<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
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Central Hudson Gas & Electric Corporation
- - - - - --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Central Hudson Gas & Electric Corporation
- - - - - --------------------------------------------------------------------------------
(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(j)(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:
Not Applicable
- - - - - --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
Not Applicable
- - - - - --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
Not Applicable
- - - - - --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
Not Applicable
- - - - - --------------------------------------------------------------------------------
/ / 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
CENTRAL HUDSON GAS & ELECTRIC CORPORATION
284 SOUTH AVENUE
POUGHKEEPSIE, NEW YORK 12601-4879
February 25, 1994
To the Holders of Common Stock:
The annual meeting of shareholders will be held at the Corporation's office
in Poughkeepsie, N.Y. on April 5, 1994. You are cordially invited to attend in
person; but if this should be impossible, we hope you will send us your proxy so
that the business of the meeting can be attended to properly. A formal Notice
and Proxy Statement are attached hereto.
It is always a pleasure to meet with our shareholders and I personally look
forward to greeting as many of you as possible at the meeting.
John E. Mack III
Chairman of the Board
and Chief Executive Officer
<PAGE> 3
CENTRAL HUDSON GAS & ELECTRIC CORPORATION
284 SOUTH AVENUE
POUGHKEEPSIE, NEW YORK 12601-4879
NOTICE OF ANNUAL MEETING
February 25, 1994
To the Holders of Common Stock:
NOTICE IS HEREBY GIVEN that the annual meeting of the shareholders of
Central Hudson Gas & Electric Corporation will be held at the office of the
Corporation, 284 South Avenue, in the City of Poughkeepsie, Dutchess County, New
York, on TUESDAY, APRIL 5, 1994 AT 10:30 A.M., for the following purposes:
(1) To elect directors for the ensuing year;
(2) To ratify the appointment of Price Waterhouse as independent public
accountants for the year 1994; and
(3) To take action upon any other matters that may properly come before
the meeting.
By Order of the Board of Directors,
Ellen Ahearn
Assistant Secretary
IMPORTANT
THE BOARD OF DIRECTORS WELCOMES THE PERSONAL ATTENDANCE OF SHAREHOLDERS AT
THE MEETING. HOWEVER, IF YOU DO NOT PLAN TO BE PRESENT, PLEASE MAKE SURE THAT
YOU INDICATE ON YOUR PROXY YOUR VOTE ON THE MATTERS TO BE CONSIDERED AT THE
ANNUAL MEETING AND THAT YOU DATE AND SIGN YOUR PROXY AND RETURN IT PROMPTLY IN
THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
<PAGE> 4
PROXY STATEMENT
The enclosed proxy is being solicited by the Board of Directors of the
Corporation for use in connection with the annual meeting of shareholders to be
held on April 5, 1994. This proxy statement and enclosed proxy are first being
sent to shareholders on or about February 25, 1994. The mailing address of the
principal executive office of the Corporation is 284 South Avenue, Poughkeepsie,
New York 12601-4879. The cost of preparing, printing and mailing the notice of
meeting, proxy, proxy statement and annual report will be borne by the
Corporation. Proxy solicitation other than by use of the mail may be made by
regular employees of the Corporation by telephone and personal solicitation.
Banks, brokerage houses, custodians, nominees and fiduciaries are being
requested to forward the soliciting material to their principals and to obtain
authorization for the execution of proxies, and may be reimbursed for their
out-of-pocket expenses incurred in that connection. In addition, the Corporation
has retained D.F. King & Co., Inc. of New York, New York, a proxy solicitation
organization, to assist in the solicitation of proxies. The fee of such
organization in connection therewith is estimated to be $6,500, plus reasonable
out-of-pocket expenses. Any shareholder giving the enclosed proxy has the right
to revoke it at any time before it is voted. To revoke a proxy, the shareholder
must file with the Secretary of the Corporation either a written revocation or a
duly executed proxy bearing a later date.
The record of shareholders entitled to notice of, and to vote at, the
annual meeting was taken at the close of business on February 14, 1994. At that
date the Corporation had outstanding 17,007,975 shares of Common Stock. Each
share of Common Stock is entitled to one vote. No other class of securities is
entitled to vote at this meeting.
The proxies given pursuant to this solicitation will be voted at the
meeting or any adjournment thereof. Abstentions and broker non-votes are voted
neither "for" nor "against," and have no effect on the vote, but are counted in
the determination of a quorum.
