<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
PUGET SOUND POWER & LIGHT COMPANY
(Name of Registrant as Specified In Its Charter)
PUGET SOUND POWER & LIGHT COMPANY
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
(4) Proposed maximum aggregate value of transaction:
- --------
*Set forth the amount on which the filing is calculated and state how it was
determined.
[_] 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
PUGET SOUND POWER & LIGHT COMPANY
Notice of Annual Meeting of Shareholders
To Be Held May 10, 1994
To the Holders of Common Stock of
Puget Sound Power & Light Company:
The Annual Meeting of Shareholders of Puget Sound Power & Light Company will be
held at 10 a.m. on May 10, 1994 at the Meydenbauer Center located at 11100 N.E.
6th Street, Bellevue, Washington for the purpose of acting upon the following
matters:
1. To elect three Directors to serve until the expiration of three-year terms
and until their successors are elected and qualified.
2. To consider and vote on a proposal increasing the common stock of the Company
(the "Common Stock") which may be issued under the Investment Plan for
Employees from 1,000,000 to 2,000,000 shares.
3. To consider and vote upon any and all other matters that may come before the
meeting and any adjournment thereof.
Only shareholders of record at the close of business on March 14, 1994 will be
entitled to attend and to vote at the meeting. If you have your shares
registered in the name of a brokerage firm or trustee and plan to attend the
meeting, please obtain from the firm or trustee a letter, account statement or
other evidence of your beneficial ownership of those shares to facilitate your
admittance to the meeting.
If you are a participant in the Stock Purchase and Dividend Reinvestment Plan,
please note that the enclosed proxy covers all shares in your account, including
any shares which may be held in such plan.
March 24, 1994
By Order of the Board of Directors,
/s/ James W. Eldredge
J. W. Eldredge, Corporate Secretary
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
Proxy Statement 1
Annual Report.............................................. 1
Election of Directors...................................... 1
Security Ownership of Directors and Executive Officers..... 4
Board of Directors and Committee Meetings.................. 5
Compensation and Retirement Committee Report............... 6
Stock Price Performance Graph.............................. 8
Summary Compensation Table................................. 10
SAR Grants in 1993......................................... 12
Aggregated SAR Exercises & Values.......................... 13
Retirement Benefits Table.................................. 14
Other Agreements........................................... 14
Proposal to Increase Shares Authorized for Issuance Under
the Investment Plan for Employees....................... 15
Independent Public Accountants............................. 16
Voting Rights and Proxy.................................... 16
Shareholder Proposals...................................... 17
Solicitation of Proxies.................................... 17
Map to Annual Meeting...................................... 18
</TABLE>
YOUR VOTE IS IMPORTANT
The Company has approximately 65,000 shareholders of record. Many shareholders
own 100 shares or less. Each shareholder, regardless of the number of shares
owned, is requested to date, sign and return promptly the enclosed proxy form,
using the accompanying addressed envelope.
<PAGE>
PROXY STATEMENT
The following information is furnished in connection with the solicitation of
proxies for the Annual Meeting of Shareholders (the "Annual Meeting") of Puget
Sound Power & Light Company (the "Company") to be held at 10 a.m. on May 10,
1994 at the Meydenbauer Center located at 11100 N.E. 6th Street, Bellevue,
Washington. The approximate mailing date of the proxy material is March 24,
1994. The mailing address of the Company's principal executive offices is Puget
Sound Power & Light Company, P.O. Box 97034, Bellevue, Washington 98009-9734.
Management is not aware of any matter to be presented for action at the Annual
Meeting other than the election of three Directors and a proposal to increase
the Common Stock which may be issued under the Investment Plan for Employees
from 1,000,000 shares to 2,000,000 shares.
ANNUAL REPORT
The Company's Annual Report for 1993, including financial statements, is being
mailed to shareholders on or about March 24, 1994.
ELECTION OF DIRECTORS
The number of Directors is determined by resolution of the Board of Directors,
subject to revision by the shareholders. The Board of Directors has, by
resolution, fixed the number of Directors at eleven. The terms of the Board of
Directors are classified so that each year approximately one-third of the
Directors are elected for a three-year term. These three groups of Directors are
identified herein as Class I, Class II and Class III Directors. At the Annual
Meeting, three Class III Directors will be elected to serve for a term of three
years expiring on the date of the Annual Meeting of Shareholders in 1997.
Proxies will be voted for the following named nominees. In the event any nominee
is not available to serve as Director at the date of the Annual Meeting (which
is not now anticipated), the persons named in the enclosed proxy shall have full
discretion and authority to vote or refrain from voting for any other nominee in
accordance with their judgment. Directors are elected to hold office until their
successors are elected and qualified, or until resignation or removal in the
manner provided in the Bylaws of the Company.
1
<PAGE>
The names of nominees for Directors of the Company are set forth below.
CLASS III NOMINEES
TERMS EXPIRE 1997
CHARLES W. BINGHAM
Mr. Bingham has been Executive Vice President of Weyerhaeuser Company (forest
products industry) since 1981. Mr. Bingham, age 60, has been a Director of the
Company since 1978.
JOHN W. ELLIS
Mr. Ellis served as Chairman of the Board of the Company from 1987 to 1993, and
as Chief Executive Officer from 1976 to 1992. He has been Chairman and CEO of
the Baseball Club of Seattle since 1992. Mr. Ellis, age 65, has been a Director
since 1969 and also serves as a director of SAFECO Corporation, Washington
Mutual Savings Bank, UTILX Corporation and Associated Electric & Gas Insurance
Services, Ltd.
RICHARD R. SONSTELIE
Mr. Sonstelie has been Chief Executive Officer and President of the Company
since 1992. His prior positions with the Company include Chief Operating Officer
from 1991 to 1992, Chief Financial Officer from 1987 to 1991 and Executive Vice
President from 1985 to 1987. Mr. Sonstelie, age 49, has been a Director of the
Company since 1987 and also serves as a director of First Interstate Bank of
Washington, Association of Edison Illuminating Companies and Utech Venture
Capital Corporation.
The names of the Class I and Class II Directors of the Company who are not
standing for election and whose terms of office will continue after the Annual
Meeting are listed below.
Class I Directors
Terms Expire 1995
DOUGLAS P. BEIGHLE
Mr. Beighle has been Senior Vice President of the Boeing Company (aerospace
manufacturing and sales) since 1986. He served the Boeing Company as Vice
President from 1980 to 1986. Mr. Beighle, age 61, has been a Director of the
Company since 1981 and also serves as a director of Washington Mutual Savings
Bank and Washington State Executive Board, U.S. West Communications Group, Inc.
