SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Paragraph 240.14a-12
The United Illuminating Company
-------------------------------
(Name of Registrant as Specified in its Charter)
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(Name of Person(s) filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing party:
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(4) Date filed:
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<PAGE>
THE UNITED ILLUMINATING COMPANY
NOTICE OF ANNUAL MEETING OF THE SHAREOWNERS
DATE: June 26, 2000
TIME: 10:00 a.m.
PLACE: Quinnipiac University
275 Mount Carmel Avenue
Hamden, Connecticut
MATTERS TO BE VOTED ON:
1. Election of directors.
2. Approval of the employment of PricewaterhouseCoopers LLP as the Company's
independent public accountants for 2000.
3. Any other matters properly brought before the shareowners at the annual
meeting or any adjournment of the annual meeting.
You can vote your shares of common stock at the annual meeting if the
Company's records show that you owned the shares on April 24, 2000.
WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING OR NOT, PLEASE FILL IN,
SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE THAT WE HAVE
PROVIDED TO YOU. IF YOU MAIL US BACK THE ENVELOPE FROM ANYWHERE IN THE UNITED
STATES, THEN YOU DON'T HAVE TO PUT ANY POSTAGE STAMPS ON THE ENVELOPE.
May 10, 2000
By Order of the Board of Directors,
ROBERT L. FISCUS,
VICE CHAIRMAN OF THE BOARD OF DIRECTORS,
CHIEF FINANCIAL OFFICER, TREASURER AND SECRETARY
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT
IN ORDER TO SAVE THE COMPANY THE EXPENSE OF FURTHER SOLICITATION TO
ENSURE THAT A QUORUM IS PRESENT AT THE ANNUAL MEETING, PLEASE MAIL YOUR
PROXY PROMPTLY - REGARDLESS OF THE NUMBER OF SHARES YOU OWN, AND
REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE MEETING.
- --------------------------------------------------------------------------------
DIRECTIONS TO QUINNIPIAC UNIVERSITY APPEAR AT THE END OF THE PROXY STATEMENT.
<PAGE>
PROXY STATEMENT
The Company is mailing this proxy statement and the attached proxy form
on or about May 10, 2000 to all of its shareowners who, according to its
records, held common stock as of the close of business on April 24, 2000, in
connection with the solicitation of proxies for use at the Annual Meeting of the
Shareowners. The annual meeting is going to be held on Monday, June 26, 2000 at
10:00 a.m. at Quinnipiac University, 275 Mount Carmel Avenue, Hamden,
Connecticut for the purposes explained in the accompanying Notice of Annual
Meeting of the Shareowners. The Company is making the solicitation and it will
bear the expense of printing and mailing proxy materials to shareowners. The
Company will ask banks, brokers and other custodians, nominees and fiduciaries
to send proxy materials to beneficial owners of shares and to secure their
voting instructions, if necessary, and the Company will reimburse them for their
reasonable expenses in so doing. Directors, officers and employees of the
Company may also solicit proxies personally or by telephone, but they will not
be specifically compensated for soliciting proxies. In addition, the Company has
retained Georgeson Shareholder Communications of New York, New York, to aid in
the solicitation of proxies by similar methods at a cost to the Company of
approximately $12,500, plus expenses.
SHAREOWNERS ENTITLED TO VOTE
At the close of business on April 24, 2000, the record date for the
annual meeting, 14,334,922 shares of the Company's common stock were
outstanding. All outstanding shares of common stock will be entitled to vote at
the meeting, each share being entitled to one vote, on each matter coming before
the meeting as explained in the accompanying Notice of Annual Meeting of the
Shareowners. In accordance with the Company's bylaws, the President will appoint
inspectors of proxies and tellers to count all votes on each matter coming
before the meeting.
Shareowners who are participants in the Company's Automatic Dividend
Reinvestment and Common Stock Purchase Plan will receive proxy forms that cover
the shares held in their accounts under the plan. American Stock Transfer &
Trust Company, the Company's transfer agent under the plan, has authorized the
Company to vote shares held in the plan according to the instructions received
on the proxy forms.
If you properly sign and return the accompanying proxy, then the shares
covered by that proxy:
o will be voted or not voted, in accordance with the instructions
you give on the proxy, to elect as directors for the ensuing year
the twelve persons named in this proxy statement, or any other
person or persons that the present board of directors will
determine if one or more of the twelve persons named is unable to
serve;
o will be voted for or against, or not voted, in accordance with the
instructions you give on the proxy, with respect to the proposal
to approve the retention of PricewaterhouseCoopers LLP as
independent public accountants for fiscal year 2000; and
o will be voted in accordance with the discretion of the person or
persons designated as proxies on the proxy with respect to other
matters, if any, that come before the meeting. The Company is not
aware of any other matters to be presented at the meeting.
You may revoke your proxy at any time prior to its use. In order to
revoke your proxy, you must file with the Company's Secretary a written notice
of revocation or another properly signed proxy bearing a later date. If you
attend the meeting in person you may, if you wish, vote by ballot at the
meeting. If you do vote by ballot at the meeting, then the proxy you previously
gave would be cancelled.
Under Connecticut law and the Company's bylaws, shareowners holding a
majority of the shares of outstanding common stock will constitute a quorum for
purposes of considering and acting upon the matters described in the
accompanying Notice of Annual Meeting of the Shareowners.
<PAGE>
Assuming that a quorum is present at the meeting, directors will be
elected by a plurality of the votes cast at the meeting. Withholding authority
to vote for a director nominee will not prevent that director nominee from being
elected. Cumulative voting for directors is not permitted under Connecticut law
unless a corporation's certificate of incorporation provides for cumulative
voting rights. The Company's certificate of incorporation does not contain a
provision for cumulative voting rights.
Under Connecticut law, assuming that a quorum is present at the
meeting, the proposal to retain PricewaterhouseCoopers LLP as the Company's
independent public accountants will be approved if the votes cast in favor of
this action exceed the votes cast against it. Proxies marked to abstain from
voting with respect to this action will not have the legal effect of voting
against it.
PRINCIPAL SHAREOWNERS
In statements filed with the Securities and Exchange Commission, the
persons identified in the table below have disclosed beneficial ownership of
shares of the Company's common stock as shown in the table. The percentages
shown in the right-hand column are calculated based on the 14,334,922 shares of
common stock outstanding as of the close of business on April 24, 2000. In the
statements filed with the Securities and Exchange Commission, none of the
persons identified in the table, except David T. Chase, has admitted beneficial
ownership of any shares not held in their individual names. All of the persons
identified in the table, including David T. Chase, have denied that they have
acted, or are acting, as a partnership, limited partnership or syndicate, or as
a group of any kind for the purpose of acquiring, holding or disposing of common
stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL
TITLE OF CLASS OF BENEFICIAL OWNER OWNERSHIP PERCENT OF CLASS
- -------------- ------------------- ----------------- ----------------
<S> <C> <C> <C>
Common Stock Rhoda L. Chase 560,000 shares, 3.91%
280 Trumbull Street owned directly
Hartford, CT 06103
Common Stock Cheryl A. Chase 79,200 shares, 0.55%
280 Trumbull Street owned directly
Hartford, CT 06103
Common Stock Arnold L. Chase 230,300 shares, 1.61%
280 Trumbull Street owned directly
Hartford, CT 06103
Common Stock The Darland Trust 146,000 shares, 1.02%
St. Peter's House, owned directly
Le Bordage
St. Peter Port
Guernsey GY16AX
Channel Islands(1)
Common Stock David T. Chase 1,010,000 shares, 7.05%
280 Trumbull Street owned indirectly(2)
Hartford, CT 06103
Common Stock DTC Holdings Corporation(3) 210,000 shares, 1.46%
280 Trumbull Street owned directly
Hartford, CT 06103
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL
TITLE OF CLASS OF BENEFICIAL OWNER OWNERSHIP PERCENT OF CLASS
- -------------- ------------------- ----------------- ----------------
<S> <C> <C> <C>
Common Stock The Rhoda & David Chase 15,000 shares, 0.1%
Family Foundation, Inc. (4) owned directly
280 Trumbull Street
Hartford, CT 06103
Common Stock The Sandra & Arnold Chase 26,500 shares, 0.2%
Family Foundation, Inc. (4) owned directly
280 Trumbull Street
Hartford, CT 06103
Common Stock The Cheryl Chase & Stuart 33,000 shares, 0.2%
Bear Family Foundation, owned directly
Inc.(4)
280 Trumbull Street
Hartford, CT 06103
</TABLE>
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(1) The Darland Trust is a trust for the benefit of Cheryl A. Chase and her
children. The trustee of this trust is Rothschild Trust Cayman Limited.
(2) All of the shares listed for David T. Chase are included in the shares
listed for Rhoda L. Chase, his wife, Cheryl A. Chase, his daughter, Arnold
L. Chase, his son, and The Darland Trust.
(3) DTC Holdings Corporation was formerly known as American Ranger, Inc. It is
a wholly-owned subsidiary of D.T. Chase Enterprises, Inc. and is indirectly
owned and controlled by David T. Chase, Rhoda L. Chase, Cheryl A. Chase,
Arnold L. Chase, trusts for the benefit of Arnold L. Chase and his
children, and trusts for the benefit of Cheryl A. Chase and her children.
D.T. Chase Enterprises, Inc. has its address at 280 Trumbull Street,
Hartford, CT 06103.
