<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/X/ Preliminary proxy statement
/ / Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
WASHINGTON GAS LIGHT COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
WASHINGTON GAS LIGHT COMPANY
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
/ / 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 registrations statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
- ---------------
(1)Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE> 2
WASHINGTON GAS LIGHT COMPANY
1100 H STREET, N.W.
WASHINGTON, D.C. 20080
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The annual meeting of stockholders of Washington Gas Light Company will be
held at the Capital Hilton Hotel, 16th and K Streets, N.W., Washington, D.C.
20036, on Wednesday, February 22, 1995, at 10:00 a.m. for the following
purposes, as more fully set forth in the annexed Proxy Statement:
(1) To elect directors for the ensuing year.
(2) To ratify the appointment of independent public accountants for
1995.
(3) To authorize a proposed amendment to the Company's Charter (both in
the District of Columbia and Virginia):
Increasing the presently authorized 40,000,000 shares of Common
Stock, $1.00 par value, to 80,000,000 shares with a $1.00 par
value.
(4) To consider and take action with respect to a stockholder proposal
relating to cumulative voting, if such proposal is brought before
the meeting.
(5) To transact any other business properly brought before the meeting
or any adjournment thereof.
Each holder of Common Stock and of Serial Preferred Stock, $4.25 Series;
$5.00 Series; $4.80 Series; $4.60 Convertible Series; and $4.36 Convertible
Series is entitled to one vote for each share of such stock standing in the name
of such holder on the records of the Company at the close of business on January
4, 1995.
By order of the Board of Directors,
Douglas V. Pope
Secretary
January 18, 1995
------------------
PLEASE SIGN AND RETURN THE ENCLOSED PROXY CARD AS SOON AS POSSIBLE, WHETHER
OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON. EARLY RETURN OF YOUR PROXY
CARD WILL SAVE THE COMPANY THE EXPENSE OF ATTEMPTING TO CONTACT YOU AGAIN. THANK
YOU.
<PAGE> 3
WASHINGTON GAS LIGHT COMPANY
1100 H STREET, N.W.
WASHINGTON, D.C. 20080
January 18, 1995
PROXY STATEMENT
To the Stockholders:
This Proxy Statement is furnished in connection with a solicitation of
proxies by the Board of Directors of Washington Gas Light Company (Company) to
be used at the annual meeting of stockholders of the Company to be held on
Wednesday, February 22, 1995, and at any adjournment thereof. The meeting will
be held at the Capital Hilton Hotel, 16th and K Streets, N.W., Washington, D.C.
at 10:00 a.m. If the enclosed proxy card is executed and returned, it will be
voted in the manner directed, but if not otherwise marked, proxies will be voted
"FOR" proposals (1), (2) and (3) and "AGAINST" proposal (4). The proxy may be
revoked at any time by notice to the Company or by execution of a later proxy
card, to the extent that it has not been exercised.
Each holder of Common Stock and of Serial Preferred Stock, $4.25 Series;
$5.00 Series; $4.80 Series; $4.60 Convertible Series; and $4.36 Convertible
Series is entitled to one vote for each share of such stock standing in the name
of such holder on the records of the Company at the close of business on January
4, 1995. Outstanding voting securities as of January 4, 1995, consisted of:
21,215,375 shares of Common Stock; 70,600 shares of Serial Preferred Stock,
$4.25 Series; 60,000 shares of Serial Preferred Stock, $5.00 Series; 150,000
shares of Serial Preferred Stock, $4.80 Series; 672 shares of Serial Preferred
Stock, $4.60 Convertible Series; and 2,532 shares of Serial Preferred Stock,
$4.36 Convertible Series. Total outstanding voting securities as of January 4,
1995 were 21,499,179 shares. The matters to be voted upon at the annual meeting
are described in this Proxy Statement.
With respect to the election of Directors, the ten nominees receiving the
greatest number of votes shall be elected. With respect to the stockholder
proposal, a majority of shares voting on the proposal is required for approval.
Abstentions and broker non-votes will not be counted either for or against
matters submitted for vote by the stockholders.
1
<PAGE> 4
(1) ELECTION OF DIRECTORS
At the meeting, ten directors (constituting the entire Board of Directors)
are to be elected to hold office for the ensuing year.
It is the intention of the persons named in the enclosed proxy card to vote
such proxy for the election of the nominees named below, all of whom are now
serving as directors, unless such authority is withheld. The Company does not
contemplate that any of such nominees will become unavailable for any reason,
but if that should occur before the meeting, proxies will be voted for another
nominee, or other nominees, to be selected by the Board of Directors.
<TABLE>
<S> <C>
MICHAEL D. BARNES, age 51, is a partner in the Washington, D.C.
PHOTO law firm of Hogan & Hartson. Mr. Barnes was previously a partner
in the law firm of Arent, Fox, Kintner, Plotkin & Kahn
(1987-1993). Mr. Barnes was United States Representative from
Maryland's 8th Congressional District from 1979 to 1987. He was
Commissioner of the Maryland Public Service Commission and Vice
Chairman of the Washington Metropolitan Area Transit Commission
from 1975 to 1978. Mr. Barnes is a graduate of the University of
North Carolina and the George Washington University National Law
Center, where he received his law degree with honors. Mr. Barnes
is active in several civic and business groups, including the
Center for National Policy, the University of Maryland
Foundation, the International Human Rights Law Group, and the
Council on Foreign Relations. Mr. Barnes has been a Director of
Washington Gas Light Company since 1991.
