<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:
[ ] 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 Rule 14a-11(c) or Rule 14a-12
WASHINGTON GAS LIGHT COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(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)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(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):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] 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:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
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<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 Willard Inter-Continental Hotel, 1401 Pennsylvania Ave., N.W.,
Washington, D.C. 20004, on Friday, February 21, 1997, 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
1997;
(3) To consider and take action with respect to a stockholder proposal
relating to cumulative voting, if such proposal is brought before
the meeting;
(4) To consider and take action with respect to a stockholder proposal
relating to retirement benefits for outside directors, if such
proposal is brought before the meeting; and
(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
2, 1997.
By order of the Board of Directors,
Douglas V. Pope
Secretary
January 21, 1997
------------------
IMPORTANT NOTICES
ADMISSION PROCEDURES
ADMISSION TO THIS YEAR'S MEETING WILL BE LIMITED TO PERSONS WHO (i) ARE
LISTED ON THE COMPANY'S RECORDS AS SHAREHOLDERS AS OF JANUARY 2, 1997 (THE
"RECORD DATE"), OR (ii) BRING A STATEMENT TO THE MEETING SHOWING THEIR
BENEFICIAL OWNERSHIP OF COMPANY STOCK THROUGH A BROKER, A BANK OR OTHER
INSTITUTION AS OF THE RECORD DATE.
NEW LOCATION OF ANNUAL MEETING
THE ANNUAL MEETING WILL BE HELD AT THE WILLARD INTER-CONTINENTAL HOTEL,
1401 PENNSYLVANIA AVE., N.W., WASHINGTON, D.C. AT 10 A.M. ON FRIDAY, FEBRUARY
21, 1997. THIS IS A CHANGE IN LOCATION FROM PRIOR YEARS.
<PAGE> 3
WASHINGTON GAS LIGHT COMPANY
1100 H STREET, N.W.
WASHINGTON, D.C. 20080
January 21, 1997
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
Friday, February 21, 1997, and at any adjournment thereof. The meeting will be
held at The Willard Inter-Continental Hotel, 1401 Pennsylvania Ave., 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) and (2) and "AGAINST" proposals (3)
and (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
2, 1997. Outstanding voting securities as of January 2, 1997, consisted of:
43,708,694 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; 588 shares of Serial Preferred
Stock, $4.60 Convertible Series; and 2,032 shares of Serial Preferred Stock,
$4.36 Convertible Series. Total outstanding voting securities as of January 2,
1997 were 43,991,914 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 nine nominees receiving the
greatest number of votes shall be elected. With respect to each stockholder
proposal, a majority of shares voting on each 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, nine 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 53, 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 68, 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 CPAs, 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., Figgie International, Inc. and
Washington Mutual Investors Fund. Mr. Brinkman has been a
Director of Washington Gas Light Company since 1992.
</TABLE>
2
<PAGE> 5
<TABLE>
<S> <C>
DANIEL J. CALLAHAN, III, age 64, is Vice Chairman and Treasurer
PHOTO of The Morris and Gwendolyn Cafritz Foundation. Mr. Callahan
retired in 1995 as Chairman and Chief Executive Officer of USLICO
Corporation, an insurance holding company, a position he 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 ReliaStar Financial 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, 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 and serves as Chairman of
the Personnel and Compensation Committee.
ORLANDO W. DARDEN, age 66, is President of OWD Enterprises Inc, a
PHOTO real estate investment firm and is a partner in several real
estate limited partnerships. He 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. He is a
member of 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 43, 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. Mr.
DeGraffenreidt is also a member of the boards of directors of
Harbor Bank of Maryland, Medlantic Health Care Group, Southern
Gas Association, the American Red Cross, Greater Chesapeake and
Potomac Region, and the Healthy Babies Project. He has been a
member of the Board of Directors of the Company since 1994.
</TABLE>
3
<PAGE> 6
<TABLE>
<S> <C>
MELVYN J. ESTRIN, age 54, is Chairman of the Board and Chief
PHOTO Executive Officer of FoxMeyer Health Corporation (formerly
National Intergroup, Inc.), involved in medical information and
medical product manufacturing. Mr. Estrin is also Chairman of the
Board and Chief Executive Officer of Human Service Group, Inc.
