<PAGE>
LOGO NEW ENGLAND POWER COMPANY
Notice of Special Meeting in Lieu of
Annual Meeting of Stockholders
25 Research Drive
Westborough, Massachusetts 01582
April 14, 1994
To the Holders of Common Stock
and 6% Cumulative Preferred Stock of
New England Power Company
You are hereby notified that the Special Meeting in Lieu of
Annual Meeting of Stockholders of New England Power Company will be
held in the Directors Room, 25 Research Drive, Westborough,
Massachusetts, on May 12, 1994 at 10:00 a.m., E.D.S.T., for the
following purposes:
1. To fix the number of and elect the directors, a Treasurer,
and a Clerk of the Company for the ensuing year;
2. To select an Auditor for the year ending December 31, 1994;
and
3. To transact such other business as may be appropriate and
incidental to the foregoing purposes or which may legally
be brought before the meeting or any adjourned session
thereof.
Stockholders entitled to vote will be determined on the basis
of the records of the Company at the close of business April 13,
1994. With respect to each of the above matters, the holders of
the Common Stock and the 6% Cumulative Preferred Stock will vote as
a single class.
The accompanying Information Statement contains further
information about the matters to be considered at the meeting.
By order of the Board of Directors,
(facsimile signature)
ROBERT KING WULFF
Clerk
<PAGE>
INFORMATION STATEMENT
NEW ENGLAND POWER COMPANY
25 Research Drive
Westborough, Massachusetts 01582
Special Meeting in Lieu of Annual Meeting
of Stockholders, May 12, 1994
In connection with the matters to be acted upon at the Annual
Meeting of Stockholders, the Board of Directors is submitting this
Information Statement to the holders of its 6% Cumulative Preferred
Stock and Common Stock.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO
SEND US A PROXY.
All outstanding common stock of the Company is owned by New
England Electric System (NEES). The common stock represents more
than a majority of the shares with general voting rights. It is
anticipated that NEES will vote its shares affirmatively on the
matters to be presented and, accordingly, solicitation of proxies
will not be necessary. No other person owns of record or
beneficially more than 5% of any securities to be voted at the
meeting.
At the close of business on April 13, 1994, the record date for
determining the stockholders entitled to vote at said meeting,
there were issued and outstanding the following shares with general
voting rights:
Common Stock ....................... 6,449,896 shares
6% Cumulative Preferred Stock ...... 76,066 shares
CONTENTS
PAGE
Election of Directors and Officers .............. 2
Selection of Auditor ............................ 10
Other Matters ................................... 10
<PAGE>
ELECTION OF DIRECTORS AND OFFICERS
The Board of Directors recommends fixing the number of directors
for the ensuing year at six and the nomination and election of the
following as directors.
JOAN T. BOK - Director since 1979 - Age 64 - Chairman or Vice
Chairman of the Company from 1988 to 1994 - Chairman of NEES from
1984 (Chairman, President, and Chief Executive Officer from
July 26, 1988 until February 13, 1989). Directorships of NEES
System companies: New England Electric System, Granite State
Electric Company, Massachusetts Electric Company, The Narragansett
Electric Company, Narragansett Energy Resources Company, New
England Electric Resources, Inc., New England Electric Transmission
Corporation, New England Energy Incorporated, New England Hydro
Finance Company, Inc., New England Hydro-Transmission Corporation,
New England Hydro-Transmission Electric Company, Inc., and New
England Power Service Company. Other directorships: Avery
Dennison Corporation, John Hancock Mutual Life Insurance Company,
Monsanto Company, and the Federal Reserve Bank of Boston.
