[NM LOGO]
To the Shareholders of
Niagara Mohawk Power Corporation
You are cordially invited to attend the Annual Meeting of your
Corporation to be held at 10:30 a.m. on Tuesday, May 7, 1996 at THE
DESMOND, 660 ALBANY-SHAKER ROAD, ALBANY, NEW YORK 12211.
At this Annual Meeting, you will be asked to elect Class II Directors.
A current report on the affairs of the Corporation will be presented at
the meeting and shareholders will have an opportunity to ask questions.
Your vote is important. Whether or not you plan to attend the Annual
Meeting, please take a moment now to record your vote, sign and date
your proxy card and promptly return it in the self-addressed envelope.
No postage is necessary. You may revoke your voted proxy at any time
prior to the vote being taken at the meeting or vote in person if you
decide to attend the meeting.
We appreciate your continued support and express our appreciation in
advance.
Sincerely,
William E. Davis
Chairman of the Board and
Chief Executive Officer
March 25, 1996
Niagara Mohawk Power Corporation
300 Erie Boulevard West
Syracuse, NY 13202
NOTICE OF ANNUAL MEETING
Niagara Mohawk Power Corporation
300 Erie Boulevard West, Syracuse, New York 13202
Please take notice that the Annual Meeting of Shareholders of Niagara
Mohawk Power Corporation will be held at The Desmond, 660 Albany-Shaker
Road, Albany, New York 12211 on Tuesday, May 7, 1996 at 10:30 a.m. for
the following purposes:
(1) To elect five directors to serve in Class II for a term expiring
at the 1999 Annual Meeting;
(2) To transact such other business as may be properly brought before
the meeting or any adjournment thereof.
Shareholders entitled to vote at the meeting are the holders of Common
Stock of record at the close of business on March 19, 1996.
By Order of the Board of Directors
Kapua A. Rice
Secretary
Dated: March 25, 1996
PROXY STATEMENT
Niagara Mohawk Power Corporation
300 Erie Boulevard West, Syracuse, New York 13202
The enclosed proxy is solicited by the Board of Directors (the "Board
of Directors" or the "Board") of Niagara Mohawk Power Corporation
("Corporation") for use at the Annual Meeting of Shareholders to be
held on May 7, 1996 and at any adjournment thereof. This proxy
statement and the form of proxy, together with the 1995 Annual Report,
are first being mailed to shareholders on or about March 25, 1996.
VOTING RIGHTS AND VOTE REQUIRED
The close of business on March 19, 1996 has been fixed as the record
date for determining the holders of Common Stock entitled to vote at
the meeting. Only shareholders of Common Stock whose names appeared of
record on the books of the Corporation on the record date will be
entitled to notice of and to vote at the meeting and at any adjournment
thereof. On the record date there were 144,332,855 shares of Common
Stock outstanding and entitled to vote. Each share of Common Stock is
entitled to one vote.
Shareholders are urged to sign the accompanying form of proxy and
return it promptly in the envelope provided for that purpose. The proxy
does not affect the right to vote in person at the meeting and, if
voted, may be revoked at any time prior to the vote being taken at the
meeting. Proxies will be voted in accordance with the shareholders'
directions. If no directions are given, proxies will be voted for the
election of the nominees for directors set forth in this Proxy
Statement. In the event any nominee withdraws or is for any reason
unable to serve, a contingency not presently anticipated, proxies will
be voted for any nominee that may be designated by the Board of
Directors as a substitute nominee.
A majority of the shares entitled to vote at the meeting shall
constitute a quorum. A plurality of the votes cast at the meeting is
required for the election of directors. Except where otherwise provided
by law, an affirmative vote of a majority of the votes cast at the
meeting is required for approval of any other matter. Abstentions and
broker non-votes will not be considered as votes cast with respect to a
particular matter, but will be counted in the number of shares present
in person or represented by proxy for purposes of determining whether a
quorum is present.
Voting is confidential, in accordance with the provisions of Sections 8
and 9 of Article II of the By-Laws of the Corporation. Tabulation of
proxies and the votes cast at the meeting is conducted by an
independent agent and certified by independent inspectors of election.
Any information which would identify the vote of any shareholder is
held permanently confidential and will not be disclosed to the
Corporation, except in limited circumstances set forth in such Sections
of the By-Laws.
NOMINATION AND ELECTION OF DIRECTORS
At the meeting, five directors will be elected to Class II of the Board
of Directors for three-year terms expiring at the 1999 Annual Meeting
or until their respective successors are duly elected and qualified.
Directors will be elected by a plurality of the votes cast at the
meeting.
In accordance with the Corporation's Certificate of Incorporation, the
Board of Directors is divided into three classes, composed of as nearly
equal a number of directors as is possible, with staggered terms of
office so that one class of the directors must be elected at each
annual meeting.
The Board of Directors currently consists of fifteen directors. Mr.
Anthony H. Gioia was elected to the Board of Directors in February,
1996. Mr. Edward W. Duffy, who has served as director for 23 years,
will retire from the Board of Directors at the 1996 Annual Meeting and
the Board of Directors is deeply appreciative of the contributions made
by Mr. Duffy. As a result, the Corporation will have fourteen directors
as of the 1996 Annual Meeting. All nominees are members of the present
Board of Directors.
As applicable to each nominee and continuing director, the name, age as
of March 1, 1996, principal occupation, business experience for the
last five years or more, other directorships and the year in which
first elected a director, are set forth below.
BUSINESS BACKGROUND OF NOMINEES AND DIRECTORS
NOMINEES FOR CLASS II DIRECTORS'TERMS EXPIRING IN 1999
[PHOTO] WILLIAM F. ALLYN
William F. Allyn, age 60, is President of Welch Allyn, Inc.,
Skaneateles Falls, N.Y., a manufacturer of medical equipment. Mr. Allyn
joined Welch Allyn, Inc. in 1962 and was elected to his present
position in 1980. Director of ONBANCorp., Inc.; Oneida Limited; and
Perfex Corporation. Mr. Allyn has been a director of this Corporation
since 1988.
[PHOTO] WILLIAM E. DAVIS
William E. Davis, age 53, was elected Chairman of the Board and Chief
Executive Officer in 1993. Mr. Davis joined the Corporation in 1990 as
Vice President-Corporate Planning and was elected Senior Vice President
in April 1992, serving in that capacity until elected Vice-Chairman of
the Board of the Corporation in November 1992. Prior to that, Mr.
Davis was executive deputy commissioner of the New York State Energy
Office. Director of Opinac Energy Corporation, a wholly-owned
subsidiary of the Corporation, and its subsidiaries, Canadian Niagara
Power Company, Limited and Plum Street Enterprises, Inc.; and Utilities
Mutual Insurance Company. Mr. Davis has been a director of this
Corporation since 1992.
