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 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-12
______________________________________________________________
CONNECTICUT ENERGY CORPORATION
______________________________________________________________
J. Richard Tiano
Payment of Filing Fee (Check the appropriate box) :
X $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(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: NA
_________________________________________________________________
(2) Aggregate number of securities to which transaction applies: NA
_________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: NA
_________________________________________________________________
(4) Proposed maximum aggregate value of transaction: NA
_________________________________________________________________
Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or schedule
and the date of its filing.
(1) Amount previously paid: NA
_________________________________________________________________
(2) Form, Schedule or Registration Statement No. : NA
_________________________________________________________________
(3) Filing Party: NA
_________________________________________________________________
(4) Date Filed: NA
<PAGE>
CONNECTICUT ENERGY CORPORATION
855 Main Street
Bridgeport, CT 06604
(203) 382-8111
NOTICE OF ANNUAL MEETING OF COMMON SHAREHOLDERS
(To be Held January 30, 1996)
December 13, 1995
To the Common Shareholders of Connecticut Energy Corporation:
The Annual Meeting of the Common Shareholders of Connecticut
Energy Corporation (the "Company") will be held in the Grand
Ballroom of the Trumbull Marriott Hotel, 180 Hawley Lane, Trumbull,
CT, on Tuesday, January 30, 1996 at 10:00 A.M. for the following
purposes:
1. To elect the four nominees for Director named in the
Proxy Statement.
2. To consider and act upon a resolution to approve the
employment of the firm of Coopers & Lybrand L.L.P. as the
independent accountants to audit the books and affairs of
the Company and the subsidiaries of both it and of The
Southern Connecticut Gas Company for the 1996 fiscal
year.
3. To transact such other business as may properly be
brought before the meeting.
The Board of Directors has fixed the close of business on
December 8, 1995 as the record date for the determination of
shareholders entitled to notice of and to vote at the Annual
Meeting.
All shareholders are cordially invited to attend the Annual
Meeting.
J. Richard Tiano,
Secretary
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON,
MANAGEMENT WOULD APPRECIATE THE PROMPT RETURN OF THE ENCLOSED
PROXY, FILLED IN, DATED AND SIGNED. AN ADDRESSED ENVELOPE IS
ENCLOSED. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
<PAGE>
CONNECTICUT ENERGY CORPORATION
855 MAIN STREET
BRIDGEPORT, CT 06604
(203) 382-8111
PROXY STATEMENT
FOR
ANNUAL MEETING OF COMMON SHAREHOLDERS
JANUARY 30, 1996
Approximate Date of Mailing: December 13, 1995
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Connecticut
Energy Corporation ("Company"), whose principal subsidiary is The
Southern Connecticut Gas Company ("Southern"), to be used at the
Annual Meeting of the Common Shareholders to be held January 30,
1996 and any adjournment(s) thereof.
The Board of Directors has fixed the close of business on
December 8, 1995 as the record date for the determination of
shareholders entitled to notice of and to vote at the meeting. On
December 8, 1995, there were 8,875,249 shares of Common Stock
outstanding and entitled to vote.
Any common shareholder may revoke his or her proxy at any time
before it is voted. The Company will consider a proxy to be
revoked if it receives a duly executed proxy bearing a later date
or a written statement signed by the shareholder or his or her
authorized representative clearly indicating the shareholder's
intent to revoke an earlier submitted proxy. A shareholder of
record on the record date attending the Annual Meeting may revoke
his or her proxy and vote in person by informing any of the persons
named as proxies on the accompanying proxy card that he or she
desires to revoke a previously submitted proxy. Attendance at the
Annual Meeting will not of itself revoke a proxy. If the proxy is
properly signed and is not revoked, it will be voted at the Annual
Meeting in accordance with the shareholder's direction.
Each share of common stock is entitled to one vote on each
question to be presented at the Annual Meeting. A favorable vote
of the majority of the voting power of the common stock present, in
person or by proxy, is required for the election of directors and
approval of the employment of the independent accountants. In
certain circumstances, a shareholder will be considered to be
present at the Annual Meeting for quorum purposes, but will not be
deemed to have voted in the election of directors or in connection
with other matters presented for approval at the Annual Meeting.
Such circumstances will exist where a shareholder is present but
specifically abstains from voting, or where shares are represented
at a meeting by a proxy conferring authority to vote on certain
matters but not for the election of directors or on other matters.
Under Connecticut law, such abstentions and non-votes effectively
are a vote against the election of management's nominees and
against approval of the other matters presented for shareholder
approval.
The Company will bear the cost of soliciting proxies. In
addition to solicitations by mail, some directors, officers and
regular employees of the Company or its subsidiaries, without extra
remuneration, may conduct solicitations by telephone and personal
interview. The Company may also request brokers, custodians,
nominees and fiduciaries to forward proxy solicitation material to
the beneficial owners of shares held of record by such persons, and
will reimburse them for reasonable out-of-pocket expenses incurred
by them in connection therewith.
