[DESCRIPTION] 1993 10K FILING
<COVER>
March 31, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: CHITTENDEN CORPORATION - REGISTRATION NO. 0-7974
ANNUAL REPORT (ON FORM 10-K)
To Whom It May Concern:
Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, there is, appended to this transmittal, an electronic file of the
Annual Report (on Form 10-K) of Chittenden Corporation, Two Burlington Square,
Burlington, Vermont (the "Corporation"), for the year ended December 31, 1993.
Several additional copies of the Corporation's 1993 Annual Report will be
mailed.
The Corporation will wire the filing fee of $250.00 via Fedwire.
If any questions concerning this Annual Report, please telephone the
undersigned at (802) 660-1410.
Kindly acknowledge receipt of this letter by Compuserve Email.
Thank you.
Very truly yours,
F.SHELDON PRENTICE
Secretary
FSP/mgm
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 1993
Commission File Number 0-7974
CHITTENDEN CORPORATION
(Exact name of registrant as specified in charter)
Vermont 03-0228404
(State of Incorporation) (IRS Employer Identification No.)
Two Burlington Square
Burlington, Vermont 05401
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number: 802-658-4000
Securities registered pursuant to Section 12(g) of the Act:
$1.00 par value common stock
(Title of Class)
Indicate by check mark whether the registrant (l) has filed all reports to be
filed by Section 13 or 15(D) of the Securities Exchange Act of 1934 during t
he preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. YES X NO .
The aggregate market value of the Registrant's common stock held by
non-affiliates of the Registrant, based on the average of the high and low
prices of such stock on March 4, 1994, as reported on NASDAQ, was $113,339,390.
At March 4, 1994, there were 6,227,439 shares of the Registrant's common
stock issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents, in whole or in part, are specifically incorporated by
reference in the indicated Part of this Annual Report on Form 10-K:
l. Proxy Statement for 1994 Annual Meeting of Registrant's Stockholders:
Part III, Items 10, 11, 12, 13.
2. Proxy Statement for 1994 Annual Meeting of Registrant's Stockholders:
Part I, Item 4.
3. Annual Report to Stockholders for fiscal year ended December 31, 1993:
Part I, Items l, 2, 3; Part II, Items 5, 6, 7, 8, 9; and Part IV, Item 14.
PART I
Item l. Business
Chittenden Corporation (the "Company"), a Vermont corporation organized in 1971,
is a registered bank holding company under the Bank Holding Company Act of 1956,
as amended. Assets of the Company were $1,231,003,000 at December 31, 1993.
The Company is the holding company parent of Chittenden Trust Company, and as
of December 31, 1993, owned 100% of the outstanding common stock of that bank.
The Company's principal executive offices are located at Two Burlington Square,
Burlington, Vermont 05401; telephone number: 802-660-4000.
Chittenden Trust Company
Chittenden Trust Company ("Chittenden Trust") was chartered by the Vermont
Legislature as a commercial bank in 1904, and is the largest bank in Vermont,
based on total deposits of $1,034,764,000 and total assets of $1,223,701,000 at
December 31, 1993.
Chittenden Trust has its principal offices in Burlington, Vermont and has 40
additional locations in Vermont, of which two are free standing automated
teller machines ("ATM's"). (See Item 2, "Properties"). Since
December 1, 1983, all offices of Chittenden Trust have used the trade name
"Chittenden Bank".
Chittenden Trust offers a wide range of banking services, including the
acceptance of demand, savings, and time deposits. As of December 31, 1993,
total time and savings deposits amounted to $875,441,000 or 85% of total
deposits.
Chittenden Trust offers a variety of lending services. The largest loan
category is real estate mortgage loans, which amounted to 73% of total loans
outstanding at December 31, 1993. The largest classification of real estate
mortgage loans is loans secured by residential properties including home equity
loans, which amounted to 47% of total loans outstanding at December 31, 1993.
Home equity loans as a seperate group amounted to 8% of loans at
December 31, 1993. The remaining real estate mortgage loans are commercial
related and primarily owner occupied or investment properties.
Consumer loans outstanding at December 31, 1993 were 15% of total loans,
constituting the second largest category. These include direct and indirect
installment loans, student loans and revolving credit.
Commercial loans outstanding at December 31, 1993 amounted to 13% of total
loans. These loans are made to a variety of businesses, including retail
concerns, small manufacturing businesses, and larger corporations.
In making commercial loans, Chittenden Trust occasionally solicits the
participation of other Vermont banks or correspondent banks and other financial
investors outside the State. Chittenden Trust also occasionally participates
in loans originated by other banks. A small amount of Chittenden Trust's
commercial loans are made under programs administered by the Vermont Industrial
Development Authority, the U.S. Small Business Administration, or the U.S.
Farmers Home Administration. These loans contain repayment guarantees by the
agency involved in varying amounts up to 90% of the original loan.
All of Chittenden Trust's loans, except a small volume of loans (less than 1%
of total loans as December 31, 1993), are made to individuals and businesses
located in Vermont. Lending is particularly active in Chittenden County, where
the main office of Chittenden Trust and 17 of its 38 branch offices are
located. Chittenden County also has the highest concentration of business and
population in Vermont, with approximately 132,821 persons, or 23.6% of the
State's residents.
