-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PYEensw5M/XHknTPKN6yD+taOCVQjS6fanTXnWyO034MX3rnDuPZ1yyUu3BeIhEF D5DBYSc50fsKho8oXcG2Lw== 0001005150-96-000103.txt : 19960416 0001005150-96-000103.hdr.sgml : 19960416 ACCESSION NUMBER: 0001005150-96-000103 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960516 FILED AS OF DATE: 19960415 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GREEN MOUNTAIN POWER CORP CENTRAL INDEX KEY: 0000043704 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 030127430 STATE OF INCORPORATION: VT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-08291 FILM NUMBER: 96547128 BUSINESS ADDRESS: STREET 1: 25 GREEN MOUNTAIN DR STREET 2: P.O.BOX 850 CITY: SOUTH BURLINGTON STATE: VT ZIP: 05402-0850 BUSINESS PHONE: 8028645731 MAIL ADDRESS: STREET 1: 25 GREEN MOUNTAIN DR STREET 2: P O BOX 850 CITY: SOUTH BURLINGTON STATE: VT ZIP: 05402-0850 DEF 14A 1 FORM DEF 14A [LOGO] 25 Green Mountain Drive P.O. Box 850 South Burlington, Vermont 05402 April 15, 1996 To Our Shareholders: You are cordially invited to attend the Annual Meeting of Shareholders of Green Mountain Power Corporation, which will be held at the headquarters building, 25 Green Mountain Drive, South Burlington, Vermont, on Thursday, May 16, 1996, at 10:00 a.m., EDST. The accompanying Notice of Meeting and Proxy Statement describe the matters to be acted on at the Meeting. For your convenience, a map showing the location of the corporate headquarters is printed on the reverse side of this letter. Regardless of the number of shares you own, it is important that your shares be represented at the Meeting. We hope that you will be able to attend personally and urge you to do so if it is at all possible. In any event, we ask that you sign and complete the enclosed proxy and return it to us promptly. If you are able to attend the Meeting, you may revoke the proxy at that time and vote your shares personally. If for any reason you are not able to attend the Meeting, your signed proxy will assure proper representation of your ownership interests in Green Mountain Power Corporation. We urge you to read the accompanying materials carefully before voting on the matters to be considered at the Meeting. Commencing at 9:00 a.m., prior to the Meeting, refreshments will be served. You are encouraged to arrive in sufficient time to complete registration before the Meeting convenes at 10:00 a.m. Following the Meeting, you are invited to attend a picnic lunch to be served on the lawn at the headquarters building. To help us to plan for the Meeting and lunch, we would appreciate your completing the enclosed reply card and returning it to us. Thank you for your continued interest in Green Mountain Power Corporation. Sincerely, DOUGLAS G. HYDE President and Chief Executive Officer MAP [LOGO] 25 Green Mountain Drive P.O. Box 850 South Burlington, Vermont 05402 NOTICE OF MEETING To the Shareholders of Green Mountain Power Corporation: Notice is hereby given that the Annual Meeting of the Shareholders of Green Mountain Power Corporation will be held at the headquarters building, 25 Green Mountain Drive, South Burlington, Vermont, on Thursday, May 16, 1996, at 10:00 o'clock in the forenoon (Eastern Daylight Savings Time), for the following purposes: Item 1. To elect four Class I Directors to serve until the Annual Meeting of Shareholders in 1999; and Item 2. To vote on such other matters as may properly come before the Meeting and any and all adjournments thereof; all as set forth in the Proxy Statement accompanying this notice. Only holders of record of Common Stock as shown on the stock transfer books of Green Mountain Power Corporation at the close of business on March 28, 1996, will be entitled to vote at the Meeting or any adjournments thereof. By Order of the Board of Directors, DONNA S. LAFFAN Secretary Date: April 15, 1996 IMPORTANT If you cannot be present and desire to have your stock voted at the Meeting, please MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY in the envelope provided. PROXY STATEMENT GREEN MOUNTAIN POWER CORPORATION 25 Green Mountain Drive P.O. BOX 850 South Burlington, Vermont 05402 ANNUAL MEETING OF SHAREHOLDERS May 16, 1996 April 15, 1996 PROXY AND SOLICITATION The accompanying proxy is solicited on behalf of the Board of Directors of Green Mountain Power Corporation (the "Company") for use at the Annual Meeting of Shareholders of the Company to be held on Thursday, May 16, 1996, and at any and all adjournments thereof. This proxy statement and the accompanying form of proxy are being sent to the shareholders on or about April 15, 1996. The cost of soliciting proxies by the Board of Directors will be borne by the Company, including the charges and expenses of brokers and others for sending proxy material to beneficial owners of Common Stock. In addition to the use of the mails, proxies may be solicited by personal interview, by telephone or by telegraph by certain of the Company's employees without compensation therefor. The Company has retained Morrow & Co. to assist in the solicitation of proxies at an estimated cost of $5,000, plus reimbursement of reasonable out-of-pocket expenses. Shareholders who execute proxies retain the right to revoke them by notifying the Corporate Secretary by mail at the above address or in person at the Annual Meeting before they are voted. A proxy in the accompanying form when it is returned properly executed will be voted at the Annual Meeting in accordance with the instructions given, and if no instructions are given, the proxy will be voted in accordance with the recommendation of the Board of Directors. STOCK OUTSTANDING AND VOTING RIGHTS On March 28, 1996, the record date for the Annual Meeting, the Company had outstanding 4,852,820 shares of Common Stock (excluding 15,856 of such shares held by the Company as Treasury Stock), which is the only class of stock entitled to vote at the Annual Meeting. Each holder of record of Common Stock on the record date is entitled to one vote for each share of Common Stock so held. The affirmative vote by the holders of a majority of the shares represented at the Annual Meeting is required for the election of Class I Directors (Item 1 herein). Abstentions and broker non-votes (when shares are represented at the Annual Meeting by a proxy specifically conferring only limited authority to vote on particular matters) will not be counted as votes in favor of or opposed to Item 1. The shares of Common Stock represented by each properly executed proxy received by the Board of Directors will be voted at the Annual Meeting in accordance with the instructions specified therein. If no instructions are specified, such shares of Common Stock will be voted FOR the election of nominees for Class I Directors (Item 1 herein). The Board of Directors knows of no other business to come before the Annual Meeting. However, if any other matters are properly presented at the Annual Meeting, or any adjournment thereof, the persons voting the proxies will vote them in accordance with their best judgment. Any proxy may be revoked by notifying the Secretary of the Company in writing at any time prior to the voting of the proxy. SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT To the knowledge of the Company, no person owned beneficially more than 5% of the outstanding Common Stock of the Company on March 28, 1996. The following table sets forth, as of March 28, 1996, information relating to the ownership of the Company's Common Stock by each Director, by each of the Executive Officers named in the Summary Compensation Table and by all Directors and Executive Officers as a group.