The Company has engaged Georgeson & Company, Inc.
("Georgeson") to assist it in the solicitation of proxies.
Georgeson will solicit the proxies by mail, by telephone, possibly
by personal interview and by requesting brokers, custodians,
nominees and fiduciaries to forward proxy solicitation material to
beneficial owners of shares held of record by such person. The
Company will pay Georgeson a fee of $5,000, plus expenses, for such
solicitation services.
1. ELECTION OF DIRECTORS
The By-Laws of the Company provide that there shall be ten
members of the Board of Directors for the coming year. The
Company's Certificate of Incorporation and By-Laws further provide
that the Board of Directors shall be divided into three classes as
nearly equal in number as possible. Each class will serve for
three years, with one class being elected each year. The persons
elected as Directors will serve until the 1999 Annual Meeting of
Shareholders and until their successors have been elected and
qualified.
Pursuant to the recommendation of its Nominating and Salary
Committee, the Board of Directors has nominated James P. Comer,
M.D., Paul H. Johnson, Samuel M. Sugden and Helen B. Wasserman to
fill the vacancies on the Board that will exist on January 30,
1996.
All of the Nominees have indicated their willingness to serve
as Directors if elected. If, for any reason, any Nominee should
not be a candidate for election at the time of the Annual Meeting,
the proxies may be voted, in the discretion of those named as
proxies, for a substitute nominee.
Certain information concerning the Nominees and the Directors
continuing in office, including the business experience of each
during the past five years, is set forth below.
The Board of Directors recommends that shareholders vote FOR
the election of the nominees for director listed below.
INFORMATION CONCERNING DIRECTORS
Terms Expiring at the 1999 Annual Meeting
PHOTO James P. Comer, M.D. is the Maurice Falk Professor of
Child Psychiatry, Yale Child Study Center and Associate
Dean, Yale Medical School, New Haven, CT. Dr. Comer has
been a Director of the Company since 1979 and a Director
of Southern since 1976. He is a member of the Nominating
and Salary and Audit Committees of the Boards of
Directors of the Company and Southern. He is 61 years
old.
PHOTO Paul H. Johnson is President and Chief Executive Officer
of Gaylord Hospital, Wallingford, CT. Formerly he was
Assistant to the Dean, Yale Law School and President and
Chief Executive Officer and a Trustee of Connecticut
Savings Bank. He is also a Director of Middlesex Mutual
Assurance Company and Cooper Instrument Company.
Mr. Johnson has been a Director of the Company since 1979
and a Director of Southern since 1973. He is a member of
the Executive and Audit Committees and Chairman of the
Company's and Southern's Pension Committees of the
Boards of Directors of the Company and Southern. He is
59 years old.
PHOTO Samuel M. Sugden is Chairman of the international law
firm of LeBoeuf, Lamb, Greene & MacRae L.L.P. Mr. Sugden
has been a member of the Board of Directors of the
Company and Southern since July 1993. He is also a
member of the Company's and Southern's Nominating and
Salary Committees. He is 53 years old.
PHOTO Helen B. Wasserman is a member of the Board of Governors
for Higher Education, State of Connecticut. She is also
the Treasurer and a Director of Bridgeways Communications
Corp. (Channel 43, WBCT-TV) and a past President of the
Jewish Federation of Greater Bridgeport.
Ms. Wasserman has been a Director of the Company since
1979 and a Director of Southern since 1976. She is a
member of the Pension and Audit Committees of the
Boards of Directors of the Company and Southern. She is
66 years old.
Terms Expiring at the 1997 Annual Meeting
PHOTO J. R. Crespo is the Chairman of the Boards of Directors,
President and Chief Executive Officer of the Company and
Southern. He is Chairman of the Executive Committees of
the Boards of Directors of the Company and Southern. Mr.
Crespo has been a Director of Southern since January 1989
and a Director of the Company since April 1989. From
1982 through 1988, he was Managing Partner - Utility
Regulatory and Advisory Services, Coopers & Lybrand
L.L.P. He is 53 years old.
PHOTO Richard F. Freeman is the President and Chief Executive
Officer, Greater Bridgeport Area Foundation. He is a
principal in the firm of Freeman & Associates and the
former President and Chief Executive Officer and Trustee
of The Bank Mart. He is a Director of Physicians Health
Services, Inc.
Mr. Freeman has been a Director of the Company and
Southern since 1979 and is a member of the Executive,
Nominating and Salary and Pension Committees and
Chairman of the Audit Committees of the Boards of
Directors of the Company and Southern. He is 61 years
old.
PHOTO Newman M. Marsilius, III is the President and Chief
Executive Officer, Producto-Moore Companies, a specialty
tool and machine manufacturer. He is a member of the
Boards of Directors of the Bridgeport Regional Business
Council and the Connecticut Business & Industry
Association. He has been a Director of the Company and
Southern since September 1992. He is a member of the
Company's and Southern's Audit Committees. He is 49
years old.