Chittenden Trust provides personal trust services, including services as
executor, trustee, administrator, custodian and guardian, and corporate trust
services, including services as trustee for pension and profit sharing plans.
Chittenden Trust offers data processing services consisting primarily of
payroll and automated clearing house for several outside clients. The services
are performed by Systematics, Inc., a data processing facilities management
firm based in Little Rock, Arkansas, and Chittenden Trust.
Chittenden Trust provides financial and investment counseling to municipalities
and school districts within its service area and also provides central
depository, lending, payroll, and other banking services for such customers.
Chittenden Trust also provides safe deposit facilities, MasterCard, and VISA
credit card services.
Chittenden also offers certain non-bank, investment products through a
dual-employee contractual relationship with Link Investment Services, Inc.
COMPETITION
There is vigorous competition in Vermont for all aspects of the banking and
related financial services presently engaged in by the Company and its
subsidiaries.
Chittenden Trust competes with Vermont banks and metropolitan banks based in
southern New England and New York City to provide commercial banking services
to businesses. Many of these out-of-state banks have greater financial
resources than those of Vermont banks and are actively seeking financial
relationships with promising Vermont enterprises. Two out-of-state banks have
acquired in-state banks; Bank of Boston acquired Bank of Vermont, and Arrow
Financial acquired United Bancorp. Regulatory changes in the banking industry
have permitted thrift institutions to engage in commercial lending activities.
As a result, local bank competition has intensified.
In the retail market for financial services, competitors include other banks,
credit unions, finance companies, thrift institutions and, increasingly,
brokerage firms, insurance companies, and mortgage loan companies. Interest
rate competition for the investments of individuals has accelerated with the
enactment of the Garn-St. Germain Depository Institutions Act, which phased-out
interest rate ceilings applicable to certain deposit accounts. Money market
deposit accounts and short term flexible-maturity certificates of deposit
offered by the Company's banking subsidiary compete with investment account
offerings of brokerage firms and, more recently, with new products offered by
insurance companies.
The banking subsidiary also competes for personal and commercial trust business
with investment advisory firms, mutual funds, and insurance companies.
SUPERVISION AND REGULATION
The Company is a bank holding company within the meaning of the Bank Holding
Company Act of 1956 (the "Act") and is registered as such with the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board"). As a
bank holding company, the Company is required to file with the Federal Reserve
Board an annual report and such other information as may be required. The
Federal Reserve Board may also make examinations of the Company.
The Act requires every bank holding company to obtain prior approval of the
Federal Reserve Board before acquiring substantially all the assets of direct
or indirect ownership or control of more than 5% of the voting shares of any
bank which is not already majority-owned. The Act also prohibits a bank
holding company, with certain exceptions, from itself engaging in or acquiring
direct or indirect control of more than 5% of the voting shares of any company
engaged in non-banking activities. One of the principal exceptions to these
prohibitions is for engaging in or acquiring shares of a company engaged in
activities found by the Federal Reserve Board by order or regulation to be so
closely related to banking or managing banks as to be a proper incident
thereto. The Act prohibits the acquisition by a bank holding company of more
than 5% of the outstanding voting shares of a bank located outside the state in
which the operations of its banking subsidiaries are principally conducted,
unless such an acquisition is specifically authorized by statute of the state
in which the bank to be acquired is located. Under Section 106 of the 1970
amendments to the Act and regulations of the Federal Reserve Board, a bank
holding company and its subsidiaries are prohibited from engaging in certain
tie-in arrangements in connection with any extension of credit or provision of
any property or services.
Chittenden Trust is a federally insured bank organized under the Banking Law of
the State of Vermont. Accordingly, its operations are subject to State laws
applicable to commercial banks with trust powers and to regulation by the
Department of Banking and Insurance of the State of Vermont and the Federal
Deposit Insurance Corporation.
The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA"),
which went into effect on December 19, 1992, made extensive changes to the
federal banking laws. Among other changes, FDICIA requires federal bank
regulatory agencies to take prompt corrective action to address the problems of
undercapitalized banks. Through the issuance of appropriate prompt corrective
action directives to certain undercapitalized institutions, federal bank
regulatory agencies may require recapitalization, apply broader restrictions on
transactions with affiliates, limit interest rates paid on deposits, limit
asset growth and other activities, require possible replacement of directors
and officers, and restrict capital distributions by any bank holding company
controlling the institution.
With certain exceptions, FDICIA prohibits state banks from engaging, as
principals, in activities that are not permissible for national banks. In
addition, FDICIA amends federal statutes governing extensions of credit to
directors, executive officers and principal shareholders of banks, savings
associations and their holding companies, limits the aggregate amount of a
depository institution's loans to insiders, restricts depository institutions
that are not well capitalized from accepting brokered deposits without an
express waiver from the FDIC and imposes certain advance notice requirements
before closing a branch. FDICIA also requires the FDIC to institute a system
of risk-based deposit insurance assessments and requires depository
institutions to make additional disclosures to depositors with respect to the
rate of interest and terms of consumer deposit accounts.