FRED J. BRINKMAN, age 66, retired in 1991 as a Senior Partner
PHOTO with the firm of Arthur Andersen & Co., independent public
accountants (Arthur Andersen & Co. is now Arthur Andersen LLP).
From 1981-1989, Mr. Brinkman was Area Managing Partner for the
Asia-Pacific Area and Managing Partner of the Washington, D.C.
office of Arthur Andersen & Co. From 1989 to June 1991, at which
time he retired, he was Senior Partner consulting on global
initiatives of Arthur Andersen & Co. From 1991 to present, he has
engaged in consulting. Mr. Brinkman is a member of several
professional and civic organizations, including the American
Institute of CPA's, the Boards of Directors of SHARE, Inc. and of
the Academy of Economic Education, and Special Olympics
International. Mr. Brinkman also serves on the Boards of Charles
E. Smith Residential Realty, Inc. and Figgie International, Inc.
Mr. Brinkman has been a Director of Washington Gas Light Company
since 1992.
DANIEL J. CALLAHAN, III, age 62, is Chairman and Chief Executive
PHOTO Officer of USLICO Corporation, an insurance holding company, a
position he has held since 1992. Mr. Callahan was previously Vice
Chairman of American Security Bank (1991-1992) and served as
President of MNC Financial Inc. (1987-1991) and Chairman of the
Board and Chief Executive Officer of American Security
Corporation and American Security Bank, N.A. from 1985-1991. Mr.
Callahan also is a Director of FoxMeyer Drug Corporation, USLICO
Corporation and is on the Advisory Board of Washington Mutual
Investors Fund, and of Ferris, Baker, Watts, Inc. Mr. Callahan is
on the Atlantic Council, and the Federal City Council and is a
former Chairman of the Greater Washington Research Center. He has
been a Director of Washington Gas Light Company since 1989.
</TABLE>
2
<PAGE> 5
<TABLE>
<S> <C>
ORLANDO W. DARDEN, age 64, is President of OWD Enterprises Inc, a
PHOTO real estate development firm and is a partner in several real
estate limited partnerships. Mr. Darden is a graduate of Howard
University. Mr. Darden founded and was President and Chief
Executive Officer of Community Federal Savings and Loan
Association of Washington, D.C., from 1974 to 1981. He has served
as Director of the Pennsylvania Avenue Development Corporation
(PADC). He also was a trustee and Chairman of the Investment
Committee of the District of Columbia Retirement Board. Mr.
Darden is on the Board of Trustees of the Consortium of
Universities of the Washington Metropolitan Area and he is also a
member of The Greater Washington Board of Trade. He has been a
Director of Washington Gas Light Company since 1979 and serves as
Chairman of the Audit Review Committee.
JAMES H. DEGRAFFENREIDT, JR., age 41, is President and Chief
PHOTO Operating Officer of the Company. Mr. DeGraffenreidt joined the
Company in 1986 as managing attorney, and was promoted to senior
managing attorney in 1988, and then vice president of rates and
regulatory affairs in 1991. He was elected senior vice president
in May 1993 and was elected President and Chief Operating Officer
effective December 1, 1994. Prior to joining Washington Gas Mr.
DeGraffenreidt was a partner with a Washington, D.C. law firm
where he specialized in public utilities, telecommunications and
public finance. Previous to that, he was assistant people's
counsel in the Maryland Office of People's Counsel. Mr.
DeGraffenreidt earned his Juris Doctor and Master of Business
Administration degrees from Columbia University and his Bachelor
of Arts degree from Yale College. He is admitted to the District
of Columbia Bar and the Maryland Bar, and is a member of the
Washington Bar Association and the National Bar Association. He
has been a member of the Board of Directors of the Company since
December 1, 1994.
MELVYN J. ESTRIN, age 52, is Chairman of the Board and Chief
PHOTO Executive Officer of FoxMeyer Health Corporation (formerly
National Intergroup, Inc.), a diversified holding company
involved in steel production, drug wholesaling and the retail
chain store business. He is also Chairman and Chief Executive
Officer of Ben Franklin Retail Stores, a retail craft store
chain. Mr. Estrin is also Chairman of the Board and Chief
Executive Officer of Human Service Group, Inc. (1983-present) and
is President and a director of HSG Acquisition Co.
(1986-present), both of which are private management and
investment firms. Mr. Estrin is a Trustee of the University of
Pennsylvania and is active with several charitable organizations,
including the Endowment Board of the Kennedy Center. Mr. Estrin
is a member of The Business Roundtable and a Commissioner of the
National Capital Park and Planning Commission. Mr. Estrin is a
graduate of the University of Pennsylvania's Wharton School of
Finance. Mr. Estrin is a director of FoxMeyer Health
Corporation.; FoxMeyer Drug Corporation; Ben Franklin Retail
Stores and has been a Director of Washington Gas Light Company
since 1991.