Terms Expiring at the 1998 Annual Meeting
PHOTO Henry Chauncey, Jr. is Lecturer and Head of the
Management Program, Department of Epidemiology and Public
Health, Yale School of Medicine, New Haven, CT. He was
the President and Chief Executive Officer of Gaylord
Hospital from 1988 to 1994. Previously, from 1982 to
1988, he served as President of Science Park Development
Corporation, a Connecticut non-profit corporation formed
for the purpose of establishing a high technology
business development area in New Haven, CT.
Mr. Chauncey has been a Director of the Company and
Southern since 1986. He is Chairman of the Company's and
Southern's Nominating and Salary Committees and is a
member of the Company's and Southern's Executive
Committees. He is 60 years old.
PHOTO Richard M. Hoyt is the President and Chief Executive
Officer of Chapin & Bangs, a steel service center. He is
also the Chairman and Chief Executive Officer of
Lindquist Steels, Inc., a distributor of tool steel, and
Vice Chairman of the Board of Directors of Bridgeport
Hospital. Mr. Hoyt has been a Director of the Company
and Southern since January 1992. He is a member of the
Company's and Southern's Pension Committees. He
is 53 years old.
PHOTO Christopher D. Turner is Project Manager, Energy Sector
Restructuring, Bechtel International Consulting Group.
Previously, he was Regional Manager, Resource Management
International, Manager, Strategic Business Operation,
Power Technologies, Inc., and President of C.D. Turner
Associates. From 1963 through January 1988, Mr. Turner
was employed by Niagara Mohawk Power Corporation and was
Vice President of Corporate Development.
Mr. Turner has been a Director of the Company and
Southern since 1989. He is a member of the Executive,
Nominating and Salary and Pension Committees of
the Boards of Directors of the Company and Southern. He
is 52 years old.
During the last calendar quarter of 1991, receivers were
appointed for the business of Connecticut Savings Bank of which Mr.
Johnson was President and Chief Executive Officer and of The Bank
Mart of which Mr. Freeman was President and Chief Executive
Officer.
The following table sets forth, as of December 8, 1995,
information with respect to the beneficial ownership of Common
Stock of the Company by the Nominees and Directors of the Company.
Amount and Nature of
Beneficial Ownership
(unless otherwise
indicated, holder
has sole voting and
investment powers as
to shares listed)(1)
Henry Chauncey, Jr................... 1,140
Dr. James P. Comer................... 1,503
J. R. Crespo......................... 11,497
Richard F. Freeman................... 2,246
Richard M. Hoyt...................... 1,050
Paul H. Johnson...................... 1,351
Newman Marsilius, III................ 1,187
Samuel M. Sugden..................... 1,000(2)
Christopher D. Turner................ 1,000
Helen B. Wasserman................... 1,587
(1) No Director owns more than 0.001% of the Common Stock of the
Company.
(2) All of these shares are held jointly by Mr. Sugden and his
wife.
As of December 8, 1995, the shares of Common Stock
beneficially owned by the executive officers named in the Summary
Compensation Table and representing less than 1% of the Common
Stock outstanding were: Mr. Trotta -3,912; Mr. Tiano -1,275; Mr.
Healy -2,019; and Mr. Ammann -734. Including such shares, the
Directors and executive officers as a group own beneficially
41,062 shares of Common Stock, or .005% thereof.
To the knowledge of the Company, except for Brinson Partners,
Incorporated, no person or group of persons is the beneficial owner
of more than 5% of the Company's Common Stock. The following table
sets forth as of June 30, 1995, certain information as to the
number of shares of Common Stock beneficially owned by persons in
excess of 5% based on reports filed with the Securities and
Exchange Commission or other reliable information:
Title Number Percent
of of of
Name and Address Class Shares Class
Brinson Partners, Inc. Common 499,000 5.6%
209 South LaSalle
Chicago, Illinois 60604
Mr. S. A. Ardigliano, Vice President, Marketing and Gas Supply
Services, and Ms. P. A. Younger, Vice President, Customer
Relations, filed untimely initial reports of beneficial share ownership on
Form 3 as required by the Securities Exchange Act of 1934 (the
"Act"). Mr. Paul Johnson, a Director, and Mr. F. L. Esposito, Vice
President, Human Resources, did not file a timely Form 4 as
required by the Act.
Compensation of Directors
The Directors do not receive a retainer for service on the
Company's Board of Directors, nor do they receive any compensation
for attendance at meetings of the Company's Board of Directors and
meetings of its Committees. Presently, Southern's standard
arrangement with its Directors, other than Directors who are
officers of Southern, for their services is to pay them $500 each
for each meeting of the Board of Directors attended. Southern
compensates each Committee Chairman $500 for each Committee meeting
attended, and Committee members receive $400 for each Committee
meeting attended. Except for the Chairman of the Board, each
Director of Southern, who is not an officer of Southern, is paid an
annual retainer of $11,000.