COMMON STOCK BENEFICIALLY OWNED (1) --------------------- Robert E. Boardman......................................... 1,392 Nordahl L Brue............................................. 2,926 (2) William H. Bruett.......................................... 2,000 Merrill O. Burns........................................... 1,776 Lorraine E. Chickering..................................... 256 John V. Cleary............................................. 2,306 Richard I. Fricke.......................................... 2,900 (3) Douglas G. Hyde............................................ 10,130 (4) Euclid A. Irving........................................... 619 Martin L Johnson........................................... 1,155 Ruth W. Page............................................... 1,100 (5) Thomas P. Salmon........................................... 1,135 Christopher L. Dutton...................................... 2,950 (6) Edwin M. Norse............................................. 1,829 A. Norman Terreri.......................................... 5,340 (7) Stephen C. Terry........................................... 2,260 (8) All directors and Executive Officers as a group (26 persons)................................................... 52,923 (1) Each listed individual exercises sole voting and investment power over all of the shares of Common Stock beneficially owned, except as noted herein below. As of March 28, 1996, no Director, nominee or listed Executive Officer owned beneficially as much as 1% of the Company's outstanding Common Stock. (2) Mr. Brue owns 2,777 of these shares directly. The remaining 149 shares are owned by Mr. Brue's children for whom Mr. Brue serves as custodian; Mr. Brue disclaims any other beneficial interest in the 149 shares owned by his children. (3) Mr. Fricke owns 2,500 of these shares directly. His wife owns the remaining 400 of these shares; Mr. Fricke disclaims any other beneficial interest in the 400 shares owned by his wife. (4) Mr. Hyde owns 9,730 of these shares directly. His wife owns the remaining 400 of these shares; Mr. Hyde disclaims any other beneficial interest in the 400 shares owned by his wife. (5) Mrs. Page owns 900 of these shares directly. Her husband owns the remaining 200 of these shares; Mrs. Page disclaims any other beneficial interest in the 200 shares owned by her husband. (6) Mr. Dutton owns 2,878 of these shares directly. The remaining 72 shares are owned by Mr. Dutton's children for whom Mr. Dutton's wife serves as custodian; Mr. Dutton disclaims any other beneficial interest in the 72 shares owned by his children. (7) Mr. Terreri owns 4,966 these shares directly. His wife owns the remaining 374 of these shares; Mr. Terreri disclaims any other beneficial interest in the 374 shares owned by his wife. (8) Mr. Terry owns 2,230 of these shares directly. His wife owns the remaining 30 of these shares; Mr. Terry disclaims any other beneficial interest in the 30 shares owned by his wife.
