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FORM 10-Q/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended March 31, 1995
Commission file number 1-1910
BALTIMORE GAS AND ELECTRIC COMPANY
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(Exact name of registrant as specified in its charter)
Maryland 52-0280210
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(State of incorporation) (IRS Employer Identification No.)
Gas and Electric Building, Charles Center,
Baltimore, Maryland 21201
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 410-783-5920
Not Applicable
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(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months,
and (2) has been subject to such filing requirements for the past
90 days.
Yes X No
Common Stock, without par value - 147,527,114 shares outstanding
on April 30, 1995.
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BALTIMORE GAS AND ELECTRIC COMPANY
PART I. FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<CAPTION> Quarter Ended March 31,
1995 1994
(In Thousands, Except Per-Share Amounts)
<S> <C> <C>
Revenues
Electric ................................................ $ 507,825 $ 517,147
Gas ..................................................... 152,784 205,186
Diversified businesses .................................. 54,642 45,353
Total revenues ............................................. 715,251 767,686
Expenses Other Than Interest and In
Electric fuel and purchased energy ...................... 147,454 126,554
Gas purchased for resale ................................ 81,803 126,926
Operations .............................................. 131,535 150,139
Maintenance ............................................. 36,881 45,446
Diversified businesses - selling, general, and administrativ 38,649 33,489
Depreciation and amortization ........................... 76,648 69,778
Taxes other than income taxes ........................... 54,122 52,795
Total expenses other than interest and income taxes ..... 567,092 605,127
Income From Operations .................................... 148,159 162,559
Other Income
Allowance for equity funds used during construction ..... 5,369 5,074
Equity in earnings of Safe Harbor Water Power Corporation 1,107 1,089
Net other income and deductions ......................... (2,578) 607
Total other income ...................................... 3,898 6,770
Income Before Interest and Income Taxes ................... 152,057 169,329
Interest Expense
Interest charges ........................................ 54,977 52,199
Capitalized interest .................................... (3,484) (2,801)
Allowance for borrowed funds used during construction ... (2,905) (2,742)
Net interest expense .................................... 48,588 46,656
Income Before Income Taxes ................................ 103,469 122,673
Income Taxes
Current ................................................. (3,059) 13,144
Deferred ................................................ 37,702 29,423
Investment tax credit adjustments ....................... (2,027) (2,039)
Total income taxes ...................................... 32,616 40,528
Net Income ................................................ 70,853 82,145
Preferred and Preference Stock Dividends .................. 9,951 10,031
Earnings Applicable to Common Stock ....................... $ 60,902 $ 72,114
Average Shares of Common Stock Outstanding ............... 147,527 146,437
Earnings Per Share of Common Stock ........................ $0.41 $0.49
Dividends Declared Per Share of Common Stock .............. $0.38 $0.37
Certain prior-year amounts have been restated to conform with the current year's presentation.
See Notes to Consolidated Financial Statements.
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<TABLE>
PART I. FINANCIAL INFORMATION (Continued)
CONSOLIDATED BALANCE SHEETS March 31, December 31,
<CAPTION> 1995 * 1994
(In Thousands)
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents ................................... $ 34,131 $ 38,590
Accounts receivable (net of allowance for uncollectibles).... 324,105 314,842
Fuel stocks ................................................... 48,968 70,627
Materials and supplies ........................................ 149,030 149,614
Prepaid taxes other than income taxes ......................... 27,365 57,740
Other ......................................................... 55,790 47,022
Total current assets .......................................... 639,389 678,435
Investments and Other Assets
Real estate projects .......................................... 481,073 471,435
Power generation systems ...................................... 323,423 311,960
Financial investments ......................................... 209,142 224,340
Nuclear decommissioning trust fund ............................ 72,282 66,891
Safe Harbor Water Power Corporation ........................... 34,175 34,168
Senior living facilities ...................................... 10,775 11,540
Other ........................................................ 58,144 58,824
Total investments and other assets ............................ 1,189,014 1,179,158
Utility Plant
Plant in service
Electric .................................................... 6,001,230 5,929,996
Gas ......................................................... 634,418 616,823
Common ...................................................... 516,392 511,016
Total plant in service ...................................... 7,152,040 7,057,835
Accumulated depreciation ......................................(2,358,359) (2,305,372)
Net plant in service .......................................... 4,793,681 4,752,463
Construction work in progress ................................. 473,343 506,030
Nuclear fuel (net of amortization) ............................ 127,211 134,012
Plant held for future use ..................................... 24,411 24,320
Net utility plant ............................................. 5,418,646 5,416,825
Deferred Charges
Regulatory assets ............................................. 765,011 773,034
Other deferred charges ........................................ 92,691 96,086
Total deferred charges ........................................ 857,702 869,120
TOTAL ASSETS .................................................. $ 8,104,751 $ 8,143,538
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* Unaudited
See Notes to Consolidated Financial Statements.
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<TABLE>
PART I. FINANCIAL INFORMATION (Continued)
CONSOLIDATED BALANCE SHEETS March 31, December 31,
<CAPTION> 1995 * 1994
(In Thousands)
<S> <C> <C>
LIABILITIES AND CAPITALIZATION
Current Liabilities
Short-term borrowings ....................................... $ 27,800 $ 63,700
Current portions of long-term debt and preference stock ....... 334,146 323,675
Accounts payable .............................................. 144,606 181,931
Customer deposits ............................................. 25,576 24,891
Accrued taxes ................................................. 25,686 19,585
Accrued interest .............................................. 60,457 60,348
Dividends declared ............................................ 66,012 66,012
Accrued vacation costs ........................................ 32,834 30,917
Other ......................................................... 11,286 30,857
Total current liabilities ..................................... 728,403 801,916
Deferred Credits and Other Liabilities
Deferred income taxes ......................................... 1,195,904 1,156,429
Deferred investment tax credits ............................... 147,411 149,394
Pension and postemployment benefits ........................... 135,546 138,835
Decommissioning of federal uranium enrichment facilities ...... 45,637 45,836
Other ......................................................... 57,884 59,645
Total deferred credits and other liabilities .................. 1,582,382 1,550,139
Capitalization
Long-term Debt
First refunding mortgage bonds of BGE ......................... 1,744,385 1,744,385
Other long-term debt of BGE ................................... 544,550 544,550
Long-term debt of Constellation Companies ..................... 580,618 575,765
Unamortized discount and premium .............................. (17,066) (17,593)
Current portion of long-term debt ............................. (272,646) (262,175)
Total long-term debt .......................................... 2,579,841 2,584,932
Preferred Stock ................................................. 59,185 59,185
Redeemable Preference Stock ..................................... 341,000 341,000
Current portion of redeemable preference stock ................ (61,500) (61,500)
Total redeemable preference stock ............................. 279,500 279,500
Preference Stock Not Subject to Mandatory Redemption ............ 150,000 150,000
Common Shareholders' Equity
Common stock .................................................. 1,425,391 1,425,378
Retained earnings ............................................. 1,317,497 1,312,655
Pension liability adjustment ................................ (16,521) (16,521)
Net unrealized loss on available-for-sale securities ........ (927) (3,646)
Total common shareholders' equity ............................. 2,725,440 2,717,866
Total capitalization .......................................... 5,793,966 5,791,483
TOTAL LIABILITIES AND CAPITALIZATION .......................... $ 8,104,751 $ 8,143,538
</TABLE>
* Unaudited
See Notes to Consolidated Financial Statements.
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PART I. FINANCIAL INFORMATION (Continued)
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION> Three Months Ended March 31,
1995 1994
(In Thousands)
<S> <C> <C>
Cash Flows From Operating Activities
Net income ................................................... $ 70,853 $ 82,145
Adjustments to reconcile to net cash provided by operating activities
Depreciation and amortization .............................. 92,102 81,598
Deferred income taxes ...................................... 37,753 29,423
Investment tax credit adjustments .......................... (2,017) (2,039)
Deferred fuel costs ........................................ 10,366 (13,537)
Accrued pension and postemployment benefits ................ (5,198) (38,426)
Allowance for equity funds used during construction......... (5,369) (5,074)
Equity in earnings of affiliates and joint ventures 2,995 2,870
Changes in current assets, other than sale of accounts receivable ... 30,893 30,119
Changes in current liabilities, other than short-te......... (43,687) (29,277)
Other ...................................................... 9,097 13,397
Net cash provided by operating activities .................... 197,788 151,199
Cash Flows From Financing Activities
Proceeds from issuance of
Short-term borrowings (net) ................................ (35,900) -
Long-term debt ............................................. 10,641 124,090
Common stock ............................................... 14 11,588
Reacquisition of long-term debt .............................. (5,789) (79,180)
Common stock dividends paid .................................. (56,060) (54,033)
Preferred and preference stock dividends paid ................ (9,952) (9,934)
Other ........................................................ (748) 11
Net cash used in financing activities ........................ (97,794) (7,458)
Cash Flows From Investing Activities
Utility construction expenditures ............................ (80,484) (93,357)
Allowance for equity funds used during construction .......... 5,369 5,074
Nuclear fuel expenditures .................................... (6,346) (7,659)
Deferred nuclear expenditures ................................ - (2,132)
Deferred energy conservation expenditures .................... (10,226) (9,495)
Contributions to nuclear decommissioning trust fund .......... (2,445) (2,445)
Purchases of marketable equity securities .................... (4,395) (21,809)
Sales of marketable equity securities ........................ 18,127 10,815
Other financial investments .................................. 5,041 533
Real estate projects ......................................... (11,266) (3,383)
Power generation systems ..................................... (15,960) (4,412)
Other ........................................................ (1,868) 679
Net cash used in investing activities ........................ (104,453) (127,591)
.........
Net Increase (Decrease) in Cash and Cash Equivalents ........... (4,459) 16,150
Cash and Cash Equivalents at Beginning of Period ...... 38,590 84,236
.........
Cash and Cash Equivalents at End of Period ............ $ 34,131 $ 100,386
Other Cash Flow Information
Cash paid during the period for: .........
Interest (net of amounts capitalized) ...................... $ 47,403 $ 47,470
Income taxes ............................................... $ 82 $ 64
</TABLE>
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See Notes to Consolidated Financial Statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Results for interim periods, which can be largely influenced
by weather conditions, are not necessarily indicative of results
to be expected for the year.
The preceding interim financial statements of Baltimore Gas
and Electric Company (BGE) and Subsidiaries (collectively, the
Company) reflect all adjustments which are, in the opinion of
Management, necessary for the fair presentation of the Company's
financial position and results of operations for such interim
periods. These adjustments are of a normal recurring nature.
Statement of Financial Accounting Standards No. 121
In March 1995, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards (SFAS) No. 121
regarding accounting for asset impairments. This statement,
which must be adopted by the Company by January 1, 1996, requires
the Company to review long-lived assets for impairment whenever
events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. Additionally, the
statement requires rate-regulated companies to write-off
regulatory assets against earnings whenever those assets no
longer meet the criteria for recognition of a regulatory asset as
defined by SFAS No. 71, Accounting for the Effects of Certain
Types of Regulation. Adoption of SFAS No. 121 is not expected to
have a material impact on the Company's financial statements.
BGE Financing Activity
No issuances or early redemptions of long-term debt or
preference stock have occurred or have been announced during the
period January 1, 1995 through the date of this Report.
Diversified Business Financing Matters
See Management's Discussion and Analysis of Financial
Condition and Results of Operations - Diversified Businesses
Capital Requirements for additional information about the debt of
Constellation Holdings, Inc. and its subsidiaries.
Environmental Matters
The Clean Air Act of 1990 (the Act) contains two titles
designed to reduce emissions of sulfur dioxide and nitrogen oxide
(NOx) from electric generating stations. Title IV contains
provisions for compliance in two separate phases. Phase I of
Title IV became effective January 1, 1995, and Phase II of Title
IV must be implemented by 2000. BGE met the requirements of
Phase I by installing flue gas desulfurization systems and fuel
switching and through unit retirements. BGE is currently
examining what actions will be required in order to comply with
Phase II of the Act. However, BGE anticipates that compliance
will be attained by some combination of fuel switching, flue gas
desulfurization, unit retirements, or allowance trading.
<PAGE>
At this time, plans for complying with NOx control
requirements under Title I of the Act are less certain because
all implementation regulations have not yet been finalized by the
government. It is expected that by the year 1999 these
regulations will require additional NOx controls for ozone
attainment at BGE's generating plants and at other BGE
facilities. The controls will result in additional expenditures
that are difficult to predict prior to the issuance of such
regulations. Based on existing and proposed ozone nonattainment
regulations, BGE currently estimates that the NOx controls at
BGE's generating plants will cost approximately $70 million. BGE
is currently unable to predict the cost of compliance with the
additional requirements at other BGE facilities.
BGE has been notified by the Environmental Protection Agency
and several state agencies that it is being considered a
potentially responsible party with respect to the cleanup of
certain environmentally contaminated sites owned and operated by
third parties. In addition, a subsidiary of Constellation
Holdings, Inc. has been named as a defendant in a case concerning
an alleged environmentally contaminated site owned and operated
by a third party. Cleanup costs for these sites cannot be
estimated, except that BGE's 15.79% share of the possible cleanup
costs at one of these sites, Metal Bank of America, a metal
reclaimer in Philadelphia, could exceed amounts recognized by up
to approximately $14 million based on the highest estimate of
costs in the range of reasonably possible alternatives. Although
the cleanup costs for certain of the remaining sites could be
significant, BGE believes that the resolution of these matters
will not have a material effect on its financial position or
results of operations.
Also, BGE is coordinating investigation of several former gas
manufacturing plant sites, including exploration of corrective
action options to remove tar. However, no formal legal
proceedings have been instituted against BGE. BGE has recognized
estimated environmental costs at these sites totaling $38.6
million as of March 31, 1995. These costs, net of accumulated
amortization, have been deferred as a regulatory asset. The
technology for cleaning up such sites is still developing, and
potential remedies for these sites have not been identified.
Cleanup costs in excess of the amounts recognized, which could be
significant in total, cannot presently be estimated.
Nuclear Insurance
An accident or an extended outage at either unit of the
Calvert Cliffs Nuclear Power Plant could have a substantial
adverse effect on BGE. The primary contingencies resulting from
an incident at the Calvert Cliffs plant would involve the
<PAGE>
physical damage to the plant, the recoverability of replacement
power costs, and BGE's liability to third parties for property
damage and bodily injury. BGE maintains various insurance
policies for these contingencies. The costs that could result
from a major accident or an extended outage at either of the
Calvert Cliffs units could exceed the coverage limits.
In addition, in the event of an incident at any commercial
nuclear power plant in the country, BGE could be assessed for a
portion of any third party claims associated with the incident.
Under the provisions of the Price Anderson Act, the limit for
third party claims from a nuclear incident is $8.92 billion. If
third party claims relating to such an incident exceed $200
million (the amount of primary insurance), BGE's share of the
total liability for third party claims could be up to $159
million per incident, that would be payable at a rate of $20
million per year.
BGE and other operators of commercial nuclear power plants
in the United States are required to purchase insurance to cover
claims of certain nuclear workers. Other non-governmental
commercial nuclear facilities may also purchase such insurance.
Coverage of up to $400 million is provided for claims against BGE
or others insured by these policies for radiation injuries. If
certain claims were made under these policies, BGE and all
policyholders could be assessed, with BGE's share being up to
$6.08 million in any one year.
For physical damage to Calvert Cliffs, BGE has $2.75
billion of property insurance, including $1.4 billion from an
industry mutual insurance company.
If an outage at Calvert Cliffs is caused by an insured
physical damage loss and lasts more than 21 weeks, BGE has up to
$473.2 million per unit of insurance, provided by the same
industry mutual insurance company, for replacement power costs.
This amount can be reduced by up to $94.6 million per unit if an
outage to both units at Calvert Cliffs is caused by a singular
insured physical damage loss.
If accidents at any insured plants cause a shortfall of
funds at the industry mutual, BGE and all policyholders could be
assessed, with BGE's share being up to $23.7 million.
Recoverability of Electric Fuel Costs
By statute, actual electric fuel costs are recoverable so
long as the Public Service Commission of Maryland (PSC) finds
that BGE demonstrates that, among other things, it has maintained
the productive capacity of its generating plants at a reasonable
level. The PSC and Maryland's highest appellate court have
interpreted this as permitting a subjective evaluation of each
<PAGE>
unplanned outage at BGE's generating plants to determine whether
or not BGE had implemented all reasonable and cost-effective
maintenance and operating control procedures appropriate for
preventing the outage. Effective January 1, 1987, the PSC
authorized the establishment of a Generating Unit Performance
Program (GUPP) to measure, annually, utility compliance with
maintaining the productive capacity of generating plants at
reasonable levels by establishing a system-wide generating
performance target and individual performance targets for each
base load generating unit. In future fuel rate hearings, actual
generating performance after adjustment for planned outages will
be compared to the system-wide target and, if met, should signify
that BGE has complied with the requirements of Maryland law.
Failure to meet the system-wide target will result in review of
each unit's adjusted actual generating performance versus its
performance target in determining compliance with the law and the
basis for possibly imposing a penalty on BGE. Parties to fuel
rate hearings may still question the prudence of BGE's actions or
inactions with respect to any given generating plant outage,
which could result in the disallowance of replacement energy
costs by the PSC.
Since the two units at BGE's Calvert Cliffs Nuclear Power
Plant utilize BGE's lowest cost fuel, replacement energy costs
associated with outages at these units can be significant. BGE
cannot estimate the amount of replacement energy costs that could
be challenged or disallowed in future fuel rate proceedings, but
such amounts could be material.
In October 1988, BGE filed its first fuel rate application
for a change in its electric fuel rate under GUPP. The resultant
case before the PSC covers BGE's operating performance in
calendar year 1987, and BGE's filing demonstrated that it met the
system-wide and individual nuclear plant performance targets for
1987. In November 1989, testimony was filed on behalf of the
Maryland People's Counsel (People's Counsel) alleging that seven
outages at the Calvert Cliffs plant in 1987 were due to
management imprudence and that the replacement energy costs
associated with those outages should be disallowed by the
Commission. Total replacement energy costs associated with the
1987 outages were approximately $33 million.
In May 1989, BGE filed its fuel rate case in which 1988
performance was examined. BGE met the system-wide and nuclear
plant performance targets in 1988. People's Counsel alleged that
BGE imprudently managed several outages at Calvert Cliffs, and
BGE estimates that the total replacement energy costs associated
with these 1988 outages were approximately $2 million. On
November 14, 1991, a Hearing Examiner at the PSC issued a
proposed Order, which became final on December 17, 1991 and
concluded that no disallowance was warranted. The Hearing
Examiner found that BGE maintained the productive capacity of the
Plant at a reasonable level, noting that it produced a near
record amount of power and exceeded the GUPP standard. Based on
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this record, the Order concluded there was sufficient cause to
excuse any avoidable failures to maintain productive capacity at
higher levels.
During 1989, 1990, and 1991, BGE experienced extended
outages at its Calvert Cliffs Nuclear Power Plant. In the Spring
of 1989, a leak was discovered around the Unit 2 pressurizer
heater sleeves during a refueling outage. BGE shut down Unit 1
as a precautionary measure on May 6, 1989, to inspect for similar
leaks and none were found. However, Unit 1 was out of service
for the remainder of 1989 and 285 days of 1990 to undergo
maintenance and modification work to enhance the reliability of
various safety systems, to repair equipment, and to perform
required periodic surveillance tests. Unit 2, which returned to
service on May 4, 1991, remained out of service for the remainder
of 1989, 1990, and the first part of 1991 to repair the
pressurizer, perform maintenance and modification work, and
complete the refueling. The replacement energy costs associated
with these extended outages for both units at Calvert Cliffs,
concluding with the return to service of Unit 2, are estimated to
be $458 million.
In a December 1990 order issued by the PSC in a BGE base
rate proceeding, the PSC found that certain operations and
maintenance expenses incurred at Calvert Cliffs during the test
year should not be recovered from ratepayers. The PSC found that
this work, which was performed during the 1989-1990 Unit 1 outage
and fell within the test year, was avoidable and caused by BGE
actions which were deficient.
The PSC noted in the order that its review and findings on
these issues pertain to the reasonableness of BGE's test-year
operations and maintenance expenses for purposes of setting base
rates and not to the responsibility for replacement power costs
associated with the outages at Calvert Cliffs. The PSC stated
that its decision in the base rate case will have no res judicata
(binding) effect in the fuel rate proceeding examining the 1989-
1991 outages. The work characterized as avoidable significantly
increased the duration of the Unit 1 outage. Despite the PSC's
statement regarding no binding effect, BGE recognizes that the
views expressed by the PSC make the full recovery of all of the
replacement energy costs associated with the Unit 1 outage
doubtful. Therefore, in December 1990, BGE recorded a provision
of $35 million against the possible disallowance of such costs.
BGE cannot determine whether replacement energy costs may be
disallowed in the present fuel rate proceeding in excess of the
provision, but such amounts could be material.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The financial condition and results of operations of
Baltimore Gas and Electric Company (BGE) and its subsidiaries
(collectively, the Company) are set forth in the Consolidated
Financial Statements and Notes to Consolidated Financial
Statements (Notes) sections of this Report. Factors
significantly affecting results of operations, liquidity, and
capital resources are discussed below.
RESULTS OF OPERATIONS FOR THE QUARTER ENDED MARCH 31, 1995
COMPARED WITH THE CORRESPONDING PERIOD OF 1994
Earnings per Share of Common Stock
Consolidated earnings per share were $.41 for the quarter
ended March 31, 1995 and $.49 for the quarter ended March 31,
1994. The $.08 decrease in earnings per share reflects a lower
level of earnings applicable to common stock and a slight
increase in the number of common shares outstanding. The
earnings per share are summarized as follows:
Quarter Ended
March 31
1995 1994
Utility operations $.38 $.48
Diversified businesses .03 .01
Total $.41 $.49
Earnings Applicable to Common Stock
Earnings applicable to common stock decreased $11.2 million
during the quarter ended March 31, 1995. The 1995 decrease
reflects lower earnings from the utility operations.