(4) The Chase family foundations are charitable private foundations that are
controlled by Cheryl A. Chase, Arnold L. Chase and David T. Chase.
There is no other person or group of persons known to the Company to be
the beneficial owner of more than 5% of the shares of the Company's common stock
as of the close of business on April 24, 2000.
NOMINEES FOR ELECTION AS DIRECTORS
Unless you instruct otherwise on the proxy, shares to which the proxy
relates will be voted in favor of the persons listed below for election as
directors of the Company. Although the Company knows of no reason why any of the
persons listed below will be unable to serve as director, if that should occur,
your proxy would be voted for any other person or persons that the present board
of directors will determine. All of the nominees listed below were elected
directors at the last annual meeting. The stated age of the director nominees
will be their age at June 26, 2000. The board of directors has adopted a policy
that states that a director will not be a candidate for re-election after his or
her seventieth birthday. In accordance with this policy, Frank R. O'Keefe, Jr.,
a director since 1989, is not a candidate for re-election this year.
3
<PAGE>
<TABLE>
<CAPTION>
NAME, PRINCIPAL OCCUPATION, OTHER
CORPORATE AFFILIATIONS AND PRINCIPAL OCCUPATIONS DIRECTOR
DURING THE PAST FIVE YEARS OF NOMINEE AGE SINCE
------------------------------------------------ --- -----
<S> <C> <C>
Thelma R. Albright 53 1995
President, Carter Products Division, Carter-Wallace, Inc., Cranbury, New Jersey.
During 1995, Ms. Albright was General Manager and Executive Vice President of
Revlon Beauty Care Division. Also, Director, Cosmetics, Toiletry and Fragrance
Association and Consumer Healthcare Products Association.
Marc C. Breslawsky 57 1995
President and Chief Operating Officer, Pitney Bowes, Inc., Stamford,
Connecticut. Also, Director, Pitney Bowes, Inc., Pitney Bowes Credit Corp., C.R.
Bard, Inc., Pittston Corp., The Family Foundation of North America, Connecticut
Business and Industry Association and United Way of Eastern Fairfield County;
Vice Chairman of the Governor's Council of Economic Competitiveness and
Technology; Member, Board of Governors, the State of Connecticut/Red Cross
Disaster Relief Cabinet and the Landmark Club; and Trustee, Norwalk Hospital.
David E. A. Carson 65 1993
Trustee, People's Mutual Holdings, Bridgeport, Connecticut. From 1985-1999 Mr.
Carson was Chief Executive Officer of People's Bank and People's Mutual
Holdings. Also, Chairman, Bridgeport Public Education Fund, Business Advisory
Committee of Connecticut Commission on Children and Bridgeport Area Foundation;
and Director, Mass Mutual Institutional Funds, MML Series Investment Funds,
American Skandia Trust, Old State House, Hartford, Connecticut, The Bushnell,
Hartford, Connecticut, and Hartford Stage Company.
Arnold L. Chase 48 1999
Chairman of the Board of Directors and President, Gemini Networks, Inc., and
Executive Vice President, Chase Enterprises, Hartford, Connecticut. Also,
Director, First International Bank, Juvenile Diabetes Foundation International,
Old State House Association, Connecticut Historic Society and Science Center of
Connecticut.
John F. Croweak 63 1987
Chairman of the Board of Directors, Anthem Blue Cross & Blue Shield of
Connecticut, Inc., North Haven, Connecticut. Prior to his retirement in 1997,
Mr. Croweak served as Chairman of the Board of Directors and Chief Executive
Officer of Anthem Blue Cross & Blue Shield of Connecticut and its predecessor,
Blue Cross & Blue Shield of Connecticut, Inc. Also Chairman of the Board of
Directors, Connecticut American Insurance Company, ProMed Systems, Inc., OPTIMED
Medical Systems and Signal Medical Services, Inc.; and Director, BCS Financial,
The New Haven Savings Bank, Quinnipiac University, Opticare and Anthem, Inc.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
NAME, PRINCIPAL OCCUPATION, OTHER
CORPORATE AFFILIATIONS AND PRINCIPAL OCCUPATIONS DIRECTOR
DURING THE PAST FIVE YEARS OF NOMINEE AGE SINCE
------------------------------------------------ --- --------
<S> <C> <C>
Robert L. Fiscus 62 1992
Vice Chairman of the Board of Directors, Chief Financial Officer, Treasurer and
Secretary, The United Illuminating Company. Mr. Fiscus served as President and
Chief Financial Officer of the Company during the period January 1995 to
February 1998 and as Vice Chairman of the Board of Directors and Chief Financial
Officer from February 1998 to October 1999. He has served as Vice Chairman of
the Board of Directors, Chief Financial Officer, Treasurer and Secretary since
October 1999. Also, Director, Bridgeport Regional Business Council, The
Aristotle Corporation, Bridgeport Area Foundation and Susquehanna University;
Governor, University of New Haven; and Trustee, Central Connecticut Coast Young
Men's Christian Association, Inc.
Betsy Henley-Cohn 47 1989
Chairman of the Board of Directors, Joseph Cohn & Son, Inc., New Haven,
Connecticut. Also, Chairwoman of Birmingham Utilities, Inc.; and Director, The
Aristotle Corporation and Citizens Bank of Connecticut.
John L. Lahey 53 1994
President, Quinnipiac University, Hamden, Connecticut. Also, Director, Yale-New
Haven Hospital and The Aristotle Corporation; Vice Chairman and Director,
Regional Plan Association Board, New York, New York; and Member, Greater New
Haven Regional Leadership Council and Accreditation Committee of the American
Bar Association.
F. Patrick McFadden, Jr. 62 1987
Retired Chairman, Citizen's Bank of Connecticut, New Haven, Connecticut. During
the period 1995 through 1997, Mr. McFadden was President, Chief Executive
Officer and Director, The Bank of New Haven and BNH Bancshares, Inc. Also,
Chairman of the Board of Directors, Yale-New Haven Health Services Corporation;
and Member, Representative Policy Board of the South Central Connecticut
Regional Water District.
Daniel J. Miglio 59 1999
Formerly Chairman, President and Chief Executive Officer of Southern New England
Telecommunications Corporation during the period 1995 through 1998. Director,
The Aristotle Corporation, Yale-New Haven Health Services Corporation and
Connecticut Public Television and Radio; and Chairman, International Festival of
Arts and Ideas.
James A. Thomas 61 1992
Associate Dean, Yale Law School. Also, Trustee, Yale-New Haven Hospital and
People's Mutual Holdings; and Director, People's Bank and Sea Research
Foundation.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
NAME, PRINCIPAL OCCUPATION, OTHER
CORPORATE AFFILIATIONS AND PRINCIPAL OCCUPATIONS DIRECTOR
DURING THE PAST FIVE YEARS OF NOMINEE AGE SINCE
------------------------------------------------ --- --------
<S> <C> <C>
Nathaniel D. Woodson 58 1998
Chairman of the Board of Directors, President and Chief Executive Officer, The
United Illuminating Company. Mr. Woodson served as President of the Energy
Systems Business Unit of Westinghouse Electric Corporation during the period
January 1995 to April 1996. He has served as President of the Company since
February 1998, Chief Executive Officer since May 1998 and Chairman of the Board
of Directors since January 1999. Also, Director, Philip Services Corporation,
The Enterprise Center and CURE (Connecticut United for Research Excellence);
Trustee, Yale New-Haven Hospital; Member, Governor's Council on Competitiveness
and Technology; Chairman, Regional Leadership Council; and Vice Chairman,
Regional Growth Partnership.
</TABLE>
The board of directors held eleven meetings during 1999. The average
attendance record of the directors was 94.9% for meetings of the board of
directors and its committees held during 1999.
Ms. Henley-Cohn and Messrs. Croweak, McFadden and Woodson serve on the
Executive Committee of the board of directors. The Executive Committee, a
standing committee that has and may exercise all the powers of the board of
directors when it is not in session, held four meetings during 1999.
Msses. Albright and Henley-Cohn and Messrs. Breslawsky, Chase, Croweak,
Lahey, McFadden and O'Keefe serve on the Audit Committee of the board of
directors. The Audit Committee is a standing committee that oversees the
Company's financial accounting and reporting practices; evaluates the
reliability of the Company's system of internal controls; assures the
objectivity of independent audits; explores other issues that it deems may
potentially affect the Company and its employees; and makes recommendations in
these regards to the officers and to the board of directors. The Audit Committee
held three meetings during 1999.
Ms. Albright and Messrs. Breslawsky, Carson, McFadden, Miglio and
Thomas serve on the Compensation and Executive Development Committee of the
board of directors. The Compensation and Executive Development Committee is a
standing committee that reviews the performance of the officers of the Company;
reviews and recommends to the board of directors the levels of compensation and
other benefits paid and to be paid to the officers of the Company; reviews and
administers incentive compensation programs for the officers of the Company;
recommends to the board of directors changes in these programs; reviews the
recommendations of management for its succession planning and the selection of
officers of the Company; and reviews the investment standards, policies and
objectives established for, and the performance and methods of, the Company's
pension plan investment managers. The Compensation and Executive Development
Committee held five meetings during 1999.
Ms. Henley-Cohn and Messrs. Carson, Croweak, Lahey, O'Keefe and Thomas
serve on the Committee on Directors of the board of directors. The Committee on
Directors is a standing committee that recommends policy with respect to the
composition, organization, practices and compensation of the board of directors
and performs the nominating function for the board of directors. The Committee
on Directors held five meetings during 1999. The Committee on Directors will
consider nominees for election as directors recommended by shareowners upon the
timely submission of the names of such nominees with their qualifications and
biographical information forwarded to the Committee in care of the Treasurer and
Secretary of the Company.
