<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
BALTIMORE GAS AND ELECTRIC COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
C.W. SHIVERY
Vice President and Chief Financial Officer
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/X/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
N O T I C E O F
A N N U A L M E E T I N G
A N D P R O X Y S T A T E M E N T
BALTIMORE GAS AND ELECTRIC COMPANY
ANNUAL MEETING OF SHAREHOLDERS
APRIL 18, 1995
OMNI INNER HARBOR HOTEL
101 WEST FAYETTE STREET
BALTIMORE, MARYLAND
[LOGO OF BALTIMORE GAS
AND ELECTRIC COMPANY
APPEARS HERE]
<PAGE>
[LOGO]
This statement was printed
entirely on recycled paper.
<PAGE>
CHRISTIAN H. POINDEXTER BALTIMORE GAS AND ELECTRIC COMPANY
CHAIRMAN OF THE BOARD P.O. BOX 1475
AND CHIEF EXECUTIVE OFFICER BALTIMORE, MARYLAND 21203-1475
March 3, 1995
[ LOGO ]
Dear Shareholder:
I'd like to invite you to attend BGE's Annual Meeting of
Shareholders on April 18, 1995, at 2 p.m. at the Omni
Inner Harbor Hotel, 101 West Fayette Street in Baltimore.
In addition to a review of company operations, this year's
meeting will include votes on two important charter
amendments. The first amendment provides for a change that
will help ease the stock transfer process for both
shareholders and the Company by allowing for book entry
ownership. The second amendment allows for preference
stock with variable terms, which will give BGE the
flexibility to meet its financial needs. On the following
pages you'll find a complete explanation of these
amendments as well as other useful information.
A proxy card is enclosed that lists all matters that need
your vote. PLEASE SIGN AND RETURN THIS CARD PROMPTLY IN
THE ENVELOPE PROVIDED. This will allow your shares to be
voted whether or not you plan to attend the meeting. If
you plan to attend the meeting, please also check the box
on the proxy card.
Your vote is especially important this year to ensure that
these important charter amendments are passed. I thank you
for your continued support of BGE and look forward to
seeing you on April 18.
Sincerely,
Chairman of the Board
<PAGE>
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
The Annual Meeting of the Shareholders of Baltimore Gas and Electric Company
will be held at the Omni Inner Harbor Hotel, 101 West Fayette Street, Baltimore,
Maryland, at 2:00 p.m. on April 18, 1995 for the following purposes:
1. The election of fourteen directors to serve for the ensuing year and
until their successors are elected and qualified.
2. The election of Coopers & Lybrand as independent auditors for 1995.
3. The approval of the 1995 Long-Term Incentive Plan.
4. To act upon a proposal to amend the Company's Charter to allow for
uncertificated securities.
5. To act upon a proposal to amend the Company's Charter to allow for
preference stock with variable terms.
6. To act upon the shareholder proposal set forth in the accompanying Proxy
Statement, if such proposal is brought before the Annual Meeting.
7. The transaction of such other business as may properly come before the
Annual Meeting.
Each of the above items is described in the Proxy Statement which
accompanies this Notice.
The stock transfer books will not be closed before the Annual Meeting.
Common, preferred and preference shareholders of record at the close of business
on February 21, 1995 will be entitled to notice of and to vote at the Annual
Meeting.
C. W. Shivery
Secretary
March 3, 1995
<PAGE>
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS -- APRIL 18, 1995 -- 2:00 P.M.
OMNI INNER HARBOR HOTEL
101 WEST FAYETTE STREET
BALTIMORE, MARYLAND
This proxy statement is provided in connection with the 1995 Annual Meeting
of Shareholders of Baltimore Gas and Electric Company (the Company or BGE).
Proxies are solicited so that all shares may be voted. Shares cannot be voted
unless the owner of record is present or represented by proxy at the Annual
Meeting. By completing and returning the accompanying proxy card, the
shareholder authorizes Messrs. Jerome W. Geckle, George V. McGowan, or Christian
H. Poindexter, as designated on the face of the proxy, to vote all shares for
the shareholder. All returned proxies which are properly executed will be voted
as the shareholder directs. If no direction is given, the executed proxies will
be voted FOR each of the directors, FOR the election of Coopers & Lybrand as
independent auditors, FOR the approval of the 1995 Long-Term Incentive Plan, FOR
the approval of Charter amendments to allow for uncertificated securities and
preference stock with variable terms, and AGAINST the shareholder proposal. A
proxy may be revoked by a shareholder at any time before it is voted at the
Annual Meeting by giving notice of revocation to the Company in writing, by
execution of a later dated proxy, or by attending and voting at the Annual
Meeting.
The accompanying proxy is solicited on behalf of the Board of Directors by
the Company, through its directors, officers, and other employees. In addition,
the Company has retained Georgeson & Co. Inc., a proxy solicitation firm, to
assist in the solicitation, and it is anticipated that the fee for these
services will not exceed $32,500 plus out-of-pocket expenses. Solicitations will
be made primarily through the use of the mail, but they may also be made in
person, by telephone, or by FAX. The Company bears the cost of soliciting
proxies. This proxy statement and the accompanying proxy card are being sent or
given to shareholders beginning on or about March 3, 1995, together with the
1994 Annual Report to Shareholders.
Shareholders of record at the close of business on February 21, 1995, will
be entitled to vote at the Annual Meeting. The holders of common stock will be
entitled to vote on all matters. The holders of preferred stock will be entitled
to vote on the proposed amendments to the Company's Charter to allow for
uncertificated securities and preference stock with variable terms, and the
holders of preference stock will be entitled to vote only on the proposed
amendment to the Company's Charter to allow for preference stock with variable
terms. The holders of common and preference stock will have one vote per share;
the holders of preferred stock will have 24 votes per share. Common, preferred,
and preference stock each will be voted as a separate class. The proposed
amendments to the Charter of the Company require an affirmative vote of the
holders of two-thirds of the outstanding shares of each class of stock; other
items, for which only the holders of common stock can vote, require the
affirmative vote of the holders of a majority of the Company's common stock
present in person or by proxy at the meeting, at which a quorum is present. On
February 21, 1995, the Company had outstanding 147,527,114 shares of common
stock, without par value; 591,849 shares of preferred stock, par value of $100
per share; and 4,910,000 shares of preference stock, par value of $100 per
share. Broker non-votes, abstentions and withhold-authority votes all count for
the purpose of determining a quorum. Shares voted include votes for or against
an item, but do not include broker non-votes, abstentions or withhold-authority
votes.
1
<PAGE>
The Board of Directors is aware of several items of business to be
considered at the Annual Meeting: Item 1, the election of fourteen directors;
Item 2, the election of independent auditors for 1995; Item 3, the approval of
the 1995 Long-Term Incentive Plan; Items 4 and 5, the approval of Charter
amendments to allow for uncertificated securities and preference stock with
variable terms, respectively, and; Item 6, a shareholder proposal regarding
director retirement benefits, if such proposal is brought before the Annual
Meeting.
ITEM 1. ELECTION OF 14 DIRECTORS
The entire Board of Directors is elected at the Annual Meeting. Each
director is elected for a term of one year and until a successor is elected and
qualified. Each of the nominees was elected a director at the 1994 Annual
Meeting of Shareholders except Mr. Grass, who was elected to the Board effective
January 1, 1995.
Information concerning the nominees for election as directors is presented
below. Each of the nominees has consented to serve as a director if elected.
Should any nominee become unable to accept nomination or election, it is
intended that the enclosed proxy will be voted for the election of a nominee
designated by the Board of Directors, unless the Board of Directors reduces the
number of directors.
H. FURLONG BALDWIN, age 63, currently serves as Chairman of the Board and Chief
Executive Officer of Mercantile Bankshares Corporation (a bank holding
company), positions he has held since 1984 and 1976, respectively, and as
Chairman of the Board and Chief Executive Officer of Mercantile-Safe Deposit
and Trust Company, positions he attained in 1976. Mr. Baldwin also serves as a
director of GRC International, Inc., USF&G Corporation, Conrail, Inc.,
Offitbank, Wills Group, and Constellation Holdings, Inc. Mr. Baldwin has been
a director of the Company since 1988 and is a member of the Executive
Committee and is the Chairman of the Long Range Strategy Committee.
BEVERLY B. BYRON, age 62, served for seven successive terms as a Congresswoman
to the United States House of Representatives from 1978 to 1992. She is a
director of Farmers & Mechanics Bank, McDonnell Douglas Corp., and UNC
Incorporated. Mrs. Byron has been a director of the Company since 1993 and is
a member of the Audit Committee, the Committee on Nuclear Power and is the
Chairwoman of the Committee on Workplace Diversity.
J. OWEN COLE, age 65, currently serves as Chairman of the Trust Committee of the
Board of Directors of both First Maryland Bancorp (a bank holding company) and
The First National Bank of Maryland, positions he has held since 1994. From
1988 to 1994, Mr. Cole served as Chairman of the Executive Committee of the
Board of Directors of both First Maryland Bancorp and The First National Bank
of Maryland. In addition, he serves as a director of the Farm Credit Bank of
Baltimore. Mr. Cole has been a director of the Company since 1977 and is the
Chairman of the Audit Committee and a member of the Committee on Management.
DAN A. COLUSSY, age 63, currently serves as Chairman of the Board and Chief
Executive Officer of UNC Incorporated (aviation services). He was elected
Chief Executive Officer in 1984, Chairman of the Board in 1989 and served as
President from 1984 to September, 1994. Mr. Colussy has been a director of the
Company since 1992 and is a member of the Committee on Management and the
Chairman of the Committee on Nuclear Power.
2
<PAGE>
EDWARD A. CROOKE, age 56, currently serves as President and Chief Operating
Officer of the Company. Mr. Crooke has been President of the Company since
1988 and Chief Operating Officer since 1992. In addition, Mr. Crooke is also
Chairman of the Board and Chief Executive Officer of BGE Home Products &
Services, Inc., positions he attained in 1994. Mr. Crooke serves as a director
of Constellation Holdings, Inc., First Maryland Bancorp, The First National
Bank of Maryland, Associated Electric & Gas Insurance Services, Limited, and
Baltimore Equitable Insurance. Mr. Crooke has been a director of the Company
since 1988 and is a member of the Executive Committee.
JAMES R. CURTISS, age 41, currently is a partner in the law firm of Winston &
Strawn, a position he attained in 1993. From 1988 to 1993, he served as a
Commissioner of the United States Nuclear Regulatory Commission. Mr. Curtiss
is also a director of Cameco Corporation. He has been a director of the
Company since 1994 and is a member of the Committee on Nuclear Power and the
Committee on Workplace Diversity.
JEROME W. GECKLE, age 65, was Chairman of the Board of PHH Corporation (vehicle,
relocation, and management services) from 1979 to 1989. He served as Chief
Executive Officer of PHH Corporation from 1979 to 1988. Now retired, Mr.
Geckle serves as a director of First Maryland Bancorp, The First National Bank
of Maryland, and Constellation Holdings, Inc. Mr. Geckle has been a director
of the Company since 1980 and is the Chairman of the Committee on Management
and a member of the Long Range Strategy Committee.
MARTIN L. GRASS, age 41, currently serves as President and Chief Operating
Officer of Rite Aid Corporation (retail drugs), positions he attained in 1989,
and as a Director of Rite Aid Corporation, a position he attained in 1982. In
addition, Mr. Grass is Vice Chairman, Treasurer and Director of Super Rite
Corporation (food wholesaler and retailer), positions he attained in 1989. Mr.
Grass is also a director of Tessco, Inc. He has served as a director since
January 1, 1995 and is a member of the Audit and Long Range Strategy
Committees.
