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DELMARVA POWER & LIGHT COMPANY
800 KING STREET
P.O. BOX 231
WILMINGTON, DELAWARE 19899
HOWARD E. COSGROVE
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
April 22, 1994
To The Holders of Common Stock of
Delmarva Power & Light Company:
You are cordially invited to attend the Annual Meeting of Stockholders
of Delmarva Power & Light Company (the "Company") to be held at the
University of Delaware's John M. Clayton Hall, located on Rt. 896 North,
Newark, Delaware, on Thursday, May 26, 1994 at 11:00 A.M.
The purpose of the meeting is:
1. To elect three members of the Board of Directors;
2. To appoint the Company's independent public accountants for the year
1994; and
3. To transact such other business as may properly come before the
meeting.
The close of business on April 18, 1994 has been fixed by the Board of
Directors as the time for determining the holders of Common Stock entitled
to vote at this meeting.
Please date, sign and mail the enclosed proxy as promptly as possible in
the enclosed return envelope. Stockholders who are present at the meeting
may withdraw their Proxy and vote in person if they so desire.
Yours very truly,
SIG
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| Whether or not you expect to be present at the Annual Meeting, please |
| sign, date and return the accompanying proxy promptly so that your shares |
| may be represented and voted at the Meeting. You may revoke your proxy if |
| you so desire at any time before it is voted. A return envelope, which |
| requires no postage if mailed in the United States, is enclosed for your |
| convenience. |
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DELMARVA POWER & LIGHT COMPANY
800 KING STREET
P.O. BOX 231
WILMINGTON, DELAWARE 19899
PROXY STATEMENT
This statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Delmarva Power & Light
Company (the "Company") to be used at the Annual Meeting of Stockholders
of the Company to be held on Thursday, May 26, 1994 and at any
adjournments thereof. This Proxy Statement and accompanying proxy will be
mailed to holders of Common Stock on or about April 22, 1994.
Properly executed proxies received in time for the meeting will be
voted in the manner set forth on the proxy unless specifically otherwise
directed by the stockholder. If the enclosed form of proxy is executed and
returned, it may nevertheless be revoked at any time by delivering notice
of revocation or a duly executed proxy bearing a later date to the
Secretary of the Company before the proxy is voted, and stockholders who
are present at the meeting may revoke their proxies and vote in person.
The Company's proxies are returned to an outside proxy agent who
tabulates the results of the voting and notifies the Company in writing.
Proxies voted at the Annual Meeting are counted by the Company's
Inspectors of Election for the Annual Meeting. The Inspectors of Election
are Company officers who have been appointed by the Board of Directors.
If a proxy card indicates an abstention or a broker non-vote on a
particular matter, then the shares represented by such proxy will be
counted for quorum purposes. If a quorum is present, an abstention will
have the effect of a vote against the matter and broker non-votes will
have no effect.
The Annual Report of the Company for the year 1993, containing
financial statements, was mailed to all stockholders of record on or about
March 21, 1994, and subsequently to all new stockholders through the close
of business on April 18, 1994.
On December 31, 1993, the Company had outstanding 58,829,283 shares of
Common Stock. All holders of record of outstanding Common Stock at the
close of business on April 18, 1994, are entitled to one vote per share at
the meeting.
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PROPOSAL NO. 1 - ELECTION OF DIRECTORS
The Board of Directors currently consists of ten members divided into
three classes. Three nominees are to be elected at the Annual Meeting to
serve for a term of three years or until their successors are elected and
qualified. The remaining seven directors will continue to serve as set
forth herein, with four directors having terms expiring in 1995 and three
directors having terms expiring in 1996.
Unless such authority is withheld, it is the intention of the persons
named in the accompanying proxy to vote such proxy for the nominees named
herein, who, with the exception of Michael B. Emery, are currently serving
as directors. Each nominee has consented to being named in this Proxy
Statement and to serve if elected. Although it is contemplated that all of
the nominees will be able to serve, in the event the inability of one or
more to do so is made known prior to the meeting, the proxy holders will
vote for a substitute nominee or nominees as selected by the Board of
Directors.
Effective May 26, 1994, Elwood P. Blanchard, Jr., a director since
1988, is retiring from the Company's Board of Directors.
Michael B. Emery, Senior Vice President of E.I. duPont deNemours &
Company, Wilmington, Delaware, has consented to have his name placed in
nomination. Mr. Emery is active in the community, serving as a board
member of non-profit organizations and educational institutions.
All of the nominees for director were recommended by the Nominating
Committee and were approved by the Board of Directors on November 18,
1993.
The election of directors requires the affirmative vote of the holders
of a majority of the shares present, in person or by proxy, and entitled
to vote at the Annual Meeting.
The nominees and directors are listed herein, together with their
principal occupation or employment, certain additional information as of
December 31, 1993, and their respective terms. Except as otherwise
indicated, nominees and directors have been engaged in their present
occupations for at least the past five years.
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Equity Securities Beneficially
Owned on February 28, 1994 (1)
Nominees for Director Common Shares
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CLASS I - TERM EXPIRING IN 1997
MICHAEL B. EMERY....................... 1,000
SARAH I. GORE.......................... 1,000
H. RAY LANDON.......................... 19,034(2)(3)
Incumbent Directors
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CLASS II - TERM EXPIRING IN 1995
HOWARD E. COSGROVE..................... 24,069(2)(4)
AUDREY K. DOBERSTEIN................... 1,000
JAMES C. JOHNSON....................... 1,020
JAMES T. MCKINSTRY..................... 1,637(5)
Incumbent Directors
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CLASS III - TERM EXPIRING IN 1996
MICHAEL G. ABERCROMBIE................. 550(6)
ROBERT D. BURRIS....................... 500
JAMES H. GILLIAM, JR................... 1,000
Other Executive Officers
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PAUL S. GERRITSEN...................... 8,373(2)
RALPH E. KLESIUS....................... 8,465(2)(4)
THOMAS S. SHAW......................... 7,053(2)
As of February 28, 1994, all current executive officers and directors
as a group (20 persons) owned beneficially 128,770 shares of Common Stock,
representing 0.22% of the shares of Common Stock outstanding.
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(1) Includes shares owned beneficially by officers/directors and Other
Executive Officers of the Company pursuant to the Company's Savings &
Thrift Plan and PAYSOP (as defined on page 19) as of January 31, 1994.