EMPLOYEES
The Company and its subsidiaries on December 31, 1993 employed 744 persons, with
a full-time equivalency of 704 employees. The Company enjoys good relations
with its employees. A variety of employee benefits, including health, group
life and disability income replacement insurance, a funded, non-contributory
pension plan, and an incentive savings and profit sharing plan, are available
to officers and employees.
SELECTED STATISTICAL INFORMATION
Certain consolidated financial data about the business of the Company and its
subsidiaries, principally Chittenden Trust, is contained on pages 13-36 of the
Company's 1993 Annual Report to Stockholders, which is specifically
incorporated herein by reference.
ITEM 2. PROPERTIES
The Company's principal banking subsidiary, Chittenden Trust, operates banking
facilities in 41 locations in Vermont.
The offices of the Company and its non-banking subsidiaries are located in the
main office of the Chittenden Trust, which occupied all of the five-floor
Chittenden Building at Two Burlington Square in Burlington as of
December 31, 1993. The Chittenden Building is owned by Chittenden Trust.
The offices of Chittenden Trust are in good physical condition with modern
equipment and facilities considered adequate to meet the banking needs of
customers in the communities serviced.
ITEM 3. Legal Proceedings
A number of legal claims against the Company arising in the normal course of
business were outstanding at December 31, 1993. Management, after reviewing
these claims with legal counsel, is of the opinion that these matters, when
resolved, will not have a material effect on the consolidated financial
statements.
Note 12 of the Consolidated Financial Statements appearing on page 31 of the
Company's 1993 Annual Report to Stockholders contains a discussion of one legal
claim, Walsh v. Chittenden Corp., et.al., which is a class action, and is
specifically incorporated herein by reference.
ITEM 4. Submission of Matters to a Vote of Security Holders
No matters.
PART II
ITEM 5. Market For Registrant's Common Equity and Related Stockholder Matters
Information regarding the market in which the Company's common stock is
traded, the quarterly high and low bid quotations for the Company's common
stock during the past five years is included in the Company's 1993 Annual
Report to Stockholders on page 55, and is specifically incorporated herein by
reference. The approximate number of stockholders at March 4, 1994 was
3,063. Note 8 of the Consolidated Financial Statements appearing on page 26 of
the Company's 1993 Annual Report to Stockholders contains a discussion of
restrictions on dividends, which is specifically incorporated herein by
reference.
ITEM 6. Selected Financial Data
A five-year summary of selected consolidated financial data for the Company and
its subsidiaries is included on page 39 of the Company's 1993 Annual Report to
Stockholders, and is specifically incorporated herein by reference.
ITEM 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Management's Discussion and Analysis of Financial Condition and Results of
Operations is included on pages 40-52 of the Company's 1993 Annual Report to
Stockholders specifically incorporated herein by reference.
ITEM 8. Financial Statements and Supplementary Data
The following consolidated financial statements of the Company and its
subsidiaries appear in the Company's 1993 Annual Report to Stockholders at the
pages indicated and are incorporated herein by reference:
Page
Independent Auditors' Reports 37-38
Consolidated Balance Sheets at
December 31, 1993 and 1992 13
Consolidated Statements of Income for
the Years Ended December 31, 1993, 1992, and 1991 14
Consolidated Statements of Changes in
Stockholders' Equity for the Years Ended
December 31, 1993, 1992, and 1991 15
Consolidated Statements of Cash Flows for the Years
Ended December 31, 1993, 1992, and 1991 16
Notes to Consolidated Financial Statements 17-36
ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
There were no disagreements with accountants on accounting principles, or
practices, or financial statement disclosure. Arthur Andersen & Co. are the
principal accountants for Chittenden Corporation as of and for the year ended
December 31, 1993. KPMG Peat Marwick were the principal accountants for
Chittenden Corporation for prior periods presented in this Annual Report.
On December 28, 1992, that firm was notified that they would be terminated as
principal accountants upon completion of the audit of the consolidated
financial statements of the Chittenden Corporation as of and for the year
ended December 31, 1992, and Arthur Andersen & Co. would be engaged as
principal accountants. The decision to change accountants was
approved by the Audit Committee of the Board of Directors and by the Board of
Directors.
In connection with the audits of the fiscal years ended December 31, 1993,
1992, and 1991, there were no disagreements with Arthur Andersen & Co. or
KPMG Peat Marwick on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope.
The audit reports of Arthur Andersen & Co. and KPMG Peat Marwick on the
consolidated financial statements of Chittenden Corporation and as
of and for the years ended December 31, 1993, 1992, 1991 did not contain any
adverse opinion or disclaimers of opinion nor were they qualified or modified as
to uncertainty, audit scope, or accounting principles.
PART III
ITEM 10. Directors and Executive Officers of the Registrant
Information regarding the directors and director-nominees of the Registrant is
included in the Company's definitive Proxy Statement for the 1994 Annual Meeting
of Stockholders at pages 5-10, and is specifically incorporated herein by
reference.