All of the directors serve on the Strategic Direction Committee of the
board of directors. The Strategic Direction Committee is a standing committee
that assists the Chief Executive Officer and senior management with the
development of an overall strategic plan for the Company, taking into account
the key strategic issues facing the Company and the electric utility industry
and providing a focus for defining and implementing the annual goals and
projects comprising the Company's corporate business and operational plans. The
Strategic Direction Committee held two meetings during 1999.
6
<PAGE>
Ms. Henley-Cohn and Messrs. Carson, Fiscus, Miglio, O'Keefe and Woodson
serve on the Finance Committee of the board of directors. The Finance Committee
is a standing committee that reviews the financial decisions and transactions
necessary to execute the Company's strategic plan and reviews, at least
annually, the Company's projected income, cash flow and capital structure. The
Finance Committee held one meeting during 1999.
TRANSACTIONS WITH MANAGEMENT
Under a lease agreement dated May 7, 1991, the Company leased its
corporate headquarters offices in New Haven from Connecticut Financial Center
Associates Limited Partnership, which is controlled by Arnold L. Chase and
members of his immediate family. During 1999, the Company's lease payments to
the partnership totaled $6,162,000.
On March 30, 2000, one of the Company's indirect subsidiaries, United
Capital Investments, Inc., agreed to purchase, for $3,750,000, a minority
ownership interest in a newly-formed corporation, Gemini-United, Inc., which
proposes to develop, build and operate an open-access, hybrid fiber coaxial
communications network serving business and residential customers located in the
Company's franchised service area. United Capital Investments, Inc. will also
provide marketing, management of system customer base, and network deployment
and maintenance consulting services to Gemini-United, Inc., for an annual fee of
$70,000. The majority owner of Gemini-United, Inc. is Gemini Networks, Inc., a
corporation owned and controlled by Arnold L. Chase and members of his immediate
family; and Arnold L. Chase is Chairman of the Board of Directors of
Gemini-United, Inc. and Chairman of the Board of Directors and President of
Gemini Networks, Inc.
CORPORATE GOVERNANCE STANDARDS
The board of directors has approved the following corporate governance
standards for the discharge of its duties to the Company and its shareowners:
The Board of Directors (the Board) of The United Illuminating Company
(the Company) will discharge its duties in accordance with both the letter and
the spirit of all of the laws and governmental regulations that are applicable
to the Company and its operations, including the Standards of Conduct prescribed
for individual Directors by the Connecticut Business Corporation Act. This is
the Board's primary governance standard; and the following requirements and
proscriptions, which are reviewed by the Board annually and are subject to
revision from time to time, are intended to serve as supportive standards in
this regard.
BOARD MEMBERS
- -------------
o The entire Board will be elected annually.
o A Director will not be a candidate for reelection after his or her
seventieth birthday.
o As a general rule, former executive officers of the Company will not
be candidates for election as Directors.
o A Director will not be a candidate for election to a sixth term unless
he or she is the beneficial owner, directly or indirectly, of at least
1,200 shares of the Company's common stock at that time.
BOARD COMMITTEES
- ----------------
o Committees of the Board, and members of committees of the Board, will
be appointed by affirmative vote of Directors holding a majority of
the Directors.
o The membership of the Audit Committee and the Compensation and
Executive Development Committee will consist entirely of independent
Directors.
o The Committee on Directors will assess, annually, the effectiveness of
the Board.
7
<PAGE>
FUNCTIONING OF THE BOARD
- ------------------------
o Directors will receive materials relative to agenda items as far in
advance of Board meetings as feasible.
o When the Chief Executive Officer of the Company serves as the Chairman
of the Board, the senior independent Director, in terms of service,
will preside at meetings of the Board at which the Chairman of the
Board and Chief Executive Officer is not in attendance, and at
executive sessions of independent Directors of the Board, and will
also serve as an ex officio member of the Committee on Directors.
o The Board will review and approve, annually, a strategic plan and an
operating plan for the Company.
OFFICERS
- --------
o The Board will evaluate, annually, in an executive session of
independent Directors of the Board, the performance of the Chief
Executive Officer of the Company.
o The Chief Executive Officer will report, annually, to the Compensation
and Executive Development Committee of the Board, and to the Board,
regarding succession planning and management development.
o Acceptance by any officer of the Company of a compensated appointment
to the governing body of another business entity will be subject to
prior approval by the Board.
o Officers of the Company will be required to be beneficial owners,
directly or indirectly, of shares of the common stock of the Company
in amounts and within time periods determined by the Chief Executive
Officer of the Company.
o Incentive compensation plans will link compensation directly and
objectively to measurable goals set in advance by the Board on the
recommendation of the Compensation and Executive Development Committee
of the Board.
o Awarded stock options will not be repriced, except in the event of a
reorganization, recapitalization, stock split, stock dividend,
combination of shares, merger, consolidation, distribution of assets
or other change in the corporate structure or shares of the Company.
STOCK OWNERSHIP OF DIRECTORS AND OFFICERS
The following table indicates the number of shares of the Company's
common stock beneficially owned, directly or indirectly, as of April 24, 2000,
by each director, by the Chief Executive Officer during 1999, and by each of the
four other most highly compensated officers during 1999, and by all of the
directors and officers of the Company as a group.
8
<PAGE>
SHARES
BENEFICIALLY
NAME OF INDIVIDUAL OR OWNED DIRECTLY
NUMBER OF PERSONS IN GROUP OR INDIRECTLY
----------------------------------------------------------------------
Thelma R. Albright 5,031
Marc C. Breslawsky 6,529
David E.A. Carson 10,743
Arnold L. Chase 230,845
John F. Croweak 4,977
Robert L. Fiscus 34,806
Betsy Henley-Cohn 5,741
John L. Lahey 3,523
F. Patrick McFadden, Jr. 5,332
Daniel J. Miglio 8,619
Frank R. O'Keefe, Jr. 5,843
James A. Thomas 3,274
Nathaniel D. Woodson 12,281
James F. Crowe 7,254
Albert N. Henricksen 3,368
Anthony J. Vallillo 2,613
20 Directors and Officers as a
group, including those named above 366,533
The number of shares listed in the table above includes those held for
the benefit of officers that are participating in The United Illuminating
Company 401(k)/Employee Stock Ownership Plan and, in the case of Robert L.
Fiscus, 10,500 shares, and, in the case of all directors and officers as a
group, 16,300 shares, that may be acquired currently through the exercise of
stock options under the Company's 1990 Stock Option Plan.
The numbers in the above table are based on reports furnished by the
directors and officers. The shares reported for Mr. Chase do not include shares
held by other members of his family or entities owned or controlled by him and
them, which are described at "Principal Shareowners" above. Mr. Chase does not
admit beneficial ownership of any shares other than those shown in the foregoing
table, and he has denied that he has acted, or is acting, as a member of a
partnership, limited partnership or syndicate, or group of any kind for the
purpose of acquiring, holding or disposing of the Company's common stock. With
respect to other directors and officers, the shares reported in the foregoing
table include, in some instances, shares held by the immediate families of
directors and officers or entities controlled by directors and officers, the
reporting of which is not to be construed as an admission of beneficial
ownership.
Each of the persons included in the above table has sole voting and
investment power as to the shares of common stock beneficially owned, directly
or indirectly, by him or her, except as described below:
o each person listed below shares investment and voting power for the
number of shares listed opposite his or her name below with his or her
spouse:
NAME NUMBER OF SHARES
---- ----------------
James F. Crowe 765
Albert N. Henricksen 457
All directors and officers
as a group 1,414
o voting and investment power is held by the other people or entities
described below with respect to the number of shares listed opposite
their respective names:
9
<PAGE>
NAME OF OTHER PERSON OR
ENTITY HOLDING VOTING
NAME NUMBER OF SHARES AND INVESTMENT POWER
---- ---------------- -----------------------
David E.A. Carson 162 Spouse
Robert L. Fiscus 700 Trust
Betsy Henley-Cohn 2,035 Trust
Frank R. O'Keefe, Jr. 672 Trust
Nathaniel D. Woodson 12,000 Trust
James F. Crowe 10 Child
All directors and officers
as a group 15,817 Spouse, Trust or Child
The number of shares listed in the stock ownership table above also
includes the number of stock units listed opposite each person's name below, for
which neither investment nor voting power is held:
NAME NUMBER OF SHARES
---- ----------------
Thelma R. Albright 4,791
Marc C. Breslawsky 6,429
David E.A. Carson 9,745
Arnold L. Chase 545
John F. Croweak 4,054
Betsy Henley-Cohn 1,729
John L. Lahey 613
F. Patrick McFadden, Jr. 2,957
Daniel J. Miglio 619
Frank R. O'Keefe, Jr. 4,926
James A. Thomas 1,301
These stock units are in stock accounts under the Company's Non-Employee
Directors' Common Stock and Deferred Compensation Plan, described below at
"Director Compensation." Stock units in this plan are payable, in an equivalent
number of shares of the Company's common stock, upon termination of service on
the board of directors.