(2) Includes 12,180, 2,940, 2,960, 5,900 and 2,960 shares of
performance-based restricted stock for Messrs. Cosgrove, Gerritsen,
Klesius, Landon and Shaw, respectively, which were granted as a part
of the Company's Long-Term Incentive Plan. The number of shares
actually earned will depend on the Company's performance, as measured
by Total Stockholder Return (stock appreciation and dividends paid),
relative to the Peer Group (as defined on page 9) at the end of a
four-year period.
(3) Does not include 4,200 shares of Common Stock owned by Mr. Landon's
wife, beneficial ownership of which he disclaims.
(4) Messrs. Cosgrove and Klesius are deemed to have beneficial ownership
of 14,400 and 4,400 shares, respectively, of Common Stock which
currently may be acquired upon the exercise of stock options granted
under the Company's Long-Term Incentive Plan.
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(5) Does not include 25 shares of Common Stock owned by Mr. McKinstry's
daughter, beneficial ownership of which he disclaims.
(6) Does not include 300 shares of Common Stock owned by Mr. Abercrombie's
wife, beneficial ownership of which he disclaims.
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Nominees for Class I Directors with Terms
Expiring in 1997:
Michael B. Emery, age 55. Senior Vice President of PHOTO
E.I. duPont deNemours & Company (a diversified
chemical, energy, and specialty products company),
Wilmington, Delaware (Vice President of
Engineering 1989 to 1990, Director - Interconnect
and Packing 1987 to 1989).
Sarah I. Gore, age 59. Director since 1990. Human PHOTO
Resources Associate, W. L. Gore & Associates, Inc.
(a high technology manufacturing company), Newark,
Delaware. Vice Chairperson of the Compensation
Committee, member of the Executive Committee of
the Board. Director of Delaware Trust Company,
Wilmington, Delaware.
H. Ray Landon, age 58. Director since 1988. PHOTO
Executive Vice President of the Company. Member of
the Executive and Investment Committees of the
Board. Director of Delmarva Capital Investments,
Inc., a wholly-owned subsidiary of the Company,
Wilmington, Delaware. Director of Artisans'
Savings Bank, Wilmington, Delaware.
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Class II Directors with Terms
Expiring in 1995:
Howard E. Cosgrove, age 51. Director since 1986. PHOTO
Chairman, President and Chief Executive Officer of
the Company (President and Chief Operating Officer
1991 to 1992, Executive Vice President 1985 to
1991). Chairperson of the Executive Committee and
Member of the Investment, Nominating and Nuclear
Oversight Committees of the Board. Director of
Delmarva Capital Investments, Inc., a wholly-owned
subsidiary of the Company, Wilmington, Delaware.
Director of Wilmington Trust Company, Wilmington,
Delaware.
Audrey K. Doberstein, age 61. Director since 1992. PHOTO
President of Wilmington College, New Castle,
Delaware. Chairperson of the Nominating Committee
and member of the Audit Committee of the Board.
James C. Johnson, age 59. Director since 1992. PHOTO
President and member of the Board of Directors of
Loyola Capital Corporation and President of its
primary subsidiary, Loyola Federal Savings & Loan
Bank, Baltimore, Maryland. Chairperson of the
Audit Committee and member of the Compensation
Committee of the Board.
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James T. McKinstry, age 67. Director since 1987. PHOTO
Partner and Director, law firm of Richards, Layton
& Finger, Wilmington, Delaware. Chairperson of the
Nuclear Oversight Committee, Vice Chairperson of
the Executive Committee and member of the
Investment Committee of the Board.
Class III Directors with Terms
Expiring in 1996:
Michael G. Abercrombie, age 54. Director since PHOTO
1993. President of Cato, Inc. (a petroleum
distributorship), Salisbury, Maryland. Member of
the Nominating and Nuclear Oversight Committees of
the Board.
Robert D. Burris, age 49. Director since 1993. PHOTO
President of Burris Foods, Inc. (a refrigerated
food distribution company), Milford, Delaware.
Member of the Audit Committee of the Board.
Director of Mellon Bank Delaware, Wilmington,
Delaware.
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James H. Gilliam, Jr., age 49. Director since PHOTO
1993. Director and Executive Vice President and
General Counsel of Beneficial Corporation (a
financial services company), Wilmington, Delaware
(Executive Vice President, General Counsel and
Secretary from 1989 to 1992, Senior Vice
President, General Counsel and Secretary from 1987
to 1989). Member of the Compensation and
Investment Committees of the Board. Director of
Bell Atlantic Corporation, Philadelphia,
Pennsylvania.
Board of Directors Meetings
The Board of Directors held ten regular meetings in 1993. All
incumbent directors attended more than seventy-five percent (75%) of the
aggregate of the total number of meetings of the Board of Directors and
meetings of the Committees of the Board on which they served.
Committees and Committee Meetings
The Board of Directors has Audit, Executive, Investment, Nominating,
Compensation and Nuclear Oversight Committees. In 1993, the Audit
Committee held 2 meetings, the Executive Committee held 3 meetings, the
Investment Committee held no meetings, the Nominating Committee held 2
meetings, the Compensation Committee held 3 meetings, and the Nuclear
Oversight Committee held 2 meetings.
The Audit Committee meets primarily to review and approve the scope of
the annual audit of financial statements by the independent certified
public accountants and to review and approve or disapprove the reports
rendered by the independent certified public accountants. The Audit
Committee also recommends independent certified public accountants for
appointment by vote of the holders of shares of Common Stock at the
Company's Annual Meeting.
The Executive Committee, during intervals between meetings of the
Board of Directors, may exercise all powers of the Board of Directors
(except those powers specifically reserved by Delaware and Virginia law
and the Company's Restated Certificate and Articles of Incorporation, as
amended, and By-Laws, as amended, to the full Board of Directors) in the
management of all affairs of the Company.
The Investment Committee reviews financial investments and policies
encompassing matters beyond normal cash management functions, including
overseeing equity funding from the Company to its subsidiary companies.
The Nominating Committee meets primarily to review and screen all
recommendations submitted to it and to select potential candidates for
vacancies that occur on the Board of Directors and to make recommendations
to the Board of Directors for candidates to fill those vacancies. The
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Nominating Committee, in recommending candidates for election as
directors, endeavors to locate candidates for Board membership who have
attained prominent positions in their fields of endeavor and whose
backgrounds indicate that they have broad knowledge and experience and the
ability to exercise sound business judgment. The Nominating Committee will
consider nominees recommended by stockholders for election as directors.