</TABLE>
3
<PAGE> 6
<TABLE>
<S> <C>
SHELDON W. FANTLE, age 71, is Chairman and Chief Executive
PHOTO Officer of Fantle Enterprises, engaged in consulting and venture
capital opportunities. Mr. Fantle was formerly Chairman and Chief
Executive Officer of Fantle's Drugstores (1987-90), and Chairman,
President and Chief Executive Officer of People's Drug Stores
(1972-1987). Mr. Fantle is a graduate of Ohio State University
and the University of Cincinnati. Mr. Fantle is active in
numerous civic and community organizations, including serving as
a Trustee of The American University, a Director of Medlantic
Health Care Group, and the National Symphony Orchestra. He also
serves as Chairman of the Trustees Assembly of The United Way of
the National Capital Area and as a member of the Board of
Governors of the United Way of America. Mr. Fantle is a member of
the Board of Directors of FoxMeyer Health Corporation and Ben
Franklin Retail Stores, Inc. He has been a Director of Washington
Gas Light Company since 1984 and serves as Chairman of the
Personnel & Compensation Committee.
PATRICK J. MAHER, age 58, is Chairman of the Board and Chief
PHOTO Executive Officer of the Company. Mr. Maher joined the Company in
1974 as Vice President and Chief Financial Officer and was
elected Executive Vice President--Finance and Administration in
1980. He was President of the Company from October 1987 to
November 1992, and he has been Chief Executive Officer since
February 1992 and Chairman of the Board since November 1992. Mr.
Maher is active in several industry and business groups,
including the American Gas Association, where he is a member of
the Board of Directors. Mr. Maher serves on the Boards of
Directors of the Institute of Gas Technology, Southern Gas
Association, the Greater Washington Research Center and Public
Utilities Reports, Inc. He is a member of the National Petroleum
Council. Mr. Maher is on the Board of Directors of Crestar
Financial Corporation and has been a Director of Washington Gas
Light Company since 1988.
KAREN HASTIE WILLIAMS, age 50, is a Partner with the Washington,
PHOTO D.C. law firm of Crowell & Moring, where she specializes in
public contract law. Prior to joining Crowell & Moring, Ms.
Williams served as Administrator for the Office of Federal
Procurement Policy at the Office of Management and Budget
(1980-81) and she was Chief Counsel of the Senate Committee on
the Budget (1977-1980). Ms. Williams is a member of many
professional and civic organizations, including serving as Chair
of the American Bar Association Section of Public Contract Law.
Ms. Williams is a Director of Crestar Financial Corporation, the
Federal National Mortgage Association, Continental Airlines
Company and SunAmerica, Inc. Ms. Williams has been a director of
Washington Gas Light Company since 1992.
</TABLE>
4
<PAGE> 7
<TABLE>
<S> <C>
STEPHEN G. YEONAS, age 69, is President of the Stephen G. Yeonas
PHOTO Company, a real estate investment and development firm. He is a
graduate of the American University and the Catholic University
of America (Columbus School of Law). In 1946 he founded and
served as President (1946-1973) of the Yeonas Company, the
largest builder of new homes in the Washington metropolitan area
for many years. Mr. Yeonas has been the recipient of numerous
professional and civic awards, including American University's
Alumni Recognition Award, Catholic University's 1980 Alumni Award
for outstanding achievements in the fields of business and
finance, Man of the Year Award by the Home Builders Association
of Metropolitan Washington, Marketing Man of the Year by the
American Marketing Association (Washington Chapter), Virginia
Realtor of the Year, the Citizenship of the Year Award (by the
American Legion), Member, Northern Virginia Board of Realtors
Hall of Fame, Member Home Builders Association of Virginia Hall
of Fame and Member, National Association of Home Builders Hall of
Fame. Mr. Yeonas also serves on the Board of Directors of
Washington Mutual Investors Fund. He has been a Director of
Washington Gas Light Company since 1964 and serves as Chairman of
the Nominating Committee.
</TABLE>
THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board has established four standing committees:
The Executive Committee members are: Patrick J. Maher (Chairman), Orlando
W. Darden, Sheldon W. Fantle and Stephen G. Yeonas. There are three alternate
members: Michael D. Barnes, Daniel J. Callahan, III and Melvyn J. Estrin. This
committee may exercise all of the authority of the Board of Directors when the
Board is not in session. This committee met one time during the fiscal year
which ended September 30, 1994 (fiscal year 1994).
The Audit Review Committee members are: Orlando W. Darden (Chairman),
Daniel J. Callahan, III, Sheldon W. Fantle, and Stephen G. Yeonas. Functions of
the Audit Review Committee include recommending the independent public
accountants to be engaged by the Company, reviewing with the independent public
accountants the financial statements and their accompanying report and reviewing
the Company's system of internal controls and the adequacy of the internal audit
program. This committee held six meetings during fiscal year 1994.
The Nominating Committee members are: Stephen G. Yeonas (Chairman), Michael
D. Barnes, Patrick J. Maher and Karen Hastie Williams. Functions of the
Nominating Committee include maintaining a roster of persons for consideration
as members of the Board of Directors and recommending procedures for filling
vacancies on the Board of Directors. The Nominating Committee will consider
nominees recommended by stockholders; the name and resume of each such nominee
should be sent to the Chairman of the Nominating Committee. This committee did
not meet during fiscal year 1994.
The Personnel & Compensation Committee members are: Sheldon W. Fantle
(Chairman), Fred J. Brinkman, Daniel J. Callahan, III and Melvyn J. Estrin. The
Personnel & Compensation Committee considers compensation and benefits for
directors and officers of the Company and succession planning matters. There
were three meetings of this committee during fiscal year 1994.
The Board of Directors held 11 meetings during fiscal year 1994.