Southern has an unfunded, non-qualified deferred compensation
plan for its Directors, pursuant to which any individual Director
may defer up to 100% of his Director's fees and/or retainer during
each year. The designation is made in advance as to the amount to
be deferred, when the Director's account will be distributed and
the length of time over which distribution will occur. Amounts
deferred plus interest earned are credited to the Director's
account, but no specific fund has been created with respect to
these accounts, and the Director is considered to be a general
creditor of Southern. At this time, Mr. Chauncey and Mrs.
Wasserman are participants in the plan. Mr. Chauncey has elected
to defer 100% of his 1995 fees and retainer; Mrs. Wasserman has
elected to defer only a portion of her retainer, i.e. $7,000.
Effective October 1, 1992, Southern has an unfunded retirement
plan for its Directors. If a Director attains sixty-five (65)
years of age and has received a retainer for five (5) years, then
the Director is eligible to retire and receive an annual payment,
payable in monthly installments commencing on the first day of the
month following such retirement, of an amount equal to the annual
retainer in effect during the fiscal year in which the Director
attained the age of sixty-five (65). Such payments shall continue
for a period of ten (10) years or the life of the eligible
Director, whichever is shorter, and no monthly payment shall be
made after the month in which an eligible Director dies. If a
Director dies before or after payments under the plan are made, no
further amounts are payable to the Director's surviving spouse,
descendants or estate. The plan is a non-contributory plan and is
not intended to qualify under Sections 401(a) and 501(a) of the
Internal Revenue Code of 1986, as amended.
For services rendered in fiscal year 1995, the Company paid
legal fees to the law firm of LeBoeuf, Lamb, Greene & MacRae in
which Mr. Sugden is a partner.
Southern retained Mr. Freeman as a consultant on economic
development issues impacting the areas serviced by Southern,
especially Bridgeport and New Haven. He is paid at an hourly rate
which is competitive with other individuals providing similar
advice. For services rendered during the fiscal year ending
September 30, 1995 he received $2,125.
Meetings and Committees of the Board of Directors
During the fiscal year ending September 30, 1995 the Company's
Board of Directors met 7 times. Of the Company's or Southern's
incumbent Directors, all Directors attended more than 75% of the
aggregate of the total number of (a) meetings of the Boards of
Directors and (b) meetings of all Committees of the Boards on which
such Director served.
Both the Company's Board of Directors and Southern's Board of
Directors have Audit Committees consisting of the following
Directors:
Richard F. Freeman, Chairman Dr. James P. Comer
Helen B. Wasserman Paul H. Johnson
Newman M. Marsilius, III
The Audit Committees recommend the employment of independent
accountants to audit the financial statements (see "Employment of
Independent Accountants"), approve the scope of that audit, confer
with the auditors respecting their examination of the Company's
accounting practices, approve the auditors' fees for performing
both audit and non-audit functions, and report their activities to
the full Board. The Audit Committees held five meetings during the
fiscal year ending September 30, 1995.
The Company's and Southern's Board of Directors have
Nominating and Salary Committees consisting of the following
Directors:
Henry Chauncey, Jr., Chairman Dr. James P. Comer
Richard F. Freeman Christopher D. Turner
Samuel M. Sugden
The Nominating and Salary Committees recommend to the
appropriate Board of Directors (a) nominees to fill Board
vacancies, (b) the composition of the Board Committees, (c) the
election of officers of the Company or of Southern and (d) the
salaries paid to the officers of Southern. The Nominating and
Salary Committees held three meetings during the fiscal year ending
September 30, 1995.
The Nominating and Salary Committees will consider
recommendations for nominees to serve on the Board of Directors by
shareholders who submit such recommendations in writing to the
Company's Secretary by November 1 of the year prior to the Annual
Meeting of Shareholders for which such recommended person might be
proposed by the Committee. Any such written recommendation should
contain a brief statement of background and qualifications
concerning the person being recommended.
Shareholder Proposals
If a shareholder intends to present a proposal for action at
the 1997 Annual Meeting of Shareholders, such proposal must be
received by the Company on or before August 16, 1996 for inclusion
in the Company's Proxy Statement and Form of Proxy for such
meeting. The Company reserves the right to omit any proposals from
its Proxy Statement and Form of Proxy where such omission is
permitted by the rules of the Securities and Exchange Commission.
REPORT OF THE
NOMINATING AND SALARY COMMITTEE
ON
EXECUTIVE COMPENSATION
The Nominating and Salary Committee (the Committee) is a
standing committee of Southern's Board of Directors composed
entirely of outside Directors who are not employees of Southern or
any of its subsidiaries. Mr. Chauncey is the Chairman. Messrs.
Comer, Freeman, Sugden and Turner are the other members.
All members of the Committee qualify as disinterested persons
under Rule 16b-3 of the Securities and Exchange Commission. This
means that none participate in any of the executive compensation
plans overseen and administered by the Committee with Board of
Directors' approval, and none participates in any compensation plan
administered by the executives of Southern.