The name of any such nominee, together with the nominee's qualifications
and consent to be considered as a nominee, should be sent to the Secretary
of the Company, pursuant to the Company's By-Laws, as amended.
The Compensation Committee reviews the compensation programs, makes
recommendations regarding the salaries of the principal officers and
remuneration of the directors, designates appropriate programs to carry
out the purpose of the Long-Term Incentive Plan and approves the
distribution of payments under the Management Incentive Compensation Plan.
The Nuclear Oversight Committee reviews the status of those nuclear
power stations of which the Company is a part owner and assesses the
Company's position in respect to related matters.
Director's Compensation
Directors who are not officers of the Company receive an annual
retainer of $12,000 plus $700 for each Board meeting attended and $600 for
each Committee of the Board meeting attended. Chairpersons of the Audit,
Compensation, and Nuclear Oversight Committees receive an additional
annual retainer of $1,000.
Changes to By-Laws
At its meeting on September 30, 1993, the Board of Directors amended
the By-Laws of the Company to reflect minor revisions to the wording of
the document to render it gender-neutral.
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DELMARVA POWER & LIGHT COMPANY
BOARD COMPENSATION COMMITTEE REPORT
PRINCIPLES OF EXECUTIVE COMPENSATION PROGRAM
Overall Objectives
The Company's executive compensation program is designed to motivate
its senior executives to achieve the Company's goals of providing its
customers with high quality service at a competitive price and providing
the Company's stockholders with a competitive return on their investment.
Toward that end, the program provides:
* Total compensation levels that are competitive with those provided
by other utilities from which the Company may compete for executive
talent.
* Base salary levels related to position and individual performance.
* Annual incentive compensation that varies based on corporate and
individual performance.
* Long-term incentive compensation based on long-term performance
that increases stockholder value.
In administering the executive compensation program, the Compensation
Committee attempts to strike an appropriate balance among these
objectives, each of which is discussed in greater detail below.
Competitive Compensation Levels
Compensation (base salary, annual incentive, and long-term incentive)
opportunities are developed for Company executives utilizing the Edison
Electric Institute ("EEI") Executive Compensation Survey Report and
counsel with the Company's outside consulting firm, Towers Perrin. In
general, executive compensation is targeted to the median of utility
industry peers contained in the EEI Executive Compensation Survey Report
(the "Peer Group") for each component of the compensation program. The
compensation Peer Group does not include all of the same companies as the
published industry index in the Comparison of Five Year Cumulative Total
Return graph included in this Proxy Statement. However, 44 out of the 47
companies (93.6%) in the Dow Jones Electric Utilities Index are included
in the EEI Executive Compensation Survey Report.
Each component of the executive compensation program is reviewed on an
annual basis to ensure its alignment with the Company's compensation
philosophy. Annual base salary increases reflect the individual's
performance and contribution over several years in addition to the results
for a single year. Year to year changes in annual incentive awards vary
with the Company's annual performance results. Following the 1993 salary
increases, the Company's salary level for each of its five named executive
officers was below the median of the salary range defined by the Peer
Group.
The Company has examined the IRS regulation pertaining to the
$1,000,000 compensation deductibility cap for each of the five named
executive officers and has determined that the regulation is not
applicable to the Company, since the total compensation for any one
individual is significantly below the cap.
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Annual Incentive Compensation
The Company's Management Incentive Compensation Plan is designed to
motivate participants to accomplish stretch financial and individual
goals. The corporate financial goals relate to both customer and
stockholder measurements. Two criteria must be met before there are any
awards under this plan: (1) at least half of specified corporate goals
must be met; and (2) actual earnings per share ("EPS") for the year must
exceed 95% of the Company's EPS goal.
The awards, upon satisfaction of these criteria, contain two
components, corporate performance and individual performance.
Approximately 80% of the maximum incentive opportunity for the Company's
senior executives, including those named in the compensation tables in
this Proxy Statement, arises out of corporate performance, which is
measured by (a) the Company's EPS as compared with the Company's EPS goal,
and (b) the Company's net change in electric rates per kilowatt hour as
compared against the net change in the electric rates of the Peer Group
over a three-year period. Generally, the payout in connection with
corporate performance is determined in the following manner. There is a
basic incentive opportunity ("BIO") set at the beginning of each year,
which is expressed as a percentage of salary. The BIO is adjusted at
year-end based upon corporate performance. This adjusted amount may not
exceed 150% of the BIO. The adjustment is made based upon the EPS/Rates
multiplier (the "multiplier"), which takes corporate performance into
account. The BIO assumes that 100% of the annual EPS goal is met and the
net change in rates over a three-year period equals the industry average.
Therefore, the multiplier starts at 1.00, but it may be adjusted up or
down to reflect actual results. If actual EPS is higher than the goal, the
multiplier is increased by 5% for each 1% above the goal. If actual EPS is
lower than the goal, the multiplier is decreased by 20% for each 1% below
the goal. A second adjustment is made for the average change in rates over
a three-year period, as compared to the Peer Group. If the Company's rates
go down more, or increase less, than the industry average, the multiplier
is increased by 5% for each 1% positive deviation. If the Company's rates
increase more, or decrease less than the industry average, the decrease is
2% for each 1% negative deviation.
The remaining approximately 20% of the maximum incentive opportunity
for senior executives arises out of individual performance, with a
particular focus on achievement of individual goals, as evaluated at each
January 1 merit review.
Long-Term Incentive Compensation
The Company's Long-Term Incentive Plan reinforces the importance of
providing investors with a competitive return on their investment.
Participants in the Plan are contingently awarded shares of the Company's
stock. Beginning with 1993, awards granted under this Plan consist
entirely of shares of performance-based restricted stock. Actual awards
are made after the end of a four-year performance cycle and are based on a
comparison of the Company's performance, as measured by Total Stockholder
Return (stock appreciation and dividends paid), to the Peer Group. The
target number of shares will be awarded if the Company's Total Stockholder
Return Percentile (4-year cumulative as compared to the Peer Group) is in
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the 50% to 59.9% range. The threshold number will be awarded if the Total
Stockholder Return Percentile is in the 35% to 39.9% range and the maximum
number will be awarded if the Stockholder Return Percentile is in the 90%
to 100% range. Formerly, the Plan also provided for stock options and
dividend rights, some of which are still outstanding.