---------------
5
<PAGE> 8
NON-EMPLOYEE DIRECTOR COMPENSATION
Directors who are not employees of the Company are paid an annual retainer
of $15,000 and $900 per meeting of the Board, committee of the Board and
stockholders which they attend. Directors who have served a minimum of 5 years
on the Board are eligible to receive a retirement benefit which continues for 10
years. For Directors who have 10 years of service at the time of their
retirement from the board, the annual benefit is equal to the retainer payable
at the time of their retirement from the Board. For Directors who retire after
at least 5 years of service but fewer than 10 years of service on the Board, the
benefit is ratable (i.e., 50% of the retainer after 5 years of service, 60%
after 6 years of service, etc.).
BUSINESS RELATIONSHIPS WITH
ASSOCIATES OF DIRECTORS
The law firm of Crowell & Moring, with which Ms. Williams is a partner,
performed legal services for the Company during fiscal year 1994.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the beneficial ownership information as of
January 4, 1995, regarding the Company's outstanding equity securities by each
director, the executive officers named in the Summary Compensation Table in this
Proxy Statement, and all directors and executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT
AND NATURE PERCENT
OF BENEFICIAL OF
TITLE OF CLASS NAME OF BENEFICIAL OWNER OWNERSHIP* CLASS
- ------------------------------- --------------------------------- ------------- -------
<S> <C> <C> <C>
Common Stock................... Michael D. Barnes................ 500 **
Common Stock................... Fred J. Brinkman................. 1,000 **
Common Stock................... Daniel J. Callahan, III.......... 3,000 **
Common Stock................... Patrick E. Clarke................ 14,906 **
Common Stock................... Orlando W. Darden................ 200 **
Common Stock................... James H. DeGraffenreidt, Jr. .... 11,624 **
Common Stock................... Melvyn J. Estrin................. 2,659 **
Common Stock................... Sheldon W. Fantle................ 9,064 **
Common Stock................... Frank J. Hollewa................. 7,584 **
Common Stock................... Jeremiah K. Hughitt.............. 19,707 **
Common Stock................... Patrick J. Maher................. 24,458 **
Common Stock................... Karen Hastie Williams............ 200 **
Common Stock................... Stephen G. Yeonas................ 3,671 **
All directors and executive
officers as a group:
Common Stock................................................... 156,500 **
</TABLE>
- ---------------
* All shares are directly owned by persons shown in this table except the
following shares which are owned indirectly: (i) 11,772 shares are held by
executive officers in the Company's 401(k) plan, (ii) 1,000 shares are owned
by Mr. Callahan's wife, and Mr. Callahan disclaims beneficial ownership of
those shares, and (iii) 6,200 shares are held by Mr. Clarke's spouse and
mother-in-law.
** Less than 1% of class outstanding.
6
<PAGE> 9
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------------------- ----------------
NAME AND FISCAL OTHER ANNUAL RESTRICTED STOCK ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(2) AWARDS(3) COMPENSATION(5)
- ------------------------------- ---- -------- -------- --------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Patrick J. Maher............... 1994 $365,000 $225,000 $3,064 $ 0 $6,419
Chairman of the Board and 1993 335,000 160,000 2,023 665,625(4) 8,937
Chief Executive Officer 1992 273,333 125,000 1,781 0 8,674
Jeremiah K. Hughitt............ 1994 285,000 145,000 5,177 0 6,419
President and Chief 1993 260,000 115,000 2,895 310,625(4) 9,067
Operating Officer(1) 1992 220,667 80,000 2,553 0 8,827
James H. DeGraffenreidt, 1994 155,000 65,000 453 0 5,627
Jr. ......................... 1993 128,333 35,000 125 199,688(4) 5,133
Senior Vice President(1) 1992 112,333 21,000 7 50,625 4,489
1994 166,000 50,000 1,421 0 6,160
Patrick E. Clarke.............. 1993 151,250 39,000 861 210,781(4) 6,050
Senior Vice President 1992 128,750 33,000 744 0 5,150
1994 166,000 50,000 624 0 6,160
Frank J. Hollewa............... 1993 154,167 40,000 412 177,500(4) 6,167
Senior Vice President 1992 136,833 36,000 258 0 5,473
</TABLE>
- ---------------
(1) Effective December 1, 1994, Mr. DeGraffenreidt was elected President and
Chief Operating Officer, succeeding Mr. Hughitt, who began a leave of
absence pending retirement on March 1, 1995.
(2) This column reports taxes paid by the Company on behalf of the named
executive officer relating to group term life insurance coverage with
benefits exceeding $50,000.
(3) The number and value of the aggregate restricted stock holdings at the end
of fiscal year 1994 for the named executive officers was as follows:
Patrick J. Maher, 12,000 shares valued at $430,500; Jeremiah K. Hughitt,
7,000 shares valued at $251,125; James H. DeGraffenreidt, Jr., 5,550 shares
valued at $199,106; Patrick E. Clarke, 3,800 shares valued at $136,325 and
Frank J. Hollewa, 3,600 shares valued at $129,150. The level of restricted
stock holdings reported for Mr. DeGraffenreidt at September 30, 1994 does
not include 6,000 shares granted on October 25, 1994 nor does it reflect
289 shares returned to the Company as a result of a cashless withholding
tax election for shares that vested on November 1, 1994.