2 As of March 28, 1996, all Directors and Executive Officers of the Company as a group (consisting of 26 persons) beneficially owned an aggregate of 52,923 shares (or approximately 1.1% of the outstanding shares) of Common Stock. COMPLIANCE WITH THE SECURITIES EXCHANGE ACT The Company's Directors and Executive Officers are required under Section 16(a) of the Securities Exchange Act of 1934 to file reports of ownership and changes in ownership with the Securities and Exchange Commission and the New York Stock Exchange. Based on a review of those reports and written representations from the Directors and Executive Officers, the Company believes that during 1995 all requirements applicable to Directors and Executive Officers have been complied with. ITEM 1. ELECTION OF DIRECTORS The Board of Directors of the Company is divided into three classes, as nearly equal in number as possible. Each class serves three years, with the terms of office of the respective classes expiring in successive years. The term of office of Directors in Class I expires at the 1996 Annual Meeting. The Board of Directors proposes that the nominees described below, all of whom are currently serving as Class I Directors, be elected to Class I for a new term of three years and until their successors are duly elected and qualified. The Board of Directors has no reason to believe that any of the nominees will not serve if elected, but if any of them should become unavailable to serve as a Director, and if the Board of Directors designates a substitute nominee, the persons named as proxies will vote for the substitute nominee designated by the Board of Directors. Directors will be elected by a majority of the votes cast at the Annual Meeting. If elected, all nominees are expected to serve until the 1999 Annual Meeting and until their successors are duly elected and qualified. CLASS I NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS (Term Expiring in 1999)
Director Since ----------- William H. Bruett Senior Vice President, Group Product Manager of 1986 Painewebber, Inc.; Director of Painewebber Trust Co. and Chairman of Painewebber International Bank LTD., London, Subsidiaries of Painewebber Group, Inc., since 1990; President, Chief Executive Officer and Director of Chittenden Corporation and of Chittenden Trust Company from 1984 to 1990. (52) Richard I. Fricke Director Emeritus of National Life Insurance Company; 1984 Director of Sentinel Group Funds, Inc. and of Sentinel Pennsylvania Tax-Free Fund, Inc. from 1977 to 1995, Chairman from 1977 to 1983; President and Chief Executive Officer of the Bank of Vermont from 1987 to 1989; Retired Chairman of the Board and Chief Executive Officer of National Life Insurance Company; Fellow of the American Bar Foundation; Member of the Board of Overseers, Middlebury College, of the Cornell University Council and of the Cornell Law School Advisory Council. (74) Martin L. Johnson President of The Johnson Company (environmental and 1991 engineering consultants) since 1978; Secretary of the State of Vermont Agency of Environmental Conservation from 1973 to 1978. (68) 3 Thomas P. Salmon Chairman of the Board of the Company since 1983; 1978 President of the University of Vermont since 1993; Interim President of the University of Vermont from 1991 to 1993; On leave from Salmon and Nostrand, Attorneys, Bellows Falls, Vermont; Governor of the State of Vermont from 1973 to 1977; Director of Vermont Electric Power Company, Inc., of National Life Insurance Company, of Union Mutual Insurance Company and of BankNorth Group, Inc. (63) CLASS II DIRECTORS CONTINUING IN OFFICE (Term Expiring in 1997) Robert E. Boardman Chairman of Hickok and Boardman, Inc. (insurance 1974 agency); Director of Key Bank, of National Life Insurance Company and of Mount Mansfield Corporation (recreation); Trustee of Lake Champlain Maritime Museum. (63) Merrill O. Burns Senior Vice President and Executive Corporate 1988 Development Officer, BankAmerica Corporation since 1991; President and Managing Director, BankAmerica International from 1988 to 1991. (49) Douglas G. Hyde President, Chief Executive Officer and Chairman of the 1986 Executive Committee of the Company since 1993; Executive Vice President and Chief Operating Officer of the Company from 1989 to 1993; Executive Vice President from 1986 to 1989; Director of Vermont Yankee Nuclear Power Corporation, of Vermont Electric Power Company, Inc., of Edison Electric Institute, of Vermont Business Roundtable, and of Howard Bank. (53) Ruth W. Page Writer, Editor and Radio Commentator; past member of the 1985 Northeast Energy Council of the United States Department of Energy. (75) CLASS III DIRECTORS CONTINUING IN OFFICE (Term Expiring in 1998) Nordahl L. Brue Chairman of Bruegger's Corporation (quick-service 1992 restaurants); Chairman of the Executive Committee of Waterbury Holdings, LLC (specialty food manufacturing and distribution business); Principal of Champlain Management Services, Inc. (real estate development and management enterprises); Director of BankNorth Group, Inc.; Stockholder, Sheehey Brue Gray & Furlong, P.C., Attorneys, Burlington, Vermont; Director and Officer of Vermont Business Roundtable; Member of the Governor's Council of Economic Advisors. (51) 4 Lorraine E. Chickering President of Public and Operator Services of Bell 1994 Atlantic Corporation since 1993; Vice President, Quality, and Vice President, Operations and Engineering of Chesapeake and Potomac Telephone Company, a subsidiary of Bell Atlantic Corporation, from 1991 to 1993; Assistant Vice President, Marketing Operations of Bell Atlantic Corporation from 1989 to 1991. (45) John V. Cleary Retired Chief Executive Officer and President of the 1980 Company; Chief Executive Officer, President and Chairman of the Executive Committee of the Company from 1983 to 1993. (67) Euclid A. Irving Partner, Paul, Hastings, Janofsky & Walker, Attorneys, 1993 New York, New York, since 1990; Partner, Mudge Rose Guthrie Alexander & Ferdon, Attorneys, New York, New York from 1984 to 1990. (43)