SUMMARY OF ACTIONS TAKEN BY THE COMPENSATION COMMITTEE
The Compensation Committee, consisting entirely of outside directors,
reviews and approves each of the Company's executive compensation plans
and assesses the effectiveness of the program as a whole. This includes
activities such as reviewing the design of the Company's various incentive
plans and assessing the reasonableness of the overall executive
compensation program.
In addition, the Committee administers key aspects of the Company's
salary program and incentive plans, such as approving the annual salary
increase budget, setting the targets used in the annual incentive plan,
approving the size of the annual incentive pool and setting grant levels
under the annual and long-term incentive plans. With respect to the annual
incentive pool, individual awards are not limited by the size of the total
pool. The awards are limited by the Plan to 27% of base salary for each of
the senior executives, including the five named executive officers, and
other specified amounts for other employees covered by the Plan.
Finally, the Committee implements the Company's executive compensation
program, which includes the Chief Executive Officer and the Company's four
other most-highly compensated executives - i.e., the five "named
executive officers." Significant actions by the Committee for fiscal year
1993 included setting salaries and reviewing criteria for and approving
the awarding of annual incentive awards, and long-term incentive grants.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Cosgrove assumed the position of Chairman of the Board, President
and Chief Executive Officer in October 1992.
Salary Action
Effective October 1, 1992, Mr. Cosgrove was granted an annual salary
increase as a result of his promotion to Chairman of the Board, President
and Chief Executive Officer, which reflected an adjustment to align his
salary with the median of the Peer Group. The adjustment placed Mr.
Cosgrove's salary at approximately ninety percent of the median for Chief
Executive Officers in comparably-sized utiIities. Mr. Cosgrove's salary
was not increased for the fiscal year 1993.
Annual Incentive Award
Mr. Cosgrove's annual incentive award for 1993, as shown in the
compensation table contained in this Proxy Statement, was based upon the
following: (a) actual EPS for the year was 109% of the Company's EPS goal,
(b) all of the eight corporate goals established for 1993 were met or
exceeded (these goals were in the areas of safety, cost, conservation,
customer relations, employee absenteeism, and team effectiveness), and (c)
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the Company's average kilowatt hour rate went down an average of 0.5%
while its Peer Group increased an average of 2.7%, for a net positive
deviation of 3.2% during the period of 1991-1993.
Long-Term Incentive Plan
Long-term incentive grants represent an important component of the
compensation opportunity for the Chief Executive Officer.
Consistent with the Company's Long-Term Incentive Plan, the Committee
determined the 1993 grants of performance-based restricted stock
(reflected in the compensation tables contained in this Proxy Statement)
made to Mr. Cosgrove. The initial award of performance-based restricted
stock is targeted at providing a long-term opportunity consistent with
similar awards made to other utility executives from the Peer Group who
earn similar salary levels. The number of shares actually earned, if any,
will be awarded in 1997 based on a comparison of the Company's
performance, as measured by Total Stockholder Return compared to the Peer
Group over the four-year period 1993-1996, as discussed under "Long-Term
Incentive Compensation" on page 10.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is comprised solely of non-officer
directors. There are no Compensation Committee interlocks.
COMPENSATION COMMITTEE
E. P. Blanchard, Jr., Chairperson J. H. Gilliam, Jr.
S. I. Gore, Vice Chairperson J. C. Johnson
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Summary Compensation Table
The following table sets forth certain information regarding
compensation earned during 1992 and 1993 by the Company's Chief Executive
Officer and for the last three fiscal years by each of the Company's four
other most highly compensated executive officers based on compensation
earned during 1993.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
-----------------------------
Annual Compensation Awards Payouts
-------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Restricted Securities All Other
Annual Com- Stock Underlying LTIP Com-
pensation Award(s) Options Payouts pensation
Name and Principal Position Year Salary($) Bonus($) $ $(1) (#) ($) ($)(2)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
H. E. Cosgrove Chairman of the Board 1993 320,000 86,400 -0- -0- -0- -0- 28,584
President and Chief 1992(3) 245,000 -0- -0- -0- 5,900 -0- 32,551
Executive Officer
H. R. Landon Executive Vice President 1993 200,000 53,600 -0- -0- -0- -0- 105,998
1992 185,000 -0- -0- -0- 4,800 -0- 104,464
1991 175,000 44,700 -0- -0- 8,500 -0- -
T. S. Shaw Senior Vice President/ 1993 150,000 39,800 -0- -0- -0- -0- 11,506
President, Delmarva 1992 139,900 -0- -0- -0- 1,300 -0- 12,740
Capital Investments, Inc. 1991 119,300 30,700 -0- -0- 3,400 -0- -
R. E. Klesius Senior Vice President 1993 150,000 38,300 -0- -0- -0- -0- 10,890
1992 129,300 -0- -0- -0- 1,300 -0- 11,446
1991 113,400 28,100 -0- -0- 3,400 -0- -
P.S. Gerritsen Vice President 1993 146,200 37,300 -0- -0- -0- -0- 17,108
1992 146,200 -0- -0- -0- 2,800 -0- 18,409
1991 139,500 31,700 -0- -0- 5,000 -0- -
#-Number of units $-Dollar amounts
</TABLE>
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(1) Dividends on shares of performance-based restricted stock are accrued
at the same rate as that paid to all holders of Common Stock.
Restricted stock awards are reported in the Long-Term Incentive Plan
table on page 14. As of December 31, 1993: Mr. Cosgrove held 6,110
shares of restricted stock with a value of $136,235 (1,230 shares with
a grant-date market price of $20.50 per share and 4,880 shares with a
grant-date market price of $22.75 per share); Mr. Landon held 3,250
shares of restricted stock with a value of $71,710 (990 shares with a
grant-date market price of $20.50 per share and 2,260 shares with a
grant-date market price of $22.75 per share); Messrs. Shaw and Klesius
each held 1,610 shares of restricted stock with a value of $35,997.50
(280 shares with a grant-date market price of $20.50 per share and
1,330 shares with a grant-date market price of $22.75 per share); and
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Mr. Gerritsen held 1,590 shares of restricted stock with a value of
$34,845 (590 shares with a grant-date market price of $20.50 per share
and 1,000 shares with a grant-date market price of $22.75 per share).