At December 31, 1993, the principal officers of the Company and its principal
subsidiary, Chittenden Trust, with their ages, positions, and years of
appointment, were as follows:
Year
Name and Age Appointed Positions
Barbara W. Snelling, 66 1990 Chair of the Company
Paul A. Perrault, 42 1990 President and Chief
Executive Officer of
the Company and
Chittenden Trust
Lawrence W. Deshaw, 47 1990 Executive Vice
President of the
Company and Chittenden
Trust
William R. Heaslip, 49 1988 Executive Vice
President of the
Company and of
Chittenden Trust for
Trust Services
John W. Kelly, 44 1990 Executive Vice
President of the
Company and
Chittenden Trust
Nancy Rowden Brock, 37 1984 Treasurer of the
Company and Senior
Vice President,
Chief Financial Officer,
and Treasurer of
Chittenden Trust
F. Sheldon Prentice, 43 1985 Secretary of the
Company and Senior
Vice President,
General Counsel, and
Secretary of Chittenden Trust
John P. Barnes, 38 1990 Senior Vice President of
Chittenden Trust
Danny H. O'Brien, 43 1990 Senior Vice President of
Chittenden Trust
All of the current officers, with the exceptions of Messrs. Perrault and Kelly,
have been principally employed in executive positions with Chittenden Trust for
more than five years. Mr. Perrault was President of Bank of New England - Old
Colony Bank located in Providence, Rhode Island. Mr. Kelly was Executive Vice
President and the head of commercial lending division of Bank of New England -
Old Colony in Providence, Rhode Island.
In accordance with the provisions of the Company's By-Laws, the officers, with
the exception of the Secretary, hold office at the pleasure of the Board of
Directors. The Secretary is elected annually by the Board of Directors.
ITEM 11. Executive Compensation
Information regarding remuneration of the directors and officers of the Company
is included in the Company's definitive Proxy Statement for the 1994 Annual
Meeting of Stockholders at pages 4-10 and is specifically incorporated herein
by reference.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management
Information regarding the security ownership of directors and director-nominees
of the Company, all directors and officers of the Company as a group, and
certain beneficial owners of the Company's common stock, as of February 3, 1994,
is included in the Company's definitive Proxy Statement for its 1994 Annual
Meeting of Stockholders, at pages 4-10, and is specifically incorporated
herein by reference.
There are no arrangements known to the registrant which may, at a subsequent
date, result in a change of control of the registrant.
ITEM 13. Certain Relationships and Related Transactions
Information regarding certain relationships and transactions between the Company
and its Directors, Director-Nominees, Executive Officers, and family members
of these individuals, is included in the Company's definitive Proxy Statement
for its 1994 Annual Meeting of Stockholders at page 10, and is specifically
incorporated herein by reference.
PART IV
ITEM 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) Documents Filed as Part of this Report were filed as a full document and a
segment filing on the EDGAR system called Annual.
(l) Financial Statements
The following consolidated financial statements of the Company and its
subsidiaries appear in the Company's 1993 Annual Report to Stockholders
Page
Independent Auditors' Reports 37-38
Consolidated Balance Sheets at
December 31, 1993 and 1992 13
Consolidated Statements of Income for
the Years Ended December 31, 1993,
1992, and 1991 14
Consolidated Statements of Changes in
Stockholders' Equity for the Years Ended
December 31, 1993, 1992, and 1991 15
Consolidated Statements of Cash Flows for the Years
Ended December 31, 1993, 1992, and 1991 16
Notes to Consolidated Financial Statements 17-34
(2)Financial Statement Schedules
There are no financial statement schedules required to be included in this
report.
(4) Exhibits
The following are included as exhibits to this report:
3. By-Laws of the Company, as amended, incorporated herein by reference to
Exhibit 3 to the Company's Annual Report on Form 10-K for the year ended
December 31, 1985.
3.01 Amendment to the By-Laws of the Company, dated February 16, 1988,
incorporated herein by reference to the Company's Annual Report on Form
10-K for the year ended December 31, 1987.
3.02 Amendment to the By-Laws of the Company, dated January 17, 1990,
incorporated herein by reference to the Company's Annual Report on Form
10-K for the year ended December 31, 1989.
3.03 Amendment to the By-Laws of the Company, dated June 19, 1991, incorporated
herein by reference to the Company's Annual Report on Form 10-K for the
year ended December 31, 1991.
3.1 Articles of Association of the Company, as amended, incorporated herein by
reference to the Proxy Statement for the 1994 Annual Meeting of
Stockholders.
4.2 Agreement regarding furnishing the instruments defining rights of holders
of long-term debt, incorporated herein by reference to Exhibit 4.5 to
Registration No. 2-89460 under the Securities Act of 1933.
4.31 Statement of the Company regarding its Dividend Reinvestment Plan is
attached and made part of the Company's Annual Report on Form 10-K for
the year ended December 31, 1993.
10.1 The Company's Employee Stock Purchase Plan, incorporated herein by
reference to Appendix A to Registration No. 2-69030 under the Securities
Act of 1933.