FREDERIC E. GREENMAN - Director since 1986 - Age 57 - Vice
President of the Company since 1979 - Senior Vice President of NEES
since 1987 - General Counsel of NEES since 1985 - Secretary of NEES
since 1984. Directorships of NEES System companies and affiliates:
Narragansett Energy Resources Company, New England Electric
Resources, Inc., New England Electric Transmission Corporation, New
England Energy Incorporated, New England Hydro Finance Company,
Inc., New England Hydro-Transmission Corporation, New England
Hydro-Transmission Electric Company, Inc., New England Power
Service Company, Yankee Atomic Electric Company, Connecticut Yankee
Atomic Power Company, Maine Yankee Atomic Power Company, and
Vermont Yankee Nuclear Power Corporation.
ALFRED D. HOUSTON - Director since 1984 - Age 53 - Vice
President of the Company since 1987 - Elected Executive Vice
President of NEES in 1993 - Senior Vice President-Finance of NEES
from 1987 to 1994 - Chief Financial Officer of NEES since 1984.
Directorships of NEES System companies: Narragansett Energy
Resources Company, New England Electric Resources, Inc., New
England Electric Transmission Corporation, New England Energy
Incorporated, New England Hydro Finance Company, Inc., New England
Hydro-Transmission Corporation, New England Hydro-Transmission
Electric Company, Inc., and New England Power Service Company.
JOHN W. NEWSHAM - Director since 1991 - Age 61 - Executive Vice
President of the Company since 1993 - Vice President of the
Company from 1987 to 1993. Directorships of NEES System companies:
Narragansett Energy Resources Company, New England Electric
Resources, Inc., and New England Power Service Company.
<PAGE>
JOHN W. ROWE - Director since 1989 - Age 48 - Chairman of the
Company since 1993 - President or Chairman of the Company since
1989 - President and Chief Executive Officer of NEES since 1989 -
President and Chief Executive Officer of Central Maine Power
Company from 1984 to 1989. Directorships of NEES System companies
and affiliates: New England Electric System, Massachusetts
Electric Company, The Narragansett Electric Company, Narragansett
Energy Resources Company, New England Electric Resources, Inc., New
England Electric Transmission Corporation, New England Energy
Incorporated, New England Hydro Finance Company, Inc., New England
Hydro-Transmission Corporation, New England Hydro-Transmission
Electric Company, Inc., New England Power Service Company, and
Maine Yankee Atomic Power Company. Other directorships: Bank of
Boston Corporation and UNUM Corporation.
JEFFREY D. TRANEN - Director since 1991 - Age 47 - President of
the Company since 1993 - Vice President of the Company from 1984 to
1993. Directorships of NEES System affiliates: Narragansett
Energy Resources Company, New England Electric Resources, Inc.,
New England Electric Transmission Corporation, New England Energy
Incorporated, New England Hydro Finance Company, Inc., New England
Hydro-Transmission Corporation, New England Hydro-Transmission
Electric Company, Inc., and New England Power Service Company.
There were seven meetings of the Board in 1993. Directors are
to be elected and hold office until the next annual meeting of the
stockholders or a special meeting held in lieu thereof and until
their respective successors are chosen and qualified. Since all
members of the Board are employees of NEES System companies, no
fees are paid for service on the Board except as noted below for
Mrs. Bok.
Mrs. Bok retired as an employee of the System (remaining
Chairman of the Board of NEES) on January 1, 1994. She became a
consultant to NEES on that date. Under the terms of her contract,
she will receive an annual retainer of $100,000. Mrs. Bok also
serves as director for NEES subsidiaries. She has agreed to waive
the normal fees and annual retainers otherwise payable for services
by non-employees on these boards and will receive in lieu thereof
a single annual stipend, $5,455 of which will be charged to the
Company. No payments were made in 1993 pursuant to these
arrangements.
<PAGE>
SECURITY OWNERSHIP
The following table lists the holdings of NEES common shares as
of March 10, 1994 by the Company's directors, the executive
officers named in the Summary Compensation Table, and all directors
and executive officers as a group.
Name Shares Beneficially Owned (a)
- ---- -------------------------
Lawrence E. Bailey 1,953
Joan T. Bok 25,162
Frederic E. Greenman 10,632
Alfred D. Houston 10,953
John W. Newsham 10,270
John W. Rowe 20,419
Richard P. Sergel 6,702
Jeffrey D. Tranen 6,604
All directors and
executive officers,
as a group (13 persons) 115,340 (b)
(a) Includes restricted shares and allocated shares in employee
benefit plans.