(trading as Estrin International) (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
served as Trustee of the University of Pennsylvania and is active
with several charitable organizations, including serving as a
Director of The National Council for the Performing Arts and the
Endowment Board of the Kennedy Center. Mr. Estrin is a member of
The Washington Board of Trade, The Economic Club of Washington
and The Business Roundtable. He is a former 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,
UroHealth Systems, Inc., Phar-Mor Inc., FWB Bancorp, and has been
a Director of Washington Gas Light Company since 1991.
PATRICK J. MAHER, age 60, 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, the Greater
Washington Research Center, the Greater Washington Board of
Trade, the Corporation Against Drug Abuse and Public Utilities
Reports, Inc. He is a Trustee of the Federal City Council. Mr.
Maher is on the Board of Directors of Crestar Financial
Corporation, AEGIS Insurance Services, Inc. and has been a
Director of Washington Gas Light Company since 1988.
KAREN HASTIE WILLIAMS, age 52, 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 71, 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
(INFORMATION ON COMMITTEE MEMBERSHIP IS FOR FISCAL YEAR 1996)
The Board has established four standing committees:
The Executive Committee members are: Patrick J. Maher (Chairman), Daniel J.
Callahan, III, Orlando W. Darden, James H. DeGraffenreidt, Jr. and Stephen G.
Yeonas. There are four alternate members: Michael D. Barnes, Fred J. Brinkman,
Melvyn J. Estrin and Karen Hastie Williams. This committee may exercise all of
the authority of the Board of Directors when the Board is not in session. This
committee held three meetings during the fiscal year which ended September 30,
1996 (fiscal year 1996).
The Audit Review Committee members are: Orlando W. Darden (Chairman), Fred
J. Brinkman, Daniel J. Callahan, III, Karen Hastie Williams 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 five meetings during fiscal
year 1996.
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 1996.
The Personnel & Compensation Committee members are: Daniel J. Callahan, III
(Chairman), Michael D. Barnes, Fred J. Brinkman 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 1996.
The Board of Directors held 11 meetings during fiscal year 1996.
---------------
5
<PAGE> 8
NON-EMPLOYEE DIRECTOR COMPENSATION
Directors who are not employees of the Company are paid an annual retainer
of $17,000 and $900 per meeting of the Board, committee of the Board and
stockholders which they attend. Directors receive $5,000 worth of the $17,000
retainer in the form of common stock of the Company. 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 1996.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the beneficial ownership information as of
January 2, 1997, 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................ 1,479 **
Common Stock................... Fred J. Brinkman................. 2,229 **
Common Stock................... Daniel J. Callahan, III.......... 6,229 **
Common Stock................... Orlando W. Darden................ 629 **
Common Stock................... James H. DeGraffenreidt, Jr. .... 32,952 **
Common Stock................... Melvyn J. Estrin................. 7,970 **
Common Stock................... John K. Keane, Jr. .............. 16,394 **
Common Stock................... Frederic M. Kline................ 12,371 **
Common Stock................... Patrick J. Maher................. 72,629 **
Common Stock................... Joseph M. Schepis................ 26,037 **
Common Stock................... Karen Hastie Williams............ 638 **
Common Stock................... Stephen G. Yeonas................ 8,452 **
All directors and executive
officers as a group:
Common Stock................................................... 277,539 **
</TABLE>
- ---------------
* All shares are directly owned by persons shown in this table except the
following shares which are owned indirectly: (i) 24,200 shares are held by
executive officers in the Company's Savings Plan for Management Employees,
(ii) 2,000 shares are owned by Mr. Callahan's wife, and Mr. Callahan
disclaims beneficial ownership of those shares and (iii) 642 shares are held
by two of Mr. Maher's adult children, and Mr. Maher disclaims beneficial
ownership of those shares.