[PHOTO] WILLIAM J. DONLON
William J. Donlon, age 66, retired in 1993 as Chairman of the Board and
Chief Executive Officer of the Corporation with 45 years service as an
active employee. Director of Opinac Energy Corporation, a wholly-owned
subsidiary of the Corporation, and its subsidiary, Canadian Niagara
Power Company, Limited; and ONBANCorp., Inc. Mr. Donlon has been a
director of this Corporation since 1980.
[PHOTO] ANTHONY H. GIOIA
Anthony H. Gioia, age 54, is Chairman and Chief Executive Officer of
Gioia Management, Inc., a holding company for several companies,
including three packaging companies, Cello-Pak, Corson Packaging and
Armor Box, located in Buffalo and Lockport. Mr. Gioia has held his
present position since 1987. Mr. Gioia was elected to the Board
effective April 1, 1996.
[PHOTO] DR. PATTI McGILL PETERSON
Patti McGill Peterson, age 52, is President of St. Lawrence University,
Canton, N.Y. Dr. Peterson has held her present position since 1987.
Director of Security Mutual Life Insurance Company of New York. Trustee
of John Hancock Mutual Funds. Dr. Peterson has been a director of this
Corporation since 1988.
CONTINUING CLASS I DIRECTORS - TERMS EXPIRING IN 1998
[PHOTO] ALBERT J. BUDNEY, JR.
Albert J. Budney, Jr., age 48, was elected President of the Corporation
effective April 1995. Mr. Budney was previously employed by UtiliCorp
United, Inc., an energy services company, as Managing Vice President of
the UtiliCorp Power Services Group and as President of the Missouri
Public Service Division. From 1990-1992, he held the position of Vice
President with Stone & Webster Inc., an engineering firm. Director of
Opinac Energy Corporation, a wholly-owned subsidiary of the
Corporation, and its subsidiaries, Canadian Niagara Power Company,
Limited and Plum Street Enterprises, Inc.; and Utilities Mutual
Insurance Company. Mr. Budney has been a director of this Corporation
since 1995.
[PHOTO] EDMUND M. DAVIS
Edmund M. Davis, age 66, became of counsel to Hiscock & Barclay, LLP,
Syracuse, N.Y., Attorneys-at-Law, effective July 1, 1995. Mr. Davis has
been associated with the law firm since 1957. Member of the Central
Region Board of Directors of Marine Midland Bank. Mr. Davis has been a
director of this Corporation since 1970.
[PHOTO] DR. BONNIE GUITON HILL
Bonnie Guiton Hill, age 54, is the Dean and Professor of Commerce of
the McIntire School of Commerce at the University of Virginia. Dr. Hill
has held her present position since 1992. Prior to that, she served as
the Secretary of State and Consumer Services Agency for the State of
California. During 1990 she was President and Chief Executive Officer
of Earth Conservation Corps., and from 1989 to 1990, she served as
Special Advisor to the President and Director of the United States
Office of Consumer Affairs. Director of AK Steel Corporation; Crestar
Financial Corporation; Hershey Foods Corporation; Louisiana-Pacific
Corporation; and RREEF America, Inc. Dr. Hill has been a director of
this Corporation since 1991.
[PHOTO] HENRY A. PANASCI, JR.
Henry A. Panasci, Jr., age 67, is Chairman of the Board and Chief
Executive Officer of Fay's Incorporated, a drug store chain. Mr.
Panasci has held his present position since 1976. Prior to that he
co-founded Fay's Drug Co., Inc. with his father in 1958 and was elected
president in 1966. Director of the National Association of Chain Drug
Stores. Mr. Panasci has been a director of this Corporation since
1988.
CONTINUING CLASS III DIRECTORS' TERMS EXPIRING IN 1997
[PHOTO] LAWRENCE BURKHARDT, III
Lawrence Burkhardt, III, age 63, is an independent consultant. Prior to
his retirement in 1990, Mr. Burkhardt was employed by the Corporation
and served as Executive Vice President of Nuclear Operations. Director
of Management Analysis Company. Mr. Burkhardt has been a director of
this Corporation since 1988.
[PHOTO] DOUGLAS M. COSTLE
Douglas M. Costle, age 56, is a Distinguished Senior Fellow and
Chairman of the Board of the Institute for Sustainable Communities in
Montpelier, Vt., and is of counsel to the law firm of Updike, Kelly and
Spellacy. Mr. Costle served as Dean of the Vermont Law School in South
Royalton, Vermont from 1987 until 1991. Former Administrator of the
U.S. Environmental Protection Agency. Director of Air and Water
Technologies Corporation. Trustee of John Hancock Mutual Funds. Mr.
Costle has been a director of this Corporation since 1991.
[PHOTO] DONALD B. RIEFLER
Donald B. Riefler, age 68, is self-employed as a financial market
consultant and is an advisor to J. P. Morgan, Florida FSB. Prior to his
retirement in 1991, Mr. Riefler was Chairman of the Market Risk
Committee for J. P. Morgan & Co. Incorporated and Morgan Guaranty Trust
Company of New York. Director of Bank of Tokyo Trust Company. Mr.
Riefler has been a director of this Corporation since 1978.
[PHOTO] STEPHEN B. SCHWARTZ
Stephen B. Schwartz, age 61, retired in 1992 as Senior Vice President,
Market-Driven Quality, of International Business Machines Corporation.
Mr. Schwartz joined IBM in 1957 and was elected Senior Vice President
in 1990. From 1982, he served as an officer in a wide variety of sales,
development, manufacturing, staff and general management positions.
Director of MFRI, Inc. Mr. Schwartz has been a director of this
Corporation since 1992.
[PHOTO] JOHN G. WICK
John G. Wick, age 71, retired in June, 1994, as of counsel to Falk &
Siemer, Buffalo, N.Y., Attorneys-at-Law. Mr. Wick had been a partner
with Falk & Siemer since 1985 and has engaged in the practice of law
since 1952. Mr. Wick has been a director of this Corporation since
1976.
BOARD OF DIRECTORS AND COMMITTEES
Meetings and Attendance
During 1995, thirteen meetings of the Corporation's Board of Directors
were held. Each director serving in 1995 attended 87% ormore of the
combined total of meetings of the Board of Directors and the Committees
on which he or she served.
There are six standing Committees of the Board: the Audit Committee,
the Compensation and Succession Committee, the Committee on Corporate
Public Policy and Environmental Affairs, the Executive Committee, the
Finance Committee and the Nuclear Oversight Committee. The Board does
not have a standing Nominating Committee to nominate candidates for
Board membership, but functions as a committee of the whole. Any
nomination may be made from the floor by any shareholder who has made a
written request to the Corporation to have such nomination considered
at the annual meeting in accordance with the requirements of the
Corporation's By-Laws. Information with respect to the Audit Committee
and the Compensation and Succession Committee is set forth below.