(4) Restricted stock awards are reported at the aggregate market value on the
date of the grant. The 1993 restricted stock awards shown were granted on
March 31, 1993, effective June 1, 1993. The market value on the grant date
was $44.375 per share. The number of shares and vesting schedule for
restricted shares granted in 1993 for the named executive officers was as
follows: Patrick J. Maher, 15,000 shares, with shares vesting in increments
of 20% on each anniversary of the effective date of the award, except the
last 20% increment which vests on April 20, 1998; Jeremiah K. Hughitt,
7,000 shares, all of which vest on March 1, 1995; James H. DeGraffenreidt,
Jr., 4,500 shares with shares vesting in increments of 10% on each
anniversary of the effective date of the award; Patrick E. Clarke, 4,750
shares, with shares vesting in increments of 20% on each anniversary of the
effective date of the award, except the last 20% increment which vests on
September 14, 1998 and Frank J. Hollewa, 4,000 shares, with shares vesting
in increments of 10% on each anniversary of the effective date of the
award. Dividends are paid on restricted shares from the effective date of
the awards.
(5) This column reports the Company's matching contributions to the Section
401(k) plan during the applicable fiscal years.
---------------
7
<PAGE> 10
The Company maintains a trusteed, noncontributory pension plan covering all
active employees and vested former employees of the Company and its utility
subsidiaries. Executive officers also participate in a nonfunded Supplemental
Executive Retirement Plan (SERP). Upon normal retirement (age 65), or at age 60
with 30 years of benefit service, each eligible participant is entitled under
the SERP to an annual benefit that is based on both years of benefit service (up
to a maximum of 30 years) and final average compensation, including any amounts
paid or deferred under the Executive Incentive Compensation Plan.
The following table shows the estimated annual single life benefits payable
under the pension plan and SERP upon normal retirement (age 65) to executive
officers in various salary and years-of-service classifications:
<TABLE>
<CAPTION>
FINAL YEARS OF BENEFIT SERVICE
AVERAGE ------------------------------------
COMPENSATION 10 20 30
------------------------------- -------- -------- --------
<S> <C> <C> <C>
$100,000....................... $ 20,000 $ 40,000 $ 60,000
200,000....................... 40,000 80,000 120,000
400,000....................... 80,000 160,000 240,000
600,000....................... 120,000 240,000 360,000
700,000....................... 140,000 280,000 420,000
750,000....................... 150,000 300,000 450,000
</TABLE>
Each of the five executive officers named above in the Summary Compensation
table has 30 years of benefit service except Mr. DeGraffenreidt, who has 11
years of benefit service. Benefits shown in the pension table are not subject to
reductions for Social Security, but are subject to offset for certain other
retirement benefits.
---------------
8
<PAGE> 11
REPORT OF PERSONNEL AND COMPENSATION COMMITTEE
The Personnel and Compensation Committee of the Board of Directors (P & C
Committee) has responsibility for recommending levels of executive compensation
for consideration by the Company's Board of Directors. The objective of
executive compensation is to provide remuneration which fairly reflects
corporate performance and achievements and responsibilities of each executive
officer. Executive compensation is also intended to provide rewards and
incentive for achievement of long-term growth in shareholder value and to
attract and retain experienced corporate executives.
ELEMENTS OF EXECUTIVE COMPENSATION
The P & C Committee's philosophy is that total compensation for each of the
Company's officers should be competitive with executives having similar
experience and responsibility. This compensation should also reflect the
individual performance of each officer as well as corporate performance. To
accomplish these objectives, each officer's compensation is composed of base
salary and elements of short-term and long-term incentive compensation.
Short-term and long-term incentive compensation is "at risk," in that payment of
any such compensation depends upon performance of the individual officer and
performance of the Company as a whole.
The following is a description of these elements of each officer's
compensation.
Base Salary: The P & C Committee intends base salary levels of officers to
be set at a level somewhat below market levels for officers of similar
experience and responsibility. To reach a competitive level of total
compensation, the officer then has an opportunity to earn incentive
compensation, as described further below. This approach to determination of base
salary is seen by the P & C Committee to better align the interests of the
officers of the Company with the interests of the stockholders.
To determine competitive compensation levels, management of the Company
obtains data on executive compensation paid by other utility and non-utility
companies. Based on that information and in consideration of each officer's
responsibility and performance, the Chairman and CEO of the Company makes
specific recommendations for salary adjustments for all executive officers
except himself. The P & C Committee reviews these recommendations in
consultation with an independent advisor retained by the P & C Committee. Based
on this consultation and the data on industry compensation levels, the P & C
Committee makes a final recommendation to the full Board of Directors as to all
executive officers, including the Chairman and CEO (whose compensation is
described further below).
For fiscal year 1995 (October 1, 1994 through September 30, 1995), the P &
C Committee decided that the officers' base salaries should generally remain
unchanged from levels set in FY 1994. The only base salaries which were modified
were those of officers whose responsibilities increased and those officers
having salaries that were significantly below current market levels. This
approach was taken to generally place base salaries below overall market rates,
and to leave the opportunity for each officer to meet or exceed market
compensation through incentive pay. This practice is designed to encourage
higher levels of performance by the Company officers.
Short-Term Incentive Compensation: Short-Term incentive compensation for
executive officers is earned under the Company's Executive Incentive
Compensation Plan (EICP). Payments can only be made under the EICP if the
Company's rate of return on common stock equity exceeds a threshold amount
predetermined annually by the Board of Directors. For Fiscal Year 1994 (FY
1994), that minimum threshold was determined to be the return on equity that
results when net income applicable to common stock is at least $48.4 million.