ELECTION OF DIRECTORS
Eleven directors are to be elected by a plurality of the votes cast at the
annual meeting of shareholders by holders of shares entitled to vote. Such
directors shall hold office until the next annual meeting of shareholders or
until their successors are duly elected and qualify. The Board of Directors
proposes the following nominees, all of whom are now directors of the
Corporation, and recommends a vote in favor thereof:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR PERIOD OF
EMPLOYMENT AND POSITIONS SERVICE
AND AS
OFFICES WITH THE BUSINESS EXPERIENCE DIRECTOR
NAME AGE(1) CORPORATION(1) DURING PAST FIVE YEARS(1) BEGAN
---- ------ -------------------------- -------------------------- ---------
<S> <C> <C> <C> <C>
L. Wallace Cross... 64 Retired from the Present position, except 1990
Corporation; Chairman of Executive Vice President
the Board of Directors, and Chief Financial
Christian Herald Officer of the
Association, Inc., a Corporation, April 1989-
not-for-profit March 1991, when he re-
charitable organization tired from the
Poughkeepsie, N.Y. Corporation; Senior Vice
President-Finance and
Accounting of the
Corporation, prior to
1989
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR PERIOD OF
EMPLOYMENT AND POSITIONS SERVICE
AND AS
OFFICES WITH THE BUSINESS EXPERIENCE DIRECTOR
NAME AGE(1) CORPORATION(1) DURING PAST FIVE YEARS(1) BEGAN
---- ------ -------------------------- -------------------------- ---------
<S> <C> <C> <C> <C>
Jack Effron........ 60 President of Efco Present positions, except 1987
Products, a bakery President of the Council
ingredients corpora- of Industry of
tion; member of the St. Southeastern New York,
Francis Health Care 1989-March 1991
Foundation; Chairman of
the Chief Executive's
Network for
Manufacturing of the
Council of Industry of
Southeastern New York;
Chairman of Committee on
Compensation and Succes-
sion
Poughkeepsie, N.Y.
Richard H.
Eyman............ 63 Retired; Member, National Present position, except 1984
Advisory Board of the Senior Vice President,
Salvation Army; Chairman Brouillard
of Committee on Audit Communications Division
Norwalk, CT. of J. Walter Thompson
Co., an advertising
agency, 1989-January
1992, when he retired
Frances D.
Fergusson........ 49 President and Professor of Present positions 1993
Art, Vassar College;
Member, Board of
Trustees of the Ford
Foundation and Chair of
its Education and
Culture Committee;
Trustee of the Mayo
Foundation; Trustee of
Historic Hudson; Direc-
tor, Marine Midland
Bank, N.A.; Director,
National Association of
Independent Colleges and
Universities
Poughkeepsie, N.Y.
Heinz K.
Fridrich(2)...... 60 Retired; former Vice Retired from IBM on 1988
President September 30, 1993; former
-- Manufacturing, Member, Board of
International Business Trustees of Mount St.
Machines Corporation Mary College, 1989-1993
("IBM")
Fernandina Beach, FL.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR PERIOD OF
EMPLOYMENT AND POSITIONS SERVICE
AND AS
OFFICES WITH THE BUSINESS EXPERIENCE DIRECTOR
NAME AGE(1) CORPORATION(1) DURING PAST FIVE YEARS(1) BEGAN
---- ------ -------------------------- -------------------------- ---------
<S> <C> <C> <C> <C>
Edward F. X.
Gallagher........ 60 Owner of Gallagher Present position 1984
Transportation Services, a
group of companies
engaged in the sale and
leasing of commercial
motor vehicles, the dis-
tribution of wholesale
automotive parts and the
operation, under the
trade name of Leprechaun
Lines and Tours, of
several bus companies
Newburgh, N.Y.
Paul J. Ganci...... 55 President and Chief Present position, except 1989
Operating Officer of the Senior Vice President--
Corporation Operations of the
Poughkeepsie, N.Y. Corporation prior to
April 1989
Charles LaForge.... 63 President of Wayfarer Inns Present positions 1987
and owner of the Beekman
Arms in Rhinebeck, N.Y.;
Trustee of Rondout
Savings Bank in
Kingston, N.Y.; Trustee
emeritus of the Cu-
linary Institute of
America in Poughkeepsie,
N.Y.
Rhinebeck, N.Y.
John E. Mack, 59 Chairman of the Board and Present positions, except 1981
III.............. Chief Executive Officer President and Chief
of the Corporation; Executive Officer of the
Chairman Corporation prior to
of the Executive and April 1989
Retirement Committees
Poughkeepsie, N.Y.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR PERIOD OF
EMPLOYMENT AND POSITIONS SERVICE
AND AS
OFFICES WITH THE BUSINESS EXPERIENCE DIRECTOR
NAME AGE(1) CORPORATION(1) DURING PAST FIVE YEARS(1) BEGAN
---- ------ -------------------------- -------------------------- ---------
<S> <C> <C> <C> <C>
Howard C.
St. John......... 70 Chairman of the Board of Present positions, except 1984
Ulster Savings Bank; Chief Executive Officer of
lawyer, member of the Ulster Savings Bank,
law firm of Howard C. 1989-1993
St. John & Associates,
both of Kingston, N.Y.;
Chairman of the Board of
Stavo Industries, a
liquid filtration
business, Kingston,
N.Y.; Vice Chairman of
the Board; Chairman of
Committee on Finance
Kingston, N.Y.
Edward P. Swyer.... 44 President of L. A. Swyer Present positions, except 1990
Realty and Management, Managing Partner of
Inc. and Stuyvesant WTZA-TV Associates, a
Plaza, Inc., commercial UHF television station,
real estate firms 1989-1993
Albany, N.Y.
</TABLE>
- - - - - ------------
(1) Based on information furnished to the Corporation by the nominees as of
December 31, 1993.
(2) The Corporation, in the ordinary course of business, purchases from IBM
equipment, supplies and services, which aggregated $.6 million in 1993. The
Corporation has certain license agreements with IBM for the use by IBM of
the Corporation's electrical facilities, for which the Corporation received
$2.8 million in 1993. The Corporation, in the ordinary course of business,
performs certain electrical service work for IBM, for which the total
amount of payments received in 1993 was insubstantial. The Corporation does
not consider the aggregate amount of such transactions material in relation
to its business and believes that such amount is not material in relation
to the business of IBM or the interests of Mr. Fridrich.