DR. FREEMAN A. HRABOWSKI, III, age 44, currently serves as the President of the
University of Maryland Baltimore County, a position he attained in 1993.
Previously, he served as Interim President from 1992 to 1993, Executive Vice
President from 1990 to 1992, and Vice Provost from 1987 to 1990. Dr. Hrabowski
is also a director of the Citizens Bancorp, Citizens Bank of Maryland, and
Baltimore Equitable Insurance. He has served as a director of the Company
since 1994 and is a member of the Audit and Executive Committees and the
Committee on Workplace Diversity.
NANCY LAMPTON, age 52, currently serves as Chairman and Chief Executive Officer
of American Life and Accident Insurance Company of Kentucky, a position she
attained in 1971. Ms. Lampton is also a director of BancOne Kentucky, Duff &
Phelps Utility Income Fund, Inc. and Liberty National Bank. She has served as
a director of the Company since 1994 and is a member of the Long Range
Strategy Committee and the Committee on Workplace Diversity.
GEORGE V. MCGOWAN, age 67, served as Chairman of the Board and Chief Executive
Officer of the Company and Chairman of the Board of Constellation Holdings,
Inc., from 1988 to 1992. Mr. McGowan is a director of The Baltimore Life
Insurance Company, Life of Maryland, Inc., McCormick & Company, Inc.,
NationsBank, N.A., and UNC Incorporated. Mr. McGowan has been a director of
the Company since 1980 and is the Chairman of the Executive Committee and a
member of the Committee on Nuclear Power.
3
<PAGE>
CHRISTIAN H. POINDEXTER, age 56, currently serves as Chairman of the Board and
Chief Executive Officer of the Company and Chairman of the Board of
Constellation Holdings, Inc., positions he attained in 1993, after serving as
Vice Chairman of the Board, a position he held since 1989. Mr. Poindexter is
also a director of BGE Home Products & Services, Inc., a position he attained
in 1994. In addition, Mr. Poindexter serves as a director of Mercantile
Bankshares Corporation, Mercantile Mortgage Corporation, and Mercantile-Safe
Deposit and Trust Company. Mr. Poindexter has been a director of the Company
since 1988 and is a member of the Executive Committee.
GEORGE L. RUSSELL, JR., age 65, currently is a partner in the law firm of Piper
& Marbury, a position he attained in 1986. Mr. Russell has been a director of
the Company since 1988 and is a member of the Audit and the Executive
Committees.
MICHAEL D. SULLIVAN, age 55, currently is Chairman of the Board of Waye
Laboratories, Inc. (hair restoration) and Lombardi Research Group (hair
products), positions he attained in January, 1995. Mr. Sullivan was Chief
Executive Officer (from 1982 to February, 1994) and President (from 1982 to
November, 1994) of Merry-Go-Round Enterprises, Inc. (specialty retailing).
That company filed a petition under Chapter XI of the Federal Bankruptcy law
in January, 1994. Mr. Sullivan has been a director of the Company since 1992
and is a member of the Committee on Management and the Long Range Strategy
Committee.
COMMITTEES, MEETINGS, AND FEES
The Executive Committee of the Board of Directors may exercise most of the
powers of the Board of Directors in the management of the business and affairs
of the Company in the intervals between meetings of the full Board. The
Committee, however, may not declare dividends, authorize the issuance of stock,
recommend to shareholders any action requiring shareholders' approval, amend the
by-laws, or approve mergers.
The Audit Committee of the Board of Directors, comprised of outside
directors, recommends an auditing firm to be engaged, discusses the scope of the
examination with that firm, and reviews the annual financial statements with the
auditing firm and with Management of the Company. Additionally, the Committee
meets with the Manager of the Auditing Department of the Company to ensure that
an adequate program of internal auditing is being carried out, and invites
comments and recommendations from the auditing firm concerning the system of
internal controls and accounting procedures. The Audit Committee reports on its
activities periodically to the Board of Directors.
The Committee on Nuclear Power monitors the performance and safety of the
Company's Calvert Cliffs Nuclear Power Plant. The Committee meets periodically,
usually on-site at the Calvert Cliffs plant, to confer with Management, senior
plant management, and other nuclear oversight personnel. Following each meeting,
the Committee reports the results of its observations and findings to the Board
of Directors and makes such recommendations as it deems appropriate.
The Committee on Management's duties include recommending to the Board of
Directors nominees for election as directors and officers and making
recommendations concerning remuneration arrangements for directors and officers
of the Company. This Committee, which is comprised of outside directors,
considers nominees recommended by shareholders; such recommendations should be
submitted in writing to the attention of the Corporate Secretary, Baltimore Gas
and Electric Company, 39 West Lexington Street, Baltimore, Maryland 21201.
4
<PAGE>
The Committee on Workplace Diversity provides an ongoing Board of Directors'
perspective of management's progress in achieving employee diversity goals. The
Committee provides input to management in setting goals and developing
strategies to increase goal attainment, provides oversight on implementation of
strategies, and evaluates results. The Committee on Workplace Diversity reports
on its activities periodically to the Board of Directors.
The Long Range Strategy Committee provides an oversight role in the
development of the Company's long range strategic goals. The Committee meets
periodically to review the continued appropriateness of these goals and to
approve presentations to the Board regarding the implementation of significant
strategic initiatives. This Committee also reviews major regulatory,
environmental and public policy issues as well as technology advances which may
impact Company operations. The Long Range Strategy Committee reports on its
activities periodically to the Board of Directors.
The Board of Directors met eleven times during 1994 for regularly scheduled
meetings. The Committee on Management met six times, while the Audit Committee,
Long Range Strategy Committee and Committee on Nuclear Power each met four
times. The Executive Committee and Committee on Workplace Diversity each met one
time.
Each director, who is not an officer or employee of the Company or its
subsidiaries, receives a fee of $1,000 for each regular, committee, or special
meeting of the Board attended and a retainer fee of $18,000 per year, payable
quarterly. Each committee chairman receives an additional annual retainer fee of
$3,000 per year, payable quarterly. Each director may be reimbursed for
reasonable travel expenses incidental to attendance at meetings. Each director
who is not an officer or employee may elect to defer receipt of any portion of
the fees earned. In addition, the Company maintains a director retirement plan.
Under this plan, non-employee directors with at least five years of service
receive an annual retirement benefit for life equal to the annual Board retainer
in effect at the time of the director's retirement from the Board. Benefit
payments begin at the director's date of retirement or at age 65, whichever is
later. The Company also provides an automobile to Mr. McGowan, a director who
retired on December 31, 1992 as Chairman of the Board and Chief Executive
Officer of the Company and who continues to participate in civic and community
activities on behalf of the Company. The approximate yearly cost to the Company
is $10,000.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
The Company and certain of its subsidiaries paid legal fees to the law firm
of Piper & Marbury of which Mr. George L. Russell, Jr., a Company director, is a
partner. It is expected that the Company and subsidiaries will continue to do
business with this firm in 1995.
The Company and certain of its subsidiaries maintain a banking relationship
with Mercantile-Safe Deposit and Trust Company, of which Mr. H. Furlong Baldwin,
a Company director, is Chairman of the Board and Chief Executive Officer. As of
December 31, 1994, loans to certain of the Company's subsidiaries were
outstanding in the amount of $11,500,000. The loans were obtained on competitive
terms and in the ordinary course of business.
5
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the beneficial ownership of equity securities
of the Company of each nominee for director, the five executive officers shown
in the Summary Compensation Table on page 7, and all directors and executive
officers as a group as of January 20, 1995.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
NAME (SHARES OF COMMON STOCK) (1)
- --------------------------------- ----------------------------
<S> <C>
Bruce M. Ambler 31,149(2)
H. Furlong Baldwin 750
Beverly B. Byron 500
J. Owen Cole 3,792
Dan A. Colussy 1,500
George C. Creel 22,739(3)
Edward A. Crooke 58,133(4)
James R. Curtiss 300
Jerome W. Geckle 6,192
Martin L. Grass 700
Freeman A. Hrabowski, III 550
Nancy Lampton 936
George V. McGowan 100,642(5)
Christian H. Poindexter 85,192(6)
George L. Russell, Jr. 1,131
Charles W. Shivery 22,483(7)
Michael D. Sullivan 1,500
All Directors and Executive
Officers as a Group (27
Individuals) 492,082
<FN>
(1) Each of the individuals listed, as well as all directors and
executive officers as a group, beneficially owned less than 1% of
the Company's outstanding common stock. If the individual
participates in the Company's Dividend Reinvestment and Stock
Purchase Plan or the Company's Employee Savings Plan those shares
are included.
(2) Includes shares awarded under the Company's Long-Term Incentive
Plan.
(3) Includes shares awarded under the Company's Long-Term Incentive
Plan. Of the total shares, 7,593 shares are held in the name of Mr.
Creel's wife of which Mr. Creel disclaims beneficial ownership.
(4) Includes shares awarded under the Company's Long-Term Incentive
Plan. Of the total shares, 940 shares are beneficially owned by Mr.
Crooke with his wife, and 2,850 shares are held in trust which Mr.
Crooke votes.
(5) Of the total shares, 1,313 shares are beneficially owned by Mr.
McGowan with his wife.
(6) Includes shares awarded under the Company's Long-Term Incentive
Plan. Of the total shares, 18,401 shares are held in the name of Mr.
Poindexter's wife, and 12,000 shares are held as trustee.
(7) Includes shares awarded under the Company's Long-Term Incentive
Plan. Of the total shares, 10,050 shares are beneficially owned by
Mr. Shivery with his wife and 199 shares are beneficially owned by
Mr. Shivery with his son.
</TABLE>
6
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS BY THE COMPANY
The summary compensation table below provides information about salary and
other compensation. Following the summary compensation table are tables about
long-term incentive program awards and pension benefits, a performance graph
that compares BGE common stockholder return to both the S&P 500 Index and the
Dow Jones Electric Utilities Index, and a report by the Committee on Management
about executive compensation.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------------------
RESTRICTED
NAME AND PRINCIPAL POSITION FISCAL STOCK ALL OTHER
@ 12/31/94 YEAR SALARY BONUS AWARD (1) COMPENSATION (2)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Christian H. Poindexter 1994 $ 498,533 $ 163,000 -0- $ 26,436
Chairman of the Board and 1993 $ 465,533 $ 124,000 $ 81,813 $ 36,844
Chief Executive Officer 1992 $ 355,300 -0- $ 267,150 $ 29,805
Edward A. Crooke 1994 $ 385,067 $ 125,000 -0- $ 19,089
President and Chief Operating 1993 $ 361,267 $ 83,000 -0- $ 30,335
Officer 1992 $ 328,533 -0- $ 232,900 $ 29,347
Bruce M. Ambler 1994 $ 280,133 $ 69,000 -0- $ 11,443
President and Chief Executive 1993 $ 264,000 $ 139,267(3) -0- $ 15,902
Officer of Constellation 1992 $ 249,633 $ 66,733 $ 198,650 $ 13,159
Holdings, Inc.
George C. Creel 1994 $ 248,867 $ 55,000 -0- $ 11,754
Senior Vice President -- 1993 $ 230,233 $ 47,000 -0- $ 19,079
Generation 1992 $ 205,767 -0- $ 154,563 $ 16,278
Charles W. Shivery 1994 $ 188,300 $ 44,500 -0- $ 7,441
Vice President -- 1993 $ 178,100 $ 34,500 -0- $ 10,889
Finance and Accounting, 1992 $ 164,267 -0- $ 85,625 $ 9,370
Chief Financial Officer and
Secretary
<FN>
(1) At December 31, 1994, Mr. Poindexter held 15,200 shares of Restricted Stock
with a value of $336,300, Mr. Crooke held 10,200 shares of Restricted Stock
with a value of $225,675, Mr. Ambler held 8,700 shares of Restricted Stock
with a value of $192,488, Mr. Creel held 6,750 shares of Restricted Stock
with a value of $149,344, and Mr. Shivery held 3,750 shares of Restricted
Stock with a value of $82,969. Dividends on Restricted Stock Awards are
paid directly to the named executive officers from the record date
following the date of grant.