Audit Committee
The Audit Committee, consisting of John G. Wick, Chairperson, William
F. Allyn, Bonnie Guiton Hill, Patti McGill Peterson and Donald B.
Riefler, all of whom are non-employee directors, met seven times in
1995. Duties performed by the Audit Committee include: meeting with the
independent accountants, chief internal auditors and certain personnel
of the Corporation to discuss the planned scope of auditing
examinations and the adequacy of internal controls and interim and
annual financial reporting; reviewing the results of the annual
examination of the consolidated financial statements and periodic
internal audit examinations; reviewing the services and fees of the
Corporation's independent accountants; overseeing matters involving
compliance with corporate business ethics policies; reviewing
management's assessment of financial risks; authorizing and
participating in special projects and studies; and performing any other
duties or functions deemed appropriate by the Board.
Compensation and Succession Committee
The Compensation and Succession Committee, consisting of Edward W.
Duffy, Chairperson, William F. Allyn, Edmund M. Davis, Henry A.
Panasci, Jr. and Stephen B. Schwartz, all of whom are non-employee
directors, met eight times during 1995. The Committee reviews the
annual and incentive compensation of the elected officers of the
Corporation, the Corporation's pension and health benefit funds,
savings fund, nuclear decommissioning trust funds, and officer
development and succession plans, and makes recommendations to the
Board of Directors with respect to these matters; regularly reviews the
assets held by the various Trustees for the Corporation's trust funds
and meets with investment managers to review earnings on assets held in
the Trust funds when appropriate; selects, appoints or terminates
investment managers and investment advisors and recommends to the Board
of Directors continuation or replacement of any of the Trustees for
these funds; and meets with the Corporation's actuarial advisor to
review the advisor's annual reports and progress toward funding the
pension and post-retirement health plans.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows the persons (as the term is used in Section
13(d)(3) of the Securities Exchange Act of 1934) known to the
Corporation to beneficially own more than five percent (5%) of the
Corporation's Common Stock as of December 31, 1995. It also shows the
same information for all directors of the Corporation, the executive
officers named in the Summary Compensation Table below and the
directors and executive officers of the Corporation as a group.
<TABLE>
<CAPTION>
Amount
and
Nature of
Beneficial Percent
Title of Class Name and Address of Beneficial Owner Owner** of Class
___________ __________________________________ _________ _______
<S> <C> <C> <C>
Common Stock Fidelity Management Trust Co. 11,136,566(1) 7.72 %
82 Devonshire Street
Boston, Massachusetts 02109
Franklin Resources, Inc. 8,061,410(2) 5.6 %
777 Mariners Island Blvd.
San Mateo, California 94404
Directors:
________
William F. Allyn 1,000 *
Albert J. Budney, Jr. 0 -
Lawrence Burkhardt, III 452 *
Douglas M. Costle 500 *
Edmund M. Davis 2,274 *
William E. Davis 14,422(3) *
William J. Donlon 15,343(4) *
Edward W. Duffy 3,234 *
Anthony H. Gioia 500(5) *
Bonnie Guiton Hill 700 *
Henry A. Panasci, Jr. 2,500 *
Patti McGill Peterson 500 *
Donald B. Riefler 1,000 *
Stephen B. Schwartz 500 *
John G. Wick 1,320 *
Named Executives:
________________
B. Ralph Sylvia 11,585(6) *
John W. Powers 19,530(7) *
Darlene D. Kerr 8,531(8) *
All Directors and Executive
Officers (23) as a group 106,994(9) *
</TABLE>
* Less than one percent.
** Based on information furnished to the Corporation by the Directors
and Executive Officers. Includes shares of Common Stock credited under
the Employee Savings Fund Plan as of December 31, 1995.
(1)Fidelity Management Trust Company serves as Trustee. The above
represents shares in the Corporation's Employee Savings Fund Plans for
Non-Represented Employees and Represented Employees. The Trustee will
vote all shares of Common Stock held in the Trusts established for the
Plans in accordance with the directions received from the employees
participating in the Plans. The Trustee will vote shares for which it
receives no instructions in the same proportion as it votes shares for
which it receives instructions.
(2)Includes 7,991,000 shares with respect to which Franklin Resources,
Inc. ("Franklin") has sole voting power and 8,061,410 shares with
respect to which Franklin has shared dispositive power, as reported on
Schedule 13G, dated February 12, 1996, filed with the SEC.
(3)Includes presently exercisable options for 12,625 shares of Common
Stock.
(4)Includes presently exercisable options for 13,333 shares of Common
Stock.
(5)Shares of Common Stock beneficially owned as of March 1, 1996.
(6)Includes presently exercisable options for 8,000 shares of Common
Stock.
(7)Includes presently exercisable options for 6,000 shares of Common
Stock.
(8)Includes presently exercisable options for 3,000 shares of Common
Stock.
(9)Includes presently exercisable options at January 27, 1996 for
57,958 shares of Common Stock.
Section 16(a) Compliance
Section 16(a) of the Securities and Exchange Act of 1934 requires the
Corporation's directors and executive officers to file initial reports
of ownership and reports of changes in ownership of the Corporation's
equity securities with the Securities and Exchange Commission ("SEC")
and the New York Stock Exchange. Based solely on a review of the copies
of such forms and written representations from the Corporation's
directors and executive officers, the Company believes that during the
preceding year the Corporation's directors and executive officers have
complied with all Section 16(a) filing requirements with the exception
of one late report. Mr. John G. Wick, a director, failed to timely file
Form 4, Statement of Changes of Beneficial Ownership of Securities, to
report that he sold 1,200 shares and 2,700 shares of the Corporation's
Preferred Stock, 9 1/2% Series, on September 1, 1995.
BOARD OF DIRECTORS' COMPENSATION AND SUCCESSION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Compensation and Succession Committee of the Board of Directors
(the "Committee") is composed entirely of non-employee directors. The
Committee has responsibility for recommending officer salaries and for
the administration of the Corporation's annual officer incentive
compensation plan, performance share unit plan, stock option plan and
the 1995 Stock Incentive Plan. The Committee makes recommendations to
the Board of Directors which makes final officer compensation
determinations.
This Committee report describes the Corporation's executive officer
compensation policies, the components of the compensation program, and
the manner in which 1995 compensation determinations were made for the
Corporation's Chairman of the Board and Chief Executive Officer, Mr.
William E. Davis.