The Corporation supplies gas and electric services to IBM facilities at
rates approved by the Public Service Commission of the State of New York
("PSC"). In July 1988, IBM commenced an action against the Corporation and
other unnamed defendants in the Supreme Court of the State of New York,
County of Dutchess, alleging damages as a result of a power outage and
electrical loss in August 1985 at IBM's East Fishkill site to which the
Corporation supplies electric service. The amount of damages claimed in
such action is not material in relation to the Corporation's business.
IT IS THE INTENTION OF THE PERSONS NAMED IN THE PROXY FORM TO VOTE SUCH
PROXIES FOR THE ELECTION AS DIRECTORS OF THE NOMINEES NAMED ABOVE. ALTHOUGH THE
BOARD OF DIRECTORS DOES NOT CONTEMPLATE THAT ANY OF THE NOMINEES WILL BE UNABLE
TO SERVE, SHOULD SUCH A SITUATION ARISE PRIOR TO THE MEETING, THE PROXIES WILL
BE VOTED IN ACCORDANCE WITH THE BEST JUDGMENT OF THE PERSONS ACTING THEREUNDER.
5
<PAGE> 8
SECURITY OWNERSHIP
The following table lists the number of shares of Common Stock ($5.00 par
value) of the Corporation ("Common Stock") beneficially owned by all the
directors, and nominees for election as directors, each executive officer listed
in the table under the caption "Executive Compensation" and by all directors and
executive officers of the Corporation as a group:
<TABLE>
<CAPTION>
NO. OF % OF
NAME SHARES(1) CLASS(2)
---- -------- ------------
<S> <C> <C>
Marjorie S. Brown................................ 607(3) less than 1%
L. Wallace Cross................................. 10,300 less than 1%
Jack Effron...................................... 1,800 less than 1%
Richard H. Eyman................................. 2,060(4) less than 1%
Frances D. Fergusson............................. 200 less than 1%
Heinz K. Fridrich................................ 1,343 less than 1%
Edward F. X. Gallagher........................... 1,673 less than 1%
Paul J. Ganci.................................... 4,045(4) less than 1%
Charles LaForge.................................. 2,365 less than 1%
John E. Mack, III................................ 8,631(4) less than 1%
Howard C. St. John............................... 4,000 less than 1%
Edward P. Swyer.................................. 4,900(5) less than 1%
Joseph J. DeVirgilio, Jr......................... 1,136 less than 1%
Carl E. Meyer.................................... 1,007 less than 1%
Allan R. Page.................................... 1,878 less than 1%
All directors and executive officers as a group
(22 persons)................................... 52,375 less than 1%
</TABLE>
- - - - - ---------------
(1) Based on information furnished to the Corporation by the directors and
executive officers as of December 31, 1993. No other equity securities are
owned beneficially by any such directors and officers, except that Mr. St.
John owns 100 shares of the Corporation's 4 1/2% Cumulative Preferred
Stock, and Mrs. St. John owns 100 shares of the Corporation's 7.72%
Cumulative Preferred Stock. Such shares owned by Mr. and Mrs. St. John
represent in the aggregate less than 1% of the total of the shares of
Cumulative Preferred Stock outstanding. Said 100 shares of 7.72% Cumulative
Preferred Stock owned by Mrs. St. John are considered to be beneficially
owned by Mr. St. John only for the purpose of this proxy statement and he
disclaims any beneficial interest in such shares for all other purposes.
(2) The percentage ownership calculation for each owner has been made on the
basis that there are outstanding 17,007,975 shares of Common Stock on the
record date.
(3) Mrs. Brown resigned as a director of the Corporation, effective January 1,
1994.
(4) Includes shares owned by the respective spouses of the named individuals as
follows: Mrs. Mack--624 shares; Mrs. Ganci--294 shares; and Mrs. Eyman--100
shares. The shares owned by Mrs. Mack, Mrs. Ganci and Mrs. Eyman are
considered to be beneficially owned by Mr. Mack, Mr. Ganci and Mr. Eyman,
respectively, only for the purpose of this proxy statement and the
respective named individuals disclaim any beneficial interest in such shares
for all other purposes.
(5) Includes 1,900 shares owned by a trust for the benefit of Mr. Swyer's
sisters, under which trust Mr. Swyer is a co-trustee with power of
investment. Said shares held in trust are considered to be beneficially
owned
6
<PAGE> 9
by Mr. Swyer only for the purpose of this proxy statement and he disclaims
any beneficial interest in such shares for all other purposes.
Section 16(a) of the Securities and Exchange Act of 1934 requires the
Corporation's officers and directors to file initial reports of ownership and
reports of changes in ownership with the Securities and Exchange Commission
("SEC") and the New York Stock Exchange. Officers and directors are required by
SEC regulations to furnish the Corporation with copies of all Section 16(a)
forms they file. Based solely on a review of the copies of such forms furnished
to the Corporation and written representations from the Corporations's officers
and directors, all requisite filings were made in 1993.
BOARD OF DIRECTORS AND COMMITTEES
MEETINGS AND ATTENDANCE
During 1993, there were 12 meetings of the Board of Directors. All
directors attended at least 88% of the aggregate of the total number of Board
meetings and meetings of Committees of the Board on which they served.