(b) This is less than 1% of the total number of shares of NEES
outstanding.
While the Company has no audit, compensation, or nominating
committee, NEES, its parent, has an audit committee and a
compensation committee.
The Board of Directors further recommends the nomination and
election of the following persons to the offices named.
For Treasurer of the Company: Michael E. Jesanis, who has been
associated with the Company and affiliates since 1983 and has been
Treasurer of the Company and New England Electric System since
1992. He also serves as an officer of certain other subsidiaries
of NEES.
For Clerk of the Company: Robert King Wulff, Corporation
Counsel, who has been associated with the Company and affiliates
since 1968 and has been Clerk of the Company since 1973. He also
serves as clerk, secretary, or assistant clerk of certain other
subsidiaries of NEES.
These votes require a majority of the Common Stock and 6%
Cumulative Preferred Stock, voting as a single class. Votes will
be counted by the Company as (i) For or (ii) Withhold Authority;
abstentions have the same effect as "Withhold Authority" votes.
<PAGE>
Under Massachusetts law and the Company's By-Laws, broker non-votes
(uninstructed shares held by brokers) are counted as not being
represented at the meeting for purposes of electing directors.
EXECUTIVE COMPENSATION
The following table gives information with respect to all
compensation (whether paid directly by the Company or billed to it
as hourly charges) for services in all capacities for the Company
for the years 1991 through 1993 to or for the benefit of the Chief
Executive Officer and the four other most highly compensated
executive officers of the Company.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term
Compensa-
Annual Compensation (b) tion
-------------------------- ---------
Other
Name and Annual Restricted All Other
Principal Compensa- Share Compensa-
Position Year Salary Bonus tion Awards tion
(a) ($) ($)(c) ($)(d) ($)(e) ($)(f)
- ---------- ---- ------- ------ --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
John W. 1993 181,269 112,095 2,318 54,256 2,386(g)
Rowe 1992 184,532 69,205 2,318 56,479 2,340
Chairman 1991 160,202 67,618 2,188 58,394 2,153
Joan T. 1993 154,428 92,949 3,323 46,245 3,444(h)
Bok 1992 157,705 59,310 2,899 48,274 3,326
Vice 1991 155,392 66,005 3,135 56,641 3,615
Chairman
Jeffrey D. 1993 159,936 112,105 2,974 32,753 3,563(i)
Tranen 1992 120,843 52,286 2,307 23,732 2,670
President 1991 129,725 45,832 2,240 20,970 2,595
Frederic E. 1993 123,648 75,058 2,131 22,811 3,110(j)
Greenman 1992 133,223 50,258 2,361 26,960 3,298
Vice 1991 125,237 43,804 2,516 24,028 3,145
President
Lawrence E. 1993 135,123 61,283 101 21,286 3,790(k)
Bailey 1992 129,711 47,737 101 20,985 2,594
Vice 1991 122,928 32,588 102 14,474 2,459
President
</TABLE>
<PAGE>
(a) Certain officers of the Company are also officers of NEES and
various other System companies.
(b) Includes deferred compensation in category and year earned.
(c) The bonus figure represents cash bonuses under an incentive
compensation plan, special bonuses, the goals program award,
and the variable portion of the incentive thrift plan match by
the Company. See description under Plan Summaries.
(d) Includes amounts reimbursed by the Company for the payment of
taxes.
(e) These shares receive the same dividends as the other common
shares of NEES. The shares become unrestricted after five
years. See also Payments Upon a Change in Control, below. As
of December 31, 1993, the following executive officers held the
amount of restricted shares with the value indicated: Mr. Rowe
11,807 shares, $461,949 value; Mrs. Bok 10,241 shares, $400,679
value; Mr. Greenman 3,220 shares, $125,983 value; Mr. Tranen
2,193 shares, $85,019 value; and Mr. Bailey 1,369 shares,
$53,562 value. These amounts do not include the restricted
share awards for 1993 which were not determined until February
1994. The value was calculated by multiplying the closing
market price on December 31, 1993 by the number of shares.