Earnings from utility operations were lower in the first
quarter of 1995 compared to the first quarter of 1994 primarily
due to lower electric and gas sales resulting from substantially
milder winter weather in 1995. The effect of weather on utility
sales is discussed on pages 12 and 13. Depreciation and
amortization expense also increased during the first quarter.
These factors were offset partially by lower operations and
maintenance expenses due to the Company's continuing cost control
efforts.
The following factors influence BGE's utility
operations earnings: regulation by the Public Service Commission
of Maryland (PSC), the effect of weather and economic conditions
on sales, and competition in the generation and sale of
electricity. Several electric fuel rate cases now pending before
<PAGE>
the PSC discussed in Notes 1 and 13 of the Form 10-K for the year
ended December 31, 1994 (Form 10-K) could also affect future
years' earnings.
Electric utilities presently face competition in the
construction of generating units to meet future load growth and
in the sale of electricity in the bulk power markets. Electric
utilities also face the future prospect of competition for
electric sales to retail customers. It is not possible to
predict currently the ultimate effect competition will have on
BGE's earnings in future years. In response to the competitive
forces and regulatory changes, as discussed in Part 1 of the Form
10-K under the heading Regulatory Matters and Competition, BGE
from time to time will consider various strategies designed to
enhance its competitive position and to increase its ability to
adapt to and anticipate regulatory changes in its utility
business. These strategies may include internal restructurings
involving the complete or partial separation of its generation,
transmission and distribution businesses, acquisitions of related
or unrelated businesses, business combinations, and additions to
or dispositions of portions of its franchised service
territories. BGE may from time to time be engaged in preliminary
discussions, either internally or with third parties, regarding
one or more of these potential strategies. No assurances can be
given as to whether any potential transaction of the type
described above may actually occur, or as to the ultimate effect
thereof on the financial condition or competitive position of
BGE.
Earnings from diversified businesses, which primarily
represent the operations of Constellation Holdings, Inc. and its
subsidiaries (collectively, the Constellation Companies) and BGE
Home Products & Services, Inc. (HPS) and its subsidiary were
higher during the quarter ended March 31, 1995. Diversified
businesses' earnings are discussed on pages 19 through 21.
Effect of Weather on Utility Sales
Weather conditions affect BGE's utility sales. BGE measures
weather conditions using degree days. A degree day is the
difference between the average daily actual temperature and the
baseline temperature of 65 degrees. Colder weather during the
winter, as measured by greater heating degree days, results in
greater demand for electricity and gas to operate heating
systems. Conversely, warmer weather during the winter, measured
by fewer heating degree days, results in less demand for
electricity and gas to operate heating systems. Hotter weather
during the summer, measured by more cooling degree days, results
in greater demand for electricity to operate cooling systems.
Conversely, cooler weather during the summer, measured by fewer
cooling degree days, results in less demand for electricity to
operate cooling systems. The degree-days chart on the following
page presents information regarding heating degree days for the
quarters ended March 31, 1995 and 1994.
<PAGE>
Quarter Ended
March 31
1995 1994
Heating degree days............ 2,240 2,752
Percent change compared to
prior period.................. (18.6)%
BGE Utility Revenues and Sales
Electric revenues decreased in the first quarter of 1995
because of the following factors:
Quarter Ended
March 31
1995 vs. 1994
(In millions)
System sales volumes $(24.2)
Base rates 1.4
Fuel rates (8.7)
Revenues from system sales (31.5)
Interchange sales 24.2
Other revenues (2.0)
Total $(9.3)
Electric system sales represent volumes sold to customers
within BGE's service territory at rates determined by the PSC.
These amounts exclude interchange sales, which are discussed
separately. Below is a comparison of the changes in electric
system sales volumes:
Quarter Ended
March 31
1995 vs. 1994
Residential (11.1)%
Commercial (1.9)
Industrial 13.5
Total (4.1)
The overall decrease in sales to electric customers is
attributable to the very mild winter weather conditions during
the first quarter of 1995 compared to the extremely cold weather
conditions experienced last year. This decrease was offset
partially by moderate customer growth in all classes. Sales to
industrial customers reflect primarily an increase in the sale of
electricity to Bethlehem Steel, which is now purchasing its full
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electricity requirements from BGE. Bethlehem Steel is still
producing power with its own generating facility, but is now
selling the output from this facility to BGE rather than using
the power to reduce its requirements.
Base rates are affected by two principal items: rate orders
by the PSC and recovery of eligible electric conservation program
costs through the energy conservation surcharge. Base rates were
essentially unchanged during the quarter ended March 31, 1995.
Under the energy conservation surcharge, if the PSC
determines that BGE is earning in excess of its authorized rate
of return, BGE will have to refund (by means of lowering future
surcharges) a portion of energy conservation surcharge revenues
to its customers. The portion subject to the refund is
compensation for foregone sales from conservation programs and
incentives for achieving conservation goals and will be refunded
to customers with interest beginning in the ensuing July when the
annual resetting of the conservation surcharge rates occur. BGE
earned in excess of its authorized rate of return on electric
operations for the period July 1, 1993 through June 30, 1994. As
a result, BGE deferred the portion of electric energy
conservation revenues subject to refund for the period December
1993 through November 1994. The deferral of these billings
totaled $20.1 million, of which $4.6 million occurred during the
quarter ended March 31, 1994.
Changes in fuel rate revenues result from the operation of
the electric fuel rate formula. The fuel rate formula is designed
to recover the actual cost of fuel, net of revenues from
interchange sales. (See Notes 1 and 13 of the Form 10-K.)
Changes in fuel rate revenues and interchange sales normally do
not affect earnings. However, if the PSC were to disallow
recovery of any part of these costs, earnings would be reduced as
discussed in Note 13 of the Form 10-K.
Fuel rate revenues were lower for the first quarter of 1995
as compared to the first quarter of 1994 as a result of decreased
electric system sales volumes and a lower fuel rate. The fuel
rate was lower because of a less costly twenty-four month
generation mix due to greater generation at the Calvert Cliffs
Nuclear Power Plant. BGE expects electric fuel rate revenues to
remain relatively constant during the remainder of 1995.
Interchange sales are sales of BGE's energy to the
Pennsylvania - New Jersey - Maryland Interconnection (PJM), a
regional power pool of eight member companies including BGE.
Interchange sales occur after BGE has satisfied the demand for
its own system sales of electricity, if BGE's available
generation is the least costly available to PJM utilities.
Interchange sales increased for the quarter ended March 31, 1995
because BGE had a less costly generation mix than other PJM
utilities due to greater generation from the Brandon Shores Power
Plant and continued operation of the Calvert Cliffs Nuclear Power
Plant.
<PAGE>
Gas revenues decreased in the first quarter of 1995 because of
the following factors:
Quarter Ended
March 31
1995 vs. 1994
(In millions)
Sales volumes $(7.7)
Base rates 1.4
Gas cost adjustment revenues (46.0)
Other revenues (0.1)
Total $(52.4)
Below is a comparison of the changes in gas sales volumes:
Quarter Ended
March 31
1995 vs. 1994
Residential (14.3)%
Commercial (8.7)
Industrial 13.8
Total (6.9)
Total gas sales for the first quarter decreased, as compared
with the same period last year, as a result of the mild 1995
weather in contrast to the extremely cold 1994 winter heating
season. The decrease in sales to residential and commercial
customers was offset partially by an increase in the number of
customers. Sales to industrial customers increased due to
greater usage of gas per customer, an increase in sales to
Bethlehem Steel, and fewer customer interruptions in the first
quarter of 1995, due to the milder weather, as compared to the
same period last year. Interruptible customers maintain
alternate fuel sources and pay reduced rates for natural gas in
exchange for BGE's right to interrupt service during periods of
peak demand.
Base rates were essentially unchanged in the first quarter
of 1995. Gas base rate revenues may be impacted positively by
the Maryland Commissions anticipated November 1995 order in
response to BGE's April 21, 1995 application for $30 million of
increased gas base rates.
Changes in gas cost adjustment revenues result primarily
from the operation of the purchased gas adjustment clause,
commodity charge adjustment clause, and the actual cost
adjustment clause which are designed to recover actual gas costs.
(See Note 1 of the Form 10-K.) Changes in gas cost adjustment
revenues normally do not affect earnings.
<PAGE>
Gas cost adjustment revenues decreased for the first quarter
of 1995 because of lower prices for purchased gas and lower sales
volumes subject to gas cost adjustment clauses. Delivery service
sales volumes are not subject to gas cost adjustment clauses
because these customers purchase their gas directly from third
parties.
BGE Utility Fuel and Energy Expenses
Electric fuel and purchased energy expenses were as follows:
Quarter Ended
March 31
1995 1994
(In millions)
Actual costs $138.6 $153.4
Net (deferral) recovery of
costs under electric fuel
rate clause (see Note 1 of
the Form 10-K) 8.9 (26.8)
Total $147.5 $126.6
Electric fuel and purchased energy expenses increased during
the quarter ended March 31, 1995 primarily as a result of the
operation of the electric fuel rate clause. BGE recovered $8.9
million of deferred fuel costs during the first quarter of 1995
compared to a deferral of $26.8 million of fuel costs during the
first quarter of 1994. The resulting increase in electric fuel
and purchased energy expense was offset partially by the decrease
in actual fuel and purchased energy costs.
Actual electric fuel and purchased energy costs decreased
for the quarter ended March 31, 1995 primarily as a result of a
less costly generation mix. The cost of BGE's generation mix
decreased due to higher purchased energy costs and refueling and
maintenance outages at the Calvert Cliffs Nuclear Power Plant
during the first quarter of 1994.
<PAGE>
Purchased gas expenses were as follows:
Quarter Ended
March 31
1995 1994
(In millions)
Actual costs $87.3 $122.7
Net (deferral) recovery of costs
under purchased gas adjustment
clause (see Note 1 of the
Form 10-K) (5.5) 4.2
Total $81.8 $126.9
Purchased gas expenses decreased during the quarter ended
March 31, 1995 as the result of lower actual gas costs and the
operation of the purchased gas adjustment clause.
Actual purchased gas costs decreased due to the lower output
associated with the decreased demand for BGE gas and lower gas
prices. The decreased demand for BGE gas and the lower gas
prices reflect the much milder weather experienced during the
first quarter of 1995 compared to the first quarter of 1994.
Purchased gas costs exclude gas purchased by delivery
service customers, including Bethlehem Steel, who obtain gas
directly from third parties. Future purchased gas costs are
expected to be increased by transition costs incurred by BGE gas
pipeline suppliers in implementing FERC Order No. 636. These
transition costs, if approved by FERC, will be passed on to BGE
customers through the purchased gas adjustment clause.
<PAGE>
Other Operating Expenses
Operations expense decreased for the quarter ended March 31,
1995 for three principal reasons: operations expense for the
first quarter of 1994 reflected a $10.0 million one-time bonus
paid to employees in lieu of a general wage increase; continuing
labor and other savings in 1995 resulting from the Company's
ongoing cost control efforts; and higher expenses attributable
to the winter storms in the first quarter of 1994. Operations
expense is expected to continue to decline during 1995 due to
ongoing cost control efforts of the Company.
Maintenance expense decreased during the quarter ended March
31, 1995 due primarily to less maintenance needed due to the mild
winter weather during 1995 and lower costs at the Calvert Cliffs
Nuclear Power Plant.
Depreciation and amortization expense increased during the
quarter ended March 31, 1995 because of higher depreciable plant
in service, higher levels of energy conservation program costs,
and the completion of a facility-specific study of the cost to
decommission the Calvert Cliffs Nuclear Power Plant. This study
generated a higher decommissioning cost than the prior estimate
which will increase depreciation expense by $9 million annually,
$2.2 million of which occurred during the first quarter of 1995.
Other Income and Expenses
Other income and deductions decreased for the quarter ended
March 31, 1995 due primarily to lower other interest, dividend
and finance charge income.
Interest expense increased for the quarter ended March 31,
1995 due to higher interest expense on notes payable, offset
partially by more capitalized interest.
Income tax expense decreased for the quarter ended March 31,
1995 because of lower taxable income.
<PAGE>
Diversified Businesses Earnings
Earnings per share from diversified businesses were:
Quarter Ended
March 31
1995 1994
Constellation Holdings, Inc.
Power generation systems $.02 $.01
Financial investments .02 .01
Real estate development and
senior living facilities (.01) (.01)
Total Constellation Holdings, Inc. .03 .01
BGE Home Products & Services, Inc. .00 .00
Total diversified businesses $.03 $.01
The Constellation Companies' power generation systems
business includes the development, ownership, management, and
operation of wholesale power generating projects in which the
Constellation Companies hold ownership interests, as well as the
provision of services to power generation projects under
operation and maintenance contracts. Power generation systems
earnings increased in the first quarter of 1995 due primarily to
higher equity earnings from Constellation Companies' energy
projects.
The Constellation Companies' investment in wholesale power
generating projects includes $174 million representing ownership
interests in 16 projects that sell electricity in California
under Interim Standard Offer No. 4 power purchase agreements.
Under these agreements, the projects supply electricity to
purchasing utilities at a fixed rate for the first ten years of
the agreements and at variable rates based on the utilities'
avoided cost for the remaining term of the agreements. Avoided
cost generally represents a utility's next lowest cost generation
to service the demands on its system. These power generation
projects are scheduled to convert to supplying electricity at
avoided cost rates in various years beginning in late 1996
through the end of 2000. As a result of declines in purchasing
utilities' avoided costs subsequent to the inception of these
agreements, revenues at these projects based on current avoided
cost levels would be substantially lower than revenues presently
being realized under the fixed price terms of the agreements. If
current avoided cost levels were to continue into 1996 and
beyond, the Constellation Companies could experience reduced
earnings or incur losses associated with these projects, which
could be significant. The Constellation Companies are
investigating and pursuing alternatives for certain of these
power generation projects including, but not limited to,
<PAGE>
repowering the projects to reduce operating costs, renegotiating
the power purchase agreements, and selling its ownership
interests in the projects. Two of these wholesale power
generating projects, in which the Constellation Companies'
investment totals $27 million, have executed agreements with
Pacific Gas & Electric (PG&E) providing for the curtailment of
output through the end of the fixed price period in return for
payments from PG&E. The payments from PG&E during the
curtailment period will be sufficient to fully amortize the
existing project finance debt. However, following the
curtailment period, the projects remain contractually obligated
to commence production of electricity at the avoided cost rates,
which could result in reduced earnings or losses for the reasons
described above. The Company cannot predict the impact that
these matters regarding any of the 16 projects may have on the
Constellation Companies or the Company, but the impact could be
material.
Earnings from the Constellation Companies' portfolio of
financial investments include capital gains and losses,
dividends, income from financial limited partnerships, and income
from financial guaranty insurance companies. Financial
investment earnings were higher for the quarter ended March 31,
1995 due to favorable earnings on the Companies' investment
portfolio and realized gains from a financial partnership.
The Constellation Companies' real estate development
business includes land under development; office buildings;
retail projects; commercial projects; an entertainment, dining
and retail complex in Orlando, Florida; a mixed-use planned-unit-
development; and senior living facilities. The majority of these
projects are in the Baltimore-Washington corridor. They have been
affected adversely by the depressed real estate market and
economic conditions, resulting in reduced demand for the purchase
or lease of available land, office, and retail space. Earnings
from real estate development and senior living facilities for the
quarter ended March 31, 1995 are unchanged from the prior year.
The Constellation Companies' real estate portfolio has
experienced continuing carrying costs and depreciation.
Additionally, the Constellation Companies have been expensing
rather than capitalizing interest on certain undeveloped land
where development activities were at minimal levels. These
factors have affected earnings negatively and are expected to
continue to do so until the levels of undeveloped land are
reduced. Cash flow from real estate operations has been
insufficient to cover the debt service requirements of certain of
these projects. Resulting cash shortfalls have been satisfied
through cash infusions from Constellation Holdings, Inc., which
obtained the funds through a combination of cash flow generated
by other Constellation Companies and its corporate borrowings.
To the extent the real estate market continues to improve,
<PAGE>
earnings from real estate activities are expected to improve
also.
The Constellation Companies continued investment in real
estate projects is a function of market demand, interest rates,
credit availability, and the strength of the economy in general.
The Constellation Companies' Management believes that although
the real estate market has improved, until the economy reflects
sustained growth and the excess inventory in the market in the
Baltimore-Washington corridor goes down, real estate values will
not improve significantly. If the Constellation Companies were to
sell their real estate projects in the current depressed market,
losses would occur in amounts difficult to determine. Depending
upon market conditions, future sales could also result in losses.
In addition, were the Constellation Companies to change their
intent about any project from an intent to hold until market
conditions improve to an intent to sell, applicable accounting
rules would require a write-down of the project to market value
at the time of such change in intent if market value is below
book value.
Environmental Matters
The Company is subject to increasingly stringent federal,
state, and local laws and regulations relating to improving or
maintaining the quality of the environment. These laws and
regulations require the Company to remove or remedy the effect on
the environment of the disposal or release of specified
substances at ongoing and former operating sites, including
Environmental Protection Agency Superfund sites. Details
regarding these matters, including financial information, are
presented in the Environmental Matters section on pages 6, 7 and
25 of this Report.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity
For the twelve months ended March 31, 1995, the Company's
ratio of earnings to fixed charges and ratio of earnings to
combined fixed charges and preferred and preference dividend
requirements were 3.02 and 2.39, respectively.
<PAGE>
Capital Requirements
The Company's capital requirements reflect the capital-
intensive nature of the utility business. Actual capital
requirements for the three months ended March 31, 1995, along
with estimated annual amounts for the years 1995 through 1997,
are reflected below.
Three Months Ended
March 31 Calendar Year Estimate
1995 1995 1996 1997
(In millions)
Utility Business:
Construction expenditures
(excluding AFC)
Electric $51 $233 $219 $206
Gas 12 61 71 84
Common 9 56 50 35
Total construction expenditures 72 350 340 325
AFC 8 26 13 13
Nuclear fuel (uranium purchases
and processing charges) 6 48 50 52
Deferred energy conservation
expenditures 10 44 43 29
Retirement of long-term debt
and redemption of preference
stock - 268 98 164
Total utility business 96 736 544 583
Diversified Businesses:
Retirement of long-term debt 6 55 67 135
Investment requirements 28 84 70 40
Total diversified businesses 34 139 137 175
Total $130 $875 $681 $758
BGE Utility Capital Requirements
BGE's construction program is subject to continuous review
and modification, and actual expenditures may vary from the
estimates above. Electric construction expenditures include the
installation of two 5,000 kilowatt diesel generators at Calvert
Cliffs Nuclear Power Plant, one of which is scheduled to be
placed in service in June, 1995 and the second in 1996; the
construction of a 140-megawatt combustion turbine at Perryman,
scheduled to be placed in service in June, 1995; and improvements
in BGE's existing generating plants and its transmission and
distribution facilities. Future electric construction
expenditures do not include additional generating units.
<PAGE>
During the twelve months ended March 31, 1995, the internal
generation of cash from utility operations provided 62% of the
funds required for BGE's capital requirements exclusive of
retirements and redemptions of debt and preference stock. During
the three-year period 1995 through 1997, the Company expects to
provide through utility operations approximately 70% of the funds
required for BGE's capital requirements, exclusive of retirements
and redemptions.
Utility capital requirements not met through the internal
generation of cash are met through the issuance of debt and
equity securities. The amount and timing of issuances and
redemptions depends upon market conditions and BGE's actual
capital requirements. From January 1, 1995 through the date of
this Report, BGE has not issued or redeemed any long-term debt or
equity securities.
The Constellation Companies' capital requirements are
discussed below in the section titled "Diversified Businesses
Capital Requirements - Debt and Liquidity." The Constellation
Companies are exploring expansion of their energy, real estate
service, and senior living facility businesses. Expansion may
be achieved in a variety of ways, including without limitation
increased investment activity and acquisitions. The Constellation
Companies plan to meet their capital requirements with a
combination of debt and internal generation of cash from their
operations. Additionally, from time to time, BGE may make loans
to Constellation Holdings, Inc., or contribute equity to enhance
the capital structure of Constellation Holdings, Inc.
Diversified Businesses Capital Requirements
Debt and Liquidity
The Constellation Companies intend to meet capital
requirements by refinancing debt as it comes due and through
internally generated cash. These internal sources include cash
that may be generated from operations, sale of assets, and cash
generated by tax benefits earned by the Constellation Companies.
In the event the Constellation Companies can obtain reasonable
value for real estate properties, additional cash may become
available through the sale of projects (for additional
information see the discussion of the real estate business and
market on pages 19 to 21 under the heading "Diversified
Businesses Earnings"). The ability of the Constellation
Companies to sell or liquidate assets described above will depend
on market conditions, and no assurances can be given that such
sales or liquidations can be made. Also, to provide additional
liquidity to meet interim financial needs, CHI entered into a $50
million credit agreement and has borrowed $10 million as of the
first quarter of 1995.
<PAGE>
Investment Requirements
The investment requirements of the Constellation Companies
include its portion of equity funding to committed projects under
development, as well as net loans made to project partnerships.
Investment requirements for the years 1995 through 1997 reflect
the Constellation Companies' estimate of funding for ongoing and
anticipated projects and are subject to continuous review and
modification. Actual investment requirements may vary
significantly from the estimates on page 22 because of the type
and number of projects selected for development, the impact of
market conditions on those projects, the ability to obtain
financing, and the availability of internally generated cash.
The Constellation Companies have met their investment
requirements in the past through the internal generation of cash
and through borrowings from institutional lenders.