The five standing Committees of the Board of Directors are the Committee on
Audit, the Committee on Compensation and Succession, the Executive Committee,
the Committee on Finance and the Retirement Committee. Information with respect
to the Committee on Audit and the Committee on Compensation and Succession is
set forth below.
COMMITTEE ON AUDIT
The members of this Committee are Messrs. Eyman (Chairman), Fridrich, St.
John and Cross. The Committee had three meetings during 1993, which were
attended by representatives of the Corporation's independent accountants, Price
Waterhouse. The Committee examines the adequacy of the Corporation's internal
audit activities, reviews the scope of the audit by Price Waterhouse and related
matters pertaining to the examination of the financial statements, reviews the
nature and extent of any non-audit services provided by the Corporation's
independent accountants, consults at least three times a year with them and
makes recommendations to the Board of Directors with respect to the foregoing
matters as well as with respect to the appointment of the Corporation's
independent accountants.
COMMITTEE ON COMPENSATION AND SUCCESSION
The members of this Committee ("Compensation Committee") are Messrs. Effron
(Chairman), Eyman and Swyer. Messrs. Mack and Ganci were members of the
Compensation Committee until its restructuring in September, 1993. Mrs. Brown
was a member of such Committee until her resignation as a director, effective
January 1, 1994; she was also Chairwoman of the Compensation Committee until
April 6, 1993. The Compensation Committee had three meetings during 1993. The
Compensation Committee considers and recommends to the Board of Directors the
compensation (and special terms, if any, of employment) of directors, officers
of the Board of Directors and the salaries of officers of the Corporation. The
Compensation Committee also considers and recommends to the Board of Directors
the candidates to be nominated for election to the Board and candidates for
appointment by the Board as officers of the Corporation. The Compensation
Committee is charged with receiving recommendations of nominees by shareholders
for election of the Board of Directors and reviewing and comparing the
qualifications of such nominees with those of other potential nominees. Any
shareholder desiring to submit the name of a nominee should send it, together
with a statement of the candidate's qualifications, to the Committee on
Compensation and
7
<PAGE> 10
Succession, c/o the Secretary, Central Hudson Gas & Electric Corporation, 284
South Avenue, Poughkeepsie, New York 12601-4879.
EXECUTIVE COMPENSATION
The Summary Compensation Table set forth below includes compensation
information on the Chairman of the Board and Chief Executive Officer of the
Corporation and each of the Corporation's four most highly compensated executive
officers whose salary in 1993 exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
---------------------------------------
ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(1) COMPENSATION(2)
--------------------------- ---- ------------------- ---------------
<S> <C> <C> <C>
John E. Mack, III, Chairman 1993 $ 307,750 $ 4,497
of the Board and Chief 1992 288,750 4,364
Executive Officer 1991 258,750 4,237
Paul J. Ganci, President 1993 236,250 4,497
and Chief Operating Officer 1992 220,000 4,364
1991 196,250 4,237
Carl E. Meyer, Vice President-- 1993 140,125 3,503
Customer Services 1992 127,250 3,181
1991 107,025 2,676
Allan R. Page, Vice President-- 1993 128,750 3,862
Corporate Services 1992 117,250 3,517
1991 100,350 3,010
Joseph J. DeVirgilio, Jr., Vice 1993 127,375 2,821
President--
Human Resources & Administration 1992 116,175 3,183
1991 98,950 2,968
</TABLE>
- - - - - ---------------
(1) This base salary amount includes amounts deferred pursuant to the
Corporation's (i) Flexible Benefits Plan, which Plan is established pursuant
to Section 125 of the Internal Revenue Code of 1986, as amended ("Code")
which permits those electing to participate to defer salary, within
specified limits, to be applied to qualified medical and/or child care
benefit payments, and (ii) Savings Incentive Plan ("SIP"), a "defined
contribution" plan which meets the requirements of the Code, including Code
Section 401(k), which, among other things, permits, within limitations,
participants to tax-defer base salary, and, within limits, provides for
Corporation contributions to management participants.
(2) These are amounts contributed by the Corporation for the benefit of the
named individual under the SIP.
RETIREMENT INCOME PLAN
The Corporation's Retirement Income Plan ("Retirement Plan") is a "defined
benefit" plan, which meets the requirements of the Code, and applies to all
employees of the Corporation. In 1993, there were no contributions made to the
Retirement Plan as a result of its full-funding status for Federal income tax
purposes. The Retirement Plan provides for retirement benefits related to the
participant's annual base salary for each year of eligible employment.
Retirement Plan benefits depend upon length of service, age at retirement and
earnings during years of participation in the Retirement Plan and any
predecessor plans. A participant's benefits under the Retirement Plan are
determined as the accumulation, over that participant's career, of a percentage
of each year's base salary. For periods on and after October 1, 1992, the
percentage is 2% of base salary, except that for years in which the participant
is over 50 years of age such percentage is increased to 2.5%. The Retirement
Plan also provides a benefit for service prior to October 1, 1992 based on a
percentage of a participant's average earnings at October 1, 1992 (being 50% of
each of the base salaries at
8
<PAGE> 11
October 1, 1989 and 1992 and 100% of each of the base salaries at October 1,
1990 and 1991) and the number of years of service while a member of the
Retirement Plan prior to October 1, 1992, all subject to certain limitations. A
cash balance account benefit provided by the Corporation is also available on
retirement under the Retirement Plan, which benefit, generally, provides for a
credit to those participants in the Retirement Plan, on January 1, 1987, of 10%
of their base salary on that date and for a further credit to those participants
in the Retirement Plan, on September 30, 1991, of 5% of their base salary on
that date, with, in both cases, annual interest earned thereon. While the amount
of the contribution payment or accrual with respect to a specified person is not
and cannot readily be separately or individually calculated by the regular
actuaries for the Retirement Plan, estimated annual benefits under the
Retirement Plan upon retirement at age 65 for the individuals listed in the
table under the above caption "Executive Compensation", assuming continuation of
present annual salaries and giving effect to applicable benefit limitations in
the Code, are as follows: Mr. Mack--$115,641; Mr. Ganci--$115,641; Mr.