BOARD COMPENSATION, OTHER RELATIONSHIPS MEETINGS AND COMMITTEES Compensation During 1995, each Director of the Company, except the President, earned an annual fee of $9,500 for service as a Director. In addition to the annual fee, the Chairman of the Board earned $22,500 for service as Chairman of the Board in 1995. The President was not paid any fees for service as a Director. The Chairmen of the Audit, Compensation, Nominating, Special Issues and Subsidiaries Oversight Committees earned annual fees of $2,500 each for service in such capacity. The President, who is Chairman of the Executive Committee, was not paid any fee for service in such capacity. For attendance at meetings of the Board of Directors and of all committees of the Board, Directors other than the President earned $650 for each meeting attended in person (plus $350 for any meeting that occurred on the same day as another meeting) and $350 for participation by means of conference telephone. Travel and lodging expenses incurred by Directors attending Board or committee meetings are paid by the Company. The Company also maintains a Deferred Compensation Plan for Directors pursuant to which Directors may defer receipt of all or part of the fees otherwise payable to them for service as Directors. Other Relationships Mr. Nordahl L. Brue, a Director of the Company, is a stockholder in the law firm of Sheehey Brue Gray & Furlong, P.C. In prior years, the Company has retained the services of Sheehey Brue Gray & Furlong, P.C. as special counsel and has retained Sheehey Brue Gray & Furlong, P.C. to represent the Company in certain matters during 1996. The Company paid Sheehey Brue Gray & Furlong, P.C. $156,236 for legal services rendered in 1995. Meetings of the Board During 1995, the Board of Directors held seven regular meetings and one special meeting. During such year, no Director attended less than 86% of the aggregate number of meetings of the Board of Directors and the committees on which such Director served. 5 Committees of the Board The Board of Directors has six standing committees, an Executive Committee, an Audit Committee, a Nominating Committee, a Compensation Committee, a Special Issues Committee and a Subsidiaries Oversight Committee. Members of the Committees are appointed annually by the Board of Directors. The Executive Committee is vested with the powers of the Board of Directors in the management of the current and ordinary business of the Company, except as otherwise provided by law. The present members of the Executive Committee are Douglas G. Hyde, Chairman, William H. Bruett, Merrill O. Burns, John V. Cleary, Richard I. Fricke and Thomas P. Salmon. During 1995, the Executive Committee did not meet. The Audit Committee annually recommends to the Board of Directors the appointment of independent public accountants of the Company, reviews the scope of audits and receives, reviews and takes action deemed appropriate with respect to audit reports submitted and other audit matters. The present members of the Audit Committee are Richard I. Fricke, Chairman, William H. Bruett, Merrill O. Burns, Lorraine E. Chickering, Euclid A. Irving, Martin L. Johnson and Ruth W. Page. The Audit Committee met twice during 1995. The function of the Nominating Committee is to recommend to the Board of Directors persons selected by the Committee for nomination to the Board of Directors. The Committee also reviews the Company's organizational plans and activities to assure the development and continuity of management leadership. The present members of the Nominating Committee are William H. Bruett, Chairman, Nordahl L. Brue, John V. Cleary, Douglas G. Hyde, Martin L. Johnson, Ruth W. Page and Thomas P. Salmon. This Committee met once during 1995. The Nominating Committee will consider nominees recommended by shareholders. The names of any such nominees should be forwarded to the Corporate Secretary, Green Mountain Power Corporation, 25 Green Mountain Drive, P.O. Box 850, South Burlington, Vermont 05402, who will submit them to the Nominating Committee for its consideration. The Compensation Committee is charged with the responsibility of reviewing and making recommendations to the Board of Directors regarding the annual salaries of Officers and incentive awards of Officers and key management personnel of the Company, recommending to the Board of Directors any needed revisions to the compensation of Officers and of otherwise assisting the Board of Directors in discharging its responsibilities in connection with the compensation of Officers. The present members of the Compensation Committee are Merrill O. Burns, Chairman, Robert E. Boardman, William H. Bruett, Lorraine E. Chickering, Richard I. Fricke, Euclid A. Irving and Thomas P. Salmon. The Compensation Committee met five times during 1995; two of such meetings were held by conference telephone. The Special Issues Committee addresses unusual, extraordinary or miscellaneous issues that confront the Company from time to time. The present members of the Special Issues Committee are John V. Cleary, Chairman, Nordahl L. Brue, Douglas G. Hyde, Euclid A. Irving and Thomas P. Salmon. The Special Issues Committee met three times during 1995. The Subsidiaries Oversight Committee oversees the non-utility operations of the Company. The present members of the Subsidiaries Oversight Committee are Martin L. Johnson, Chairman, and Euclid A. Irving. The Subsidiaries Oversight Committee met four times during 1995. 6 EXECUTIVE COMPENSATION The following Summary Compensation Table shows compensation earned by the Executive Officers named in the table (the "Named Executive Officers") for services rendered to the Company during fiscal years 1995, 1994 and 1993. SUMMARY COMPENSATION TABLE
- -------------------------------------------------------------------------------------------------------------- Annual Compensation(1) Long-Term Compensation ------------------------------------------------------------ Awards Payouts ------------------------------ Restricted Stock All Other Incentive Other Award(s) Options LTIP compensation Name and Principal Position Year Salary (2) (4) (3) SARS payouts (3)(5) =========================== ==== ======== =========== ========= ============ ======= ======== ========== Douglas G. Hyde 1995 $215,754 $ -- $ 3,888 -- $0 $0 $5,545 President and Chief 1994 $206,468 $56,930 $21,337 $56,929 $0 $0 $6,144 Executive Officer 1993 $179,243 $ 0 $ --$ -- $0 $0 $5,681 A. Norman Terreri 1995 $161,344 $ -- $ 2,886 $ -- $0 $0 $5,630 Executive Vice President and 1994 $153,839 $42,240 $20,837 $42,238 $0 $0 $5,211 Chief Operating Officer 1993 $144,023 $ 0 $ --$ -- $0 $0 $5,207 Edwin M. Norse 1995 $139,520 $ -- $ 1,185 $ -- $0 $0 $4,623 Vice President and General 1994 $120,247 $31,672 $20,837 $15,836 $0 $0 $4,192 Manager, Energy Resources and Sales 1993 $110,373 $ 0 $ --$ -- $0 $0 $3,679 Christopher L. Dutton 1995 $125,703 -- $ 1,098 $ -- $0 $0 $4,284 Vice President, Finance and 1994 $112,102 $29,326 $20,837 $14,664 $0 $0 $3,543 Administration, Chief Financial Officer and Treasurer 1993 $103,268 $ 0 $ --$ -- $0 $0 $3,351 Stephen C. Terry 1995 $123,476 $ -- $ 1,023 $ -- $0 $0 $4,154 Vice President and General 1994 $103,717 $27,324 $21,337 $13,663 $0 $0 $3,731 Manager, Retail Energy Services 1993 $ 94,814 $ 0 $ --$ -- $0 $0 $3,040 - -------------------------------------------------------------------------------------------------------------- - ------------ (1) Amounts shown include salary and incentive earned by the Named Executive Officers on the