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
Asbestos
During 1993 and 1994, BGE was served in several actions
concerning asbestos. The actions are collectively titled In re
Baltimore City Personal Injuries Asbestos Cases in the Circuit
Court for Baltimore City, Maryland. The actions are based upon
the theory of "premises liability," alleging that BGE knew of and
exposed individuals to an asbestos hazard. The actions relate to
two types of claims.
The first type, direct claims by individuals exposed to
asbestos, were described in a Report on Form 8-K filed August 20,
1993. BGE and approximately 70 other defendants are involved.
Approximately 482 non-employee plaintiffs each claim $6 million
in damages ($2 million compensatory and $4 million punitive).
BGE does not know the specific facts necessary for BGE to assess
its potential liability for these type claims, such as the
identity of the BGE facilities at which the plaintiffs allegedly
worked as contractors, the names of the plaintiffs' employers,
and the date on which the exposure allegedly occurred.
The second type are claims by two manufacturers - Owens
Corning Fiberglas and Pittsburgh Corning Corp. - against BGE and
approximately eight others, as third-party defendants. These
relate to approximately 1,500 individual plaintiffs. BGE does
not know the specific facts necessary for BGE to assess its
potential liability for these type claims, such as the identity
of BGE facilities containing asbestos manufactured by the two
manufacturers, the relationship (if any) of each of the
individual plaintiffs to BGE, the settlement amounts for any
individual plaintiffs who are shown to have had a relationship to
BGE, and the dates on which/places at which the exposure
allegedly occurred.
Until the relevant facts for both type claims are
determined, BGE is unable to estimate what its liability, if any,
might be. Although insurance and hold harmless agreements from
contractors who employed the plaintiffs may cover a portion of
any ultimate awards in the actions, BGE's potential liability
could be material.
Environmental Matters
The Company's potential environmental liabilities and pending
environmental actions are listed in Item 1. Business -
Environmental Matters of the Form 10-K.
<PAGE>
PART II. OTHER INFORMATION (Continued)
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibit No. 3(a) Charter of BGE, restated as of
April 25, 1995.
Exhibit No. 3(b) By-Laws of BGE, as amended to April
18, 1995.
Exhibit No. 10 Baltimore Gas and Electric Company
Executive Benefits Plan, as amended
and restated.
Exhibit No. 12 Computation of Ratio of Earnings to
Fixed Charges and Computation of
Ratio of Earnings to Combined Fixed
Charges and Preferred and
Preference Dividend Requirements.
Exhibit No. 27 Financial Data Schedule.
(b) Form 8-K None
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
BALTIMORE GAS AND ELECTRIC COMPANY
(Registrant)
Date May 15, 1995 /s/ C. W. Shivery
C. W. Shivery, Vice President
on behalf of the Registrant and
as Principal Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit
Number
3(a) Charter of BGE, restated as of April 25,
1995.
3(b) By-Laws of BGE, as amended to April 18,
1995.
10 Baltimore Gas and Electric Company
Executive Benefits Plan, as amended and
restated.
12 Computation of Ratio of Earnings to
Fixed Charges and Computation of Ratio
of Earnings to Combined Fixed Charges
and Preferred and Preference Dividend
Requirements.
27 Financial Data Schedule.
<PAGE>
EXHIBIT 3(a)
ARTICLES OF RESTATEMENT
TO THE CHARTER OF
BALTIMORE GAS AND ELECTRIC COMPANY
Baltimore Gas and Electric Company, a corporation organized
and existing under the laws of the State of Maryland, hereby
certifies as follows:
1. The corporation desires to restate its Charter as
currently in effect.
2. The provisions of the Charter set forth in these
Articles of Restatement are all of the provisions of
the Charter currently in effect.
3. The restatement of the Charter was approved by a
majority of the Board of Directors of the
corporation at its April 18, 1995 meeting.
4. The Charter is not amended by these Articles of
Restatement.
5. The current address of the principal office of the
corporation is Gas and Electric Building, 39 West
Lexington Street, Baltimore, Maryland 21201.
6. The names of the corporation's current resident
agents are David A. Brune and Stephen J. Rosasco,
and the address for both of them is 39 West
Lexington St., Baltimore, Maryland 21201.
7. The number of Directors of the corporation is 14 and
the names of those currently in office are as
follows:
Christian H. Poindexter
Edward A. Crooke
H. Furlong Baldwin
Beverly B. Byron
J. Owen Cole
Dan A. Colussy
James R. Curtiss
Jerome W. Geckle
Martin L. Grass
Freeman A. Hrabowski, III
Nancy Lampton
George V. McGowan
George L. Russell, Jr.
Michael D. Sullivan
- 2 -
8. The restated provisions of the charter are as
follows:
I
The name of the said corporation shall be
BALTIMORE GAS AND ELECTRIC COMPANY
<PAGE>
II
Without in any particular limiting or restricting any of the
objects and powers of the corporation hereby formed, it is
expressly provided that it shall have power to manufacture,
buy, deal in or otherwise acquire gas, and to furnish,
convey, distribute, sell or otherwise dispose of the same
for any and all purposes, public or private; to generate or
otherwise acquire electricity or other mechanical power, and
to transmit, convey, distribute, furnish, sell or otherwise
dispose of the same for light, heat, power, refrigeration,
signaling, traction and any and all other purposes, both
public and private; to acquire, hold, sell or otherwise
dispose of all property, real, personal or mixed, useful in
carrying out any lawful purpose whatsoever; and to have,
enjoy and exercise all the rights, powers and privileges
which are now or may hereafter be conferred upon
corporations organized under the laws of Maryland; and, in
carrying on its business, or for the purpose of attaining or
furthering any of its objects and purposes, to do any and
all other things and exercise any and all other powers which
now are or hereafter may be permitted by law.
It is expressly declared that the corporate purposes and
powers of this corporation, the purposes for which it was
formed and the business and objects to be carried on and
promoted by it, and the powers of its Board of Directors,
include, among other things, the making, by this corporation
alone or together with one or more persons or corporations
of this or any state or jurisdiction, of any and all
contracts and arrangements for the purchase or acquisition
of electricity in this state or elsewhere from any one or
more persons or corporations of this or any state or
jurisdiction and/or the acquisition, by purchase,
subscription or otherwise, holding, sale and/or other
disposition of all or any part, whether more or less than a
majority, of the capital stock or any class thereof, bonds,
notes and/or other obligations of any such last mentioned
persons or corporations and/or the guaranteeing, whether
severally by this corporation or jointly and/or severally
with one or more persons or corporations of this or any
state or jurisdiction, of dividends on any such stock
aforesaid and/or principal of and/or interest on any such
bonds, notes and/or other obligations aforesaid and/or other
terms or provisions of any such stock, bonds, notes and/or
other obligations aforesaid and/or mortgages or other
instruments securing the same. This express declaration
shall not be construed as implying that the purposes,
powers, business and objects of this corporation, and the
powers of its directors, do not already (without this
declaration) include all those herein stated.
III
The business and operations of said corporation are to be
carried on in the City of Baltimore, and in such other place
or places within and without the State of Maryland as the
directors may determine. The principal offices of said
corporation shall be located in the City of Baltimore.
IV
1. The total amount of capital stock which this
corporation is authorized to issue is one hundred eighty-
two million, five hundred thousand (182,500,000) shares,
classified as follows: (1) one million (1,000,000) shares
of the par value of one hundred dollars ($100) each, with
an aggregate par value of one hundred million dollars
($100,000,000), are preferred stock, of which two hundred
twenty-two thousand, nine hundred twenty-one (222,921)
shares of the aggregate par value of twenty-two million,
two hundred ninety-two thousand, one hundred dollars
($22,292,100) are issued and outstanding preferred stock,
Series B, sixty-eight thousand, nine hundred twenty-eight
(68,928) shares of the aggregate par value of six million,
<PAGE>
eight hundred ninety-two thousand, eight hundred dollars
($6,892,800) are issued and outstanding preferred stock,
Series C, and three hundred thousand (300,000) shares of
the aggregate par value of thirty million dollars
($30,000,000) are issued and outstanding preferred stock,
Series D, and four hundred eight thousand, one hundred
fifty-one (408,151) shares of the aggregate par value of
forty million, eight hundred fifteen thousand, one hundred
dollars ($40,815,100) are authorized but unissued and
unclassified preferred stock; (2) six million, five
hundred thousand shares (6,500,000) with an aggregate par
value of six hundred fifty million dollars ($650,000,000)
are preference stock, of which two hundred thousand shares
(200,000) of the aggregate par value of twenty million
dollars ($20,000,000) are issued and outstanding 7.78%
Cumulative Preference Stock, 1973 Series, four hundred
fifty-five thousand shares (455,000) of the aggregate par
value of forty-five million, five hundred thousand dollars
($45,500,000) are issued and outstanding 7.50% Cumulative
Preference Stock, 1986 Series, four hundred fifty-five
thousand shares (455,000) of the aggregate par value of
forty-five million, five hundred thousand dollars
($45,500,000) are issued and outstanding 6.75% Cumulative
Preference Stock, 1987 Series, five hundred thousand
shares (500,000) of the aggregate par value of fifty
million dollars ($50,000,000) are issued and outstanding
6.95% Cumulative Preference Stock, 1987 Series, five
hundred thousand shares (500,000) of the aggregate par
value of fifty million dollars ($50,000,000) are issued
and outstanding 7.80% Cumulative Preference Stock, 1989
Series, five hundred thousand shares (500,000) of the
aggregate par value of fifty million dollars ($50,000,000)
are issued and outstanding 8.25% Cumulative Preference
Stock, 1989 Series, six hundred fifty thousand shares
(650,000) of the aggregate par value of sixty-five million
dollars ($65,000,000) are issued and outstanding 8.625%
Cumulative Preference Stock, 1990 Series, three hundred
fifty thousand shares (350,000) of the aggregate par value
of thirty five million dollars ($35,000,000) are issued
and outstanding 7.85% Cumulative Preference Stock, 1991
Series, four hundred thousand shares (400,000) of the
aggregate par value of forty million dollars ($40,000,000)
are issued and outstanding 7.125% Cumulative Preference
Stock, 1993 Series, five hundred thousand shares (500,000)
of the aggregate par value of fifty million dollars
($50,000,000) are issued and outstanding 6.97% Cumulative
Preference Stock, four hundred thousand shares (400,000)
of the aggregate par value of forty million dollars
($40,000,000) are issued and outstanding 6.70% Cumulative
Preference Stock, one million, five hundred ninety
thousand shares (1,590,000) of the aggregate par value of
one hundred fifty nine million dollars ($159,000,000) are
authorized, but unissued and unclassified preference
stock; and (3) the balance, one hundred seventy-five
million (175,000,000) shares without par value, is common
stock of which one hundred fifty million, nine hundred
seventy-one thousand, six hundred and sixty-two
(150,971,662) shares have either been issued and are now
outstanding or have been reserved for issuance and twenty-
four million, twenty-eight thousand, three hundred thirty-
eight (24,028,338) shares are authorized but unissued and
unreserved. The aggregate par value of all the authorized
shares of all classes of stock having par value, viz., the
preference stock and the preferred stock, is seven hundred
fifty million dollars ($750,000,000).
The issued and outstanding shares of common stock without
par value mentioned in this paragraph numbered 1 include
both the number of such shares for which stock
certificates have been issued and also the number of
shares for which new stock certificates are now issuable
in lieu and upon cancellation of outstanding certificates
for shares of common stock of the par value of one hundred
dollars ($100) each formerly authorized.
2. All preferred stock redeemed shall forthwith be
cancelled and retired but shall have the status of
authorized but unissued preferred stock of the
corporation.
<PAGE>
3. In the event of any liquidation or dissolution or
winding up, whether voluntary or involuntary, of the
corporation, the holders of the preferred stock shall be
entitled to be paid in full both the par amount of their
shares and an amount equal to the unpaid dividends accrued
thereon (whether earned or declared or not) adjusted to
date of such payment, before any amount shall be paid to
either the holders of the preference stock or the holders
of the common stock.
4. All payments to the holders of the preferred stock,
whether payments of dividends or payments in the event of
redemption, liquidation, dissolution or winding up, shall
be made without deduction for any tax or taxes (other than
income taxes in excess of two per cent of any such
dividend payment with respect to preferred stock issued on
or prior to November 27, 1961 and then outstanding, and
other than any income taxes on any payments with respect
to preferred stock issued after November 27, 1961) which
the corporation may be required or permitted to pay
thereon or to retain therefrom under any present or future
law of the United States of America or of any state,
county or municipality therein.
5. The right is hereby reserved to make from time to time
any amendments of the charter of the corporation which
change the terms of the preferred stock by classification
or subclassification of all or any of the authorized but
unissued preferred stock into one or more series of the
preferred stock, which series may differ from each other
and other series already outstanding in any or all of the
following respects: (a) the rate and/or payment periods of
the fixed preferential dividends payable thereon, which
rate shall, however, in no case exceed eight per cent. per
annum, (b) whether or not, and if so to what extent and on
what terms and conditions, such series shall participate
in dividends in excess of the fixed preferential dividends
thereon, or in distribution of assets, upon liquidation,
dissolution or winding up, in excess of the fixed
preferential distribution thereof to the holders of the
preferred stock, (c) whether or not, and if so on what
terms and conditions, such series shall be convertible at
the option of the holders into other stock (preferred,
preference, or common), bonds or securities of the
corporation, and (d) the prices and times, if any, of
redemption thereof. Up to the fixed preferential
dividends payable on each series of preferred stock, all
series of preferred stock shall participate (not before
the respective dividend dates of each series of preferred
stock) at the same rate per cent. per annum in any
payments for, or including any period (whether a dividend
period or part of such a period) aggregating less than the
full preferential dividends on all series of preferred
stock for such period; if for any period (whether a
dividend period or part of such a period) full
preferential dividends shall not have been paid on any
series of preferred stock when payable, the deficiency
shall be payable before any dividends for any subsequent
dividend period, or part of such a period, shall be paid
upon or set apart for any series of the preferred stock.
All of the preferred stock having identical
characteristics shall be given the same serial
designation. Except in the event of a failure to pay full
dividends on the preferred stock and/or on the preference
stock, and the continuance of such failure for one year as
hereinafter, in the paragraph numbered 6 hereof, provided,
neither the preferred stock nor the preference stock shall
have any voting power and the common stock shall have full
sole voting power with respect to any such proposed
amendment of the charter of the corporation. The express
reservation of the right to make, through the sole voting
power of the common stock and without the vote of any of
the preferred stock or any of the preference stock, any
such amendments of the charter of the corporation as are
specified in this paragraph, numbered 5, shall not be
construed as in any way limiting the right to make any
<PAGE>
other amendments of the charter of the corporation in
accordance with the laws of Maryland and the provisions of
the next succeeding paragraph, numbered 6, hereof.
6. The common stock shall have full voting powers, that is
to say, one vote for each share with respect to all
matters. Neither the preferred stock nor the preference
stock shall have any voting power except that: (a) the
preferred stock shall have twenty-four votes for each
share of preferred stock, with respect to any proposed
amendment of the charter of the corporation (other than
any such amendment as is specified in paragraphs numbered
5 and 19 hereof), any proposed consolidation with any
other corporation or corporations, any proposed sale,
lease or exchange of all its property and assets as an
entirety, including its good will and franchises, to or
with any other corporation or any proposed dissolution of
the corporation, and no such amendment of the charter of
the corporation, consolidation, sale, lease, exchange or
dissolution shall be authorized, ratified, accepted or
effected without the affirmative vote of two-thirds of all
the shares of preferred stock outstanding in favor of such
amendment, consolidation, sale, lease, exchange or
dissolution, as the case may be; (b) whenever the
corporation shall fail to pay full dividends on the
preferred stock and such failure shall continue for one
year, the preferred stock shall then have twenty-four
votes for each share of preferred stock with respect to
all matters, until and unless all such dividends shall
have been paid in full; (c) the preference stock shall
have one vote for each share of preference stock with
respect to any proposed amendment of the charter of the
corporation which would create or authorize any shares of
stock ranking prior to or on a parity with the preference
stock as to dividends or as to distribution of assets, or
which would substantially adversely affect the contract
rights, as expressly set forth in the charter, of the
preference stock, and no such amendment of the charter of
the corporation of the nature described in this subsection
(c) of this paragraph 6 shall be authorized, ratified,
accepted or effected without the affirmative vote of two-
thirds of all the shares of preference stock outstanding
in favor of such amendment; and (d) whenever the
corporation shall fail to pay full dividends on the
preference stock and such failure shall continue for one
year, the preference stock shall then have one vote for
each share of preference stock with respect to all
matters, until and unless such dividends shall have been
paid in full; provided, however, that immediately upon the
retirement of the preferred stock outstanding as of
November 27, 1961, consisting of 222,921 shares of Series
B 4 1/2% and 68,928 shares of Series C 4% preferred stock
and without further action by the officers, Board of
Directors, or stockholders of the corporation, the
foregoing provisions of this paragraph 6 shall be deleted
and of no further effect and the following paragraph in
lieu thereof shall be fully operative (and all preferred
stock issued after November 27, 1961, but prior to the
retirement of all the outstanding preferred stock shall be
subject to such deletion and amendment):
6. The common stock shall have full voting powers, that is
to say, one vote for each share with respect to all
matters. Neither the preferred stock nor the preference
stock shall have any voting power except that: (a) the
preferred stock shall have four votes for each share of
preferred stock, with respect to any proposed amendment of
the charter of the corporation (other than any such
amendment as is specified in the paragraphs numbered 5 and
19 hereof), any proposed consolidation with any other
corporation or corporations, any proposed sale, lease or
exchange of all its property and assets as an entirety,
including its good will and franchises, to or with any
other corporation or any proposed dissolution of the
corporation, and no such amendment of the charter of the
corporation, consolidation, sale, lease, exchange or
<PAGE>
dissolution shall be authorized, ratified, accepted or
effected without the affirmative vote of two-thirds of all
the shares of preferred stock in favor of such amendment,
consolidation, sale, lease, exchange or dissolution, as
the case may be; (b) whenever the corporation shall fail
to pay full dividends on the preferred stock and such
failure shall continue for one year, the preferred stock
shall then have four votes for each share of preferred
stock with respect to all matters, until and unless all
such dividends shall have been paid in full; (c) the
preference stock shall have one vote for each share of
preference stock with respect to any proposed amendment of
the charter of the corporation FPwhich would create or
authorize any shares of stock ranking prior to or on a
parity with the preference stock as to dividends or as to
distribution of assets, or which would substantially
adversely affect the contract rights, as expressly set
forth in the charter, of the preference stock, and no such
amendment of the charter of the corporation of the nature
described in this subsection (c) of this paragraph 6 shall
be authorized, ratified, accepted or effected without the
affirmative vote of two-thirds of all the shares of
preference stock outstanding in favor of such amendment;
and (d) whenever the corporation shall fail to pay full
dividends on the preference stock and such failure shall
continue for one year, the preference stock shall then
have one vote for each share of preference stock with
respect to all matters, until and unless all such
dividends shall have been paid in full.
7. At no time shall preferred stock be issued if, after
giving effect to such issuance, the aggregate amount of
preferred stock, in number of shares, exceeds one twenty-
fourth of the total amount, in number of shares, of common
stock at the time being issued and outstanding and not
held or owned by the corporation, provided, however, that
if preferred stock is issued for the purpose of retiring
outstanding preferred stock then the preferred stock to be
retired shall not be counted as outstanding for purposes
of the foregoing limitation; nor shall the total amount,
in number of shares, of common stock issued and
outstanding and not held or owned by the corporation be at
any time reduced, either by purchase of common stock by
the corporation or by amendment of the charter of the
corporation, below twenty-four times the total amount, in
number of shares, of preferred stock at the time being
issued and outstanding; provided, however, that
immediately upon the retirement of the preferred stock
outstanding as of November 27, 1961, consisting of 222,921
shares of Series B 4 1/2% and 68,928 shares of Series C 4%
preferred stock, and without further action by the
officers, Board of Directors, or stockholders of the
corporation, the foregoing provisions of this paragraph 7
shall be deleted and of no further effect and the
following paragraph in lieu thereof shall be fully
operative (and all preferred stock issued after November
27, 1961, but prior to the retirement of all the
outstanding preferred stock shall be subject to such
deletion and amendment):
7. While any shares of preferred stock are outstanding,
there shall not be issued without the prior affirmative
vote or written consent of the holders of two-thirds of
the total number of shares of preferred stock then
outstanding, any additional preferred stock if, at the
time of issuance of such additional preferred stock and
after giving effect to such issuance, the aggregate par
value of the preferred stock to be outstanding after such
issuance, would exceed an amount equal to the aggregate
amount in dollars in the common stock account of the
corporation plus any capital surplus represented by
consideration received for the issuance of common stock,
all as shown on the books of account of the corporation,
provided, however, that if preferred stock is issued for
the purpose of retiring outstanding preferred stock then
the preferred stock to be retired shall not be counted as
outstanding for purposes of the foregoing limitation; nor,
without like affirmative vote or written consent, shall
the outstanding common stock not held or owned by the
corporation be reduced by purchase or retirement by the
corporation or such capital surplus be reduced by
<PAGE>
distribution, if and to the extent that, after such
reduction, the aggregate par value of the outstanding
preferred stock would exceed the sum of the dollars in the
common stock account of the corporation plus any capital
surplus represented by consideration received for the
issuance of common stock, all as shown on the books of
account of the corporation. For the purpose of
determining compliance with the limitations contained in
this paragraph, if the corporation purchases common stock,
the said common stock and capital surplus accounts shall
be deemed to be thereby reduced by that portion of the
total dollars in said accounts which is equivalent to the
ratio of the number of shares of common stock purchased to
the number outstanding and not held or owned by the
corporation immediately before such purchase, but in such
a case if the common stock so purchased is subsequently
sold or retired the said common stock and capital surplus
accounts shall be deemed to be reduced thereafter only by
the actual charges to said accounts.