(2) In accordance with transitional provisions set forth in the Proxy
Rules of the Securities and Exchange Commission (the "SEC"), amounts
of All Other Compensation have not been included for the Company's
1991 fiscal year. The amounts of All Other Compensation for each of
the five named executive officers for fiscal year 1993 include the
following: for Mr. Cosgrove, $5,896 in Company matching contributions
to the Company's Savings & Thrift Plan and an accrual of $22,484 for
dividend rights acquired through the Company's Long-Term Incentive
Plan; for Mr. Landon, an $80,000 deposit made by the Company into a
trust which is subject to the claims of the Company's creditors to
cover future pension liability under the Company's Supplemental
Executive Retirement Plan (due to Internal Revenue Service limits on
annual benefits payable under qualified, defined benefit plans and due
to Mr. Landon's seniority with the Company, this deposit towards
future pension liability was necessary to satisfy the requirement that
Mr. Landon's pension be calculated on the same effective basis as
other management employees who are not subject to these limits),
$5,004 in Company matching contributions to the Company's Savings &
Thrift Plan, and an accrual of $20,790 for dividend rights acquired
through the Company's Long-Term Incentive Plan; for Mr. Shaw, $3,756
in Company matching contributions to the Company's Savings & Thrift
Plan and an accrual of $7,546 for dividend rights acquired through the
Company's Long-Term Incentive Plan; for Mr. Klesius, $3,756 in Company
matching contributions to the Company's Savings & Thrift Plan and an
accrual of $6,930 for dividend rights acquired through the Company's
Long-Term Incentive Plan; and for Mr. Gerritsen, $3,660 in Company
matching contributions to the Company's Savings & Thrift Plan and an
accrual of $13,244 for dividend rights acquired through the Company's
Long-Term Incentive Plan. In addition, the amounts of All Other
Compensation for each of the five named executive officers include
$204 in term life insurance premiums paid by the Company on such
officer's behalf (which insurance is provided on an equal basis to all
employees of the Company). All dividends on shares of restricted stock
are accrued at the same rate as that paid to all holders of Common
Stock.
(3) H. E. Cosgrove was elected Chairman of the Board and Chief Executive
Officer effective October 1, 1992. In accordance with the SEC Proxy
Rules, compensation amounts include compensation for the fiscal year
1992 earned prior to his becoming the Chairman of the Board and Chief
Executive Officer. Also, in accordance with the provisions of these
Rules, compensation has not been included for fiscal year 1991.
15
<PAGE>
<PAGE> 17
Option Exercises During 1993 and Year-End Option Values
The following table provides information related to options exercised
by the five named executive officers during 1993 and the number and value
of options held at year-end. The Board of Directors, at its January 1993
meeting, approved an amendment to the Company's Long-Term Incentive Plan
eliminating awards of Common Stock options and dividend rights effective
fiscal year 1993. The Company does not grant stock appreciation rights.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
FY-End(#) FY-End ($)
Shares Acquired Value
Name and Principal Position on Exercise (#) Realized ($)(1) Exercisable Exercisable(2)
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
H. E. Cosgrove Chairman of the Board -0- -0- 14,400 38,625
President and Chief
Executive Officer
H. R. Landon Executive Vice President 13,300(3) 38,513 -0- -0-
T. S. Shaw Senior Vice President/ 8,100(4) 23,750 -0- -0-
President, Delmarva
Capital Investments, Inc.
R. E. Klesius Senior Vice President -0- -0- 4,400 11,425
P. S. Gerritsen Vice President 7,800(4) 13,800 -0- -0-
</TABLE>
----------
(1) Value is calculated based on the difference between the exercise price
of the options and the market value of the Company's Common Stock
underlying the options at the time the options were exercised.
(2) The closing price for the Company's Common Stock as reported by the
New York Stock Exchange on December 31, 1993, was $23.625. Value is
calculated on the basis of the difference between exercise price of
the options and $23.625, which difference is multiplied by the number
of options. The options all are currently exercisable.
(3) Of the shares acquired upon exercise, 12,171 were simultaneously sold.
(4) All of the shares acquired upon exercise were simultaneously sold.
16
<PAGE>
<PAGE> 18
Performance-Based Restricted Stock Grants Chart
The following table shows the number of shares of performance-based
restricted stock that were granted to the five named executive officers as
part of the Company's Long-Term Incentive Plan for 1993. It also shows the
number of shares of Common Stock that would be awarded if the threshold,
target or maximum performance is achieved at the end of the four-year
performance period.
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Estimated Future
Payouts Under Non-Stock
Price-Based Plans
--------------------------------
(a) (b) (c) (d) (e) (f)
Number of Performance or
Restricted Shares Other Period Until Threshold Target Maximum
Name and Principal Position (#)(1) Maturation or Payout (#) (#) (#)
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
H. E. Cosgrove Chairman of the Board 4,880 4 yrs. 1,220 4,880 7,320
President and Chief
Executive Officer
H. R. Landon Executive Vice President 2,260 4 yrs. 565 2,260 3,390
T. S. Shaw Senior Vice President/ 1,330 4 yrs. 333 1,330 1,995
President, Delmarva
Capital Investments, Inc.
R. E. Klesius Senior Vice President 1,330 4 yrs. 333 1,330 1,995
P. S. Gerritsen Vice President 1,000 4 yrs. 250 1,000 1,500
</TABLE>
----------
(1) Shares of performance-based restricted stock were granted as a part of
the Company's Long-Term Incentive Plan. Actual awards are made after
the end of a four-year performance cycle and are based on a comparison
of the Company's performance, as measured by Total Stockholder Return
(stock appreciation and dividends paid), to the Peer Group. The target
number of shares will be awarded if the Company's Total Stockholder
Return Percentile (4-year cumulative as compared to the Peer Group) is
in the 50% to 59.9% range. The threshold number will be awarded if the
Total Stockholder Return Percentile is in the 35% to 39.9% range and
the maximum number will be awarded if the Stockholder Return
Percentile is in the 90% to 100% range.
