stock"). The total amount
of the Stock with respect to which Options may be granted shall not
exceed in the aggregate 100,000 shares, and the number of shares granted
to each Optionee shall be no greater than 10,000; provided that such
aggregate number of shares and the number of shares granted to each
Optionee shall be subject to adjustment in accordance with the
provisions of Paragraph 14 hereof.
4. AUTHORITY TO GRANT OPTIONS
The Board may grant to the eligible individuals named in
Paragraph 6 an Option or Options to buy a stated number of shares of
Stock under the terms and conditions of the Plan. No member of the
Board shall act in connection with the grant of an Option to himself.
5. WRITTEN AGREEMENT
Each Option granted hereunder shall be embodied in a written option
agreement which shall be subject to the terms and conditions prescribed
herein and shall be signed by the Optionee and by the President or any
Vice President of the Company for and in the name and on behalf of the<PAGE>
Company. Such an option agreement may also contain such other
provisions as the Board in its discretion shall deem advisable.
6. ELIGIBILITY
The individuals who shall be eligible to participate in the Plan
shall be persons who have been employed by the Company and/or the Bank
for ten (10) years or more in positions of management whose efforts, in
the judgment of the Board, have contributed substantially to the
financial results of the Company and/or the Bank (hereinafter called
"Optionees").
7. OPTION PRICE
The price at which shares may be purchased pursuant to an Option
shall be determined by the Board, but shall not be less than 100% of the
fair market value of the Stock on the date of grant of the Option. For
purposes of the Plan, the "fair market value" of a share of Stock at any
particular date shall be determined according to the following rules:
(i) if the Stock is not at the time listed or admitted to trading on a
stock exchange, the fair market value shall be the mean between the
lowest reported bid price and highest reported asked price of the Stock
on the date in question in the over-the-counter market, as such prices
are reported in a publication of general circulation selected by the
Board and regularly reporting the market price of the Stock in such
market; provided, however, that if the price of the Stock is not so
reported, the fair market value shall be determined by the Board, which
may take into consideration (1) the price paid for the Stock in the most
recent trade of a substantial number of shares known to the Board to
have occurred at arm's length between willing and knowledgeable
investors, or (2) an appraisal undertaken in good faith by the Board, or
of some or all of the above as the Board shall in its discretion elect;
or (ii) if the Stock is at the time listed or admitted to trading on any
stock exchange, then the fair market value shall be the mean between the
lowest and highest reported sale prices of the Stock on the date in
question on the principal exchange on which the Stock is then listed or
admitted to trading. If no reported sale of Stock takes place on the
date in question on the principal exchange, then the reported closing
asked price of the Stock on such date on the principal exchange shall be
determinative of fair market value.
8. DURATION OF OPTIONS
No Option shall be exercisable after the expiration of five (5)
years from the date such Option is granted. The Board, in its
discretion, may provide that an Option shall be exercisable during such
period or during any lesser period of time.
9. AMOUNT EXERCISABLE
Each Option may be exercised so long as it is valid and outstanding
from time to time, in part or as a whole, in such manner and subject to
such conditions as the Board, in its discretion, may provide in the
option agreement.
-2-<PAGE>
10. EXERCISE OF OPTION
Options shall be exercised by the delivery of written notice to the
Company setting forth the number of shares with respect to which the
Option is to be exercised, accompanied by payment of the option price of
such shares, which payment shall be made, subject to the alternative
provisions of this Paragraph 10, in cash or by cashier's check,
certified check, bank draft or postal or express money order payable to
the order of the Company in an amount in United States dollars equal to
the option price of such shares. Such notice shall be delivered in
person to the Secretary of the Company or shall be sent by registered
mail, return receipt requested, to the Secretary of the Company, in
which case delivery shall be deemed made on the date such notice is
deposited in the mail.
Alternatively, payment of the option price may be made, in whole or
in part, in shares of Stock previously acquired by the Optionee. If
payment is made in whole or in part in shares of Stock, then the
Optionee shall deliver to the Company in payment of the option price of
the shares with respect of which such Option is exercised
(i) certificates registered in the name of such Optionee representing a
number of shares of Stock legally and beneficially owned by such
Optionee, free of all liens, claims and encumbrances of every kind and
having a fair market value on the date of delivery of such notice that
is not greater than the option price of the shares with respect to which
such Option is to be exercised, such certificates to be accompanied by
stock powers duly endorsed in blank by the record holder of the shares
represented by such certificates; and (ii) if the option price of the
shares with respect to which such Option is to be exercised exceeds such
fair market value, cash or a cashier's check, certified check, bank
draft or postal or express money order payable to the order of the
Company in an amount in United States dollars equal to the amount of
such excess. Notwithstanding the foregoing provisions of this
Paragraph 10, the Board, in its sole discretion, may refuse to accept
shares of Stock in payment of the option price of the shares with
respect to which such Option is to be exercised and, in that event, any
certificates representing shares of Stock which were delivered to the
Company with such written notice shall be returned to such Optionee
together with notice by the Company to such Optionee of the refusal of
the Board to accept such shares of Stock.
Alternatively, if the option agreement so specifies, payment of the
option price may be made, in whole or in part, by a promissory note
executed by the Optionee and collaterally secured by the Stock obtained
upon exercise of the Option, providing for repayment at such time or
times as the Board shall specify; provided, however, that such
promissory note shall provide for payment no later than one (1) year
from the date of exercise and for interest at a rate not less than the
prime rate of interest charged on the date of exercise by the Bank. The
decision as to whether to permit payment by a promissory note for any
Option granted shall rest entirely in the discretion of the Board.
As promptly as practicable after the receipt by the Company of
(i) such written notice from the Optionee setting forth the number of
shares with respect to which such Option is to be exercised and
-3-<PAGE>
(ii) payment of the option price of such shares in the form required by
the foregoing provisions of this Paragraph 10, the Company shall cause
to be delivered to such Optionee certificates representing the number of
shares with respect to which such Option has been exercised.
11. TRANSFERABILITY OF OPTIONS
Options shall not be transferable by the Optionee otherwise than by
will or under the laws of descent and distribution, and shall be
exercisable during his lifetime only by him.
12. REQUIREMENTS OF LAW
The Company shall not be required to sell or issue any shares under
any Option if the issuance of such shares shall constitute or result in
a violation by the Optionee or the Company of any provisions of any law,
statute or regulation of any governmental authority. Specifically, in
connection with the Securities Act of 1933, upon exercise of any Option
the Company shall not be required to issue such shares unless the Board
has received evidence satisfactory to it to the effect that the holder
of such Option will not transfer such shares except pursuant to a
registration statement in effect under such Act or unless an opinion of
counsel satisfactory to the Company has been received by the Company to
the effect that such registration is not required. Any determination in
this connection by the Board shall be final, binding and conclusive.
The Company shall not be obligated to take any other affirmative action
in order to cause the exercise of an Option or the issuance of shares
pursuant thereto to comply with any law or regulations of any
governmental authority.
13. NO RIGHTS AS STOCKHOLDER
No Optionee shall have rights as a stockholder with respect to
shares covered by his Option until the date of issuance of a stock
certificate for such shares; and except as otherwise provided in
Paragraph 14 hereof no adjustment for dividends or otherwise shall be
made if the record date therefor is prior to the date of issuance of
such certificate.
14. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE
The existence of outstanding Options shall not affect in any way
the right or power of the Company or its stockholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or
other changes in the Company's capital structure or its business or any
merger or consolidation of the Company or any issue of bonds,
debentures, preferred or prior preference stock ahead of or affecting
the Stock or the rights thereof or the dissolution or liquidation of the
Company or any sale or transfer of all or any part of its assets or
business or any other corporate act or proceeding, whether of a similar
character or otherwise.
The number of shares covered by any outstanding Option and the
price per share thereof shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Stock resulting
-4-<PAGE>
from the subdivision or consolidation of shares or any other capital
adjustment, the payment of a stock dividend or any other increase in
such shares effected without receipt of consideration by the Company or
any other decrease therein effected without a distribution of cash or
property in connection therewith.
In the event the Company merges or consolidates with one
or more corporations and the Company is the surviving corporation,
thereafter upon any exercise of an Option, the holder thereof shall be
entitled to purchase in lieu of the number of shares of Stock as to
which the Option shall then be exercisable, the number and class of
shares of stock and securities to which the holder would have been
entitled pursuant to the terms of the agreement of merger or
consolidation if immediately prior to such merger or consolidation, the
holder had been the holder of record of shares of Stock as to which the
Option is then exercisable.
If the Company is merged into or consolidated with another
corporation under circumstances where the Company is not the surviving
corporation, or if the Company is liquidated or sells or otherwise
disposes of substantially all of its assets to another corporation while
unexercised Options remain outstanding under the Plan, (i) subject to
the provisions of clause (iii) below, after the effective date of such
merger, consolidation or sale, as the case may be, each holder of an
outstanding Option shall be entitled; upon exercise of such Option, to
receive in lieu of shares of Stock, shares of such stock or other
securities as the holders of shares of Stock received pursuant to the
terms of the merger, consolidation or sale; and (ii) the Board may waive
any discretionary limitations imposed pursuant to Paragraph 9 hereof so
that all Options from and after a date prior to the effective date of
such merger, consolidation, liquidation or sale, as the case may be,
specified by the Board, shall be exercisable in full; and (iii) all
outstanding Options may be cancelled by the Board as of the effective
date of any such merger, consolidation, liquidation or sale provided
that notice of such cancellation shall be given to each holder of an
Option and each holder of an Option shall have the right to exercise
such Option in full (without regard to any discretionary limitations
imposed pursuant to Paragraph 9 hereof) during a thirty (30) day period
preceding the effective date of such merger, consolidation, liquidation,
sale or acquisition.
Except as hereinbefore expressly provided, the issue by the Company
of shares of Stock of any class or securities convertible into shares of
Stock of any class for cash or property or for labor or services either
upon direct sale or upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the
number, class or price of shares of Stock then subject to outstanding
Options.
15. AMENDMENT OR TERMINATION OF PLAN
The Board may modify, revise or terminate this Plan at any time and
from time to time; provided, however, that without the further approval
-5-<PAGE>
of the holders of at least a majority of the outstanding shares of
Stock, the Board may not (i) materially increase the benefits accruing
to the Employees under the Plan; (ii) change the aggregate number of
shares which may be issued under Options pursuant to the provisions of
the Plan; (iii) reduce the option price at which Options may be granted
to an amount less than the fair market value per share at the time the
Option is granted; (iv) change the number of shares which may be issued
under Options to any individual; or (v) change the class of persons
eligible to receive Options.
16. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall become effective and shall be deemed to have been
adopted on March 11, 1987 subject only to ratification by the holders of
at least a majority of the outstanding shares of Stock within twelve
(12) months after such date. Unless the Plan shall have terminated
earlier, the Plan shall terminate on the tenth (10th) anniversary of its
effective date, and no Option shall be granted pursuant to the Plan
after the day preceding such anniversary of its effective date.
-6-<PAGE>
AMENDMENT TO THE
VERMONT FINANCIAL SERVICES CORP.
1987 NON-QUALIFIED STOCK OPTION PLAN
______________________________________
As adopted by resolution of the
Board of Directors on October 13, 1993
______________________________________
(1) Section 10 of the Officers' Plan shall be amended by adding
the following new paragraph immediately following its first paragraph:
"Options may be exercised by means of a "cashless
exercise" procedure in which a broker (i) transmits the
option price to the Company in cash or acceptable cash
equivalents, either (1) against the optionee's notice of
exercise and the Company's confirmation that it will
deliver to the broker stock certificates issued in the
name of the broker for at least that number of shares
having fair market value equal to the option price, or
(2) as the proceeds of a margin loan to the optionee; or
(ii) agrees to pay the option price to the Company in
cash or acceptable cash equivalents upon the broker's
receipt from the Company of stock certificates issued in
the name of the broker for at least that number of shares
having fair market value equal to the option price. The
optionee's written notice of exercise of an option
pursuant to a "cashless exercise" procedure must include
the name and address of the broker involved, a clear
description of the procedure, and such other information
or undertaking by the broker as the Board shall
reasonably require."