PHYLLIS J. CAMPBELL
Ms. Campbell has been President and Chief Executive Officer of U.S. Bank of
Washington (financial institution) since 1993. She also served as Area President
of U.S. Bank of Washington for Seattle-King County from 1992 to 1993, Executive
Vice President and Manager from 1989 to 1992, and in various banking capacities
since 1973. Ms. Campbell, age 42, has been a Director of the Company since 1993
and also serves as a director of U.S. Bank of Washington and Executive Vice
President of U.S. Bancorp.
WILLIAM S. WEAVER
Mr. Weaver has been Executive Vice President and Chief Financial Officer of the
Company since 1991. For more than five years prior to joining the Company, he
was a partner in the law firm of Perkins Coie. Mr. Weaver, age 50, has been a
Director of the Company since 1991.
R. KIRK WILSON
Mr. Wilson has been President and Chief Executive Officer of Thrifty Foods, Inc.
(retail grocery) since 1969. Mr. Wilson, age 55, has been a Director of the
Company since 1976.
2
<PAGE>
CLASS II DIRECTORS
TERMS EXPIRE 1996
JOHN H. DUNKAK, III
Mr. Dunkak served as Senior Vice President, Western Division, Georgia Pacific
Corporation (wood products industry) from 1982 until his retirement in 1987. Mr.
Dunkak, age 71, has been a Director of the Company since 1978 and also serves as
a director of Horizon Bank, Bellingham, Washington.
JOHN D. DURBIN
Mr. Durbin has been President and Chief Executive Officer of Hostar
International, Inc. (equipment for hotels) since 1988, and a General Partner of
John Durbin & Associates (industrial real estate) since 1969. His prior
positions include Chairman and President of CEC Equipment Company (construction
equipment) from 1982 to 1987 and Chairman of Spokane Truck Sales, Inc. (trucks)
from 1983 to 1987. Mr. Durbin, age 58, has been a Director of the Company since
1984 and also serves as a director of John Fluke Manufacturing Company, Inc.
DANIEL J. EVANS
Mr. Evans has been Chairman of Daniel J. Evans Associates (consulting) and a
commentator with KIRO-TV since 1989. His prior positions include United States
Senator, State of Washington, from 1983 to 1989 and Chairman, Pacific Northwest
Power and Conservation Planning Council from 1981 to 1983. Mr. Evans, age 68,
has been a Director of the Company since 1990 and also serves as a director of
Washington Mutual Savings Bank, McCaw Cellular Communications, Inc., Tera
Computer Company, Burlington Northern , Inc., the Kaiser Family Foundation, Flow
International Corporation and Heart Technology.
NANCY L. JACOB
Ms. Jacob is Managing Director, Capital Trust Company (financial advisory). Her
prior positions include Professor of Finance and Business Economics at the
University of Washington (educational institution) from 1981 to 1992 and Dean of
the School and Graduate School of Business Administration from 1981 to 1988. Ms.
Jacob, age 51, has been a Director of the Company since 1980 and also serves as
a director of Recreational Equipment, Inc. and a trustee of College Retirement
Equities Fund in New York.
3
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS AND
EXECUTIVE OFFICERS
The following table sets forth information as of February 14, 1994, concerning
the shares of the Company's Common Stock beneficially owned by each Director and
nominee, the executive officers named in the Summary Compensation Table and
Directors and executive officers of the Company as a group. No Director or
executive officer owns more than 1% of the outstanding shares of Common Stock.
<TABLE>
<CAPTION>
Name of Beneficial Owner Shares (#)
------------------------ ----------
<S> <C>
John H. Dunkak, III 3,450
John D. Durbin 1,862
Daniel J. Evans 1,000
Nancy L. Jacob 586
Douglas P. Beighle 2,480
Phyllis J. Campbell 1,000
William S. Weaver 1,545 /(1)/
R. Kirk Wilson 10,479
Charles W. Bingham 3,410
John W. Ellis 21,022 /(1)/
Richard R. Sonstelie 7,066 /(1)/
Robert V. Myers 6,409 /(1)/
Neil L. McReynolds 5,305 /(1)/
Gary B. Swofford 3,876 /(1)/
All Directors and Executive
Officers as a group
(23 persons) 105,802
</TABLE>
/(1)/ Includes shares credited under the Company's Investment Plan
for Employees through February 14, 1994.
4
<PAGE>
BOARD OF DIRECTORS AND COMMITTEE MEETINGS
The Board of Directors has established three committees, which meet outside of
regular Board of Directors meetings, to assist in the discharge of the
Directors' responsibilities relating to audit, nominating and compensation
issues. The names of these committees, their current membership and a brief
statement of their principal responsibilities are presented below.
BOARD OF DIRECTORS MEETINGS
There were eight Board of Directors meetings held during 1993. Each Director
attended at least 75% of the meetings of the Board of Directors and committees
of the Board on which the Director served.
AUDIT COMMITTEE
The Audit Committee currently includes Douglas P. Beighle (Chairperson), Charles
W. Bingham, John D. Durbin, Daniel J. Evans and R. Kirk Wilson. The Audit
Committee is responsible for the review of the annual report of the independent
auditors, evaluation of the external and internal audit function and
recommendations to the Board of Directors with respect to the retention of
independent auditors and other auditing matters. Five Audit Committee meetings
were held during 1993.
DIRECTOR AFFAIRS COMMITTEE
The Director Affairs Committee currently includes John H. Dunkak (Chairperson),
Charles W. Bingham, John D. Durbin and Daniel J. Evans. The Director Affairs
Committee acts and makes recommendations with respect to identification and
selection of candidates for Directors, compensation of Directors and similar
matters. Shareholders may propose candidates for consideration as nominees to
the Board of Directors; such proposals should be directed in writing to the
Corporate Secretary prior to the Annual Meeting. Director candidates are
considered on the basis of recognized achievements and their ability to bring
skills and experience to the deliberations of the Board of Directors. Two
Director Affairs Committee meetings were held during 1993.
COMPENSATION AND RETIREMENT COMMITTEE
The Compensation and Retirement Committee currently includes Nancy L. Jacob
(Chairperson), Douglas P. Beighle, Phyllis J. Campbell, John H. Dunkak and R.