Base Salary
The Committee seeks to ensure that salaries of the Corporation's
officers including executive officers, remain competitive with levels
paid to comparable positions among 23 Eastern Region investor-owned
electric and gas utilities (the same companies included in the peer
group shown on the performance graph - the "Peer Group") together with
other U.S. electric and gas utilities with comparable revenues
(collectively referred to as the "Comparator Utilities"). The
Committee believes that competitive salaries provide the foundation of
the Corporation's officer compensation program and are essential for
the Corporation to attract and retain qualified officers, especially in
light of the increasing competition within the industry. Each officer
position has been assigned to a competitive salary range. The Committee
annually evaluates the continued competitiveness of these ranges and
approves adjustments based on compensation survey data for the
Comparator Utilities. The Committee intends to administer salaries
within the 25th to 75th percentiles of practice with respect to those
Comparator Utilities. The 1995 salary of the Chief Executive Officer
and the average salary of the other four named executive officers fall
below median (50th percentile) competitive levels. The Committee also
annually evaluates each officer's performance and salary position
within the range to which that position has been assigned. Taking these
factors into account, the Committee independently determines the salary
of the Chief Executive Officer ("CEO") and reviews recommendations
submitted by the CEO in approving the salaries of the other executive
officers.
1995 Stock Incentive Plan
On December 14, 1995, the Board of Directors approved the Corporation's
1995 Stock Incentive Plan ("SIP") applicable to officers to promote the
success and enhance the value of the Corporation through the retention
and continued motivation of participants, focusing their efforts toward
the execution of business strategies directed toward improving
financial returns to shareholders. Awards under the SIP consist of
stock units and stock appreciation rights ("SARs"). The stock unit
grants will be paid in cash in early 1998 based on the average closing
price of the Corporation's common stock during the last twelve
consecutive trading days in 1997. Dividends are credited with respect
to all stock units granted. These credits are reinvested at the
prevailing stock price, thereby increasing the number of stock units
payable at the end of the period. The SARs first become exercisable on
January 2, 1998 and may be exercised until they expire on December 31,
2002.
The SIP was structured so that any compensation earned by officers
during the two-year period 1996 and 1997, in addition to base salary,
will be based on the Corporation's year-end 1997 stock price and total
returns realized by shareholders during this period. Accordingly,
participants (including the executive officers listed in the Summary
Compensation Table) will not receive any salary increases (except to
reflect promotions), annual bonus payments or stock option grants
during 1996 and 1997 and must surrender their rights to payment with
respect to Performance Share Units granted in 1995 for the 1995-1997
period. Generally speaking, SIP grants were structured so that the
Corporation's stock price would have to more than double during this
two-year period in order for the total compensation of the participants
to approximate median competitive levels. Since the stock units granted
under the SIP will be paid in early 1998, and the Committee wishes to
provide for a continuous program of long-term stock incentives
thereafter, the Committee intends to grant share units for the
1996-1998 period. Any awards paid pursuant to these grants will be paid
in early 1999, one year after the SIP stock unit grants have been paid
and the SAR grants first become exercisable.
Annual Officer Incentive Compensation Plan ("OICP")
On December 13, 1990 the Board of Directors adopted the Corporation's
OICP for officers and the Management Incentive Compensation Plan
("MICP")for management employees. The OICP is structured and
administered so that a significant component of each officer's annual
cash compensation must be earned on the basis of the Corporation's and
the officer's annual performance. Incentive award opportunities for
1995 were set by the Committee at 35% of salary for Mr. Davis and at
20% to 35% for all other officers. The opportunities represent the
maximum OICP payment an officer could earn with respect to 1995. OICP
award opportunities are intended to position officer annual
compensation (salary + OICP awards) within the 25th to 75th percentile
of Comparator Utility practice depending on company financial, business
and support unit performance.
As a condition of their participation in the 1995 Stock Incentive Plan,
all officers will forego payment of annual bonuses in 1996 and 1997
under the OICP.
For the 1995 plan year, an incentive pool funding mechanism was used in
the OICP as well as the MICP. If actual earnings per share ("EPS") were
below budgeted EPS, there would be no incentive pool and consequently
no payments to officers or management employees. If actual EPS equaled
budgeted EPS, 50% of the maximum awards would be placed into the
incentive pool. If EPS were to equal or exceed a maximum level, 100% of
maximum awards would be placed into the incentive pool. The payment of
actual awards from the incentive pool depends on the achievement of
preestablished operating and financial criteria. Actual EPS would be
determined after the cost of the awards under the OICP and MICP. In
addition to the incentive pool funding mechanism, awards from the OICP
and MICP were predicated on the maintenance of 1995 dividend payments
at least equal to 1994 levels.
Since 1995 EPS was below the minimum required level, no OICP or MICP
awards were paid.
Performance Share Unit Plan
On January 30, 1992, the Board of Directors adopted the Performance
Share Unit Plan to provide executive officers of the Corporation with
the opportunity to earn longer-term incentive awards, payable in cash
at the end of a three-year period (the "Performance Cycle"), based on
the achievement of performance results which provide appropriate
financial returns to the Corporation's shareholders and quality
services to its customers.
The number of performance share units ("PSUs"), together with the stock
options described below, which are granted each year is based on an
evaluation of the long-term incentive award opportunities provided by
the Comparator Utilities. The Committee endeavors to position long-term
incentive grants in the top quartile relative to the practices of these
utilities. However, any amounts realized under the Performance Share
Unit Plan are largely dependent upon the performance of the Corporation
in relation to that of the Peer Group during the 3-year Performance
Cycle.
The number of PSUs that are earned out of the total granted at the end
of the 1995-1997 Performance Cycle will be based on (1) total
shareholder return i.e., market appreciation plus dividends (75% of
PSUs), and (2) the quality of service the Corporation provides its
customers (25% of PSUs) during the Performance Cycle measured relative
to the Peer Group. To earn all the PSUs, the Corporation's relative
ranking on total shareholder return would have to equal or exceed the
85th percentile of the Peer Group and the relative ranking on customer
satisfaction would have to equal or exceed the 75th percentile. The
earning of any PSUs under (1) above is conditioned on the Corporation's
3-year total return to shareholders equaling the 25th percentile for
the Peer Group. Dividends are credited with respect to all PSUs granted
during the Performance Cycle. These dividend credits are reinvested at
the prevailing stock price, thereby increasing the number of PSUs
available to be earned during the Performance Cycle. The cash payment
value of each performance share unit earned will be equal to the
Corporation's average daily closing stock price during the fourth
quarter of the last year of the Performance Cycle.
As previously described, as a condition of participation in the 1995
Stock Incentive Plan, participants must surrender their rights to
payment with respect to performance share units granted for the
1995-1997 performance period.
Stock Option Plan
On May 5, 1992, the shareholders approved the Corporation's 1992 Stock
Option Plan applicable to officers. The purpose of this plan is to
promote the interests of the Corporation, its shareholders, and its
ratepayers by ensuring continuity of management and increased incentive
on the part of officers and other key employees of the Corporation and
its subsidiaries through facilitating their acquisition of equity
interests in the Corporation. These options are intended to compensate
participants commensurate with future increases in stock price.
Dividends are credited on all outstanding options and are regarded as
having been reinvested to purchase shares of the Corporation's common
stock. At the time the option is exercised, the officer receives a cash
payment equal to the value of the dividend share credits at the
prevailing stock price.