The number of shares of common stock beneficially owned by Mr. Chase,
as listed in the above stock ownership table, is approximately 1.6% of the
14,334,922 shares of common stock outstanding as of April 24, 2000. The number
of shares of common stock beneficially owned by each of the other persons
included in the foregoing table is less than 1% of the outstanding shares of
common stock as of April 24, 2000; and the number of shares of common stock
beneficially owned by all of the directors and officers as a group represents
approximately 2.6% of the outstanding shares of common stock as of April 24,
2000.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission (SEC) and The New York Stock Exchange initial reports of
ownership and reports of changes in ownership of the Company's common stock and
other equity securities of the Company. Directors, officers and
greater-than-ten-percent shareowners are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of reports furnished
to the Company and written representations that no other reports were required,
during the fiscal year ended December 31, 1999 all Section
10
<PAGE>
16(a) filing requirements applicable to its directors, officers and
greater-than-ten-percent shareowners were complied with.
EXECUTIVE COMPENSATION
The following table shows the annual and long-term compensation, for
services in all capacities to the Company for the years 1999, 1998 and 1997, of
the person who served as Chief Executive Officer during 1999 and of the four
other most highly compensated persons during 1999 who were serving as executive
officers at December 31, 1999:
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
----------------------
NAME AND ANNUAL COMPENSATION SECURITIES UNDERLYING LTIP ALL OTHER
-------------------
PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS/SARS(#) PAYOUTS($) COMPENSATION
------------------ ---- --------- -------- --------------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Nathaniel D. Woodson 1999 $412,000 $220,000 21,000 $169,338
Chairman of the Board of 1998 341,668 105,000 80,000 38,756
Directors, President and Chief
Executive Officer
Robert L. Fiscus 1999 $233,200 $110,000 15,500 $334,141 $8,471
Vice Chairman of the Board of 1998 224,900 55,000 260,691 7,745
Directors, Chief Financial Officer, 1997 220,400 70,000 59,850 7,360
Treasurer and Secretary
James F. Crowe 1999 $187,900 $70,000 8,000 $257,031 $7,750
Group Vice President 1998 181,200 37,000 200,531 7,235
1997 177,600 55,000 42,750 6,830
Anthony J. Vallillo 1999 $185,900 $68,000 8,000 $257,031 $7,105
Group Vice President 1998 175,700 46,000 72,191 6,679
1997 170,000 55,000 6,840 6,144
Albert N. Henricksen 1999 $162,700 $60,000 8,000 $154,219 $7,304
Group Vice President 1998 147,650 36,000 96,255 6,876
1997 140,600 38,000 13,680 6,401
</TABLE>
None of the persons named in the table received any cash compensation
in any of the years shown other than the amounts appearing in the columns
captioned "Salary ($)," "Bonus ($)," "LTIP Payouts ($)" and "All Other
Compensation." None of these persons received, in any of the years shown, any
cash-equivalent form of compensation, other than through participation in the
Company's group life, health and hospitalization plans, which are available on a
uniform basis to all salaried employees of the Company and the dollar value of
which, together with the dollar value of all other non-cash perquisites and
other personal benefits received by that person, did not exceed the lesser of
$50,000 or 10% of the total salary and bonus compensation received by him for
the year.
The amounts appearing in the column captioned "Annual Compensation -
Bonus ($)" in the above table are awards earned in the years 1997, 1998 and 1999
pursuant to the Executive Incentive Compensation Program described below.
The amount 80,000 appearing under the column captioned "Long-Term
Compensation - Securities Underlying Options/SARs(#)" for Mr. Woodson is the
number of phantom stock options on shares of the Company's common stock granted
to him in February of 1998 at the time of his employment as President. The
options are exercisable at the rate of 16,000 options on each of the first five
anniversaries of the grant date during the term of Mr. Woodson's employment
agreement, which is described below. The other amounts appearing in this column
are numbers of stock options on shares of the Company's common stock granted to
each of the persons named on March 22, 1999 under the 1999 Stock Option Plan
described below. The options are exercisable at the rate of one-third of the
options on each of the first three anniversaries of the grant date.
11
<PAGE>
The amount listed for each person under the column captioned "Long-Term
Compensation - LTIP Payouts ($)" for fiscal year 1999 is the amount that he
earned for the 1997-1999 performance period under the 1996 Long-Term Incentive
Program described below. The cash payouts were made in February 2000. The amount
listed for each person under the column captioned "Long-Term Compensation - LTIP
Payouts ($)" for fiscal year 1998 is the amount that he earned for the 1996-1998
performance period under the 1996 Long-Term Incentive Program. The cash payouts
were made in March 1999. The amount listed for each person under the column
captioned "Long-Term Compensation - LTIP Payouts ($)" for fiscal year 1997 is
the amount that he earned for the 1995-1997 performance period under the 1993
Dividend Equivalent Program. Under this program, which was terminated when the
1996 Long-Term Incentive Program was established, each officer of the Company
was awarded a number of dividend equivalent units prior to the commencement of
the 1995 performance period and, according to the ranking of the Company's total
shareowner return during the performance period relative to the total shareowner
returns of a preselected peer group of companies, the officer earned a number of
dividend equivalent units that resulted in a cash payment equal to that number
of units multiplied by the sum of all dividends paid per share on the Company's
common stock during the performance period. The cash payments were made in
February 1998.
The amounts appearing in the column captioned "All Other Compensation,"
except the amounts shown for Mr. Woodson, are cash contributions by the Company
to The United Illuminating Company 401(k)/Employee Stock Ownership Plan on
behalf of each of the persons named for (i) a match of pre-tax elective deferral
contributions by him to the plan from his salary and bonus compensation
(included in the columns captioned "Salary ($)" and "Bonus ($)"), and (ii) an
additional contribution by the Company equal to 25% of the dividends paid on his
shares in the plan. Cash contributions of $5,403 and $5,521 were made on behalf
of Mr. Woodson for these purposes during 1998 and 1999 respectively, and are
included in the amount appearing in this column. In addition, during 1998, Mr.
Woodson received a reimbursement of his relocation expenses, in the amount of
$33,355, when he moved from Pennsylvania to Connecticut at the commencement of
his employment. In 1999, Mr. Woodson received $163,817 as reimbursement for the
costs associated with the selling of his residence in Pennsylvania.
The Company's Executive Incentive Compensation Program was established
in 1985 for the purposes of (i) helping to attract and retain executives and key
managers of high ability, (ii) heightening the motivation of those executives
and key managers to attain goals that are in the interests of shareowners and
customers, and (iii) encouraging effective management teamwork among the
executives and key managers of the Company. Under this program, cash awards may
be made each year to officers and key employees based on their achievement of
pre-established performance levels with respect to specific shareowner goals,
customer goals and individual goals for the preceding year, and upon an
assessment of the officers' performance as a group with respect to strategic
opportunities during that year. Eligible officers, performance levels and
specific goals are determined each year by directors who are not employees, and
incentive awards are paid following action by the board of directors after the
close of the year. Incentive awards are made from individual target incentive
award amounts, which are prescribed percentages of the individual participants'
salaries, ranging from 20% to 35% depending on each participant's payroll salary
grade. A participant may, by achieving his or her pre-established performance
levels with respect to specific shareowner goals, customer goals and individual
goals for a year, become eligible for an incentive award for this achievement of
up to 150% of his or her target incentive award amount for that year.
The Company's 1996 Long-Term Incentive Program was established for the
purposes of (i) promoting the long-term success of the Company by attracting,
retaining and providing financial incentives to key employees who are in a
position to make significant contributions toward that success, (ii) linking the
interests of these key employees to the interests of the shareowners, and (iii)
encouraging these key employees to maintain proprietary interests in the Company
and achieve extraordinary job performance levels. Under the program, an initial
three-year performance period commenced on January 1, 1996, three-year
performance periods commenced on January 1, 1997 and January 1, 1998, and a
series of three-year performance periods was to commence on January 1, 1999 and
on each January 1 thereafter to and including January 1, 2005. In 1999, the
board of directors determined to substitute stock options, under the 1999 Stock
Option Plan described below, for the 1996 Long-Term Incentive Program. Under the
program, the board of directors has designated the officer-participants in the
program for each performance period, the number of contingent performance shares
awarded each officer-participant for that performance period, and a peer group
of companies comparable to the Company for that performance period. Each
contingent performance share is a share unit, equivalent to one share of the
Company's common stock, credited to
12
<PAGE>
an officer-participant's performance share account in the program on a
conditional basis at the beginning of a performance period. At the end of each
performance period, the number of performance shares earned for the performance
period is calculated on the basis of the Company's total shareowner return
during the performance period relative to the peer group of companies
preselected by the board of directors for that performance period. Total
shareowner return for the Company, and for each member of the peer group, for a
performance period is measured by the formula:
Change in Market Price from + Dividends Declared During the Period
Beginning to End of Period
------------------------------------------------------------------------
Market Price at Beginning of Period
If the Company's total shareowner return for the performance period ranks at the
ninetieth percentile among the total shareowner returns of the peer group
companies, the number of performance shares earned by the officer-participant is
equal to the number of contingent performance shares awarded to that
officer-participant at the commencement of the performance period. If the
Company's total shareowner return ranks below the thirtieth percentile among
those of the peer group companies, no performance shares are earned for the
performance period. If the Company's total shareowner return ranks between the
thirtieth and the ninetieth percentiles, the number of performance shares earned
is calculated from a scale rising from 15% to 100%. On each dividend payment
date with respect to the Company's common stock, the earned performance shares
in an officer-participant's performance share account are credited with an
additional number of performance shares in an amount equal to the dividend
payable on the earned performance shares in the account divided by the market
price of the Company's common stock on the dividend payment date. Upon the
termination of an officer-participant's employment, the officer-participant is
paid, in cash, an amount equal to the number of earned performance shares in his
or her performance share account multiplied by the market price of the Company's
common stock on the employment termination date. An officer-participant is also
entitled to payment at any time, in cash, of the value of the earned performance
shares in his or her performance share account, provided that the
officer-participant is in compliance with the minimum stock ownership
requirement for such officer prescribed by the board of directors at that time.