Kirk Wilson. The Compensation and Retirement Committee acts and makes
recommendations to the Board of Directors with respect to executive
compensation, the Retirement Plan for Employees and other similar matters. Four
Compensation and Retirement Committee meetings were held during 1993.
DIRECTOR COMPENSATION
Directors who are not Company officers are paid a quarterly retainer of $3,000
plus $800 for each Board of Directors meeting and Committee meeting attended.
The Chairpersons of the Audit Committee and the Compensation and Retirement
Committee receive additional quarterly retainers of $500 each. Directors who are
also officers of the Company do not receive any compensation for duties
performed as Directors.
The Company and Mr. Ellis entered into a consulting agreement that commenced
October 1993 and will end September 30, 1998. Under the terms of this
agreement, Mr. Ellis provides consulting and other services to the Company,
including representing the Company in various industry and community related
committees and activities. For these services, Mr. Ellis is paid $2,000 per
month for the term of the agreement. In addition, the Company provides
administrative support for Mr. Ellis' services performed under the consulting
agreement.
5
<PAGE>
COMPENSATION AND RETIREMENT COMMITTEE REPORT
The Board of Directors delegates responsibility for executive pay to the
Compensation and Retirement Committee ("the Committee"). That Committee's
members are all non-employee Directors, none of whom participate in the
compensation programs described here for executives. The following is the
Committee's report on executive compensation for 1993.
In determining executive pay, the Committee is guided by three primary
objectives:
Attract and retain outstanding executives by providing compensation
opportunities consistent with the electric utility industry for similar
positions.
Have a significant portion of each executive's total pay at risk and dependent
on Company performance (measured in the short term by desirable operating
results and, in the long term, by total shareholder return).
Encourage career service by providing retirement income for that service
consistent with industry practice.
Compensation levels for the named executive officers are based on their
performance and are guided by recognized industry surveys of prevailing
practice. The Company's principal source of market data for levels of base
salary and annual incentives and for long-term incentive practices is the Edison
Electric Institute's ("EEI") comprehensive, industry-wide annual survey of
management pay.
The Committee establishes compensation for the CEO and reviews and approves the
CEO's recommended compensation actions for the other executive officers. In
making individual pay decisions, the Committee makes a subjective evaluation of
each executive's experience and performance and is guided by the survey medians
observed for similar positions in similar sized companies. Salaries for
executive officers employed for the entire year are, in aggregate, below the
medians for the five highest paid officers in similar sized companies. The
companies included in the EEI survey are substantially the same as those
included in the EEI 100 Index of Investor-owned Electrics used in the Total
Shareholder Return Performance Graph. The Company makes salary decisions, as it
does all pay decisions, in the context of the competitiveness of the entire
compensation package.
All executive officers participate in the Company's annual Pay at Risk Plan. The
intent of this plan is to provide financial incentives to executives for
achieving desired annual operating results. Funding of the Company's Pay at Risk
Plan in 1993 was dependent upon the achievement of financial and operating
goals. Steps in the plan's funding included: (1) creating a primary fund by
comparing earnings per share to a pre-set goal and (2) increasing or decreasing
that fund by comparing operating and maintenance expenditures to a target (50%
weight); measuring the success of the Company's conservation program (25%
weight); and measuring the success of the Company's Energy Plus Program (25%
weight), an incentive program to operate within budgets, maintain service
levels, promote conservation and safety and maintain good community relations.
All goals were approved by the Committee at the beginning of the year. The
year's earnings per share fell within the funding range, but short of the plan's
target goal; each of the fund modifiers either reached or exceeded its goals.
Individual target awards ranged from 25% to 35% of salary for the named
executives; funding could range from zero to twice a target fund. 1993 awards to
executive officers were approximately half these targets.
The Company's ability to attract necessary capital at a favorable cost depends
on successful, long-term shareholder return. The Company's executive
compensation program encourages achievement of this return through the Long-Term
Incentive Program. This program includes the use of both a Performance Share
Unit ("PSU") Plan and a Stock Appreciation Right ("SAR") Plan. Awards of each
are guided by an "objective gain" attributed to each participant ranging from
35% to 75% of salary. PSU awards are guided by 75% of these objective gains;
SARs by 25%.
6
<PAGE>
PSUs may be awarded bi-annually; each has a four-year term. A PSU's value is the
Company's stock price at the end of its term plus the per share dividends paid
during the term. The number of PSUs on which values are paid can range from zero
to 160% of those awarded. In the present PSU Plan, this number depends on the
Company's four-year, total shareholder return compared to the returns as
reported by the Duff & Phelps Index of Investor-owned Utilities or a similar
index. (Plan terms governing the value of matured PSUs reported for 1993 and
1991 are described in Footnote 5 to the Summary Compensation Table.) Since PSUs
are considered only every other year and awards were made in 1992, no PSU awards
were made in 1993.
SAR awards are generally made annually; each has a ten-year term and vests 20%
per year beginning one year after the date of grant. A SAR's value is the
Company's stock price gain over the base price, which is the closing market
value on the date of grant, plus the incremental value of per share dividend
increases during the holding period. 1993 grants of SARs are described in the
SAR Grants Table and its accompanying footnotes. An objective value of a SAR was
set for each award at a level the Committee believed represented a desirable
result for shareholders. The amount of the SAR award's objective gain, as
described above, was then divided by the SAR's objective value to obtain the
guideline number of shares in each award. In making each award decision, the
Committee considers awards previously made and awards still held. In 1993,
certain of the named executive officers exercised their rights to previously
granted and vested SARs. Their values are described in the SAR Exercise and
Year-End Value Table.
No formal policy has been adopted by the Company with respect to qualifying
compensation paid to its executive officers for deductibility under the recently
proposed Section 162(m) of the Internal Revenue Code. The matter is being
studied with the goal of qualifying such compensation were it to be paid. The
Company anticipates that compensation paid to its executive officers during 1994
will qualify for deductibility because no executive's compensation is expected
to exceed the dollar limitations of Section 162(m).
Mr. Sonstelie has served as Chief Executive Officer since May 1992. The
Committee recommended and the Board of Directors approved an increase to Mr.
Sonstelie's salary in September 1993 in recognition of his effective response to
the Company's needs, his assumption of added responsibilities upon Mr. Ellis'
retirement as Chairman late in the year and the relationship of his compensation
to comparative survey data. Mr. Sonstelie's base salary after the increase is at
the median of observed industry practice. As described above, the Pay at Risk
Plan's earnings per share performance was lower than target, although the
modifying performance goals were met or exceeded. Mr. Sonstelie's resulting
annual incentive award was well below his target level and his annual cash pay
(salary plus bonus) earned for the year was below the median industry
observation. Mr. Sonstelie received a SAR award in 1993 consistent with the
award guidelines described above. No bi-annual PSU awards were made in 1993. Mr.