8. At no time shall any preferred stock be issued unless
at the time of such issuance the net earnings of the
corporation, over and above operating expenses (including
allowance for depreciation and other reserves), fixed
charges and any other deductions from or charges against
income ranking prior to dividends on the preferred stock,
for a period of twelve successive calendar months ending
within the sixty days immediately preceding such issuance
of preferred stock, shall have been at least twice a sum
equal to full preferential dividends for one year on (a)
all preferred stock already outstanding at the time of
such issuance, and (b) the preferred stock so to be
issued, provided that in the case of preferred stock being
issued for the purpose of retiring outstanding preferred
stock, the preferred stock to be retired shall not be
counted as outstanding for purposes of this limitation.
9. Subject to and upon compliance with all the provisions
aforegoing, the capital stock of the corporation,
preferred, preference, and common, may be issued and
disposed of as and when such issuance may, pursuant to the
laws of Maryland, be authorized by the Board of Directors.
The Board of Directors is hereby empowered to authorize
the issuance from time to time of shares of common stock
without par value and securities convertible into shares
of common stock without par value and rights to purchase
the same for such consideration as said Board of Directors
may deem advisable. The Board of Directors is hereby
empowered by resolution to authorize the issuance of any
number of shares of stock of one or more classes and/or
any amount of convertible securities and/or rights to
purchase the same from time to time for such
considerations as said Board of Directors may deem
advisable. The holders of shares of capital stock of the
corporation shall have no preferential or preemptive
right, as stockholders, to subscribe for, purchase or
receive any proportionate or other part of any issue of
additional capital stock of any class, now or hereafter
authorized, which may be issued by the corporation, except
such right, if any, as may be conferred by the Board of
Directors in authorizing such issuance. In furtherance
and not in limitation of the powers already vested in the
corporation or the Board of Directors, the corporation,
through the Board of Directors, may authorize from time to
time the issuance and disposition, pursuant to the laws of
Maryland, of shares of common stock to any or all of its
employees, including officers, or to trustees on behalf of
such employees for such considerations as said Board of
Directors may deem advisable. Notwithstanding any other
provision contained in this Charter, the Board of
Directors of the corporation may authorize the issue of
some or all of the shares of any or all classes or series
of stock authorized under this Charter to be issued
without certificates. This authorization may not affect
shares already represented by certificates outstanding
until they are surrendered to the corporation.
<PAGE>
10. The Board of Directors is hereby empowered from time to
time to classify or reclassify all or any of the
authorized but unissued preferred stock into one or more
series of the preferred stock, which series may differ
from each other and other series already outstanding in
any or all of the following respects: (a) the rate and/or
payment periods of the fixed preferential dividends
payable thereon, which rate shall, however, in no case
exceed eight per cent. per annum, (b) whether or not, and
if so on what terms and conditions, such series shall be
convertible at the option of the holders into other stock
(preferred, preference, or common), bonds or securities of
the corporation, and (c) the prices and times, if any, of
redemption thereof. Up to the fixed preferential
dividends payable on each series of preferred stock, all
series of preferred stock shall participate (not before
the respective dividend dates of each series of preferred
stock) at the same rate per cent. per annum in any
payments for, or including, any period (whether a dividend
period or part of such period) aggregating less than the
full preferential dividends on all series of preferred
stock for such period; if for any period (whether a
dividend period or part of such a period) full
preferential dividends shall not have been paid on any
series of preferred stock when payable, the deficiency
shall be payable before any dividends for any subsequent
dividends period, or part of such a period, shall be paid
upon or set apart for the preferred stock. All of the
preferred stock having identical characteristics shall be
given the same serial designation.
11. Subject to the provisions of paragraph 6 hereof,
notwithstanding any provision of law requiring any action
to be taken or authorized by the affirmative vote of the
holders of a majority or other designated proportion of
the shares of stock of the corporation or of the shares of
each class or to be otherwise taken or authorized by vote
of the stockholders of the corporation, such action shall
be effective and valid if taken or authorized by such vote
of its stockholders as is hereby required for such action,
viz., by the affirmative vote of the holders of a majority
or other designated proportion of all of the shares of
preferred stock outstanding and entitled to vote thereon
voting as a class, and the affirmative vote of the holders
of a majority or other designated proportion of the shares
of common stock outstanding and entitled to vote thereon,
voting as a class, the same (in the case of preferred
stock and common stock respectively) as the majority or
other designated proportion of the shares of each class of
stock otherwise required by law; the requisite number of
affirmative votes in any case not to be less than a
majority in number of the aggregate number of votes to
which the holders of all of the shares of preferred stock
outstanding and entitled to vote thereon shall be entitled
and a majority in number of the aggregate number of votes
to which the holders of all of the shares of common stock
outstanding and entitled to vote thereon shall be
entitled, except in cases in which the law authorizes such
action to be taken or authorized by a less vote; the
requisite number of affirmative votes in any case not to
be less than the affirmative vote, if any, of shares of
preferred stock required in such case by the provisions of
the paragraph numbered 6 hereof.
12. (a) The preferred stock, series B, shall entitle the
holders thereof to receive, when and as declared, from the
surplus or net profits of the corporation yearly dividends
at the rate of four and one-half per cent. per annum and
no more, payable quarterly on the first days of January,
April, July and October in each year. The dividends on
the preferred stock, Series B, shall be cumulative and
shall be payable before any dividend on either the
preference stock or on the common stock shall be paid or
set apart; so that, if in any year or years dividends
amounting to four and one-half per cent. shall not have
been paid thereon, the deficiency shall be payable before
any dividends shall be paid upon or set apart for either
the preference stock or the common stock.
<PAGE>
(b) The preferred stock, series B, or any portion thereof
may, whenever the Board of Directors shall so determine,
be redeemed by the payment to the holders thereof of the
sum hereinafter specified as the redemption price at the
time of redemption, in cash, for each share thereof,
together with all accrued dividends. The redemption price
shall be one hundred and fifteen dollars ($115) at any
time prior to July 1, 1944, one hundred and fourteen
dollars ($114) after June 30, 1944, one hundred and
thirteen dollars ($113) after June 30, 1947, one hundred
and twelve dollars ($112) after June 30, 1950, one hundred
and eleven dollars ($111) after June 30, 1953, and one
hundred and ten dollars ($110) after June 30, 1956. In
case less than all of the preferred stock, Series B, at
the time being outstanding is so redeemed, the shares to
be redeemed shall be, as nearly as is reasonably
practicable without creating fractional shares, a
proportionate part of the holdings of each holder of
preferred stock, Series B, or shall be selected, in whole
or in part, by lot. At least sixty days' written notice
of the election of the corporation to redeem the preferred
stock, Series B, or any part thereof, and (in case less
than all is to be redeemed) of the shares thereof so to be
redeemed, shall be given to each holder of preferred erred
stock, Series B, so to be redeemed by mailing the same,
postage prepaid, and addressed to him at his address as it
appears upon the books of the corporation. When such
notice shall have been so given and the funds for payment
thereof shall have been provided and set apart, the
dividends on the preferred stock so called for redemption
and all other rights of the holders thereof, except the
right to receive the redemption price, shall cease.
13. (a) The preferred stock, Series C, shall entitle the
holders thereof to receive, when and as declared, from the
surplus or net profits of the corporation yearly dividends
at the rate of four per cent. per annum and no more,
payable quarterly on the first days of January, April,
July and October in each year. The dividends on the
preferred stock, Series C, shall be cumulative and shall
be payable before any dividend on either the preference
stock or the common stock shall be paid or set apart; so
that, if in any year or years dividends amounting to four
per cent. shall not have been paid thereon, the deficiency
shall be payable before any dividends shall be paid upon
or set apart for either the preference stock or the common
stock.
(b) The preferred stock, Series C, or any portion thereof
may, whenever the Board of Directors shall so determine,
be redeemed by the payment to the holders thereof of the
sum hereinafter specified as the redemption price at the
time of redemption, in cash, for each share thereof,
together with all accrued dividends. The redemption price
shall be one hundred and seven dollars ($107) per share at
any time prior to July 1, 1945, one hundred and six
dollars ($106) per share after June 30, 1945, and one
hundred and five dollars ($105) per share after June 30,
1950. In case less than all of the preferred stock,
Series C, at the time being outstanding is so redeemed,
the shares to be redeemed shall be, as nearly as is
reasonably practicable without creating fractional shares,
a proportionate part of the holdings of each holder of
preferred stock, Series C, or shall be selected, in whole
or in part, by lot. At least sixty days' written notice
of the election of the corporation to redeem the preferred
stock, Series C, or any part thereof, and (in case less
than all is to be redeemed) of the shares thereof so to be
redeemed, shall be given to each holder of preferred
stock, Series C, so to be redeemed by mailing the same,
postage prepaid, and addressed to him at his address as it
appears upon the books of the corporation. When such
notice shall have been so given and the funds for payment
thereof shall have been provided and set apart, the
dividends on the preferred stock so called for redemption
and all other rights of the holders thereof, except the
right to receive the redemption price, shall cease.
<PAGE>
14. (a) The preferred stock, Series D, shall entitle the
holders thereof to receive, when and as declared, from the
surplus or net profits of the corporation yearly dividends
at the rate of five and forty hundredths per cent. per
annum and no more, payable quarterly on the first days of
January, April, July, and October in each year. The
dividends on the preferred stock, Series D, shall be
cumulative and shall be payable before any dividend on
either the preference stock or the common stock shall be
paid or set apart; so that, if in any year or years
dividends amounting to five and forty hundredths per cent.
shall not have been paid thereon, the deficiency shall be
payable before any dividends shall be paid upon or set
apart for either the preference stock or the common stock.
Dividends on preferred stock, Series D, will accrue from
May 4, 1967 with respect to shares issued prior to July 1,
1967, and from the first day of the quarterly dividend
period in which they are issued with respect to shares
issued on or after July 1, 1967.
(b) The preferred stock, Series D, or any portion
thereof, may, whenever the Board of Directors shall so
determine, be redeemed by the payment to the holders
thereof of the sum hereinafter specified as the redemption
price at the time of redemption, in cash, for each share
thereof, together with all accrued dividends. The
redemption price shall be one hundred and five dollars and
fifty cents ($105.50) per share at any time prior to April
1, 1972, then one hundred and four dollars ($104) per
share prior to April 1, 1977, then one hundred and two
dollars and fifty cents ($102.50) per share prior to April
1, 1982, and one hundred and one dollars ($101) per share
thereafter; provided, however, that the Company will not,
prior to April 1, 1972, redeem any shares of the preferred
stock, Series D, if such redemption is a part of or in
anticipation of any refunding operation involving the
application, directly or indirectly, of borrowed funds or
the proceeds of an issue of any stock ranking prior to or
on a parity with the preferred stock, Series D, if such
borrowed funds have an interest rate or cost to the
Company (calculated in accordance with generally accepted
financial practice), or such stock has a dividend rate or
cost to the Company (so calculated), less than the
dividend rate per annum of the preferred stock, Series D.
In case less than all of the preferred stock, Series D, at
the time being outstanding is so redeemed, the shares to
be redeemed shall be, as nearly as is reasonably
practicable without creating fractional shares, a
proportionate part of the holdings of each holder of
preferred stock, Series D, or shall be selected, in whole
or in part, by lot. At least sixty days' written notice
of the election of the corporation to redeem the preferred
stock, Series D, or any part thereof, and (in case less
than all is to be redeemed) of the shares thereof so to be
redeemed, shall be given to each holder of preferred
stock, Series D, so to be redeemed by mailing the same,
postage prepaid, and addressed to him at his address as it
appears upon the books of the corporation. When such
notice shall have been so given and the funds for payment
of the redemption price plus accrued dividends shall have
been provided and set apart, the dividends on the
preferred stock so called for redemption and all other
rights of the holders thereof, except the right to receive
the redemption price plus accrued dividends, shall cease.
15. The preference stock shall entitle the holders thereof
to receive, when and as declared, from the surplus or net
profits of the corporation remaining after the
preferential dividend requirements for the outstanding
preferred stock have been provided for yearly dividends
payable at such times and at such rates as hereinafter
provided. The dividends on the preference stock shall be
cumulative and shall be payable before any dividend on the
common stock shall be paid or set apart.
<PAGE>
16. In the event of any liquidation or dissolution or
winding up, whether voluntary or involuntary, of the
corporation, the holders of the preference stock shall be
entitled to be paid in full, from any assets and funds of
the corporation remaining after payment to the holders of
the preferred stock as provided in paragraph numbered 3
hereof, both the par amount of their shares and an amount
equal to the unpaid dividends accrued thereon (whether
earned or declared or not) adjusted to date of such
payment before any amount shall be paid to the holders of
the common stock; and after the payment to the holders of
the preference stock of its par value and an amount equal
to the unpaid dividends accrued thereon, the remaining
assets and funds shall be divided and paid to the holders
of the common stock according to their respective shares.
17. All preference stock redeemed shall forthwith be
cancelled and retired but shall have the status of
authorized but unissued preference stock of the
corporation.
18. The Board of Directors is hereby empowered from time to
time to classify or reclassify all or any of the
authorized, but unissued preference stock into one or more
series of preference stock, which series may differ from
each other and other series already outstanding in any or
all of the following respects: (a) the rate or rates of
the preferential dividends payable thereon, and, if
applicable, the manner in which such dividends are
determined , (b) whether or not, and if so, on what terms
and conditions, such series shall be convertible at the
option of the holders into other stock, bonds or
securities of the corporation, (c) the prices and times,
if any, of redemption thereof, (d) the sinking fund
provisions, if any, applicable thereto, (e) the date(s),
or the method of determining the date(s), on which such
dividends are payable thereon, and (f) the par value
thereof. Up to the preferential dividends payable on each
series, all series of preference stock shall participate
at the same rate per cent. per annum, in any payments for,
or including, any period (whether a dividend period or
part of such a period) aggregating less than the full
preferential dividends on all series of preference stock
for such period; if for any period (whether a dividend
period or part of such a period) full preferential
dividends shall not have been paid on any series of
preference stock when payable, the deficiency shall be
payable before any dividends for any subsequent dividend
period, or part of such a period, shall be paid upon or
set apart for the preference stock. All of the preference
stock having identical characteristics shall be given the
same serial designation
19. The right is hereby reserved to make from time to time
amendments of the charter of the corporation to provide
that one or more series of the authorized but unissued
preference stock shall, and to what extent and on what
terms and conditions, participate in dividends in excess
of the fixed preferential dividends thereon, or in
distribution of assets, upon liquidation, dissolution, or
winding up, in excess of the fixed preferential
distribution thereof to the holders of preference stock.
Except in the event of a failure to pay full dividends on
the preferred stock and/or on the preference stock, and
the continuance of such failure for one year as provided
in paragraph numbered 6 hereof, neither the preferred
stock nor the preference stock shall have any voting power
and the common stock shall have full sole voting power
with respect to any such proposed amendment of the charter
of the corporation.
20. At no time shall any preference stock be issued unless
at the time of such issuance the net earnings of the
corporation, over and above operating expenses (including
allowance for depreciation and other reserves), fixed
charges and any other deductions from or charges against
income (including dividend requirements on stock ranking
prior to preference stock) which rank prior to dividends
on the preference stock, for a period of twelve successive
<PAGE>
calendar months ending within the three calendar months
immediately preceding the month in which such preference
stock is issued, shall have been at least twice a sum
equal to full preferential dividends for one year on (a)
all preference stock already outstanding at the time of
such issuance, and (b) the preference stock so to be
issued.
21. (a) The 7.78% Cumulative Preference Stock, 1973 Series
($100 par value) , shall entitle the holders thereof to
receive, when and as declared, from the surplus or net
profits of the corporation remaining after the
preferential dividend requirements for the outstanding
preferred stock have been provided for, yearly dividends
at the rate of seven and seventy-eight hundredths per
cent. per annum and no more, payable quarterly on the
first days of January, April, July, and October in each
year commencing January 1, 1974. The dividends on the
7.78% Cumulative Preference Stock, 1973 Series ($100 par
value), shall be cumulative and shall be payable before
any dividend on the common stock shall be paid or set
apart; so that, if in any year or years dividends
amounting to seven and seventy-eight hundredths per cent.
shall not have been paid thereon, the deficiency shall be
payable before any dividends shall be paid upon or set
apart for the common stock. Dividends on 7.78% Cumulative
Preference Stock, 1973 Series ($100 par value), will
accrue from November 28, 1973.
(b) The 7.78% Cumulative Preference Stock, 1973 Series
($100 par value), or any portion thereof, may whenever the
Board of Directors shall so determine, be redeemed by the
payment to the holders thereof of the sum hereinafter
specified as the redemption price at the time of
redemption, in cash, for each share thereof, together with
all accrued dividends. The redemption price shall be one
hundred eight dollars ($108) per share at any time prior
to December 1, 1978, then one hundred five dollars and
fifty cents ($105.50) per share prior to December 1, 1983,
then one hundred three dollars ($103) per share prior to
December 1, 1988, and one hundred one dollars ($101) per
share thereafter; provided, however, that the corporation
will not, prior to December 1, 1978, redeem any shares of
the 7.78% Cumulative Preference Stock, 1973 Series ($100
par value), if such redemption is a part of or in
anticipation of any refunding operation involving the
application, directly or indirectly, of borrowed funds or
the proceeds of an issue of any stock ranking prior to or
on a parity with 7.78% Cumulative Preference Stock, 1973
Series ($100 par value) if such borrowed funds have an
interest rate or cost to the corporation (calculated in
accordance with generally accepted financial practice), or
such stock has a dividend rate or cost to the corporation
(so calculated), less than the dividend rate per annum of
the 7.78% Cumulative Preference Stock, 1973 Series ($100
par value). In case less than all of the preference stock
of this series at the time being outstanding is so
redeemed, the shares to be redeemed shall be, as nearly as
is reasonably practicable without creating fractional
shares, a proportionate part of the holdings of each
holder of preference stock of this series, or shall be
selected in whole or in part, by lot. At least thirty
days' written notice of the election of the corporation to
redeem the preference stock of this series, or any part
thereof, and (in case less than all is to be redeemed) of
the shares thereof so to be redeemed, shall be given to
each holder of preference stock of this series so to be
redeemed by mailing the same, postage prepaid, and
addressed to him at his address as it appears upon the
books of the corporation. When such notice shall have
been so given and the funds for payment of the redemption
price plus accrued dividends shall have been provided and
set apart, the dividends on the shares of preference stock
of this series so called for redemption and all other
rights of the holders thereof, except the right to receive
the redemption price plus accrued dividends, shall cease.
<PAGE>
22. (a) The 7.50% Cumulative Preference Stock, 1986 Series
($100 par value), shall entitle the holders thereof to
receive, when and as declared, from the surplus or net
profits of the corporation remaining after the
preferential dividend requirements for the outstanding
preferred stock have been provided for, yearly dividends
at the rate of 7.50 per cent per annum and no more,
payable quarterly on the first days of January, April,
July, and October in each year commencing January 1, 1987.
The dividends on the 7.50% Cumulative Preference Stock,
1986 Series ($100 par value), shall be cumulative and
shall be payable before any dividend on the common stock
shall be paid or set apart; so that, if in any year or
years dividends amounting to 7.50 per cent shall not have
been paid thereon, the deficiency shall be payable before
any dividends shall be paid upon or set apart for the
common stock. Dividends on 7.50% Cumulative Preference
Stock, 1986 Series ($100 par value) will accrue from and
including the date of issuance.
(b) The 7.50% Cumulative Preference Stock, 1986 Series
($100 par value), or any portion thereof, may whenever the
Board of Directors shall so determine, be redeemed by the
payment to the holders thereof of the sum hereinafter
specified as the redemption price at the time of
redemption, in cash, for each share thereof, together with
all accrued dividends. The redemption price shall be
$107.50 per share at any time prior to October 1, 1991,
then $105 per share prior to October 1, 1996, then $102.50
per share prior to October 1, 2001, and $100 per share
thereafter; provided, however, that prior to October 1,
1991, the corporation will not redeem any shares of the
7.50% Cumulative Preference Stock, 1986 Series ($100 par
value), if such redemption is a part of or in anticipation
of any refunding operation involving the application,
directly or indirectly, of borrowed funds or the proceeds
of an issue of any stock ranking prior to or on a parity
with 7.50% Cumulative Preference Stock, 1986 Series ($100
par value), if such borrowed funds have an interest rate
or cost to the corporation (calculated in accordance with
generally accepted financial practice), or such stock has
a dividend rate or cost to the corporation (so
calculated), less than the dividend rate per annum of the
7.50% Cumulative Preference Stock, 1986 Series ($100 par
value). In case less than all of the preference stock of
this series at the time being outstanding is so redeemed,
the shares to be redeemed shall be, as nearly as is
reasonably practicable without creating fractional shares,
a proportionate part of the holdings of each holder of
preference stock of this series, or shall be selected, in
whole or in part, by lot. At least thirty (30) days
written notice of the election of the corporation to
redeem the preference stock of this series (or any part
thereof, in which case the notice shall specify the
particular shares to be redeemed) shall be given to each
holder of the preference stock of this series so to be
redeemed by mailing the same, postage prepaid, and
addressed to him at his address as it appears upon the
books of the corporation. When such notice shall have
been so given and the funds for payment of the redemption
price plus accrued dividends shall have been provided and
set apart, the dividends on the shares of preference stock
of this series so called for redemption and all other
rights of the holders thereof, except the right to receive
the redemption price plus accrued dividends, shall cease.