basis of the Company's operating results in 1993 and 1994, as well as amounts earned but deferred at the election of those officers. The amount of the incentive to be awarded for 1995 has not yet been determined. (2) Certain of the Company's officers, including the Named Executive Officers, were designated to participate in the Company's Management Incentive Plan, adopted in December 1985 and amended in December 1990. Annual awards could have amounted to a maximum of 10% to 30% of a participant's salary depending on such participant's position and certain corporate performance standards. Distributions to participants could have been made in three annual installments, depending on the amount of the award. The Management Incentive Plan, as it applied to officers, was superseded in 1994 by the Compensation Program for Officers and Certain Key Management Personnel (the "Compensation Program"). Payments made in the last three years under the Management Incentive Plan, based on the Company's and the participants' performance in those years are set forth in the Incentive column of this Summary Compensation Table. (3) The restricted share awards for 1994 were made in accordance with the Company's Compensation Program. No restricted share awards have yet been made for 1995. See Compensation Committee Report. Regular quarterly dividends are paid on the shares and reported as part of other compensation. At December 31, 1995, the aggregate value of all restricted stock holdings, based on the market value of the shares at December 31, 1995, without giving effect to the diminution of value attributed to the restrictions on such stock, of Messrs. Hyde, Terreri, Norse, Dutton, and Terry, respectively, were $61,355, $45,538, $17,066, $15,818, and $14,735. (4) The 1995 amounts shown in this column represent dividends paid on restricted shares awarded under the Compensation Program. The 1994 amounts shown in this column represent a one-time payment to each of the Named Executive Offiicers for purchase of their Company assigned vehicle in conjunction with the elimination of Company provided vehicles. 7 (5) The total amounts shown in this column for the last fiscal year consist of the following: (i) Benefits attributable to Company-owned life insurance policy: Mr. Hyde $1,045, Mr. Terreri $1,839, Mr. Norse $437, Mr. Dutton $513, and Mr. Terry $450. (ii) Company matching contributions to the Employee Savings and Investment Plan: Mr. Hyde $4,500, Mr. Terreri $3,791, Mr. Norse $4,186, Mr. Dutton $3,771, and Mr. Terry $3,704.
Variable Compensation Plan Awards for 1995 Performance As of April 1996, the Compensation Committee of the Board of Directors has not determined the amounts of any incentive awards to be paid to the Named Executive Officers under the Compensation Program on the basis of 1995 operating results for 1995. See Compensation Committee Report. COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION The Compensation Committee of the Board of Directors (the "Board") is responsible for administering executive compensation plans as authorized by the Board and recommending executive compensation plans and compensation levels for the officers of the Company, including the Chief Executive Officer, to the Board for approval. The Compensation Committee is also responsible for reviewing and making recommendations to the Board regarding incentive awards pursuant to the Compensation Program for executives and certain key management personnel. The Compensation Committee considers all executive compensation issues and makes recommendations on such issues to the full Board for approval. Set forth below is the report of the Compensation Committee describing the Company's Compensation Program and the basis upon which the 1995 compensation determinations were made. Compensation Philosophy It is the philosophy of the Company that executive compensation should be competitive in the marketplace, aligned with corporate performance, and promote the strategic objectives of the Company. Specifically, base compensation for executives should compare favorably with organizations competing for similar talent; should provide an opportunity for officers and other key management personnel to share in the success of the Company by aligning a portion of compensation (variable compensation) to corporate performance results; should encourage a longer-term view by paying part of an earned variable compensation award in common stock that is subject to five-year restriction and forfeiture provisions; and should foster and reinforce teamwork among officers and other key management personnel. The Company's Compensation Program for Officers and Certain Key Management Personnel is designed to meet these objectives. It comprises two components, base salary and incentive compensation, which are described below. Base Salary Base salaries under the Compensation Program are intended to provide a competitive rate of fixed compensation. Base salary levels are assessed by compiling and analyzing salary information from various survey sources on an annual basis. Survey sources include the Mercer Finance Accounting & Legal Compensation Survey, the Wyatt Top Management Report, and the Edison Electric Executive Compensation Survey. The companies utilized from such surveys are of a similar size or have other operating characteristics similar to the Company. The Compensation Committee believes these companies are representative of the Company's main competition for executive talent. Consequently, the compensation survey groups include companies that are different from the companies in the Duff & Phelps Electric Utility Index and the S&P 500 Composite Index used for the Performance Graphs. Base salaries are intended to be managed within a plus or minus 10% range around the market average of base salaries for similar positions, as determined from the survey analysis. The market average and the range may or may not change from year to year depending on movement in the market and, therefore, base salaries may not be increased annually. Actual base compensation within the market range depends on internal equity, overall scope of responsibilities of the position, recruitment needs, and significant individual performance variations. 