COMMITTEE FUNCTIONS
The Committee is responsible for assuring that Southern's
compensation programs are developed, implemented and administered
to support the Company's fundamental philosophy that compensation
should be effectively linked to corporate and individual
performance. The Committee meets on a regularly scheduled basis.
The Committee reviews Southern's overall program for salaries and
incentive compensation as well as the compensation of the President
and Chief Executive Officer, Mr. Crespo, and other senior
executives. Reviews of executive performance and compensation
occur outside the presence of the executives who are being
discussed. The Committee has access to outside professional
compensation consultants and meets with these consultants, with and
without executives present. The Committee also reviews corporate
organization, management development plans and benefits programs.
It makes reports and recommendations to Southern's Board of
Directors on all of these matters of organization and compensation.
CORPORATE COMPENSATION PHILOSOPHY
Southern's executive compensation program is designed to
motivate, reward, and retain the management talent needed to
achieve Southern's business objectives and to maintain Southern's
position of leadership in the natural gas distribution industry.
Retention of executives who have developed the skills and expertise
required to lead a capital intensive organization is vital to
Southern's competitive strength. Motivation of these individuals
is, and will continue to be, key to Southern's success.
The philosophical basis of the compensation program is to pay
for performance and the level of responsibility of an individual's
position. Assessments of both individual and corporate performance
influence executive compensation levels. The Committee, with Board
of Directors' approval, seeks to encourage a performance-based
environment that motivates individual performance by recognizing
the past year's results and by providing incentives for further
improvement in the future. This includes the ability to implement
Southern's business plans as well as to react to unanticipated
external factors having a significant impact on corporate
performance. Compensation decisions for all executives, including
the named executive officers and Chief Executive Officer, are based
on the same criteria.
Compensation opportunities are linked to financial and
operating performance. For each executive, a significant
percentage of compensation each year is at risk, that is, it
depends on the accomplishment of challenging performance goals
approved and reviewed by the Committee and the Board of Directors.
The percentage of compensation at risk for an executive increases
with more responsibilities and as opportunities to contribute
directly to the success of the organization increase. The
performance upon which the incentive compensation program is based
is assessed annually to ensure that executives work to support both
the current as well as the strategic objectives of Southern.
COMPONENTS OF COMPENSATION
There are two major components to Southern's compensation
program: Base Salary and Management Incentive Compensation Awards.
Base Salary -- A competitive base salary supports the
philosophy of management development and career orientation of
executives and is consistent with the long-term nature of
Southern's business. Southern's compensation philosophy is to pay
base salaries to its executive officers that do not exceed the
median for comparable positions at other, comparable companies.
Base salaries for some executives will be set at a higher level if
the Committee concludes (and the Board of Directors agrees) that it
is appropriate in light of a particular individual's
responsibilities, experience and personal performance.
Compensation opportunities must be sufficient to attract and retain
the highly qualified individuals the Company needs to succeed.
Salary budget expenditures and adjustments to the salary
structure are a result of annual reviews of competitive positioning
(how Southern's salary structure for comparable positions compares
with that of other companies), business performance and general
economic factors. While there is no specific weighting of these
factors, competitive positioning is the primary consideration in
setting base salary. Business and other economic factors such as
net income and estimates of inflation are secondary considerations
in establishing base salary.
The Committee recommends and the Board of Directors approves
the salaries of the President and Chief Executive Officer and the
salaries of other elected officers. The Committee met in November
1994 to recommend the 1995 salaries for the President and Chief
Executive Officer and to set the 1995 salaries for the other
elected officers. The Board of Directors approved the Committee's
recommendations. Any changes to these approved salaries must be
reviewed by the Committee and approved by the Board of Directors
before implementation.
Mr. Crespo became President and Chief Executive Officer in
1989. His 1995 salary reflects the size and complexity of
Southern, as well as his experience and personal contributions to
corporate performance.
Management Incentive Awards -- Corporate and individual
performance goals are set by the Committee and approved by the
Board of Directors. The goals set each year are ones which the
Committee believes are challenging in light of all current
circumstances. If the financial performance of Southern does not
meet a certain threshold level specified by the Board of Directors
for that year, then no annual incentive awards would be paid.
Annual incentive opportunities are designed to provide a
strong incentive for executives to increase corporate earnings each
year. The program places a significant portion of the executive's
annual compensation at risk. As a result of Southern's overall
compensation philosophy, approximately one quarter of an
executive's total annual cash compensation depends on the
achievement of annual performance goals. The amount of
compensation at risk increases with the executive's
responsibilities. With limited exceptions, base salaries do not
exceed the median for comparable positions at comparable companies.
If performance goals are met, then an executive's annual cash
compensation will total more than the median total annual cash
compensation for comparable positions at comparable companies.