Sonstelie's 1990 PSU award matured and was paid based on performance to the
award's four-year goals as described in Footnote 5 to the Summary Compensation
Table.
1993 was a challenging year for the Company. Although the sought after 45%
common equity ratio was allowed in rates, other aspects of the rate case,
including the allowed return on equity, were below what the Company had sought.
Nevertheless, Mr. Sonstelie's response to these challenges has been assertive,
realistic and designed to (1) maximize earnings within allowable limits, (2)
ensure regulatory support for the Company's resource acquisition program and (3)
maintain the Company's strong service levels. The Committee believes that Mr.
Sonstelie's compensation in 1993 was appropriate given the Company's results in
this period and the steps he took to address the associated challenges.
COMPENSATION AND RETIREMENT COMMITTEE
Nancy L. Jacob, Chairperson
Douglas P. Beighle
Phyllis J. Campbell
John H. Dunkak
R. Kirk Wilson
7
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
Set forth below is a comparison of the five-year cumulative total shareholder
return (share price appreciation plus reinvested dividends) on the Common Stock
against the cumulative total return of the Standard and Poor's 500 Stock Index,
the EEI 100 Index of Investor-owned Electrics and the Duff & Phelps Index of
Investor-owned Utilities.
FIVE-YEAR CUMULATIVE TOTAL RETURN COMPARISON/(1)/
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG PUGET POWER, S&P 500 INDEX, DUFF & PHELPS INDEX AND EEI INDEX
<TABLE>
<CAPTION>
Measurement period S&P 500 DUFF & PHELPS EEI
(Fiscal year Covered) PUGET POWER Index Index Index
- --------------------- ----------- -------- ------------- --------
<S> <C> <C> <C> <C>
Measurement PT -
12/31/88 $ 100 $ 100 $ 100 $ 100
FYE 12/31/89 $ 130 $ 132 $ 127 $ 130
FYE 12/31/90 $ 131 $ 128 $ 126 $ 132
FYE 12/31/91 $ 186 $ 166 $ 162 $ 170
FYE 12/31/92 $ 200 $ 179 $ 176 $ 182
FYE 12/31/93 $ 197 $ 197 $ 193 $ 199
</TABLE>
(1) This comparison assumes $100 is invested on December 31, 1988, in (1) Puget
Power Common Stock, (2) the S&P 500 Stock Index, (3) the EEI 100 Index of
Investor-owned Electrics (the "EEI Index") and (4) the Duff & Phelps Index of
Investor-owned Utilities (the "Duff & Phelps Index"); a listing of companies
which comprise the Duff & Phelps Index is shown on page 9. The graph then
observes, in each case, stock price growth and dividends paid (assuming dividend
reinvestment) over the following five years. The Duff & Phelps Index, which was
included in the Company's 1993 Proxy Statement, will not be included in future
Proxy Statements because it does not meet certain requirements of the Securities
and Exchange Commission for indexes which may be included in the Stock Price
Performance Graph. The companies included in the EEI Index and the Duff & Phelps
Index are substantially the same.
The Board of Directors and its Compensation and Retirement Committee recognize
that the market price of stock is influenced by many factors, one of which is
Company performance. The stock price contribution to the total return
performance shown on the graph is not necessarily indicative of future price
performance.
8
<PAGE>
LIST OF COMPANIES IN THE DUFF & PHELPS INDEX OF INVESTOR-OWNED UTILITIES
The following is a list of the companies which comprise the Duff & Phelps Index
of Investor-owned Utilities as published on February 11, 1994; performance as
shown in the graph on the preceding page is measured as of December 31, 1993.
Allegheny Pwr, American Elec Pwr, Atlantic Engy, Baltimore G&E, Black Hills,
Boston Edison Company, CIPSCO Inc., CMS Energy Corporation, Carolina P&L,
Centerior Engy, Central & So. West, Central Hudson G&E, Central Louisiana Elec,
Central Maine Pwr, Central Vt PS, Cincinnati Gas & Electric Co., Commonwealth
Edison Company, Commonwealth Engy, Consolidated Ed, DPL, DQE Inc., Delmarva
Power & Light Co., Dominion Resources, Duke Pwr, Eastern Util., El Paso Elec,
Empire District, Entergy, FPL Group, Florida Progress, General Pub Util, Green
Mountain Pwr, Hawaiian Electric Ind., Houston Ind., IES Industries, IPALCO
Enterprises, Inc., Idaho Pwr, Illinois Power Company, Iowa Illinois G&E, KU
Energy Corporation, Kansas City P&L, LG&E Energy Corporation, Long Island Ltg,
Midwest Resources Inc., Minnesota P&L, NIPSCO Industries, NY State E&G, Nevada
Power Company, New England Elec, Niagara Mohawk, Northeast Utilities, Northern
States Pwr, Ohio Edison Company, Oklahoma G&E, Orange & Rockland Util, Otter
Tail Power, PS Colorado, PS Enterp Group, PS New Mexico, PSI Resources,
PacifiCorp, Pacific Gas and Electric Co., Pennsylvania P&L, Philadelphia
Electric Company, Pinnacle West Cap., Portland General Corp., Potomac Elec Pwr,
Puget Sound P&L, Rochester G&E, SCANA, SCEcorp, San Diego Gas & Electric Co.,
Sierra Pac Res, Southern Co., Southern Indiana G&E, Southwestern PS, TECO Engy,
TNP Enterprises, Texas Util, The Detroit Edison Company, The Montana Power
Company, Tucson Elec. Pwr, Union Elec., United Illum, UtiliCorp, WPL Holdings,
Washington Water Pwr, Western Resources Inc., Wisconsin Engy, Wisconsin PS.