17
<PAGE>
<PAGE> 19
Stock Performance Chart
The following chart compares the yearly change in the cumulative Total
Stockholder Return on the Company's Common Stock during the last five
fiscal years ended December 31, 1993, with the cumulative total return of
the Standard & Poor's ("S&P") 500 Index and the Dow Jones ("D J")
Electric Utilities Index. The comparison assumes $100 was invested on
December 31, 1988, in the Company's Common Stock and in each of the
foregoing indices and assumes reinvestment of dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN (1)
AMONG DELMARVA POWER, THE STANDARD & POOR'S 500 INDEX
AND THE DOW JONES ELECTRIC UTILITIES INDEX
250 |------------------------------------------------------------------|
| |
|- -|
| & |
200 |------------------------------------------------------------------|
| & & @ |
|- @ @ * -|
| * |
150 |--------------------------------*---------------------------------|
| & & |
|- @ @ -|
| * * |
100 |*@&---------------------------------------------------------------|
| |
|- -|
| |
50 |------------------------------------------------------------------|
| |
|- -|
| |
0 |--|---------|---------|---------|----------|----------|--------|--|
1989 1990 1991 1992 1993
DELMARVA POWER & LIGHT = * S&P 500 = @ D J ELECTRIC UTILITIES = &
(1) $100 INVESTED ON 12/31/88 IN STOCK OR INDEX -
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31 OF EACH YEAR.
18
<PAGE>
<PAGE> 20
Retirement Plan
PENSION PLAN TABLE
<TABLE>
<CAPTION>
Annual Retirement Benefits to
Persons in Specified Remuneration
and Years of Service Classifications
----------------------------------------------------------------------------
Average Annual
Earnings for the 5
Consecutive Years of Credited Years of Service
Earnings that result ----------------------------------------------------------------------------
in the Highest 15 20 25 30 35
Average Yrs.(1) Yrs. Yrs. Yrs. Yrs.
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 125,000 $22,020 $ 38,632 $ 48,290 $ 57,948 $ 67,606
200,000(2) 35,700 62,632 78,290 93,948 109,606
300,000(2) 53,940 94,632 118,290 141,948 (3) 165,606 (3)
400,000(2) 72,180 126,632 (3) 158,270 (3) 189,948 (3) 221,606 (3)
500,000(2) 90,240 158,632 (3) 198,290 (3) 237,948 (3) 277,606 (3)
</TABLE>
----------
(1) Represents reduced early retirement benefit payable at age 55.
(2) Effective January 1, 1994, annual compensation recognized in computing
Average Annual Earnings under the Retirement Plan may not exceed
$150,000 as limited by Section 401(a)(17) of the Internal Revenue Code
of 1986, as amended (the "Internal Revenue Code"). With the
exception of this limitation, and the exclusion of dividend rights
granted as part of the Company's Long-Term Incentive Plan and Company
contributions under the Savings & Thrift Plan and Supplemental
Executive Retirement Plan, Average Annual Earnings include
substantially all cash compensation shown in the Summary Compensation
Table on page 12. Compensation in excess of the limitation of Section
401(a)(17) is recognized in computing the benefit payable under the
Supplemental Executive Retirement Plan described herein.
(3) For 1994, the limit on annual benefits payable under qualified,
defined benefit plans is $118,800. The amount in excess of $118,800 in
the above table would be payable under the Supplemental Executive
Retirement Plan described herein.
The Company has a trusteed, noncontributory Retirement Plan covering
all regular employees. Directors who are not employees of the Company do
not participate in the Plan. Subject to the maximum limitation on benefits
imposed by Section 415(b) of the Internal Revenue Code, the Retirement
Plan provides management employees, including all officers, a retirement
income equal to years of service times the sum of (a) plus (b) where (a)
is 1.30% of the Average Annual Earnings (for the five consecutive years of
earnings that result in the highest annual average) up to the Average
Social Security Earnings Base ($22,800 in 1994), and where (b) is 1.60% of
such Average Annual Earnings above the Average Social Security Earnings
Base. Normal retirement is age 65; however, employees may retire as early
19
<PAGE>
<PAGE> 21
as age 55 with an actuarial reduction in benefits and also at age 60
without such reduction, provided they have completed the requisite number
of years of service with the Company. Aside from the integration feature
of the above-described benefit formula, retirement benefits are not
subject to any reduction for Social Security benefits or other offset
amounts.
Annual benefits payable upon retirement will be in the form of a joint
and 50% survivor annuity for married individuals and a straight life
annuity for single individuals. Both the straight life and joint and
survivor forms are paid to management employees in specified remuneration
and years of service classifications, as illustrated in the Pension Plan
Table above.
Messrs. Cosgrove, Landon, Gerritsen, Shaw and Klesius have,
respectively, 27, 30, 16, 22 and 28 credited years of service under the
Company's Retirement Plan.
In the event of a change in control of the Company, as defined in the
Retirement Plan, the Plan's surplus assets are to be allocated to the
extent available to (i) satisfy all Plan liabilities, (ii) fund certain
post-retirement medical benefits and death benefits and (iii) subject to
certain limitations, increase the benefits payable to employees who were
active participants on the date of such change in control by crediting
each such participant with an additional five years of deemed credited
service and five years of deemed salary increases at 5% per year. If the
Plan is terminated or merged or benefits are reduced within five years of
such change in control, any remaining surplus assets would be allocated to
the extent available to (a) provide a 2% cost of living increase for
retirees for each year of retirement and (b) subject to certain
limitations, increase the benefits payable to employees who were active
participants on the date of such termination, merger or benefit
curtailment by crediting each such participant with additional years of
deemed credited service for the ten-year period following such change in
control together with salary increases at 5% per year for such period. The
Retirement Plan requires that the obligations described above that are
assumed following such a change in control must be funded by the purchase
of a guaranteed annuity contract.
Supplemental Executive Retirement Plan
The Company has a Supplemental Executive Retirement Plan ("SERP")
for vice presidents and above, or others designated by the Chief Executive
Officer and approved by the Compensation Committee, and those employees,
including the five named executive officers, who are subject to the
maximum benefit limitations of Section 415(b) of the Internal Revenue Code
or limitations on compensation under Section 401(a)(17) of the Internal
Revenue Code. Participants meeting the requirements specified in the Plan
may, at the discretion of the Compensation Committee, be awarded
additional credit for service with other firms. The additional amounts of
pensions and any related survivor benefits attributable to such additional
service credit are paid out of the general funds, annuities or life
insurance contracts bought with the general funds of the Company. The SERP
also provides that in the event of a change in control, as defined
therein, the Company will satisfy liabilities accrued under the SERP
20
<PAGE>
<PAGE> 22
through the purchase of fully paid annuity or life insurance contracts.
Payments under the SERP are not subject to the maximum limitations on
benefits imposed by Section 415(b) of the Internal Revenue Code.