Meyer--$104,040; Mr. Page--$94,800; and Mr. DeVirgilio--$100,956.
RETIREMENT BENEFIT RESTORATION PLAN
Effective May 1, 1993, the Corporation adopted an unfunded, uninsured
pension benefit plan for a select group of highly compensated management
employees called the Retirement Benefit Restoration Plan ("RBRP"). The RBRP
provides an annual retirement benefit to those participants in the Retirement
Plan who hold the following offices with the Corporation: Chairman of the Board
and Chief Executive Officer, President and Chief Operating Officer, Vice
President (including all levels thereof), Secretary, Treasurer, Controller, and
Assistant Vice President. Such benefit is equal to the difference between (i)
that received under the Retirement Plan, giving effect to applicable salary and
benefit limitations under the Code, and (ii) that which would have been received
under the Retirement Plan, without giving effect to such limitations under the
Code. None of the individuals listed in the table under the above caption
"Executive Compensation" have a current salary level which, if continued to
retirement at age 65, would provide a benefit under the RBRP, except for Messrs.
Mack and Ganci, whose estimated annual benefits under the RBRP upon retirement
at age 65, assuming the continuation of their present salaries, are $64,815 and
$39,711, respectively.
EXECUTIVE DEFERRED COMPENSATION PLAN
The Corporation's Executive Deferred Compensation Plan covers a select
group of highly compensated management employees as an incentive for them to
remain with the Corporation. Under that Plan, an annual benefit is payable,
commencing on retirement, to eligible participants (who retire at age 60 or
older and with 10 or more years of service) for 10 years of the following
percentage of annual base compensation at retirement: 60 to 63--10%; 63 to
65--15%; 65 or over--20%. In view of changes in the Code which became effective
January 1, 1994, the Plan was amended prior thereto so that eligible
participants, who reached age 55 at December 31, 1993, are considered to have
accrued benefits under this Plan as if they were age 60 and had 10 years of
service with the Corporation at December 31, 1993. No amounts were paid under
such Plan for the individuals named in the table under the above caption
"Executive Compensation" for the year 1993. Estimated annual benefits under this
Plan upon retirement at age 65 for such named individuals, assuming continuation
of their present annual salaries, are as follows: Mr. Mack--$62,400; Mr.
Ganci--$48,000; Mr. Meyer--$28,500; Mr. Page--$26,200; and Mr.
DeVirgilio--$25,900.
REMUNERATION OF DIRECTORS AND OFFICERS OF THE BOARD AND RELATED MATTERS
Each member of the Board of Directors, other than any employee-director
(Messrs. Mack and Ganci are the only such employee-directors), receives an
annual retainer of $10,000, $600 for attendance at each meeting of the Board and
$500 for attendance at each meeting of any committee of the Board of which such
9
<PAGE> 12
director is a member if such meeting is held on the same day as a meeting of the
Board, and $600 for such committee meeting if held on a day other than that on
which a Board meeting is held. Chairpersons of Committees of the Board received
additional annual compensation in 1993 as follows: Mr. St. John, as Chairman of
the Committee on Finance--$5,000; Mr. Effron, as Chairman of the Compensation
Committee for nine months of 1993--$1,875; Mrs. Brown, as Chairwoman of the
Compensation Committee for three months of 1993--$625; and Mr. Eyman, as
Chairman of the Committee on Audit--$2,500.
DIRECTORS' DEFERRED COMPENSATION PLAN
The Corporation's Directors' Deferred Compensation Plan applies to all
directors, other than employee-directors of the Corporation, and permits a
director to elect at any time or from time to time to defer all or part of such
director's compensation for services thereafter rendered to the Corporation. For
purposes of such Plan, compensation is defined to include the amount of money to
be paid to the director for serving as a member of the Board of Directors and
any committee of the Board, for serving as an officer of the Board of Directors
and any committee of the Board and for any other services rendered individually
by agreement with the Corporation. A director's compensation deferred in
accordance with such Plan is paid to said director (together with an interest
equivalent computed by applying monthly a rolling average of the United States
Treasury Bill rate to the amount of compensation then deferred from the time the
compensation would ordinarily have been paid until the time it is actually paid)
at such time as the director ceases being a member of the Board of Directors or
at such other time after ceasing to be a director as the director may specify
when making the original election to defer compensation. The commencement of
such pay-out period, however, must be at least one year after the effective date
of such election.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As described in the above caption entitled "Board of Directors and
Committees -- Committee on Compensation and Succession," the persons who served
as members of the Compensation Committee, during 1993, were Messrs. Effron,
Eyman, Swyer, Mack and Ganci and Mrs. Brown. Messrs. Mack and Ganci are officers
of the Corporation. No Compensation Committee interlock relationship existed in
1993.