In connection with implementation of the 1995 Stock Incentive Plan, the
Board of Directors determined not to grant any stock options during
1996 and 1997.
Compensation of William E. Davis, Chairman of the Board and Chief
Executive Officer
Mr. Davis became CEO on May 1, 1993. During 1995, Mr. Davis' salary was
increased by 8.8% to his present annual level of $490,000. The
Committee has been advised by its consultant that Mr. Davis' 1995
salary falls below the median relative to the CEOs of the Comparator
Utilities. Early in 1995, the Committee approved the grant of 25,000
PSUs under the Performance Share Unit Plan to Mr. Davis (which grant
must be surrendered in connection with the grants under the 1995 Stock
Incentive Plan described below). On January 25, 1995 the Corporation
granted 10,000 stock options to Mr. Davis. These options become
exercisable on January 25, 1998 and expire on January 25, 2005, ten
years following the date they were granted. On December 13, 1995, the
Board granted Mr. Davis 25,000 stock units and 142,500 SARs, with an
exercise price of $10.75, under the 1995 Stock Incentive Plan.
Mr. Davis' salary increase reflected an evaluation of his performance
and the fact that his salary was below the median relative to
Comparator Utility practice. His stock option and PSU grants were
determined with reference to the 75th percentile of Comparator Utility
practice. Mr. Davis' SIP stock unit and SAR grants were intended to
maintain the competitiveness of his total compensation during the 1996
and 1997 period within the 25th to 75th percentiles of Comparator
Utility practice, based on the Corporation's stock price, considering
that his salary would not be increased and that he would receive no
annual bonuses and no stock options during this two-year period.
_____________________
The Committee is aware of the limitations that tax legislation has
placed on the tax deductibility of compensation in excess of $1 million
which is paid in any year to an executive officer. Currently none of
the executive officers has received compensation subject to such
limitations. The Committee believes that payments received under the
OICP, Performance Share Unit Plan, Stock Option Plan and 1995 Stock
Incentive Plan will reflect Company performance, and it will continue
to monitor developments in this area and take appropriate actions to
preserve the tax deductibility of compensation paid to executive
officers, should this become necessary.
Through the combination of base salary, and during 1996 and 1997, the
combination of stock unit and stock appreciation right grants, the
Committee seeks to focus the efforts of officers toward improving,
annually and over the longer-term, the financial returns for its
shareholders.
Edward W. Duffy, Chairperson
William F. Allyn
Edmund M. Davis
Henry A. Panasci, Jr.
Stephen B. Schwartz
EXECUTIVE COMPENSATION
The table below sets forth all compensation paid by the Corporation and
its wholly-owned subsidiaries for services rendered in all capacities
during the fiscal years ended December 31, 1995, December 31, 1994 and
December 31, 1993, to the Chairman of the Board and Chief Executive
Officer and to each of the other four most highly compensated Executive
Officers of the Corporation for the fiscal year ended December 31,
1995.
<TABLE>
<CAPTION>
Summary Compensation Table
Fiscal Years 1995, 1994 and 1993
Long Term Compensation
_______________________
Annual Compensation Securities
_________________________________
Other Restricted Underlying All Other
Annual Stock Options/ Compensation
Name Position Year Salary(A) Bonus Compensation Awards($)(D) SARs(#) (E)
_____ _______ ____ _________ ______ ____________ ____________ _________ ____________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
W. E. Davis Chairman of the 1995 $490,542 $ 0 $ 0 $246,875 152,500 $ 18,729
Board and Chief 1994 457,867 0 0 - 20,000 28,591
Executive Officer 1993 394,045 40,632 65,314 - 11,125 123,692
A. J. Budney, Jr. President and 1995 237,251 50,000(B) 32,727(C) 148,125 76,000 47,541
Chief Operating 1994 - - - - - -
Officer 1993 - - - - - -
B. R. Sylvia Executive Vice 1995 295,001 0 0 98,750 49,000 24,832
President 1994 290,834 0 0 - 5,000 8,061
1993 280,834 58,921 0 - 5,000 7,970
J. W. Powers Senior Vice 1995 228,251 0 0 0 22,000 39,466
President 1994 206,683 0 0 0 3,000 8,454
1993 196,651 27,899 0 - 3,000 8,383
D. D. Kerr Senior Vice 1995 191,085 0 0 74,063 31,500 7,338
President(F) 1994 183,968 0 0 - 3,000 6,829
1993 - - - - - -
</TABLE>
(A) Includes all employee contributions to the Employee Savings Fund
Plan; for Messrs. Davis, Budney, and Powers, Directors' fees received
from Opinac Energy Corporation; and for Mr. Davis, in 1993, Director
fees received from the Corporation.
(B) 1995 bonus for Mr. Budney represents a bonus for 1995 guaranteed at
the time he was hired if OICP EPS thresholds were not met.
(C) 1995 Other Annual Compensation for Mr. Budney represents amounts
reimbursed for payment of taxes associated with relocation expenses.
(D) Stock Units were granted pursuant to the 1995 Stock Incentive Plan.
These stock units vest and become payable on December 31, 1997.
Dividend equivalents will be credited on all stock units and will be
paid in cash when the related stock units are paid. The values listed
in the table were calculated by multiplying the stock units granted by
the closing market price of the company's stock ($9.875) on the date of
the grant (12/13/95). As of the end of the 1995 fiscal year, based on a
closing market price of $9.50, Mr. Davis held 25,000 stock units
having a market value of $237,500; Mr. Budney held 15,000 stock units
having a market value of $142,500; Mr. Sylvia held 10,000 stock units
having a market value of $95,000; and Ms. Kerr held 7,500 stock units
having a market value of $71,250.
(E) Other Compensation for 1995 includes:
Employer contributions to the Corporation's Employee Savings Fund
Plan:Mr. Davis ($3,000), Mr. Sylvia ($3,000), Mr. Powers ($4,500), and
Ms. Kerr ($4,500); Taxable portion of life insurance premiums: Mr.
Davis ($9,259), Mr. Budney ($1,104), Mr. Sylvia ($3,537), Mr. Powers
($3,502), and Ms Kerr ($1,652); Employer contributions to the
Corporation's Excess Benefit Plan: Mr. Davis ($6,470), Mr. Sylvia
($1,425), Mr. Powers ($1,464), and Ms. Kerr ($1,186); Payments under
the Corporation's Relocation Policy: Mr. Budney ($46,437); Lump-sum
payment in lieu of increase in base annual salary: Mr.Sylvia ($15,000);
Lump-sum payment following successful closing of the sale of HYDRA-CO
Enterprises, Inc.: Mr. Powers ($30,000); Personal Travel Allowance: Mr.
Sylvia ($1,621); Miscellaneous Non-Cash Awards: Mr. Sylvia ($249).