In evaluating the performance of Mr. Crespo, President and
Chief Executive Officer, the Committee, in addition to financial
performance, considers such factors as ethical business conduct,
progress towards strategic plan objectives and the general
perception of Connecticut Energy Corporation and Southern by the
financial community and customers. Mr. Crespo's 1994 award
reflects his significant personal contributions to the business and
his leadership which resulted in 1994 performance that was strong
relative to the industry. This determination was based on the
judgment of the Committee (with Board of Directors approval)
regarding his overall contribution as President and Chief Executive
Officer. Narrow quantitative measures or formulas are not viewed
as sufficiently comprehensive for this purpose. The combination of
Mr. Crespo's base salary and the management incentive award was
appropriately positioned relative to other Chief Executive Officers
of competitors recognizing the size and business results of these
companies relative to Southern.
SUMMARY
The Committee has the responsibility to ensure that Southern's
compensation program satisfies the best interests of the
shareholders. The Committee believes that the existing
compensation program is competitive and appropriate. Balancing
base salaries with management incentive awards is the foundation
upon which Southern's stability and business success should be
built.
Henry Chauncey, Jr., Chairman
James P. Comer
Richard F. Freeman
Samuel M. Sugden
Christopher D. Turner
Executive Compensation
All of the executive officers of the Company except one are
currently officers of Southern. The Company has no existing plan
or arrangement to pay any remuneration to such officers in addition
to the compensation that they will receive from Southern in their
respective capacities as employees of Southern. The salaries paid
by Southern during the last three fiscal years ending September 30,
1995 to each of the five most highly compensated executive officers
(or executive officers of the Company's subsidiaries) were as
follows:
SUMMARY COMPENSATION TABLE
Annual Compensation (1)
All Other
Name and Compen-
Principal Salary Bonus sation (2)
Position Year ($) ($) ($)
J.R. Crespo 1995 365,000 132,276 7,320
Chairman, 1994 345,000 123,750 7,831
President 1993 322,500 84,375 9,176
& CEO
T.A. Trotta 1995 206,000 39,585 4,500
Exec. VP and 1994 191,875 39,750 4,687
COO 1993 143,750 25,531 4,134
J.R. Tiano 1995 154,150 32,182 4,500
VP, General 1994 145,850 41,093 4,375
Counsel & 1993 136,450 29,422 4,020
Secretary
J.P. Healy 1995 140,600 16,915 4,218
VP, Energy 1994 137,375 29,614 4,121
Service Planning 1993 133,000 22,045 3,990
V.L. Ammann, Jr. 1995 133,313 26,006 1,559
Group VP, Corp. 1994 121,393 33,350 1,213
Plng. & Admin. 1993 101,375 21,795 287
(1) None of the persons named received any cash compensation in
any of the years shown other than the amounts appearing in the
columns captioned "Salary", "Bonus" and "All Other
Compensation." None of the perquisites and other personal
benefits received by such named persons exceed 10% of the
total salary and bonus received by such person for each year
shown.
(2) The amounts appearing in this column are cash contributions by
Southern to a Section 401(k) plan for each of the named
individuals except Mr. Crespo. The amount shown for the years
1995, 1994 and 1993 for Mr. Crespo include premium payments of
$2,820, $2,670 and $2,161, respectively, for a renewable term
life insurance policy.
Pension and Retirement Benefits
The approximate annual retirement benefits payable under the
Pension Plan to an individual whose compensation as defined in the
Pension Plan is in the classification indicated would be as
follows:
PENSION PLAN TABLE
Years of Service
Remuneration 15 20 25 30 35
$125,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000
$150,000 $ 90,000 $ 90,000 $ 90,000 $ 90,000 $ 90,000
$175,000 $105,000 $105,000 $105,000 $105,000 $105,000
$200,000 $120,000 $120,000 $120,000 $120,000 $120,000
$225,000 $135,000 $135,000 $135,000 $135,000 $135,000
$250,000 $150,000 $150,000 $150,000 $150,000 $150,000
$300,000 $180,000 $180,000 $180,000 $180,000 $180,000
$400,000 $240,000 $240,000 $240,000 $240,000 $240,000
$450,000 $270,000 $270,000 $270,000 $270,000 $270,000
$500,000 $300,000 $300,000 $300,000 $300,000 $300,000
$550,000 $330,000 $330,000 $330,000 $330,000 $330,000
Remuneration covered for pension purposes is defined as the
employee's average annual compensation (which includes taxable
compensation and pre-tax employee contribution to Southern's
Section 401(k) plan) for those five consecutive years of the
employee's last ten years of service yielding the highest such
average. Remuneration for pension purposes is the sum of the
amounts shown in the Salary and Bonus columns of the Summary
Compensation Table.
The projected years of service for each of the five highest
paid executive officers at age 65 are: Mr. Crespo, 19 years; Mr.
Trotta, 48 years; Mr. Tiano, 21 years; Mr. Healy, 30 years; and Mr.
Ammann, 34 years. The benefits illustrated are payable as life
annuities. Except for Mr. Healy, the benefits for the named
individuals are not subject to any offset. Mr. Healy's benefits
are offset by Social Security benefits.