8 The market ranges have been incorporated into three organization bands (in lieu of job grades). These bands may be modified from time to time by direction of the Board or the Chief Executive Officer. These bands reflect functional similarities of the positions and their impact on the organization. Additionally, these bands signify varying levels of participation in the variable compensation component. The band assignments are determined on the basis of survey data and the functions of the position. Band A includes the President and Chief Executive Officer and the Executive Vice President and Chief Operating Officer; Band B includes the Vice Presidents and General Counsel; Band C includes all other Executive Officers and key management personnel. Variable Compensation Each Executive Officer is eligible to earn additional compensation under the Compensation Program when the Company's performance meets or exceeds various performance objectives. The purpose of the variable compensation component is to tie compensation directly to the achievements of key corporate-wide objectives. Awards earned are paid in cash, stock grants and restricted stock grants as deemed appropriate by the Compensation Committee. Each organization band has a different variable compensation opportunity with threshold, target and maximum percentage requirements, as set forth below. Award Table VARIABLE COMPENSATION OPPORTUNITIES AS A % OF BASE SALARY BAND THRESHOLD TARGET MAXIMUM - ---- ---------- ------ ------- A .... 25% 50% 75% B..... 17.5% 35% 52.5% C..... 12.5% 25% 37.5% Corporate performance measures have been established for purposes of generating the variable compensation award. The measures used to determine variable compensation are: Return on Equity; Total Shareholder Return; Rates; Customer Satisfaction; and Reliability. These measures are expected to remain substantially the same from year-to-year. They may change, however, as the Company revisits its strategic and operational plans. Performance objectives associated with these measures are established for each fiscal year by the Compensation Committee and reviewed by the Board. After the close of each year, the Compensation Committee, with input from the Chief Executive Officer, determines the degree to which these performance objectives were accomplished to ascertain if variable compensation awards are to be paid. If the threshold level of performance is not met, an award will not be paid with respect to that specific performance measure. No variable awards will be paid unless earnings, after subtracting the variable awards, are greater than dividends paid in the year for which variable compensation is to be awarded. Individual performance may be taken into consideration in determining the final award. An award earned for Band A individuals is paid as follows: one-fourth in cash, one-fourth in stock grants and one-half in restricted stock grants. For Band B and C individuals, the award is paid one-third in cash, one-third in stock grants and one-third in restricted stock grants. 1995 Compensation Action In late 1994, the Company made organizational changes that affected the responsibilities of several of the Executive Officers of the Company. Consistent with the program described above, the Chief Executive Officer made recommendations regarding salary adjustments for these Executive Officers based on market data for comparable positions compiled by an independent compensation consultant. The recommended adjustments were approved by the Compensation Committee and subsequently the Board of Directors effective January 1, 1995. 9 In May 1995, the Company's Chief Executive Officer reviewed with the Compensation Committee and the Board of Directors competitive market data for each Executive Officer position, except that of the Chief Executive Officer, together with each Executive Officer's individual performance for 1994 and objectives for 1995. The Company's performance for 1994 and performance targets for 1995 were also reviewed. Based on the foregoing, the Chief Executive Officer recommended to the Compensation Committee that no base salary adjustments for Executive Officers be made in May 1995. Based on the Company's 1994 performance, the Chief Executive Officer also recommended to the Committee that variable compensation awards be paid to the Executive Officers. The Compensation Committee and, subsequently, the Board accepted the foregoing recommendations and the variable compensation awards are reflected in the Summary Compensation Table. The Company has reviewed its compensation policies and programs in light of Section 162(m) of the Internal Revenue Code and has determined that Section 162(m) will have no impact on its executive compensation program in 1995 because no Executive Officer will receive compensation for such year in excess of the $1 million threshold. Chief Executive Officer Compensation The Compensation Committee reviewed the salary of the Chief Executive Officer and compared it to salaries paid to chief executives of utility companies and of other companies of similar size. The survey analysis and performance measurements described above were used to determine the base salary and the variable compensation for the Chief Executive Officer. In May 1995, the Compensation Committee presented its report and recommendations to the Board of Directors for approval. The Board accepted the Compensation Committee's recommendations not to increase the base salary of the Chief Executive Officer in May 1995, consistent with the action taken on all other officers base compensation, but to approve a variable compensation award based on 1994 performance. That award is reflected in the Summary Compensation Table. Variable compensation awards based on the year ended 1995 have not been determined at this time. Conclusion The Compensation Committee believes the Company's executive compensation program appropriately aligns executive compensation to individual and corporate performance and shareholder value, is competitive with the market and is sensitive to the concerns of customers, shareholders, and other constituencies. Compensation Committee -------------------------------------- Robert E. Boardman Richard I. Fricke William H. Bruett Euclid A. Irving Merrill O. Burns, Chairman Thomas P. Salmon Lorraine E. Chickering 10 PERFOMANCE GRAPHS The following graphs compare the total return on investment (change in stock price plus reinvested dividends) performance of the Company with that of the Duff & Phelps Electric Utility Index as calculated by Duff & Phelps and the S&P 500 Composite Index calculated by Standard & Poor's Corporation. The Duff & Phelps Electric Utility Index is comprised of 87 electric utility companies. Company performance as compared to this index is used to determine a portion of awards under the Company's Compensation Program for Officers and key management personnel. The comparison of total return on investment for each of the periods assumes $100 was invested on December 31, 1990 (for the five-year graph) or December 31, 1985 (for the 10-year graph) in each of: the Company; the Duff & Phelps Electrics; and the S&P 500 Composite Index. The performances of the compared investments on a total return basis are quite sensitive to the market price prevailing on the date when the periods that are depicted on the graphs begin. Five-Year Comparison Of Return Assuming Quarterly Reinvestment of Dividends [Graph] 1990 1991 1992 1993 1994 1995 --------- --------- --------- --------- --------- --------- GMP............ $100.00 $144.60 $171.28 $170.49 $166.01 $179.07 D&P Electrics . $100.00 $128.78 $140.25 $153.31 $137.05 $175.38 S&P 500........ $100.00 $130.34 $140.27 $154.35 $156.44 $215.01 11 Ten-Year Comparison Of Return Assuming Quarterly Reinvestment of Dividends [Graph]