For FY 1994, that return on equity was 10.25%. Since the Company earned $59.1
million and 12.5% on its common equity, the threshold was exceeded, and
individual awards were allowable under the EICP.
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<PAGE> 12
Individual awards under the EICP are considered by the P & C Committee
annually in conjunction with base salary adjustments. The Chairman and CEO makes
recommendations to the P & C Committee for EICP awards for each executive
officer except himself. These recommendations include evaluation of the
following factors applicable to the executive officers: (i) success in meeting
established corporate and departmental goals, (ii) controlling costs within
established departmental budgets, (iii) effectiveness in areas of leadership,
planning and teamwork, and (iv) comparison of incentive compensation in other
industry groups, based on data supplied by the outside study of executive
compensation. The P & C Committee considers the amount and bases for these
recommendations in consultation with its independent advisor and makes final
recommendations to the full Board of Directors.
Long-Term Incentive Compensation: In February 1990, the stockholders of
the Company approved the adoption of a Long-Term Incentive Compensation Plan
(LTICP). The LTICP provides a long-term element of compensation for executive
officers. The plan is intended to promote achievement of long-term growth of the
Company by assisting in the recruiting and retention of key employees, including
the Executive Officers. Under the LTICP, there may be awards of Stock Options,
Restricted Stock, Stock Appreciation Rights, Performance Shares and Dividend
Units. The P & C Committee is the Administrator of the LTICP and has the
authority to grant awards under the LTICP. Specific awards are granted based
upon consideration of the individual officer's responsibility for, and
contribution toward, achievement of long-term objectives in enhancement of the
Company's shareholder value, financial stability and competitive position. To
date, awards have only been granted in the form of Restricted Stock. No awards
were made under the LTICP during FY 1994.
COMPENSATION OF THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Mr. Maher's base salary was increased in October 1993 to a level intended
to be closer to a competitive market base salary. In October 1994, the P & C
Committee decided to keep that base salary unchanged for Mr. Maher during FY
1995, reflecting an approach by the P & C Committee that an increased percentage
of the total compensation of the Chairman and CEO should be derived from
incentive compensation rather than base pay. This approach is also being taken
with other executive officers, as explained earlier in this report.
Mr. Maher received an incentive payment under the EICP applicable to FY
1994 of $225,000, which was 62% of his base salary. EICP payments are incentive
compensation which is variable from year to year depending upon performance of
the Company compared to its industry peers and accomplishment of established
corporate objectives. Mr. Maher's incentive compensation for FY 1994 was based
on substantial corporate achievements attained in FY 1994, including (i) a
return on common equity of 12.5%; (ii) an increase in earnings to $2.83 per
share for FY 1994, compared to $2.62 for FY 1993; and (iii) improvements in the
market penetration of the Company.
PERSONNEL AND COMPENSATION COMMITTEE
Sheldon W. Fantle (Chairman)
Fred J. Brinkman
Daniel J. Callahan, III
Melvyn J. Estrin
---------------
10
<PAGE> 13
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the yearly cumulative total
shareholder return on Washington Gas Light Company's Common Stock against the
cumulative total return of the Standard & Poor's 500 Stock Index and the Dow
Jones Utility Average for the period of five years commencing September 30,
1989, and ended September 30, 1994.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURNS*
[FIGURE 1]
<TABLE>
<CAPTION>
WASHINGTON DOW JONES
MEASUREMENT PERIOD GAS LIGHT STANDARD & UTILITY AVER-
(FISCAL YEAR COVERED) COMPANY POOR'S 500 AGE
<S> <C> <C> <C>
1989 100.00 100.00 100.00
1990 109.84 90.75 98.21
1991 136.00 119.04 112.46
1992 165.33 132.21 124.11
1993 203.67 149.42 148.51
1994 170.01 154.93 115.35
</TABLE>
* Assumes reinvestment of dividends daily for Standard & Poor's 500, quarterly
for the Dow Jones Utility Average and Washington Gas Light Company. This
calculation is based on $100 invested on September 30, 1989.
11
<PAGE> 14
(2) RATIFICATION OF APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors recommends that the stockholders ratify the
appointment of Arthur Andersen LLP, independent public accountants, to audit the
books, records and accounts of the Company for fiscal year 1995. The appointment
was made upon the recommendation of the Audit Review Committee, which is
composed of directors who are not officers or otherwise employees of the
Company. This firm has been similarly employed by the Company since 1949.
Representatives of Arthur Andersen LLP will be present at the annual meeting
with the opportunity to make a statement if they desire to do so, and will be
available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL (2)
(3) PROPOSED CHARTER AMENDMENT
INCREASING AUTHORIZED COMMON STOCK
AND MAINTAINING THE COMMON STOCK PAR VALUE OF $1.00 PER SHARE
The Board of Directors of the Company recommends that (1) the total
authorized shares of Common Stock be increased from the presently authorized
40,000,000 to 80,000,000 shares, and (2) that Common Stock par value be
maintained at $1.00 par value per share. The Board believes that the Charter
Amendment increasing the authorized Common Stock and maintaining the Common
Stock par value of $1.00 par value is in the best interests of the Company and
its shareholders.
INCREASE AUTHORIZED COMMON STOCK
At its meeting on September 28, 1994, the Board approved, subject to
regulatory approvals and shareholder approval of this Charter Amendment, the
issuance to stockholders of Common Stock, of one additional share of Common
Stock for each share held (a 2 for 1 stock split). The Board thinks this 2 for 1
stock split will be of benefit to the holders of the Company's Common Stock.