(f) Includes Company contributions to life insurance and the
incentive thrift plan that are not bonus contributions. See
description under Plan Summaries. The life insurance
contribution is calculated based on the value of term life
insurance for the named individuals. The premium costs for
most of these policies have been or will be recovered by the
Company.
(g) For Mr. Rowe, the amount and type of compensation in 1993 is as
follows: $1,879 for contributions to the thrift plan and $507
for life insurance.
(h) For Mrs. Bok, the amount and type of compensation in 1993 is as
follows: $1,937 for contributions to the thrift plan and
$1,507 for life insurance.
(i) For Mr. Tranen, the amount and type of compensation in 1993 is
as follows: $3,198 for contributions to the thrift plan and
$365 for life insurance.
(j) For Mr. Greenman, the amount and type of compensation in 1993
is as follows: $2,478 for contributions to the thrift plan and
$637 for life insurance.
(k) For Mr. Bailey, the amount and type of compensation in 1993 is
as follows: $2,702 for contributions to the thrift plan and
$1,088 for life insurance.
<PAGE>
PLAN SUMMARIES
A brief description of the various plans through which
compensation and benefits are provided to the named executive
officers is presented below to better enable shareholders to
understand the information presented in the tables shown earlier.
The general provisions of the incentive compensation plans are
described in the report of the NEES Compensation Committee. The
amounts of compensation and benefits provided to the named
executive officers under the plans described below (and charged to
the Company) are presented in the Summary Compensation Table.
Goals Program
The goals program covers all employees who have completed one
year of service with any NEES subsidiary. Goals are established
annually. For 1993, these goals related to earnings per share,
customer costs, safety, absenteeism, conservation, generating
station availability, transmission reliability, environmental and
OSHA compliance, and customer favorability attitudes. Some goals
apply to all employees, while others apply to particular functional
groups. Depending upon the number of goals met, and provided the
minimum goal for earnings per share is met, employees may earn a
cash bonus of 1% to 4-1/2% of their compensation.
Incentive Thrift Plan
The incentive thrift plan (a 401(k) program) provides for a
match of one-half of up to the first 4% of base compensation
contributed to the System's incentive thrift plan (shown under All
Other Compensation in the Summary Compensation Table) and, based on
an incentive formula tied to earnings per share, may fully match
the first 4% of base compensation contributed (the additional
amount, if any, is shown under Bonus in the Summary Compensation
Table). Under Federal law, contributions to these plans are
restricted. In 1993, the salary reduction amount was limited to a
total of $8,994 from all the System Companies.
Life Insurance
The System has established for certain senior executives life
insurance plans funded by individual policies. The combined death
benefit under these insurance plans is three times the
participant's annual salary.
After termination of employment, participants in one of the
insurance plans may elect, commencing at age 55 or later, to
receive an annuity income equal to 40% of annual salary. In that
event, the life insurance is reduced over fifteen years to an
amount equal to the participant's final annual salary. Due to
changes in the tax law, this plan was closed to new participants,
and an alternative was established with only a life insurance
<PAGE>
benefit. The individuals listed in the summary table are in one or
the other of these plans. These plans are structured so that, over
time, the System should recover the cost of the insurance premiums.
Other
The System does not have any share option plans.
The NEES Compensation Committee administers certain of the
incentive compensation plans and the Management Committee
administers the others (including the incentive share plan).
RETIREMENT PLANS
The following table shows estimated annual benefits payable to
executive officers under the qualified pension plan and the
supplemental retirement plan, assuming retirement at age 65 in
1994.