9
<PAGE>
PUGET SOUND POWER & LIGHT COMPANY SUMMARY COMPENSATION TABLE
The following information is furnished for the years ended December 31, 1993,
1992 and 1991, respectively, with respect to the Company's Chief Executive
Officer and each of the five other most highly compensated executive officers of
the Company during 1993 whose salary and bonus exceeded $100,000. Annual
compensation includes amounts deferred at the officer's election.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------------------------- ---------------------------------- All Other
Awards Payouts Compensation ($)
----------------------- --------- ----------------
Other Annual No. of Shares LTIP
Name and Compensation Restricted Underlying Payouts
Principal Position Year Salary ($) Bonus ($) ($)/(3)/ Stock ($) SARs (#) ($)/(5)/
<S> <C> <C> <C> <C> <C> <C> <C> <C>
R. Sonstelie 1993 $320,419 $ 66,000 18,000 $193,081 $ 11,879/(6)/
President and 1992 283,480/(1)/ 120,000 17,800 --- 10,110
Chief Executive Officer 1991 202,503 115,000 5,800 89,595 ---
W. Weaver 1993 189,352 23,000 7,300 ---/(7)/ 6,923/(8)/
Executive Vice President 1992 177,503 50,000 7,500 --- 7,691
and Chief Financial Officer 1991 75,952/(2)/ 35,000 $200,005/(4)/ --- --- ---
R. Myers 1993 162,905 22,500 6,300 99,557 5,768/(9)/
Senior Vice President 1992 156,255 45,000 6,900 --- 5,355
Operations 1991 148,487 55,000 4,300 33,183 ---
N. McReynolds 1993 127,739 13,000 $ 17,775 3,500 57,321 5,444/(10)/
Senior Vice President 1992 124,502 32,000 3,900 --- 5,264
Corporate Relations 1991 121,266 45,000 2,500 29,865 ---
G. Swofford 1993 116,455 16,500 18,701 3,200 ---/(7)/ 3,867/(11)/
Vice President Divisions 1992 109,383 18,000 --- --- ---
and Customer Services 1991 95,368 25,000 --- --- ---
J. Ellis 1993 229,587 30,015 --- 362,027 14,674/(12)/
Chairman /(13)/ 1992 305,003 97,000 --- --- 16,137
1991 321,670 165,000 --- 414,792 ---
</TABLE>
10
<PAGE>
Summary Compensation Table Footnotes
(1) Mr. Sonstelie became Chief Executive Officer on May 12, 1992.
(2) Mr. Weaver became Executive Vice President on July 1, 1991. The salary and
bonus shown are for a partial year's employment.
(3) Except as noted in the table, the aggregrate amount of perquisites or
personal benefits was less than the required reporting threshold (the
lesser of $50,000 and 10% of annual salary and bonus for the named
executive officer). Amounts shown for Messrs. McReynolds and Swofford
include $15,750 for a one-time-only vehicle allowance, also received by all
other executives, associated with management's decision to no longer
provide executives with Company-purchased automobiles.
(4) On his date of employment, Mr. Weaver was granted 8,840 phantom shares. The
aggregate value of the phantom shares was $200,005, based on a stock price
at July 1, 1991 of $22.625 per share. The phantom shares vest, subject to
continued employment, equally over three years on the anniversary date of
initial employment beginning on July 1, 1993, and are valued as to the
vested portion on each such date. The value of each phantom share is the
market price on the vesting date, plus the aggregate dividends paid on each
such share during the period the phantom share is held. At December 31,
1993, 5,894 phantom shares remain outstanding with an aggregated value of
$173,136 (based on a stock price of $24.875 per share at December 31, 1993
and accumulated dividends from July 1, 1991 to December 31, 1993 of $4.50
per share).
(5) A PSU for the four-year award cycles ended on December 31, 1993 and
December 31, 1991 entitled the holder to receive a cash payment equal to
(a) the average market price of one share of Common Stock during the month
of December of the last year of the four-year cycle, plus (b) the aggregate
dividends with respect to one share of Common Stock from January 1 of the
year in which the PSU award is made until the last day of the last month of
the four-year cycle. The number of PSUs awarded was guided by the method
described in the Compensation and Retirement Committee's Report. That
number was then subject to two adjustments at maturity. The adjustments
functioned to increase or decrease the number of PSUs on which payment was
made. First, the number of PSUs awarded was multiplied by a fraction,
determined by the Committee for each award, that corresponded to the
average annual percentage increase or decrease in book value per share of
the Common Stock over the four-year period prior to maturity. Second, the
number of PSUs, as modified to give effect to the first adjustment, was
further adjusted based on the ratio of market value of the Common Stock to
its book value as compared to that of the 100 largest electric and
combination utilities in the United States. The source for determining the
Company's ranking was a Kidder, Peabody and Co., Inc. analysis of market-
to-book value for the utility industry. Their selection of utility
companies used for this analysis is substantially the same as the selection
of utility companies used in the EEI Index included in the Total
Shareholder Return Performance Graph. The second adjustment was made by
multiplying the number of PSUs awarded by a fraction, determined by the
Committee at the time the PSU award was made, based upon the Company's
average monthly market-to-book percentile rank among this group of large
electric and combination utilities during the 48-month period prior to
maturity.
The value of the PSU award that was paid in 1993 and reported in the
Summary Compensation Table was based on an average stock price during
December 1993 of $24.55 per share and total dividends paid during the four-
year cycle of $7.14 per share. The book value performance during this
period was very strong, resulting in an above-target positive modification
to the number of PSUs paid. However, the average relative market-to-book
ranking among electric and combination utilities was below the award's goal
resulting in a negative modification to the number of PSUs paid resulting
in an overall award amount within 5% of its objective level.
(6) $2,968 match under Investment Plan for Employees and $7,606 Investment Plan
makeup; $1,305 imputed income on life insurance.
(7) Messrs. Weaver and Swofford were not eligible participants at the time PSUs
were awarded for the cycles ended December 31, 1991 and 1993.
(8) $4,947 match under Investment Plan for Employees; $1,976 imputed income on
life insurance.
(9) $2,473 match under Investment Plan for Employees and $2,903 Investment Plan
makeup; $392 imputed income on life insurance.
(10) $2,473 match under Investment Plan for Employees and $1,742 Investment Plan
makeup; $1,229 imputed income on life insurance.
(11) $2,473 match under Investment Plan for Employees and $1,370 Investment Plan
makeup; $24 imputed income on life insurance.
(12) $7,576 Investment Plan makeup; $7,098 imputed income on life insurance.
(13) Mr. Ellis retired from the Company as of October 1, 1993. He will continue
on the Company's Board of Directors and has entered into a consulting
agreement with the Company as described under "Director Compensation".
11
<PAGE>
SAR GRANTS IN 1993
The following information is furnished for the year ended December 31, 1993 with
respect to the Company's Chief Executive Officer and each of the five most
highly compensated executive officers of the Company for stock appreciation
rights (SARs) which were granted in 1993.