(2) Section 10 of the Officers' Plan shall be further amended by
inserting into the sentence that constitutes its final paragraph,
immediately after the words "to be delivered to the optionee," the words
"or to the order of the optionee."
(3) Except as hereinabove amended, the provisions of the Officers'
Plan, as previously amended, shall remain in full force and effect.<PAGE>
Exhibit 4.1.b
VERMONT FINANCIAL SERVICES CORP.
Directors Non-Qualified Stock Option Plan
1988
1. PURPOSE.
The purpose of this Non-Qualified Stock Option Plan (the "Plan") is
to encourage certain directors who are not officers of Vermont Financial
Services Corp. (the "Company") and its subsidiary, Vermont National Bank
(the "Bank") to continue their association with the Company and to
acknowledge their years of service to the Company and/or the Bank by
providing favorable opportunities for them to participate in the
ownership of the Company and in its future growth.
2. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by the Board of Directors of the
Company (the "Board"). The Board shall have the authority to adopt,
amend and rescind such rules and regulations as, in its opinion, may be
advisable in the administration of the Plan, except as otherwise set
forth in this paragraph. All questions or interpretation and
application of such rules and regulations, of the Plan or of options
granted thereunder (the "Options") shall be subject to the
determination, which shall be final and binding, of a majority of the
whole Board. The Board shall have no authority to modify or revise the
Plan with respect to the number or maximum number of shares of the Stock
(as defined in Paragraph 3) which the Optionees (as defined in
Paragraph 6) may acquire or which may be subject to the Options pursuant
to the Plan or the terms upon which and times at which such Stock may be
acquired.
3. OPTION SHARES.
The stock subject to Options under the Plan shall be shares of the
Company's Common Stock, $1.00 par value (the "Stock"). Each Optionee
shall be granted an Option to purchase not less than 500 shares or 250
shares of the Stock for each year of service as a director of the
Company, whichever is greater. In each year following the year in which
this Plan is adopted (a "Succeeding Year") the Board may grant each
Optionee then a member of the Board and each other member of the Board
who is not an officer an Option to purchase 250 shares of Stock;
however, if the Board issues Options in a Succeeding Year, it must issue
Options to purchase 250 shares of Stock to each and every then Board
member. The total number of Shares of the Stock with respect to which
Options may be granted under this Plan shall not exceed in the aggregate
___ shares and the number of shares granted to each Optionee shall be no
greater than _____________________; provided that such aggregate number
of shares and the number of shares granted to each Optionee shall be
subject to adjustment in accordance with the provisions of Paragraph 14
hereof. Any shares subject to an Option which expires for any reason or
is terminated unexercised as to such shares may again be subject to an<PAGE>
Option under this Plan. The unpurchased shares which were subject
thereto, shall, unless the Plan shall have terminated, become available
for other Options under the Plan.
4. AUTHORITY TO GRANT OPTIONS.
The Board will grant to the eligible individuals named in
Paragraph 6 an Option or Options to buy a stated number of shares of
Stock under the terms and conditions of the Plan.
5. WRITTEN AGREEMENT.
Each Option granted hereunder shall be embodied in a written option
agreement which shall be subject to the terms and conditions prescribed
herein and shall be signed by the Optionee and by the President or any
Vice President of the Company for and in the name and on behalf of the
Company. Such an option agreement may also contain such other
provisions as the Board in its discretion shall deem advisable.
6. ELIGIBILITY.
Those certain directors of the Company, whose names are set forth
in Schedule A hereto, shall be eligible to participate in the Plan (all
directors eligible to participate in the Plan shall hereinafter be
called "Optionees") and shall receive the number of shares set forth on
that Schedule. Upon receipt of an Option in a Succeeding Year, a new
member of the Board who is not an officer of the Company shall become an
Optionee for purposes of this Plan. Officers of the Company are not
eligible to participate in the Plan.
7. OPTION PRICE.
The price at which shares may be purchased pursuant to an Option
shall be an amount equal to 100% of the fair market value of the Stock
on the date of grant of the Option. For purposes of the Plan, the "fair
market value" of a share of Stock at any particular date shall be
determined according to the following rules: (i) if the Stock is not at
the time listed or admitted to trading on a stock exchange, the fair
market value shall be the mean between the lowest reported bid price and
the highest reported asked price of the Stock on the date in question in
the over-the-counter market, as such prices are reported in a
publication of general circulation selected by the Board and regularly
reporting the market price of the Stock in such market; provided,
however, that if the price of the Stock is not so reported, the fair
market value shall be determined by the Board, which may take into
consideration (1) the price paid for the Stock in the most recent trade
of a substantial number of shares known to the Board to have occurred at
arm's length between willing and knowledgeable investors, or (2) an
appraisal undertaken in good faith by the Board, or of some or all of
the above as the Board shall in its discretion elect; or (ii) if the
Stock is at the time listed or admitted to trading on any stock
exchange, then the fair market value shall be the mean between the
lowest and highest reported sale prices of the Stock on the date in
question on the principal exchange on which the Stock is then listed or
admitted to trading. If no reported sale of Stock takes place on the
-2-<PAGE>
date in question on the principal exchange, then the reported closing
asked price of the Stock on such date on the principal exchange shall be
determinative of fair market value.
8. DURATION OF OPTIONS.
No Option shall be exercisable after the expiration of five (5)
years from the date such Option is granted. The Board, in its
discretion, may provide that an Option shall be exercisable during such
period or during any lesser period of time.
9. AMOUNT EXERCISABLE.
Each Option may be exercised so long as it is valid and outstanding
from time to time, in part or as a whole, in such manner and subject to
such conditions as the Board, in its discretion, may provide in the
option agreement.
10. EXERCISE OF OPTION.
Options shall be exercised by the delivery of written notice to the
Company setting forth the number of shares with respect to which the
Option is to be exercised, accompanied by payment of the option price of
such shares, which payment shall be made, subject to the alternative
provisions of this Paragraph 10, in cash or by cashier's check,
certified check, bank draft or postal or express money order payable to
the order of the Company in an amount in United States dollars equal to
the option price of such shares. Such notice shall be delivered in
person to the Secretary of the Company or shall be sent by registered
mail, return receipt requested, to the Secretary of the Company, in
which case delivery shall be deemed made on the date such notice is
deposited in the mail.
Alternatively, payment of the option price may be made, in whole or
in part, in shares of Stock previously acquired by the Optionee. If
payment is made in whole or in part in shares of Stock, then the
Optionee shall deliver to the Company in payment of the option price of
the shares with respect to which such Option is exercised
(i) certificates registered in the name of such Optionee representing a
number of shares of stock legally and beneficially owned by such
Optionee, free of all liens, claims and encumbrances of every kind and
having a fair market value on the date of delivery of such notice that
is not greater than the option price of the shares with respect to which
such Option is to be exercised, such certificates to be accompanied by
stock powers duly endorsed in blank by the record holder of the shares
represented by such certificates; and (ii) if the option price of the
shares with respect to which such Option is to be exercised exceeds such
fair market value, cash or a cashier's check, certified check, bank
draft or postal or express money order payable to the order of the
Company in an amount in United States dollars equal to the amount of
such excess. Notwithstanding the foregoing provisions of this
Paragraph 10, the Board, in its sole discretion, may refuse to accept
shares of Stock in payment of the option price of the shares with
respect to which such Option is to be exercised and, in that event, any
certificates representing shares of Stock which were delivered to the
-3-<PAGE>
Company with such written notice shall be returned to such Optionee
together with notice by the Company to such Optionee of the refusal of
the Board to accept such shares of Stock.
As promptly as practicable after the receipt by the Company of
(i) such written notice from the Optionee setting forth the number of
shares with respect to which such Option is to be exercised and
(ii) payment of the option price of such Shares in the form required by
the foregoing provisions of this Paragraph 10, the Company shall cause
to be delivered to such Optionee certificates representing the number of
shares with respect to which such Option has been exercised.
11. TRANSFERABILITY OF OPTIONS.
Options shall not be transferable by the Optionee otherwise than by
will or under the laws of descent and distribution, and shall be
exercisable during his lifetime only by him.
12. REQUIREMENTS OF LAW.
The Company shall not be required to sell or issue any shares under
any Option if the issuance of such shares shall constitute or result in
a violation by the Optionee or the Company of any provisions of law,
statute or regulation of any governmental authority. Specifically, in
connection with the Securities Act of 1933, upon exercise of any Option,
the Company shall not be required to issue such shares unless the Board
has received evidence satisfactory to it to the effect that the holder
of such Option will not transfer such shares except pursuant to a
registration statement in effect under such Act or unless an opinion of
counsel satisfactory to the Company has been received by the Company to
the effect that such registration is not required. Any determination in
this connection by the Board shall be final, binding and conclusive.
The Company shall not be obligated to take any other affirmative action
in order to cause the exercise of an Option or the issuance of shares
pursuant thereto to comply with any law or regulations of any
governmental authority.
13. NO RIGHTS AS STOCKHOLDER.
No Optionee shall have rights as a stockholder with respect to
shares covered by his Option until the date of issuance of a stock
certificate for such shares; and except as otherwise provided in
Paragraph 14 hereof, no adjustment for dividends or otherwise shall be
made if the record date therefor is prior to the date of issuance of
such certificate.
14. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE.
The existence of outstanding Options shall not affect in any way
the right or power of the Company or its stockholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or
other changes in the Company's capital structure or its business or any
merger or consolidation of the Company or any issue of bonds,
debentures, preferred or prior preference stock ahead of or affecting
the stock or the rights thereof or the dissolution or liquidation of the
-4-<PAGE>
Company or any sale or transfer of all or any part of its assets or
business or any other corporate act or proceeding, whether of a similar
character or otherwise.
The number of shares covered by any outstanding Option and the
price per share thereof shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Stock resulting
from the subdivision or consolidation of shares or any other capital
adjustment, the payment of a stock dividend or any other increase in
such shares effected without receipt of consideration by the Company or
any other decrease therein effected without a distribution of cash or
property in connection therewith.
In the event the Company merges or consolidates with one or more
corporations and the Company is the surviving corporation, thereafter
upon any exercise of an Option, the holder thereof shall be entitled to
purchase in lieu of the number of shares of Stock as to which the Option
shall then be exercisable, the number and class of shares of stock and
securities to which the holder would have been entitled pursuant to the
terms of the agreement of merger or consolidation if immediately prior
to such merger or consolidation, the holder had been the holder of
record of shares of Stock as to which the Option is then exercisable.
If the Company is merged into or consolidated with another
corporation under circumstances where the Company is not the surviving
corporation, or if the Company is liquidated or sells or otherwise
disposes of substantially all of its assets to another corporation while
unexercised Options remain outstanding under the Plan (i) subject to the
provisions of clause (iii) below, after the effective date of such
merger, consolidation or sale, as the case may be, each holder of an
outstanding Option shall be entitled, upon exercise of such Option, to
receive in lieu of shares of stock shares of such stock or other
securities as the holders of shares of stock received pursuant to the
terms of the merger, consolidation or sale; and (ii) the Board may waive
any discretionary limitations imposed pursuant to Paragraph 9 hereof so
that all Options from and after a date prior to the effective date of
such merger, consolidation, liquidation or sale, as the case may be,
specified by the Board, shall be exercisable in full; and (iii) all
outstanding Options may be cancelled by the Board as of the effective
date of any such merger, consolidation, liquidation or sale provided
that notice of such cancellation shall be given to each holder of an
Option and each holder of an Option shall have the right to exercise
such Option in full (without regard to any discretionary limitations
imposed pursuant to Paragraph 9 hereof) during a thirty (30) day period
preceding the effective date of such merger, consolidation, liquidation,
sale or acquisition.