PENSION TABLE
Five-Year 20 Years 25 Years 30 Years 35 Years 40 Years
Average of of of of of
Compensation Service Service Service Service Service
- ------------ -------- -------- -------- -------- --------
$200,000 $ 76,000 $ 93,500 $111,000 $122,100 $128,100
$250,000 95,700 117,800 139,800 153,800 161,300
$300,000 115,400 142,000 168,600 185,500 194,500
$350,000 135,100 166,300 197,400 217,200 227,700
$400,000 154,800 190,500 226,200 249,000 261,000
$450,000 174,500 214,800 255,000 280,700 294,200
For purposes of the retirement plans, Messrs. Rowe, Tranen,
Greenman, and Bailey currently have 16, 24, 30 and 25 credited
years of service, respectively. At the time she retired from the
Company, Mrs. Bok had 38 credited years of service and she
commenced receiving the described benefits under the pension plans
and the life insurance program. As a non-employee she no longer
accrues service credit or additional benefits under these plans.
Benefits under the pension plans are computed using formulae
based on percentages of highest average compensation computed over
five consecutive years. The compensation covered by the pension
plan includes salary, bonus, and restricted share awards. The
benefits listed in the pension table are not subject to reduction
for Social Security and are shown without any joint and survivor
benefits.
The Pension Table above does not include annuity payments to be
received in lieu of life insurance. The policies are described
above under Plan Summaries.
<PAGE>
In February 1993, the Company announced a voluntary early
retirement program available to all non-union employees over age 55
with 10 or more years of service as of June 30, 1993. Mrs. Bok
accepted the offer. The program offered either an annuity or a
lump sum equal to the greater value of either one week's base pay
times the number of years of service plus two weeks' base pay or an
additional five years of service and five years of age. In
accordance with the terms of the offer, Mrs. Bok received an
additional annuity of $12,611 from a supplemental pension plan and
a lump sum of $110,896 from the qualified plan. A portion of these
payments was charged to the Company.
Mrs. Bok had not been eligible for a bonus under a prior
incentive compensation plan. In lieu thereof she will receive a
limited cost of living (consumer price index) adjustment to her
benefits from the qualified pension plan and the supplemental
retirement plan. Since this plan serves to adjust the pension
benefit only after retirement, there will be no supplement paid
under the plan until at least 1995.
Senior executives receive the same post-retirement health
benefits as those offered non-union employees who retire with a
combination of age and years of service equal to 85.
PAYMENTS UPON A CHANGE OF CONTROL
The incentive compensation plans would provide a payment of 40%
of base compensation in the event of a "change in control" as
defined in the plans. This payout would be made in lieu of any
cash bonuses under the plans for the year in which the "change in
control" occurs. A similar payment is provided for the previous
plan year if awards for that year had not yet been distributed. A
"change in control" is defined, generally, as an occurrence of
certain events that either evidence a merger or acquisition of NEES
or cause a significant change in the makeup of the NEES board of
directors over a short period of time.
Upon the occurrence of a "change in control," restrictions on
all shares issued to participants under the incentive share plan
would cease and the participants would receive an award of shares
for that year, determined in the usual manner, based upon the cash
awards described in the preceding paragraph.
COMPENSATION
Except for Mrs. Bok, all of the Company's officers and
directors are employees of, and are paid by, one or more
subsidiaries of NEES. The individual salaries of officers are
determined in accordance with System-wide policy. The allocation
of these salaries between the subsidiaries, including the Company,
is dependent upon the number of hours worked for each of the
subsidiaries. The following is a report by the NEES Compensation
Committee (made up of outside directors) on the System-wide
compensation policy.