Management Incentive Compensation Plan
The Company has a Management Incentive Compensation Plan established
by the Board of Directors. Participants, including the five named
executive officers, are eligible for compensation upon the attainment of
prescribed goals related to financial performance, relative price
competitiveness, control of expenses and management objectives. The
Compensation Committee of the Board of Directors approves the performance
goals for each year and the amount of any awards under the Plan. Seventy
participants, including all officers, were credited with a total of
$1,417,600 (equal to 1.5 cents per share outstanding) based on results for
1993. The maximum award was 27.0% of annual salary. The Management
Incentive Compensation Plan provides that in the event of a change of
control of the Company, as defined therein, at the option of the
participant, the Company will pay all Incentive Awards earned but not
distributed.
Management Life Insurance Plan
In order to provide executives with life insurance coverage equivalent
to approximately three times their annual salary, which is the coverage
for other employees, the Company has a Management Life Insurance Plan
under which the Company offers whole life insurance policies to its
officers, including the five named executive officers, and selected
members of management. Premium payments made by the Company for the fifty
participants are fully recoverable at the employee's retirement or death,
whichever occurs first. In addition, the Company bears the entire cost for
$50,000 in coverage for each of the fifty participants under its Group
Term Insurance Plan, which is available to all employees on an equal
basis. In the event of a change of control of the Company, as defined in
the Management Life Insurance Plan, the Company will prepay all premiums
to any life insurance policy under this Insurance Plan.
Long-Term Incentive Plan
The Company also has a Long-Term Incentive Plan ("LTIP") for certain
officers, including the five named executive officers and key employees of
the Company and its subsidiaries. LTIP provides for the authority to grant
the following types of long-term incentive awards: stock options, both
non-qualified stock options and incentive stock options, stock
appreciation rights, restricted stock, and performance awards, or such
other forms of awards as the Compensation Committee of the Board of
Directors may in its discretion deem appropriate. In addition to
previously approved non-qualified stock options and dividend rights
programs (which now have been eliminated), the Compensation Committee
approved a performance-based restricted stock program which became
effective on January 1, 1992. These programs are distinctly separate and
none depends upon the other for any specific level of grant. There were
31,600 shares of performance-based restricted stock granted to forty-seven
participants in 1993. The fixed date for payout under the Dividend Rights
21
<PAGE>
<PAGE> 23
Program is five years after the date of grant. The exercise price of the
stock options granted under the Long-Term Incentive Plan is 100% of the
fair market value of the Common Stock on the date of grant and is payable
in cash or shares of Common Stock. Options may be exercised after one year
with an expiration date of either ten years or when the participant
reaches the age of 70, whichever occurs first. There are no dividend,
voting or other rights of a stockholder in connection with an option
grant, unless and until the participant receives stock upon exercise of
the option.
No more than 750,000 shares of Common Stock may be issued under the
LTIP during the ten-year period ending April 28, 1997, the date of
termination of the Plan, unless approved by the holders of Common Stock
and certain regulatory agencies.
The Board of Directors, at its January 1993 meeting, changed the
"mix" of LTIP components from a combination of non-qualified stock
options, dividend rights, and performance-based restricted stock to 100%
performance-based restricted stock. The change is effective January 1,
1993, and does not affect any awards granted prior to 1993. In the event
of a change of control of the Company as defined in the LTIP document, all
restrictions on shares of performance-based restricted stock will lapse
immediately, without regard to performance criterion, and shares will be
immediately issued to all participants. In addition, all dividends in each
Dividend Rights Account will be immediately paid or, at the employee's
option, the ongoing obligation to make such payments will continue.
Severance Agreements
The Company has entered into severance agreements with the five named
executive officers and thirty-nine other members of management. The
severance agreements are intended to encourage the continued dedication of
members of the Company's management. These agreements provide potential
benefits for such persons upon actual or constructive termination of
employment (other than for cause) following a change of control of the
Company, as defined in such agreements. Each affected employee would
receive a severance payment equal to 2.99 times base salary (as defined in
Section 280G of the Internal Revenue Code), and entitlement to
Company-paid life, disability, medical and dental benefits for 24 months
following termination, as well as an amount in cash equal to the actuarial
equivalent value of accrued retirement pension credits equal to 24 months
following termination; provided, however, that if any payments under such
agreements would not be deductible by the Company as a result of Section
280G of the Internal Revenue Code, the amounts payable under such
agreements will be reduced until the entire payment is deductible.
22
<PAGE>
<PAGE> 24
Savings & Thrift Plan and PAYSOP
The contributory Savings & Thrift Plan was inaugurated September 1,
1964, and amended effective July 1, 1984, to add a cash or deferred option
(as described in Section 401(k) of the Internal Revenue Code). Under the
Plan, the Company contributes in cash or in Common Stock 50% (subject to
Plan limitations) of the amount deposited by employees (from 1% to 5% of
the eligible straight time earnings) with an independent trustee. All
Company matching contributions are invested in Company Common Stock.
Employees are fully vested in Company contributions immediately.
During the period the Company was making contributions to a tax credit
performance-based employee stock ownership plan ("PAYSOP"), employees of
the Company, including officers, who had completed one year of service
were eligible to participate. For tax years in which the Company elected
to claim a tax credit under the Internal Revenue Code, the Company
transferred to PAYSOP shares of Company stock or cash equal in value to
the claimed credit. Common Stock acquired by PAYSOP was allocated to
participant's accounts on a per capita basis. Contributions under PAYSOP
ceased as of January 1, 1987 due to the elimination of the payroll-based
employee stock ownership credit by the Tax Reform Act of 1986. The Common
Stock acquired by PAYSOP for the benefit of the participants will continue
to be held in trust and distributed in accordance with rules under the
Internal Revenue Code applicable to tax credit employee stock ownership
plans.
The Savings & Thrift Plan and PAYSOP permit participants to direct the
trustee to vote Company Common Stock allocated to their accounts on any
matter for which a stockholder vote is solicited and, in the event of a
tender or exchange offer, will require the plan trustee to solicit and
follow the instructions of a participant as to shares of the Company's
Common Stock allocated to such participant's account.
PROPOSAL NO. 2 - APPOINTMENT OF THE COMPANY'S
INDEPENDENT PUBLIC ACCOUNTANTS
Coopers & Lybrand, Certified Public Accountants, have been recommended
by the Audit Committee to examine the financial statements of the Company
for the year 1994. The By-Laws of the Company require the independent
public accountants to be appointed by vote of the holders of Common Stock.