Except as hereinbefore expressly provided, the issue by the Company
of shares of stock of any class or securities convertible into shares of
stock of any class for cash or property or for labor or services either
upon direct sale or upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, shall not affect and
no adjustment by reason thereof shall be made with respect to, the
-5-<PAGE>
number, class or price of shares of stock then subject to outstanding
Options.
15. AMENDMENT OR TERMINATION OF PLAN.
The Board may modify, revise or terminate this Plan at any time and
from time to time, subject to the specific limitations on the Board's
authority to amend, modify or revise the Plan set forth in Paragraph 2;
provided, however, that without the further approval of the holders of
at least a majority of the outstanding shares of Stock, the Board may
not (i) materially increase the benefits accruing to the directors under
the Plan; (ii) change the aggregate number of shares which may be issued
under the Options pursuant to the provisions of the Plan; (iii) reduce
the option price at which Options may be granted to an amount less than
the fair market value per share at the time the Option is granted;
(iv) change the number of shares which may be issued under Options to
any individual; or (v) change the class of persons eligible to receive
Options.
16. EFFECTIVE DATE AND DURATION OF THE PLAN.
The Plan shall become effective and shall be deemed to have been
adopted on November ___ , 1988 subject only to ratification by the
holders of at least a majority of the outstanding shares of Stock within
twelve (12) months after such date. Unless the Plan shall have
terminated earlier, the Plan shall terminate on the tenth (10th)
anniversary of its effective date and no Option shall be granted
pursuant to the Plan after the day preceding such anniversary of its
effective date.
-6-<PAGE>
AMENDMENT TO THE
VERMONT FINANCIAL SERVICES CORP.
1988 DIRECTORS' NON-QUALIFIED STOCK OPTION PLAN
__________________________________________
As adopted by resolution of the
Board of Directors on October 13, 1993
__________________________________________
1. Section 3 of the Directors' Plan shall be amended by inserting
after the third sentence the following:
"Options not granted in any Succeeding Year shall accrue on a
cumulative basis and the Board may, in its sole discretion, in
any Succeeding Year, grant each Optionee then a member of the
Board who is not an officer Options to purchase that number of
shares of stock that an Optionee would have received had the
Board granted Options in each Succeeding Year (a "Cumulative
Option"); however, if the Board issues a Cumulative Option to
one Optionee, it must issue Cumulative Options to each and
every then Board member. The Board may grant Options to
purchase 250 shares of Stock in a Succeeding Year without
granting Cumulative Options for past Succeeding Years."
2. Section 10 of the Directors' Plan shall be amended by adding
the following new paragraph immediately following its
first paragraph:
"Options may be exercised by means of a "cashless exercise"
procedure in which a broker (i) transmits the option price to
the Company in cash or acceptable cash equivalents, either
(1) against the Optionee's notice of exercise and the
Company's confirmation that it will deliver to the broker
stock certificates issued in the name of the broker for at
least that number of shares having fair market value equal to
the option price, or (2) as the proceeds of a margin loan to
the Optionee; or (ii) agrees to pay the option price to the
Company in cash or acceptable cash equivalents upon the
broker's receipt from the Company of stock certificates issued
in the name of the broker for at least that number of shares
having fair market value equal to the option price. The
Optionee's written notice of exercise of an Option pursuant to
a "cashless exercise" procedure must include the name and
address of the broker involved, a clear description of the
procedure, and such other information or undertaking by the
broker as the Board shall reasonably require."
3. Section 10 of the Directors' Plan shall be further amended by
inserting into the sentence that constitutes its final paragraph,<PAGE>
immediately after the words "to be delivered to the Optionee," the words
"or to the order of the Optionee."
4. Except as hereinabove amended, the provisions of the
Directors' Plan, as previously amended, shall remain in full force and
effect.
-2-<PAGE>
Exhibit 4.1.c
=================================================================
VERMONT FINANCIAL SERVICES CORP.
1994 STOCK OPTION PLAN
=================================================================<PAGE>
VERMONT FINANCIAL SERVICES CORP.
1994 STOCK OPTION PLAN
TABLE OF CONTENTS
Page
1. PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. ADMINISTRATION OF THE PLAN . . . . . . . . . . . . . . . . . . 1
3. STOCK SUBJECT TO THE PLAN . . . . . . . . . . . . . . . . . . 2
4. AUTHORITY TO GRANT OPTIONS . . . . . . . . . . . . . . . . . . 2
5. WRITTEN OPTION AGREEMENT . . . . . . . . . . . . . . . . . . . 3
6. ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . 3
7. OPTION PRICE . . . . . . . . . . . . . . . . . . . . . . . . . 3
8. DURATION OF OPTIONS . . . . . . . . . . . . . . . . . . . . . 4
9. RESTRICTIONS ON EXERCISE OF OPTIONS . . . . . . . . . . . . . 4
10. EXERCISE OF OPTIONS . . . . . . . . . . . . . . . . . . . . . 4
11. TRANSFERABILITY OF OPTIONS . . . . . . . . . . . . . . . . . . 6
12. TERMINATION OF EMPLOYMENT OR INVOLVEMENT OF OPTIONEE WITH THE
COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
13. SPECIAL BONUS GRANTS . . . . . . . . . . . . . . . . . . . . . 7
14. REQUIREMENTS OF LAW, ETC. . . . . . . . . . . . . . . . . . . 7
15. LEGEND ON CERTIFICATES . . . . . . . . . . . . . . . . . . . . 8
16. NO RIGHTS AS STOCKHOLDER . . . . . . . . . . . . . . . . . . . 8
17. EMPLOYMENT OBLIGATION . . . . . . . . . . . . . . . . . . . . 8
18. FORFEITURE AS A RESULT OF TERMINATION FOR CAUSE . . . . . . . 8
19. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE . . . . . . . . . . . 9
20. AMENDMENT OR TERMINATION OF PLAN . . . . . . . . . . . . . . . 11
21. CERTAIN RIGHTS OF THE COMPANY . . . . . . . . . . . . . . . . 12
22. TAX WITHHOLDING . . . . . . . . . . . . . . . . . . . . . . . 13
23. EFFECTIVE DATE AND DURATION OF THE PLAN . . . . . . . . . . . 14<PAGE>
VERMONT FINANCIAL SERVICES CORP.
1994 STOCK OPTION PLAN
1. PURPOSE
The purpose of this 1994 Stock Option Plan (the "Plan") is to
encourage directors, officers and other key employees of Vermont
Financial Services Corp. (the "Company") and its Subsidiaries (as
hereinafter defined) to continue their association with the Company and
its Subsidiaries, by providing opportunities for such persons to
participate in the ownership of the Company and in its future growth
through the granting of stock options (the "Options") which may be
options designed to qualify as incentive stock options (within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended
[the "Code"]) (an "ISO"), or options not intended to qualify for any
special tax treatment under the Code (a "NQO"). The term "Subsidiary"
as used in the Plan means a corporation or other business organization
of which the Company owns, directly or indirectly through an unbroken
chain of ownership, fifty percent (50%) or more of the total combined
voting power of all classes of stock.
2. ADMINISTRATION OF THE PLAN
The Plan shall be administered by a committee (the "Committee")
consisting of those directors of the Company who shall at any time and
from time to time be serving as members of the Compensation Committee of
the Board of Directors (the "Board"). If required to insure compliance
with Section 16 of the Securities and Exchange Act of 1934, as amended
(the "Exchange Act"), if applicable to the Company, during the period of
one year immediately preceding any action by the Committee under the
Plan, no member of the Committee may have been granted an option, or
stock, or stock appreciation right or similar right under any plan of
the Company under which any person exercises discretion to determine the
recipients or terms or conditions of such grants. The Committee shall
select one of its members as Chairman and shall hold meetings at such
times and places as it may determine. A majority of the Committee shall
constitute a quorum and acts of the Committee at which a quorum is
present, or acts consented to or approved in writing by all of the
members of the Committee, shall be the valid acts of the Committee.
The Committee shall have the sole authority, in its absolute
discretion, to adopt, amend and rescind such rules and regulations as,
in its opinion, may be advisable in the administration of the Plan, and
to interpret the Plan, the rules and regulations, and the instruments
evidencing options granted under the Plan and to make all other
determinations deemed necessary or advisable for the administration of
the Plan. All questions of interpretation and application of such rules
and regulations shall be subject to the determination of the Committee,
which shall be final and binding. The Plan shall be administered in
such a manner as to permit those Options granted hereunder and specially
designated under Section 4 as such to qualify as incentive stock options
as described in Section 422 of the Code.<PAGE>
3. STOCK SUBJECT TO THE PLAN
The total number of shares of stock which may be subject to Options
issued under the Plan shall be 225,000 shares of the Company's Common
Stock, $1.00 par value per share ("Stock"), from either authorized but
unissued shares or treasury shares; provided that the number of shares
stated in this Section 3 shall be subject to adjustment in accordance
with the provisions of Section 19. If any outstanding Option shall
expire for any reason or shall terminate by reason of the death or
severance of employment of the optionee, the surrender of any such
Option, or any other cause, the shares of Stock allocable to the
unexercised portion of such Option may again be subject to an option
under the Plan.
4. AUTHORITY TO GRANT OPTIONS
The Committee may determine, from time to time, which key employees of
the Company or any Subsidiary or other persons shall be granted Options
under the Plan, the terms of the Options (including without limitation
whether an Option shall be an ISO or a NQO) and the number of shares
which may be purchased under the Option provided, however, that if an
individual to whom a grant has been made fails to execute and deliver to
the Committee an Option Agreement, within ten (10) days after it is
submitted to him, the Option granted under the agreement shall be
voidable by the Company at its election, without further notice to the
Optionee. Without limiting the generality of the foregoing, the
Committee may from time to time grant: (a) to such eligible employees
as it shall determine, an Option or Options to buy a stated number of
shares of Stock under the terms and conditions of the Plan, which Option
or Options will to the extent so designated at the time of grant
constitute an ISO; and (b) to such eligible directors, employees or
other persons as it shall determine an Option or Options to buy a stated
number of shares of Stock under the terms and conditions of the Plan,
which Option or Options shall constitute a NQO. The Committee shall,
from time to time, report to the Board the names of employees or other
persons to whom Options are granted, the type of Options granted, the
number of shares covered by each Option and the terms and conditions of
each such Option. Subject only to any applicable limitations set forth
elsewhere in the Plan, the number of shares of Stock to be covered by
any Option shall be as determined by the Committee.
5. WRITTEN OPTION AGREEMENT
Each Option granted hereunder shall be embodied in an option agreement
(the "Option Agreement") substantially in the form of Exhibit 1, which
shall be signed by the Optionee and by the Chairman of the Board, the
President, the Chief Operating Officer, or the Chief Financial Officer
of the Company for and in the name and on behalf of the Company. An
Option Agreement pertaining to an ISO shall contain the restriction on
exercisability set forth in Section 9 and any Option Agreement for any
Option, whether ISO or NQO, may contain such other provisions not
-2-<PAGE>
inconsistent with the Plan as the Committee in its sole and absolute
discretion shall approve.
6. ELIGIBILITY
The individuals who shall be eligible for grant of Options under the
Plan shall be key employees, officers (including officers who may be
members of the Board), and directors who are not employees. The
President and the five Executive Vice Presidents shall be among the key
employees eligible for such grants. ISOs shall not be granted to any
individual who is not an employee of the Company or a Subsidiary. An
employee, director or other person to whom an Option has been granted
under this Plan, and any successor to such person who may be eligible to
exercise such Option following the death of the employee, is hereinafter
referred to as an "Optionee."
7. OPTION PRICE
The price at which shares of Stock may be purchased pursuant to an
Option shall be specified by the Committee at the time the Option is
granted, but shall in no event be less than one hundred percent (100%)
of the fair market value of the Stock on the date the Option is granted.
In the case of an employee who owns (or is considered under Section
424(d) of the Code as owning) stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the
Company or any Subsidiary, the price at which shares of Stock may be so
purchased pursuant to an ISO shall be not less than one hundred and ten
percent (110%) of the fair market value of the Stock on the date the ISO
is granted.