(F) Ms. Kerr was appointed an Executive Officer effective January 1,
1994.
The following table discloses, for the Chairman of the Board and Chief
Executive Officer, Mr. William E. Davis, and the other named
executives, the number and terms of options granted during the fiscal
year ended December 31, 1995.
<TABLE>
<CAPTION>
Option/SAR Grants in Last Fiscal Year
Individual Grants
______________________________________________________________________
Number of of Total
Securities Options/SARs
Underlying Granted to
Options/SARs Employees Exercise or Grant Date
Granted In Fiscal Base Price Expiration Present
Name (#)(A) Year (B) Per Share Date(C) Value (D)
_____________ ___________ _________ __________ ___________ __________
<S> <C> <C> <C> <C> <C>
W. E. Davis 10,000 11.71% $14.75 1/25/2005 $ 28,910
W. E. Davis 142,500 34.42% 10.75 12/31/2002 206,910
A. J. Budney, Jr. 10,000 11.71% 14.00 4/03/2005 27,440
A. J. Budney, Jr. 66,000 15.94% 10.75 12/31/2002 95,832
B. R. Sylvia 5,000 5.86% 14.75 1/25/2005 14,455
B. R. Sylvia 44,000 10.63% 10.75 12/31/2002 63,888
J. W. Powers 3,000 3.51% 14.75 1/25/2005 8,673
J. W. Powers 19,000 4.59% 10.75 12/31/2002 27,588
D. D. Kerr 3,000 3.51% 14.75 1/25/2005 8,873
D. D. Kerr 28,500 6.88% 10.75 12/31/2002 41,382
</TABLE>
(A) The first grant listed for each officer represents a grant of stock
options made under the Stock Option Plan, while the second grant
represents stock appreciation rights granted under the 1995 Stock
Incentive Plan. The issuance of common stock pursuant to the Stock
Option Plan is subject to approval by the New York State Public Service
Commission.
(B) Percentages are shown separately for stock options and SARs as
applicable.
(C) Stock Options become exercisable January 25, 1998 (for Mr. Davis,
Mr. Sylvia, Mr. Powers and Ms. Kerr) and April 3, 1998 (for Mr.
Budney), and Stock Appreciation Rights become exercisable January 2,
1998. All SARs become exercisable upon a Change In Control.
(D) The Grant Date Present Value of Stock Options is calculated using
the Black-Scholes Option Pricing Model with the following assumptions:
market price of the stock at January 25, 1995 grant date ($14.75) and
at April 3, 1995 grant date ($14.00); exercise price of options that
expire on January 25, 2005 ($14.75) and options that expire on April 3,
2005 ($14.00); stock volatility (0.1731); dividend yield (4.94%); risk
free rate (7.50%); exercise term (10 years); Black-Scholes ratio
(0.196); and Black-Scholes value ($2.891) for options that expire on
January 25, 2005 and ($2.744) for options that expire on April 3, 2005.
The Black-Scholes values do not reflect dividend share equivalents
credited on all outstanding stock options which will be paid when the
associated stock options are exercised. The Grant Date Present Value of
Stock Appreciation Rights is also calculated using the Black-Scholes
Option Pricing Model with the following assumptions: market price of
the stock at December 13, 1995 grant date ($9.875); exercise price of
rights that expire on December 31, 2002 ($10.75); stock volatility
(0.2376); dividend yield (6.45%); risk free rate (5.70%); exercise term
(8 years); Black-Scholes ratio (0.147); and Black-Scholes value
($1.452) for rights that expire on December 31, 2002.
The following table summarizes exercises of options by the Chairman of
the Board and Chief Executive Officer, Mr. William E. Davis, and the
other named executives, the number of unexercised options held by them
and the spread (the difference between the current market price of the
stock and the exercise price of the option, to the extent that market
price at the end of the year exceeds exercise price) on those
unexercised options for fiscal year ended December 31, 1995.
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
Number of
Securities Underlying Value of Unexercised
Unexercised Options/SARs Options/SARs At
At Fiscal Year End (#) Fiscal Year-End ($) (A)
__________________________ _____________________________
Shares
Acquired on Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
_____ ___________ ___________ __________ ____________ ___________ _____________
<S> <C> <C> <C> <C> <C> <C>
W. E. Davis 0 $0 1,500 183,625 $0 $0
A. J. Budney, Jr. 0 0 0 76,000 0 0
B. R. Sylvia 0 0 3,000 59,000 0 0
J. W. Powers 0 0 3,000 28,000 0 0
D. D. Kerr 0 0 1,500 36,000 0 0
</TABLE>
(A) Calculated based on the closing market price of the Corporation's
common stock on December 29, 1995 ($9.50), which is less than the
exercise price of all unexercised options.
The following table outlines the awards granted to the Chairman of the
Board and Chief Executive Officer, Mr.William E. Davis, and the other
named executives under the Corporation's Performance Share Unit Plan, a
long-term incentive plan, for the fiscal year ended December 31, 1995.
These grants must be surrendered as a condition of receiving restricted
stock units granted under the 1995 Stock Incentive Plan. See Restricted
Stock Award Column in Summary Compensation Table for information
regarding the restricted stock unit grants.
<TABLE>
Long-Term Incentive Plan - Awards in Last Fiscal Year
Estimated Future Payouts
Under Non-Stock Price-Based Plans
_______________________________
Number Performance
of Share or Other
Units or Period Until
Other Rights Maturation Threshold Target Maximum
Name (#) Or Payout (#)(A) (#)(B) (#)
_____ _____________ ___________ _________ ________ _________
<S> <C> <C> <C> <C> <C>
W. E. Davis 25,000 1998 6,250 - 25,000
A. J. Budney, Jr. 11,458 1998 2,865 - 11,458
B. R. Sylvia 10,000 1998 2,500 - 10,000
J. W. Powers 6,000 1998 1,500 - 6,000
D. D. Kerr 6,000 1998 1,500 - 6,000
</TABLE>
(A) The number of units listed in this column represent the units
earned at threshold performance on both goals in the plan (i.e., Total
Shareholder Return- 75%, Customer Satisfaction - 25%).
(B) The Performance Share Unit Plan does not have a target payout.
Awards between threshold and maximum are determined by interpolation.
For more details regarding plan performance criteria, refer to the
section in the Compensation Committee Report entitled "Performance
Share Unit Plan."
NIAGARA MOHAWK POWER CORPORATION
Comparison of Five Year Cumulative Total Return(1)
vs. S&P 500 and Peer Group of Eastern Region Utilities
[ILLUSTRATION OF PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
NMPC 100.00 138.78 154.55 170.71 128.68 93.77
S&P 500 100.00 130.47 140.41 154.56 156.60 215.45
Peer Group 100.00 129.12 148.10 161.65 139.02 183.89
</TABLE>
Assumes $100 invested on 12-31-90 in Niagara Mohawk stock, S&P 500 and
Eastern Region utilities. All dividends assumed to be reinvested over
the five-year period.