The Company's 1999 Stock Option Plan is intended to promote the
profitability of the Company and its subsidiaries by providing directors,
officers and key full-time employees with incentives to contribute to the
Company's success, and enable the Company to attract, retain and reward the best
available directors and managerial employees. A maximum of 650,000 shares of the
Company's common stock may be purchased under the 1999 Stock Option Plan, and
the maximum number of shares that may be purchased through options granted in
any one year to any optionee may not exceed 50,000. Options under the 1999 Stock
Option Plan may be granted as incentive stock options, intended to qualify for
favorable tax treatment under federal tax law, or as nonqualified stock options.
When incentive stock options or nonqualified stock options become exercisable
and are exercised by the optionee to whom they have been granted, the optionee
pays the Company the exercise price per share fixed on the date of the option
grant and receives shares of common stock equal to the number of incentive stock
options or nonqualified stock options exercised. All proceeds received by the
Company from the exercise of options are used for general corporate purposes.
Directors who are not employees of the Company select the optionees, determine
the number of stock options to be granted to each optionee, whether the stock
options will be nonqualified stock options or incentive stock options, and
whether any stock option will include a right to purchase an additional share of
common stock contingent upon the option holder's having exercised the stock
option and having paid its exercise price in full in shares of common stock (a
"reload right"). The non-employee directors also determine the period within
which each stock option granted will be exercisable, and may provide that the
stock options will become exercisable in installments.
The following rules must be observed under the 1999 Stock Option Plan:
o the exercise price for each option must be equal to or greater than the
fair market value of the common stock on the date of the creation of the
option, determined by averaging the high and low sales prices of the common
stock on the New York Stock Exchange on that date,
o no option may be repriced after the date of its creation,
13
<PAGE>
o no stock option may be exercisable less than one year, or more than ten
years, from the date it is granted,
o no more than 1/3 of the number of stock options granted to any optionee on
any date may first become exercisable in any twelve-month period,
o in the case of the grant of an incentive stock option to an optionee who,
at the time of the grant, owns more than 10% of the total combined voting
power of all classes of the stock of the Company or any of its
subsidiaries, in no event may the stock option be exercisable more than
five years from the date it is granted,
o in the case of incentive stock options, the number of stock options granted
to an optionee on any date that may first become exercisable in any
calendar year must be limited to $100,000 divided by the exercise price per
share,
o an option arising from the exercise of a reload right cannot be exercised
before the six-month anniversary of the date when the reload right was
exercised, and it will expire on the same date on which the option from
which it arose would have expired if it had not been exercised,
o except as otherwise provided in the 1999 Stock Option Plan, an employee
optionee may exercise a stock option only if he or she is, and has
continuously been since the date of the stock option was granted, a
full-time employee of the Company or one of its subsidiaries.
The Company has entered into an employment agreement with Mr. Woodson,
which will continue in effect until terminated by the Company at any time or by
Mr. Woodson on six months' notice. This agreement provides that the annual
salary rate of Mr. Woodson will be $400,000, subject to upward revision by the
board of directors at such times as the salary rates for other officers of the
Company are reviewed by the directors, and subject to downward revision by the
board of directors contemporaneously with any general reduction of the salary
rates of other officers of the Company, except in the event of a change in
control of the Company. The salary paid to Mr. Woodson in 1998 and 1999, shown
on the above table, was paid pursuant to this agreement. This agreement also
provides that when Mr. Woodson's employment by the Company terminates after he
has served in accordance with its terms, the Company will pay him an annual
supplemental retirement benefit in an amount equal to the excess, if any, of (A)
over (B), where (A) is 2.0% of his highest three-year average total salary and
bonus compensation from the Company times the number of years (not to exceed 30)
of his deemed service as an employee of the Company, and (B) is the annual
benefit payable to him under the Company's pension plan. If the Company
terminates Mr. Woodson's employment on less than three years' notice and without
cause, he will receive four benefits: (i) He will be paid the present value of
his supplemental retirement benefit. The present value of the benefit will be
calculated by assuming that he retires at his normal retirement date and lives
until the age when an average person dies. (ii) He will continue to receive his
then-current salary for a period of three years. (iii) He will continue to
participate in the Company's employee benefit plans and programs for one year.
(iv) If his termination occurs in connection with a change in control of the
Company, the three-years' salary continuation benefit will be accelerated into
an immediate lump-sum payment, and he will choose either a cash severance
payment equal to a year of his then-current salary and bonus compensation, or an
increase of any combination of years of age, or years of service as an employee,
totaling six, for purposes of calculating his supplemental retirement benefit or
the benefits payable under the Company's retiree medical benefit plans. Under
the Company's Change in Control Severance Plan, if Mr. Woodson's employment is
terminated without cause within two years following a change in control of the
Company, he will be entitled to receive, in lieu of his employment agreement
termination benefits, a severance payment of three years' compensation at his
then-current salary and bonus rate, an increase of three years of service in the
calculation of his supplemental retirement benefit and the benefits payable
under the Company's retiree medical benefit plans, and three years of continued
participation in the Company's employee benefit plans and programs.
The Company has also entered into employment agreements with Messrs.
Fiscus and Crowe, each of which will continue in effect until terminated by the
Company on three years' notice or by the officer on six months' notice. These
agreements provide that the annual salary rates of Messrs. Fiscus and Crowe will
be $218,400 and $176,600, respectively, subject to upward revision by the board
of directors at such times as the salary rates of other officers of the Company
are reviewed by the directors, and subject to downward revision by the board of
directors contemporaneously with any general reduction of the salary rates of
other officers of the Company, except in the event of a change in control of the
Company. The salaries paid to Messrs. Fiscus and Crowe in 1997, 1998 and
14
<PAGE>
1999, shown on the above table, were paid pursuant to these agreements. Each of
these agreements also provides that when the officer's employment by the Company
terminates after he has served in accordance with its terms, the Company will
pay him an annual supplemental retirement benefit in an amount equal to the
excess, if any, of (A) over (B), where (A) is 2.2% of his highest three-year
average total salary and bonus compensation from the Company times the number of
years of his service deemed as an employee, which number of years is not to
exceed 30 years, and (B) is the annual benefit payable to him under the
Company's pension plan. If the Company terminates the officer's employment on
less than three years' notice and without cause, he will receive four benefits:
(i) He will be paid the present value of his supplemental retirement benefit.
The present value of the benefit will be calculated by assuming that he retires
at his normal retirement date and lives until the age when an average person
dies. (ii) He will continue to receive his then-current salary for a period of
three years. (iii) He will continue to participate in the Company's employee
benefit plans and programs for three years. (iv) If his termination occurs in
connection with a change in control of the Company, the three-years' salary
continuation benefit will be accelerated into an immediate lump-sum payment, and
he will choose either a severance payment equal to two years of his then-current
salary and bonus compensation, or an increase of any combination of years of
age, or years of service as an employee, totaling six, for purposes of
calculating his supplemental retirement benefit or the benefits payable under
the Company's retiree medical benefit plans. Under the Company's Change in
Control Severance Plan, if the officer's employment is terminated without cause
within two years following a change in control of the Company, he will be
entitled to receive, in lieu of his employment agreement termination benefits, a
severance payment of two years' compensation at his then-current salary and
bonus rate, an increase of two years of service in the calculation of his
supplemental retirement benefit and the benefits payable under the Company's
retiree medical benefit plans, and two years of continued participation in the
Company's employee benefit plans and programs.
The Company has also entered into employment agreements with Messrs.
Vallillo and Henricksen, each of which will continue in effect until terminated
by the Company at any time or by the officer on six months' notice. These
agreements provide that the annual salary rates of Messrs. Vallillo and
Henricksen will be $140,000 and $136,900, respectively, subject to upward
revision by the board of directors at such times as the salary rates for other
officers of the Company are reviewed by the directors, and subject to downward
revision by the board of directors contemporaneously with any general reduction
of the salary rates of other officers of the Company, except in the event of a
change in control of the Company. The salaries paid to Messrs. Vallillo and
Henricksen in 1997, 1998 and 1999, shown on the above table, were paid pursuant
to these agreements. Each of these agreements also provides that when the
officer's employment by the Company terminates after he has served in accordance
with its terms, the Company will pay him an annual supplemental retirement
benefit in an amount equal to the excess, if any, of (A) over (B), where (A) is
2.0% of his highest three-year average total salary and bonus compensation from
the Company times the number of years of his service as an employee, which
number of years is not to exceed 30 years, and (B) is the annual benefit payable
to him under the Company's pension plan. If the Company terminates the officer's
employment without cause, he will receive two benefits: (i) He will be paid the
present value of his supplemental retirement benefit. The present value of the
benefit will be calculated by assuming that he retires at his normal retirement
date and lives until the age when an average person dies. (ii) He will choose
either a severance payment equal to two years of his then-current salary and
bonus compensation, or an increase of any combination of years of age, or years
of service as an employee, totaling six, for purposes of calculating his
supplemental retirement benefit or the benefits payable under the Company's
retiree medical benefit plans. Under the Company's Change in Control Severance
Plan, if the officer's employment is terminated without cause within two years
following a change in control of the Company, he will be entitled to receive, in
lieu of his employment agreement termination benefits, a severance payment of
two years' compensation at his then-current salary and bonus rate, an increase
of two years of service in the calculation of his supplemental retirement
benefit and the benefits payable under the Company's retiree medical benefit
plans, and two years of continued participation in the Company's employee
benefit plans and programs.