(c) On or before October 1 of each year commencing
October 1, 1992 and continuing through October 1, 2025,
there shall be provided and set apart by the corporation a
sum sufficient for the sinking fund redemption of 15,000
shares of 7.50% Cumulative Preference Stock, 1986 Series
($100 par value). On October 1 of each year commencing
October 1, 1992 and continuing through October 1, 2025,
the corporation shall make sinking fund redemptions of
15,000 shares of the 7.50% Cumulative Preference Stock,
1986 Series ($100 par value) by the payment to the holders
thereof, in cash, of the sum of one Hundred Dollars and No
<PAGE>
Cents ($100.00) for each share thereof, together with all
accrued dividends. Shares shall be selected for sinking
fund redemption by lot. At least thirty (30) days'
written notice of the shares of the 7.50% Cumulative
Preference Stock, 1986 Series ($100 par value) so to be
redeemed shall be given to the respective holders thereof
by mailing the same, postage prepaid, and addressed to
such holder at the address as it appears upon the books of
the corporation. When such notice shall have been so
given and funds for the payment of the sinking fund
redemption price, plus accrued dividends, shall have been
provided and set apart by the corporation, the dividends
on the shares of the 7.50% Cumulative Preference Stock,
1986 Series ($100 par value) so called for sinking fund
redemption and all other rights of the holders thereof,
except the right to receive the sinking fund redemption
price plus accrued dividends, shall cease.
The corporation may, at its option, in connection with any
sinking fund redemption, increase by not more than 15,000
shares the number of shares of 7.50% Cumulative Preference
Stock, 1986 Series ($100 par value) to be redeemed for the
sinking fund, at such sinking fund redemption price, on
any such sinking fund redemption date, together, in every
case, with all accrued dividends; provided, however, that
the right to make such optional increases shall not be
cumulative.
The corporation may, at its option, satisfy its obligation
to make sinking fund redemptions provided for in the first
paragraph of this Section 22(c) by crediting shares of
7.50% Cumulative Preference Stock, 1986 Series ($100 par
value) acquired by purchase in the open market, by
redemption (otherwise than by reason of the required
sinking fund redemption provided for by the first
paragraph of this Section 22(c)) or otherwise.
Notwithstanding the foregoing provisions of this Section
22(c), the obligation to redeem shares of 7.50% Cumulative
Preference Stock, 1986 Series ($100 par value) by reason
of the sinking fund redemption (provided for in the first
paragraph of this Section 22(c)) annually commencing on
October 1, 1992 shall be cumulative, and unless full
cumulative redemptions of shares of 7.50% Cumulative
Preference Stock, 1986 Series ($100 par value) for the
sinking fund required hereby have been made, no dividends
shall be declared nor any distribution made on the Common
Stock, except dividends paid in stock of the corporation
ranking junior to the 7.50% Cumulative Preference Stock,
1986 Series ($100 par value), nor shall any purchase or
other acquisition for value of such Common Stock be made.
The provisions of this Section 22(c) shall apply so long
as any shares of 7.50% Cumulative Preference Stock, 1986
Series ($100 par value) are outstanding.
23. (a) The 6.75% Cumulative Preference Stock, 1987 Series
($100 par value), shall entitle the holders thereof to
receive, when and as declared, from the surplus or net
profits of the corporation remaining after the
preferential dividend requirements for the outstanding
preferred stock have been provided for, yearly dividends
at the rate of six and seventy five hundredths per cent
per annum and no more, payable quarterly on the first days
of January, April, July, and October in each year
commencing April 1, 1987. The dividends on the 6.75%
Cumulative Preference Stock, 1987 Series ($100 par value),
shall be cumulative and shall be payable before any
dividend on the common stock shall be paid or set apart;
so that, if in any year or years dividends amounting to
six and seventy five hundredths per cent shall not have
been paid thereon, the deficiency shall be payable before
any dividends shall be paid upon or set apart for the
common stock. Dividends on 6.75% Cumulative Preference
Stock, 1987 Series ($100 par value), will accrue from and
include January 22, 1987.
(b) The 6.75% Cumulative Preference Stock, 1987 Series
($100 par value), or any portion thereof, may whenever the
<PAGE>
Board of Directors shall so determine, be redeemed by the
payment to the holders thereof of the sun hereinafter
specified as the redemption price at the time of
redemption, in cash, for each share thereof, together with
all accrued dividends. The redemption price shall be
$106.75 per share at any time prior to April 1, 1992, then
$104.50 per share prior to April 1, 1997, then $102.25 per
share prior to April 1, 2002, and $100 per share
thereafter; provided, however, that prior to April 1,
1992, the corporation will not redeem any shares of the
6.75% Cumulative Preference Stock, 1987 Series ($100 par
value), if such redemption is a part of or in anticipation
of any refunding operation involving the application,
directly or indirectly, of borrowed funds or the proceeds
of an issue of any stock ranking prior to or on a parity
with 6.75% Cumulative Preference Stock, 1987 Series ($100
par value), if such borrowed funds have an interest rate
or cost to the corporation (calculated in accordance with
generally accepted financial practice), or such stock has
a dividend rate or cost to the corporation (so
calculated), less than the dividend rate per annum of the
6.75% Cumulative Preference Stock, 1987 Series ($100 par
value) . In case less than all of the preference stock of
this series at the time being outstanding is so redeemed,
the shares to be redeemed shall be, as nearly as is
reasonably practicable without creating fractional shares,
a proportionate part of the holdings of each holder of
preference stock of this series, or shall be selected, in
whole or in part, by lot. At least thirty (30) days
written notice of the election of the corporation to
redeem the preference stock of this series (or any part
thereof, in which case the notice shall specify the
particular shares to be redeemed) shall be given to each
holder of the preference stock of this series so to be
redeemed by mailing the same, postage prepaid, and
addressed to him at his address as it appears upon the
books of the corporation. When such notice shall have
been so given and the funds for payment of the redemption
price plus accrued dividends shall have been provided and
set apart, the dividends on the shares of preference stock
of this series so called for redemption and all other
rights of the holders thereof, except the right to receive
the redemption price plus accrued dividends, shall cease.
(c) On or before April 1 of each year commencing April 1,
1993 and continuing through April 1, 2026, there shall be
provided and set apart by the corporation a sum sufficient
for the sinking fund redemption of 15,000 shares of 6.75%
Cumulative Preference Stock, 1987 Series ($100 par value).
Thereafter, on April 1 of each year commencing April 1,
1993 and continuing through April 1, 2026, the corporation
shall make sinking fund redemptions of 15,000 shares of
the 6.75% Cumulative Preference Stock, 1987 Series ($100
par value) by the payment to the holders thereof, in cash,
of the sum of One Hundred Dollars and No Cents ($100.00)
for each share thereof, together with all accrued
dividends. Shares shall be selected for sinking fund
redemption by lot. At least thirty (30) days' written
notice of the shares of the 6.75% Cumulative Preference
Stock, 1987 Series ($100 par value) so to be redeemed
shall be given to the respective holders thereof by
mailing the same, postage prepaid, and addressed to such
holder at the address as it appears upon the books of the
corporation. When such notice shall have been so given and
funds for the payment of the sinking fund redemption
price, plus accrued dividends, shall have been provided
and set apart by the corporation, the dividends on the
shares of the 6.75% Cumulative Preference Stock, 1987
Series ($100 par value) so called for sinking fund
redemption and all other rights of the holders thereof,
except the right to receive the sinking fund redemption
price Plus accrued dividends, shall cease.
The corporation may, at its option, in connection with any
sinking fund redemption, increase by not more than 15,000
shares the number of shares of 6.75% Cumulative Preference
Stock, 1987 Series ($100 par value) to be redeemed for the
sinking fund, at such sinking fund redemption price, on
any such sinking fund redemption date, together, in every
case, with all accrued dividends; provided, however, that
<PAGE>
the right to make such optional increases shall not be
cumulative.
The corporation may, at its option, satisfy its obligation
to make sinking fund redemptions provided for in the first
paragraph of this Section 23(c) by crediting shares of
6.75% Cumulative Preference Stock, 1987 Series ($100 par
value) acquired by purchase in the open market, by
redemption (otherwise than by reason of the required
sinking fund redemption provided for by the first
paragraph of this Section 23(c)) or otherwise.
Notwithstanding the foregoing provisions of this Section
23(c), the obligation to redeem shares of 6.75% Cumulative
Preference Stock, 1987 Series ($100 par value) by reason
of the sinking fund redemption provided for in the first
paragraph of this Section 23 (c) , annually commencing on
April 1, 1993 shall be cumulative, and unless full
cumulative redemptions of shares of 6.75% Cumulative
Preference Stock, 1987 Series ($100 par value) for the
sinking fund required hereby have been made, no dividends
shall be declared nor any distribution made on the common
stock, except dividends paid in stock of the corporation
ranking junior to the 6.75% Cumulative Preference Stock,
1987 Series ($100 par value), nor shall any purchase or
other acquisition for value of such common stock be made.
The provisions of this section 23(c) shall apply so long
as any shares of 6.75% Cumulative Preference Stock, 1987
Series ($100 par value) are outstanding.
24. (a) The 6.95% Cumulative Preference Stock, 1987 Series
($100 par value), shall entitle the holders thereof to
receive, when and as declared, from the surplus or net
profits of the corporation remaining after the
preferential dividend requirements for the outstanding
preferred stock have been provided for, yearly dividends
at the rate of six and ninety five hundredths per cent.
per annum and no more, payable quarterly on the first days
of January, April, July, and October in each year
commencing October 1, 1987 and continuing each such first
day of January, April, July and October thereafter through
and including October 1, 1995. The dividends on the 6.95%
Cumulative Preference Stock, 1987 Series ($100 par value),
shall be cumulative and shall be payable before any
dividend on the common stock shall be paid or set apart;
so that, if in any year or years dividends amounting to
six and ninety five hundredths per cent. shall not have
been paid thereon, the deficiency shall be payable before
any dividends shall be paid upon or set apart for the
common stock. Dividends on 6.95% cumulative Preference
Stock, 1987 Series ($100 par value), will accrue from and
include the date of issuance.
(b) The 6.95% Cumulative Preference Stock, 1987 Series
($100 par value), shall be redeemed in whole on October 1,
1995, by the payment, to the holders thereof, in cash, of
the sum of One Hundred Dollars and No Cents ($100.00) for
each share thereof, together with all accrued dividends.
At least thirty (30) days' written notice shall be given
to each holder of the preference stock of this series so
to be redeemed by mailing the same, postage prepaid, and
addressed to him at his address as it appears upon the
books of the corporation. When such notice shall have
been so given and the funds for payment of the redemption
price plus accrued dividends shall have been provided and
set apart, the dividends on the shares of preference stock
of this series so called for redemption and all other
rights of the holders thereof, except the right to receive
the redemption price plus accrued dividends, shall cease.
25. (a) The 7.80% Cumulative Preference Stock, 1989 Series
($100 par value), shall entitle the holders thereof to
receive, when and as declared, from the surplus or net
profits of the corporation remaining after the
preferential dividend requirements for the outstanding
preferred stock have been provided for, yearly dividends
<PAGE>
at the rate of seven and eighty hundredths per cent per
annum and no more, payable quarterly on the first days of
January, April, July, and October in each year commencing
October 1, 1989. The dividends on the 7.80% Cumulative
Preference Stock, 1989 Series ($100 par value), shall be
cumulative and shall be payable before any dividend on the
common stock shall be paid or set apart; so that, if in
any year or years dividends amounting to seven and eighty
hundredths per cent. shall not have been paid thereon, the
deficiency shall be payable before any dividends shall be
paid upon or set apart for the common stock. Dividends on
7.80% Cumulative Preference Stock, 1989 Series ($100 par
value) will accrue from and include June 22, 1989.
(b) The 7.80% Cumulative Preference Stock, 1989 Series
($100 par value) shall be redeemed in whole on July 1,
1997 by the payment to the holders thereof, in cash, of
the sum of One Hundred Dollars and No Cents ($100.00) for
each share thereof, together with all accrued dividends.
At least thirty (30) days' written notice shall be given
to each holder of the preference stock of this series so
to be redeemed by mailing the same, postage prepaid, and
addressed to him at his address as it appears upon the
books of the corporation. When such notice shall have
been so given and the funds for payment of the redemption
price plus accrued dividends shall have been provided and
set apart, the dividends on the shares of preference stock
of this series so called for redemption and all other
rights of the holders thereof, except the right to receive
the redemption price plus accrued dividends, shall cease.
26. (a) The 8.25% Cumulative Preference Stock, 1989 Series
($100 par value), shall entitle the holders thereof to
receive, when and as declared, from the surplus or net
profits of the corporation remaining after the
preferential dividend requirements for the outstanding
preferred stock have been provided for, yearly dividends
at the rate of eight and twenty-five hundredths per cent.
per annum and no more, payable quarterly on the first days
of January, April, July, and October in each year
commencing January 1, 1990. The dividends on the 8.25%
Cumulative Preference Stock, 1989 Series ($100 par value),
shall be cumulative and shall be payable before any
dividend on the common stock shall be paid or set apart;
so that, if in any year or years dividends amounting to
eight and twenty-five hundredths per cent. shall not have
been paid thereon, the deficiency shall be payable before
any dividends shall be paid upon or set apart for the
common stock. Dividends on the 8.25% Cumulative
Preference Stock, 1989 Series ($100 par value) will accrue
from and include November 21, 1989.
(b) On or before October 1 of each year commencing
October 1, 1995 and continuing through October 1, 1999 (or
such earlier October 1 on which there remain any shares of
8.25% Cumulative Preference Stock, 1989 Series ($100 par
value) outstanding), there shall be provided and set apart
by the corporation a sum sufficient for the sinking fund
redemption of 100,000 shares of 8.25% Cumulative
Preference Stock, 1989 Series ($100 par value).
Thereafter, on October I of each year commencing October
1, 1995 and continuing through October 1, 1999 (or such
earlier October 1 on which there remain any shares of
8.25% Cumulative Preference Stock, 1989 Series ($100 par
value) outstanding), the corporation shall make sinking
fund redemptions of 100,000 shares of the 8.25% Cumulative
Preference Stock, 1989 Series ($100 par value) by the
payment to the holders thereof, in cash, of the sum of One
Hundred Dollars and No Cents ($100.00) for each share
thereof, together with all accrued dividends. Shares
shall be selected for sinking fund redemption by lot. At
least thirty (30) days written notice of the shares of the
8.25% Cumulative Preference Stock, 1989 Series ($100 par
value) so to be redeemed shall be given to the respective
holders thereof by mailing the same, postage prepaid, and
<PAGE>
addressed to such holder at the address as it appears upon
the books of the corporation. When such notice shall have
been so given and funds for the payment of the sinking
fund redemption price, plus accrued dividends, shall have
been provided and set apart by the corporation, the
dividends on the shares of the 8.25% Cumulative Preference
Stock, 1989 Series ($100 par value) so called for sinking
fund redemption and all other rights of the holders
thereof, except the right to receive the sinking fund
redemption price plus accrued dividends, shall cease.
The corporation may, at its option, in connection with any
sinking fund redemption, increase by not more than 100,000
shares the number of shares of 8.25% Cumulative Preference
Stock, 1989 Series ($100 par value) to be redeemed for the
sinking fund, at the sinking fund redemption price of one
Hundred Dollars and No Cents ($100.00) for each share
thereof, on any such sinking fund redemption date,
together, in every case, with all accrued dividends;
provided, however, that the right to make such optional
increases shall not be cumulative.
The corporation may, at its option, satisfy its obligation
to make sinking fund redemptions provided for in the first
paragraph of this Section 26(b) by crediting shares of
8.25% Cumulative Preference Stock, 1989 Series ($100 par
value) acquired by purchase in the open market or
otherwise. Notwithstanding the foregoing provisions of
this section 26(b), the obligation to redeem shares of
8.25% Cumulative Preference Stock, 1989 Series ($100 par
value) by reason of the sinking fund redemption (provided
for in the first paragraph of this Section 26(b)),
annually commencing on October 1, 1995 shall be
cumulative, and unless full cumulative redemptions of
shares of 8.25% Cumulative Preference Stock, 1989 Series
($100 par value) for the sinking fund required hereby have
been made, no dividends shall be declared nor any
distribution made on the common stock, except dividends
paid in stock of the corporation ranking junior to the
8.25% Cumulative Preference Stock, 1989 Series ($100 par
value), nor shall any purchase or other acquisition for
value of such common stock be made. The provisions of
this section 26(b) shall apply so long as any shares of
8.25% Cumulative Preference Stock, 1989 Series ($100 par
value) are outstanding.
27. (a) The 8.625% Cumulative Preference Stock, 1990
Series ($100 par value) shall entitle the holders thereof
to receive, when and as declared, from the surplus or net
profits of the corporation remaining after the
preferential dividend requirements for the outstanding
preferred stock have been provided for, yearly dividends
at the rate of eight and six hundred and twenty-five
thousandths per cent per annum and no more, payable
quarterly on the first days of January, April, July, and
October in each year commencing July 1, 1990. The
dividends on the 8.625% Cumulative Preference Stock, 1990
Series ($100 par value) shall be cumulative and shall be
payable before any dividend on the common stock shall be
paid or set apart; so that, if in any year or years
dividends amounting to eight and six hundred and twenty-
five thousandths per cent shall not have been paid
thereon, the deficiency shall be payable before any
dividends shall be paid upon or set apart for the common
stock. Dividends on the 8.625% Cumulative Preference
Stock, 1990 Series ($100 par value) will accrue from and
include June 7, 1990.
(b) On or before July 1 of each year commencing on July
1, 1996 and continuing through July 1, 2000, there shall
be provided and set apart by the corporation a sum
sufficient for the sinking fund redemption of 130,000
shares of 8.625% Cumulative Preference Stock, 1990 Series
($100 par value). Thereafter, on July 1 of each year
commencing July 1, 1996 and continuing through July 1,
2000, the corporation shall make sinking fund redemptions
<PAGE>
of 130,000 shares of the 8.625% Cumulative Preference
Stock, 1990 Series ($100 par value) by the payment to the
holders thereof, in cash, of the sum of one Hundred
Dollars and No Cents ($100.00) for each share thereof,
together with all accrued dividends. Shares shall be
selected for sinking fund redemption by lot. At least
thirty (30) days' written notice of the shares of the
8.625% Cumulative Preference Stock, 1990 Series ($100 par
value) so to be redeemed shall be given to the respective
holders thereof by mailing the same, postage prepaid, and
addressed to such holder at the address as it appears upon
the books of the corporation. When such notice shall have
been so given and funds for payment of the sinking fund
redemption price, plus accrued dividends, shall have been
provided and set apart by the corporation, the dividends
on the shares of the 8.625% Cumulative Preference Stock,
1990 Series ($100 par value) so called for sinking fund
redemption and all other rights of the holders thereof,
except the right to receive the sinking fund redemption
price plus accrued dividends, shall cease.
The corporation may, at its option, in connection with any
sinking fund redemption, increase by not more than 130,000
shares the number of shares of 8.625% cumulative
Preference stock, 1990 Series ($100 par value) to be
redeemed for the sinking fund, at the sinking fund
redemption price of One Hundred Dollars and No Cents
($100.00) for each share thereof, on any such sinking fund
redemption date, together, in every case, with all accrued
dividends; provided, however, that the right to make such
optional increases shall not be cumulative.
The corporation may, at its option, satisfy its obligation
to make sinking fund redemptions provided for in the first
paragraph of this Section 27(b) by crediting shares of
8.625% Cumulative Preference Stock, 1990 Series ($100 par
value) acquired by purchase in the open market or
otherwise. Notwithstanding the foregoing provisions of
this Section 27(b), the obligation to redeem shares of
8.625% cumulative Preference Stock, 1990 Series ($100 par
value) by reason of the sinking fund redemption provided
for in the first paragraph of this Section 27(b), annually
commencing on July 1, 1996 shall be cumulative, and unless
full cumulative redemptions of shares of 8.625% Cumulative
Preference Stock, 1990 Series ($100 par value) for the
sinking fund required hereby have been made, no dividends
shall be declared nor any distribution made on the common
stock, except dividends paid in stock of the corporation
ranking junior to the 8.625% Cumulative Preference Stock,
1990 Series ($100 par value), nor shall any purchase or
other acquisition for value of such common stock be made.
The provisions of this Section 27(b) shall apply so long
as any shares of 8.625% Cumulative Preference Stock, 1990
Series ($100 par value) are outstanding.
28. (a) The 7.85% Cumulative Preference Stock, 1991 Series
($100 par value) shall entitle the holders thereof to
receive, when and as declared, from the surplus or net
profits of the corporation remaining after the
preferential dividend requirements for the outstanding
preferred stock have been provided for, yearly dividends
at the rate of seven and eighty-five hundredths per cent
per annum and no more, payable quarterly on the first days
of January, April, July, and October in each year
commencing July 1, 1991. The dividends on the 7.85%
Cumulative Preference Stock, 1991 Series ($100 par value)
shall be cumulative and shall be payable before any
dividend on the common stock shall be paid or set apart;
so that, if in any year or years dividends amounting to
seven and eighty-five hundredths per cent shall not have
been paid thereon, the deficiency shall be payable before
any dividends shall be paid upon or set apart for the
common stock. Dividends on the 7.85% Cumulative
Preference Stock, 1991 Series ($100 par value) will accrue
from and include May 1, 1991.
<PAGE>
(b) On or before July 1 of each year commencing on July
1, 1997 and continuing through July 1, 2001, there shall
be provided and set apart by the corporation a sum
sufficient for the sinking fund redemption of 70,000
shares of 7.85% Cumulative Preference Stock, 1991 Series
($100 par value). Thereafter, on July I of each year
commencing July 1, 1997 and continuing through July 1,
2001, the corporation shall make sinking fund redemptions
of 70,000 shares of the 7.85% Cumulative Preference Stock,
1991 Series ($100 par value) by the payment to the holders
thereof, in cash, of the sum of One Hundred Dollars and No
Cents ($100.00) for each share thereof, together with all
accrued dividends. Shares shall be selected for sinking
fund redemption by lot. At least thirty (30) days'
written notice of the shares of the 7.85% Cumulative
Preference Stock, 1991 Series ($100 par value) so to be
redeemed shall be given to the respective holders thereof
by mailing the same, postage prepaid, and addressed to
such holder at the address as it appears upon the books of
the corporation. When such notice shall have been so
given and funds for payment of the sinking fund redemption
price, plus accrued dividends, shall have been provided
and set apart by the corporation, the dividends on the
shares of the 7.85% Cumulative Preference Stock, 1991
Series ($100 par value) so called for sinking fund
redemption and all other rights of the holders thereof,
except the right to receive the sinking fund redemption
price plus accrued dividends, shall cease.