For purposes of the Plan, the "fair market value" of a share of Stock
on any date specified herein shall mean the last reported sales price,
regular way, or, in the event that no sale takes place on such day, the
average of the reported closing bid and asked prices, regular way, in
either case as reported on the NASDAQ National Market System.
8. DURATION OF OPTIONS
The duration of any Option shall be specified by the Committee in the
Option Agreement, but no Option shall be exercisable after the
expiration of ten (10) years. In the case of any employee who owns (or
is considered under Section 424(d) of the Code as owning) stock
possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or any Subsidiary, no ISO
shall be exercisable after the expiration of five (5) years from the
date such Option is granted. The Committee, in its sole and absolute
discretion, may extend any Option theretofore granted subject to the
aforesaid limits and may provide that an Option shall be exercisable
during its entire duration or during any lesser period of time.
-3-<PAGE>
9. RESTRICTIONS ON EXERCISE OF OPTIONS
Notwithstanding any other provision of the Plan, the aggregate fair
market value (determined as of the time the Option is granted) of the
Stock with respect to which ISOs may be exercisable for the first time
by an Optionee during any calendar year (under the Plan or any other
incentive stock option plan(s) of the Company or any Subsidiary) shall
not exceed $100,000. Subject to the foregoing, each Option may be
exercised so long as it is valid and outstanding from time to time, in
part or as a whole, in such manner and subject to such conditions as the
Committee, in its sole and absolute discretion, may provide in the
Option Agreement.
10. EXERCISE OF OPTIONS
Options shall be exercised by the delivery of written notice to the
Company setting forth the number of shares of Stock with respect to
which the Option is to be exercised, accompanied by payment of the
option price of such shares, which payment shall be made, subject to the
alternative provisions of this Section, in cash or by such cash
equivalents, payable to the order of the Company in an amount in United
States dollars equal to the option price of such shares, as the
Committee in its sole and absolute discretion shall consider acceptable.
Such notice shall be delivered in person to the Treasurer of the Company
or shall be sent by registered mail, return receipt requested, to the
Treasurer of the Company, in which case delivery shall be deemed made on
the date such notice is deposited in the mail.
Options may also be exercised by means of a "cashless exercise"
procedure in which a broker (i) transmits the option price to the
Company in cash or acceptable cash equivalents, either (1) against the
optionee's notice of exercise and the Company's confirmation that it
will deliver to the broker stock certificates issued in the name of the
broker for at least that number of shares having the fair market value
equal to the option price, or (2) as the proceeds of a margin loan to
the optionee; or (ii) agrees to pay the option price to the Company in
cash or acceptable cash equivalents upon the broker's receipt from the
Company of stock certificates issued in the name of the broker for at
least that number of shares having fair market value equal to the option
price. The optionee's written notice of exercise of an option pursuant
to a "cashless exercise" procedure must include the name and address of
the broker involved, a clear description of the procedure, and such
other information or undertaking by the broker as the Board shall
reasonably require.
Alternatively, payment of the option price may be made, in whole or in
part, in shares of Stock owned by the Optionee; provided, however, that
the Optionee may not make payment in shares of Stock that he acquired
upon the earlier exercise of any ISO (or other "incentive stock
option"), unless and until he has held the shares until at least two (2)
years after the date the ISO (or such other incentive stock option) was
granted and at least one (1) year after the date the ISO (or such other
-4-<PAGE>
incentive stock option) was exercised. If payment is made in whole or
in part in shares of Stock, then the Optionee shall deliver to the
Company in payment of the option price of the shares in respect of which
such Option is exercised (a) certificates registered in the name of such
Optionee representing a number of shares of Stock legally and
beneficially owned by such Optionee, fully vested and free of all liens,
claims and encumbrances of every kind, and having a fair market value on
the date of delivery of such notice equal to the option price of the
shares of Stock with respect to which such Option is to be exercised,
such certificates to be duly endorsed or accompanied by stock powers
duly endorsed in blank by the record holder of the shares of Stock
represented by such certificates; and (b) if the option price of the
shares in respect of which such Option is to be exercised exceeds such
fair market value, cash or such cash equivalents payable to the order to
the Company, in an amount in United States dollars equal to the amount
of such excess, as the Committee in its sole and absolute discretion
shall consider acceptable. Notwithstanding the foregoing provisions of
this Section, the Committee, in its sole and absolute discretion, may
refuse to accept shares of Stock in payment of the option price of the
shares of Stock with respect to which such Option is to be exercised
and, in that event, any certificates representing shares of Stock which
were delivered to the Company with such written notice shall be returned
to such Optionee together with notice by the Company to such Optionee of
the refusal of the Committee to accept such shares of Stock.
As promptly as practicable after the receipt by the Company of
(a) written notice from the Optionee setting forth the number of shares
of Stock with respect to which such Option is to be exercised and
(b) payment of the option price of such shares in the form required by
the foregoing provisions of this Section, the Company shall, subject to
the provisions of Section 16 hereof, cause to be delivered to such
Optionee certificates representing the number of shares with respect to
which such Option has been so exercised.
11. TRANSFERABILITY OF OPTIONS
Options shall not be transferable by the Optionee otherwise than by
will or under the laws of descent and distribution, and shall be
exercisable during his or her lifetime only by the Optionee.
12. TERMINATION OF EMPLOYMENT OR INVOLVEMENT OF OPTIONEE WITH THE
COMPANY
For purposes of this Section, employment by or involvement with (in
the case of an Optionee who is not an employee) a Subsidiary shall be
considered employment by or involvement with the Company. Unless
otherwise set forth in the Option Agreement, after the Optionee's
termination of employment with the Company, including his retirement in
good standing from the employ of the Company for reasons of age under
the then established rules of the Company, the Option shall terminate on
the earlier of the date of its expiration or three (3) months after the
date of such termination or retirement. If the holder of an Option dies
-5-<PAGE>
before the date of expiration of such Option and while in the employ of
the Company or during the three (3) month period described in the
preceding sentence, or in the event of the retirement of the Optionee
for reasons of disability (within the meaning of Section 22(e)(3) of the
Code), such Option shall terminate on the earlier of such date of
expiration or one (l) year following the date of such death or
disability retirement. After the death of the Optionee, his or her
executors, administrators or any persons to whom his or her Option may
be transferred by will or by the laws of descent and distribution shall
have the right at any time prior to such termination to exercise the
Option to the extent to which the Optionee was entitled to exercise the
Option on the date of his or her death.
Authorized leave of absence or absence on military or government
service shall not constitute severance of the employment relationship
between the Company and the Optionee for purposes of the Plan, provided
that either (a) such absence is for a period of no more than ninety (90)
days or (b) the Employee's right to re-employment after such absence is
guaranteed either by statute or by contract.
For Optionees who are not employees of the Company, options shall be
exercisable for such periods following the termination of the Optionee's
involvement with the Company as may be set forth in the specific written
option agreement with the Optionee.
13. SPECIAL BONUS GRANTS
In its discretion, the Committee may grant in connection with any NQO
a special bonus in an amount not to exceed the combined federal, state
and local income tax liability incurred by the Optionee as a consequence
of his acquisition of Stock pursuant to the exercise of the NQO. Any
such special bonus shall be payable solely to federal, state and local
taxing authorities for the benefit of the Optionee at such time or times
as withholding payments of income tax may be required. In the event
that an NQO with respect to which a special bonus has been granted
becomes exercisable by the personal representative of the estate of the
Optionee, the bonus shall be payable to or for the benefit of the estate
in the same manner and to the same extent as it would have been payable
for the benefit of the Optionee had he survived to the date of exercise.
A special bonus may be granted simultaneously with a related NQO or
separately with respect to an outstanding NQO or granted at an earlier
date.
14. REQUIREMENTS OF LAW, ETC.
The Company shall not be required to transfer any Stock or to sell or
issue any shares upon the exercise of any Option if the transfer, sale
or issuance of such shares may result in a violation by the Optionee or
the Company of any provisions of any law, statute or regulation of any
governmental authority. Without limiting the generality of the
foregoing, in connection with the Securities Act of 1933, as amended
(the "Securities Act") and any applicable state securities or "blue sky"
-6-<PAGE>
law (a "Blue Sky Law"), upon the proposed transfer of Stock or the
proposed exercise of any Option the Company shall not be required to
transfer or issue shares unless the Board has received evidence or
advice satisfactory to it to the effect that such transfer or issuance
of shares is pursuant to a registration statement in effect under the
Securities Act and applicable Blue Sky Laws or otherwise is subject to
an exemption from such registration. Any determination in this
connection by the Board shall be conclusive. The Company shall not be
obligated to take any other affirmative action in order to cause the
transfer of Stock or the exercise of an Option to comply with any law or
regulations of any governmental authority, including, without
limitation, the Securities Act or applicable Blue Sky Law.
Notwithstanding any other provision of the Plan to the contrary, the
Company may refuse to permit transfer of shares of Stock if in the
opinion of its legal counsel such transfer may violate federal or state
securities laws or subject the Company to liability thereunder. Any
sale, assignment, transfer, pledge or other disposition of shares of
Stock received upon a grant of stock hereunder or the exercise of any
Option (or any other shares or securities derived therefrom) which is
not in accordance with the provisions of this Section shall be void and
of no effect and shall not be recognized by the Company.
15. LEGEND ON CERTIFICATES
The Committee may cause any certificate representing shares of Stock
acquired upon exercise of an Option (and any other shares or securities
derived therefrom) to bear a legend to the effect that the securities
represented by such certificate have not been registered under the
Securities Act or any applicable Blue Sky Law, and may not be sold,
assigned, transferred, pledged or otherwise disposed of except in
accordance with the Plan and applicable agreements binding the holder
and the Company or any of its stockholders.
16. NO RIGHTS AS STOCKHOLDER
No Optionee shall have any rights as a stockholder with respect to
shares until the date of issuance of a stock certificate for such
shares; except as otherwise provided in Section 19, no adjustment for
dividends or otherwise shall be made if the record date therefor is
prior to the date of issuance of such certificate.
17. EMPLOYMENT OBLIGATION
The granting of any Option shall not impose upon the Company or any
Subsidiary any obligation to employ or continue to employ any Optionee,
or to engage or retain the services of any person, and the right of the
Company or any Subsidiary to terminate the employment or services of any
person shall not be diminished or affected by reason of the fact that an
Option has been granted to him or her. The existence of any Option
shall not be taken into account in determining any damages relating to
termination of employment or services for any reason.
-7-<PAGE>
18. FORFEITURE AS A RESULT OF TERMINATION FOR CAUSE
Any Option Agreement may, in the Committee's discretion, include a
provision substantially in the form of Clause I below or with such
changes or alternative provisions and for such period of time, as the
Committee may determine to be appropriate in the circumstances:
I. Notwithstanding any provision of the Plan to the contrary,
if the Committee determines, after full consideration of the facts
presented on behalf of the Company and an Optionee, that
(a) the Optionee has been engaged in fraud, embezzlement, theft,
commission of a felony or dishonesty in the course of his or her
employment by or involvement with the Company or a Subsidiary,
which damaged the Company or a Subsidiary, or has made
unauthorized disclosure of trade secrets or other proprietary
information of the Company or a Subsidiary or of a third party who
has entrusted such information to the Company or a Subsidiary, or
(b) the Optionee's employment or involvement was otherwise
terminated for "cause," as defined in any employment agreement
with the Optionee, if applicable, or if there is no such
agreement, as determined by the Committee, which may determine
that "cause" includes among other matters the failure or inability
of the Optionee to perform and carry out his or her assigned
duties and responsibilities diligently and in a manner
satisfactory to the Committee,
then, in the Committee's discretion, the Optionee's right to exercise
an Option shall terminate as of the date of such act (in the case of
(a)) or such termination (in the case of (b)) and the Optionee shall
forfeit all unexercised Options. If an Optionee whose behavior the
Company asserts falls within the provisions of (a) or (b) above has
exercised or attempts to exercise an Option prior to a decision of the
Committee, the Company shall not be required to recognize such
exercise until the Committee has made its decision and, in the event
any exercise shall have taken place, it shall be of no force and
effect (and void ab initio) if the Committee makes an adverse
determination; provided, however, if the Committee finds in favor of
the Optionee then the Optionee will be deemed to have exercised such
Option retroactively as of the date he or she originally gave written
notice of his or her attempt to exercise or actual exercise, as the
case may be. The decision of the Committee as to the cause of an
Optionee's discharge and the damage done to the Company or a
Subsidiary and whether or not the Optionee's Option shall be
forfeited, shall be final, binding and conclusive. No decision of the
Committee, however, shall affect in any manner the finality of the
discharge of such Optionee by the Company or a Subsidiary.