** Less than 1% of class outstanding.
6
<PAGE> 9
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------------- -----------
OTHER RESTRICTED ALL
NAME AND FISCAL ANNUAL STOCK OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(2) AWARDS(3) COMPENSATION(5)
- ------------------------------- ---- -------- ----------- -------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Patrick J. Maher............... 1996 $425,000 $400,000(1) $3,064 $708,000(4) $6,000
Chairman of the Board and 1995 365,000 225,000 3,064 0 6,000
Chief Executive Officer 1994 365,000 225,000 3,064 0 6,419
James H. DeGraffenreidt,
Jr. ......................... 1996 270,000 230,000 1,387 285,250(4) 6,000
President and 1995 225,000 150,000 693 221,250(4) 6,000
Chief Operating Officer 1994 155,000 65,000 453 0 5,627
1996 185,000 140,000 755 207,250(4) 5,836
Joseph M. Schepis.............. 1995 145,000 90,000 647 101,406(4) 5,243
Senior Vice President 1994 123,000 32,000 410 0 4,920
Frederic M. Kline.............. 1996 145,000 100,000 454 97,500(4) 5,679
Vice President and 1995 123,000 45,000 467 0 4,730
Treasurer 1994 123,000 32,000 440 0 4,920
John K. Keane, Jr. ............ 1996 161,000 80,000 1,710 97,500(4) 6,000
Senior Vice President 1995 161,000 65,000 1,755 0 6,000
and General Counsel 1994 161,000 47,000 1,691 0 6,110
</TABLE>
- ---------------
(1) The Board of Directors deferred payment of this incentive award to Mr. Maher
as follows: 25% was paid on January 1, 1997; 25% is payable on January 1,
1998 and 50% is payable on January 1, 1999.
(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 1996 for the named executive officers was as follows: Patrick
J. Maher, 48,000 shares valued at $1,056,000; James H. DeGraffenreidt, Jr.,
32,350 shares valued at $711,700; Joseph M. Schepis, 17,900 shares valued at
$393,800; John K. Keane, Jr., 8,850 shares valued at $194,700 and Frederic
M. Kline, 7,100 shares valued at $156,200.
(4) Restricted stock awards are reported at the aggregate market value on the
date of the grant. The fiscal year 1995 restricted stock awards shown were
granted on October 25, 1994, effective November 1, 1994. The market value on
the grant date was $18.4375 per share. The number of restricted shares
granted in fiscal year 1995 for the named executive officers was as follows:
James H. DeGraffenreidt, Jr., 12,000 shares, and Joseph M. Schepis, 5,500
shares. The awards granted in fiscal year 1995 to Messrs. DeGraffenreidt and
Schepis vest in increments of 10% on each anniversary of the effective date
of the awards. The fiscal year 1996 restricted stock awards shown were
granted and effective on November 1 and November 28, 1995. The market values
on the grant dates were $19.50 per share on November 1, 1995 and $20.50 per
share on November 28, 1995. The number of restricted shares granted in
fiscal year 1996 for the named executive officers was as follows: Patrick J.
Maher, 36,000 shares; James H. DeGraffenreidt, Jr., 14,500 shares; Joseph M.
Schepis, 10,500 shares; John K. Keane, Jr., 5,000 shares; Frederic M. Kline,
5,000 shares. Shares granted on November 1, 1995 vest as follows: for Mr.
Maher, the shares vest in increments of 33.3% on each anniversary of the
award except the final increment, which vests on April 20, 1998; for Messrs.
DeGraffenreidt, Keane, Schepis and Kline, the shares vest in 20% increments
on each anniversary of the award, except that the final increment vests for
Mr. Keane on January 19, 2000. The shares granted to Messrs. Maher,
DeGraffenreidt and Schepis on November 28, 1995 vested on November 28, 1996.
Dividends are paid on restricted shares from the effective date of the
awards.
(5) This column reports the Company's matching contributions to the Company's
Savings Plan for Management Employees 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 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 the average of the participant's highest rates of
annual basic compensation, including any amounts paid or deferred under the
Executive Incentive Compensation Plan, on December 31 of the three years out of
the final five years of the participant's service as a participant. Under
certain conditions, participants may elect to have a portion of their SERP
benefit paid in the form of a lump sum.
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
800,000....................... 160,000 320,000 480,000
</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 15
years of benefit service. Benefits shown in the pension table are not subject to
reductions for Social Security.
---------------
8
<PAGE> 11
REPORT OF THE 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 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 value of long-term incentive compensation is
affected by the performance of the Company's stock.
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 as a way 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 1996 (October 1, 1995 through September 30, 1996), the P &
C Committee decided that the officers' base salaries should generally be set at
approximately 90% of market levels based on a group of comparable utilities.
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 1996, that
minimum threshold was determined to be the return on equity that results when
net income applicable to common stock is at least
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<PAGE> 12
$54.4 million. For FY 1996, that return on equity was 10.16%. Since the Company
earned $80.3 million and 15% on its common equity, the threshold was exceeded,
and individual awards were allowable under the EICP.