As of September 30, 1994, of the 40,000,000 presently authorized shares of
Common Stock, 21,104,238, including 10,927 treasury shares, were issued. As of
that date, 687,034 shares were reserved for future issuance, including 25,043
shares that are reserved for issuance upon conversion of Serial Preferred Stock,
$4.60 and $4.36 Convertible Series. Also, 337,045 unissued shares were reserved
for issuance under the Company's Dividend Reinvestment and Common Stock Purchase
Plan (DRP), 46,286 shares were reserved for the Management Savings and Capital
Appreciation Plans, 274,200 shares were reserved for the Long-Term Incentive
Compensation Plan and 4,460 shares were reserved for Employee Stock Awards
Plans. The 2 for 1 stock split will require approximately 21,000,000 shares,
including 687,034 shares to satisfy reserve requirements for preferred stock
conversions, DRP and other stock plans. Accordingly, there are not sufficient
shares available to complete the stock split under present Charter
authorization.
In order to provide sufficient shares for the stock split and a reasonable
reserve of authorized (but unissued) Common Stock after the 2 for 1 Common Stock
split, it is desirable at this time to authorize an additional 40,000,000
shares. The percentage of outstanding shares of Common Stock to authorized
shares of Common Stock (approximately 50%) will remain approximately the same
after the proposed increase in authorized Common Stock and the proposed stock
split.
12
<PAGE> 15
The Board could authorize the public or private offering of additional
shares of Common Stock or of debt or other securities convertible into shares of
Common Stock. Such offering could be made in exchange for debt or other
securities of the Company, in connection with the acquisition of another
business or the assets or securities of another business, in connection with a
stock split or stock dividend, or for any purpose the Board may in its
discretion deem to be in the best interest of the Company and its stockholders,
without further action by the stockholders.
MAINTAIN PAR VALUE OF $1.00
The Board also recommends that a par value of $1.00 per share be maintained
for the Company's Common Stock. The proposed 2-for-1 stock split would normally
reduce the par value by half, to 50(c) per share. The Board believes it is
appropriate to maintain the $1.00 par value, and this has no material impact on
the Company or its stockholders.
It is therefore proposed that ARTICLE IV of the Charter be amended to read:
"The Company shall have authority to issue 81,500,000 shares of
capital stock divided into 80,000,000 shares of Common Stock with a
$1.00 par value and 1,500,000 shares of Serial Preferred Stock without
par value."
The proposed amendment does not affect the total amount of capital
applicable to outstanding Common Stock nor will it change any present right of a
holder of Common Stock or of a holder of Serial Preferred Stock. Approval of the
Public Service Commission of the District of Columbia and the State Corporation
Commission of Virginia is required to issue any of the authorized shares,
including the contemplated 2 for 1 Common Stock split approved by the Board.
Your Board of Directors urges the approval of the Amendment. The Amendment
will require the affirmative vote of (1) the holders of more than two-thirds of
the outstanding shares of Common Stock entitled to vote at the meeting, and (2)
the holders of more than two-thirds of the total outstanding shares (Common
Stock and all series of Serial Preferred Stock) entitled to vote at the meeting.
---------------
(4) STOCKHOLDER PROPOSAL
Mrs. Evelyn Y. Davis, whose address is The Watergate Office Building, 2600
Virginia Ave., N.W., Suite 215, Washington, D.C. 20037, has given the Company
notice of her intention to present a proposal for consideration by the
stockholders at the annual meeting. The proposal of Mrs. Davis, who is owner of
record of 140 shares of common stock of the Company, is set forth below in the
form of a resolution along with her supporting statement.
YOUR BOARD OF DIRECTORS AND THE MANAGEMENT OF THE COMPANY OPPOSE THE
ADOPTION OF THE FOLLOWING PROPOSAL FOR THE REASONS STATED AFTER THE PROPOSAL
AND, THEREFORE, RECOMMEND THAT STOCKHOLDERS VOTE AGAINST THE PROPOSAL.
STOCKHOLDER PROPOSAL
RESOLVED, "That the stockholders of Washington Gas Light, assembled in
annual meeting in person and by proxy, hereby request the Board of Directors to
take the necessary steps to provide for cumulative voting in the election of
directors which means each stockholder shall be entitled to as many votes as
shall
13
<PAGE> 16
equal the number of shares he or she owns multiplied by the number of directors
to be elected, and he or she may cast all of such votes for a single candidate,
or any two or more of them as he or she may see fit."
The statement submitted by Mrs. Davis in support of her resolution is as
follows:
REASONS: "Many states have mandatory cumulative voting, so do National
Banks." "In addition, many corporations have adopted cumulative voting."
Last year the owners of 2,482,649 shares, representing over 17.9% of the
shares voting, voted for this proposal.
"If you AGREE, please mark your proxy FOR this resolution."
OPPOSITION OF YOUR BOARD OF DIRECTORS AND THE MANAGEMENT
AND REASONS THEREFOR:
Your Board of Directors believes it is important for each member of the
Board to represent all stockholders, not just a particular interest group or
faction.
Persons serving on this Company's Board of Directors have wide experience
in law, public accounting, business and finance. Directors are not elected to
represent a particular viewpoint, and the Directors do not believe it is
desirable to select candidates for election in that manner.