<TABLE>
<CAPTION>
Individual Grants
-------------------------------------------------------------------------------------------------
No. of
Shares Percent of Total SARs
Underlying SARs Granted to Employees Base Price Grant Date
Name Granted (#) in 1993 ($/SH) Expiration Date Present Value ($)(2)
<S> <C> <C> <C> <C> <C>
R. Sonstelie 18,000 (1) 47% $27.625 2/2003 $33,840
President and
Chief Executive Officer
W. Weaver 7,300 (1) 19 27.625 2/2003 13,724
Executive Vice President and
Chief Financial Officer
R. Myers 6,300 (1) 17 27.625 2/2003 11,844
Senior Vice President
Operations
N. McReynolds 3,500 (1) 9 27.625 2/2003 6,580
Senior Vice President
Corporate Relations
G. Swofford 3,200 (1) 8 27.625 2/2003 6,016
Vice President
Divisions and Customer
Services
J. Ellis (3) 0 --- --- --- ---
Chairman
</TABLE>
(1) SARs have a ten-year term, and vest 20% per year beginning one year after
the date of grant. A SAR's value is the Company's stock price gain over the
base price, which is the fair market value on the date of grant, plus the
incremental value of per share dividend increases during the holding period.
In the event of certain corporate transactions, such as certain mergers or
consolidations of the Company with another corporation or a dissolution or
liquidation of the Company, a SAR terminates, but the vesting of the SAR is
accelerated and the SAR may be exercised in full immediately prior to such
corporate transactions.
(2) Present value is computed using the binomial method, a variation of the
Black-Scholes method. The Edison Electric Institute uses the binomial method
in its annual comparative survey of industry pay practices. The estimated
values under the binomial model are based on the following assumptions: (a)
an option term of ten years, representing the period of time the named
executive officers may hold their SARs from date of grant; (b) a Risk-Free
Rate of Return of 6.2% determined by the interest rate on a Zero Coupon U.S.
Treasury Bond at the time the SARs were granted with a yield to maturity
equivalent to the term of the SAR and (c) a volatility factor of .123
calculated using three years of historical monthly stock price and dividend
data ending January 31, 1993. The binomial value was adjusted by a discount
of 3% for each year the SAR must be held, reflecting its vesting
restrictions. The actual value that an executive may realize, if any, will
depend on the amount by which the stock price exceeds the base price plus
the incremental value of per share dividend increases during the holding
period. There is no assurance any executive will receive the amounts
estimated by the binomial method.
(3) Mr. Ellis' last award was in 1989, due to anticipated retirement.
12
<PAGE>
Aggregated SAR Exercises in 1993 and Year-End SAR Values
The following information is furnished for the year ended December 31, 1993
with respect to the Company's Chief Executive Officer and each of the five other
most highly compensated executive officers of the Company for SAR exercises
that occurred during 1993 and for unexercised SARs outstanding at year end.
<TABLE>
<CAPTION>
Number of Number of Shares Value of Unexercised
Shares Underlying Underlying Unexercised In-The-Money SARs
SARs Exercised Value Realized ($)(1) SARs at Fiscal Year-End (#) at Fiscal Year-End ($)(2)
----------------- --------------------- --------------------------- -------------------------
Name Exerciseable/Unexercisable Exerciseable/Unexercisable
<S> <C> <C> <C> <C>
R. Sonstelie 9,720 (3) $64,002 0/41,400 $0/39,623
President and Chief Executive
Officer
W. Weaver 1,500 (4) 6,622 0/13,300 0/600
Executive Vice President and
Chief Financial Officer
R. Myers 4,020 (3) 29,981 0/16,180 0/18,221
Senior Vice President Operations
N. McReynolds 4,620 (3) 33,610 0/9,360 0/12,619
Senior Vice President Corporate
Relations
G. Swofford --- --- 0/3,200 0/0
Vice President Divisions
and Customer Services
J. Ellis 29,840 (5) 304,777 0/14,620 0/96,492
Chairman
</TABLE>
(1) This amount is the aggregrate of the market value of the Common Stock at the
time each SAR was exercised minus the base price for that SAR, plus the
incremental value of per share dividend increases during the holding period.
(2) This amount is the aggregrate of the number of SARs multiplied by the
difference between the closing price of the Common Stock on the New York
Stock Exchange on December 31, 1993 of $24.875 per share minus the base
price for that SAR, plus the incremental value of per share dividend
increases up to December 31, 1993.
(3) From awards made in 1988, 1989, 1990, 1991 and 1992.
(4) From awards made in 1992.
(5) From awards made in 1988 and 1989.
13
<PAGE>
RETIREMENT BENEFITS TABLE
Estimated retirement benefits for the named executive officers are shown in the
table below, assuming retirement on January 1, 1994 at age 65 after selected
periods of service. The benefit levels shown are the estimated aggregate value
resulting from the Company's funded pension plan, Supplemental Executive
Retirement Plan for Officers (the "SERP"), Deferred Compensation Plan make-up
and Social Security benefits.
ESTIMATED ANNUAL BENEFIT UPON RETIREMENT AT AGE 65
<TABLE>
<CAPTION>
Final Average Years of Credited Service
Compensation 10 15+*
-------------------------------------------------------------
<S> <C> <C>
$100,000 $ 40,000 $ 60,000
200,000 80,000 120,000
300,000 120,000 180,000
400,000 160,000 240,000
500,000 200,000 300,000
</TABLE>
The named executive officers have the following years of credited service as of
December 31, 1993: R. Sonstelie, 19.5; W. Weaver, 2.5; R. Myers, 20.67; N.
McReynolds, 13.0; G. Swofford, 26.42; J. Ellis, 23.75 (as of October 1, 1993).
Estimated aggregate benefits are based on 60% of average annual compensation
(salary plus bonus) for the highest consecutive five years preceding the
retirement date. The five-year averages as of December 31, 1993 are as follows
for the named executive officers: R. Sonstelie, $315,208; W. Weaver, $211,124;
R. Myers, $187,262; N. McReynolds, $152,059; G. Swofford, $112,928; J. Ellis,
$426,271 (actual average based on October 1, 1993 retirement). See "Other
Agreements" for additional information regarding a supplemental retirement
agreement with Mr. Weaver.
* All persons with 15 or more years of credited service receive the maximum
benefits payable under the plan for their salary level.