(2) These amounts represent the Company match under the Company's savings plans
and the interest on the cumulative corporate funds used to pay annual
premiums on policies providing split-dollar life insurance benefits
(calculated at the Internal Revenue Service's blended rate).
(3) $80,000 of Mr. Ambler's 1993 bonus relates to 1993 performance, and $59,267
relates to performance initiated in 1992 and completed in 1993.
</TABLE>
7
<PAGE>
LONG-TERM INCENTIVE PLAN TABLE
The Board of Directors, upon recommendation from the Committee on
Management, adopted the 1995 Long-Term Incentive Plan and made initial grants of
restricted shares, all subject to approval by the Company's common shareholders.
Additional information about the Plan and the initial grants is found in ITEM 3.
APPROVAL OF THE 1995 LONG-TERM INCENTIVE PLAN on page 13.
For each named executive, the initial grants are subject to both performance
and time (3 years) contingencies. Performance will be measured by comparing
BGE's total shareholder return to the Dow Jones Electric Utilities Index. Both
are shown in the performance graph on page 10. No award will be earned if the
BGE three-year cumulative total shareholder return percentile rank is below the
50th percentile and a maximum award will be earned for a return at or above the
75th percentile, with a straight line progression in between.
Pursuant to the initial grants, restricted shares were issued equivalent to
the number of shares that will be earned if "target" performance (62.5th
percentile) is achieved. These restricted shares will be forfeited in whole or
part, if performance is below target. Dividends on the restricted shares will be
accumulated during the performance period and reinvested in BGE shares. Actual
dividends awarded at the end of the performance period will be based upon
performance and paid in stock (except that the recipients may elect to have a
portion of the shares withheld to satisfy tax withholding requirements).
Additional shares, up to the maximum number noted below, will be awarded if
performance is above target at the end of the 1995-1997 performance period.
Dividend equivalents from the date of the initial grant will be paid for any
additional shares that are awarded.
<TABLE>
<CAPTION>
PERFORMANCE
NAME MINIMUM (A) TARGET (A) MAXIMUM (A) PERIOD
- ----------------------------- --------------- ----------- --------------- -------------
<S> <C> <C> <C> <C>
C.H. Poindexter 5,000 10,000 14,000 3 years
E.A. Crooke 4,000 7,000 10,000 3 years
B.M. Ambler 3,000 6,000 8,000 3 years
G.C. Creel 2,500 4,500 6,500 3 years
C.W. Shivery 2,000 3,500 5,500 3 years
<FN>
- --------------------------
(A) The target number of shares have been issued. If fewer shares are actually
earned during the performance period, all or some shares will be forfeited;
if additional shares are actually earned during the performance period,
additional shares, up to the maximum listed, will be issued.
</TABLE>
8
<PAGE>
PENSION BENEFITS
The following table shows annual pension benefits payable upon normal
retirement at age 65 to executives, including the five individuals named in the
Summary Compensation Table. Pension benefits are computed at 60% of total final
average salary plus bonus for Messrs. Poindexter, Crooke, and Ambler, without
regard to years of service. Pension benefits are computed at 55% of total final
average salary plus bonus for Mr. Creel, who has attained the maximum credited
years of service. Pension benefits are computed at 45% of final average salary
plus bonus for Mr. Shivery and, when he attains 30 years service in 2001, will
be computed at 55%.
<TABLE>
<CAPTION>
PERCENTAGE OF FINAL AVERAGE
TOTAL FINAL SALARY AND BONUS
SALARY AND -------------------------------
BONUS 45% 55% 60%
- ----------- --------- --------- ---------
<S> <C> <C> <C>
$ 225,000 $ 101,250 $ 123,750 $ 135,000
250,000 112,500 137,500 150,000
300,000 135,000 165,000 180,000
350,000 157,500 192,500 210,000
400,000 180,000 220,000 240,000
450,000 202,500 247,500 270,000
500,000 225,000 275,000 300,000
525,000 236,250 288,750 315,000
550,000 247,500 302,500 330,000
600,000 270,000 330,000 360,000
650,000 292,500 357,500 390,000
675,000 303,750 371,250 405,000
700,000 315,000 385,000 420,000
750,000 337,500 412,500 450,000
800,000 360,000 440,000 480,000
</TABLE>
Salary and bonus are calculated in the same manner shown in the Summary
Compensation Table. There is no offset of pension benefits for social security
or other amounts.
During 1994, the Company implemented a program to secure the supplemental
pension benefits for each of the executive officers, including those listed in
the Summary Compensation Table. The program does not increase the amount of
supplemental pension benefits. In the past, the supplemental pension benefits
were unfunded -- that means no money was set aside on behalf of the executive as
he earned the benefit, and the benefits were paid from the Company's general
funds when the executive retired. To provide security, accrued supplemental
pension benefits are now being funded through a trust at the time they are
earned. An executive officer's accrued benefits in the trust become vested when
any of these events occur: retirement eligibility; termination, demotion or loss
of benefit eligibility without cause; a change of control of the Company
followed within two years by the executive's demotion, termination or loss of
benefit eligibility; or reduction of previously accrued benefits. As a result of
becoming vested, the executive would be entitled to a payout of the vested
amount from the trust upon the later of age 55 or employment termination. To
date, no payments have been made to the trust. Future payments will be included
in the Summary Compensation Table.
9
<PAGE>
PERFORMANCE GRAPH
The following graph assumes $100 was invested on December 31, 1989 in
Baltimore Gas and Electric Company common stock, S&P 500 Index and Dow Jones
Electric Utilities Index. Total return is computed assuming reinvestment of
dividends.
Additional, more detailed information about earnings is included in the
Company's Annual Report to Shareholders, particularly in the MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, which
accompanied this proxy statement.
PERFORMANCE GRAPH
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF FIVE YEAR CUMULATIVE
RETURN AMONG BALTIMORE GAS &
ELECTRIC, D.J. ELEC. UTIL. INDEX,
AND S & P 500
<S> <C> <C> <C>
Measurement Period (Fiscal Years Baltimore Gas DJ Elec. Util.
Covered) and Electric Index S&P 500 Index
12/31/89 100 100 100
FYE 12/31/90 87 102 97
FYE 12/31/91 114 132 126
FYE 12/31/92 125 141 136
FYE 12/31/93 144 158 150
FYE 12/31/94 134 138 152
</TABLE>
REPORT OF COMMITTEE ON MANAGEMENT
REGARDING EXECUTIVE COMPENSATION
The Committee on Management, made up completely of outside Directors, is
responsible for executive compensation policies. In addition to establishing
policies, the Committee approves all compensation plans and recommends to the
Board of Directors for approval specific salary amounts and other compensation
awards for individual executives.
The Committee designs compensation policies to encourage executives to
manage the Company in the best long-term interests of shareholders and to allow
BGE to attract and retain executives best suited to lead BGE in a changing
industry.
10
<PAGE>
The Committee determined that the relevant labor market for executives is
the utility industry. Utilities used for comparison in 1994 were electric
utilities and combination electric/gas utilities that have annual revenues in
the $2-3 billion range. After a rigorous review of data, the Committee
determined the relevant size of comparison companies should be $2-5 billion for
1995 and future years, adjusted by using regression analysis to account for
BGE's size. These utilities are thought to best represent the portion of the
executive labor market in which BGE competes. All of these utilities are
included in the Dow Jones Electric Utilities Index shown on the Performance
Graph.
The Committee's philosophy is that base salary should approximate the middle
of that labor market for average performance, and that short-term and long-term
incentive awards for above-average performance should bring total compensation
for superior performance to approximately the 75th percentile of the labor
market. Total compensation is made up of three components: base salary,
short-term incentive awards, and long-term incentive awards. As described below,
corporate performance is one of the criteria used by the Committee in
determining base salary, and it is a key component in determining both
short-term and long-term incentive awards.
The Committee has retained an outside executive compensation consultant
since 1993. He provides information and advice on a regular basis. In addition,
internal compensation analysts (certified by the American Compensation
Association) use survey data, outside consultants, and other resources to make
recommendations to the Committee.
Base salary range increases or decreases for Mr. Poindexter and other named
executives in 1994 were based upon survey data and the policies mentioned above.
In Mr. Poindexter's case the desired mid-point of the range for the position of
Chairman and Chief Executive Officer was decreased to correspond to the survey
data from the relevant labor market for the position of Chairman and Chief
Executive Officer.
Salary increases during 1994 for Mr. Poindexter and the other named
executives were based upon 1993 corporate performance (consolidated corporate
earnings increased 13.5% or $.22 per share in 1993 compared to 1992, and utility
earnings increased 16.4%, or $.25 per share in 1993 compared to 1992), stability
of prices to customers, streamlining work processes and the workforce, and the
corporate response to changes in the industry and the regulatory environment.
Mr. Poindexter's base salary increase moved him from the bottom of the salary
range toward the revised mid-point.
Bonus payments to Mr. Poindexter and other executives represent the
short-term incentive component of executive compensation. The Committee sets
short-term incentive amounts, as well as the mix among base salary, short-term
incentive compensation and long-term incentive compensation, to bring total
compensation in line with survey data for the relevant labor market. For 1994
short-term incentive awards, the Committee determined the appropriate measure
for corporate and utility earnings were earnings from ongoing operations, which
had the effect of eliminating the $.07 per share reduction related to the
write-off of $16 million of assets on the balance sheet associated with
preliminary work on a second combined cycle unit at the Company's Perryman site.
The work had been accomplished in prior periods, but in 1994 Management decided
it would not be necessary to build the second unit. The emerging competitive
bulk power market is significantly different than the conditions which existed
when the investment in future facilities at Perryman was made. Both Mr.
Poindexter's and Mr. Crooke's short-term bonuses were based upon corporate
performance measured by the following factors: higher consolidated corporate
earnings from ongoing operations (an increase of 8.1% or $.15 per share, in 1994
compared to 1993), weighted at 70%; and corporate business plan performance in
the following areas: safety, customer satisfaction, environmental performance,
competitive performance, nuclear performance, and financial performance,
together weighted at 30%. Messrs. Creel's and Shivery's bonuses were based upon
two factors of equal importance: higher utility earnings from ongoing operations
(an increase of 6.2%, or $.11 per share, in 1994 compared to 1993), and
achievement of operational targets contained in their respective divisional
(nuclear and fossil for Mr. Creel and finance and
11
<PAGE>
accounting for Mr. Shivery) business plans. Mr. Ambler's bonus was based upon
net income from Constellation Holdings ($13.8 million in 1994, up from $11.9
million in 1993) weighted at 50%; higher consolidated corporate earnings from
ongoing operations (an increase of 8.1%, or $.15 per share, in 1994 compared to
1993), weighted at 30%; and operational targets contained in Constellation
Holdings' business plan weighted at 20%.
The last component of executive compensation is long-term incentive pay. For
many years, restricted BGE common stock awarded under the former Long-Term
Incentive Plan was the only form of long-term incentive pay for executives.
Restricted stock awards were designed to increase the amount of common stock
owned by executives and as an incentive for executives to remain at BGE during
the restriction period. No restricted stock awards were made to the named
executives in 1994.
The Committee determined a second form of long-term incentive pay for
executives was appropriate, and in 1993 approved the cash Long-Term Performance
Program for executive officers, including Mr. Poindexter. The program is
designed to tie the awards directly to total shareholder return. The first
awards to be made under the new program will be payable in 1997, if earned.