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 --------- --------- -------- -------- -------- -------- -------- -------- -------- -------- -------- GMP........... $100.00 $143.86 150.53 142.30 175.97 163.81 236.87 280.58 279.29 271.95 293.34 D&P Electrics..... $100.00 131.75 119.66 141.53 178.83 177.32 228.35 248.68 271.84 243.01 310.99 S&P 500....... $100.00 118.62 124.76 145.34 191.25 185.30 241.51 259.92 286.00 289.88 398.41
PENSION PLAN INFORMATION The following table shows annual pension benefits payable pursuant to the Company's Retirement Plan to all covered employees, including Executive Officers, upon retirement at age 65, in various compensation and years-of-service classifications, assuming the election of a retirement allowance payable as a life annuity. The retirement benefits in connection with the separate life insurance plan referred to below are in addition to those described in the following table. PENSION PLAN TABLE Annual Average Base Estimated Annual Compensation in 3 Retirement Benefits Consecutive Highest at Normal Retirement Age Paid Years out of Last of 65 Years 10 Years Preceding Credited Years of Service* Retirement ----------------------------- ----------- 15 20 25 30 35 & Over -- -- -- -- --------- $75,000................ 16,065 21,420 26,775 32,l30 37,485 $100,000............... 22,065 29,420 36,775 44,l30 51,485 $125,000............... 28,065 37,420 46,775 56,l30 65,485 $150,000**............. 34,065 45,420 56,775 68,130 79,485 - ----------- *Credited years of service (including service credited with other companies), as of December 31, 1995, for each of the following Executive Officers were as follows: D. G. Hyde 17.9 years; A. N. Terreri 33.5 years; E. M. Norse 25.6 years; C. L. Dutton 10.8 years; and S. C. Terry 9.8 years. **Compensation cap for 1993 is $235,840; and for 1994 and 1995 is $150,000. 12 All employees, including Executive Officers of the Company, are covered by the Company's Retirement Plan if they have been employed for more than a year. This Plan is a defined benefit plan providing for normal retirement at age 65. Early retirement may be taken commencing with the first of any month following the attainment of age 55, provided at least ten years of continuous service have been completed. For employees with at least 10 years of continuous service, the accrued benefits are reduced as follows if retirement occurs prior to age 62: Age at Retirement Reduction of Benefits -------------------- -------------------------- 61 5% 60 10% 59 15% 58 20% 57 25% 56 32% 55 37% For employees with at least five but less than 10 years of continuous service who commence benefits before age 65, benefits are actuarially reduced. The Company has amended the Plan to allow the full accrued benefit to be payable after age 60 with 10 years of credited service, while maintaining the 37% reduction at age 55, effective for members of the collective barganing unit. Retirement benefits are not subject to any deductions for Social Security or other offset amounts. Retirement benefits are based on final average base compensation and length of service. Final average compensation is the average of the compensation (limited to base salary for Executive Officers, which is shown in the Salary column of the Summary Compensation Table for the Named Executive Officers, and straight-time payroll wages for other employees) for the three highest consecutive years out of the final 10 years of employment. Effective January 1, 1989, the normal retirement benefit is equal to 1.1% of the final average compensation up to covered compensation plus 1.6% of final average compensation over covered compensation multiplied by each year of credited service up to 35 years. Executive Officers and key management personnel of the Company, including the Named Executive Officers, participate in a separate life insurance plan. Under this separate plan, the Company has purchased life insurance on the lives of the Executive Officers and key management personnel to provide life insurance benefits to them in an amount equal to four times salary for the most senior Executive Officer (President and Chief Executive Officer), three times salary for the next most senior Executive Officers (Executive Vice President and Chief Operating Officer, and Vice Presidents) and two times salary for the third most senior Executive Officers and key management personnel (General Counsel, Assistant Vice Presidents, Assistant General Counsel, Assistant Treasurer, Controller and General Manager, Administrative Service). The plan also provides retirement and survivor's benefits for a period of fifteen years following retirement as a supplement to the Company's Retirement Plan in an amount equal to 44% of final salary for the most senior Executive Officer, 33% of final salary for the next most senior Executive Officers and 22% of final salary for the third most senior Executive Officers and key management personnel. Retirement benefits will be paid out of the Company's general assets. The life insurance benefits are designed so that the Company does not expect to incur any significant net expense in implementing this part of the plan. The retirement benefits are partially covered by the life insurance coverage obtained by the Company. These costs cannot be properly allocated or determined for any one plan participant because of the overall plan assumptions. The Company is recording the estimated cost of this plan on a current basis and will record as income life insurance benefits when they occur. The Company has adopted a Deferred Compensation Plan pursuant to which Executive Officers and key management personnel may elect to defer a portion of their salaries. Amounts deferred are credited to a separate account for each participant. The balance in a participant's account will be paid to him or her or his or her beneficiary according to their election form. The Company has entered into severance contracts with 17 of its Executive Officers and key management personnel, including the Named Executive Officers, under which the Company has certain obligations to each affected Executive Officer if there is a change in control of the Company (as defined 13 below), and if the Executive Officer's employment is involuntarily terminated without cause or is voluntarily terminated by the Executive