OTHER AGREEMENTS
The Company has entered into an agreement with Mr. Weaver regarding certain
benefits payable upon retirement. If Mr. Weaver continues employment with the
Company until age 65, it is estimated that the special agreement will not
provide him any additional benefits beyond those set out in the Retirement
Benefits table. However, if Mr. Weaver continues in employment with the Company
through July 1, 1996, then terminates employment at any time thereafter, but
before becoming SERP eligible (in general, age 65, or age 62 with 15 years of
credited service), he would, commencing at age 62, receive his normal retirement
benefit under the Company's funded pension plan, plus, under the agreement, an
additional annual benefit of approximately 29% of his final average annual
earnings. Earnings used in calculating his benefit under the Company's funded
pension plan and under the special agreement will be limited to the amount
established by Section 401 (a) (17) of the Internal Revenue Code, as amended,
which is currently $150,000 per year. If Mr. Weaver terminates employment prior
to July 1, 1996, he would not receive any benefit under the Company's funded
pension plan, but would, commencing at age 62, receive an annual benefit of
approximately $11,250 if service terminates prior to July 1, 1994, $16,875 if
service terminates prior to July 1, 1995 or $22,500 if service terminates prior
to July 1, 1996.
14
<PAGE>
PROPOSAL TO INCREASE SHARES AUTHORIZED FOR
ISSUANCE UNDER INVESTMENT PLAN FOR EMPLOYEES
The Investment Plan for Employees (the "Plan") is a retirement plan that is
intended to qualify under Section 401(a) of the Internal Revenue Code of 1986,
as amended (the "Code") and constitute a plan described in Section 404 (i) of
the Employee Retirement Income Security Act of 1974, as amended. The Plan is
funded through contributions from eligible employees and the Company. Eligible
employees may contribute up to 12% of their basic earnings to the Plan by
payroll deduction, on either a pre-tax or an after-tax basis, subject to a limit
of $9,240 (in 1994) on pre-tax contributions. The Company contributes an amount
equal to 55% of the first 6% of basic earnings that the employee elects to
contribute, subject to certain limitations imposed by the Code to ensure that
highly compensated employees do not receive a disproportionate percentage of
such contributions. An employee's salary deferral contributions are invested by
the Plan trustee, as directed by the employee, in investment funds maintained
for the Plan by the trustee. The Company's contributions are invested by the
Plan trustee in Common Stock, purchased either directly from the Company or on
the open market (the "Company Stock Fund"). If Common Stock is purchased from
the Company, it will be priced at the last sale price of the Common Stock on the
New York Stock Exchange on the last business day of the month preceding the
month in which the contribution is made. The Company may also make its
contributions in shares of Common Stock.
Prior to February 1, 1994, employees could not direct funds into or out of the
Company Stock Fund. Effective February 1, 1994, the Board of Directors amended
the Plan to permit employees to direct that all or a portion of their salary
deferral contributions be invested in the Company Stock Fund or that all or a
portion of the amounts which they have invested in other investment funds be
transferred to the Common Stock Fund. Also as of February 1, 1994, employees are
permitted to direct that amounts invested in the Company Stock Fund (including
amounts resulting from Company contributions) be transferred into other
investment funds. Any Common Stock that must be purchased to satisfy employee
investment directions is purchased either directly from the Company or in the
open market at a price per share equal to the fair market value of the Common
Stock on the date of purchase. The closing price of the Common Stock as reported
on the New York Stock Exchange on March 14, 1994 was $ 23.00.
Employees are fully vested in their salary deferral contributions at all times.
Employees are vested in the Company's contributions only after they have
completed three years of service or at age 65 or in the event of death or
disability. Participants are entitled to instruct the trustee how to vote all
shares of Common Stock credited to their accounts, whether vested or not.
An employee's vested interest is distributable in a lump sum upon the employee's
termination of employment. In addition, an employee can withdraw all or a
portion of his or her after-tax salary deferral contributions prior to
termination of employment for any reason. The employee also may withdraw all or
a portion of his or her pre-tax salary deferral contributions and vested Company
contributions prior to termination of employment if the employee has a
qualifying hardship.
Substantially all of the Company's employees are eligible to participate in the
Plan. As of December 31, 1993, approximately 2,313 active employees were
participating in the Plan out of approximately 2,624 who were eligible to
participate. Directors who are not employees of the Company may not participate
in the Plan. Future Company contributions will depend on employee participation,
salary levels and Internal Revenue Code limitations on Company contributions to
qualified plans. Because each participant will determine the extent of his or
her participation within the limits prescribed by the Plan and the Code, it is
difficult to estimate the Company's potential contribution obligation.
Contributions made for each of the six individuals named on page 10 for the year
ended December 31, 1993 were as follows: Mr. Sonstelie, $2,968; Mr. Weaver,
$4,947; Mr. Myers, $2,473; Mr. McReynolds, $2,473; Mr. Swofford, $2,473 and Mr.
Ellis, $0. All executive officers as a group received an aggregate of $39,693 in
Company contributions in fiscal year 1993. The aggregate Company contributions
for fiscal year 1993 for all other employees were approximately $3,481,136.
15
<PAGE>
The Company intends to continue the Plan indefinitely, but the Board of
Directors may terminate the Plan or modify or amend the Plan in any manner
without shareholder approval, except (1) no modification may retroactively
deprive any individual of rights accrued under the Plan, and (2) shareholder
approval must be obtained for any increase in the maximum number of shares of
Common Stock which may be issued under the Plan.
Under the Washington Utilities Law, the Company may not sell any increase of its
capital stock to its employees unless the stock is first offered to shareholders
or a majority of the shareholders authorizes the issuance of such stock. Since
the time of initial approval of the Plan in 1970, shareholders have authorized
the issuance of 1,000,000 shares of Common Stock under the Plan. Proposal No. 2
increases the maximum amount which may be issued under the Plan from 1,000,000
to 2,000,000 shares. From the effective date of the Plan, which was August 1,
1970, through December 31, 1993, an aggregate of 959,142 shares of Common Stock
have been issued under the Plan.
The Board of Directors recommends adoption of the proposed increase in the
number of shares that may be issued under the Plan. Proxies solicited by
management will be so voted unless shareholders specify in their proxy a
contrary vote.
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Coopers & Lybrand has examined the financial statements of the
Company since 1933, and the Company intends to continue the service of this firm
for the fiscal year ending December 31, 1994. Representatives of the firm will
be present at the Annual Meeting with the opportunity to make a statement and to
answer shareholder questions.