These objectives of your Directors are fundamentally different from the
objectives of a cumulative voting procedure. Cumulative voting could permit a
relatively small group of stockholders to elect a particular Director. A
Director elected through cumulative voting might therefore become (or appear to
become) an advocate for a particular stockholder group. This result would be
directly opposite to the purpose of having each member of your Board of
Directors represent all stockholders.
Mrs. Davis has submitted substantially the same proposal in the preceding
nine years and it was defeated by a vote of over 80% of shares voting on the
proposal each year.
For these reasons, the Board of Directors and the management oppose the
proposed resolution.
THE BOARD OF DIRECTORS AND THE MANAGEMENT OF THE COMPANY RECOMMEND A VOTE
AGAINST THE ADOPTION OF THIS STOCKHOLDER PROPOSAL.
---------------
OTHER MATTERS
The Board of Directors knows of no other matters to be brought before the
meeting. However, if any other matters come before the meeting, it is the
intention of the persons named in the enclosed proxy card to vote in accordance
with their best judgment on such matters.
---------------
The Annual Report for 1994, including financial statements, was mailed to
stockholders on or about January 5, 1995.
14
<PAGE> 17
UPON WRITTEN REQUEST, THE COMPANY WILL FURNISH WITHOUT CHARGE A COPY OF ITS
MOST RECENT ANNUAL REPORT ON FORM 10-K. PLEASE DIRECT THESE REQUESTS TO: MARIA
FRAZZINI; MANAGER -- FINANCIAL RELATIONS; WASHINGTON GAS LIGHT COMPANY; 1100 H
ST., N.W., WASHINGTON, D.C. 20080.
The solicitation of proxies is being made on behalf of the Board of
Directors, and the cost will be borne by the Company. Brokerage houses and other
custodians will be reimbursed by the Company for their expenses in forwarding
proxy materials to principals. Further solicitation of proxies may be made by
telephone or other communication by regular employees of the Company. Morrow &
Company has been retained by the Company for a fee of $6,500, plus expenses, to
assist in the solicitation of proxies.
STOCKHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING
Proposals by stockholders which are intended to be presented at the
Company's next annual meeting of stockholders must be received by the Company
not later than September 25, 1995.
VOTING BY PROXY
Proxy cards will be voted as specified, but if not otherwise marked they
will be voted: "FOR" Proposals (1), (2) and (3) and "AGAINST" Proposal (4).
By order of the Board of Directors,
Douglas V. Pope
Secretary
January 18, 1995
15
<PAGE> 18
WASHINGTON GAS LIGHT COMPANY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING FEBRUARY 22, 1995
I(WE) here appoint Patrick J. Maher and Stephen G. Yeonas and each of them
as proxies, with full power of substitution to each, to act and vote in the
name of the undersigned with all the powers that the undersigned would possess
if personally present, on all matters, including the election of Directors,
which may come before the February 22, 1995 Annual Meeting of the Shareholders
of Washington Gas Light Company and any adjournment of such meeting, hereby
revoking any prior conflicting proxies. The meeting will be held at the Capital
Hilton Hotel, 16th and K Streets, N.W., Washington, D.C. on Wednesday, February
22, 1995 at 10 a.m.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE
BOXES, SEE REVERSE SIDE. YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS RECOMMENDATIONS. THIS PROXY WHEN
PROPERLY EXECUTED AND PRESENTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2 AND 3 AND AGAINST PROPROSAL 4.
(Continued and to be signed and dated on the reverse side.)
<PAGE> 19
/ /
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL 1.
<TABLE>
<S> <C> <C>
1. Election of all Directors FOR all nominees / / WITHHOLD AUTHORITY to vote / /
listed below for all nominees
</TABLE>
Nominees: Michael D. Barnes, Fred J. Brinkman, Daniel J. Callahan, III,
Orlando W. Darden, James H. DeGraffenreidt, Jr., Melvyn J. Estrin,
Sheldon W. Fantle, Patrick J. Maher, Karen Hastie Williams,
Stephen G. Yeonas
(INSTRUCTIONS: To withhold authority to vote for any individual nominee,
strike a line through that nominee's name.)
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL 2.
2. Ratification of the Appointment of Auditors.
FOR / / AGAINST / / ABSTAIN / /
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL 3.
3. Charter Amendment.
FOR / / AGAINST / / ABSTAIN / /
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "AGAINST" PROPOSAL 4.
4. Stockholder Proposal.
FOR / / AGAINST / / ABSTAIN / /
5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment thereof.
Change of Address and
or Comments Mark Here / /
PROXY DEPARTMENT
NEW YORK, N.Y. 10203-0038
Please sign exactly as name or names appear on this proxy. If
stock is held jointly, each holder should sign. If signing as
attorney, trustee, executor, administrator, custodian, guardian
or corporate officer, please give full title.
Dated: , 19
----------------------------------- ----
-------------------------------------------------
Signature
-------------------------------------------------
Signature (if held jointly)
VOTES MUST BE INDICTAED (X)
IN BLACK OR BLUE INK. / /
PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE> 20
EDGAR APPENDIX
In the printed version of this document, photographs of the directors.
(Barnes, Brinkman, Callahan, Darden, Estrin, Fantle, DeGraffenreidt, Maher,
Williams and Yeonas) appear to the left of the captions as indicated on EDGAR
pages two, three, four and five.
The total return on investment table on page eleven of this document is
presented in the printed version by a line graph.