A trust fund has been established by the Company for the funding of the
supplemental retirement benefits accruing under the employment agreements with
Messrs. Woodson, Fiscus, Crowe, Vallillo and Henricksen, and to ensure the
performance of the Company's other payment obligations under each of these
employment agreements and the Company's Change in Control Severance Plan in the
event of a change in control of the Company.
15
<PAGE>
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
NUMBER OF % OF TOTAL POTENTIAL REALIZABLE VALUE
SECURITIES OPTIONS/SARS AT ASSUMED ANNUAL RATES
UNDERLYING GRANTED TO EXERCISE OR OF STOCK PRICE APPRECIATION
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION FOR OPTION TERM
---------------------------
NAME GRANTED (#) FISCAL YEAR ($/SHARE) DATE 5%($) 10%($)
- ---- ----------- ----------- --------- ---- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Nathaniel D. Woodson 21,000 21.8% $43.2188 03/22/09 $453,797 $907,594
Robert L. Fiscus 15,500 16.1% 43.2188 03/22/09 334,945 669,891
James F. Crowe 8,000 8.3% 43.2188 03/22/09 172,875 345,750
Anthony J. Vallillo 8,000 8.3% 43.2188 03/22/09 172,875 345,750
Albert N. Henricksen 8,000 8.3% 43.2188 03/22/09 172,875 345,750
</TABLE>
- -------------------
These are stock options on shares of the Company's common stock granted
on March 22, 1999. The options include reload rights and are exercisable at the
rate of one-third of the options on each of the first three anniversaries of the
grant date.
STOCK OPTION EXERCISES IN 1999 AND YEAR-END OPTION VALUES
The following table shows aggregated common stock option exercises
during 1999 by the Chief Executive Officer and each of the other four most
highly compensated executive officers of the Company, including the aggregate
value of gains realized on the dates of exercise. In addition, this table shows
the number of shares covered by both exercisable and non-exercisable options as
of December 31, 1999. Also reported are the values as of December 31, 1999 for
"in-the-money" options, calculated as the positive spread between the exercise
price of existing options and the year-end fair market value of the Company's
common stock.
The amounts listed in the column captioned "Value of Unexercised
In-the-Money Options/SARs at FY-End ($)" in the table below represent the fair
market value of the shares of common stock underlying the options listed as of
December 31, 1999 ($51.375 per share) minus the exercise price.
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/SARS
ACQUIRED ON VALUE OPTIONS/SARS AT FY-END(#) AT FY-END ($)
----------------------------- -----------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE NOT EXERCISABLE EXERCISABLE NOT EXERCISABLE
---- ------------- ----------- ----------------------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Nathaniel D. Woodson 0 $0 16,000 85,000 $ 99,499 $569,278
Robert L. Fiscus 0 0 10,500 15,500 157,500 126,422
James F. Crowe 0 0 0 8,000 0 65,250
Anthony J. Vallillo 0 0 0 8,000 0 65,250
Albert N. Henricksen 0 0 0 8,000 0 65,250
</TABLE>
RETIREMENT PLANS
The following table shows the estimated annual benefits payable as a
single life annuity under the Company's qualified defined benefit pension plan
on retirement at age 65 to persons in the earnings classifications and with the
years of service shown. Retirement benefits under the plan are determined by a
fixed formula, based on years of service and the person's average annual
earnings from the Company during the three years during which the person's
earnings from the Company were the highest, applied uniformly to all persons.
16
<PAGE>
<TABLE>
<CAPTION>
AVERAGE
ANNUAL EARNINGS DURING
THE HIGHEST 3 ESTIMATED ANNUAL BENEFITS PAYABLE AT AGE 65
-------------------------------------------
YEARS OF SERVICE 20 YEARS 25 YEARS 30 YEARS 35 YEARS 40 YEARS
---------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$100,000 $32,000 $40,000 $48,000 $48,000 $48,000
$150,000 $48,000 $60,000 $72,000 $72,000 $72,000
$200,000 $51,200 $64,000 $76,800 $76,800 $76,800
$250,000 $51,200 $64,000 $76,800 $76,800 $76,800
$300,000 $51,200 $64,000 $76,800 $76,800 $76,800
$350,000 $51,200 $64,000 $76,800 $76,800 $76,800
$400,000 $51,200 $64,000 $76,800 $76,800 $76,800
$450,000 $51,200 $64,000 $76,800 $76,800 $76,800
</TABLE>
Earnings amounts listed in the column captioned "Average Annual
Earnings During the Highest 3 Years of Service" include annual salary and cash
bonus awards paid under the Executive Incentive Compensation Program. See
"Executive Compensation" above. The annual estimated benefit amounts shown in
the table are not subject to any deduction for Social Security or other offset
amounts.
Internal Revenue Code Section 401(a)(17) limits earnings used to
calculate qualified plan benefits to $160,000 for 1999. This limit was used in
the preparation of the table. In addition, qualified plan benefits cannot exceed
an Internal Revenue Code Section 415(b) limit of $130,000 for 1999. The board of
directors has adopted a supplemental executive retirement plan that has
permitted the directors to award supplemental retirement benefits to Messrs.
Woodson, Fiscus, Crowe, Vallillo and Henricksen and to other officers
individually selected by the directors in amounts sufficient to prevent these
Internal Revenue Code limitations from adversely affecting their retirement
benefits determined by the pension plan's fixed formula.
As of their last employment anniversary dates, Messrs. Woodson, Fiscus,
Crowe, Vallillo and Henricksen had accrued 2, 27, 35, 31 and 36 years of
service, respectively.
* * * *
BOARD OF DIRECTORS
COMPENSATION AND EXECUTIVE DEVELOPMENT COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
All of the members of the Compensation and Executive Development
Committee of the board of directors (the committee) are non-employee directors.
The committee, with the assistance of an outside compensation
consulting firm, formulates all of the objectives and policies relative to the
compensation of the officers of the Company, subject to approval by the entire
board of directors; and the committee recommends to the board of directors all
of the elements of the officers' compensation arrangements, including the design
and adoption of compensation programs, the identity of program participants,
salary grades and structure, annual payments of salaries, and any awards under
the annual incentive compensation program and the long-term incentive program.
The Company's basic executive compensation program consists of three
components: annual salaries, bonuses under an annual incentive compensation
program, and long-term incentive program awards. The overall objective of this
program is to attract and retain qualified executives and to produce strong
financial performance for the benefit of the Company's shareowners, while
providing a high level of customer service and value for its customers.
Accordingly, all of the committee's decisions, in 1999 and in prior years, have
ultimately been based on the committee's assessment of the Company's performance
in these regards. As benchmarks, the committee compares the Company's overall
performance relative to other electric utilities of comparable size, the
compensation practices and programs of other companies that are most likely to
compete with the Company for services of executive officers, the Company's
strategic objectives, and the challenges it faces.
17
<PAGE>
The committee formulates annual salary ranges for officers by periodic
comparisons to rates of pay for comparable positions in other electric
utilities, as reported in the Edison Electric Institute's Executive Compensation
Survey (the EEI Survey). Within the applicable range, each individual officer's
annual salary is then set at a level that will compensate the officer for
day-to-day performance, in the light of the officer's level of responsibility,
past performance, prior year's salary and bonus, and potential future
contributions to the Company's strategic objectives.
As described in detail above at "Executive Compensation," the Company's
annual incentive compensation program and its long-term incentive program have
somewhat different purposes. Under the annual Executive Incentive Compensation
Program, cash awards may be made each year to officers based on their
achievement of performance levels formulated by the committee with respect to
(1) specific shareowner financial goals, (2) specific business unit goals, (3)
specific team/individual goals, and (4) a qualitative assessment of the
officers' performance as a group with respect to strategic opportunities of the
Company during that year, and based on such other factors as the committee deems
relevant. The Company's Long-Term Incentive Program rewards officers for
achieving a return to shareowners over three-year periods of time. Under the
Long-Term Incentive Program that was replaced by the 1999 Stock Option Plan
approved by the shareowners last year, long-term incentive awards have been
linked to the total return to the shareowners compared to a peer group of
electric utilities. This program continues to provide strong incentives for
superior future performance under the three-year contingent performance share
awards granted in 1998; and it also encourages officers to continue serving the
Company, because the earning of each incentive award is conditioned upon the
officer's continued service for the award's three-year performance period.
Continued service is also a key feature of the Company's 1999 Stock Option Plan.
As described above at "Executive Compensation," this plan provides officers with
incentives to contribute to the Company's success as measured by the market
value of its common stock. Except as otherwise provided in the plan, an officer
optionee may exercise a stock option only if he or she is, and has continuously
been since the date that the stock option was granted, a full-time employee of
the Company or one of its subsidiaries.