-8-<PAGE>
19. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE
The existence of outstanding Options shall not affect in any way the
right or power of the Company or its stockholders to make or authorize
any or all adjustments, recapitalizations, reorganizations or other
changes in the Company's capital structure or its business or any merger
or consolidation of the Company or any issue of bonds, debentures,
preferred or preference stock or Stock or other common stock, whether or
not convertible into Stock or other securities or ranking prior to Stock
or affecting the rights thereof, or warrants, rights or options to
acquire the same, or the dissolution or liquidation of the Company or
any sale or transfer of all or any part of its assets or business or any
other corporate act or proceeding, whether of a similar character or
otherwise.
The number of shares of Stock subject to the Plan (less the number of
shares theretofore delivered or paid in respect of the exercise of
Options) and the number of shares of Stock covered by any outstanding
Option and the price per share payable upon or in respect of exercise
thereof (provided that in no event shall the option price be less than
the par value of such shares) shall be proportionately and appropriately
adjusted for any increase or decrease in the number of issued and
outstanding shares of Stock resulting from any subdivision, split,
combination or consolidation of shares of Stock or the payment of a
dividend in shares of Stock or other securities of the Company on the
Stock. The decision of the Board as to the adjustment, if any, required
by the provisions of this Section shall be final, binding and
conclusive.
If the Company merges or consolidates with a wholly-owned subsidiary
for the purpose of reincorporating itself under the laws of another
jurisdiction, the Optionees will be entitled to acquire shares of Stock
of the reincorporated Company upon the same terms and conditions as were
in effect immediately prior to such reincorporation (unless such
reincorporation involves a change in the number of shares or the
capitalization of the Company, in which case proportional adjustments
shall be made as provided above) and the Plan, unless otherwise
rescinded by the Board, will remain the Plan of the reincorporated
Company.
If while unexercised Options remain outstanding under the Plan the
Company merges or consolidates with one or more corporations (whether or
not the Company is the surviving corporation), or if the Company is
liquidated or sells or otherwise disposes of substantially all of its
assets to another entity, then, except as otherwise specifically
provided to the contrary in an Optionee's Option Agreement, the
Committee, in its discretion, shall amend the terms of all outstanding
Options so that either:
(a) after the effective date of such merger, consolidation or
sale, as the case may be, each Optionee shall be entitled, upon
exercise of an Option, to receive in lieu of shares of Stock the
-9-<PAGE>
number and class of shares of such stock or other securities to which
he would have been entitled pursuant to the terms of the merger,
consolidation or sale if he had been the holder of record of the
number of shares of Stock as to which the Option is being exercised,
or shall be entitled to receive from the successor entity a new stock
option or stock appreciation right of comparable value, or
(b) all outstanding Options shall be cancelled as of the
effective date of any such merger, consolidation, liquidation or sale,
provided that each Optionee shall have the right to exercise his
Option according to its terms during the period of twenty (20) days
ending on the day preceding the effective date of such merger,
consolidation, liquidation or sale; and in addition to the foregoing,
the Committee may in its discretion amend the terms of an Option by
cancelling some or all of the restrictions on its exercise, to permit
its exercise pursuant to this paragraph (b) to a greater extent than
that permitted on its existing terms.
Except as expressly provided herein, the issue by the Company of
shares of Stock or other securities of any class or series or securities
convertible into or exchangeable or exercisable for shares of Stock or
other securities of any class or series for cash or property or for
labor or services either upon direct sale or upon the exercise of rights
or warrants to subscribe therefor, or upon conversion of shares or
obligations of the Company convertible into shares of Stock or other
securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number, class or price of shares of Stock
then subject to outstanding Options.
20. AMENDMENT OR TERMINATION OF PLAN
The Board may, in its sole and absolute discretion, modify, revise or
terminate the Plan at any time and from time to time; provided, however,
that without the further approval of the holders of at least a majority
of the outstanding shares of Stock, the Board may not materially
increase the benefits accruing to Optionees or grantees under the Plan
or make any "modifications" as that term is defined under Section
424(h)(3) (or its successor) of the Code if such increase in benefits or
modifications would adversely affect (i) the availability to the Plan of
the protections of Section 16(b) of the Exchange Act, if applicable to
the Company, or (ii) the qualification of the Plan or any Options for
"incentive stock option" treatment under Section 422 of the Code; (b)
change the aggregate number of shares of Stock which may be issued under
Options pursuant to the provisions of the Plan, except as provided in
Section 19; (c) reduce the option price at which ISOs may be granted to
an amount less than the minimum amount refined by Section 7; or (d)
change the class of persons eligible to receive ISOs. Notwithstanding
the preceding sentence, the Board shall in all events have the power and
authority to make such changes in the Plan and in the regulations and
administrative provisions hereunder or in any outstanding Option as, in
the opinion of counsel for the Company, may be necessary or appropriate
from time to time to enable any Option granted pursuant to the Plan to
-10-<PAGE>
qualify as an incentive stock option or such other form of stock option
as may be defined under the Code, as amended from time to time, so as to
receive preferential federal income tax treatment.
21. CERTAIN RIGHTS OF THE COMPANY
(a) Any Stock Option Agreement may, in the Committee's discretion,
include a provision substantially in the form of Clause I below or with
such changes or alternative provisions and for such period of time as
the Committee may determine to be appropriate in the circumstances:
I. Voluntary or Involuntary Transfers of Stock. Shares of Stock
acquired by an Optionee pursuant to the Plan (or other shares or
securities derived therefrom) shall not be voluntarily transferred by
the Optionee without the prior written consent of the Committee, which
consent may be withheld or conditioned as the Committee, in its sole
and absolute discretion, may determine. If such shares of Stock (or
other shares or securities derived therefrom) are subject to an
involuntary transfer, including by reason of death, a divorce
settlement or judicial proceeding, the Company shall have the right to
repurchase all or any such shares (including any shares or other
securities of the Company derived therefrom) at a price equal to the
Repurchase Price at the time of the involuntary transfer event. The
Company may exercise its repurchase right no later than one hundred
eighty (180) days following the later of (a) the date of such
involuntary transfer of such shares of Stock, and (b) the Committee's
receipt of written notice of the occurrence of such transfer event.
Any such shares of Stock (or other shares or securities) as to which
the Company does not exercise its repurchase rights within such period
shall thereafter be free of the restrictions of this Section.
Termination of Employment or Involvement. If an Optionee's
employment by or involvement with the Company (including, for this
purpose, any Subsidiary) shall terminate for any reason other than the
Optionee's death or a Justifiable Termination (as defined below) or
the Optionee's retirement for reasons of age or disability in
accordance with the then policy of the Company, the Company shall have
the right to repurchase all or any of such shares of Stock (or other
shares or securities derived therefrom) at a price equal to the
Repurchase Price at the time of such repurchase. In addition, if at
the time of such termination the Optionee holds an Option granted
under the Plan which is by its terms exercisable after such
termination, the Company shall have the right to repurchase all or any
part of the shares of Stock (or other shares or securities derived
therefrom) acquired pursuant to the exercise of such Option, at the
Repurchase Price. In the case of a termination on account of any
circumstance listed in Clause I of Section 18(a) or (b) (a
"Justifiable Termination"), the Company shall have the right to
repurchase all or any of such shares of Stock (or other shares or
securities derived therefrom) at the lesser of (i) the Option exercise
price per share or (ii) the Repurchase Price. If the option price for
any repurchased shares has been paid by the Optionee's promissory note
-11-<PAGE>
pursuant to Section 10, then the repurchase price for such shares of
Stock shall be first applied to the repayment of the outstanding
amount, if any, due under such note in respect of the repurchased
shares, and any accrued but unpaid interest thereon. The Company's
right to repurchase shares of Stock (or other shares or securities)
may be exercised at any time during the period beginning on the date
of the Optionee's termination of employment or involvement and ending
ninety (90) days after the later of (a) the date of such termination
and (b) the date on which shares of Stock (or other shares or
securities) subject to the repurchase rights of this Clause I of
Section 21(a) are acquired by the Optionee. Any such shares of Stock
(or other shares or securities) as to which the Company does not
exercise its repurchase rights within such period shall thereafter be
free of the restrictions of this Clause I.
Repurchase Price. As used herein the term "Repurchase Price"
shall mean the fair market value of a share of Stock (or other shares
or securities) as determined in accordance with the provisions of
Section 7, except that in making its determination of fair market
value of a share of Stock (or other shares and securities) the
Committee shall be entitled to take into account that the shares of
Stock (or other shares and securities) may be illiquid, may be subject
to restrictions on transfer or may constitute a minority interest in
the Company.
(b) The Committee may, in its sole and absolute discretion, also
require a key employee, as a condition to receiving any option, to enter
into a noncompetition agreement and/or nondisclosure agreement in such
form as the Committee may, from time to time in its sole and absolute
discretion, determine.
22. TAX WITHHOLDING
To the extent required by law the Company shall withhold income and
other taxes with respect to any income recognized by an Optionee or
other person relating to any Options granted under this Plan. It shall
be a condition to the Optionee's receipt of any Options that the
Optionee acknowledges and agrees to the Company's withholding of taxes
and further that if the amount of any consideration payable to the
Optionee is insufficient to pay such taxes, upon the request of the
Company the Optionee shall pay to the Company an amount sufficient for
the Company to satisfy tax withholding requirements.
Without limiting the foregoing, the Committee may in its discretion
permit any withholding obligation to be paid in whole or in part in the
form of Stock, by withholding from the shares to be issued upon exercise
of an NQO or by accepting delivery from the Optionee of shares already
owned by the Optionee in connection with withholding in respect of
exercise of an NQO. The fair market value of the shares for such
purposes shall be determined exclusively by the Committee. However, an
Optionee may not make any such payment of withholding taxes in the form
of shares of Stock previously acquired by him pursuant to the exercise
-12-<PAGE>
of any ISO unless and until such shares shall have been held by him for
at least two (2) years from the date such option was granted and at
least one (1) year from the date the option was exercised. If payment
of withholding taxes is made in whole or in part in shares of Stock
already owned by the Optionee, then the Optionee shall deliver to the
Company certificates registered in the name of the Optionee representing
shares of Stock legally and beneficially owned by such Optionee, fully
vested and free of all liens, claims and encumbrances of every kind,
such certificates to be duly endorsed or accompanied by stock powers
duly endorsed in blank by the record holder of the shares represented by
such certificates.
23. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall become effective and shall be deemed to have been
adopted on July 13, 1994, subject only to ratification by the holders of
a majority of the outstanding shares of capital stock entitled to vote
thereon (voting as a single class) within twelve (12) months after such
date. Unless the Plan shall have terminated earlier, the Plan shall
terminate on the tenth (10th) anniversary of its effective date, and no
Option shall be granted or awarded pursuant to the Plan after the day
preceding the tenth (10th) anniversary of its effective date.
-13-<PAGE>
Exhibit 1 to 1994 Stock Option Plan
Form of Stock Option Agreement
Vermont Financial Services Corp.