REPORT ON EXECUTIVE COMPENSATION
The following disclosure is made over the name of each member of the
Compensation Committee, on the date hereof, and is the Report of the
Compensation Committee:
As described above under the caption "Board of Directors and
Committees -- Committee on Compensation and Succession," the members of the
Compensation Committee are Messrs. Effron, Eyman and Swyer. Among the
responsibilities of the Compensation Committee are consideration and
recommendation to the Board of Directors of the salaries of officers of the
Corporation. Annual salary determinations by the Board of Directors become
effective as of April 1 of each year and continue until the following March 31.
The Compensation Committee based its 1993 officers' compensation
recommendations to the Board of Directors on an evaluation of each of the
following three factors, giving balanced weight to each, which factors reflect a
long-standing executive compensation philosophy of the Corporation:
1. Compensation comparisons of other comparable executive officers.
Comparisons are made to the compensation of officers of other New York
State utilities and of other utilities with revenues and other
characteristics similar to those of the Corporation, using data received
from the Edison Electric Institute and the American Gas Association, which
utilities are some, but not all, of the utilities included on the graph
under the below caption "Performance Graph." And, every two years, an
executive
10
<PAGE> 13
compensation study is performed by an independent consultant engaged by the
Corporation. Such a study was performed by an independent consultant for
the period covered by this Report. The data obtained by these various
sources was evaluated and compensation levels for the Corporation's
officers were established based generally on averages of comparative salary
ranges.
2. The experience, responsibility and contribution of each individual
officer to the Corporation's performance.
3. The incumbent's performance in carrying out the responsibilities
and duties of his or her office, as described below.
The performance of each officer of the Corporation (other than Mr. Mack, as
discussed below) was also evaluated, by the Compensation Committee, on the basis
of how he or she contributed to the extent applicable, to furthering the
Corporation's mission--
to provide customers with safe, reliable utility service at the lowest
reasonable price;
to provide a competitive return to the Corporation's shareholders;
to provide a safe working environment that will attract, retain and
motivate employees; and
to provide corporate resources to enhance the quality of life in the
Corporation's service territory.
The performance of the Chairman of the Board and Chief Executive Officer
was evaluated, by the outside members of the Board of Directors, under the
Corporation's Executive Incentive Compensation Plan ("Incentive Plan"), which
was adopted, effective January 1, 1993, by the Board of Directors in November
1993. The Incentive Plan is applicable initially only to the Chairman of the
Board and Chief Executive Officer. The Incentive Plan establishes the
compensation for the incumbent in such office based on two components: annual
base salary (which becomes effective as of April 1 of each year and continues
until the following March 31) and an incentive feature (which provides an award,
as noted below, for performance for the most recently ended calendar year). The
determination of annual base salary and incentive compensation, if any, is
determined by the outside members of the Board of Directors.
In establishing the annual base salary component for Mr. Mack under the
Incentive Plan, which for the period April 1, 1993 to March 31, 1994 is
$312,000, the outside members of the Board of Directors reviewed Mr. Mack's
performance during 1992 related to his policies and leadership in the goal of
building a more profitable corporation and thereby increasing shareholder value
while providing reliable service at reasonable prices. As a measure of this
goal, his performance was evaluated pursuant to the following criteria, with
full recognition that there are events which affect a public utility's
operational and financial performance which are beyond the control of management
(such as weather conditions, the regulated nature of the utility business and
the interest-rate sensitivity of utility securities):
Has the confidence of the financial community and the Corporation's
shareholders been maintained and/or enhanced? Key financial indices,
credit ratings, total return to shareholders and the adequacy of cash
flow are significant quantitative factors.
Does the Corporation have effective management and other personnel so as
to assure a high quality of customer service and to meet the changing
needs of its customers?
Has the Corporation's physical plant and equipment been maintained
and/or improved so as to assure that the Corporation continues to meet
its objective of providing highly reliable utility service at the lowest
reasonable price?
11
<PAGE> 14
Is the Corporation's strategic plan effective in keeping the Corporation
abreast of or ahead of changes that occur as a result of competition,
technology changes and new regulation?
With respect to the relationship of the Company's performance in 1992 to
Mr. Mack's base salary for 1993, the outside members of the Board of Directors
determined that performance by Mr. Mack of his duties in 1992 more than
satisfied the related performance criteria, as described above.
Under the incentive component of the Incentive Plan, Mr. Mack has the
opportunity to earn up to an additional 10% of his base salary, based on a
formula which measures the Corporation achieving goals within the following four
categories, each category being weighted in importance as follows: (1)
shareholder value (4%); (2) the level of customer electric and gas prices (3%);
(3) employee safety (2%); and (4) community involvement (1%).
The shareholder value category is measured by a comparison against the peer
group of utilities shown in the Corporation's Proxy Statement. Under this
category, the Corporation must achieve a change in shareholder value that is
better than the change in the average performance for such peer group.
The customer electric and gas price category is measured by comparison of
typical residential electric prices (including fuel) of the Corporation to other
New York State electric and gas combination companies as of the first of each
year. For natural gas prices, the measurement is by comparison of typical
residential gas prices of the Corporation to a yearly average of certain fuel
oil prices. The incentive as to rates is to achieve typical residential prices
of the Corporation lower than the benchmarks against which they are measured.