Management Incentive Compensation Plan
Effective October 1, 1992, Southern's Board of Directors
adopted amendments to a Management Incentive Compensation Plan
("Compensation Plan") which provides competitive compensation to
key employees approved by the Board of Directors to reward them for
the achievement of certain corporate and individual objectives. At
the beginning of each fiscal year, the Nominating and Salary
Committee of the Board of Directors determines key employees and
the range of the potential incentive award for each key employee
depending upon the degree to which Southern achieves certain
financial targets and the key employee achieves certain individual
objectives. To be eligible for an award, a key employee must be
employed by Southern for the entire fiscal year and must be
employed at the commencement of the fiscal year, i.e., October 1.
After the end of each fiscal year, the Nominating and Salary
Committee determines the incentive award based upon a participant's
attainment of his respective goals and the evaluation of an
individual's performance. The individual performance goals vary
from participant to participant according to duties. Corporate
goals and individual goals are assigned different weighted values
from individual to individual in calculating the amount of the
award. The time period for the measurement of benefits for key
employees is the fiscal year prior to the payment of awards.
Since awards under the Compensation Plan are based on
corporate and individual achievements, there are no pre-set payment
schedules. Amounts to be paid for 1995 performances to the
executives named in the Summary Compensation Table and all other
executive officers as a group will be determined no later than the
end of the first quarter of 1996. The Board of Directors has
determined that the Compensation Plan shall continue in effect
until amended, superseded or rescinded by future resolution of the
Board of Directors.
Other
The Boards of Directors has approved employment and deferred
compensation agreements with Mr. Crespo. Pursuant to these
agreements, Mr. Crespo's base salary was set at the rate of
$225,000 per year, subject to upward revision when the salaries of
other officers of Southern are revised. The term of the employment
agreement is for three years commencing March 24, 1992 and shall be
automatically extended on the first day of each succeeding month to
end three years from such extension. Mr. Crespo also participates
in the Company's Compensation Plan described above. His agreements
with the Company and Southern provide for certain compensation and
benefits to be paid if his employment is terminated without
"Cause," or terminated by him for "Good Reason," or if there is a
"Change in Control" of the Company as those terms are defined in
the agreements. If there is a "Change in Control," the Company
will pay Mr. Crespo his full base salary through the date of
termination and all benefits and awards to which he is entitled
under benefits plans and policies in effect prior to the "Change in
Control." Additionally, the Company will pay Mr. Crespo three
times (1) his annual base salary on the effective day of the
termination or, if higher, immediately prior to a "Change in
Control," (2) the highest bonus he received in the previous five
fiscal years or, if higher, during the year in which a "Change in
Control" took place, and (3) amounts paid by the Company to
Southern's Section 401(k) Plan on Mr. Crespo's behalf plus an
amount equal to thirty five percent (35%) of his annual base salary
on the date of termination or, if higher, immediately prior to the
"Change in Control" as compensation for medical, life insurance and
other benefits lost as a result of termination. If any of the
foregoing payments result in the imposition of an excise tax under
the Internal Revenue Code, the amount paid to Mr. Crespo will not
be reduced because of the imposition of such excise tax.
If Mr. Crespo terminates his employment for "Good Reason" or
if the Company and Southern terminate his employment without
"Cause," Mr. Crespo will continue to receive his base salary for
the remaining term of the agreement and any amounts payable under
the Compensation Plan within twelve (12) months of termination to
which he is entitled unless he is receiving payments because of a
"Change in Control."
Mr. Crespo's deferred compensation agreement provides for
compensation payments upon retirement or termination of his
employment unless such termination is for "Cause," for other than
"Good Reason" or death. Under the agreement, if employed by the
Company until December 1, 2004, he would be entitled to receive, on
retirement or termination of his employment, 60% of the average of
his total base pay plus any incentive compensation paid in those
five highest paid consecutive years out of the ten years preceding
his retirement or termination, less amounts paid under Southern's
retirement plans. He will receive lesser amounts if he retires or
his termination occurs prior to December 1, 2004. The deferred
compensation agreement also contains provisions relating to the
election of benefits for his spouse, the receipt of deferred
compensation prior to attaining the age of 65, payments in the
event of his death or disability, and provisions for supplemental
term life insurance.
SHARE PERFORMANCE CHART
The following chart compares the total cumulative return on an
investment in the Company's Common Stock with the cumulative total
return of the Standard & Poor's 500 C+Stock Index and the Standard
& Poor's Utilities Index (which includes telephone, electric, gas
pipeline and gas distribution companies) over the last five fiscal
years in accord with the rules of the Securities and Exchange
Commission:
CHART
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG
CONNECTICUT ENERGY CORPORATION, S&P 500 INDEX AND S&P UTILITIES
INDEX
$225
$200
$175
$150
$125
$100
$ 75
$ 50
1990 1991 1992 1993 1994 1995
The numbers listed below are graphically represented on the chart
above.