Stock Option Agreement
Specific Terms of the Option
Subject to the terms and conditions hereinafter set forth and the
terms and conditions of the Vermont Financial Services Corp. 1994 Stock
Incentive Plan (the "Plan"), Vermont Financial Services Corp., a
Delaware corporation (the "Company", which term shall include, unless
the context otherwise clearly requires, all Subsidiaries [as defined in
the Plan] of the Company) hereby grants the following option (the
"Option") to purchase Common Stock, par value, $___ per share (the
"Stock") of the Company:
1. Name of Person to Whom the Option is granted (the "Optionee"):
__________________________.
2. Date of Grant of Option: _______________.
3. An Option for _______ shares of Stock.
4. Option Exercise Price (per share): $ .
5. Term of Option: Subject to Section 9 below, this Option expires
at 5:00 p.m. Eastern Time on _________.
6. Exercise Schedule: Provided that on the dates set forth below
the Optionee is still employed by the Company the Option will become
exercisable as follows and as provided in Section 9 below:
Date Number of Shares Cumulative Number
____________________ ________________ ____________
____________________ ________________ ____________
____________________ ________________ ____________
____________________ ________________ ____________
____________________ ________________ ____________
____________________ ________________ ____________<PAGE>
Vermont Financial Services Corp. The undersigned hereby
accepts the grant of the Option on all
the terms set forth herein and in the
Plan
By:__________________________ X_______________________
Title:____________________ (Signature of Optionee)
Date:___________________
Optionee's Address:
________________________
________________________
OTHER TERMS OF THE OPTION
WHEREAS, the Compensation Committee (the "Committee") of the Board of
Directors of the Company has authorized the grant of this stock option
pursuant and subject to the terms of the Plan, a copy of which is the
Optionee acknowledges has been delivered to the Optionee and is hereby
incorporated herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the Company and the Optionee,
intending to be legally bound, covenant and agree as set forth on the
first page hereof and as follows:
7. Grant. Pursuant and subject to the Plan, the Company does hereby
grant to the Optionee a stock option (the "Option") to purchase from the
Company the number of shares of Stock set forth in Section 3 on the
first page hereof upon the terms and conditions set forth in the Plan
and upon the additional terms and conditions contained herein. This
Option is a [incentive] [nonqualified] stock option and [is] [is not]
intended to qualify for special federal income tax treatment as an
"incentive stock option" pursuant to Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code").
8. Option Price. This Option may be exercised at the option price
per share of Stock set forth in Section 4 on the first page hereof,
subject to adjustment as provided herein and in the Plan.
9. Term and Exercisability of Option. This Option shall expire on
the date determined pursuant to Section 5 on first page hereof and shall
be exercisable prior to that date in accordance with and subject to the
conditions set forth in the Plan and those conditions, if any, set forth
in Section 6 on first page hereof. If before this Option has been
exercised in full, the Optionee ceases to be employed by the Company for
any reason other than a termination for a reason specified in Section 18
-2-<PAGE>
of the Plan, the Optionee may exercise this Option to the extent that he
or she might have exercised it on the date of termination of his or her
employment, but only during the period ending on the earlier of (x) the
date on which the Option expires in accordance with Section 5 of this
Agreement or (y) three (3) months after the date of termination of the
Optionee's employment with the Company. If the Optionee dies before the
date of expiration of this Option and while in the employ of the Company
or during the three month period described in the preceding sentence, or
in the event of the retirement of the Optionee for reasons of disability
(within the meaning of Code Section 22(e)(3)), the Option shall
terminate on the earlier of such date of expiration or one year
following the date of such death or disability retirement. If the
Optionee dies before this Option has been exercised in full, the
personal representative of the Optionee may exercise this Option as set
forth in the preceding sentence.
10. Method of Exercise. To the extent that the right to purchase
shares of Stock has accrued hereunder, this Option may be exercised from
time to time by written notice to the Company substantially in the form
attached hereto as Exhibit A, stating the number of shares with respect
to which this Option is being exercised, and accompanied by payment in
full of the option price for the number of shares to be delivered, by
means of payment acceptable to the Company in accordance with Section 10
of the Plan.
As soon as practicable after its receipt of such notice, the Company
shall, without transfer or issue tax to the Optionee (or other person
entitled to exercise this Option), deliver to the Optionee (or other
person entitled to exercise this Option), at the principal executive
offices of the Company or such other place as shall be mutually
acceptable, a certificate or certificates for such shares out of
theretofore authorized but unissued shares or reacquired shares of its
Stock as the Company may elect; provided, however, that the time of such
delivery may be postponed by the Company for such period as may be
required for it with reasonable diligence to determine whether the
exercise of the Option and issuance of the shares will comply with any
applicable requirements of law, including the securities Act of 1933, as
amended (the "Securities Act") and applicable state securities laws, and
further, provided, that the exercise of the Option and issuance of the
shares must be either pursuant to a registration statement under the
Securities Act and applicable state securities laws or otherwise is
subject to an exemption from registration under the Securities Act and
applicable Blue Sky Laws.
Payment of the option price may be made in cash or cash equivalents,
or, in accordance with the terms and conditions of Section 10 of the
Plan, (a) in whole or in part in shares of Common Stock of the Company,
or (b) by means of the "cashless exercise" procedure described in
Section 10 of the Plan. If the Optionee (or other person entitled to
-3-<PAGE>
exercise this Option) fails to pay for and accept delivery of all of the
shares specified in such notice upon tender of delivery thereof, his or
her right to exercise this Option with respect to such shares not paid
for may be terminated by the Company.
11. Nonassignability of Option Rights. This Option shall not be
assignable or transferable by the Optionee except by will or by the laws
of descent and distribution. During the life of the Optionee, this
Option shall be exercisable only by him or her.
12. Compliance with Securities Act. The Company shall not be
obligated to sell or issue any shares of Stock or other securities
pursuant to the exercise of this Option unless the shares of Stock or
other securities with respect to which this Option is being exercised
are at that time effectively registered or exempt from registration
under the Securities Act and applicable state securities laws. In the
event shares or other securities shall be issued which shall not be so
registered, the Optionee hereby represents, warrants and agrees that he
or she will receive such shares or other securities for investment and
not with a view to their resale or distribution, and will execute an
appropriate investment letter satisfactory to the Company and its
counsel.
13. Legends. The Optionee hereby acknowledges that the stock
certificate or certificates evidencing shares of Stock or other
securities issued pursuant to any exercise of this Option will bear a
legend setting forth the restrictions on their transferability described
in Section 12 hereof, in Section 15 of the Plan, and under any
applicable agreements between the Optionee and the Company or any of its
stockholders.
14. Rights as Stockholder. The Optionee shall have no rights as a
stockholder with respect to any shares of Stock or other securities
covered by this Option until the date of issuance of a certificate to
him or her for such shares or other securities. No adjustment shall be
made for dividends or other rights for which the record date is prior to
the date such stock certificate is issued.
15. Withholding Taxes. The Optionee hereby agrees, as a condition to
any exercise of this Option, to provide to the Company an amount
sufficient to satisfy its obligation to withhold certain federal, state
and local taxes arising by reason of such exercise (the "Withholding
Amount") by (a) authorizing the Company to withhold the Withholding
Amount from his or her cash compensation, or (b) remitting the
Withholding Amount to the Company in cash; provided, however, that to
the extent that the Withholding Amount is not provided by one or a
combination of such methods, the Company in its sole and absolute
discretion may refuse to issue such shares of Stock or may withhold from
the shares of Stock delivered upon exercise of this Option that number
-4-<PAGE>
of shares having a fair market value, on the date of exercise,
sufficient to eliminate any deficiency in the Withholding Amount.
16. Termination or Amendment of Plan. The Board of Directors of the
Company may in its sole and absolute discretion at ant time terminate or
from time to time modify and amend the Plan, but no such termination or
amendment will affect rights and obligations under this Option.
17. Effect Upon Employment. Nothing in this Option or the Plan shall
be construed to impose any obligation upon the Company to employ or
retain in its employ, or continue its involvement with, the Optionee.
18. Time for Acceptance. Unless the Optionee shall evidence his or
her acceptance of this Option by execution of this Agreement within ten
(10) days after its delivery to him or her, the Option and this
Agreement shall at the option of the Company be null and void.
19. General Provisions.
(a) Amendment; Waivers. This Agreement, including the Plan,
contains the full and complete understanding and agreement of the
parties hereto as to the subject matter hereof and may not be modified
or amended, nor may any provision hereof be waived, except by a further
written agreement duly signed by each of the parties. The waiver by
either of the parties hereto of any provision hereof in any instance
shall not operate as a waiver of any other provision hereof or in any
other instance.
(b) Binding Effect. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and, to the extent provided
herein and in the Plan, their respective heirs, executors,
administrators, representatives, successors and assigns.
(c) Construction. This Agreement is to be construed in
accordance with the terms of the Plan. In case of any conflict between
the Plan and this Agreement, the Plan shall control. The titles of the
sections of this Agreement and of the Plan are included for convenience
only and shall not be construed as modifying or affecting their
provisions. The masculine gender shall include both sexes; the singular
shall include the plural and the plural the singular unless the context
otherwise requires.
(d) Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the applicable laws of the
United State of America and the law (other than the law governing
conflict of law questions) of the State of Vermont except to the extent
the laws of any other jurisdiction are mandatorily applicable.
-5-<PAGE>
(e) Notices. Any notice in connection with this Agreement shall
be deemed to have been properly delivered if it is in writing and is
delivered in hand or sent by registered mail to the party addressed as
follows, unless another address has been substituted by notice so given:
To the Optionee: To his or her address as
listed on the books of the Company.
To the Company: Vermont Financial Services Corp.
100 Main Street
Brattleboro, VT 05301
Attention: Richard O. Madden, Treasurer
Copy to:
Sullivan & Worcester
One Post Office Square
Boston, MA 02109
Attention: Christopher Cabot, Esq.
-6-<PAGE>
Exhibit A to Stock Option Agreement
[FORM FOR EXERCISE OF STOCK OPTION]
Vermont Financial Services Corp.
[Address as specified in Section 20(e)
of the Option Agreement]
RE: Exercise of Option under Vermont Financial Services Corp. 1994
Stock Incentive Plan (the "Plan")
Gentlemen:
Please take notice that the undersigned hereby elects to exercise the
stock option granted to on
, 199 by and to the extent of purchasing
shares of Common Stock, par value $.01 per share, of Vermont Financial
Services Corp. (the "Company") for the option exercise price of
$__________ per share, subject to the terms and conditions of the Stock
Option Agreement between and the Company dated as of
, 199 (the "Option Agreement") and the Plan.
The undersigned encloses herewith payment, in cash or in such other
property as is permitted under the Plan, of the purchase price for said
shares. If the undersigned is making payment of any part of the
purchase price by delivery of shares of Common Stock of the Company, he
or she hereby confirms that he or she has investigated and considered
the possible income tax consequences to him or her of making such
payments in that form. The undersigned hereby agrees to provide the
Company an amount sufficient to satisfy the obligation of the Company to
withhold certain taxes, as provided in Section 16 of the Option
Agreement.
The undersigned hereby specifically confirms to the Company that he or
she shall hold said shares subject to all of the terms and conditions of
said Stock Option Agreement and the Plan.
Very truly yours,
Date (Signed by or other
party duly exercising option)<PAGE>
Exhibit 4.1.d
West Mass Bankshares, Inc.
STOCK OPTION PLAN
1. PURPOSE
The purpose of the West Mass Bankshares, Inc. Stock Option Plan
(the "Plan") is to attract and retain the best available personnel for
positions of substantial responsibility by providing additional
incentive to such employees to whom options may be granted under this
Plan (the "Optionees") and to promote the success of West Mass
Bankshares, Inc. ("Holding Company") and its wholly-owned subsidiary,
United Savings Bank. Unless otherwise indicated, the term "Holding
Company" shall include any parent or Subsidiary of the Holding Company
which now exists or hereafter is organized or acquired by the Holding
Company. For purposes of the Plan, a "Subsidiary" means any corporation
(other than the Holding Company) in an unbroken chain of corporations,
beginning with the Holding Company, in which each of the corporations
other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain. Options
granted under the Plan may constitute either incentive stock options
(the "Incentive Options"), as defined in Section 422A of the Internal
Revenue Code of 1954, as amended (the "Code"), or nonincentive options.