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) managing resources within
established departmental budgets; (iii) effectiveness in areas of leadership,
planning and teamwork; (iv) peer evaluations; and (v) comparison to incentive
compensation in the natural gas distribution and other industries, based on data
supplied by the outside study of executive compensation. The P & C Committee
considers the amount and basis 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. Awards were
made to thirteen officers under the LTICP during FY 1996.
COMPENSATION OF THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER
In October 1995, the P & C Committee increased Mr. Maher's salary for
fiscal year 1996 to a level of approximately 90% of the market base salary for a
position of similar responsibilities. This reflects the approach by the P & C
Committee that a significant percentage of the total compensation of the
Chairman and CEO should be derived from incentive compensation rather than
salary.
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<PAGE> 13
Mr. Maher received an incentive payment under the EICP applicable to FY
1996 of $400,000, which was 94% of his base salary. The Board of Directors
deferred payment of this incentive award to Mr. Maher as described in footnote
(1) to the Summary Compensation Table appearing in this proxy statement. 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 1996 was based on substantial corporate achievements
attained in FY 1996, including: (i) a return on common equity of 15%; (ii) an
increase in earnings to $1.85 per share for FY 1996, compared to $1.45 for FY
1995; and (iii) continued development of effective strategic plans for the
Company to successfully compete in an increasingly deregulated market.
PERSONNEL AND COMPENSATION COMMITTEE
Daniel J. Callahan, III (Chairman)
Michael D. Barnes
Fred J. Brinkman
Melvyn J. Estrin
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<PAGE> 14
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,
1991, and ended September 30, 1996.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURNS*
<TABLE>
<CAPTION>
MEASUREMENT PERIOD WASHINGTON GAS STANDARD & POOR'S DOW JONES UTILITY
(FISCAL YEAR COVERED) LIGHT COMPANY 500 AVERAGE
<S> <C> <C> <C>
1991 $100.00 $100.00 $100.00
1992 $122.00 $111.00 $110.00
1993 $150.00 $126.00 $132.00
1994 $125.00 $130.00 $103.00
1995 $147.00 $169.00 $129.00
1996 $172.00 $203.00 $139.00
</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, 1991.
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<PAGE> 15
(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 1997. 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) 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 280 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 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 4,708,992 shares, representing approximately 17.2%
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.
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<PAGE> 16
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.
For these reasons, the Board of Directors and the management oppose the
proposed resolution.
Mrs. Davis has submitted substantially the same proposal in the preceding
eleven years and it was defeated by a vote of over 80% of shares voting on the
proposal each year.
THE BOARD OF DIRECTORS AND THE MANAGEMENT OF THE COMPANY RECOMMEND A VOTE
AGAINST THE ADOPTION OF THIS STOCKHOLDER PROPOSAL.
---------------
(4) STOCKHOLDER PROPOSAL
A shareholder has given the Company notice of his intention to present the
following proposal for consideration by the stockholders at the annual meeting.
Information as to the identity of the shareholder and number of shares held by
him will be furnished, orally or in writing as requested, promptly upon the
receipt of any oral or written request therefor. Such requests should be
directed to Shareholder Services, Washington Gas Light Company, 1100 H St.,
N.W., Washington, DC 20080; tel (202) 624-6558.
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
Directors at Washington Gas receive retirement benefits in addition to
their annual fees. The 1996 Washington Gas proxy statement says, "Directors who
have served a minimum of 5 years on the Board are eligible to receive a
retirement benefit which continues for 10 years."
I believe retirement benefits are unnecessary and waste shareholder money.
Most Directors are probably covered by large retirement policies at their places
of employment, and should not be "double-dipping" at this Company or at any
others.
Directors are supposed to be there to protect shareholders, the owners who
elect them. When Directors give themselves pay that isn't connected to the
company performance, this separates them from the interest of other
shareholders.
What's the Washington Gas board done for shareholders? The January 1996
proxy shows that the value of $100 dollars invested in the company has gone down
since 1993, even while the stock market was breaking new records. And if this
doesn't build confidence with shareholders, look at the Wall Street Journal
article
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<PAGE> 17
about Washington Gas Director Melvyn Estrin. The newspaper reported that he sold
shares in Fox-Meyer Health Group, where he was co-chairman, shortly before part
of the company field [sic] for bankruptcy.
These cases tell me that some directors are worrying too much about their
own personal finances and not enough about the finances of Washington Gas
shareholders. Let's help them focas [sic] on shareholders by sending a message
on director's pensions.