For 1999, the bonus opportunities of the Company's officers were
targeted by the committee so that the combination of each officer's 1999 salary
and annual Executive Incentive Compensation Program award, assuming that
pre-established performance goals were met, would approximate, on average, the
50th percentile of compensation for comparable positions as reported in the 1998
Edison Electric Institute's Executive Compensation Survey. Goals were
established to focus the officers' attention at the corporate level on
shareowner financial measures and at the business unit level on a "balanced
scorecard," covering business unit financial, operational, customer and human
resource measures. A prerequisite threshold level of recurring earnings per
share was specified in order for any bonus to be earned. For 1999 the
pre-established shareowner financial goals, accounting for 70% of the bonus
awards of the Chairman of the Board of Directors, President and Chief Executive
Officer and the Vice Chairman of the Board of Directors and Chief Financial
Officer and 40% of the business unit leaders' bonus awards, included two
measures: recurring earnings per share from operations and recurring cash from
operations available to pay down debt. For each of the business unit leaders,
40% of the bonus award for 1999 was based on the achievement of business unit
"balanced scorecard" goals. The remaining 30% of the bonus awards of the
Chairman of the Board of Directors, President and Chief Executive Officer and
the Vice Chairman of the Board of Directors and Chief Financial Officer and 20%
of the business unit leaders' bonus awards for 1999 were based on the
committee's qualitative assessment of the performance of the Company's officers
as a group with respect to 1999 strategic opportunities. For 1999, this
assessment focused on the officers' achievements in the implementation of the
Company's vision, which is to position the Company to be the premier regulated
distribution utility to the regional community and the leading value-added
energy services supplier to the Company's specific customers. The committee
believed that the implementation plan should include items such as: addressing
the issues of (i) sale of non-nuclear generating assets, (ii) successful
commencement of retail access on January 1, 2000, (iii) Year-2000 rollover
without interruption of services or any major business system, (iv) formation of
a holding company, and (v) investment in non-regulated businesses.
The officers' achievements with respect to 1999 pre-established
shareowner financial goals were especially strong: 150% of the recurring
earnings per share from operations goal and 150% of the recurring cash available
to pay down debt goal. Business unit leader achievements of business unit goals
were also strong, and ranged between 116% and 125% of the several goals.
18
<PAGE>
Overall, the committee's bonus awards for 1999 under the Executive
Incentive Compensation Program ranged between 133% and 163% of the
pre-established targeted awards, depending on the individual officer's
achievements, reflecting a strong performance by the Company's officers.
Long-term incentives, in recognition of the increasingly competitive
business environment for utilities, are based on a competitive blend of utility
and general industry award levels. It is the intention of the committee to
transition, over a period of several years, to a 50%/50% blend of median utility
and general industry long-term incentive awards. The committee believes that the
partial use of general industry data recognizes the more competitive environment
for utilities, and that it is an important step toward ensuring the Company's
ability to continue attracting, retaining and motivating experienced executive
talent, given similar changes in the compensation programs at other utilities.
Under the Company's Long-Term Incentive Program, which is now the 1999
Stock Option Plan, a total of 132,000 Nonqualified Stock Options, with reload
rights, were awarded in 1999 to a total of 29 directors, officers and key
employees of the Company. The number of options granted to each officer was
based on a weighted blend of 70% median utility and 30% general industry
long-term award levels for comparably-sized companies. Grants made in 2000 have
been based on a weighted blend of 60% median utility and 40% general industry
long-term incentive data.
It is not expected that any compensation paid to an executive officer
during 2000 will become non-deductible under Internal Revenue Code Section
162(m). Section 162(m) provides that no deduction will be available to a
publicly-held corporation for any compensation in a tax year paid to any
executive officer in excess of $1 million.
CHIEF EXECUTIVE OFFICER COMPENSATION FOR 1999
In March of 1999, the committee recommended, and the board of directors
approved, a 1999 annual salary of $412,000 for Mr. Woodson, as Chairman of the
Board of Directors, President and Chief Executive Officer of the Company. This
annual salary was between the median and the 75th percentile salary for this
officership position at other electric utilities of comparable size, as reported
in the 1998 Edison Electric Institute's Executive Compensation Survey, and below
the 25th percentile of a general industry sample for companies of similar size.
It was the committee's judgment that the salary was appropriate for an executive
with the skills and abilities of Mr. Woodson to lead the Company forward in the
competitive business environment for utilities. Mr. Woodson's bonus performance
target for 1999 under the annual Executive Incentive Compensation Program was
set at $144,200, consisting of a prerequisite threshold level of recurring
earnings per share from operations goal and pre-established goals with respect
to recurring cash from operations available to pay down debt and strategic
opportunities, as detailed above. At the conclusion of 1999, the committee
recommended, and the board of directors approved, a 1999 bonus award of $220,000
to Mr. Woodson, representing 143% of his prorated targeted annual performance
bonus based on the achievements as described above and an additional sum of
$14,515 based on the committee's judgment that Mr. Woodson's performance during
1999 had been extraordinary.
The committee's qualitative assessment of the performance of the
officers as a group with respect to strategic opportunities during 1999 was very
positive and, in the judgment of the committee, reflected favorably on Mr.
Woodson's leadership.
COMPENSATION AND EXECUTIVE DEVELOPMENT COMMITTEE
Thelma R. Albright, Chair
Marc C. Breslawsky
David E. A. Carson
F. Patrick McFadden, Jr.
Daniel J. Miglio
James A. Thomas
19
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No director of the Company who served as a member of the Compensation
and Executive Development Committee during 1999 was, during 1999 or at any time
prior thereto, an officer or employee of the Company. During 1999, no director
of the Company was an executive officer of any other entity on whose Board of
Directors an executive officer of the Company served.
DIRECTOR COMPENSATION
Directors who are employees of the Company receive no compensation for
their service as directors.
The remuneration of non-employee directors of the Company includes an
annual retainer fee of $21,000, payable $9,000 for service during the first
quarter of the year and $4,000 each for service during the second, third and
fourth quarters of the year (the $9,000 retainer fee payable for service during
the first quarter of the year is payable in shares of the Company's common stock
or by credit to a stock account under the Non-Employee Directors' Common Stock
and Deferred Compensation Plan described below), plus a fee of $1,000 for each
meeting of the board of directors or committee of the board of directors
attended. Committee chairpersons receive an additional fee of $750 per quarter
year. Non-employee directors are also provided travel/accident insurance
coverage in the amount of $200,000.
The Company's Non-Employee Directors' Common Stock and Deferred
Compensation Plan has two features: a mandatory common stock feature; and an
optional deferred compensation feature. Each non-employee director has two
accounts in the plan: a stock account for the accumulation of units that are
equivalent to shares of common stock, and on which amounts equal to cash
dividends on the shares of the Company's common stock represented by stock units
in the account accrue as additional stock units; and a cash account for
accumulation of the director's fees payable in cash that the director elects to
defer, and on which interest accrues at the prime rate in effect at the
beginning of each month at Citibank, N.A.
Under the common stock feature of the plan, a credit of stock units to
each non-employee director's stock account in the plan is made on or about the
first day of March in each year, unless the director elects to receive shares of
common stock in lieu of having an equivalent number of stock units credited to
his or her stock account. Each annual stock account credit consists of a number
of whole and fractional stock units equal to the sum of 200 plus the quotient
resulting from dividing the retainer fee for the first quarter of the year by
the market value of the Company's common stock on the date of the credit.
Under the deferred compensation feature of the plan, a non-employee
director may elect to defer receipt of all or part of (i) his or her retainer
fee for service during the second, third and fourth quarters of each year, (ii)
his or her committee chairperson fees, and/or (iii) his or her meeting fees,
that are payable in cash. All amounts deferred are credited when payable, at the
director's election, to either the director's cash account or to the director's
stock account (in a number of whole and fractional stock units based on the
market value of the Company's common stock on the date the fee is payable) in
the plan.
All amounts credited to a non-employee director's cash account or stock
account in the plan are at all times fully vested and nonforfeitable, and are
payable only upon termination of the director's service on the board of
directors. At that time, the cash account is payable in cash and the stock
account is payable in an equivalent number of shares of common stock or, at the
director's election, in cash based on the market value of an equivalent number
of shares of the Company's common stock.
Under the Company's 1999 Stock Option Plan described above, each
non-employee director was granted 4,500 stock options, with reload rights, on
March 22, 1999. These options are exercisable at the rate of one-third of the
options on each of the first three anniversaries of the grant date, at an
exercise price per share of $43 7/32, which was the fair market value of the
Company's common stock on March 22, 1999.
20
<PAGE>
SHAREOWNER RETURN PRESENTATION
The line graph appearing below compares the yearly change in the
Company's cumulative total shareowner return on its common stock with the
cumulative total return on the S&P Composite-500 Stock Index, the S&P Public
Utility Index and the S&P Electric Power Companies Index for the period of five
fiscal years commencing 1995 and ending 1999.
[GRAPH]
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
UIL $100 $134 $124 $190 $224 $236
S&P 500 100 138 169 226 290 351
S&P PUB. UTY. 100 142 147 183 210 191
S&P EL. CO. 100 131 131 165 191 154
* ASSUMES THAT THE VALUE OF THE INVESTMENT IN THE COMPANY'S COMMON STOCK AND
EACH INDEX WAS $100 ON DECEMBER 31, 1994 AND THAT ALL DIVIDENDS WERE
REINVESTED. FOR PURPOSES OF THIS GRAPH, THE YEARLY CHANGE IN CUMULATIVE
SHAREOWNER RETURN IS MEASURED BY DIVIDING (I) THE SUM OF (A) THE CUMULATIVE
AMOUNT OF DIVIDENDS FOR THE YEAR, ASSUMING DIVIDEND REINVESTMENT, AND (B) THE
DIFFERENCE IN THE FAIR MARKET VALUE AT THE END AND THE BEGINNING OF THE YEAR,
BY (II) THE FAIR MARKET VALUE AT THE BEGINNING OF THE YEAR. THE CHANGES
DISPLAYED ARE NOT NECESSARILY INDICATIVE OF FUTURE RETURNS MEASURED BY THIS
OR ANY METHOD.
EMPLOYMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The board of directors of the Company, at a meeting held on January 24,
2000, and in accordance with the recommendation of its Audit Committee, voted to
employ the firm of PricewaterhouseCoopers LLP to make an audit of the books and
affairs of the Company for the fiscal year 2000. One or more representatives of
PricewaterhouseCoopers LLP will attend the annual meeting, will be afforded the
opportunity to make a statement if they desire to do so, and will be available
to answer questions that may be asked by shareowners.
21
<PAGE>
If the shareowners do not, by the affirmative vote of a majority of the
shares of common stock represented at the meeting, approve the employment of
PricewaterhouseCoopers LLP as independent public accountants, their employment
will be reconsidered by the board of directors.
DATE FOR SUBMISSION OF PROPOSALS BY SECURITY HOLDERS
Shareowners who intend to present proposals for action at the 2001
Annual Meeting of the Shareowners are advised that such proposals must be
received at the principal executive offices of the Company by January 11, 2001
in order to be included in the Company's proxy statement and form of proxy for
that meeting.
THE COMPANY HAS FILED AN ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED DECEMBER 31, 1999 WITH THE SECURITIES AND EXCHANGE COMMISSION. THE COMPANY
WILL PROVIDE YOU WITH A COPY OF ITS ANNUAL REPORT ON FORM 10-K, INCLUDING THE
FINANCIAL STATEMENTS INCLUDED IN THE ANNUAL REPORT, WITHOUT CHARGE, IF YOU
REQUEST IT IN WRITING. PLEASE DIRECT YOUR WRITTEN REQUESTS TO CHARLES J. PEPE,
ASSISTANT TREASURER AND ASSISTANT SECRETARY, THE UNITED ILLUMINATING COMPANY,
157 CHURCH STREET, P.O. BOX 1564, NEW HAVEN, CONNECTICUT 06506. COPIES OF THE
ANNUAL REPORT ON FORM 10-K THAT ARE SENT TO YOU WILL NOT INCLUDE EXHIBITS UNLESS
YOU SPECIFICALLY REQUEST EXHIBITS AND AGREE TO PAY A FEE TO DEFRAY THE COPYING
AND POSTAGE COSTS (10 CENTS PER PAGE, PLUS POSTAGE).
BY ORDER OF THE BOARD OF DIRECTORS,
May 10, 2000 ROBERT L. FISCUS,
VICE CHAIRMAN OF THE BOARD OF DIRECTORS,
CHIEF FINANCIAL OFFICER, TREASURER AND SECRETARY
22
<PAGE>
DIRECTIONS TO QUINNIPIAC UNIVERSITY
-----------------------------------
FROM NEW LONDON VIA I-95:
- ------------------------
Take I-95 to New Haven. Then take I-91 North to Exit 10 (Route 40). Follow Route
40 approximately 3 miles to its end (at Whitney Avenue). Turn right onto Whitney
Avenue (Route 10) and proceed North for 1.4 miles. Turn right onto Mount Carmel
Avenue and go 0.3 miles to campus.
FROM NEW YORK CITY VIA I-95:
- ---------------------------
Take I-95 to New Haven. Then take I-91 North to Exit 10 (Route 40). Follow Route
40 approximately 3 miles to its end (at Whitney Avenue). Turn right onto Whitney
Avenue (Route 10) and proceed North for 1.4 miles. Turn right onto Mount Carmel
Avenue and go 0.3 miles to campus.
FROM NEW YORK CITY VIA THE WILBUR CROSS PARKWAY (MERRITT PARKWAY):
- -----------------------------------------------------------------
Take the Parkway (Route 15) to Exit 61. Turn right onto Whitney Avenue (Route
10) and proceed North 3 miles to Mount Carmel Avenue. Turn right onto Mount
Carmel Avenue and go 0.3 miles to campus.
FROM HARTFORD VIA I-91:
- ----------------------
Take I-91 South to Exit 10 (Route 40). Follow Route 40 approximately 3 miles to
its end (at Whitney Avenue). Turn right onto Whitney Avenue (Route 10) and
proceed North for 1.4 miles. Turn right onto Mount Carmel Avenue and go 0.3
miles to campus.
<PAGE>
THE UNITED ILLUMINATING COMPANY
NOTICE OF ANNUAL MEETING OF THE SHAREOWNERS
DATE: June 26, 2000
TIME: 10:00 a.m.
PLACE: Quinnipiac University
275 Mount Carmel Avenue
Hamden, Connecticut
MATTERS TO BE VOTED ON:
1. Election of directors.
2. Approval of the employment of PricewaterhouseCoopers LLP as the Company's
independent public accountants for 2000.
3. Any other matters properly brought before the shareowners at the annual
meeting or any adjournment of the annual meeting.
You can vote your shares of common stock at the annual meeting if the
Company's records show that you owned the shares on April 24, 2000.
WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING OR NOT, PLEASE FILL IN,
SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE THAT WE HAVE
PROVIDED TO YOU. IF YOU MAIL US BACK THE ENVELOPE FROM ANYWHERE IN THE UNITED
STATES, THEN YOU DON'T HAVE TO PUT ANY POSTAGE STAMPS ON THE ENVELOPE.
May 10, 2000
By Order of the Board of Directors,
ROBERT L. FISCUS,
VICE CHAIRMAN OF THE BOARD OF DIRECTORS,
CHIEF FINANCIAL OFFICER, TREASURER AND SECRETARY
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT
IN ORDER TO SAVE THE COMPANY THE EXPENSE OF FURTHER SOLICITATION TO ENSURE
THAT A QUORUM IS PRESENT AT THE ANNUAL MEETING, PLEASE MAIL YOUR PROXY
PROMPTLY - REGARDLESS OF THE NUMBER OF SHARES YOU OWN, AND REGARDLESS OF
WHETHER YOU PLAN TO ATTEND THE MEETING.
- --------------------------------------------------------------------------------
DIRECTIONS TO QUINNIPIAC UNIVERSITY APPEAR AT THE END OF THE PROXY STATEMENT.
<PAGE>
PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED
- --------------------------------------------------------------------------------
[X] Please mark your
votes as in this
example
FOR all nominees listed WITHHOLD AUTHORITY
(except as indicated to vote for all nominees
to the contrary) listed at right
(1) ELECTION OF [_] [_]
BOARD OF
DIRECTORS
NOMINEES: Thelma R. Albright
Marc C. Breslawsky
David E. A. Carson
Arnold L. Chase
John F. Croweak
Robert L. Fiscus
Betsy Henley-Cohn
John L. Lahey
F. Patrick McFadden, Jr.
Daniel J. Miglio
James A. Thomas
Nathaniel D. Woodson
and, in their discretion, such other person or persons as the present Board of
Directors shall determine, if one or more of said nominees is unable to serve.
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark
the "For" box and write that nominee's name in the space provided below.)
- ----------------------------------------------------
(2) APPROVAL OF THE EMPLOYMENT OF FOR AGAINST ABSTAIN
PRICEWATERHOUSECOOPERS LLP AS [_] [_] [_]
THE COMPANY'S INDEPENDENT
PUBLIC ACCOUNTANTS FOR 2000.
(Proposed by the Board of
Directors.)
(3) IN THEIR DISCRETION, ANY OTHER FOR AGAINST ABSTAIN
MATTERS PROPERLY BROUGHT BEFORE [_] [_] [_]
THE SHAREOWNERS AT THE ANNUAL
MEETING OR ANY ADJOURNMENT OF
THE ANNUAL MEETING.
Signature Signature Dated
------------------------ ----------------- -------------
NOTE: When signing as attorney, executor, administrator, trustee or guardian,
give title as such. If signer is a corporation, sign in the corporate
name by duly authorized officer.
<PAGE>
THE UNITED ILLUMINATING COMPANY
COMMON STOCK PROXY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John L. Lahey, or F. Patrick McFadden, Jr.
(in the absence of Mr. Lahey), or Betsy Henley-Cohn (in the absence of Messrs.
Lahey and McFadden) as proxy, for and in the name of the undersigned and with
all powers the undersigned would possess if personally present, to vote all
shares of the common stock of The United Illuminating Company that the
undersigned is entitled to vote at the Annual Meeting of the Shareowners to be
held on Monday, June 26, 2000, and at any adjournments thereof.
THIS PROXY, WHEN PROPERLY SIGNED AND RETURNED TO THE COMPANY, WILL BE
VOTED IN THE MANNER INDICATED ON THE REVERSE SIDE. UNLESS OTHERWISE DIRECTED ON
THE REVERSE SIDE, THE UNDERSIGNED'S VOTE WILL BE CAST FOR THE ELECTION OF ALL
NOMINEES LISTED TO THE BOARD OF DIRECTORS AND FOR ITEM (2).
(CONTINUED, AND TO BE SIGNED AND DATED, ON REVERSE SIDE)