The corporation may, at its option, in connection with any
sinking fund redemption, increase by not more than 70,000
shares the number of shares of 7.85% Cumulative Preference
Stock, 1991 Series ($100 par value) to be redeemed for the
sinking fund, at the sinking fund redemption price of One
Hundred Dollars and No Cents ($100.00) for each share
thereof, on any such sinking fund redemption date,
together, in every case, with all accrued dividends;
provided, however, that the right to make such optional
increases shall not be cumulative.
The corporation may, at its option, satisfy its obligation
to make sinking fund redemptions provided for in the first
paragraph of this Section 28(b) by crediting shares of
7.85% Cumulative Preference Stock, 1991 Series ($100 par
value) acquired by purchase in the open market or
otherwise. Notwithstanding the foregoing provisions of
this Section 28(b), the obligation to redeem shares of
7.85% Cumulative Preference Stock, 1991 Series ($100 par
value) by reason of the sinking fund redemption provided
for in the first paragraph of this Section 28(b), annually
commencing on July 1, 1997 shall be cumulative, and unless
full cumulative redemptions of shares of 7.85% Cumulative
Preference Stock, 1991 Series ($100 par value) for the
sinking fund required hereby have been made, no dividends
shall be declared nor any distribution made on the common
stock, except dividends paid in stock of the corporation
ranking junior to the 7.85% Cumulative Preference Stock,
1991 Series ($100 par value), nor shall any purchase or
other acquisition for value of such common stock be made.
The provisions of this Section 28(b) shall apply so long
as any shares of 7.85% Cumulative Preference Stock, 1991
Series ($100 par value) are outstanding.
29. (a) The 7.125% Cumulative Preference Stock, 1993
Series ($100 par value), shall entitle the holders thereof
to receive, when and as declared, from the surplus or net
profits of the corporation remaining after the
preferential dividend requirements for the outstanding
preferred stock have been provided for, yearly dividends
at the rate of seven and one hundred twenty-five
thousandths per cent per annum and no more, payable
quarterly on the first days of January, April, July, and
October in each year commencing October 1, 1993. The
dividends on the 7.125% Cumulative Preference Stock, 1993
Series ($100 par value), shall be cumulative and shall be
payable before any dividend on the common stock shall be
<PAGE>
paid or set apart; so that, if in any year or years
dividends amounting to seven and one hundred twenty-five
thousandths per cent shall not have been paid thereon, the
deficiency shall be payable before any dividends shall be
paid upon or set apart for the common stock. Dividends on
the 7.125% Cumulative Preference Stock, 1993 Series ($100
par value), will accrue from and include June 24, 1993.
(b) The 7.125% Cumulative Preference Stock, 1993 Series
($100 par value), or any portion thereof, may whenever the
Board of Directors shall so determine, be redeemed by the
payment to the holders thereof of the sum hereinafter
specified as the redemption price at the time of
redemption, in cash, for each share thereof, together with
all accrued dividends. The applicable redemption prices
shall be:
Redemption Price Twelve Month Period
Per Share Beginning July 1,
$103.56 2003
103.21 2004
102.85 2005
102.49 2006
102.14 2007
101.78 2008
101.42 2009
101.07 2010
100.71 2011
100.36 2012
100.00 2013 and
thereafter
provided, however, that prior to July 1, 2003, the
corporation will not redeem any shares of the 7.125%
Cumulative Preference Stock, 1993 Series ($100 par value).
In case less than all of the preference stock of this
series at the time being outstanding is so redeemed, the
shares to be redeemed shall be, as nearly as is reasonably
practicable without creating fractional shares, a
proportionate part of the holdings of each holder of
preference stock of this series, or shall be selected, in
whole or in part, by lot. At least thirty (30) days
written notice of the election of the corporation to
redeem the preference stock of this series (or any part
thereof, in which case the notice shall specify the
particular shares to be redeemed) shall be given to each
holder of the preference stock of this series so to be
redeemed by mailing the same, postage prepaid, and
addressed to him at his address as it appears upon the
books of the corporation. When such notice shall have
been so given and the funds for payment of the redemption
price plus accrued dividends shall have been provided and
set apart, the dividends on the shares of preference stock
of this series so called for redemption and all other
rights of the holders thereof, except the right to receive
the redemption price plus accrued dividends, shall cease.
30. (a) The 6.97% Cumulative Preference Stock, 1993 Series
($100 par value), shall entitle the holders thereof to
receive, when and as declared, from the surplus or net
profits of the corporation remaining after the
preferential dividend requirements for the outstanding
preferred stock have been provided for, yearly dividends
at the rate of six and ninety-seven hundredths per cent
per annum and no more, payable quarterly on the first days
of January, April, July, and October in each year
commencing October 1, 1993. The dividends on the 6.97%
<PAGE>
Cumulative Preference Stock, 1993 Series ($100 par value),
shall be cumulative and shall be payable before any
dividend on the common stock shall be paid or set apart;
so that, if in any year or years dividends amounting to
six and ninety-seven hundredths per cent shall not have
been paid thereon, the deficiency shall be payable before
any dividends shall be paid upon or set apart for the
common stock. Dividends on the 6.97% Cumulative
Preference Stock, 1993 Series ($100 par value), will
accrue from and include August 5, 1993.
(b) The 6.97% Cumulative Preference Stock, 1993 Series
($100 par value), or any portion thereof, may whenever the
Board of Directors shall so determine, be redeemed by the
payment to the holders thereof of the sum hereinafter
specified as the redemption price at the time of
redemption, in cash, for each share thereof, together with
all accrued dividends. The applicable redemption prices
shall be:
Redemption Price Twelve Month Period
Per Share Beginning October 1,
$103.49 2003
103.14 2004
102.79 2005
102.44 2006
102.09 2007
101.74 2008
101.39 2009
101.05 2010
100.70 2011
100.35 2012
100.00 2013 and
thereafter
provided, however, that prior to October 1, 2003, the
corporation will not redeem any shares of the 6.97%
Cumulative Preference Stock, 1993 Series ($100 par value).
In case less than all of the preference stock of this
series at the time being outstanding is so redeemed, the
shares to be redeemed shall be, as nearly as is reasonably
practicable without creating fractional shares, a
proportionate part of the holdings of each holder of
preference stock of this series, or shall be selected, in
whole or in part, by lot. At least thirty (30) days'
written notice of the election of the corporation to
redeem the preference stock of this series (or any part
thereof, in which case the notice shall specify the
particular shares to be redeemed) shall be given to each
holder of the preference stock of this series so to be
redeemed by mailing the same, postage prepaid, and
addressed to him at his address as it appears upon the
books of the corporation. When such notice shall have
been so given and the funds for payment of the redemption
price plus accrued dividends shall have been provided and
set apart, the dividends on the shares of preference stock
of this series so called for redemption and all other
rights of the holders thereof, except the right to receive
the redemption price plus accrued dividends, shall cease.
31. (a) The 6.70% Cumulative Preference Stock, 1993 Series
($100 par value), shall entitle the holders thereof to
receive, when and as declared, from the surplus or net
profits of the corporation remaining after the
preferential dividend requirements for the outstanding
preferred stock have been provided for, yearly dividends
at the rate of six and seventy hundredths per cent per
annum and no more, payable quarterly on the first days of
January, April, July, and October in each year commencing
January 1, 1994. The dividends on the 6.70% Cumulative
<PAGE>
Preference Stock, 1993 Series ($100 par value), shall be
cumulative and shall be payable before any dividend on the
common stock shall be paid or set apart; so that, if in
any year or years dividends amounting to six and seventy
hundredths per cent shall not have been paid thereon, the
deficiency shall be payable before any dividends shall be
paid upon or set apart for the common stock. Dividends on
the 6.70% Cumulative Preference Stock, 1993 Series ($100
par value), will accrue from and include October 14, 1993.
(b) The 6.70% Cumulative Preference Stock, 1993 Series
($100 par value), or any portion thereof, may whenever the
Board of Directors shall so determine, be redeemed by the
payment to the holders thereof of the sum hereinafter
specified as the redemption price at the time of
redemption, in cash, for each share thereof, together with
all accrued dividends. The applicable redemption prices
shall be:
Twelve Month Period Redemption Price
Beginning January 1, Per Share
2004 $103.35
2005 103.02
2006 102.68
2007 102.35
2008 102.01
2009 101.68
2010 101.34
2011 101.01
2012 100.67
2013 100.34
2014 and thereafter 100.00
provided, however, that prior to January 1, 2004, the
corporation will not redeem any shares of the 6.70%
Cumulative Preference Stock, 1993 Series ($100 par value).
In case less than all of the preference stock of this
series at the time being outstanding is so redeemed, the
shares to be redeemed shall be, as nearly as is reasonably
practicable without creating fractional shares, a
proportionate part of the holdings of each holder of
preference stock of this series, or shall be selected, in
whole or in part, by lot. At least thirty (30) days'
written notice of the election of the corporation to
redeem the preference stock of this series (or any part
thereof, in which case the notice shall specify the
particular shares to be redeemed) shall be given to each
holder of the preference stock of this series so to be
redeemed by mailing the same, postage prepaid, and
addressed to him at his address as it appears upon the
books of the corporation. When such notice shall have
been so given and the funds for payment of the redemption
price plus accrued dividends shall have been provided and
set apart, the dividends on the shares of preference stock
of this series so called for redemption and all other
rights of the holders thereof, except the right to receive
the redemption price plus accrued dividends, shall cease.
V
A director or officer of the corporation shall not be
personally liable to the corporation or its stockholders
for monetary damages except (i) to the extent that it is
<PAGE>
proved that the person actually received an improper
benefit or profit in money, property, or services for the
amount of the benefit or profit in money, property or
services actually received or (ii) to the extent that a
judgment or other final adjudication adverse to the person
is entered in a proceeding based on a finding in the
proceeding that the person's action or failure to act was
the result of active and deliberate dishonesty and was
material to the cause of action adjudicated in the
proceeding. It is the intent of this Article that the
liability of directors and officers shall be limited to
the fullest extent permitted by the Maryland General
Corporation Law, as amended from time to time.
Any repeal or modification of the foregoing paragraph by
the stockholders of the corporation shall not adversely
affect any right or protection of a director or officer of
the corporation existing at the time of such repeal or
modification.
IN WITNESS WHEREOF, Baltimore Gas and Electric Company has
caused these Articles of Restatement to its Charter to be
signed in its corporate name and on its behalf by a Vice
President, and its corporate seal to be hereto affixed,
duly attested by its Assistant Secretary on May 5, 1995
who each hereby (1) acknowledge that the execution of
these Articles of Restatement is the act of Baltimore Gas
and Electric Company, and (2) state that to the best of
their respective knowledge, information and belief, the
matters and facts set forth herein are true in all
material respects, such statement being made under the
penalties for perjury.
BALTIMORE GAS AND ELECTRIC COMPANY
By:
Vice President
SEAL: BALTIMORE GAS AND ELECTRIC COMPANY,
INCORPORATED JUNE 20, 1906
Attest:
Assistant Secretary
CHARTER.DOC/04/21/95
<PAGE>
EXHIBIT 3(b)
BY-LAWS
OF
Baltimore Gas and Electric Company
Amended to April 18, 1995
<PAGE>
Baltimore Gas and Electric Company
ARTICLE I
MEETINGS OF STOCKHOLDERS
Section 1. - Annual Meeting.
The annual meeting of the stockholders for the election
of Directors and for the transaction of general business
shall be held on any date during the period of April 6,
through May 6, as determined year to year by the Board of
Directors. The time and location of the meeting shall be
determined by the Board of Directors.
The Chief Executive Officer of the Company shall
prepare, or cause to be prepared, an annual report
containing a full and correct statement of the affairs of
the Company, including a balance sheet and a financial
statement of operations for the preceding fiscal year, which
shall be submitted to the stockholders at the annual
meeting.
Section 2. - Special Meeting.
Special meetings of the stockholders may be held in the
City of Baltimore or in any county in which the Company
provides service or owns property upon call by the Chairman
of the Board, the President, or a majority of the Board of
Directors whenever they deem expedient, or upon the written
request of the holders of shares entitled to not less than
twenty-five percent of all the votes entitled to be cast at
such a meeting. Such request of the stockholders shall
state the purpose or purposes of the meeting and the matters
proposed to be acted on the threat and shall be delivered to
the Secretary, who shall inform such stockholders of the
reasonably estimated cost of preparing and mailing such
notice of the meeting, and upon payment to the company of
such costs the Secretary shall give notice stating the
purpose or purposes of the meeting to all stockholders
entitled to vote at such meeting. No special meeting eneed
be called upon the request of the holders of the shares
entitled to cast less than a majority of all votes entitled
to be cast to such meeting, to consider any matter which is
substantially the same as a matter voted upon at any special
meeting of the stockholders held during the preceding twelve
months. The business at all special meetings shall be confined to that
specially named in the notice thereof.
Section 3. - Notice of Meetings.
Written or printed notice of every meeting of the
stockholders, whether annual or special, stating the place,
day, and hour of such meeting and (in case of special
meetings) the business proposed to be transacted shall be
given by the Secretary to each stockholder entitled to vote
at such meeting not less that ten days but no more than
ninety days before the date fixed for such meeting, by
depositing such notice in the United States mail addressed
to him at his post office address as it appears on the
records of the Company, with postage thereon prepaid.
<PAGE>
Section 4. - Organization of Meeting.
All meetings of the stockholders shall be called to
order by the Chairman of the Board, or in his absence by the
President, or in his absence by a Vice President; or in the
case of the absence of such officers, then by any
stockholder, whereupon the meeting shall organize by
electing a chairman. The Secretary of the Company, if
present, shall act as Secretary of the meeting, unless some
other person shall be elected by the meeting to act. An
accurate record of the meeting shall be kept by the
secretary thereof, and placed in the record books of the
Company.
Section 5. - Quorum.
At any meeting of the stockholders the presence in
person or by proxy of stockholders entitled to cast a
majority of the votes thereat shall constitute a quorum for
the transaction of business. If a quorum be not present at
any meeting, holders of a majority of the shares of stock so
present or represented may adjourn the meeting either sine
die or to a date certain.
Section 6. - Voting.
At all meetings of the stockholders each stockholder
shall be entitled to one vote for each share of common stock
standing in his name and, when the preferred or preference
stock is entitled to vote, such number of votes as shall be
provided in the Charter of the Company for each share of
preferred and preference stock standing in his name, and the
votes shall be cast by stockholders in person or by lawful
proxy.
Section 7. - Judge of Election and Tellers.
The Director shall, at a regular or special meeting,
appoint a Judge of Election and two Tellers to serve at each
meeting of stockholders. If the Directors fail to make such
appointments, of if the Judge of Election and/or Tellers, or
any of them, fail to appear at the meeting, the Chairman of
the meeting shall appoint a Judge of Election and/or a
Teller or Tellers to serve at that meeting. It shall be the
duty of the Tellers to receive the ballots of all the
holders of stock entitled to vote and present at a meeting
either in person or by proxy, and to count and tally said
ballots by the official record of stockholders of the
Company, or by a summary prepared therefrom and certified by
the Stock Transfer Agent or the Secretary of the Company
showing the number of shares of common and, if entitled to
vote, preferred and preference stock owned of record by each
stockholder, who may be designated therein by name, code
number, or otherwise, and certify them to the Judge of
Election, and the said Judge shall communicate in writing
the result of the balloting so certified by the Tellers to
the Chairman who shall at once announce the same to the
meeting. This certificate, signed by the Tellers and
countersigned by the Judge, shall be duly recorded as part
of the minutes of the meeting and filed among the records of
the Company.
<PAGE>
Section 8. - Record Date for Stockholders
and Closing of Transfer Books.
The Board of Directors may fix, in advance, a date as
the record for the determination of the stockholders
entitled to notice of, or to vote at, any meeting of
stockholders, or entitled to receive payment of any
dividend, or entitled to the allotment of any rights, or for
any other proper purpose. Such date in any case shall not
be more than ninety days (and in the case of a meeting of
stockholders not less than ten days) prior to the date on
which the particular action requiring such determination of
stockholders is to be taken. Only stockholders of record on
such date shall be entitled to notice of or to vote at such
meeting or to receive such dividends or rights, as the case
may be. In lieu of fixing a record date the Board of
Directors may close the stock transfer books of the Company
for a period not exceeding twenty nor less than ten days
preceding the date of any meeting of stockholders or not
exceeding twenty days preceding any other of the above
mentioned events.
ARTICLE II
BOARD OF DIRECTORS AND COMMITTEES
Section 1. - Powers of Directors
The business and affairs of the Company shall be
managed by a Board of Directors which shall have and may
exercise all the powers of the Company, except such as are
expressly conferred upon or reserved by the stockholders by
law, by Charter, or by these by-laws. Except as otherwise
provided herein, the Board of Directors shall appoint the
officers for the conduct of the business of the Company,
determine their duties and responsibilities and fix their
compensation. The Board of Directors may remove any
officer.
Section 2. - Number and Election of Directors.
The number of Directors shall be fourteen (14), all of
whom shall own at least 300 shares of the Company's common
stock. The Directors shall be elected at each Annual
Meeting of the Stockholders except as otherwise provided in
these by-laws. They shall hold their offices for one year
and until their successors are elected and qualified.
Section 3. - Removals and Vacancies.
The stockholders, at any meeting duly called and at
which a quorum is present, may remove any Director or
Directors from Office by the affirmative vote of the holders
of a majority of the outstanding shares entitled to the vote
thereon, and may elect a successor or successors to fill any
resulting vacancies for the unexpired terms of the removed
Directors.
Any vacancy occurring in the Board of Directors from
any cause other than by reason of a removal or an increase
in the number of Directors, may be filled by a majority of
the remaining Directors although such majority is less than
a quorum. Any vacancy occurring by reason of an increase in
the number of Directors may be filled by action of a
majority of Directors. A Director elected to fill a vacancy
shall hold office until the next annual meeting of
stockholders or until his successor is elected and
qualified.
<PAGE>
Section 4. - Meetings of the Board.
A regular meeting of the Board of Directors shall beheld immediately
after the annual meeting of stockholders or
any special meeting of the stockholders at which the Board
of Directors is elected, and thereafter regular meetings of
the Board of Directors shall be held on such dates during
the year as may be designated from time to time by the
Board. All meetings of the Board of Directors shall be held
at the general offices of the Company in the City of
Baltimore or elsewhere, as ordered by the Board. Of all
such meetings (except the regular meeting held immediately
after the election of Directors) the Secretary shall give
notice to each Director personally or by telephone, by
telegram directed to, or by written notice deposited in the
mails addressed to, his residence or business address at
lease 48 hours before such meeting.
Special meetings may be held at any time or place upon
the call of the Chairman of the Board, or, the Chief
Executive Officer, or in their absence, on order of the
Executive Committee by notices as above, unless the meetings
be called during the months of July and August, in which
case five days' notice shall be given. In the event three-
fourths of the Directors in office waive notice of any
meeting in writing at or before the meeting, the meeting may
be held without the aforesaid advance notices.
The Chairman shall preside at all meetings of the
Board, or, in his absence, the President, or one of the Vice
Presidents (if a member of the Board) shall preside. If at
any meeting none of the foregoing persons is present, the
Directors present shall designate one of their number to
preside at such meeting.
Section 5. - Quorum.
A majority of the Directors in office, but in no event
less than five, shall constitute a quorum of the Board for
the transaction of business. If a quorum be not present at
any meeting, a majority of the Directors present may adjourn
to any time and place they may see fit.
Section 6. - Executive Committee.
The Directors shall annually, at their first meeting
succeeding the stockholders' meeting at which they are
elected, elect from among their number an Executive
Committee of five or more (but no more than nine), as the
Board may determine. The Executive Committee may exercise,
in the intervals between meetings of the Board of Directors,
all of the powers of the Board of Directors in the
management of the business and affairs of the Company,
except the power to declare dividends, to issue stock other
than as hereinafter stated, to recommend to stockholders any
action requiring stockholder approval, amend the by-laws, or
approve any merger or share exchange which does not require
stockholder approval. If the Board of Directors has given
general authorization for the issuance of stock, the
Executive Committee, in accordance with a general formula or
method specified by the Board by resolution or by adoption
of a stock option or other plan, may fix the terms of stock
subject to classification or reclassification and the terms
on which any stock may be issued, including all terms and
conditions required or permitted to be established or
authorized by the Board of Directors.
The members of the Executive Committee shall hold their
offices as such for one year or until their successors are
elected and qualified; all vacancies in said Committee
shall be filled by the Board of Directors, but in the
absence of a member or members of the Executive
<PAGE>
Committee, the members thereof present at any meeting
(whether or not they constitute a
quorum) may appoint a member of the Board of Directors to
act in the place of such absent
member. They shall designate one of their number as
Chairman of the Committee, and shall keep a separate book of
minutes of their proceedings and actions. They shall elect
a Secretary to the Committee who shall give notice
personally or by mail, telephone, or telegraph to each
member of the Committee of all meetings, not later than 12
noon of the day before the meeting, unless a majority of the
members of the Executive Committee in office waive notice
thereof in writing at or before the meeting in which case
the meeting may be held without the aforesaid advance
notice. Meetings may be called by the Chairman of the
Committee or by the Chief Executive Officer, or, in the
event of their death, absence, or disability, by one of the
other officers among the Chairman of the Board, the
President, or the Vice Presidents. A majority of the
members of the Executive Committee in office, but in no
event less than three, shall constitute a quorum for the
transaction of business.