10.2 Deferred Directors Compensation Plan, dated April 1972, as amended
December 1976, August 1980, and March 1983, incorporated herein by
reference to Exhibit 10.2 to Registration No.2-89460 under the Securities
Act of 1933.
10.21 1986 and 1987 Amendments to Directors Deferred Compensation Plan,
incorporated here in by reference to the Company's Annual Report on Form
10-K for the year ended December 31, 1987.
10.22 1990 Amendment to Directors Deferred Compensation Plan, incorporated
herein by reference to the Company's Annual Report on form 10-K for the
year ended December 31, 1991.
10.23 1992 Amendment to Deferred Directors Compensation Plan,incorporated
herein by reference to the Company's Annual Report on Form 10-K for the
year ended December 31, 1992.
10.3 Trust Agreement and Pension Plan of Chittenden Trust, dated
December 1, 1969, with amendments thereto, incorporated herein by
reference to Exhibit 15 to Registration No. 2-50893 under the Securities
Act of 1933.
10.4 Amendments to Trust Agreement and Pension Plan of the Company are
attached and made part of the Company's Annual Report on form 10-K
for the year ended December 31, 1993.
10.8 Executive Incentive Compensation Plan dated May l, 1984, incorporated
herein by reference to Exhibit 10.9 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1985.
10.9 Incentive Savings and Profit Sharing Plan, incorporated herein by
reference to Exhibit 10.10 to the Company Annual Report on Form 10-K for
the year ended December 31, 1984.
10.10 The Company's Stock Option Plan, incorporated herein by reference to
the Company's Annual Report on Form 10-K for the year ended
December 31, 1984.
10.11 The Company's Stock Option Plan, incorporated herein by reference to the
Company's Annual Report on Form 10-K for the year ended December 31, 1987.
10.12 The Company's Restricted Stock Plan, incorporated herein by reference to
the Company's Annual Report on Form 10-K for the year ended
December 31, 1984.
11. Computation of fully diluted earnings per share.
13. The Company's 1993 Annual Report to Stockholders.
22. List of subsidiaries of the Registrant.
28. The Proxy Statement for the Company's 1994 Annual Meeting of
Stockholders.
EXHIBIT 4.31
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
THE COMPANY
Chittenden Corporation (the "Company") is a holding company whose principal
subsidiary is Chittenden Bank. The Bank provides a full range of financial
services and has 40 locations throughout Vermont. Executive offices are
located at Two Burlington Square, Burlington, Vermont 05401.
DESCRIPTION OF THE PLAN
The Dividend Reinvestment and Stock Purchase Plan (the "Plan") for Stockholders
of Chittenden Corporation gives participants the opportunity to reinvest
dividends in additional shares of the Company's common stock and make optional
cash investments in a convenient and cost-free manner without commissions or
fees.
1) What is the purpose of the Plan?
The purpose of the Plan is to provide each eligible holder of Chittenden
Corporation Common Stock with a convenient method of investing cash dividends
and making optional cash investments.
2) What are the advantages to stockholders participating in the Plan?
a) Cash dividends on all shares of Common Stock are automatically reinvested.
b) Additional amounts may be invested by making payments of between $25 and
$10,000 quarterly.
c) Dividends are reinvested and optional cash investments are made without
commissions or fees.
d) Dividends on fractions as well as full shares will be reinvested in
additional shares and credited to participants' accounts.
e) Quarterly statements of account provide participants with a record of each
transaction.
f) The Agent provides safekeeping of stock certificates.
3) Who administers the Plan for participants?
Bank of Boston is the Agent for participating stockholders and keeps a
continuing record of participants' accounts, sends quarterly statements to
participants and performs other duties relating to the Plan. Common Stock
purchased under the Plan is registered in the name of the nominee of the
Agent. Should Bank of Boston cease to act as Agent under the Plan, another
agent will be appointed by the Company.
4) Who is eligible to participate?
All stockholders of record of Common Stock are eligible to participate in the
Plan. Shares registered in the name of a broker or nominee must be transferred
to the owner's name before they can be enrolled in the Plan.
5) How can an eligible stockholder participate?
An eligible stockholder may participate in the Plan by reviewing this brochure,
signing the authorization card, and returning it to Bank of Boston. A postage-
paid envelope is provided for this purpose. Additional authorization cards may
be obtained at any time by contacting Stockholder Relations, Chittenden
Corporation, or Bank of Boston.
6) When may a stockholder join the Plan?
A stockholder of record may join the Plan at any time if the authorization card
is received by Bank of Boston ten days prior to a record date for a dividend.
That dividend and any optional cash investment will be invested in additional
shares of Common Stock. If the authorization card is received by Bank of Boston
after the tenth day before a record date for a dividend, plan membership will
not start until the next following dividend. Record dates are usually about
two weeks before dividend payment dates, which are normally in the first
business week of February, May, August and November.
7) Are there any expenses to participants in connection with purchases under
the Plan?
No. Participants pay no commissions or fees for purchases made under the Plan.
All administration costs are paid by the Company. However, a participant who
withdraws from the Plan and directs Bank of Boston to sell Plan shares will pay
a fee of 5% of the value of the transaction ($1.00 minimum up to a maximum of
$10,000).