Please support the following resolution:
That the shareholders of Washington Gas request that the Board of Directors
stop giving pension or other retirement benefits to outside Directors unless the
shareholders vote on the pension package; and that current non-employee
Directors voluntarily give up their pension benefits.
OPPOSITION OF YOUR BOARD OF DIRECTORS AND MANAGEMENT
AND REASONS THEREFOR:
Your Board of Directors and Management believe continuation of the
retirement benefit for outside directors is reasonable and in the best interest
of shareholders. The retirement benefit is part of a package of benefits which
the Directors believe represents an appropriate level of compensation. This plan
was adopted by the Board in 1993 based on a study by an outside benefits
consultant and a review of compensation practices of other companies. It
provides a benefit which the Board believes helps attract qualified Directors
and also provides an incentive for Directors to continue in Board service for a
reasonable period of time.
The proponent alleges that retirement benefits are "unnecessary and waste
shareholder money" and that Directors probably have other retirement benefits
and should not "be double dipping". The proponent's unsubstantiated "belief"
stands in contrast to the study by an independent benefits consultant retained
by the Personnel and Compensation Committee -- which included a review of the
compensation packages of several other utility companies and positioned your
company in the zone of reasonableness for director compensation.
The proponent alleges that Director compensation "isn't connected to
Company performance." This is untrue, in that currently $5,000 of the Directors'
retainer is paid in the form of Company stock. The proponent asks "What's the
Washington Gas board done for shareholders?" To answer this question, one need
only reflect on (i) the performance graph showing total return on this Company's
stock shown in this proxy statement, and (ii) the fact that dividends have been
increased each year for 20 consecutive years and paid for 145 consecutive years,
a record which puts Washington Gas in the top 1% of companies listed on the New
York Stock Exchange.
Finally, the proponent engages in rather negative and selective rhetoric
regarding the sale by a Director of shares in another company. The Director
advises that the sales were not a matter of choice, but were required according
to the terms of a pre-existing contract.
There is no basis for the proponent's complaints stated regarding this
retirement benefit. The proposal should be rejected, and your Board and
Management urge you to vote against the proposal.
THE BOARD OF DIRECTORS AND THE MANAGEMENT OF THE COMPANY RECOMMEND A VOTE
AGAINST THE ADOPTION OF THIS STOCKHOLDER PROPOSAL.
---------------
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<PAGE> 18
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 1996, including financial statements, was mailed to
stockholders on or about January 6, 1997.
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 $7,500, 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 22, 1997.
VOTING BY PROXY
Proxy cards will be voted as specified, but if not otherwise marked they
will be voted: "FOR" Proposals (1) and (2) and "AGAINST" Proposals (3) and (4).
By order of the Board of Directors,
Douglas V. Pope
Secretary
January 21, 1997
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THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL 1.
<TABLE>
<S> <C> <C>
1. Election of all Directors FOR all nominees [X] WITHHOLD AUTHORITY to vote [X]
listed below for all nominees listed below
</TABLE>
Nominees: Michael D. Barnes, Fred J. Brinkman, Daniel J. Callahan, III, Orlando
W. Darden, James H. DeGraffenreidt, Jr., Melvyn J. Estrin, 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 [X] AGAINST [X] ABSTAIN [X]
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "AGAINST" PROPOSAL 3.
3. Shareholder Proposal.
FOR [X] AGAINST [X] ABSTAIN [X]
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "AGAINST" PROPOSAL 4.
<TABLE>
<S> <C>
4. Stockholder Proposal. 5. In their discretion, the Proxies are authorized to vote
upon such other business as may properly come before the
FOR [X] AGAINST [X] ABSTAIN [X] meeting or any adjournment thereof.
Change of Address
and or Comments [X]
Mark Here
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 INDICATED (X)
IN BLACK OR BLUE INK. [X]
</TABLE>
PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WASHINGTON GAS LIGHT COMPANY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING FEBRUARY 21, 1997
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 21, 1997 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 Willard
Inter-Continental Hotel, 1401 Pennsylvania Ave., N.W. Washington, D.C. on
Friday, February 21, 1997 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 SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1 AND 2 AND AGAINST PROPOSALS 3 AND 4.
(Continued and to be signed and dated on the reverse side.)
WASHINGTON GAS LIGHT COMPANY
P.O. BOX 11038
NEW YORK, N.Y. 10203-0038
- --------------------------------------------------------------------------------