Program objectives are based upon BGE total shareholder return during the period
1994 - 1996 compared to total shareholder return for the other companies
included in the Dow Jones Electric Utilities Index (one of the indices used in
the Performance Graph). For Mr. Ambler, the performance objectives measure
improvement in Constellation Holdings' net income over the same three year
period.
The former Long-Term Incentive Plan expires this year as explained in Item 3
of this Proxy Statement. The Committee and the Board of Directors adopted a new
1995 Long-Term Incentive Plan, subject to shareholder approval. The Committee
specifically included numerous features in the 1995 Long-Term Incentive Plan to
allow various types of awards keyed to corporate performance, including
performance shares and restricted stock subject to performance-based
contingencies. Awards of performance-based restricted stock were granted,
subject to shareholder approval, in early 1995 under the 1995 Long-Term
Incentive Plan to the named executives and are shown on the Long-Term Incentive
Plan table on page 8. The awards are subject to forfeiture if corporate
performance criteria are not satisfied or if the executive's employment
terminates during the 1995 - 1997 performance period. The corporate performance
criteria for all named executives except Mr. Ambler are measured by total
shareholder return over the performance period compared to total shareholder
return for the other companies included in the Dow Jones Electric Utilities
Index (one of the indices used in the Performance Graph) and are as follows: a
threshold award at the 50th percentile, progressing to a maximum payout if
percentile rank for total shareholder return exceeds the 75th percentile. For
Mr. Ambler, the performance objectives measure improvement in Constellation
Holdings' net income over the same three year period.
In making long-term incentive awards the Committee considers the desired
amount of total compensation and the appropriate mix among base salary,
short-term incentive compensation, and long-term incentive compensation. The
Committee sets long-term incentive target amounts to bring total compensation in
line with survey data for the relevant labor market. Measures for
performance-based long-term incentive awards are based upon total shareholder
return. Under the former Long-Term Incentive Plan, for service-based awards, in
addition to compensation mix, the Committee determined the number of shares or
amount of other types of long-term incentive awards to executives, including Mr.
Poindexter, based upon the following criteria for each individual: the total
compensation paid to each individual since his last long-term incentive award,
the stock ownership of each individual, and each individual's responsibility
regarding the Company's performance. The Committee took into account the
previous long-term incentive awards to an individual when determining additional
awards. The 1995 Long-Term Incentive Plan also allows service-based restricted
stock awards. When such awards are granted, the Committee expects the same types
of criteria will be considered.
12
<PAGE>
As described on page 9 in the "Pension Benefits" section, a program to
secure supplemental pension benefits was implemented during 1994. The program
does not increase benefit levels. The Committee concluded the program was
appropriate in light of the common practice in the utility industry, the
increasing portion of all benefits provided under unfunded programs, and the
total dollar amounts to be provided under the previously unfunded supplemental
pension.
Section 162(m) of the Internal Revenue Code limits tax deductions for
executive compensation to $1 million. There are several exemptions to Section
162(m), including one for qualified performance-based compensation. To be
qualified, performance-based compensation must meet various requirements,
including shareholder approval. The Committee considered whether it should adopt
a policy regarding 162(m) and concluded it was not appropriate to do so during
1994. The primary reason for the conclusion is that, assuming the current
compensation policies and philosophy remain in place, Section 162(m) will not be
applicable in the near term for any executive's compensation.
Jerome W. Geckle, Chairman Dan A. Colussy
J. Owen Cole Michael D. Sullivan
ITEM 2. ELECTION OF AUDITORS
Coopers & Lybrand, Certified Public Accountants, have been the Company's
independent auditors since 1941. Unless the common stock shareholder otherwise
specifies in the proxy, the votes represented by the common stock proxies will
be cast FOR the election of Coopers & Lybrand as independent auditors for the
Company for the year 1995. A member of Coopers & Lybrand will be present at the
Annual Meeting and will be given an opportunity to make a statement and answer
appropriate questions.
The consolidated financial statements for the previous fiscal year were
examined by Coopers & Lybrand. In connection with the auditor function, Coopers
& Lybrand also reviewed the Company's annual report, its filings with the
Securities and Exchange Commission and Federal Energy Regulatory Commission, and
examined the financial statements of various Company benefit plans.
The Audit Committee of the Board of Directors has approved each professional
service provided by Coopers & Lybrand during the previous fiscal year, each of
which was furnished at customary rates and terms, and has determined that the
performance of each service does not impair the independence of Coopers &
Lybrand as auditors for the Company.
ITEM 3. APPROVAL OF THE 1995 LONG-TERM INCENTIVE PLAN
The Board of Directors of the Company (the "Board") proposes that the common
shareholders of the Company approve the Company's 1995 Long-Term Incentive Plan
("Plan"), effective as of January 1, 1995, for awards made during a ten year
period thereafter. The old Long-Term Incentive Plan expires on September 30,
1995, and no additional awards will be granted under that plan. The following is
a summary of the Plan which is qualified in its entirety by reference to the
full text of the Plan as proposed, which is attached to this Proxy Statement as
Exhibit A.
13
<PAGE>
OBJECTIVE: The objective of the Plan as proposed is to increase shareholder
value by providing a long-term incentive to reward officers and key employees of
the Company and its subsidiaries for the continued profitable performance of the
Company and its subsidiaries, and to increase the ownership of Company common
stock by such employees.
SHARES AVAILABLE UNDER THE PLAN: The number of shares of common stock that
may be granted to participants under the proposed Plan is 3,000,000. If an award
lapses or the participant's rights with respect to such award otherwise
terminate, any shares of common stock subject to such award will again be
available for future awards under the Plan.
As of February 21, 1995, the fair market value of a share of common stock,
as reported by the "NYSE -- Composite Transactions" published in the Eastern
Edition of The Wall Street Journal, was $24.25.
ADMINISTRATION: The Plan as proposed would be administered by a committee
of the Board ("Committee") which will be the Committee on Management of the
Board, unless such Committee fails to satisfy the disinterested administration
provisions of Section 16b-3 of the Securities Exchange Act of 1934, in which
case a committee of directors of the Board who satisfy such requirements will
administer the Plan. The proposed Plan gives the Committee broad authority to
determine the persons to whom, and the times at which, awards will be granted or
lapse under the Plan, the types of awards to be granted, the number of shares of
common stock to be covered by each award, and all other terms and conditions for
awards granted under the Plan.
PARTICIPATION: Each officer or key employee of the Company or its
subsidiaries, who is designated by the Committee, is eligible to participate in
the Plan. Non-employee directors are not eligible to participate. If the Plan
had been effective on December 31, 1994, fifteen (15) officers, and six (6) key
employees would have been eligible to participate; however, the number of other
officers and key employees who may be designated in the future is currently not
determinable.
AWARDS: Under the Plan as proposed, the following awards may be granted
from time to time by the Committee:
RESTRICTED STOCK: The Committee may grant awards of common stock bearing
restrictions ("Restricted Stock") prohibiting a participant's transfer of the
Restricted Stock until the lapse of the restriction period. No consideration is
payable by the participant as a result of the grant. The Committee may establish
the terms and conditions of each grant, including the restriction period (which
will be not less than one (1) and not more than ten (10) years), whether
dividends will be paid currently or accumulated and the form of any dividend
payment, and may also condition the awards on attainment, during a performance
period established by the Committee, of one or more performance objectives
established by the Committee. Performance objectives, which may vary from
participant to participant, may be based upon the performance of the
participant, the Company, one or more of its subsidiaries, or any combination
thereof. On completion of the restriction period and attainment of any
performance objectives, the restrictions will expire with respect to one or more
shares of Restricted Stock. If target performance objectives are exceeded, the
Committee may award additional common stock to a Participant.
OPTIONS: The Committee may grant either Incentive Stock Options, which are
qualified under section 422 of the Internal Revenue Code of 1986, as amended
(the "Code"), or options not intended to qualify under any section of the Code
("Nonqualified Options"). No consideration is payable by the participant as a
result of the grant. The
14
<PAGE>
Committee may establish the terms and conditions of each grant; provided,
however, that an option may not be granted with an exercise price less than 100%
of the fair market value of the common stock on the date the option is granted.
Further, the period during which the options are exercisable will not exceed ten
(10) years from the date of grant. In the Committee's discretion, the exercise
price may be paid in cash, shares of common stock, or both.
The federal income tax consequences of options are summarized as follows:
INCENTIVE STOCK OPTIONS: Incentive Stock Options under the
Plan are intended to meet the requirements of section 422 of the
Code. No tax consequences result to the participant or the Company
from the grant of the option. If a participant exercises an
option, no income will be recognized by the participant for
ordinary income tax purposes (although the difference between the
exercise price and the fair market value of the common stock
subject to the option may result in alternative minimum tax
liability to the participant) and the Company will not be allowed
a deduction at any time in connection with such award, if the
following conditions are met: (i) at all times during the period
beginning with the date of grant and ending on the day three
months before the date of exercise, the participant is an employee
of the Company or of a subsidiary; and (ii) the participant makes
no disposition of the common stock within two years from the date
of grant nor within one year after the common stock is transferred
to the participant. The three-month period is extended to one year
in the event of disability and is waived in the event of death of
the participant. If the common stock is sold by the participant
after meeting these conditions, any gain realized over the
exercise price ordinarily will be treated as long-term capital
gain, and any loss will be treated as long-term capital loss, in
the year of the sale.
If the participant fails to comply with the employment or
holding period requirements discussed above, the participant will
recognize ordinary income in an amount equal to the lesser of (i)
the excess of the fair market value of the common stock on the
date of exercise over the exercise price or (ii) the excess of the
amount realized upon such disposition over the exercise price. If
the participant is treated as having received ordinary income
because of his or her failure to comply with either requirement
above, a deduction for the same amount will be allowed to the
Company in the same year.
NONQUALIFIED STOCK OPTIONS: No tax consequences result to the
participant or the Company from the grant of the option. A
participant who exercises an option with cash will realize
compensation taxable as ordinary income in an amount equal to the
difference between the exercise price and the fair market value of
the common stock on the date of exercise, and the Company will be
entitled to a deduction for the same amount in the same year. The
participant's basis in such shares will be the fair market value
on the date income is realized, and when the participant disposes
of the shares he or she will recognize capital gain or loss,
either long-term or short-term, depending on the holding period of
the shares, on any gain realized in excess of the basis.
PERFORMANCE UNITS: The Committee may make performance awards payable in
common stock, cash or both, upon attainment during a performance period
established by the Committee, of one or more performance objectives established
by the Committee. Performance objectives, which may vary from participant to
participant, may be based upon the performance of the participant, the Company,
one or more of its subsidiaries, or any combination thereof.
15
<PAGE>
STOCK APPRECIATION RIGHTS: The Committee may grant awards of stock
appreciation rights in conjunction with an option or as a separate award. No
consideration is payable by the participant as a result of the grant. The
Committee may establish the terms and conditions of each grant; provided,
however, the period during which the rights are exercisable will not exceed ten
(10) years.
Stock appreciation rights provide the right to receive a payment in cash,
common stock, or both in the Committee's discretion. If a grant is in
conjunction with an option, the option must be surrendered, and the amount of
the payment will be determined based on (i) the excess of the fair market value
of the common stock at the date of exercise over the option price or, (ii) the
excess of the book value of the common stock at the date of exercise over the
book value at the date the option was granted. If a grant is not in conjunction
with an option, the payment will be determined based on (i) the excess of the
fair market value of the common stock at the date of exercise over the fair
market value at the date of grant or, (ii) the excess of the book value of the
common stock at the date of exercise over the book value at the date of grant.
In either case, the Committee has discretion to determine which formula is used.