8) How many shares of Common Stock will be purchased for participants?
The number of shares purchased for a participant's account is determined by the
amount of the dividend, the amount of any optional cash payments and the price
of Common Stock. Accordingly, you cannot purchase a previously specified number
of shares. Your account will be credited on the settlement date with the number
of shares, including fractions computed to three decimal places, equal to the
total amount invested in your name divided by the purchase price per share.
9) What will be the price of Common Stock purchased under the Plan?
The price paid by participants for their shares will be the average purchase
price of all shares purchased on the investment date. Purchase(s) may be made
in the over-the-counter market or in negotiated transactions and may take more
than one day to complete.
In making purchases for a participant's account, the Agent may commingle the
participant's funds with those of other stockholders participating in the Plan.
The Agent has no responsibility for the value of stock acquired for a
participant's account. The Agent will invest dividends promptly, and in no
event more than 30 days after their receipt except where temporary curtailment
or suspension of purchases is necessary to comply with applicable provisions of
the Federal Securities Law.
10) Will certificates be issued automatically to participants for shares of
Common Stock purchased under the Plan?
No. Shares of Common Stock purchased under the Plan will be registered in the
name of the Agent (or its nominee) as Agent for the participant. However, at
any time, a participant may request in writing that the Agent issue, at no cost
to the participant, certificates for any number of whole shares credited to the
participant's account under the Plan. A withdrawal/termination form is
provided on the reverse side of the quarterly account statement for this
purpose or participants may contact Stockholder Relations, Chittenden
Corporation. Any remaining whole or fractional shares, for which certificates
are not requested, will continue to be credited to the participant's account
under the Plan.
11) What is safekeeping of certificates?
Certificates representing the Common Stock of the Company now held by you may
be submitted to Bank of Boston and consolidated with shares purchased for you
under the Plan. The certificates, together with a letter of instruction, must
be sent to Bank of Boston by certified or registered mail, return receipt
requested. The certificates need not be endorsed.
The Agent will cancel the certificates, credit your account with the appropriate
number of shares and will treat such shares in the same manner as shares
purchased for your account under the Plan.
12) How are optional cash investments made?
Optional cash investments may be made after a stockholder has submitted an
authorization form and has become a participant in the Plan. Any number of
checks between $25 and $10,000 may be sent for investment in each quarter,
total not to exceed $10,000 per calendar quarter, checks for more or less
than these amounts will be returned to the participant. For investments to be
processed, checks must be received by Bank of Boston between 5 business and 30
calendar days before a quarterly dividend date. Interest will not be paid on
funds being held for investment. It is in your best interest to deliver any
optional cash payments before the 5th business day preceding the dividend
payment date. Checks in U.S. funds should be sent payable to:
Bank of Boston
Dividend Reinvestment Department
Box 1681, Mail Stop 45-01-06
Boston, MA 02105
Payments to any other address do not constitute valid delivery.
Dividends on all shares purchased through optional investments, and credited
to the participant's account, will be reinvested in additional shares on
subsequent dividend payment dates.
13) What reports will be sent to participants in the Plan?
Each participant will receive a quarterly statement shortly after each dividend
payment date. These statements are the record of the cost of purchases and
should be retained for tax purposes.
In addition, each participant will receive copies of all of the Company's
mailings to stockholders.
14) When may a participant withdraw from the Plan?
A participant may withdraw by notifying the Agent, in writing, so that the Agent
receives the notice before a record date. All subsequent dividends will then be
paid to the participant in cash unless the participant re-enrolls in the Plan.
If notice of withdrawal is received by the Agent after a record date, that
dividend will be reinvested, but all subsequent dividends will be paid in
cash. Any optional cash payments which have not yet been invested will
be refunded if a written request for refund or withdrawal from the Plan is
received by the Agent at least 48 hours prior to a dividend payment date.
15) How does a participant withdraw from the Plan?
To withdraw from the Plan, a participant must contact Stockholder Relations at
Chittenden Corporation or fill out the form on the top of the quarterly
statement and send it to the Agent. The participant may choose one of two
options when withdrawing:
1) Ask that certificates for whole shares be issued and sent with a check
for any fractional share. The fractional share will be valued at the current
market price of Common Stock.
2) Request that all full and fractional shares be sold and that a check for
the proceeds be sent less 5% of the value of the transaction ($1.00 minimum up
to a maximum of $10.00). The sale will be made at the then current market
price. All information regarding the sale of stock is furnished to the
Internal Revenue Service.
Selling participants should be aware that Common Stock prices may fall during
the period between a request for sale, its receipt by the Agent and the ultimate
sale in the open market within ten trading days after receipt. This risk is
borne solely by the participant.
No check will be mailed prior to settlement of funds which is five business days
(one week) after the sale of shares.
16) What happens when a participant sells or transfers stock held in
certificate form?
A Plan participant holds shares in two ways: in certificate form and through
nominee name under the Agent. If certificates are sold or transferred, but
the participant does not withdraw from the Plan, dividends on any remaining
whole or fractional shares held for the participant in nominee name under the
Plan will continue to be reinvested.