<PAGE>
NEW ENGLAND ELECTRIC SYSTEM COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The System's total compensation package is designed to attract
and retain an array of superior managers whose experience is not
limited to our System or industry. This package consists of Base
Salary, Incentive Compensation (performance based, at risk
compensation), and Benefits. The System's general compensation
philosophy is that the Base Salary ranges should be competitive
with similarly sized electric utilities. A significant portion of
management compensation should be tied to achievement of corporate
goals in order to maintain a sharp focus on performance and to
consistently align the interest of management and the System's
constituencies, i.e. shareholders, consumers, and employees. An
ever higher percentage of total compensation should be at risk as
one moves upward through management. The critical feature of the
System's executive compensation program is that a system has been
employed in which the amount of such compensation is driven by the
System's performance relative to that of other utilities. The
compensation of the CEO is based on the same considerations and
structure as that of the other executive officers. (Since the
total compensation for any of the System's executive officers is
still significantly below the $1 million threshold at which tax
deductions are limited under the recent revisions to the Internal
Revenue Code, the Committee has not had to address issues related
thereto.)
The NEES Board of Directors votes the compensation of Mr. Rowe
and Mrs. Bok, acting upon recommendations of the NEES Compensation
Committee. The Board of Directors unanimously accepted each of the
recommendations made by the Compensation Committee. The
Compensation Committee votes the compensation of all other System
executive officers.
Base Salary
Base Salary levels are established after consideration of the
appropriate market to determine the average or mid-point of the
salary range for a position. Extensive salary survey analyses are
compiled and presented to the Committee for review. Salary ranges
are then defined using market salaries as the mid-points of the
ranges. Base salaries of System executives are brought to range
mid-points in appropriate steps and then capped at the mid-point.
Salary ranges are reviewed annually to ensure competitiveness with
the market for utilities with comparable revenues. (The utility
group used for most salary range valuations is different from that
used for incentive compensation plan comparisons and from that
shown in the corporate performance chart, which include utilities
having different revenue profiles than the System.)
In November 1992, the Compensation Committee reviewed
marketplace surveys to evaluate whether or not salary ranges should
be moved for 1993. It was determined that the System's range
structure was generally competitive with the marketplace, and the
<PAGE>
Committee voted to retain the 1992 salary range structure. This
resulted in freezing the base salaries of the senior executives for
1993. Based upon the increased responsibility he assumed following
the corporate reorganization, the Committee authorized an increase
for Mr. Tranen.
Performance Based Incentive Compensation
Performance Based Incentive Compensation (at risk compensation
or bonus) is designed to deliver rewards above base salary, if the
System and the individual executives perform well.
The incentive components of the compensation plans are based on
formulae with difficult threshold targets. In order for any
incentive compensation to be awarded under the formulae, NEES must
achieve a return on equity that places NEES in the top 45% (50%
commencing in 1994) of the approximately 90 electric utilities
listed in the Duff & Phelps Utility Group (the National Grouping)
or in the top 50% of the New England/New York regional utilities
(the Regional Grouping). The Board of Directors, in response to
extraordinary events, may enhance or curtail the actual return on
equity used to determine whether the System met the targets. They
did not do so for 1993.
For the maximum incentive to be awarded, NEES must achieve a
return on equity in the top 25% of both the National and Regional
Groupings and the System's cost per kilowatthour must be the lowest
or next to lowest of a selected New England electric utility group.
In 1993, if only one of the minimum targets had been met, Mr. Rowe
would have received a bonus (cash and incentive shares as described
below) of 19% of base pay. If the maximum targets had been
achieved, his formula bonus (cash and shares) would have been 76%
of base pay.
No bonus awards are made if earnings after bonuses are not
sufficient to cover dividends, even if the return on equity targets
are met. This insures that shareholders will receive an adequate
return, before any incentive compensation awards are made.
Mr. Rowe's (and Mrs. Bok's for 1993) bonus under the plan is
directly related to achievement of the above described corporate
targets. The incentive compensation plan bonuses of the other
executives are additionally dependent upon the achievement of
individual goals.