DIVIDEND EQUIVALENTS: The Committee may grant awards of dividend
equivalents in conjunction with an outstanding option, a separately awarded
stock appreciation right, performance units, or awards of additional common
stock if performance-based Restricted Stock target performance objectives are
exceeded. No consideration is payable by the participant as a result of the
grant. Each dividend equivalent entitles the participant to receive an amount,
at such times and in a form and manner in the Committee's discretion, equal to
the dividend actually paid with respect to a share of common stock on each
dividend payment date from the date of grant until the dividend equivalent
lapses. Dividend equivalents will lapse at a date no later than the lapse date
of the award with which it is granted in conjunction.
ACCELERATED AWARD: If a change in control of the Company occurs, a
participant with an outstanding award will be entitled to an accelerated,
prorated payout of restricted stock or performance units, and any outstanding
option or stock appreciation right award will be immediately exercisable. Any
required payments will be made in cash.
TAX WITHHOLDING: The Company may deduct from cash award payouts, or
withhold shares from awards paid in common stock, any required tax withholding
related to such award.
INITIAL AWARDS: Only performance-based Restricted Stock awards were granted
in 1995 by the Committee under the proposed Plan, and the awards were made
subject to approval by the Company's common shareholders. Certain information
regarding the initial Restricted Stock award grant is set forth on the following
page. The information with respect to the named executive officers and
additional details are also reflected in the 1995 Long-Term Incentive Plan Table
on page 8.
16
<PAGE>
PLAN BENEFITS UNDER THE
BALTIMORE GAS AND ELECTRIC COMPANY
1995 LONG-TERM INCENTIVE PLAN
<TABLE>
<CAPTION>
NAME AND POSITION DOLLAR VALUE (1) NUMBER OF SHARES (2)
- ---------------------------------- ---------------- ----------------------
<S> <C> <C>
Christian H. Poindexter $ 242,500 10,000
Chairman of the Board and
Chief Executive Officer
Edward A. Crooke $ 169,750 7,000
President and Chief
Operating Officer
Bruce M. Ambler $ 145,500 6,000
President and Chief
Executive Officer of
Constellation Holdings, Inc.
George C. Creel $ 109,125 4,500
Senior Vice President --
Generation
Charles W. Shivery $ 84,875 3,500
Vice President --
Finance and Accounting,
Chief Financial Officer and
Secretary
Executive Group $ 1,491,375 61,500
Non-Executive Officer $ 375,875 15,500
Employee Group
<FN>
- --------------------------
(1) Dollar values are calculated based on the number of shares awarded times
the February 21, 1995 closing price of $24.25 per share, as reported by the
"NYSE--Composite Transactions" published in the Eastern Edition of the Wall
Street Journal.
(2) The number of shares shown were awarded at the time the initial grants were
made. All or a portion of the shares may be forfeited if corporate
performance falls below target and additional shares may be issued if
corporate performance is above target, as shown on the Long-Term Incentive
Plan Table on page 8.
</TABLE>
17
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING CHARTER AMENDMENT:
ITEM 4. AMENDMENT TO THE CHARTER TO ALLOW FOR UNCERTIFICATED SECURITIES.
The Board of Directors at its January 20, 1995 meeting adopted a resolution
recommending amendment of the Company's Charter to allow for uncertificated
securities. By allowing for uncertificated securities, the transfer of common,
preferred and preference stock can be processed without the issuance or
cancellation of physical stock certificates. Stock ownership would be reflected
solely on the books of the Company when a transaction is recorded, and a
statement of ownership would be sent to the shareholder instead of a stock
certificate. Shareholders will still have the option of receiving a certificate.
The amendment will permit faster settlements of transactions in Company stock,
because the transfer can be accomplished by book entries on the records of the
Company. This will make such transfers less cumbersome for shareholders,
eliminate the requirement for shareholders to safekeep their certificates and
alleviate the possibility of certificate losses which can be expensive and time
consuming to replace.
Before uncertificated securities can be utilized by the Company, policies
and procedures must be established and implemented that comply with securities
regulations. The development of these procedures will begin once the amendment
to the Company's Charter is approved by the shareholders.
The Board of Directors believes that allowing for uncertificated securities
is in the best interest of the Company and its shareholders. A copy of the
proposed amendment is available upon request to the Corporate Secretary,
Baltimore Gas and Electric Company, 39 W. Lexington Street, Baltimore, Maryland
21201.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING CHARTER AMENDMENT:
ITEM 5. AMENDMENT OF THE CHARTER TO ALLOW FOR PREFERENCE STOCK WITH VARIABLE
TERMS.
The Board of Directors at its January 20, 1995 meeting adopted a resolution
recommending amendment of the Company's Charter to allow the Board to establish
variable terms for the Company's authorized but unissued Preference Stock in
addition to fixed terms. Currently, the Charter provides that the par value of
the Preference Stock is $100 per share, allows the Board to establish a fixed
dividend rate, and specifies that dividends are payable quarterly. The proposed
amendment would allow the Board of Directors, when authorizing the issuance of
Preference Stock, to vary the par value, allow for floating dividend rates and
provide for dividend payments other than quarterly.
The amendment will not change any other terms of the Preference Stock,
including voting rights. The authorized number of shares of Preference Stock,
which is 6,500,000, will remain the same. At December 31, 1994, there were
4,910,000 shares of Preference Stock issued and outstanding and 1,590,000 shares
authorized but unissued.
The Board of Directors of the Company believes that amending the Charter to
permit the Board to authorize the issuance of Preference Stock with variable
terms will provide flexibility to use alternative structures for future
financings and provide the ability to reach a broader investor base. Although
Management is considering the possibility of issuing such Preference Stock for
financing purposes in 1995, no decision has yet been made to issue such stock.
If the amendment is approved, the Board of Directors will be able to specify the
precise terms of the Preference Stock to be issued, depending on current market
conditions and the nature of specific transactions.
18
<PAGE>
The Board of Directors believes that the amendment to allow for the issuance
of Preference Stock with variable terms is in the best interest of the Company
and its shareholders. A copy of the proposed amendment is available upon request
to the Corporate Secretary, Baltimore Gas and Electric Company, 39 W. Lexington
Street, Baltimore, Maryland 21201.
SHAREHOLDER PROPOSAL
The Company has been advised that the following shareholder proposal will be
introduced at the Annual Meeting. THE BOARD OF DIRECTORS IS OPPOSED TO THE
PROPOSAL AND RECOMMENDS A VOTE AGAINST THE PROPOSAL.
ITEM 6. SHAREHOLDER PROPOSAL
The text of the following shareholder proposal is presented word-for-word as
it was submitted to the Company by the shareholder.
The Amalgamated Bank of New York, America's Labor Bank, LongView Collective
Investment Fund, 11-15 Union Square, New York, New York 10003, owners of 12,000
shares of the Company's common stock, has advised the Company that they intend
to submit the following proposal for action at the Annual Meeting.
SHAREHOLDER PROPOSAL
RESOLVED: That the shareholders of Baltimore Gas & Electric
Co. (the "Company") request the Board of Directors to refrain in
the future from providing pension or other retirement benefits to
non-employee or outside Directors unless such benefits are
specifically submitted to the shareholders for approval.
SUPPORTING STATEMENT
The Board of Directors should play a vital and independent
role in helping determine overall corporate policy and strategic
direction. The Board should actively monitor senior management in
faithfully implementing these policies. In their capacity on the
Board, Directors owe their fundamental allegiance to the
shareholders of the Company -- the owners who elect them -- and
not to management.
We believe, however, that certain business or financial
relationships can adversely affect the ability of Directors to
function in their appropriate oversight role. This is especially
critical for so-called outside or independent Directors who are
not employees of the Company and who should bring a certain
arms-length objectivity to Board deliberations. According to the
Company's most recent proxy statement, in 1993 the Company
established a retirement plan for non-employee Directors with at
least five years of service. Under such plan, non-employee
Directors will receive an annual retirement benefit for life equal
to the annual Board retainer in effect at the time of the
Director's retirement from the Board. That retainer is now a
generous $18,000. Directors are also entitled to expense
reimbursements.
While non-employee or outside Directors should be entitled to
reasonable compensation for their time and expertise, we are of
the opinion that additional layers of compensation in the form of
retirement benefits, which are 100% of the Director's Base
compensation, has the pernicious
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effect of compromising their independence and impartiality. We
believe that this additional layer of compensation to outside
Directors may influence their ability to exercise that degree of
independence from management which is critical to the proper
functioning of the Board.
Because of our strong concern for maximizing the ability of
the Board of Directors to act in the shareholders' interests, we
feel that the long-term best interests of the Company are not well
served by such retirement policies. The vast preponderance of
Directors at various corporations are undoubtedly covered by
generous retirement policies at their principal place of
employment, and they need not be "double-dipping" at our Company.
We urge you to vote for this resolution!
BOARD OF DIRECTORS' OBJECTIONS TO THE PROPOSAL
The Board of Directors and Management recommend a vote AGAINST the proposal.
Compensation changes are made only after careful study. The Committee on
Management's outside consultant advises it regarding all matters of Board and
Executive compensation, including directors' retirement benefits. Also, BGE
gathers data from a number of outside sources in evaluating the levels of
directors' compensation (including retirement benefits) that is appropriate
given the obligations of directors. The recommendations of the Committee on
Management are adopted only after discussion by the Board, and such action is
permitted by Maryland corporate law and BGE's charter and by-laws.
Based on the above review, both the payment of a retirement benefit and the
amount of BGE's benefit are typical in other public companies. Hence the Board
of Directors and Management believe that the proposal would hamper BGE's ability
to attract and retain the most qualified directors. BGE's directors are
important to the continued success of BGE, especially at this time of regulatory
change in the industry.
The proponent is critical of directors' retirement benefits and believes
that these benefits may jeopardize directors' independence in carrying out their
duties on behalf of the shareholders. Yet, there is no substantiation offered
for this view. In addition, the proponent states that the directors are covered
by other retirement policies. This also is not the issue. The fact that
directors may have income from other employers is not relevant in setting
reasonable compensation, a concept which the proponent agrees is appropriate for
their contribution to the success of BGE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL. PROXIES
SOLICITED BY THE BOARD WILL BE SO VOTED UNLESS SHAREHOLDERS SPECIFY A CONTRARY
CHOICE ON THE PROXY CARD.
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OTHER MATTERS
The Board of Directors knows of no matters to be presented for action at the
Annual Meeting other than those mentioned above. However, if any other matters
come before the Annual Meeting, if any of the persons named to serve as
directors or as auditors should be unable to serve or for good cause will not
serve, if any proposal omitted from the proxy statement and proxy are presented
for action at the Annual Meeting, and any matters incident to the conduct of the
Annual Meeting are presented for action at the Annual Meeting, it is intended
that the persons named in the proxy will vote on such matters in accordance with
their best judgment.
SHAREHOLDER PROPOSALS FOR 1996
Proposals by shareholders intended to be presented at the 1996 Annual
Meeting must be received no later than November 3, 1995 for inclusion in the
proxy materials. Proposals should be mailed to the attention of the Corporate
Secretary, Baltimore Gas and Electric Company, P. O. Box 1642, Baltimore,
Maryland 21203-1642.
PLEASE SIGN AND DATE THE ENCLOSED PROXY CARD (OR VOTING INSTRUCTIONS CARD) AND
RETURN IT PROMPTLY IN THE POSTAGE-PAID ENVELOPE PROVIDED FOR THAT PURPOSE.
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EXHIBIT A
BALTIMORE GAS AND ELECTRIC COMPANY
1995 LONG-TERM INCENTIVE PLAN
(PLAN)
1. OBJECTIVE. The objective of this Plan is to increase shareholder value by
providing a long-term incentive to reward officers and key employees of BGE
and its Subsidiaries, who are mainly responsible for the continued growth,
development, and financial success of BGE and its Subsidiaries, for the
continued profitable performance of BGE and its subsidiaries. The Plan is
also designed to permit BGE and its Subsidiaries to retain talented and
motivated officers and key employees and to increase their ownership of BGE
common stock.