17) What happens if the Company issues a stock dividend or declares a stock
split?
Full and fractional shares from stock dividends or splits on all shares
participating in the Plan, whether held by the Agent or by the participant,
will be credited to a participant's account and subsequent dividends will be
reinvested.
18) How will a participant's stock be voted at meetings of stockholders?
If a properly signed proxy card is returned, it will be voted as instructed or,
if there are not any contradictory instructions, it will be voted with
management. If the proxy card is not returned, or is returned unsigned, it will
not be voted unless the participant votes in person.
19) What are the federal income tax consequences of participation in the Plan?
The calculated dividend payment which is reinvested for a participant in a given
tax year is taxable in that year as income. The reinvestment of dividends does
not relieve the Participant of any income taxes which may be payable on such
dividends. The Agent will report to each participant and the IRS for tax
purposes the dividends credited to an account in each calendar year.
There is no additional taxable income on certificates for whole shares which
have previously been credited to the participant's account under the Plan.
However, a participant who receives a cash adjustment for a fraction of a share
may have a gain or loss on that fraction. A taxable gain or loss, which is the
difference between the amount the participant receives for shares and the tax
basis thereof, may be realized by the participant when shares are sold.
All participants are urged to consult with their own tax advisors regarding the
particular federal, state and local tax consequences of their participation in
the Plan.
20) What is the responsibility of the Company and the Agent under the Plan?
Neither the Company nor the Agent will be liable for any act or omission to
act done in good faith. This includes, without limitation, any claim of
liability arising out of failure to terminate a participant's account upon a
participant's death prior to receipt of notice in writing of such death.
The Company and the Agent cannot assure a profit or protect the participant
against a loss on the shares purchased under the Plan.
The Company and the Agent reserve the right to interpret and regulate the Plan
as may be necessary or desirable.
21) What provision is made for foreign stockholders whose dividends are
subject to income tax withholding?
In the case of participating foreign holders of Common Stock, whose dividends
are subject to United States income tax withholding, the Agent will reinvest an
amount equal to the dividends less the amount of tax required to be withheld.
Quarterly statements will be mailed confirming purchases made for foreign
participants.
Optional cash investments received from foreign stockholders must be in
United States dollars.
22) Can the Plan be changed or discontinued?
The Company reserves the right to suspend, modify or terminate the Plan at any
time. Notice of any such suspension, modification or termination will be sent
to all participants.
23) How can I get more information about the Plan?
To make inquires or obtain additional information please contact:
F. Sheldon Prentice, Secretary
Eugenie J. Fortin, Assistant Secretary
Chittenden Corporation
Two Burlington Square
Burlington, VT 05401
(802) 660-1412
(800) 642-3158
or
Bank of Boston
Shareholder Services
P.O. Box 644, Mail Stop 45-02-09
Boston, MA 02102-0644
(617) 575-2900
Plan revised
January 1994
EXHIBIT 10.4
FIRST AMENDMENT TO THE PENSION PLAN FOR EMPLOYEES OF THE CHITTENDEN CORPORATION
(As Amended and Restated Effective December 1, 1984)
WHEREAS, Chittenden Corporation (the "Corporation") presently provides
retirement benefits for certain of its employees pursuant to the terms of the
Pension Plan for Employees of the Chittenden Corporation (the "Plan"); and
WHEREAS, the Corporation desires to amend the Plan to provide a cost of living
increase to retirement benefits in pay status for Plan participants;
NOW THEREFORE, the Plan is hereby amended by adding the following new Section
5.11 to Article V:
"Any member or Beneficiary whose Pension entered pay status not later than
December 31, 1985 shall have such Pension increases by a cost of living
increase percentage determined in accordance with the following schedule:
Date of which Pension Cost of Living
First Entered Pay Status Increase Percentage
- ------------------------ --------------------
Prior to January 1, 1982 10%
January 1, 1982 through December 31, 1982 8
January 1, 1983 through December 31, 1983 6
January 1, 1984 through December 31, 1984 4
January 1, 1985 through December 31, 1985 2
Such percentage increase shall, however, be applied to the amount of Pension
in pay status as of December 31, 1986 to such Members or Beneficiaries, and
shall commence with the payment due on January 1, 1987."
This First Amendment shall be effective as of December 31, 1986.
IN WITNESS WHEREOF, the foregoing amendment having been duly approved and
adopted by the Board of Directors of Chittenden Corporation, the Board has
caused this amendment to be executed in their name and on their behalf by
the Chairman and Chief Executive of the Corporation thereunto duly authorized
this 15th day of October, 1986.