The employee safety category is measured by the Corporation's having
achieved a severity rate (which is an index of employee lost-time days for
work-related employee injuries and illnesses), which is less than the
Corporation's average of such rates during the previous five years.
The community involvement category is the Corporation's performance of its
leadership role in community activities and is judgmentally evaluated by the
outside members of the Board of Directors.
A determination as to whether any incentive compensation is earned is made
as soon as possible after the end of each calendar year; and if an award is
made, compensation will be made in a lump sum within 30 days of such
determination.
Mr. Mack did not participate in the determination of his 1993 compensation.
Mr. Ganci did not participate in the determination of either his or Mr. Mack's
1993 compensation.
<TABLE>
<S> <C>
Compensation Committee
Jack Effron
Richard H. Eyman
Edward P. Swyer
</TABLE>
12
<PAGE> 15
PERFORMANCE GRAPH
The line graph set forth below provides a comparison of the Corporation's
cumulative total shareholder return on its Common Stock with the Standard &
Poor's 500 Index and, as a Corporation determined peer comparison, the Kidder
Peabody 100 Index. Such shareholder return is the sum of the dividends paid and
the change in the market price of stock.
COMPARISON OF THE CORPORATION'S FIVE YEAR TOTAL
CUMULATIVE RETURN WITH THE S&P 500 INDEX AND
THE KIDDER PEABODY 100 INDEX*
<TABLE>
<CAPTION>
MEASUREMENT PERIOD CENTRAL KIDDER
(FISCAL YEAR COVERED) HUDSON S&P 500 PEABODY 100
<S> <C> <C> <C>
1988 100.00 100.00 100.00
1989 118.12 131.69 129.94
1990 134.43 127.61 131.42
1991 167.66 166.49 169.59
1992 193.23 179.18 181.66
1993 201.26 197.26 201.99
</TABLE>
* 100 Electric and Combination Utilities
** Assumes $100 invested on January 1, 1988 in the Corporation's Common Stock,
the S&P 500 Index and the Kidder Peabody 100 Index
13
<PAGE> 16
RATIFICATION OF APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed the firm of Price Waterhouse as
independent public accountants for the Corporation for the year 1994 and
recommends to shareholders ratification of such appointment.
The appointment of the independent public accountants is approved annually
by the Board of Directors and is based on the recommendation of the Committee on
Audit, which reviews the qualifications of independent accountants and which
reviews and approves the audit scope, reasonableness of fees and also the types
of nonaudit services for the coming year.
While there is no legal requirement that this appointment be submitted to a
vote of shareholders for ratification, such action is being requested, effective
with calendar year 1994, in response to suggestions by shareholders and also
because the Board of Directors believes that the selection of the independent
accountants to audit the books, records and accounts of the Corporation is of
sufficient importance to seek such ratification. If this action were not
ratified, the Board of Directors would, in due course and having regard for the
requirements of an orderly transition, select other independent public
accountants upon the recommendation of the Committee on Audit.
Representatives of Price Waterhouse will be present at the annual meeting
of shareholders and will have an opportunity to make a statement if they desire
to do so. They will be available to respond to appropriate questions.
DEADLINE FOR SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 1995 annual
meeting to be included in the proxy material relating to that meeting must be
received by the Corporation by October 28, 1994.
OTHER MATTERS
The Board of Directors does not know of any matters to be brought before
the meeting other than those referred to in the notice hereof. If any other
matters properly come before the meeting, it is the intention of the persons
named in the form of proxy to vote such proxy in accordance with their judgment
on such matters.
By Order of the Board of Directors,
ELLEN AHEARN
Assistant Secretary
February 25, 1994
14
<PAGE> 17
FROM NEW YORK CITY AREA:
- Taconic State Parkway North to
Interstate 84 (I-84)
- I-84 West to Exit 13 (Route 9)
- Turn right off ramp onto Route 9
North
- Route 9 approximately 12 miles to
the Academy Street/ South Avenue
Exit
- Bear left at end of ramp and go
under the overpass
- Turn right into Central Hudson
entrance
FROM CONNECTICUT:
- I-84 West to Exit 13 (Route 9)
- Continue as above.
FROM PENNSYLVANIA:
- I-84 East to Exit 13 (Route 9)
[MAP]
- Turn left off ramp onto Route 9
North
- Continue as above.
FROM NEW JERSEY AND UPSTATE NEW YORK:
- New York Thruway (I-87) to Exit 18
(New Paltz)
- Turn right onto Route 299 East
- Route 299 approximately 5 miles,
turn right onto Route 9W South
- Route 9W approximately 2 miles,
bear right for Mid-Hudson Bridge
- After crossing bridge take first
right (Route 9 South) - Route 9
approximately
1 mile to
Academy
Street/South
Avenue Exit
- Bear right off exit ramp into
Central Hudson entrance
15
<PAGE> 18
Appendix to Electronic Format Document
Pursuant to Reg. 232.304 of Regulation S-T, this appendix describes all
graphic and image information in the foregoing document which will appear in
the paper format of such document:
1. Photographs of the Corporation's director-nominees appear next to
their biographical data on pages 2-5.
2. A line graph which sets forth a comparison of the Corporation's
five year total cumulative shareholder return on its common stock
with the Standard & Poor's 500 Index and, as a Corporation
determined peer comparison, the Kidder Peobody 100 Index appears on
page 13.