PEER GROUP OF EASTERN REGION UTILITIES:
Allegheny Power System Inc. Long Island Lighting Co.
Atlantic Energy, Inc. National Fuel Gas Company
Baltimore Gas & Electric Company New England Electric System
Boston Edison Company New York State Electric & Gas Corp.
Brooklyn Union Gas Company Northeast Utilities
Central Hudson Gas & Electric Corp. Orange & Rockland Utilities Inc.
Central Maine Power Co. Pennsylvania Power & Light Co.
Consolidated Edison Co. of New York, Inc. PECO Energy Company
DQE, Inc. Public Service Enterprise Group Inc.
Delmarva Power & Light Co. Rochester Gas & Electric Corp.
Eastern Utilities Associates The United Illuminating Company
General Public Utilities Corp.
(1) Total returns for each Eastern Region Utility were determined in
accordance with the Securities and Exchange Commission's regulations,
i.e., weighted according to each issuer's stock market capitalization.
Retirement Benefits
The following table illustrates the maximum aggregate pension benefit,
with certain deductions for Social Security, payable by the Corporation
under both the Niagara Mohawk Pension Plan (the "Basic Plan") and the
Corporation"s Supplemental Executive Retirement Plan (the "Supplemental
Plan") to an officer in specified average salary and years-of-service
classifications. Such benefit amounts have been calculated as though
each officer selected a straight life annuity and retired on December
31, 1995 at age 65. The amount of compensation taken into account under
a tax-qualified plan is subject to certain annual limits (adjusted for
increases in the cost of living, $150,000 in 1994 and $150,000 in
1995). This limitation may reduce benefits payable to highly
compensated individuals.
Annual Retirement Allowance
3-Year Average 10 Years 20 Years 30 Years 40 Years 45 Years
Annual Salary Service* Service Service Service Service
______________ _________ __________ _________ _________ _________
$150,000 $21,090 $ 82,512 $ 82,512 $ 82,512 $ 94,770
225,000 27,534 127,512 127,512 127,512 127,512
300,000 27,961 172,512 172,512 172,512 172,512
375,000 27,961 217,512 217,512 217,512 217,512
450,000 27,961 262,512 262,512 262,512 262,512
525,000 27,961 307,512 307,512 307,512 307,512
*Subject to five-year average annual salary.
The credited years of service under the Basic and Supplemental Plans
for the individuals listed in the Summary Compensation Table are Mr.
Davis, 6 years; Mr. Budney, 1 year; Mr. Sylvia, 5 years; Mr. Powers, 32
years; Ms. Kerr, 22 years.
The Basic Plan, a noncontributory, tax-qualified defined benefit plan,
provides all employees of the Corporation with a minimum retirement
benefit related to the highest consecutive five-year average
compensation. Compensation covered by the Basic Plan includes only the
participant's base salary or pay, subject to the maximum annual limit
noted above. Directors who are not employees are not eligible to
participate.
The Supplemental Plan is a nonqualified, noncontributory defined
benefit plan providing additional benefits to certain officers of the
Corporation upon retirement after age 55 who have 20 or more years of
employment. The Committee may grant exceptions to these requirements.
The Supplemental Plan provides for payment monthly of an amount equal
to the greater of (i) 60% of monthly base salary averaged over the
final 36 months of employment, less benefits payable under the Basic
Plan, retirement benefits accrued during previous employment and
one-half of the maximum Social Security benefit to which the
participant may be entitled at the time of retirement, or (ii) benefits
payable under the Basic Plan without regard to the annual benefit
limitations imposed by the Internal Revenue Code. Effective January 1,
1995, participants in the Supplemental Plan may elect to receive their
benefit in a lump sum payment provided certain established criteria are
met.
Employee Agreements
In 1993, the Corporation entered into employment agreements with
Messrs. Davis, Sylvia and Powers. The Corporation also entered into
employment agreements with Ms. Kerr upon her appointment as an
Executive Officer effective January 1, 1994 and with Mr. Budney when he
was hired in 1995. The agreements have a three-year term, and, unless
either party gives notice to the contrary, the agreements are extended
at the end of each year for an additional year. The agreements provide
that the executive will be able to participate in the Corporation's
incentive compensation plans according to their terms. If at any time
the executive's employment is terminated by the Corporation without
cause or, following a change in control, the executive terminates
employment for good reason (as defined in the agreement), the executive
will be entitled to a severance benefit paid over two years in an
amount equal to two times the executive's base salary plus an amount
equal to two times the greater of the executive's (i) most recent
annual incentive award or (ii) average annual incentive award paid over
the previous three years. The employment agreements also provide that
the executive's benefits under the Corporation's Supplemental Executive
Retirement Plan will be based on the executive's salary, annual
incentive awards and SIP awards, as applicable. Further, that if the
executive's employment terminates under the conditions noted above, or
after completing eight years of service, the executive will be deemed
fully vested under such plan. The agreements restrict under certain
circumstances the executive's ability to compete with the Corporation
and to use confidential information concerning the Corporation. In the
event of a dispute over an executive's rights under the executive's
agreement following a change in control of the Corporation, the
Corporation will pay the executive's reasonable legal fees with respect
to the dispute unless the executive's claims are found to be frivolous.
In November, 1994, the Corporation entered into a supplemental
agreement with Mr. Powers in exchange for his foregoing retirement
under the Corporation's Voluntary Employee Reduction Program and
continuing employment with the Corporation until December 31, 1996.
Under this agreement, Mr. Powers became entitled to a lump sum payment
following the successful closing of the sale of HYDRA-CO Enterprises,
Inc., and, upon his retirement on December 31, 1996, Mr. Powers will be
entitled to (i) a severance allowance equal to one-half of his annual
salary then in effect and (ii) a benefit under the Corporation's
Supplemental Executive Retirement Plan no less than his benefit
calculated as of November, 1994, and based on his salary and annual
incentive award as disclosed in the Summary Compensation Tables of the
Corporation's proxy statement for the years 1994, 1995 and 1996.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Corporation receive an annual
retainer of $20,000 and $1,000 per Board meeting attended. Directors
who are not employees and who chair any of the standing Board
Committees receive an additional annual fee of $3,000 and those who
serve on any of the standing Board Committees, including the chair,
receive $850 per Committee meeting attended. The Corporation also
reimburses its directors for travel, lodging and related expenses they
incur in attending Board and Committee meetings.
The Corporation has an unfunded, nonqualified retirement plan for
directors who have not been employees of the Corporation. Under the
plan, a director retiring at age 65 or older after ten years of service
as a director is entitled to an annual benefit equal to such director's
annual retainer, including Chairperson's fee if applicable, at the time
of retirement. If a director of such age retires after serving less
than ten years, but more than five years, such director will receive a
pro-rated benefit based on years of service. If a director serves on
the Board less than five years or leaves before reaching age 65, no
benefit is available.