CHITTENDEN CORPORATION
BY: Cynthia D. LaWare
-----------------------
TITLE: Senior Vice President
------------------------
ATTEST: John F. McAteer
--------------------
Secretary
AMENDMENT NUMBER TWO TO THE PENSION PLAN FOR EMPLOYEES OF THE CHITTENDEN
CORPORATION
(As Amended and Restated Effective December 1, 1984)
WHEREAS, Chittenden Corporation (the "Principal Employer") adopted the Pension
Plan for Employees of the Chittenden Corporation (the "Plan") as amended and
restated effective December 1, 1984; and
WHEREAS, Section 11.1 permits the Principal Employer to Amend the Plan; and
WHEREAS, the Principal Employer desires to amend the Plan to change the Plan
Year;
NOW, THEREFORE, the Plan is hereby amended effective December 1, 1992, and
follows:
Section 2.1.27 is amended by adding the following to the end thereof:
"Effective January 1, 1993, the Plan Year shall be the calendar year, with
a short Plan Year for the period beginning December 1, 1992, and ending
December 31, 1992."
IN WITNESS WHEREOF, the foregoing amendment having been duly approved and
adopted by the Board of Directors of Chittenden Corporation, the Board has
caused this amendment to be executed in their name and on their behalf by the
Officer of the Corporation thereunto duly authorized this 31st day of
December, 1992.
CHITTENDEN CORPORATION
BY: F. Sheldon Prentice
----------------------
TITLE: Secretary
-----------------------
ATTEST: Eugenie J. Fortin
----------------------
Asst. Secretary
AMENDMENT NUMBER THREE TO THE PENSION PLAN FOR EMPLOYEES OF THE CHITTENDEN
CORPORATION
(As Amended and Restated Effective December 1, 1984)
WHEREAS, Chittenden Corporation (the "Principal Employer") adopted the Pension
Plan for Employees of the Chittenden Corporation (the "Plan") as amended and
restated effective December 1, 1984; and
WHEREAS, Section 11.1 permits the Principal Employer to amend the Plan; and
WHEREAS, the Principal Employer desires to amend the Plan;
NOW, THEREFORE, the Plan is hereby amended effective July 1, 1993, and follows:
Section 3.2 is amended by adding the following to the end thereof:
(E) Notwithstanding anything herein to the contrary, an Employee of the
Principal Employer who was an Employee of Bellows Falls Trust Company
before it was acquired by the Principal Employer shall receive credit
for purposes of this Section 3.2 for any service with the former
Bellows Falls Trust Company, provided such service would have been
considered Eligibility Service in accordance with paragraph (A) of
Section 3.2.
Section 3.3 is amended by adding the following to the end of thereof:
(F) An Employee of Bellows Falls Trust Company who becomes a Member of this
plan shall receive credit for purposes of this Section 3.3 for all
services with the former Bellows Falls Trust Company through
June 30, 1993 which would have been credited under the Bellows Falls
Trust Company Pension Plan in the determination of the amount of accrued
benefit under the provisions of the Bellows Falls Trust Pension Plan.
In no event shall the Employee receive a lesser benefit than accrued as
of June 30, 1993, under the provisions of that former plan.
Section 5.5 is amended by adding the following to the end of thereof:
(G) Notwithstanding anything herein to the contrary, the amount of deferred
Vested Pension of any Member of this Plan who was a Member of the Bellows
Falls Trust Company Pension Plan as of June 30, 1993, shall not be less
than the deferred Vested Pension to which he was entitled as of June 30,
1993, under the provisions of that former plan.
IN WITNESS WHEREOF, the foregoing amendment having been duly approved and
adopted by the Board of Directors of Chittenden Corporation, the Board has
caused this amendment to be executed in their name and on their behalf by the
Officer of the Corporation thereunto duly authorized this 20th day of October,
1993.
CHITTENDEN CORPORATION
BY: F. Sheldon Prentice
---------------------
TITLE: Secretary
----------------------
ATTEST: Eugenie J. Fortin
-----------------------
Assistant Secretary
EXHIBIT 11
Chittenden Corporation
EARNINGS PER SHARE
Years Ended December 31,
1993 1992 1991
Net income (loss) $11,022,000 $7,218,000 $4,607,000
Average number of common shares
outstanding 6,206,848 6,193,944 6,186,600
========= ========= ==========
Earnings per common share
$ 1.78 $ 1.17 $ 0.74
EXHIBIT 13, CHITTENDEN'S 1993 ANNUAL REPORT HAS BEEN FILED AS A SUBORDINATE
SEGMENT FILING TO FORM 10K.
EXHIBIT 22
LIST OF SUBSIDIARIES OF CHITTENDEN CORPORATION
Chittenden Trust Company
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Date: March 16, 1994 CHITTENDEN CORPORATION
By: Paul A. Perrault
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on the dates indicated.
Name Title Date
Barbara W. Snelling, Chair of the Board of 3/16/94
Directors
Paul A. Perrault, President and Chief 3/16/94
Executive Officer and
Director
Nancy Rowden Brock, Treasurer 3/16/94
Frederic H. Bertrand, Director 3/16/94
David M. Boardman, Director 3/16/94
Paul J. Carrara, Director 3/16/94
Eugene P. Cenci, Director 3/16/94
Robert E. Cummings, Jr., Director 3/16/94
Marvin B. Gameroff, Director 3/16/94
Philip A. Kolvoord, Director 3/16/94
Maureen A. McNamara, Director 3/16/94
James C. Pizzagalli, Director 3/16/94
Pall D. Spera, Director 3/16/94
Martel D. Wilson, Jr., Director 3/16/94