2. ADMINISTRATION
(a) The Plan shall be administered by a committee of not less than
three members of the Board of Directors (the "Option Committee") to be
designated by the Board of Directors of the Holding Company. No member
of the Option Committee shall be eligible at any time during his or her
tenure on the Option Committee to receive stock options under the Plan.
A majority vote of the members of the Option Committee shall be required
for all of its actions.
(b) The Option Committee shall have the power, subject to, and
within the limits of, the express provisions of the Plan:
(i) To determine from time to time which of the eligible
persons shall be granted options under the Plan, and the time or times
when, and the number of shares for which, an option or options shall be
granted to such persons;
(ii) To prescribe the other terms and provisions (which need
not be identical) of each option granted under the Plan to eligible
persons;
(iii) To construe and interpret the Plan and options granted
under it, and to establish, amend, and revoke rules and regulations for
administration. The Option Committee, in the exercise of this power,
may correct any defect or supply any omission, or reconcile any
inconsistency in the Plan, or in any option agreement, in the manner and
to the extent it shall deem necessary or expedient to make the Plan<PAGE>
fully effective. In exercising this power, the Option Committee may
retain counsel at the expense of the Holding Company. All decisions and
determinations by the Option Committee in exercising this power shall be
final and binding upon the Holding Company and the Optionees;
(iv) To determine the duration and purposes of leaves of
absence which may be granted to an Optionee without constituting a
termination of his or her employment for purposes of the Plan; and
(v) Generally, to exercise such powers and to perform such
acts as are deemed necessary or expedient to promote the best interests
of the Holding Company with respect to the Plan.
3. STOCK
The stock subject to options under the Plan shall be shares of the
Holding Company's authorized but unissued common stock, par value $0.10
per share (the "Common Stock"). The number of shares for which options
may be granted, excluding the shares involved in the unexercised portion
of any cancelled, terminated or expired options, shall not exceed an
aggregate of 10 percent of the number of shares of Common Stock of the
Holding Company to be sold in the conversion of United Savings Bank from
the mutual to the stock form of organization, subject to adjustment as
provided in Section 9 hereof.
4. ELIGIBILITY
(a) The persons who shall be eligible to receive options under the
Plan shall be officers and other full-time employees (i.e., persons
employed 1,0000 or more hours per year) of the Holding Company. Subject
to the following provisions, the Option Committee may from time to time
grant options to one or more eligible persons.
(b) Incentive Options granted under this Plan shall be exercisable
for such periods as shall be determined by the Option Committee at the
time of grant of each such Incentive Option, but in no event shall an
Incentive Option be exercisable after the expiration of 10 years from
the date of grant; provided, however that if any employee, at the time
an Incentive Option is granted to him, owns stock representing more than
10 percent of the total combined voting power of all classes of stock of
the Holding Company (or, under Section 425(d) of the Code, is deemed to
own stock representing more than 10 percent of the total combined voting
power of all such classes of stock, by reason of the ownership of such
classes of stock, directly or indirectly, by or for any brother, sister,
spouse, ancestor or lineal descendant of such employee, or by or for any
corporation, partnership, estate or trust of which such employee is a
shareholder, partner or beneficiary), the Incentive Option granted to
him shall not be exercisable after the expiration of five years from the
date of grant. Each Incentive Option granted under this Plan shall also
be subject to earlier termination as provided in this Plan or as
provided in a particular option agreement.
(c) No person shall be eligible to receive Incentive Options under
this Plan (and all other stock option plans of the Holding Company or a
Subsidiary) in any calendar year with respect to which the underlying
-2-<PAGE>
stock has an aggregate fair market value, determined at the time the
option is granted, in excess of $100,000, plus any unused limit
carryover to such year, as defined in Section 422A(c)(4) of the Code.
For these purposes, the term "unused limit carryover" shall mean one-
half of the amount by which, for any calendar year, $100,000 exceeds the
fair market value (determined in accordance with Section 10 of this Plan
as of the date of grant of the option) of stock for which an officer or
employee was granted Incentive Options (as defined in Section 422A(b) of
the Code) in such calendar year under all stock option plans of the
Holding Company or any Subsidiary. Such unused limit carryover, when
reduced by the amount of such carryover that was used in prior calendar
years, may be taken into account, for purposes of this Section 4, in any
of the three succeeding calendar years.
5. TERMS OF THE OPTION AGREEMENT
Each option agreement shall contain such provisions as the Option
Committee shall from time to time deem appropriate. Option agreements
need not be identical, but each option agreement by appropriate language
shall include the substance of all of the following provisions:
(a) Any option shall expire on the date specified in the option
agreement, which date shall not be later than the tenth anniversary of
the date on which the option was granted. All options must be granted
by the tenth anniversary of the effective date of the Plan.
(b) The minimum number of shares with respect to which an option
may be exercised at any one time shall be 100 shares, unless the number
purchased is the total number at the time available for purchase under
the option.
(c) Subject to Section 5(b) hereof, each option shall be
exercisable in such installments (which need not be equal) and at all
times as designated by the Option Committee. Notwithstanding any other
provisions of this Plan, no Incentive Option shall be exercisable by an
Optionee while there is outstanding within the meaning of
Section 422(A)(c)(7) of the Code any other Incentive Option granted,
before the granting of such option, to such Optionee to purchase stock
in the Holding Company, or in a Subsidiary or predecessor corporation
referred to in Section 422A(b)(7) of the Code. For this purpose, an
Incentive Option shall be treated as outstanding until (1) it is
exercised in full, or (2) the Incentive Option expires solely by reason
of the expiration of its original term. Unless otherwise designated, no
option shall be exercisable within one year of the date on which the
option was granted, except in the event of a change in control or
threatened change in control of the Holding Company. In such event, all
options granted prior to such change in control or threatened change in
control shall become immediately exercisable. The term "control" shall
refer to the acquisition of 10 percent or more of the voting securities
of the Holding Company by any person or by a group acting in concert
within the meaning of Section 13(d) of the Securities Exchange Act of
1934 and the Articles of Organization and Bylaws of the Holding Company.
The term "person" refers to an individual or a corporation, partnership,
trust, association, joint venture, pool, syndicate, sole proprietorship,
-3-<PAGE>
unincorporated organization, joint stock company or similar
organization.
(d) The purchase price per share of Common Stock under each option
shall not be less than the fair market value of the Common Stock subject
to the option on the date the option is granted, subject to the
conditions contained below with respect to 10 percent shareholders. For
this purpose, the fair market value of the Common Stock shall be
determined by the Option Committee, provided, however, that (i) if the
Common Stock is admitted to quotation on the National Association of
Securities Dealers Automated Quotation System on the date the option is
granted, fair market value shall not be less than the average of the
highest bid and lowest asked prices of the Common Stock on such system
on such date, or (ii) if the Common Stock is admitted to trading on a
national securities exchange on the date the option is granted, fair
market value shall not be less than the last sale price reported for the
Common Stock on such exchange on such date or on the last date preceding
such date on which a sale was reported. If any employee, at the time an
Incentive Option is granted to him or her, owns stock representing more
than 10 percent of the total combined voting power of all such classes
of stock of the Holding Company (or, under Section 425(d) of the Code,
is deemed to own stock representing more than 10 percent of the total
combined voting power of all such classes of stock, by reason of the
ownership by such classes of stock, directly or indirectly, by or for
any brother, sister, spouse, ancestor, or lineal descendant of such
employee, or by or for any corporation, partnership, estate or trust of
which such employee is a shareholder, partner or beneficiary), the
Incentive Option granted to him shall not be exercisable after the
expiration of five years from the date of grant and the purchase price
per share of Common Stock under each option shall not be less than 100%
of the fair market value of the Common Stock subject to the option on
the date the option is granted. Each Incentive Option granted under
this Plan shall also be subject to earlier termination, as provided in
this Plan or as provided in a particular option agreement.
(e) The Optionee shall not be deemed to be the holder of, or to
have any of the rights of a holder with respect to, any shares of Common
Stock subject to such option unless and until the option shall have been
exercised pursuant to the terms thereof, the Holding Company shall have
issued and delivered the shares to the Optionee, and the Optionee's name
shall have been entered as a stockholder of record on the books of the
Holding Company. Thereupon, the Optionee shall have full voting,
dividend and other ownership rights with respect to such shares of
Common Stock.
(f) Except as provided in Section 10 hereof:
(i) All options granted pursuant to the Plan shall not be
transferable, except by will or the laws of descent and distribution,
and shall be exercisable during the Optionee's lifetime only by the
Optionee; and
(ii) No assignment or transfer of the option, or of the
rights represented thereby, whether voluntary or involuntary, by
operation of law or otherwise, shall vest in the assignee or transferee
-4-<PAGE>
any interest or right in the option whatsoever, but immediately upon any
attempt to assign or transfer the option the same shall terminate and be
of no force or effect.
(g) The option shall be subject to any provision necessary to
assure compliance with federal and state securities laws.
6. METHOD OF EXERCISE, PAYMENT OF PURCHASE PRICE
(a) Subject to Sections 5(b) and 5(c) hereof, Incentive Options
granted under this Plan may be exercised in whole or in installments, to
such extent, and at such time or times during the terms thereof, as
shall be determined by the Option Committee at the time of grant of each
such option.
(b) An option may be exercised by the Optionee delivering to the
Option Committee on any business day a written notice specifying the
number of shares of Common Stock the Optionee then desires to purchase
(the "Notice").
(c) Payment for the shares of Common Stock purchased pursuant to
the exercise of any option shall be in either (i) cash equal to the
option price for the number of shares specified in the Notice (the
"Total Option Price"), or (ii) in the discretion of the Option
Committee, shares of Common Stock of the Holding Company with a fair
market value, determined in accordance with Section 5(d) hereof, as of
the effective date of exercise of the Incentive Option, equal to or less
than the Total Option Price, plus cash, for an amount equal to the
amount, if any, by which the total Option Price exceeds the fair market
value of the Common Stock.
7. STOCK APPRECIATION RIGHTS; RELEASE OF FINANCIAL INFORMATION
(a) The Option Committee may, but shall not be obligated to,
authorize on such terms and conditions as it deems appropriate in each
case, the Holding Company to accept the surrender by the Optionee of the
right to exercise an option granted under the Option Plan (or portion
thereof) in consideration for the payment by the Holding Company of an
amount equal to the excess of the fair market value of the shares of
Common Stock subject to such option (or portion thereof) surrendered
over the option price of such shares. Such payment, at the direction of
the Option Committee, may be made in shares of Common Stock valued at
the then fair market value thereof (determined as provided in Section 5
hereof) or in cash or partly in cash and partly in shares of Common
Stock.
(b) Any election by an Optionee to exercise the stock appreciation
rights provided in this Section shall be made during the period
beginning on the third business day following the release for
publication of quarterly or annual financial information and ending on
the twelfth business day following such date. This condition shall be
deemed to be satisfied when the specified financial data appears on or
in a wire service, financial news service or newspaper of general
circulation or is otherwise first made publicly available.
-5-<PAGE>
(c) Any option surrendered as provided in this Section 7 shall be
cancelled by the Holding Company and not be subject to further grant.
(d) A copy of the Holding Company's annual report to stockholders
shall be delivered to each Optionee. Upon request, the Holding Company
shall furnish to each Optionee a copy of its most recent Form 10-K
Annual Report and each Form 10-Q Quarterly Report and Form 8-K Current
Report filed with the Securities and Exchange Commission, or the
applicable federal agency with which such reports are filed, since the
end of the Holding Company's prior fiscal year.
8. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of Common Stock pursuant to options granted
under the Plan shall constitute general funds of the Holding Company.