Based upon information available at the time of determining
bonus amounts, in 1993 NEES placed in the 68th and the 75th
percentiles in return on shareholder equity of the National and
Regional Groupings, respectively. The System placed in the lowest
one-third of the Regional Grouping with respect to customer cost
per kilowatthour in 1993. The Committee considered the superior
returns on equity, the success of the corporate reorganization, the
improvements in customer service, and the improvement in the
System's safety record. The Committee determined that the
<PAGE>
extraordinary efforts applied in 1993 by Mr. Rowe and Mrs. Bok (as
well as contributions of other officers) to make these achievements
possible were not adequately reflected in the incentive
compensation plan formula awards and merited additional cash awards
for 1993.
The cash portions of the incentive compensation formulae are
driven by annual measurements of the shareholder return on equity
and customer cost of electricity. In order to provide a long-term
component which is reflective of the shareholder total return, the
participants in the incentive compensation plans are awarded NEES
common shares under an incentive share plan, approved by the NEES
shareholders in 1990. The shares are generally restricted against
sale for five years. Shares are only awarded against incentive
compensation plan cash awards generated by the formulae. No
discretion is exercised by the Committee in the awarding of these
restricted shares. An individual's award of shares under the
incentive share plan is a fixed percentage of her or his cash award
for that year from the incentive compensation plan in which she or
he participates. For Mr. Rowe, the percentage was 90% for 1993.
(In response to changes in the federal tax law, the incentive
compensation plans and the incentive share plan were amended to
provide fewer shares and more cash commencing in 1994. Therefore,
for 1994 that percentage will be 60%.) If no cash award is made,
no shares are distributed. Further, total awards of shares in any
calendar year cannot exceed one-half of one percent (0.5%) of the
number of outstanding shares at the end of the previous calendar
year. (The incentive shares awarded for 1993 were 0.06% of the
number of outstanding shares.)
On February 3 and 21, the NEES Compensation Committee approved
the bonuses reflected in the NEES Summary Compensation Table. Mr.
Rowe's and Mrs. Bok's bonuses, as recommended by the Committee,
were voted by the Board on February 22, 1994.
Benefits
The executive benefits are designed both to provide a
competitive package and to retain System flexibility in staffing
management to meet changing conditions. See Plan Summaries and
Retirement Plans, above.
New England Electric System Compensation Committee
George M. Sage, Chairman Felix A. Mirando, Jr.
John M. Kucharski James R. Winoker
SELECTION OF AUDITOR
The Board of Directors recommends that the firm of Coopers &
Lybrand be selected as auditor for the fiscal year ending
December 31, 1994. This firm is the independent certified public
<PAGE>
accountant for the Company and has examined the Company's financial
statements for the previous calendar year. The firm also performs
similar services for NEES and for other NEES subsidiaries.
Since the Company is a subsidiary of a holding company,
attendance at the annual stockholders meeting is minimal and the
representatives of Coopers & Lybrand will not be present but could
be reached on short notice.
This vote requires a majority of the Common Stock and 6%
Cumulative Preferred Stock, voting as a single class. Votes will
be counted by the Company as (i) For, (ii) Against, or (iii)
Abstain; abstentions are counted separately, but have the same
effect as "Against" Votes. Under Massachusetts law and the
Company's By-laws, broker non-votes (uninstructed shares held by
brokers) have the same effect as "against" votes.
OTHER MATTERS
The foregoing is the only business which the Board of Directors
intends to present or is advised that others will present at the
meeting or any adjournment thereof.
The expense of preparing and mailing this Information Statement
will be paid by the Company. Arrangements will be made with
brokerage houses and other custodians, nominees, and fiduciaries to
send information statements to their principals, and the Company
will reimburse them for the expense of doing so.
The Company's annual report for 1993, which includes financial
statements for the last two years and a summary of important
developments during 1993, is being supplied to stockholders of
record. Those financial statements are incorporated by reference
herein. Additional copies of the annual report can be obtained by
writing to the Treasurer, at the offices of the Company, 25
Research Drive, Westborough, Massachusetts 01582.
Certain officers or directors of the Company are or at various
times in the past have been officers and directors of affiliated
companies with which this Company has entered into contracts and
had other business relations.
(facsimile signature)
ROBERT KING WULFF
Clerk
April 14, 1994