VOTING RIGHTS AND PROXY
Common Stock is the only class of stock entitled to vote at the Annual Meeting
for the election of Directors. Approximately 63.6 million shares of Common Stock
were outstanding on March 14, 1994, the record date for the Annual Meeting. The
holders of a majority of the shares of the Common Stock, present in person or by
proxy at the Annual Meeting, constitute a quorum for the transaction of
business. Each holder of Common Stock will be entitled to one vote for each
share held on the record date on each item listed in the Notice of Annual
Meeting of Shareholders. In electing Directors, every holder of Common Stock has
the right of cumulative voting, namely, the right to multiply the number of
votes represented by shares held of record by the number of Directors to be
elected, and then cast all such votes for one candidate or distribute them among
any two or more candidates. Under Washington law and the Company's Articles of
Incorporation, if a quorum is present at the meeting: (i) the three nominees for
election as Directors who receive the greatest number of votes cast for the
election of Directors at the meeting by the shares present in person or
represented by proxy at the meeting and entitled to vote shall be elected
Directors and (ii) matter two listed in the accompanying Notice of Annual
Meeting of Shareholders will be approved if a majority of the shares of Common
Stock vote in favor of the matter. In the election of directors, any actions
other than a vote for a nominee will have the practical effect of voting against
the nominee. Abstentions from voting by brokers will have the practical effect
of voting against matter two since they are one less vote for approval.
16
<PAGE>
Unless your proxy is mutilated or otherwise received in such form or at such
time as to render it not votable, the shares represented by your proxy will be
voted as directed, and if no direction is indicated, it will be voted for all
management proposals as set forth in this Proxy Statement. A proxy may be
revoked by the shareholder at any time before it is voted. A proxy, when
executed and not so revoked, will be voted, and if it contains any
specifications, will be voted in accordance with the specifications so made. The
Company acts as tabulator for the proxies of the shareholders of record, brokers
and banks. The identity and vote of all shareholders shall not be disclosed to
any third party except as necessary to meet applicable legal requirements. If
any other matters should properly come before the Annual Meeting, it is the
intention of the persons named in the accompanying form of proxy to vote thereon
in accordance with their judgment on such matters.
SHAREHOLDER PROPOSALS
Any shareholder proposal intended for inclusion in the Company proxy material
for the May 9, 1995 Annual Meeting of Shareholders must be received at the
principal executive office of the Company not later than November 25, 1994.
SOLICITATION OF PROXIES
Proxies in the form enclosed are solicited by and on behalf of the Company.
Richard R. Sonstelie, President and Chief Executive Officer, and J. W. Eldredge,
Corporate Secretary, and each or either of them are named as proxies. Proxies
may be solicited by mail, personal interview, telephone and telecopier. It is
anticipated that banks, brokerage houses and other custodians, nominees or
fiduciaries will be requested to forward soliciting materials to their
principals and to obtain authorization for the execution of proxies and will be
reimbursed for their expenses incurred in connection therewith. Proxies may also
be solicited by officers, Directors, employees and other agents of the Company
without compensation therefor, except for reimbursement of expenses. All costs
of solicitation of proxies will be borne by the Company.
March 24, 1994
By Order of the Board of Directors,
/s/ R. R. SONSTELIE
RICHARD R. SONSTELIE
President and Chief Executive Officer
17
<PAGE>
MAP TO MEYDENBAUER CENTER
11100 NE 6th Street Bellevue, WA 98004
[MAP APPEARS HERE]
PARKING
Complimentary parking is available in the Meydenbauer
Center parking garage. The garage entrance is located
on 112th Ave. NE. Please tell the attendant you are
attending the Puget Power Annual Meeting.
[RECYCLE LOGO APPEARS HERE]
Printed on recycled paper.
[PUGET POWER LOGO
APPEARS HERE]
18
<PAGE>
[LOGO OF PUGET POWER
APPEARS HERE] P.O. Box 96010, Bellevue, WA 98009-9610
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints RICHARD S. SONSTELIE and JAMES W. ELDREDGE,
and each or either of them, as Proxies, each with the power to appoint his
substitute, and hereby authorizes them to represent and to vote, as designated
below, all the shares of Common Stock of PUGET SOUND POWER & LIGHT COMPANY
held of record by the undersigned on March 14, 1994, at the Annual Meeting of
Shareholders to be held on May 10, 1994, or any adjournment thereof.
1. ELECTION OF DIRECTORS
[_] FOR all nominees listed below [_] WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees listed below
CHARLES W. BINGHAM JOHN W. ELLIS RICHARD R. SONSTELIE
(INSTRUCTION: To withhold authority
to vote for any individual
nominee, write that nominee's name
in the space provided right.)
---------------------------------
2. INCREASE THE COMMON STOCK WHICH MAY BE ISSUED UNDER THE INVESTMENT PLAN FOR
EMPLOYEES FROM 1,000,000 TO 2,000,000 SHARES
[_] FOR [_] AGAINST [_] ABSTAIN
(This Proxy Card continues and
MUST be signed on the reverse
side)
(Continued from the reverse) This proxy when properly executed will be voted
in the manner directed herein by the undersigned shareholder. PROXIES PROPERLY
EXECUTED AND RETURNED WITHOUT DIRECTION WILL BE VOTED FOR PROPOSALS 1 AND 2.
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 below. 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 authorized person.
SIGNATURE/DATE SIGNATURE IF HELD JOINTLY/DATE
- ------------------------------------ ------------------------------------
PLEASE MARK, SIGN, DATE
AND RETURN THE PROXY
CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
<PAGE>
GRAPHICS APPENDIX LIST
<TABLE>
<CAPTION>
PAGE WHERE
GRAPHIC APPEARS DESCRIPTION OF GRAPHIC OR CROSS-REFERENCE
- -------------------------------------------------------------------------------
<C> <S>
Page 8 Graphic No. 1 is a performance graph showing a
comparison of the five-year cumulative total shareholder
return on the Common Stock of Puget Sound Power & Light
Company against the cumulative total return of Standard
and Poor's 500 Stock Index, the EEI 100 Index of Investor-
owned Electrics and the Duff & Phelps Index of Investor-
owned utilities. The underlying data presented in the
graph is set forth on page 8.
Page 18 Graphic No. 2 is a map to the Meydenbauer Center in
Bellevue, Washington where the Annual Meeting will be
held.
</TABLE>