Representatives of Coopers & Lybrand will be present at the Annual
Meeting to respond to appropriate questions and may make such statements
as they may desire.
A favorable vote of the holders of a majority of the Common Stock
present and entitled to vote is necessary to appoint Coopers & Lybrand as
the Company's independent public accountants.
Your Board of Directors recommends that you vote FOR the adoption of
Proposal No. 2.
23
<PAGE>
<PAGE> 25
OTHER MATTERS
If any other matters are properly brought before the meeting, it is
intended that the holders of the proxies will vote thereon in accordance
with their best judgment.
* * * * *
Stockholder Proposals
Any stockholder proposal intended to be presented at the 1995 Annual
Meeting of Stockholders must be received by the Company at its principal
executive offices no later than December 23, 1994, in order to be eligible
to be considered for inclusion in the Company's proxy materials relating
to that Meeting.
Solicitation
The cost of the solicitation, including the expenses of brokers and
others who may forward solicitation material to beneficial owners, will be
borne by the Company. Officers and employees of the Company may solicit
proxies personally or by telegraph or telephone as well as by use of the
mails.
Participants in the Dividend Reinvestment and Common Share Purchase Plan
Please Note
The proxy includes the number of shares that are held in your name
according to the stock transfer books of the Company and the number of
shares, beneficially owned by you, that are held in nominee name by
Wilmington Trust Company, Agent for the Dividend Reinvestment and Common
Share Purchase Plan ("DRIP"). Your vote with respect to the shares that
are held in your name is also an instruction for voting the DRIP shares.
D. P. Connelly
Secretary
Wilmington, Delaware, April 22, 1994
24
<PAGE>
<PAGE> 26
DIRECTIONS TO CLAYTON HALL -
UNIVERSITY OF DELAWARE NORTH CAMPUS
(Watch for signs directing you to Clayton Hall)
To: Clayton Hall
From: Kirkwood Highway (Rt. 2)
Drive South on Kirkwood Highway, turn right onto Cleveland Ave. at
Porter Chevrolet, drive past 2 traffic lights, turn right onto New London
Rd. (Rt. 896), look for blue signs for Clayton Hall - University of
Delaware North Campus on right (about 1/8 of a mile).
To: Clayton Hall
From: I-95 or Rt. 896
Exit onto Northbound Rt. 896 Newark exit and continue north on South
College Ave., past the University of Delaware athletic complex, over the
bridge and past other University of Delaware buildings until you come to
East Main Street. Turn left onto East Main Street (position yourself in
the right lane), turn right onto New London Road (Rt. 896), drive up New
London Road, pass through one traffic light, look for signs for Clayton
Hall - University of Delaware North Campus on the right (about 1/8 of a
mile past traffic light).
(SEE MAP ON FOLLOWING PAGE)
INSERT
MAP
(MAP IS DEPICTING MAJOR HIGHWAYS IN THE NEWARK, DELAWARE AREA AND
HIGHLIGHTS CLAYTON HALL, SITE OF THE 1994 ANNUAL MEETING).
25
<PAGE>
<PAGE> 27
THIS PROXY WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE
STOCKHOLDER. IF NO DIRECTION IS GIVEN, THE SHARES REPRESENTED BY THIS
PROXY WILL BE VOTED "FOR" ITEMS 1 AND 2. THIS PROXY IS SOLICITED ON
BEHALF OF THE BOARD OF DIRECTORS.
PROXY HOWARD E. COSGROVE, JAMES H. GILLIAM, JR., AND JAMES C. JOHNSON,
OR ANY ONE OF THEM, ARE HEREBY AUTHORIZED TO REPRESENT AND VOTE
THE SHARES OF THE UNDERSIGNED AT THE ANNUAL MEETING OF STOCKHOLDERS
OF DELMARVA POWER & LIGHT COMPANY TO BE HELD ON MAY 26, 1994, OR AT
ANY ADJOURNMENTS THEREOF, AS DIRECTED ON THE BOTTOM PORTION THEREOF,
AND IN THEIR DISCRETION TO VOTE AND ACT UPON ANY OTHER MATTERS AS MAY
PROPERLY COME BEFORE SAID MEETING AND ADJOURNMENTS THEREOF.
DELMARVA POWER & LIGHT COMPANY
1) TO ELECT DIRECTORS, THE NOMINEES ARE:
3-YEAR TERM -- MICHAEL B. EMERY SARAH I. GORE H. RAY LANDON
TO VOTE FOR ALL NOMINEES, MARK AN "X" IN THE "FOR ALL" BOX ON THE LOWER
PORTION OF CARD. TO WITHHOLD AUTHORITY ON ANY INDIVIDUAL NOMINEE, MARK AN "X"
IN THE BOX MARKED "FOR ALL EXCEPT" AND PRINT THE APPROPRIATE NOMINEE'S NAME ON
THE LINE PROVIDED BELOW.
TO VOTE MARK AN /X/ IN BLUE OR BLACK INK ON THE CARD BELOW. 01
<PAGE>
<PAGE> 28
<TABLE>
<CAPTION>
DELMARVA POWER & LIGHT COMPANY
<S> <C>
VOTE ON DIRECTORS
FOR FOR
ALL OR WITHHOLD OR ALL
ALL EXCEPT 1. ______________________________________________________________
/X/ /X/ /X/ USE ONLY TO WITHHOLD AUTHORITY TO VOTE ON INDIVIDUAL NOMINEES
/ /
VOTE ON OTHER PROPOSALS
FOR AGAINST ABSTAIN 2. APPOINTMENT OF COOPERS & LYBRAND AS INDEPENDENT AUDITOR.
/X/ /X/ /X/
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE,
THE PROXY WILL BE VOTED FOR THE PROPOSALS.
---
SIGN
HERE__________________________________________________
SIGN
HERE__________________________________________________ DATE_________________, 1994
PLEASE SIGN NAME OR NAMES AS PRINTED ABOVE TO AUTHORIZE THE VOTING OF YOUR SHARES
AS INDICATED ABOVE. WHERE SHARES ARE REGISTERED WITH JOINT OWNERS, ALL JOINT
OWNERS SHOULD SIGN. PERSONS SIGNING AS AN EXECUTOR, ADMINISTRATOR, TRUSTEES, ETC.
SHOULD SO INDICATE.
</TABLE>
<PAGE>