Officer with good reason (as defined below) within two years after such change in control. The severance contracts provide for payments of 2.99 times the base salaries of the affected Executive Officers, for continuation of health, medical and other insurance programs for such Executive Officers for twenty-four months after the termination of employment of such Executive Officers following a "change in control" of the Company and for payment of an amount equal to the actuarial value of up to twenty-four additional months of credited service under the Company's Retirement Plan after such termination. A "change in control of the Company" will be deemed to have occurred under the severance contracts when a person secures the beneficial ownership of 25% or more of the voting power of the Company's then outstanding securities, when there has been a new majority of members serving on the Board of Directors for two consecutive years or when the Company's shareholders approve a merger or consolidation of the Company with another corporation where the outstanding voting securities of the Company do not continue to represent at least 80% of the combined voting power of the Company or the surviving entity. Under the severance contracts, the Board of Directors has limited discretion to determine whether a change of control of the Company has, in fact, taken place. An Executive Officer may terminate his or her employment "with good reason" following a change in control if the Executive Officer is assigned duties inconsistent with his or her responsibilities before the change in control occurred, if the Company's headquarters are relocated more than 50 miles from the present location, if the Executive Officer is required to relocate more than 50 miles from his or her present location, if the Executive Officer's compensation or benefits are reduced or adversely affected (other than as part of an overall adjustment of executive compensation or benefits) or if the Company does not obtain an agreement from its successor to perform under the severance contracts. RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS The Board of Directors on December 11, 1995 appointed the firm of Arthur Andersen LLP to serve as independent certified public accountants for the calendar year 1996. The appointment was made upon the recommendation of the Audit Committee. Arthur Andersen LLP has served the Company in this capacity continuously since 1988. Representatives of the firm are expected to attend the Annual Meeting to make statements if they desire and to respond to appropriate questions. 1997 SHAREHOLDER PROPOSALS A shareholder proposal must be received by the Secretary of the Company no later than December 13, 1996, to be included in the proxy materials for the Company's next Annual Meeting. DISCRETIONARY AUTHORITY While the Notice of Annual Meeting of Shareholders refers to such other matters as may properly come before the Meeting, the only matters which the Management intends to present or knows will be presented at the Meeting are those matters set forth in the Notice of the Meeting. However, the enclosed proxy gives discretionary authority to the persons named therein to act in accordance with their best judgment in the event any additional matters should be presented at the Meeting. By Order of the Board of Directors DONNA S. LAFFAN Secretary South Burlington, Vermont April 15, 1996 14 Please mark [ x ] your choices like this This proxy will be voted as directed, or in the absence of specific directions, FOR Item 1. Item 1 -- Election of the following nominees as Directors: Class I: William H. Bruett, Richard I. Fricke, Martin L. Johnson, Thomas P. Salmon, to serve until the 1999 Annual Meeting. WITHHELD FOR FOR ALL [ ] [ ] Withheld for the following nominee(s) only; print name(s) - --------------------------------------------------------- Item 2. -- To vote on such other matters as may properly come before the meeting and any and all adjournments thereof. Signature(s)_____________________________________________ Date__________________ NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. GREEN MOUNTAIN POWER CORPORATION 25 Green Mountain Drive South Burlington, Vermont The undersigned hereby appoints Douglas G. Hyde, A. Norman Terreri and Donna S. Laffan as Proxies, each with the power to appoint a substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side, all the shares of Common Stock of Green Mountain Power Corporation held of record by the undersigned on March 28, 1996, at the Annual Meeting of Shareholders to be held on May 16, 1996, or any adjournment thereof. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. (Please date and sign on reverse side) CONFIDENTIAL VOTING INSTRUCTIONS TO CHITTENDEN CORPORATION AS TRUSTEE UNDER THE GREEN MOUNTAIN POWER CORPORATION ESIP PLAN The Trustee will vote as directed or, in the absence of specific directions, FOR Item 1. I hereby direct that voting rights pertaining to shares of stock of Green Mountain Power Corporation held by the Trustee and allocated to my account shall be exercised at the Annual Meeting of Shareholders of Green Mountain Power Corporation, to be held on May 16, 1996, and all adjournments thereof: Item 1 - Election of the following nominees as Directors: Class I: William H. Bruett, Richard I. Fricke, Martin L. Johnson, Thomas P. Salmon, to serve until the 1999 Annual Meeting. Withheld for the following nominee(s) only; print name(s) WITHHELD FOR FOR ALL [ ] [ ] ________________________________________________________ Item 2 - To vote on such other matters as may properly come before the Meeting and any and all adjournments thereof. _____________________________________________ Date _____________________________________________ Signature of Participant You are invited to join us on May 16, 1996 for Green Mountain Power Corporation's Annual Meeting of Shareholders. Each shareholder is welcome to bring a guest. Please complete and return this card ONLY IF YOU PLAN TO ATTEND. The return of this card is not required for attendance at the meeting, but will assist us in making appropriate arrangements for you and your guest. (please check box) Meeting Lunch - ---------------------------------------- [ ] [ ] Your Name (Please Print) - ---------------------------------------- [ ] [ ] Spouse (Please Print) - ---------------------------------------- [ ] [ ] Guest (Please Print) - ---------------------------------------- [ ] [ ] Guest (Please Print) PLEASE RETURN BY MAY 3, 1996. Thank you. NO POSTAGE NECESSARY IF MAILED IN THE UNITED STATES BUSINESS REPLY MAIL FIRST CLASS MAIL PERMIT NO. 286 SO. BURLINGTON, VT Postage will be paid by addressee PENNY J. COLLINS GREEN MOUNTAIN POWER CORPORATION P. O. BOX 850 BURLINGTON VT 05402-9917 -----END PRIVACY-ENHANCED MESSAGE-----