The Corporation provides certain health and life insurance benefits to
directors who are not employees of the Corporation. During 1995, the
following directors received the indicated benefits under the foregoing
arrangements: Mr. Allyn ($6,566), Mr. Burkhardt ($3,463), Mr. Costle
($3,760), Mr. Edmund Davis ($5,307), Mr. Donlon ($180), Mr. Duffy
($5,062), Dr. Hill ($362), Mr. Panasci ($182), Dr. Peterson ($2,845),
Mr. Riefler ($5,888) and Mr. Wick ($6,059). Mr. Burkhardt received a
consulting fee of $18,000 during 1995.
COMPENSATION AND SUCCESSION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION;
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Directors Allyn, Duffy, Edmund Davis, Panasci and Schwartz, all of whom
are non-employee directors, are members of the Compensation and
Succession Committee.
Edmund Davis is of counsel to the law firm of Hiscock and Barclay, LLP.
The Corporation retained Hiscock and Barclay, LLP, to represent the
Corporation on certain litigation matters and to provide legal counsel
on corporate matters. The Corporation paid that firm a total of
$1,597,608 for services rendered during 1995.
ADDITIONAL INFORMATION
The directors and officers of the Corporation and its subsidiaries are
insured against obligations which may be incurred as a result of the
Corporation's indemnification of its directors and officers. The
coverage also insures the directors and officers against liabilities
for which they may not be indemnified by the Corporation or its
subsidiaries, except a dishonest act or breach of trust. The insurance
was purchased from the National Union Fire Insurance Company,
Associated Electric & Gas Insurance Services, Ltd., Aetna Casualty and
Surety Company, Federal Insurance Company, CNA Insurance Company and
ACE Insurance Company, Ltd. for the term from January 31, 1996 to
January 30, 1997 for an aggregate premium of $2,005,273.
INDEPENDENT ACCOUNTANTS
The Corporation has selected the independent accounting firm of Price
Waterhouse LLP to examine the financial statements of the Corporation
and its subsidiaries for the year ended December 31, 1996.
Representatives of Price Waterhouse LLP will be present at the meeting
with the opportunity to make a statement if they desire to do so and
will be available to respond to appropriate questions.
QUARTERLY REPORTS
Shareholders who are not receiving quarterly reports directly from the
Corporation and who would like to receive the Corporation's quarterly
reports may write to Investor Relations, Niagara Mohawk Power
Corporation, 300 Erie Boulevard West, Building C-3, Syracuse, New York
13202-7904 to be included on the Corporation's mailing list.
OTHER BUSINESS
The management does not know of any matters of business other than the
foregoing to be presented at the Annual Meeting. However, if other
matters are properly brought before the meeting or any adjournment
thereof, the proxies will be voted accordingly to the best judgment of
the persons authorized thereby.
Expenses incurred in connection with this solicitation will be borne by
the Corporation. The firm of D. F. King & Co., Inc. has been engaged to
aid in the solicitation of proxies for a fee of $10,500. Directors,
officers or employees of the Corporation may solicit proxies in person,
by telephone, or by mail, but without extra compensation. Upon request,
brokerage houses or other nominees or fiduciaries will be reimbursed by
the Corporation for the expense of forwarding proxy material to
beneficial owners of stock.
SHAREHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Proposals of shareholders intended to be presented at the 1997 Annual
Meeting must be received by the Corporation on or before November 25,
1996, to be considered for inclusion in the Corporation's Proxy
Statement and Form of Proxy relating to that meeting.
By Order of the Board of Directors
Kapua A. Rice
Secretary
Dated: March 25, 1996
DIRECTIONS TO THE DESMOND
660 Albany-Shaker Road (I-87 Exit 4) Albany, New York 12211
(518) 869-8100
[MAP ILLUSTRATION]
Coming from Montreal, Lake George, Saratoga:
Take the Adirondack Northway I-87 to Exit 4, Wolf Road/Albany Airport.
Turn left onto Wolf Road. Take next left onto Albany-Shaker Road. The
Desmond entrance is on the left.
Coming from New York City:
Take the NYS Thruway North to Exit 24. After toll booths, take the
Adirondack Northway I-87 North to Exit 4, Wolf Road/Albany Airport.
Turn left onto Wolf Road. Take next left onto Albany-Shaker Road. The
Desmond entrance is on the left.
Coming from Buffalo, Rochester, Syracuse:
Take the NYS Thruway East to Exit 24. After toll booths, take the
Adirondack Northway I-87 North to Exit 4, Wolf Road/Albany Airport.
Turn left onto Wolf Road. Take next left onto Albany-Shaker Road. The
Desmond entrance is on the left.
Coming from Massachusetts:
Take the Massachusetts Turnpike West to Albany, New York to Exit B1,
marked I-90 Albany West. Proceed 15-20 miles, past Rensselaer, onto
bridge to Albany. Proceed on I-90 until you see a sign for Montreal
North. Take the Adirondack Northway I-87 to Exit 4, Wolf Road/Albany
Airport. Turn left onto Wolf Road. Take next left onto Albany-Shaker
Road. The Desmond entrance is on the left.
[NM LOGO]
Niagara Mohawk Power Corporation
Proxy Solicited by the Board of Directors
for Annual Meeting to be held at 10:30 A.M. May 7, 1996
The Desmond
660 Albany-Shaker Road (I-87 Exit 4)
Albany, New York 12211
The undersigned hereby appoints William E. Davis, Henry A. Panasci,
Jr., Donald B. Riefler, and John G. Wick, and each or any of them,
proxies of the undersigned, with power of substitution to vote at the
Annual Meeting of Shareholders, and at any adjournments thereof.
Said proxies are instructed to vote for or against proposals, as
indicated by the undersigned (or, if no indication is given, for
Proposal 1).
Please sign and mail promptly to assure your representation at the
meeting.
(continued and to be signed on the other side)
[NM LOGO] PROXY INFORMATION ENCLOSED
Please mark
your votes
as this X
The Directors recommend a vote "FOR" Proposal 1:
1. Election of Directors to Class II:
William F. Allyn, William E. Davis, William J. Donlon, Anthony H.
Gioia, Dr. Patti McGill Peterson.
___ FOR all nominees
listed above
___ WITHHOLD AUTHORITY to vote
for nominees listed above.
___(INSTRUCTIONS: To withhold authority
to vote for any nominee(s), write the
name(s) in the space provided below.)
______________________________________
2. To transact such other business as may properly come before the
meeting.
Dated __________________________________, 1996
Signature ____________________________________
Signature if held jointly ________________________
Please give your full title when signing as attorney,
trustee, executor, administrator, or guardian, etc.
____________________________________________