2. DEFINITIONS. 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:
"Award" means individually or collectively, Restricted Stock, Options,
Performance Units, Stock Appreciation Rights, or Dividend Equivalents
granted under this Plan.
"BGE" means Baltimore Gas and Electric Company, a Maryland corporation, or
its successor, including any "New Company" as provided in Section 14I.
"Board" means the Board of Directors of BGE.
"Book Value" means the book value of a share of Stock determined in
accordance with BGE's regular accounting practices as of the last business
day of the month immediately preceding the month in which a Stock
Appreciation Right is exercised as provided in Section 10.
"Code" means the Internal Revenue Code of 1986, as amended. Reference in the
Plan to any section of the Code will be deemed to include any amendments or
successor provisions to such section and any regulations promulgated
thereunder.
"Committee" means the Committee on Management of the Board, provided,
however, that if such Committee fails to satisfy the disinterested
administration provisions of Section 16b-3 of the 1934 Act, "Committee"
shall mean a committee of directors of BGE who satisfy the disinterested
person requirements of such Section.
"Date of Grant" means the date on which the granting of an Award is
authorized by the Committee or such later date as may be specified by the
Committee in such authorization.
"Date of Retirement" means the date of Retirement or Early Retirement.
"Disability" means the determination that a Participant is "disabled" under
the BGE disability plan in effect at that time.
"Dividend Equivalent" means an award granted under Section 11.
"Early Retirement" means retirement prior to the Normal Retirement Date.
"Earned Performance Award" means an actual award of a specified number of
Performance Units (or shares of Restricted Stock, as the context requires)
which the Committee has determined have been earned and are payable (or, in
the case of Restricted Stock, earned and with respect to which restrictions
will lapse) for a particular Performance Period.
"Eligible Employee" means any person employed by BGE or a Subsidiary on a
regularly scheduled basis who satisfies all of the requirements of Section
5.
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"Exercise Period" means the period or periods during which a Stock
Appreciation Right is exercisable as described in Section 10.
"Fair Market Value" means the average of the highest and lowest price at
which the Stock was sold regular way on the New York Stock
Exchange-Composite Transactions on a specified date.
"Incentive Stock Option" means an incentive stock option within the meaning
of Section 422 of the Code.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"Normal Retirement Date" is the retirement date as described in the Pension
Plan or a Subsidiary's retirement or pension plan.
"Option" or "Stock Option" means either a nonqualified stock option or an
incentive stock option granted under Section 8.
"Option Period" or "Option Periods" means the period or periods during which
an Option is exercisable as described in Section 8.
"Participant" means an employee of BGE or a Subsidiary who has been granted
an Award under this Plan.
"Pension Plan" means the Pension Plan of Baltimore Gas and Electric Company
as may be amended from time to time.
"Performance-Based" means that in determining the amount of a Restricted
Stock Award payout, the Committee will take into account the performance of
the Participant, BGE, one or more Subsidiaries, or any combination thereof.
"Performance Period" means a period of time, established by the Committee at
the time an Award is granted, during which corporate and/or individual
performance is measured.
"Performance Unit" means a unit of measurement equivalent to such amount or
measure as defined by the Committee which may include, but is not limited
to, dollars, market value shares, or book value shares.
"Plan Administrator" means, as set forth in Section 4, the Committee.
"Restricted Stock" means an Award granted under Section 7.
"Retirement" means retirement on or after the "Normal Retirement Date" (as
such term is defined in the Pension Plan or a Subsidiary's retirement or
pension plan).
"Service-Based" means that in determining the amount of a Restricted Stock
Award payout, the Committee will take into account only the period of time
that the Participant performed services for BGE or its Subsidiaries since
the Date of Grant.
"Stock" means the common stock, without par value, of BGE.
"Stock Appreciation Right" means an Award granted under Section 10.
"Subsidiary(ies)" means any corporation of which 20% or more of its
outstanding voting stock or voting power is beneficially owned, directly or
indirectly, by BGE.
"Target Performance Award" means a targeted award of a specified number of
Performance Units (or shares of Restricted Stock, as the context requires)
which may be earned and payable (or, in the case of Restricted Stock, earned
and with respect to which restrictions will lapse) based upon the
performance objectives for a particular Performance Period, all as
determined by the Committee. The Target Performance Award will be a factor
in the Committee's ultimate determination of the Earned Performance Award.
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"Termination" means resignation or discharge from employment with BGE or any
of its Subsidiaries except in the event of death, Disability, Retirement or
Early Retirement.
3. EFFECTIVE DATE, DURATION AND STOCKHOLDER APPROVAL.
A. EFFECTIVE DATE AND STOCKHOLDER APPROVAL. Subject to the approval of the
Plan by a majority of the outstanding shares of Stock voted at the 1995
Annual Meeting of Stockholders, the Plan will be effective as of January
1, 1995.
B. PERIOD FOR GRANTS OF AWARDS. Awards may be made as provided herein for
a period of 10 years after January 1, 1995.
C. TERMINATION. The Plan will continue in effect until all matters
relating to the payment of outstanding Awards and administration of the
Plan have been settled.
4. PLAN ADMINISTRATION. The Committee is the Plan Administrator and has sole
authority (except as specified otherwise herein) to determine all questions
of interpretation and application of the Plan, or of the terms and
conditions pursuant to which Awards are granted, exercised or forfeited
under the Plan provisions, and, in general, to make all determinations
advisable for the administration of the Plan to achieve its stated
objective. Such determinations shall be final and not subject to further
appeal.
5. ELIGIBILITY. Each officer or key employee of BGE and its Subsidiaries
(including officers or employees who are members of the Board, but excluding
directors who are not officers or employees) may be designated by the
Committee as a Participant, from time to time, with respect to one or more
Awards. No officer or employee of BGE or its Subsidiaries shall have any
right to be granted an Award under this Plan.
6. GRANT OF AWARDS AND LIMITATION OF NUMBER OF SHARES AWARDED. The Committee
may, from time to time, grant Awards to one or more Eligible Employees,
provided that (i) subject to any adjustment pursuant to Section 14H, the
aggregate number of shares of Stock subject to Awards under this Plan may
not exceed three million (3,000,000) shares; (ii) to the extent that an
Award lapses or the rights of the Participant to whom it was granted
terminate, any shares of Stock subject to such Award shall again be
available for the grant of an Award under the Plan; and (iii) shares
delivered by BGE under the Plan may be authorized and unissued Stock, Stock
held in the treasury of BGE, or Stock purchased on the open market
(including private purchases) in accordance with applicable securities laws.
7. RESTRICTED STOCK AWARDS.
A. GRANTS OF RESTRICTED SHARES. One or more shares of Restricted Stock
may be granted to any Eligible Employee. The Restricted Stock will be
issued to the Participant on the Date of Grant without the payment of
consideration by the Participant. The Restricted Stock will be issued in
the name of the Participant and will bear a restrictive legend
prohibiting sale, transfer, pledge or hypothecation of the Restricted
Stock until the expiration of the restriction period.
The Committee may also impose such other restrictions and conditions on the
Restricted Stock as it deems appropriate, and will designate the grant as
either a Service-Based or Performance-Based Award.
Upon issuance to the Participant of the Restricted Stock, the Participant
will have the right to vote the Restricted Stock, and subject to the
Committee's discretion, to receive the cash dividends distributable with
respect to such shares, with such dividends treated as compensation to the
Participant. The Committee, in its sole discretion, may direct the
accumulation and payment of distributable dividends to the Participant at
such times, and in such form and manner, as determined by the Committee.
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B. SERVICE-BASED AWARD.
i. RESTRICTION PERIOD. At the time a Service-Based Restricted Stock
Award is granted, the Committee will establish a restriction period
applicable to such Award which will be not less than one year and not more
than ten years. Each Restricted Stock Award may have a different restriction
period, at the discretion of the Committee.
ii. FORFEITURE OR PAYOUT OF AWARD. In the event a Participant ceases
employment during a restriction period, a Restricted Stock Award is subject
to forfeiture or payout (i.e., removal of restrictions) as follows: (a)
Termination -- the Restricted Stock Award is completely forfeited; (b)
Retirement, Disability or death -- payout of the Restricted Stock Award is
prorated for service during the period; or (c) Early Retirement -- if at the
Participant's request, the payout or forfeiture of the Restricted Stock
Award is determined at the discretion of the Committee, or if at BGE's
request, payout of the Restricted Stock Award is prorated for service during
the period; provided, however, that the Committee may modify the above if it
determines at its sole discretion that special circumstances warrant such
modification.
Any shares of Restricted Stock which are forfeited will be transferred to
BGE.
Upon completion of the restriction period, all Award restrictions will
expire and new certificates representing the Award will be issued (the
payout) without the restrictive legend described in Section 7A.
C. PERFORMANCE-BASED AWARD.
i. RESTRICTION PERIOD. At the time a Performance-Based Restricted
Stock Award is granted, the Committee will establish a restriction period
applicable to such Award which will be not less than one year and not more
than ten years. Each Restricted Stock Award may have a different restriction
period, at the discretion of the Committee. The Committee will also
establish a Performance Period.
ii. PERFORMANCE OBJECTIVES. The Committee will determine, no later
than 90 days after the beginning of each Performance Period, the performance
objectives for each Participant's Target Performance Award and the number of
shares of Restricted Stock for each Target Performance Award that will be
issued on the Date of Grant. Performance objectives may vary from
Participant to Participant and will be based upon such performance criteria
or combination of factors as the Committee deems appropriate, which may
include, but not be limited to, the performance of the Participant, BGE, one
or more Subsidiaries, or any combination thereof. Performance Periods may
overlap and Participants may participate simultaneously with respect to
Performance-Based Restricted Stock Awards for which different Performance
Periods are prescribed.
If, during the course of a Performance Period significant events occur as
determined in the sole discretion of the Committee, which the Committee
expects to have a substantial effect on a performance objective during such
period, the Committee may revise such objective.
iii. FORFEITURE OR PAYOUT OF AWARD. As soon as practicable after the
end of each Performance Period, the Committee will determine whether the
performance objectives and other material terms of the Award were satisfied.
The Committee's determination of all such matters will be final and
conclusive.
As soon as practicable after the later of (i) the date the Committee makes
the above determination, or (ii) the completion of the restriction period,
the Committee will determine the Earned Performance Award for each
Participant. Such determination may result in forfeiture of all or some
shares of Restricted Stock (if Target Performance Award performance
objectives were not attained), or the issuance of additional shares of Stock
(if
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Target Performance Award performance objectives were exceeded), and will be
based upon such factors as the Committee determines at its sole discretion,
but including the Target Performance Award performance objectives.
In the event a Participant ceases employment during a restriction period,
the Restricted Stock Award is subject to forfeiture or payout (i.e., removal
of restrictions) as follows: (a) Termination -- the Restricted Stock Award
is completely forfeited; (b) Retirement, Disability or death -- payout of
the Restricted Stock Award is prorated taking into account factors
including, but not limited to, service during the period; and the
performance of the Participant during the portion of the Performance Period
before employment ceased; or (c) Early Retirement -- if at the Participant's
request, the payout or forfeiture of the Restricted Stock Award is
determined at the discretion of the Committee, or if at BGE's request,
payout of the Restricted Stock Award is prorated taking into account factors
including, but not limited to, service during the period and the performance
of the Participant during the portion of the Performance Period before
employment ceased; provided, however, that the Committee may modify the
above if it determines at its sole discretion that special circumstances
warrant such modification.
Any shares of Restricted Stock which are forfeited will be transferred to
BGE.