3. A map providing directions to the Corporation's offices at which
the annual meeting of shareholders will be held appears on page 15.
<PAGE> 19
CENTRAL HUDSON GAS & ELECTRIC CORPORATION
PROXY OF COMMON SHAREHOLDERS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P
R
O The undersigned hereby appoints JOHN E. MACK III, HOWARD
X C. ST. JOHN, JACK EFFRON and PAUL J. GANCI, or any one or more of
Y them, proxy, with full power of substitution, to vote, as
designated on the reverse hereof, all shares of Common Stock
owned by the undersigned at the annual meeting of shareholders of
Central Hudson Gas & Electric Corporation to be held at the
office of the Corporation, 284 South Avenue, in the City of
Poughkeepsie, Dutchess County, New York, on April 5, 1994, or any
adjournment thereof, upon all such matters as may properly come
before the meeting, including the following proposal which is
described in the Proxy Statement, dated February 25, 1994, a copy
of which has been received by the undersigned:
1. Election of Directors. Nominees:
L. Wallace Cross, Jack Effron, Richard H. Eyman, Frances
D. Fergusson, Heinz K. Fridrich, Edward F. X. Gallagher,
Paul J. Ganci, Charles LaForge, John E. Mack III, Howard
C. St. John, Edward P. Swyer.
2. Ratification of Appointment of Independent Accountants.
(The Board of Directors recommends a vote "FOR"
ratification.)
Comments (If Any)
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
(If you have written in the above space, please mark the
corresponding box on the reverse side of this card)
(THIS PROXY CONTINUES AND MUST BE SIGNED ON THE REVERSE SIDE)
1535
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
ITEM 1 AND FOR ITEM 2.
THE DIRECTORS RECOMMEND A VOTE "FOR" THIS ITEM
FOR WITHHELD
1. Election of [ ] [ ]
Directors
(see reverse)
For, except vote withheld from the following nominee(s):
- - - - - -------------------------------------------------------
THE DIRECTORS RECOMMEND A VOTE "FOR" THIS ITEM
FOR AGAINST ABSTAIN
2. Ratification of [ ] [ ] [ ]
Appointment of
Price Waterhouse
as Independent
Public Accountants
If you plan to attend the Annual Meeting, place an X in this box. [ ]
If you indicated a change of address below or comments on reverse side,
place an X in this box. [ ]
CHANGE OF ADDRESS
- - - - - ------------------------------------------------------
- - - - - ------------------------------------------------------
- - - - - ------------------------------------------------------
SIGNATURE(S) DATE ,1994
---------------------------- ----------------
DATE ,1994
---------------------------- ----------------
NOTE: Please sign exactly as name appears hereon. Joint owners should
each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
<PAGE> 20
EMPLOYEE STOCK PURCHASE PLAN--VOTING INSTRUCTION CARD
CENTRAL HUDSON GAS & ELECTRIC CORPORATION
PROXY OF COMMON SHAREHOLDERS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P
R
O The undersigned hereby appoints JOHN E. MACK III, HOWARD
X C. ST. JOHN, JACK EFFRON and PAUL J. GANCI, or any one or more of
Y them, proxy, with full power of substitution, to vote, as
designated on the reverse hereof, all shares of Common Stock
owned by the undersigned at the annual meeting of shareholders of
Central Hudson Gas & Electric Corporation to be held at the
office of the Corporation, 284 South Avenue, in the City of
Poughkeepsie, Dutchess County, New York, on April 5, 1994, or any
adjournment thereof, upon all such matters as may properly come
before the meeting, including the following proposal which is
described in the Proxy Statement, dated February 25, 1994, a copy
of which has been received by the undersigned:
1. Election of Directors. Nominees:
L. Wallace Cross, Jack Effron, Richard H. Eyman, Frances
D. Fergusson, Heinz K. Fridrich, Edward F. X. Gallagher,
Paul J. Ganci, Charles LaForge, John E. Mack III, Howard
C. St. John, Edward P. Swyer.
2. Ratification of Appointment of Independent Accountants.
(The Board of Directors recommends a vote "FOR"
ratification.)
Comments (If Any)
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
(If you have written in the above space, please mark the
corresponding box on the reverse side of this card)
(THIS PROXY CONTINUES AND MUST BE SIGNED ON THE REVERSE SIDE)
1274
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
ITEM 1 AND FOR ITEM 2.
THE DIRECTORS RECOMMEND A VOTE "FOR" THIS ITEM
FOR WITHHELD
1. Election of [ ] [ ]
Directors
(see reverse)
For, except vote withheld from the following nominee(s):
- - - - - -------------------------------------------------------
THE DIRECTORS RECOMMEND A VOTE "FOR" THIS ITEM
FOR AGAINST ABSTAIN
2. Ratification of [ ] [ ] [ ]
Appointment of
Price Waterhouse
as Independent
Public Accountants
If you plan to attend the Annual Meeting, place an X in this box. [ ]
If you indicated a change of address below or comments on reverse side,
place an X in this box. [ ]
CHANGE OF ADDRESS
- - - - - ------------------------------------------------------
- - - - - ------------------------------------------------------
- - - - - ------------------------------------------------------
SIGNATURE(S) DATE ,1994
---------------------------- ----------------
DATE ,1994
---------------------------- ----------------
NOTE: Please sign exactly as name appears hereon. Joint owners should
each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