Section 7. - Audit Committee.
The Directors shall annually, at their first meeting
succeeding the stockholders' meeting at which they are
elected, elect from among their number an Audit Committee
which shall consist of at least three Directors who shall be
independent of Management and free from any relationship
that, in the opinion of the Board, would interfere with the
exercise of independent judgment as a Committee member, and
provided further that no Director who was formerly an
Officer of the Company shall be a member of the said Audit
Committee. One such member of the Committee shall be
designated by the Board of Directors to be Chairman of the
Audit Committee. The tenure of the office of the members of
the Audit Committee shall; be one year or until their
successors shall have been duly appointed or elected. Any
vacancy shall be filled by the Board of Directors. Two
members of the Audit Committee shall constitute a quorum.
In order to provide for direct communication between
representatives of the Board and the Independent Auditors
for this corporation, the Audit Committee, in furtherance of
this charge, shall have the following duties and
responsibilities:
(1) To recommend to the Board of Directors the
public accounting firm to be engaged to conduct
the annual financial audit of the corporation.
(2) To discuss with such Auditors the scope of
their examination which shall be in accordance
with generally accepted auditing standards with
appropriate reports thereon to be submitted to the
Board of Directors.
(3) To review with the Auditors and appropriate
financial Officers and Management of the
corporation the annual financial statements and
the Auditors' report thereon.
(4) To invite comments and recommendations from
the Auditors regarding the need for and/or results
of the reviews of those financial statements and
other documents and data reviewed or certified by
the public accounting firm thus engaged.
(5) To invite comments and recommendations from
the Auditors regarding the system of internal
controls, accounting policies and practices, and
any other related matters employed by the
corporation.
<PAGE>
(6) To meet with the corporation's Internal
Auditor in order to ensure, as a part of the
system of internal controls, that an adequate
program of internal auditing is being continuously
carried out, to determine that the corporation's
Internal Audit Staff is adequate and to review the
findings of such Staff's investigations.
(7) To report periodically regarding its
activities to the Board of Directors of the
corporation and to make such recommendations and
findings concerning any audit or audit-related
matter as the Audit Committee deems appropriate.
Section 8. - Committee on Management.
The Directors shall annually, at their first meeting
succeeding the stockholders' meeting at which they are
elected, elect from among their number a Committee on
Management consisting of four members. One such member
shall be designated by the Board of Directors to be the
Chairman of the Committee on Management. The tenure of
office of the members of the Committee on Management shall
be one year or until their successors shall have been duly
appointed or elected. Any vacancy shall be filled by the
Board of Directors. Two members shall constitute a quorum.
The Committee on Management shall recommend to the
Board of Directors nominees for election as Directors and
shall consider the performance of incumbent Directors in
determining whether to nominate them to stand for
reelection; the Committee shall, among other things,
consider any major changes in the organization of the
corporation; it shall recommend to the Board of Directors
the remuneration arrangements for Officers and Directors of
the corporation. The Committee shall recommend to the full
Board of Directors nominees for Officers of the corporation.
The Committee on Management shall have such additional
powers to perform such duties as shall be prescribed by
resolution of the Board of Directors.
Section 9. - Other Committees.
The Board of Directors is authorized to appoint from
among its members such other committees as it may, from time
to time, deem advisable and to delegate to such committee or
committees any of the powers of the Board of Directors which
it may lawfully delegate. Each such committee shall consist
of at least two Directors.
Section 10. - Fees and Expenses.
Each member of the Board of Directors, other than
salaried Officers and employees, shall be paid an annual
retainer fee, payable in quarterly installments, in such
amount as shall be specified from time to time by the Board.
Each member of the Board of Directors, other than
salaried Officers and employees, shall be paid such fee as
shall be specified from time to time by the Board for
attending each regular or special meeting of the Board and
for attending, as a committee member, each meeting of the
Executive Committee, Audit Committee, Committee on
Management and any other committee appointed by the Board.
Each member shall be paid reasonable traveling expenses
incident to attendance at meetings.
<PAGE>
ARTICLE III
OFFICERS
Section 1. - Officers.
The Company shall have a Chairman of the Board, a
President, one or more Vice Presidents, a Treasurer, and a
Secretary who shall be elected by, and hold office at the
will of, the Board of Directors. The Chairman of the Board
and the President shall be chosen from among the Directors,
and the Board of Directors shall designate either the
Chairman of the Board or the President to be the Chief
Executive Officer of the Company. The Board of Directors
shall also elect such other officers as they may deem
necessary for the conduct of the business and affairs of the
Company. Any two offices, except those of President and
Vice President, may be held by the same person, but no
person shall sign checks, drafts and promissory notes, or
execute, acknowledge or verify any other instrument in more
than one capacity, if such instrument is required by law,
the charter, these by-laws, a resolution of the Board of
Directors or order of the Chief Executive Officer to be
signed, executed, acknowledged or verified by two or more
officers. The Chairman of the Board, President and Vice
Presidents shall receive such compensation as shall be fixed
by the Board of Directors. Compensation for officers other
than the Chairman of the Board, President and Vice
Presidents shall be fixed by the Chief Executive Officer.
The Board of Directors shall require a fidelity bond to be
given by each officer, or, in its discretion, the Board may
substitute a general blanket fidelity bond or insurance
contract to cover all officers and employees.
Section 2. - Duties of the Officers.
(a) Chairman of the Board
The Chairman of the Board shall preside at all
meetings of the Board of Directors and of
stockholders. He shall also have such other
powers and duties as from time to time may be
assigned to him by the Board of Directors.
(b) President
The President shall have general executive
powers, as well as specific powers conferred by
these by-laws. He, any Vice President, or such
other persons as may be designated by the Board of
Directors, shall sign all special contracts of the
Company, countersign checks, drafts and promissory
notes, and such other papers as may be directed by
the Board of Directors. He, or any Vice
President, together with the Treasurer or an
Assistant Treasurer, shall have authority to sell,
assign or transfer and deliver any bonds, stocks
or other securities owned by the Company. He
shall also have such other powers and duties as
from time to time may be assigned to him by the
Board of Directors. In the absence of the
Chairman of the Board, the President shall perform
all the duties of the Chairman of the Board.
(c) Vice Presidents
Each Vice President shall have such powers and
duties as may be assigned to him by the Board of
Directors, or the Chief Executive Officer, as well
as the
<PAGE>
specific powers assigned by these by-laws. A Vice
President may be designated
by the Board of Directors or the Chief Executive
Officer to perform, in the absence of the
President, all the duties of the President.
(d) Treasurer
The Treasurer shall have the care and the
custody of the funds and valuable papers of the
Company, and shall receive and disburse all moneys
in such a manner as may be prescribed by the Board
of Directors or the Chief Executive Officer. He
shall have such other powers and duties as may be
assigned to him by the Board of Directors, or the
Chief Executive Officer, as well as specific
powers assigned by these by-laws.
(e) Secretary
The Secretary shall attend all meetings of the
stockholders and Directors and shall notify the
stockholders and Directors of such meetings in the
manner provided in these by-laws. He shall record
the proceedings of all such meetings in books kept
for that purpose. He shall have such other powers
and duties as may be assigned to him by the Board
of Directors or the Chief Executive Officer, as
well as the specific powers assigned by these by-
laws.
Section 3. - Removals and Vacancies.
Any officer may be removed by the Board of Directors
whenever, in its judgment, the best interest of the Company
will be served thereby. In case of removal, the salary of
such officer shall cease. Removal shall be without
prejudice to the contractual rights, if any, of the person
so removed, but election of an officer shall not of itself
create contractual rights.
Any vacancy occurring in any office of the Company
shall be filled by the Board of Directors and the officer so
elected shall hold office for the unexpired term in respect
of which the vacancy occurred or until its successor shall
be duly elected and qualified.
In any event of absence or temporary disability of any
officer of the Company, the Board of Directors may authorize
some other person to perform the duties of that office.
ARTICLE IV
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Each person made or threatened to be made party to an
action, suit or proceeding, whether, civil, criminal,
administrative or investigative, by reason of the fact that
such person is or was a director or officer of the Company,
or, at its request, is or was a director or officer of
another corporation, shall be indemnified by the Company (to
the extent indemnification is not otherwise provided by
insurance) against the liabilities, costs and expenses of
every kind actually and reasonable incurred by him as a
result of such action, suit or proceeding, or any threat
thereof or any appeal thereon, but in each case only if and
to the extent permissible under applicable common or
statutory law, state or federal. The foregoing indemnity
shall not be inclusive of other rights to which such person
may be entitled.
<PAGE>
ARTICLE V
CAPITAL STOCK
Section 1. - Evidence of Stock Ownership.
Evidence of ownership of stock in the Company may be
either pursuant to a certificate(s) or a statement in
compliance with Maryland law, each of which shall represent
the number of shares of stock owned by a stockholder in the
Company. Stockholders may request that their stock
ownership be represented by a certificate(s). Each
certificate shall be signed on behalf of the Company by the
President or a Vice President and countersigned by the
Secretary, and shall be sealed with the corporate seal. The
signatures may be either manual or facsimile. In case any
officer who signed any certificate, in facsimile or
otherwise, ceases to be such officer of the Company before
the certificate is issued, the certificate may nevertheless
be issued by the Company with the same effect as if the
officer had not ceased to be such officer as of the date of
its issue.
For stock ownership evidenced by a statement, such
statement shall be in such form, and executed, as required
from time to time by Maryland law.
Section 2. - Transfer of Shares.
Stock shall be transferable only on the books of the
Company by assignment in writing by the registered holder
thereof, his legally constituted attorney, or his legal
representative, either upon surrender and cancellation of
the certificate(s) therefor, if such stock is represented by
a certificate, or upon receipt of such other documentation
for stock not represented by a certificate as the Board of
Directors and Maryland law may, from time to time, require.
Section 3. - Lost, Stolen or Destroyed Certificates.
No certificate for shares of stock of the Company shall
be issued in place of any other certificate alleged to have
been lost, stolen, or destroyed, except upon production of
such evidence of the loss, theft or destruction and upon
indemnification of the Company to such extent and in such
manner as the Board of Directors may prescribe.
Section 4. - Transfer Agents and Registrars.
The Board of Directors shall appoint a person or
persons, or any incorporated trust company or companies or
both, as transfer agents and registrars and, if stock is
represented by a certificate, may require that such
certificate bear the signatures or the counter-signatures of
such transfer agents and registrars, or either of them.
Section 5. - Stock Ledger.
The Company shall maintain at its principal office in
Baltimore, Maryland, a stock record containing the names and
addresses of all stockholders and the numbers of shares of
each class held by each stockholder.
<PAGE>
ARTICLE VI
SEAL
The Board of Directors shall provide, subject to
change, a suitable corporate seal which may be used by
causing it, or facsimile thereof, to be impressed or affixed
or reproduced one the Company's stock certificates, bonds,
or any other documents on which the seal may be appropriate.
ARTICLE VII
AMENDMENTS
These by-laws, or any of them, may be amended or
repealed, and new by-laws may be made or adopted at any
meeting of the Board of Directors, by vote of a majority of
the Directors, or by the stockholders at any annual meeting,
or at any special meeting called for that purpose.
I HEREBY CERTIFY that the foregoing
is a true copy of the by-laws of
Baltimore Gas and Electric Company in
effect at the date hereof.
IN WITNESS WHEREOF I have hereunto
set my hand as Assistant Secretary of
said Company and affixed its
corporate seal this 5th day of May,
1995.
Assistant Secretary.
<PAGE>
EXHIBIT 10
BALTIMORE GAS AND ELECTRIC COMPANY
EXECUTIVE BENEFITS PLAN
1. Objective. The objective of this Plan is to enhance
the benefits provided to senior management employees of BGE and
its subsidiaries in order to attract and retain talented
executive personnel.
2. Definitions. All words beginning with an initial
capital letter and not otherwise defined herein shall have the
meaning set forth in the Pension Plan. All singular terms
defined in this Plan will include the plural and vice versa. As
used herein, the following terms will have the meaning specified
below:
"Annual Base Salary" means an amount determined by adding
the monthly salary amounts earned over the twelve calendar months
immediately preceding the month that includes the date of the
computation.
"Average Incentive Award" (or "Average Award") means
generally the product of the percentage equal to an average of
the two highest of the participant's five immediately prior year
award percentages under BGE's Executive Annual Incentive Plan
and/or BGE's Manager Annual Incentive Plan multiplied by the
participant's annualized base salary in effect at the end of the
prior year, and is calculated in accordance with procedures
approved by the Committee, that are attached hereto.
"BGE" means Baltimore Gas and Electric Company, a Maryland
corporation, or its successor.
"BGE's Executive Annual Incentive Plan" means such plan or
other incentive plan or arrangement designated in writing by the
Plan Administrator.
"BGE's Manager Annual Incentive Plan" means such plan or
other incentive plan or arrangement designated in writing by the
Plan Administrator.
"Cause" means the participant's (a) failure to comply with
BGE policy, (b) deliberate and continual refusal to
satisfactorily perform employment duties on substantially a full-
time basis, (c) deliberate and continual refusal to act in
accordance with any specific instructions of a majority of BGE's
<PAGE>
Board of Directors, (d) disclosure, without the consent of a
majority of BGE's Board of Directors, of confidential information
or trade secrets concerning BGE which could be materially
damaging to BGE, or (e) deliberate misconduct which could be
materially damaging to BGE without reasonable good faith belief
by the participant that such conduct was in the best interest of
BGE.
"Committee" means the Committee on Management of the Board
of Directors of BGE.
"Demotion" means a transfer to a position with BGE or a
subsidiary of BGE that either (a) is below the substantial
equivalent position in which the participant was employed on the
date of transfer, or (b) results in a substantial reduction in
pay when compared to the participant's pay on the date of the
transfer. Whether a position is a substantial equivalent
position shall be determined in the reasonable discretion of the
Committee, with reference to factors including whether the
participant retains principal responsibility for a department or
division, and whether the participant remains eligible for the
perquisites enjoyed by the participant before the position
change.
"Interest Rate" means the rate equal to 3.5% plus 65% of
yield on the Lehman Brothers Government/Corporate Bond Index.
"LTD Plan" means the Baltimore Gas and Electric Company Long
Term Disability Plan as may be amended from time to time, or any
successor plan.
"Mortality Table" means the mortality table used to value
liabilities for Pension Plan funding purposes.
"Pension Plan" means the Pension Plan of Baltimore Gas and
Electric Company as may be amended from time to time.
"Plan Administrator" means, as set forth in Section 3, the
Committee.
"Rabbi Trust" means the trust established by BGE pursuant to
the Grantor Trust Agreement Dated as of July 31, 1994, between
BGE and Citibank, N.A.
"Termination From Employment With BGE" means a participant's
separation from service with BGE or a subsidiary of BGE; however,
a participant's retirement, disability, or transfer of employment
<PAGE>
to a subsidiary of BGE shall not constitute a Termination From
Employment With BGE.
3. Plan Administration. The Committee is the Plan
Administrator and has sole authority (except as specified
otherwise herein) to interpret the Plan and, in general, to make
all other determinations advisable for the administration of the
Plan to achieve its stated objective. Appeals of written
decisions by the Plan Administrator may be made to the Board of
Directors of BGE. Decisions by the Board shall be final and not
subject to further appeal. The Plan Administrator shall have the
power to delegate all or any part of its duties to one or more
designees, and to withdraw such authority, by written
designation.
4. Eligibility. Each member of full-time senior
management or key employee of BGE or its subsidiaries may be
designated by the Plan Administrator as a participant with
respect to one or more benefits under the Plan. Once designated,
participation shall continue until such designation is withdrawn
at the discretion and by written order of the Committee,
provided, however, that such withdrawal may not be made for
benefits provided pursuant to Sections 5 and 7 with respect to a
participant who has satisfied the eligibility requirements to
retire (as set forth in Section 5(a)(i)). Notwithstanding the
foregoing, any participant who is disabled under the LTD Plan
shall continue to participate in this Plan while classified as
disabled and, for purposes of the supplemental pension benefit
provided by this Plan, while classified as disabled, shall be
deemed to continue to accrue Credited Service until no later than
his/her Normal Retirement Date.
5. Supplemental Pension Benefit
(a) Retirement benefits.
(i) Eligibility for retirement benefits. A
participant shall be eligible to retire under this Plan on or
after the participant's Normal Retirement Date, or on the first
day of any month preceding his/her Normal Retirement Date, if the
participant has attained (1) age 55 and has accumulated at least
20 years of Credited Service; or (2) age 60 and has accumulated
at least one year of Credited Service.
(ii) Computation of retirement benefits. A
participant who is eligible to retire under this Plan will be
entitled to supplemental pension retirement benefits under this
<PAGE>
Plan, which will be calculated as set forth below on the
participant's Retirement Date:
(1) add the Annual Base Salary and the
Average Incentive Award,
(2) divide the sum by 12,
(3) multiply this dollar amount by the
appropriate percentage, determined as follows: Chairman of the
Board and President of BGE - 60%; all other participants (by
completed years of Credited Service) 1 through 9 - 3% per year;
10 through 19 - 40%; 20 through 24 - 45%; 25 through 29 - 50%;
and 30 or more - 55%,
(4) multiply this dollar amount by the Early
Retirement Adjustment Factor set forth under the Pension Plan
provided, however, if the participant is age 62 or older and is a
member of full-time senior management or key employee of BGE,
other than the Chairman of the Board or the President of BGE,
such factor shall be one (1),
(5) subtract from this dollar amount the
charges relating to coverage for a preretirement survivor annuity
in excess of 50%, and for a post-retirement survivor annuity in
excess of 50%, and
(6) subtract from the remainder the net
amount payable to the participant under the Pension Plan.
(iii) Form of payout of retirement benefits.
Each participant entitled to supplemental pension retirement
benefits will receive his/her supplemental pension retirement
benefits payout in the form of a monthly payment, unless the
participant makes a valid election to receive his/her
supplemental pension retirement benefits payout in the form of a
lump sum.
A participant may elect to receive his/her supplemental
pension retirement benefits payout in the form of a lump sum by
submitting to the Committee a signed Lump Sum Election Form. The
Form must be received by the Committee before the beginning of
the calendar year during which the participant's Retirement Date
occurs. The election may be revoked at any time before the
beginning of the calendar year during which the participant's
Retirement Date occurs, by submitting to the Committee a signed
Lump Sum Revocation Form.
<PAGE>
(iv) Amount, timing, and source of monthly
retirement benefit payout. A participant entitled to monthly
supplemental pension retirement benefits will receive monthly
payments equal to the amount determined under paragraph (a)(ii).
Such payments shall commence effective with the participant's
Retirement Date. If such participant receives (or would have
received but for the Internal Revenue Code limitations) cost of
living adjustment(s) under the Pension Plan, the monthly payments
hereunder will be automatically increased based on the percentage
of, and at the same time as, such adjustment(s). Monthly
payments hereunder shall permanently cease upon the death of the
participant, effective with the monthly payment for the month
following the month of the participant's death. Monthly payments
hereunder shall be made in accordance with the provisions of the
Rabbi Trust and, to the extent not paid under the terms of the
Rabbi Trust, from general corporate assets.
(v) Amount, timing, and source of lump sum retirement
benefit payout. A participant entitled to a lump sum
supplemental pension retirement benefit will receive a lump sum
payment. This lump sum payment will be calculated by a certified
actuary and will be equal to the present value of an immediate
annuity including the estimated present value of post-retirement
supplemental survivor annuity benefits described in Section 7,
using (1) the supplemental pension retirement benefit amount
calculated under paragraph (a)(ii), which is expressed as a
monthly amount, (2) the Interest Rate computed on the
participant's Retirement Date, and (3) the Mortality Table. Such
lump sum payment shall be made within 60 days after the
participant's Retirement Date. The lump sum payment shall be
made in accordance with the provisions of the Rabbi Trust and, to
the extent not paid under the terms of the Rabbi Trust, from
general corporate assets. A participant who receives a lump sum
payment shall not be entitled to any cost of living adjustments
or to post-retirement survivor annuity coverage under the Plan.
(vi) Death of participant entitled to lump sum payout.
In the event of the death of a participant after his/her
Retirement Date and before the participant receives the lump sum
payment under paragraph (a)(v), such lump sum payment shall be
made to the participant's surviving spouse (as defined in Section
7(i)). The lump sum payment shall be the same amount and made at
the same and from the same sources as set forth in paragraph
(a)(v). If there is no surviving spouse at the date of the
participant's death, no payments shall be made pursuant to
Sections 5 or 7. A surviving spouse who receives a lump sum
benefit under this paragraph (a)(vi) shall not be entitled to any
<PAGE>
cost of living adjustments or to post-retirement survivor annuity
coverage.
(b) Accrued Benefit.
(i) Computation of gross accrued benefit. The
computation of the gross accrued supplemental pension benefit for
a participant as of the date of the computation will be made as
follows:
(1) add the Annual Base Salary and the
Average Incentive Award,
(2) divide the sum by 12, and
(3) multiply this dollar amount by the
appropriate percentage, determined as follows: Chairman of the
Board and President of BGE - 60%; all other participants (by
completed years of Credited Service as of the date of the
computation) 1 through 9 - 3% per year; 10 through 19 - 40%; 20
through 24 - 45%; 25 through 29 - 50%; and 30 or more - 55%.
(ii) Computation of net accrued benefit. The
computation of the net accrued supplemental pension benefit for a
participant as of the date of the computation will be made by
subtracting from the gross accrued benefit determined under
paragraph (b)(i) the amount, computed on the date a benefit is
payable under paragraph (c)(iii), of (1) the participant's
Accrued Gross Pension under the Pension Plan, expressed as a
monthly amount if the participant is not eligible for Normal
Retirement, Early Retirement or Disability Retirement benefits
under the Pension Plan, otherwise (2) the gross amount payable to
the participant under the Pension Plan.