With respect to shares of Restricted Stock for which restrictions lapse, new
certificates will be issued (the payout) without the restrictive legend
described in Section 7A. New certificates will also be issued for additional
Stock, if any, awarded to the Participant because Target Performance Award
performance objectives were exceeded.
D. WAIVER OF SECTION 83(B) ELECTION. Unless otherwise directed by the
Committee, as a condition of receiving an Award of Restricted Stock, a
Participant must waive in writing the right to make an election under
Section 83(b) of the Code to report the value of the Restricted Stock as
income on the Date of Grant.
8. STOCK OPTIONS.
A. GRANTS OF OPTIONS. One or more Options may be granted to any Eligible
Employee on the Date of Grant without the payment of consideration by the
Participant.
B. STOCK OPTION AGREEMENT. Each Option granted under the Plan will be
evidenced by a "Stock Option Agreement" between BGE and the Participant
containing provisions determined by the Committee, including, without
limitation, provisions to qualify Incentive Stock Options as such under
Section 422 of the Code if directed by the Committee at the Date of Grant;
provided, however, that each Incentive Stock Option Agreement must include
the following terms and conditions: (i) that the Options are exercisable,
either in total or in part, with a partial exercise not affecting the
exercisability of the balance of the Option; (ii) every share of Stock
purchased through the exercise of an Option will be paid for in full at the
time of the exercise; (iii) each Option will cease to be exercisable, as to
any share of Stock, at the earliest of (a) the Participant's purchase of the
Stock to which the Option relates, (b) the Participant's exercise of a
related Stock Appreciation Right, or (c) the lapse of the Option; (iv)
Options will not be transferable by the Participant except by Will or the
laws of descent and distribution and will be exercisable during the
Participant's lifetime only by the Participant or by the Participant's
guardian or legal representative; and (v) notwithstanding any other
provision, in the event of a public tender for all or any portion of the
Stock or in the event that any proposal to merge or consolidate BGE with
another company is submitted to the stockholders of BGE for a vote, the
Committee, in its sole discretion, may declare any previously granted Option
to be immediately exercisable.
C. OPTION PRICE. The Option price per share of Stock will be set by the
grant, but will be not less than 100% of the Fair Market Value at the Date
of Grant.
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D. FORM OF PAYMENT. At the time of the exercise of the Option, the Option
price will be payable in cash or in other shares of Stock or in a
combination of cash and other shares of Stock, in a form and manner as
required by the Committee in its sole discretion. When Stock is used in full
or partial payment of the Option price, it will be valued at the Fair Market
Value on the date the Option is exercised.
E. OTHER TERMS AND CONDITIONS. The Option will become exercisable in such
manner and within such Option Period or Periods, not to exceed 10 years from
its Date of Grant, as set forth in the Stock Option Agreement upon payment
in full. Except as otherwise provided in this Plan or in the Stock Option
Agreement, any Option may be exercised in whole or in part at any time.
F. LAPSE OF OPTION. An Option will lapse upon the earlier of: (i) 10 years
from the Date of Grant, or (ii) at the expiration of the Option Period set
by the grant. If the Participant ceases employment within the Option Period
and prior to the lapse of the Option, the Option will lapse as follows: (a)
Termination -- the Option will lapse on the effective date of the
Termination; or (b) Retirement, Early Retirement, or Disability -- the
Option will lapse at the expiration of the Option Period set by the grant;
provided, however, that the Committee may modify the above if it determines
in its sole discretion that special circumstances warrant such modification.
If the Participant dies within the Option Period and prior to the lapse of
the Option, the Option will lapse at the expiration of the Option Period set
by the grant unless it is exercised before such time by the Participant's
legal representative(s) or by the person(s) entitled to do so under the
Participant's Will or, if the Participant fails to make testamentary
disposition of the Option or dies intestate, by the person(s) entitled to
receive the Option under the applicable laws of descent and distribution.
G. INDIVIDUAL LIMITATION. In the case of an Incentive Stock Option, the
aggregate Fair Market Value of the Stock for which Incentive Stock Options
(whether under this Plan or another arrangement) in any calendar year are
first exercisable will not exceed $100,000 with respect to such calendar
year (or such other individual limit as may be in effect under the Code on
the Date of Grant) plus any unused portion of such limit as the Code may
permit to be carried over.
9. PERFORMANCE UNITS.
A. PERFORMANCE UNITS. One or more Performance Units may be earned by an
Eligible Employee based on the achievement of preestablished performance
objectives during a Performance Period.
B. PERFORMANCE PERIOD AND PERFORMANCE OBJECTIVES. The Committee will
determine a Performance Period and will determine, no later than 90 days
after the beginning of each Performance Period, the performance objectives
for each Participant's Target Performance Award and the number of
Performance Units subject to each Target Performance Award. Performance
objectives may vary from Participant to Participant and will be based upon
such performance criteria or combination of factors as the Committee deems
appropriate, which may include, but not be limited to, the performance of
the Participant, BGE, one or more Subsidiaries, or any combination thereof.
Performance Periods may overlap and Participants may participate
simultaneously with respect to Performance Units for which different
Performance Periods are prescribed.
If during the course of a Performance Period significant events occur as
determined in the sole discretion of the Committee which the Committee
expects to have a substantial effect on a performance objective during such
period, the Committee may revise such objective.
C. FORFEITURE OR PAYOUT OF AWARD. As soon as practicable after the end of
each Performance Period, the Committee will determine whether the
performance objectives and other material terms of the Award were satisfied.
The Committee's determination of all such matters will be final and
conclusive.
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As soon as practicable after the date the Committee makes the above
determination, the Committee will determine the Earned Performance Award for
each Participant. Such determination may result in an increase or decrease
in the number of Performance Units payable based upon such Participant's
Target Performance Award, and will be based upon such factors as the
Committee determines in its sole discretion, but including the Target
Performance Award performance objectives.
In the event a Participant ceases employment during a Performance Period,
the Performance Unit Award is subject to forfeiture or payout as follows:
(a) Termination -- the Performance Unit Award is completely forfeited; (b)
Retirement, Disability or death -- payout of the Performance Unit Award is
prorated taking into account factors including, but not limited to, service
and the performance of the Participant during the portion of the Performance
Period before employment ceased; or (c) Early Retirement -- if at the
Participant's request, the payout or forfeiture of the Performance Unit
Award is determined at the discretion of the Committee, or if at BGE's
request, payout of the Performance Unit Award is prorated taking into
account factors including, but not limited to, service and the performance
of the Participant during the portion of the Performance Period before
employment ceased; provided, however, that the Committee may modify the
above if it determines in its sole discretion that special circumstances
warrant such modification.
D. FORM AND TIMING OF PAYMENT. Each Performance Unit is payable in cash or
shares of Stock or in a combination of cash and Stock, as determined by the
Committee in its sole discretion. Such payment will be made as soon as
practicable after the Earned Performance Award is determined.
10. STOCK APPRECIATION RIGHTS.
A. GRANTS OF STOCK APPRECIATION RIGHTS. Stock Appreciation Rights may be
granted under the Plan in conjunction with an Option either at the Date of
Grant or by amendment or may be separately granted. Stock Appreciation
Rights will be subject to such terms and conditions not inconsistent with
the Plan as the Committee may impose.
B. RIGHT TO EXERCISE; EXERCISE PERIOD. A Stock Appreciation Right issued
pursuant to an Option will be exercisable to the extent the Option is
exercisable; both such Stock Appreciation Right and the Option to which it
relates will not be exercisable during the six months following their
respective Dates of Grant except in the event of the Participant's
Disability or death. A Stock Appreciation Right issued independent of an
Option will be exercisable pursuant to such terms and conditions established
in the grant. Notwithstanding such terms and conditions, in the event of a
public tender for all or any portion of the Stock or in the event that any
proposal to merge or consolidate BGE with another company is submitted to
the stockholders of BGE for a vote, the Committee, in its sole discretion,
may declare any previously granted Stock Appreciation Right immediately
exercisable.
C. FAILURE TO EXERCISE. If on the last day of the Option Period, in the
case of a Stock Appreciation Right granted pursuant to an Option, or the
specified Exercise Period, in the case of a Stock Appreciation Right issued
independent of an Option, the Participant has not exercised a Stock
Appreciation Right, then such Stock Appreciation Right will be deemed to
have been exercised by the Participant on the last day of the Option Period
or Exercise Period.
D. PAYMENT. An exercisable Stock Appreciation Right granted pursuant to an
Option will entitle the Participant to surrender unexercised the Option or
any portion thereof to which the Stock Appreciation Right is attached, and
to receive in exchange for the Stock Appreciation Right payment (in cash or
Stock or a combination thereof as described below) equal to either of the
following amounts, determined in the sole discretion of the Committee at the
Date of Grant: (1) the excess of the Fair Market Value of one share of Stock
at the date of exercise over the Option price, times the number of shares
called for by the Stock Appreciation
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Right (or portion thereof) which is so surrendered, or (2) the excess of the
Book Value of one share of Stock at the date of exercise over the Book Value
of one share of Stock at the Date of Grant of the related Option, times the
number of shares called for by the Stock Appreciation Right. Upon exercise
of a Stock Appreciation Right not granted pursuant to an Option, the
Participant will receive for each Stock Appreciation Right payment (in cash
or Stock or a combination thereof as described below) equal to either of the
following amounts, determined in the sole discretion of the Committee at the
Date of Grant: (1) the excess of the Fair Market Value of one share of Stock
at the date of exercise over the Fair Market Value of one share of Stock at
the Date of Grant of the Stock Appreciation Right, times the number of
shares called for by the Stock Appreciation Right, or (2) the excess of the
Book Value of one share of Stock at the date of exercise of the Stock
Appreciation Right over the Book Value of one share of Stock at the Date of
Grant of the Stock Appreciation Right, times the number of shares called for
by the Stock Appreciation Right.
The Committee may direct the payment in settlement of the Stock Appreciation
Right to be in cash or Stock or a combination thereof. Alternatively, the
Committee may permit the Participant to elect to receive cash in full or
partial settlement of the Stock Appreciation Right, provided that (i) the
Committee must consent to or disapprove such election and (ii) unless the
Committee directs otherwise, the election and the exercise must be made
during the period beginning on the 3rd business day following the date of
public release of quarterly or year-end earnings and ending on the 12th
business day following the date of public release of quarterly or year-end
earnings. The value of the Stock to be received upon exercise of a Stock
Appreciation Right shall be the Fair Market Value of the Stock on the
trading day preceding the date on which the Stock Appreciation Right is
exercised. To the extent that a Stock Appreciation Right issued pursuant to
an Option is exercised, such Option shall be deemed to have been exercised,
and shall not be deemed to have lapsed.
E. NONTRANSFERABLE. A Stock Appreciation Right will not be transferable by
the Participant except by Will or the laws of descent and distribution and
will be exercisable during the Participant's lifetime only by the
Participant or by the Participant's guardian or legal representative.
F. LAPSE OF A STOCK APPRECIATION RIGHT. A Stock Appreciation Right will
lapse upon the earlier of: (i) 10 years from the Date of Grant; or (ii) at
the expiration of the Exercise Period as set by the grant. If the
Participant ceases employment within the Exercise Period and prior to the
lapse of the Stock Appreciation Right, the Stock Appreciation Right will
lapse as follows: (a) Termination -- the Stock Appreciation Right will lapse
on the effective date of the Termination; or (b) Retirement, Early
Retirement, or Disability -- the Stock Appreciation Right will lapse at the
expiration of the Exercise Period set by the grant; provided, however, that
the Committee may modify the above if it determines in its sole discretion
that special circumstances warrant such modification. If the Participant
dies within the Exercise Period and prior to the lapse of the Stock
Appreciation Right, the Stock Appreciation Right will lapse at the
expiration of the Exercise Period set by the grant unless it is exercised
before such time by the Participant's legal representative(s) or by the
person(s) entitled to do so under the Participant's Will or, if the
Participant fails to make testamentary disposition of the Stock Appreciation
Right or dies intestate, by the person(s) entitled to receive the Stock
Appreciation Right under the applicable laws of descent and distribution.