Fiscal Year Ended September 30
1990 1991 1992 1993 1994 1995
Connecticut 100 123 152 180 166 159
Energy
S&P 500 100 131 145 164 171 221
S&P Utilities 100 116 132 164 143 182
Total return assumes reinvestment of all dividends on the payment
date. The changes displayed are not necessarily indicative of
future returns measured by this, or any method.
2. EMPLOYMENT OF INDEPENDENT ACCOUNTANTS
On November 1, 1995 and November 28, 1995, the Audit
Committees of the Boards of Directors of the Company and Southern
and the Boards of Directors of the Company and Southern each
respectively voted to recommend to the shareholders that Coopers &
Lybrand L.L.P. be appointed as the independent accountants to audit
the books and affairs of the Company and its subsidiaries and of
Southern and its subsidiaries respectively for the fiscal year
1996. Coopers & Lybrand L.L.P. was the independent accountant
engaged as the principal accountant to audit the Company's and
Southern's books and records for the fiscal year ending September
30, 1995.
Representatives of Coopers & Lybrand L.L.P. will be present at
the Annual Meeting and they will be given the opportunity to make
a statement on behalf of their firm if they so desire. They will
also be available to respond to appropriate questions from
shareholders.
The Board of Directors recommends that shareholders vote FOR
the employment of Coopers & Lybrand L.L.P. as described above.
3. OTHER MATTERS
The Board of Directors knows of no other matters to be
presented for consideration at the Annual Meeting of Common
Shareholders. If any other matter should properly come before the
Annual Meeting, it is the intention of the persons named in the
accompanying proxy to vote on such matters in accordance with their
judgment.
By order of the Board of Directors
J. RICHARD TIANO
Secretary
Dated: December 13, 1995
<PAGE>
Travel Directions to the Trumbull Marriott Hotel:
If you're driving to the hotel from the Merritt Parkway
North Bound (direction toward New Haven): Take Exit 51;
turn right off ramp onto Rte 108 South (Nichols Ave.);
drive 1/2 mile; turn left onto Hawley Lane, hotel will be
3/10 of a mile on the left side of the road.
If you're driving to the hotel from the Merritt Parkway
South Bound (direction toward Bridgeport/New York): Take
Exit 52; follow Rte 108 signs; turn left off ramp onto Rte.
108 South (Nichols Ave.); drive 3/10 of a mile; turn left onto
Hawley Lane, hotel will be 3/10 of a mile on the left side of
the road.
If you're driving to the hotel from Interstate 95: Take Exit
27A (Rtes. 8 & 24), Follow Rte 8 (at fork, stay on Rte 8,
which is the right side of the fork) to Exit 8: turn left off
ramp, turn right at first stoplight onto Rte. 108 South
(Nichols Ave.); make a quick left at first stoplight onto Hawley
Lane, hotel will be 3/10 of a mile on the left side of the road.
<PAGE>
CONNECTICUT ENERGY CORPORATION
PROXY SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
COMMON SHAREHOLDERS TO BE HELD JANUARY 30, 1996
The undersigned hereby appoints J. R. Crespo, Richard F.
Freeman and Newman M. Marsilius III and each of them, with power of
substitution, proxies and agents of the undersigned to vote at the
Annual Meeting of the Common Shareholders of Connecticut Energy
Corporation (the "Company"), to be held in the Grand Ballroom
of the Trumbull Marriott Hotel, 180 Hawley Lane, Trumbull,
Connecticut on Tuesday, January 30, 1996 at 10:00 A.M., and at any
adjournment thereof, all shares of Common Stock of the Company
which the undersigned would be entitled to vote if personally
present for the following matters:
(Continued on the reverse side)
PLEASE SIGN ON THE REVERSE SIDE
This proxy when properly executed will be voted in the manner
directed herein by the undersigned stockholder. If no direction is
made, the proxy will be voted FOR proposals 1 and 2.
Election of Directors
1. Nominees: James P. Comer, M.D., Paul H. Johnson, Samuel M.
Sugden and Helen B. Wasserman.
For Withheld
___ ____
For all nominees except as noted above
MARK HERE FOR
ADDRESS CHANGE AND
NOTE BELOW ____
2. TO APPROVE THE APPOINTMENT OF COOPERS & LYBRAND as the
independent public accountants to audit the books and
affairs of the Company, and the subsidiaries of both it
and of The Southern Connecticut Gas Company for the
fiscal year 1996.
For Against Withheld
___ ____ ____
3. To transact such other business as may properly come before
the meeting.
In their discretion, the proxies are authorized to vote upon
such other business as may properly come before the meeting.
Please sign exactly as name appears hereon. When shares are
held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full
title as such. If a corporation, please sign in full corporate name
by President or other authorized officer. If a partnership, please
sign in partnership name by an authorized person.
Please mark, sign, date and return the proxy card
promptly using the enclosed envelope.
Signature: __________________ Date ____________
Signature: __________________ Date ____________