(c) Entitlement to benefit upon happening of certain
events.
(i) Satisfaction of requirements. A participant who
has satisfied the age and Credited Service requirements set forth
in Section 5(a)(i) while eligible as set forth in Section 4, but
who does not retire under the Plan due to Demotion, Termination
From Employment With BGE, or the withdrawal of a participant's
eligibility to participate under Section 5, shall be entitled to
his/her net accrued supplemental pension benefit. The effective
date of the Demotion, Termination From Employment With BGE, or
eligibility withdrawal event shall be the date of such Demotion,
Termination From Employment With BGE, or eligibility withdrawal.
<PAGE>
(ii) Other events. A participant, regardless of
his/her age and years of Credited Service, shall be entitled to
his/her net accrued supplemental pension benefit upon the
happening of any of the following entitlement events, but only if
such entitlement event occurs before a participant retires under
this Plan:
(1) Change in control. A change in control,
followed within two years by the participant's Demotion, a
participant's Termination From Employment With BGE, or
the withdrawal of the participant's eligibility to participate
under the Plan, is an entitlement event. The effective date of
the entitlement event shall be the date of the Demotion,
Termination From Employment With BGE, or eligibility withdrawal.
A change in control for purposes of this paragraph (c)(i)(1)
shall mean (w) the purchase or acquisition by any person, entity
or group of persons, (within the meaning of section 13(d) or
14(d) of the Securities Exchange Act of 1934 (the "Exchange
Act"), or any comparable successor provisions), of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20 percent or more of either the outstanding
shares of common stock of BGE or the combined voting power of
BGE's then outstanding shares of voting securities entitled to a
vote generally, or (x) the approval by the stockholders of BGE of
a reorganization, merger, or consolidation, in each case, with
respect to which persons who were stockholders of BGE immediately
prior to such reorganization, merger or consolidation do not,
immediately thereafter, own more than 50 percent of the combined
voting power entitled to vote generally in the election of
directors of the reorganized, merged or consolidated entity's
then outstanding securities, or (y) a liquidation or dissolution
of BGE or the sale of substantially all of its assets, or (z) a
change of more than one-half of the members of the Board of
Directors of BGE within a 90-day period for reasons other than
the death, disability, or retirement of such members.
(2) Plan amendment. A Plan amendment that has
the effect of reducing a participant's gross accrued supplemental
pension benefit is an entitlement event. In determining whether
such a reduction has occurred, the participant's gross accrued
supplemental pension benefit calculated on the day immediately
preceding the effective date of the amendment shall be compared
to the participant's gross accrued supplemental pension benefit
calculated on the effective date of the amendment. An amendment
that has the effect of reducing future benefit accruals is not an
entitlement event. It is intended that an entitlement event
under this paragraph (c)(i)(2) will occur only with respect to
<PAGE>
those amendments that are substantially similar to amendments
that are prohibited by Internal Revenue Code section 411(d)(6)
with respect to qualified pension plans. The effective date of
the entitlement event shall be the effective date of the Plan
amendment.
(3) Involuntary Demotion, Termination From
Employment With BGE, or eligibility withdrawal without Cause. A
participant's involuntary Demotion or involuntary Termination
From Employment With BGE without Cause, or the withdrawal of a
participant's eligibility to participate under Sections 5 or 7 of
the Plan without Cause, is an entitlement event. The effective
date of the entitlement event shall be the effective date of the
participant's involuntary Demotion or involuntary Termination
From Employment With BGE without Cause, or the eligibility
withdrawal without Cause.
(iii) Form of benefit payout. Each participant
entitled to a payout under this paragraph (c) will receive such
payout in the form of a lump sum payment.
(iv) Amount, timing, and source of benefit payout. A
participant entitled to a payout of his/her net accrued benefit,
as a result of the occurrence of an event described in paragraphs
(c)(i), (c)(ii)(1), (2), or (3) will be entitled to a lump sum
benefit. This lump sum benefit will be calculated by a certified
actuary as the present value of an annuity beginning at age 65
(or the participant's actual age, if the participant is older
than age 65 on the date the lump sum benefit is payable),
including the estimated present value of post-retirement survivor
annuity benefits described in Section 7, using (1) the net
accrued benefit amount calculated under paragraph (b)(ii) on the
effective date of the event, which is expressed as a monthly
amount, (2) the Early Retirement Adjustment Factor computed by
substituting the date the lump sum benefit is payable for the
Retirement Date, (3) the Interest Rate computed on the date the
lump sum benefit is payable, and (4) the Mortality Table. The
lump sum benefit shall be payable on the date that is the later
of the date of the participant's Termination From Employment With
BGE or the date the participant reaches age 55. The lump sum
payment shall be made within 60 days after such date and shall be
made in accordance with the provisions of the Rabbi Trust and, to
the extent not paid under the terms of the Rabbi Trust, from
general corporate assets. A participant who receives a lump sum
benefit under this paragraph (c)(iv) shall not be entitled to any
cost of living adjustments or to preretirement or post-retirement
survivor annuity coverage.
<PAGE>
(v) Death of participant entitled to lump sum payout.
In the event of the death of a participant after the occurrence
of an event described in paragraphs (c)(i), (c)(ii)(1), (2), or
(3) and before the participant receives the lump sum payment
under paragraph (c)(iv), such lump sum payment shall be made to
the participant's surviving spouse (as defined in Section 7(i)).
The lump sum payment will be calculated by a certified actuary
and will be equal to 50% of the present value of an immediate
annuity using (1) the monthly amount under paragraph (c)(iv), (2)
the Early Retirement Adjustment Factor computed using the
participant's age at the date of the participant's death, or if
the participant was younger than age 60 on the date of death,
using age 60, (3) the Interest Rate computed on the date the lump
sum benefit is payable, and (4) the Mortality Table. However, if
the participant's death occurred during the 60 day period
described in paragraph (c)(iv), 100% shall be used instead of 50%
in the preceding sentence. The lump sum benefit shall be payable
on the date that is the later of the date that the participant
would have reached age 55 or the date of the participant's death.
The lump sum payment shall be made within 60 days after such
date, and shall be made in accordance with the provisions of the
Rabbi Trust and, to the extent not paid under the terms of the
Rabbi Trust, from general corporate assets. If there is no
surviving spouse at the date of the participant's death, no
payments shall be made pursuant to Sections 5 or 7. A surviving
spouse who receives a lump sum benefit under this paragraph (c)
(v) shall not be entitled to any cost of living adjustments or to
preretirement or post-retirement survivor annuity coverage.
6. Supplemental Long Term Disability Benefit.
(i) Eligibility for disability benefits. Any
participant with at least one year of Credited Service who is
Disabled (as that term is defined in the LTD Plan) will be
entitled to supplemental disability benefits under this Plan.
(ii) Computation of disability benefits. The amount of
such supplemental disability benefits shall be determined as
follows:
(1) multiply the monthly base salary in
effect immediately prior to becoming entitled to benefits under
the LTD Plan by twelve,
(2) add the Average Incentive Award to the
product,
(3) divide the sum by 12,
<PAGE>
(4) multiply this monthly dollar amount by
the income replacement percentage applicable under the LTD Plan,
and
(5) subtract from the product the gross
monthly amount provided for the participant under the LTD Plan
before such amount is reduced for Offset for Other Income (as
that term is defined in the LTD Plan).
(iii) Form of payment of disability benefits. Each
participant entitled to supplemental disability benefits will
receive his/her supplemental disability benefit payout in the
form of a monthly payment.
(iv) Amount, timing, and source of monthly disability
benefit payout. A participant entitled to supplemental
disability benefits will receive a monthly payment equal to the
amount determined under (ii) above. Such payments shall commence
effective with the expiration of the participant's BGE-provided
sickness benefits. Monthly payments shall permanently cease when
benefits under the LTD Plan cease.
If a participant receiving payments pursuant to this Section
6 receives cost of living adjustment(s) under the LTD Plan, the
payments hereunder will be automatically increased based on the
same percentage of, and at the same time as, such adjustment(s).
Monthly payments shall be made from BGE's general corporate
assets.
7. Supplemental 50% Survivor Annuity Benefit.
(i) Eligibility for survivor annuity benefit.
Following the death of a participant, a supplemental survivor
annuity will be paid to the participant's surviving spouse until
the death of that spouse. For purposes of this Section 7, a
participant's surviving spouse is the individual married to the
participant on the date of the participant's death. If there is
no surviving spouse, or if the participant or the participant's
spouse previously received or is entitled to receive a lump sum
payment under Section 5, no supplemental survivor annuity will be
payable.
(ii) Computation of survivor annuity benefit. The
amount of the supplemental survivor annuity will be determined as
follows:
<PAGE>
(1) if the participant had retired prior to
the date of death, begin with the monthly pension benefit (under
both the Pension Plan and Section 5 of this Plan) that the
participant was receiving prior to the date of death. Otherwise,
begin with the larger of the Early Retirement pension benefit
(under both the Pension Plan and Section 5 of this Plan) to which
the participant would have been entitled to receive if the (A)
participant had been retired at age 60 on the date of death for
purposes of computing the Early Retirement Adjustment Factor, or
B) participant had retired on the date of death for purposes of
computing the Early Retirement Adjustment Factor,
(2) multiply this dollar amount by .5, and
(3) subtract from the product the net
amount, if any, of the survivor annuity provided on behalf of the
participant under the Pension Plan.
(iii) Form of payout of survivor annuity benefits.
Each surviving spouse entitled to a supplemental survivor annuity
benefit will receive his/her survivor annuity benefit payout in
the form of a monthly payment.
(iv) Amount, timing, and source of monthly survivor
annuity benefit payout. A surviving spouse entitled to monthly
supplemental survivor annuity benefits will receive a monthly
payment equal to the amount determined under (ii) above. Such
payments shall commence effective with the first day of the month
following the month of the participant's death. If such
surviving spouse receives (or would have received but for the
Internal Revenue Code limitations) cost of living adjustment(s)
under the Pension Plan, the monthly payments hereunder will be
automatically increased based on the percentage of, and at the
same time as, such adjustment(s). Monthly payments shall
permanently cease upon the death of the surviving spouse,
effective with the monthly payment for the month following the
month of the surviving spouse's death. Monthly payments shall be
made in accordance with the provisions of the Rabbi Trust and, to
the extent not paid under the terms of the Rabbi Trust, from
general corporate assets.
8. Death Benefit. BGE shall make arrangements, through
its split-dollar life insurance program or otherwise, for life
insurance coverage for each participant providing that the
participant's beneficiary shall receive, as a pre-rollout death
benefit, an amount which is approximately equal to three times
the participant's compensation, and as a post-rollout benefit, an
amount which is approximately equal to two times the
<PAGE>
participant's compensation, as set forth in a separate agreement
between BGE and the participant.
As determined in the sole discretion of the Plan
Administrator, in the event that either (i) a participant is
ineligible to receive the type of life insurance coverage
provided to other participants under this Plan, or (ii) such
coverage is not available on reasonably cost-effective terms as a
result of any penalty for smoking or other factors that are
reflected in the insurance carrier's rates, then BGE shall
provide a benefit that, in the discretion of the Plan
Administrator, is substantially equivalent to the cost of the
benefit provided to other participants under this Plan.
9. Dependent Death Benefit. In the event of the death of
a participant's qualified dependent while the participant is an
active employee of BGE, BGE shall make a death benefit payment to
the participant, from general corporate assets. For purposes of
this Section 9, qualified dependent shall have the same meaning
as set forth in the Family Life Insurance Plan. For purposes of
this Section 9, the amount of the death benefit payment shall be
the highest amount of insurance that would have been payable with
respect to such qualified dependent if coverage had been provided
under the Family Life Insurance Plan. The dependent death
benefit payment under this Plan shall be grossed-up to provide
for income taxes.
10. Sickness Benefit. Each participant, without regard to
length of service, shall be entitled to the greater of the
benefits stipulated under the BGE sick benefit policy for
employees or twenty-six (26) weeks of sick benefits.
11. Vacation Benefit. Each participant, without regard to
length of service, shall be entitled to the greater of the
benefits stipulated under the BGE vacation benefit policy for
employees or five weeks of paid vacation.
12. Planning Benefit. Each participant shall be entitled
to certain personal financial, tax, and estate planning services
paid for by BGE but provided through designated professional
firms. This entitlement shall be subject to any dollar
limitation established by the Committee with respect to all such
fees. The services shall be provided to each participant by the
chosen firm(s) on a personalized and confidential basis; and each
firm shall have sole responsibility for quality of the services
which it may render.
<PAGE>
The services to be provided shall be on an on-going and
continuous basis, but shall be limited to (i) the development and
legal documentation of both career-oriented financial plans and
personal estate plans, and (ii) tax counseling regarding personal
tax-return preparation and the most advantageous structuring,
tax-wise, of proposed personal transactions.
Such planning benefit shall continue during the year of
retirement plus the next two calendar years and include the
completion of the federal and state personal tax returns for the
second calendar year following retirement. However, if a retired
member of senior management continues to serve as a member of the
Board of Directors of BGE, his/her planning benefit period shall
be extended until he/she no longer serves as a member of the
Board of Directors.
Upon the death of a participant entitled to the planning
benefit provided hereunder, his/her surviving spouse shall be
entitled to receive the following planning benefit: (i) if the
deceased was not retired at the time of death, the surviving
spouse shall be entitled to the planning benefit for the year in
which the death occurred plus the next two calendar years,
including completion of the federal and state personal tax
returns for the second calendar year after the year in which the
death occurred; or (ii) if the deceased was retired at the time
of death, then the surviving spouse shall receive a planning
benefit equal to that the deceased would have received if he/she
had not died prior to expiration of the planning benefit. The
surviving spouse of a retired member of senior management whose
death occurs while serving as a member of the Board of Directors
of BGE, shall be entitled to a planning benefit as set forth in
(i) above.
The planning benefit provided under this Plan shall be
grossed-up to provide for income taxes.
13. Miscellaneous. None of the benefits provided under
this Plan shall be subject to alienation or assignment by any
participant or beneficiary nor shall any of them be subject to
attachment or garnishment or other legal process except (i) to
the extent specially mandated and directed by applicable State or
Federal statute; (ii) as requested by the participant or
beneficiary to satisfy income tax withholding or liability; and
(iii) any policy of insurance written by a commercial carrier on
a split-dollar basis shall be assignable.
This Plan may be amended from time to time, or suspended or
terminated at any time, provided, however, that no amendment or
<PAGE>
termination shall reduce any previously accrued supplemental
pension benefit under this Plan or prejudice the rights of any
participant or beneficiary entitled to receive payment hereunder
at the time of such action. All amendments to this Plan which
would increase or decrease the compensation of any Officer of
BGE, either directly or indirectly, must be approved by the Board
of Directors. All other permissible amendments may be made at
the written direction of the Committee.
Participation in this Plan shall not constitute a contract
of employment between BGE and any person and shall not be deemed
to be consideration for, or a condition of, continued employment
of any person.
The Plan, notwithstanding the creation of the Rabbi Trust,
is intended to be unfunded for purposes of Title I of the
Employee Retirement Security Act of 1974. BGE shall make
contributions to the Rabbi Trust in accordance with the terms of
the Rabbi Trust. Any funds which may be invested and any assets
which may be held to provide benefits under this Plan shall
continue for all purposes to be a part of the general funds and
assets of BGE and no person other than BGE shall by virtue of the
provisions of this Plan have any interest in such funds and
assets. To the extent that any person acquires a right to
receive payments from BGE under this Plan, such rights shall be
no greater than the right of any unsecured general creditor of
BGE.
This Plan shall be governed in all respects by Maryland law.
<PAGE>
Executive Benefits Plan
Procedures
Computation of Average Incentive Award
Average Incentive Award is the product of the annualized
prior year, year end base salary multiplied by the greater
of the following:
(i) a fraction, the numerator of which is expressed as
a percentage and is equal to the sum of the two
highest of the percentages of the applicable
annualized year end base salary awarded to the
participant under BGE's Executive Annual Incentive
Plan during the participant's most recent five
calendar years of participation thereunder (or
such shorter period, if applicable, as set forth
below), and the denominator of which is 2
(reduced, if applicable, as set forth below), or
(ii) a fraction, the numerator of which is expressed as
a percentage and is equal to the sum of the two
highest of the percentages of the applicable
annualized base salary awarded to the participant
under either BGE's Executive Annual Incentive Plan
or BGE's Manager Annual Incentive Plan
(collectively referred to as Incentive Plans)
during the participant's most recent five calendar
years of participation thereunder (or such shorter
period, if applicable, as set forth below), and
the denominator of which is 2 (reduced, if
applicable, as set forth below),
provided that
- - for purposes of (i) and (ii), the year that the
participant separates from service due to
retirement, disability, or other termination of
employment with BGE shall be completely
disregarded, therefore, the computation of the
Average Award shall generally be made, except as
otherwise provided herein, by taking into
consideration the five years preceding the year of
such separation from service, and
- - for purposes of (i) and (ii), no consideration
shall be given, in the numerator and the
denominator, to any year (or for purposes of (ii),
part of a year) for which awards were not made
under the applicable Incentive Plans, and
<PAGE>
- - for purposes of (i) and (ii), consideration shall
be given, in both the numerator and the
denominator, to any year (or for purposes of (ii),
part of a year) for which awards were made to one
or more participants under the applicable
Incentive Plans, even though the participant did
not receive an award, and
- - for purposes of (i), and for purposes of (ii)
except as provided below, no consideration shall
be given, in the numerator and in the denominator,
to any year during which the participant is deemed
to have participated under the applicable
Incentive Plans for less than the full year,
notwithstanding the fact that the participant may
have received a reduced award based upon
participation for some portion of that year, and
- - for purposes of (ii), consideration shall be given
to a year during which a participant had
participated in both Incentive Plans, however, the
numerator with respect to such year shall equal
the sum of the actual percentage award under BGE's
Executive Annual Incentive Plan (expressed as a
percentage of the applicable annualized year end
base salary as a member of senior management) plus
the actual percentage award under BGE's Manager
Annual Incentive Plan (expressed as a percentage
of annualized final base salary as a manager).
Date: March 17, 1995
EXHIBIT 12
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED AND PREFERENCE DIVIDEND REQUIREMENTS
<TABLE>
<CAPTION>
12 Months Ended
March December December December December December
1995 1994 1993 1992 1991 1990
(In Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C>
Net Income $312,326 $323,617 $309,866 $264,347 $233,681 $175,446
Taxes on Income 148,777 156,702 140,833 105,994 88,041 22,818
Adjusted Net Income $461,103 $480,319 $450,699 $370,341 $321,722 $198,264
Fixed Charges:
Interest and Amortization of Debt Discount
and Expense and Premium on all Indebtedness $206,243 $204,205 $199,415 $200,848 $213,616 $194,656
Capitalized Interest 13,110 12,427 16,167 13,800 20,953 25,748
Interest Factor in Rentals 2,079 2,011 2,144 2,033 1,801 1,840
Total Fixed Charges $221,432 $218,643 $217,726 $216,681 $236,370 $222,244
Preferred and Preference
Dividend Requirements: (1)
Preferred and Preference Dividends $ 39,843 $ 39,922 $ 41,839 $ 42,247 $ 42,746 $ 40,261
Income Tax Required 18,722 19,075 18,763 16,729 15,916 5,166
Total Preferred and Preference
Dividend Requirements $ 58,565 $ 58,997 $ 60,602 $ 58,976 $ 58,662 $ 45,427
Total Fixed Charges and Preferred
and Preference Dividend Requirements $279,997 $277,640 $278,328 $275,657 $295,032 $267,671
Earnings (2) $669,425 $686,535 $652,258 $573,222 $537,139 $394,760
Ratio of Earnings to Fixed Charges 3.02 3.14 3.00 2.65 2.27 1.78
Ratio of Earnings to Combined Fixed
Charges and Preferred and Preference
Dividend Requirements 2.39 2.47 2.34 2.08 1.82 1.47
(1) Preferred and preference dividend requirements consist of an amount equal to the pre-tax earnings that
would be required to meet dividend requirements on preferred stock and preference stock.
(2) Earnings are deemed to consist of net income that includes earnings of BGE's consolidated subsidiaries,
equity in the net income of BGE's unconsolidated subsidiary, income taxes (including deferred income taxes
and investment tax credit adjustments), and fixed charges other than capitalized interest.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 5,418,646
<OTHER-PROPERTY-AND-INVEST> 1,189,014
<TOTAL-CURRENT-ASSETS> 639,389
<TOTAL-DEFERRED-CHARGES> 857,702
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 8,104,751
<COMMON> 1,425,391
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 1,317,497
<TOTAL-COMMON-STOCKHOLDERS-EQ> 2,725,440
279,500
209,185
<LONG-TERM-DEBT-NET> 2,579,841
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 27,800
<LONG-TERM-DEBT-CURRENT-PORT> 272,646
61,500
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,948,839
<TOT-CAPITALIZATION-AND-LIAB> 8,104,751
<GROSS-OPERATING-REVENUE> 715,251
<INCOME-TAX-EXPENSE> 32,616
<OTHER-OPERATING-EXPENSES> 567,092
<TOTAL-OPERATING-EXPENSES> 599,708
<OPERATING-INCOME-LOSS> 115,543
<OTHER-INCOME-NET> 3,898
<INCOME-BEFORE-INTEREST-EXPEN> 119,441
<TOTAL-INTEREST-EXPENSE> 48,588
<NET-INCOME> 70,853
9,951
<EARNINGS-AVAILABLE-FOR-COMM> 60,902
<COMMON-STOCK-DIVIDENDS> 56,060
<TOTAL-INTEREST-ON-BONDS> 54,977
<CASH-FLOW-OPERATIONS> 197,788
<EPS-PRIMARY> .41
<EPS-DILUTED> .41
</TABLE>