9. ADJUSTMENT UPON CHANGES IN CAPITALIZATION
(a) If the outstanding shares of the Holding Company's Common
Stock as a whole are increased, decreased or changed into, or exchanged
for, a different number or kind of shares or securities of the Holding
Company, whether through merger, consolidation, reorganization,
recapitalization, reclassification, stock dividend, stock split,
combination of shares, exchange of shares, change in corporate structure
or the like, an appropriate and proportionate adjustment shall be made
in the number and kinds of shares subject to the Plan, and in the share
exercise price of shares subject to the Plan, and in the number, kinds,
and the per share exercise price of shares subject to unexercised
options or portions thereof granted prior to any such change. Any such
adjustment in an outstanding option, however, shall be made without a
change in the total price applicable to the unexercised portion of the
option, but with a corresponding adjustment in the number of shares and
price for each share of Common Stock covered by the option.
(b) Upon the effective date of a dissolution or liquidation of the
Holding Company, or upon a reorganization, merger or consolidation in
which the Holding Company is not the surviving corporation, or upon the
sale of substantially all of the assets of the Holding Company to
another corporation, this Plan and the options issued hereunder shall
terminate, unless provision is made in writing in connection with such
transaction for the continuance of the Plan and the assumption of
options theretofore granted, or the substitution for such options of new
options of the successor employer corporation or a parent or subsidiary
thereof, with appropriate adjustment as may be determined and approved
by the Board of Directors of the successor to the Holding Company as to
the number and kinds of shares and the per share exercise prices, in
which event this Plan and the options theretofore granted or the new
options substituted therefor, shall continue in the manner and under the
terms so provided. Upon the occurrence of a transaction in which
provision is not made for the continuance of this Plan and for the
assumption of options theretofore granted or the substitution for such
options of new options covering the shares of a successor corporation or
a parent or subsidiary thereof (hereinafter referred to as a
"Terminating Transaction"), each officer or employee to whom an option
has been granted under this Plan (or such officer's or employee's estate
-6-<PAGE>
or a person who acquired the right to exercise the option from such
officer or employee by request or inheritance) shall be entitled prior
to the effective date of any such Terminating Transaction, (1) to
exercise, in whole or in part, his or her rights under any option
granted to him or her without regard to any restrictions on exercise
that would otherwise apply, or (2) to surrender any such option to the
Holding Company in exchange for receipt of such shares of stock or other
securities or cash as the Optionee would have received had he exercised
his option in full prior to completion of such Terminating Transaction.
To the extent that an employee, pursuant to this Section 9(b), has a
right to exercise or surrender any option on account of a Terminating
Transaction, the exercise or surrender of such option shall be
contingent upon the consummation of such Terminating Transaction.
(c) Adjustments under this Section 9 shall be made by the Option
Committee, whose determination as to what adjustment shall be made, and
the extent thereof, shall be conclusive. The Option Committee shall
have the discretion and power in any such event to determine and to make
effective provision for the acceleration of the time during which the
option may be exercised, notwithstanding the provisions of the option
setting forth the date or dates of which all or any part of it may be
exercised. No fractional shares of Common Stock shall be issued under
the Plan on account of any adjustment specified above.
10. TERMINATION OF EMPLOYMENT OR SERVICE
(a) In the event of the death of an Optionee while in the employ
of the Holding Company, the options, whether or not exercisable at the
time of the death of the Optionee, may be exercised, as provided in
Section 6 hereof, by the estate of the Optionee or by a person who
acquired the right to exercise such option by bequest or inheritance
from such Optionee, within one year after the date of such death, but no
later than the date on which the option would otherwise expire.
(b) If the employment of an Optionee is terminated by reason of
disability, as defined in Section 22(e)(3) of the Code, the options held
by such Optionee may be exercised, whether or not exercisable at the
time of such termination of employment, within one year after such
termination, but not later than the date on which such options would
otherwise expire.
(c) If the employment of an Optionee is terminated for cause,
options held by such Optionee shall, to the extent not theretofore
exercised, be cancelled immediately upon such termination. For purposes
of this Plan "Cause" shall have the meaning ascribed to it in the
Optionee's employment agreement with the Holding Company. If no such
agreement exists with respect to an Optionee, then "cause" shall be
defined, as to such Optionee, as personal dishonesty, incompetence,
willful misconduct, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties or willful violation of any
law, rule or regulation (other than traffic violations or similar
offenses) or final cease-and-desist order.
(d) If the employment of an Optionee is voluntarily or
involuntarily terminated upon a change in control of the Holding
-7-<PAGE>
Company, as defined in Section 5(c) hereof, and other than for cause, as
provided in Section 10(c) above, the Optionee shall be permitted to
exercise such options, whether or not exercisable at the time of such
termination, for a period of one year after the date of such
termination.
(e) If the employment of an Optionee is voluntarily or
involuntarily terminated for any reason other than those enumerated in
subsections (a) through (d) inclusive, above, the Optionee shall be
permitted to exercise such options, whether or not exercisable at the
time of each termination, for a period of three months after the date of
such termination, but not later than the date on which the options would
otherwise expire.
11. AMENDMENT OF THE PLAN
The Board of Directors at any time, and from time to time, may
amend the Plan, subject to any required regulatory approval and to the
limitation that, except as provided in Section 9 hereof, no amendment
shall be effective unless approved by the vote of a majority of the
total votes cast by the stockholders of the Holding Company at an annual
or special meeting held within 12 months before or after the date of
such amendment's adoption, where such amendment will:
(a) Increase the number of shares of Common Stock as to which
options may be granted under the Plan;
(b) Change in substance Section 4 hereof relating to eligibility
to participate in the Plan or Section 2 hereof relating to
administration of this Plan; or
(c) Increase the maximum term of options as provided herein.
Except as provided in Section 9 hereof, rights and obligations
under any option granted before amendment of the Plan shall not be
altered or impaired by amendment of the Plan, except with the consent of
the Optionee.
12. EFFECTIVENESS OF THE PLAN
The Plan shall become effective upon its adoption by the Board of
Directors of the Holding Company; provided, however, that (1) the grant
of Incentive Options under this Plan shall be subject to the approval of
the stockholders of the Holding Company, within 12 months before or
after the adoption of this Plan by the Board of Directors; and (2) the
effectiveness of Incentive Options granted under this Plan prior to the
date such stockholder approval is obtained shall also be subject to such
stockholder approval.
13. TERMINATION OR SUSPENSION OF OPTION PLAN
The Board of Directors at any time may terminate or suspend the
Plan. Unless sooner terminated, the Plan shall terminate on the tenth
anniversary of the effective date specified in Section 12 hereof, but
such termination shall not effect any option theretofore granted. An
-8-<PAGE>
option may not be granted while the Plan is suspended or after it is
terminated.
Rights and obligations under any option granted while the Plan is
in effect shall not be altered nor impaired by suspension or termination
of the Plan, except with the consent of the Optionee.
14. NONEXCLUSIVITY OF THE PLAN
Neither the adoption of the Plan by the Board of Directors nor the
submission of the Plan to the stockholders of the Holding Company for
approval shall be construed as creating any limitations on the power of
the Board of Directors to adopt such other incentive arrangements as it
may deem desirable, including, without limitation, the granting of stock
options otherwise than under this Plan, and such arrangements may be
either applicable generally or only in specific cases.
15. MANNER OF GRANT OF OPTIONS
Nothing contained in this Plan or in any resolution heretofore or
hereafter adopted by the Board of Directors or the Option Committee or
any other committee or by the stockholders of the Holding Company with
respect to this Plan shall constitute the granting of an option or a
promise or commitment to grant an option under this Plan. The granting
of an option under this Plan shall be deemed to occur only upon the date
on which the Option Committee, as provided for in Section 2 hereof,
shall approve the grant of such option; provided that the date of grant
of options by the Board of Directors or the Option Committee prior to
the conversion of United Savings Bank from the mutual to stock form
shall be deemed to be the effective date of such conversion.
16. TAX WITHHOLDING
The employer of an employee granted an option under this Plan shall
have the right to deduct or otherwise effect a withholding of any amount
required by federal or state laws to be withheld with respect to the
grant or exercise of any stock option or the sale of stock acquired upon
the exercise of any option in order for the employer to obtain a tax
deduction available to the employer as a consequence of such grant,
exercise or sale, as the case may be.
17. CONTINUATION OF EMPLOYMENT
Nothing contained in this Plan (or in any written option agreement)
shall obligate the Holding Company to continue to employ, for any
period, an employee to whom an option has been granted, or interfere
with the right of the Holding Company to reduce such employee's
compensation.
18. EXCULPATION AND INDEMNIFICATION
The Holding Company shall indemnify and hold harmless the members
of the Board of Directors and the members of the Option Committee, duly
appointed in accordance with Section 2 hereof, from and against any and
all liabilities, costs and expenses incurred by such persons as a result
-9-<PAGE>
of any act, or omission to act, in connection with the performance of
such persons' duties, responsibilities, and obligations under this Plan,
other than such liabilities, costs and expenses as may result from the
negligence, gross negligence, bad faith, willful conduct, or criminal
acts of such persons.
-10-<PAGE>
Exhibit 5.1
March 24, 1995
Vermont Financial Services Corp.
100 Main Street
Brattleboro, Vermont 05301
Re: Registration Statement on Form S-3/S-8 relating to
Vermont Financial Services Corp. Stock Option Plans
Gentlemen:
You have requested our opinion in connection with the Registration
Statement on Form S-3/S-8 (the "Registration Statement") to be filed by
Vermont Financial Services Corp., a Delaware corporation (the
"Company"), with respect to the issuance by the Company of up to 323,302
shares of its common stock $1.00 par value per share (the "Shares") upon
the exercise of stock options granted pursuant to one or more of the
Company's 1987 Non-Qualified Stock Option Plan, as amended, the
Company's 1988 Directors Non-Qualified Stock Option Plan, its 1994 Stock
Option Plan, and the Stock Option Plan of West Mass Bankshares, Inc.
which merged into the Company in 1994 (together, the "Plans"). We have
examined such records and documents, including the Plans, and made such
investigation of law, as we have deemed necessary in order to render
this opinion. We express no opinion herein as to any laws other than
the General Corporation Law of the State of Delaware and the federal
laws of the United States.
In our examination described in the preceding paragraph, we have
assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to the
corresponding originals of all documents submitted to us as copies, the
authenticity of the originals of such copies, and the accuracy and
completeness of all corporate records made available to us by the
Company.
Based upon and subject to the foregoing, it is our opinion that
upon the issuance of Shares by the Company and payment therefor pursuant
to the terms of the applicable Plan or Plans, such Shares will be
validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the reference to our firm under the
heading "Legal Matters" therein. In giving such consent, we do not
thereby admit that we come within the category of persons whose consent<PAGE>
Vermont Financial Services Corp.
March 24, 1995
Page Two
is required under Section 7 of the Securities Act of 1933, as amended,
or the rules and regulations of the Securities and Exchange Commission
promulgated thereunder. This opinion is being furnished to you solely
for the foregoing use and, other than in connection with such use, is
not to be disseminated, reproduced or published in any form, used for
any other purpose or relied upon by any other person or entity without
our prior written consent.
Very truly yours,
SULLIVAN & WORCESTER
CC/lam<PAGE>
Exhibit 24.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-3 and S-8 of our report, which includes explanatory
paragraphs regarding (i) our responsibility related to the Company's
consolidated balance sheet as of December 31, 1993 and the related
consolidated statements of income, changes in stockholders' equity and
cash flow for each of the two years in the period ended December 31,
1993; (ii) the Company's change in its method of accounting for certain
investments in debt and equity securities and accounting for
postretirement benefits other than pensions in 1993; and (iii) the
Company's change in its method of accounting for income taxes in 1992;
dated January 20, 1995, on our audit of the consolidated financial
statements of Vermont Financial Services Corp. We also consent to the
reference to our firm under the caption "Experts".
COOPERS & LYBRAND L.L.P.
Springfield, Massachusetts
March 22, 1995<PAGE>