11. DIVIDEND EQUIVALENTS.
A. GRANTS OF DIVIDEND EQUIVALENTS. Dividend Equivalents may be granted
under the Plan in conjunction with an Option or a separately awarded Stock
Appreciation Right, at the Date of Grant or by amendment, without
consideration by the Participant. Dividend Equivalents may also be granted
under the Plan in conjunction with Performance Units, at any time during the
Performance Period, without consideration by the Participant. Dividend
Equivalents will be granted under a Performance-Based Restricted Stock Award
in conjunction with additional shares of Stock issued if Target Performance
Award performance objectives are exceeded.
A-8
<PAGE>
B. PAYMENT. Each Dividend Equivalent will entitle the Participant to
receive an amount equal to the dividend actually paid with respect to a
share of Stock on each dividend payment date from the Date of Grant to the
date the Dividend Equivalent lapses as set forth in Section 11D. The
Committee, in its sole discretion, may direct the payment of such amount at
such times and in such form and manner as determined by the Committee.
C. NONTRANSFERABLE. A Dividend Equivalent will not be transferable by the
Participant.
D. LAPSE OF A DIVIDEND EQUIVALENT. Each Dividend Equivalent will lapse on
the earlier of (i) the date of the lapse of the related Option or Stock
Appreciation Right; (ii) the date of the exercise of the related Option or
Stock Appreciation Right; (iii) the end of the Performance Period (or if
earlier, the date the Participant ceases employment) of the related
Performance Units or Performance-Based Restricted Stock Award; or (iv) the
lapse date established by the Committee on the Date of Grant of the Dividend
Equivalent.
12. ACCELERATED AWARD PAYOUT/EXERCISE.
A. CHANGE IN CONTROL. Notwithstanding anything in this Plan document to
the contrary, a Participant is entitled to an accelerated payout or
accelerated Option or Exercise Period (as set forth in Section 12B) with
respect to any previously granted Award, upon the happening of a change in
control.
A change in control for purposes of this Section 12 means (i) the purchase
or acquisition by any person, entity or group of persons, (within the
meaning of section 13(d) or 14(d) of the 1934 Act, or any comparable
successor provisions), of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the 1934 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 (ii) 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 (iii) a liquidation or dissolution
of BGE or the sale of substantially all of its assets, or (iv) a change of
more than one-half of the members of the Board within a 90-day period for
reasons other than the death, disability, or retirement of such members.
B. AMOUNT OF AWARD SUBJECT TO ACCELERATED PAYOUT/OPTION PERIOD/EXERCISE
PERIOD. The amount of a Participant's previously granted Award that will be
paid or exercisable upon the happening of a change in control will be
determined as follows:
RESTRICTED STOCK AWARDS. The Participant will be entitled to an accelerated
Award payout, and the amount of the payout will be based on the number of
shares of Restricted Stock that were issued on the Date of Grant, prorated
based on the number of months of the restriction period that have elapsed as
of the payout date. Also, with respect to Performance-Based Restricted Stock
Awards, in determining the amount of the payout, maximum performance
achievement will be assumed.
STOCK OPTION AWARDS AND STOCK APPRECIATION RIGHTS. Any previously granted
Stock Option Awards or Stock Appreciation Rights will be immediately
exercisable.
PERFORMANCE UNITS. The Participant will be entitled to an accelerated Award
payout, and the amount of the payout will be based on the number of
Performance Units subject to the Target Performance Award as established on
the Date of Grant, prorated based on the number of months of the Performance
Period that have elapsed as of the payout date, and assuming that maximum
performance was achieved.
C. TIMING OF ACCELERATED PAYOUT/OPTION PERIOD/EXERCISE PERIOD. The
accelerated payout set forth in Section 12B will be made in cash within 30
days after the date of the change in control. The accelerated Option
A-9
<PAGE>
Period/Exercise Period set forth in Section 12B will begin on the date of
the change in control, and applicable payments will be in cash. When Stock
is related to the Award, the amount of cash will be determined based on the
Fair Market Value of Stock on the payout or exercise date, whichever is
applicable.
13. AMENDMENT OF PLAN.
The Committee may at any time and from time to time alter, amend, suspend or
terminate the Plan in whole or in part, except (i) no such action may be
taken without stockholder approval which materially increases the benefits
accruing to Participants pursuant to the Plan, materially increases the
number of securities which may be issued pursuant to the Plan (except as
provided in Section 14H), extends the period for granting Options under the
Plan or materially modifies the requirements as to eligibility for
participation in the Plan; and (ii) no such action may be taken without the
consent of the Participant to whom any Award was previously granted, which
adversely affects the rights of such Participant concerning such Award,
except as such termination or amendment of the Plan is required by statute,
or rules and regulations promulgated thereunder. Notwithstanding the
foregoing, the Committee may amend the Plan as desirable at the discretion
of the Committee to address any issues concerning (i) Section 162(m) of the
Code, or (ii) maintaining an exemption under rule 16b-3 of the 1934 Act.
14. MISCELLANEOUS PROVISIONS.
A. NONTRANSFERABILITY. No benefit provided under this Plan shall be
subject to alienation or assignment by a Participant (or by any person
entitled to such benefit pursuant to the terms of this Plan), nor shall it
be subject to attachment or other legal process except (i) to the extent
specifically mandated and directed by applicable state or federal statute,
and (ii) as requested by the Participant (or by any person entitled to such
benefit pursuant to the terms of this Plan), and approved by the Committee,
to satisfy income tax withholding.
B. NO EMPLOYMENT RIGHT. Participation in this Plan shall not constitute a
contract of employment between BGE or any Subsidiary and any person and
shall not be deemed to be consideration for, or a condition of, continued
employment of any person.
C. TAX WITHHOLDING. BGE or a Subsidiary may withhold any applicable
federal, state or local taxes at such time and upon such terms and
conditions as required by law or determined by BGE or a Subsidiary. Subject
to compliance with any requirements of applicable law, the Committee may
permit or require a Participant to have any portion of any withholding or
other taxes payable in respect to a distribution of Stock satisfied through
the payment of cash by the Participant to BGE or a Subsidiary, the retention
by BGE or a Subsidiary of shares of Stock, or delivery of previously owned
shares of the Participant's Stock, having a Fair Market Value equal to the
withholding amount.
D. FRACTIONAL SHARES. Any fractional shares concerning Awards shall be
eliminated at the time of payment or payout by rounding down for fractions
of less than one-half and rounding up for fractions of equal to or more than
one-half. No cash settlements shall be made with respect to fractional
shares eliminated by rounding.
E. GOVERNMENT AND OTHER REGULATIONS. The obligation of BGE to make payment
of Awards in Stock or otherwise shall be subject to all applicable laws,
rules, and regulations, and to such approvals by any government agencies as
may be required. BGE shall be under no obligation to register under the
Securities Act of 1933, as amended ("Act"), any of the shares of Stock
issued, delivered or paid in settlement under the Plan. If Stock awarded
under the Plan may in certain circumstances be exempt from registration
under the Act, BGE may restrict its transfer in such manner as it deems
advisable to ensure such exempt status.
F. INDEMNIFICATION. Each person who is or at any time serves as a member
of the Committee (and each person or Committee to whom the Committee or any
member thereof has delegated any of its authority or
A-10
<PAGE>
power under this Plan) shall be indemnified and held harmless by BGE against
and from (i) any loss, cost, liability, or expense that may be imposed upon
or reasonably incurred by such person in connection with or resulting from
any claim, action, suit, or proceeding to which such person may be a party
or in which such person may be involved by reason of any action or failure
to act under the Plan; and (ii) any and all amounts paid by such person in
satisfaction of judgment in any such action, suit, or proceeding relating to
the Plan. Each person covered by this indemnification shall give BGE an
opportunity, at its own expense, to handle and defend the same before such
person undertakes to handle and defend it on such person's own behalf. The
foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such persons may be entitled under the
Charter or By-Laws of BGE or any of its Subsidiaries, as a matter of law, or
otherwise, or any power that BGE may have to indemnify such person or hold
such person harmless.
G. RELIANCE ON REPORTS. Each member of the Committee (and each person or
Committee to whom the Committee or any member thereof has delegated any of
its authority or power under this Plan) shall be fully justified in relying
or acting in good faith upon any report made by the independent public
accountants of BGE and its Subsidiaries and upon any other information
furnished in connection with the Plan. In no event shall any person who is
or shall have been a member of the Committee be liable for any determination
made or other action taken or any omission to act in reliance upon any such
report or information or for any action taken, including the furnishing of
information, or failure to act, if in good faith.
H. CHANGES IN CAPITAL STRUCTURE. In the event of any change in the
outstanding shares of Stock by reason of any stock dividend or split,
recapitalization, combination or exchange of shares or other similar changes
in the Stock, then appropriate adjustments shall be made in the shares of
Stock theretofore awarded to the Participants and in the aggregate number of
shares of Stock which may be awarded pursuant to the Plan. Such adjustments
shall be conclusive and binding for all purposes. Additional shares of Stock
issued to a Participant as the result of any such change shall bear the same
restrictions as the shares of Stock to which they relate.
I. BGE SUCCESSORS. In the event BGE becomes a party to a merger,
consolidation, sale of substantially all of its assets or any other
corporate reorganization in which BGE will not be the surviving corporation
or in which the holders of the Stock will receive securities of another
corporation (in any such case, the "New Company"), then the New Company
shall assume the rights and obligations of BGE under this Plan.
J. GOVERNING LAW. All matters relating to the Plan or to Awards granted
hereunder shall be governed by the laws of the State of Maryland, without
regard to the principles of conflict of laws.
K. RELATIONSHIP TO OTHER BENEFITS. Any Awards under this Plan are not
considered compensation for purposes of determining benefits under any
pension, profit sharing, or other retirement or welfare plan, or for any
other general employee benefit program.
L. EXPENSES. The expenses of administering the Plan shall be borne by BGE
and its Subsidiaries.
M. TITLES AND HEADINGS. The titles and headings of the sections in the
Plan are for convenience of reference only, and in the event of any
conflict, the text of the Plan, rather than such titles or headings, shall
control.
A-11
<PAGE>
BALTIMORE GAS AND ELECTRIC COMPANY
P.O. BOX 1642, BALTIMORE, MARYLAND 21203-1642
COMMON STOCK PROXY FOR ANNUAL MEETING OF SHAREHOLDERS - APRIL 18, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PLEASE VOTE AND SIGN ON REVERSE SIDE AND RETURN IN THE ENCLOSED ENVELOPE.
The undersigned appoints Jerome W. Geckle, George V. McGowan and Christian H.
Poindexter (or a majority of them or their substitutes, or one acting alone in
the absence of the others), as proxies, with power to each to appoint a
substitute and to revoke the appointment of such substitute, to vote all shares
of common stock of Baltimore Gas and Electric Company which the undersigned is
entitled to vote at the annual meeting to be held on April 18, 1995, and at any
adjournments thereof, in the manner specified on the reverse side of this card
with respect to each item identified thereon (as set forth in the Notice of
Annual Meeting and Proxy Statement), and in their discretion on any shareholder
proposal omitted from this proxy and such other business as may properly come
before the annual meeting.
SHARES REPRESENTED BY ALL PROPERLY EXECUTED PROXIES WILL BE VOTED AT THE ANNUAL
MEETING IN THE MANNER SPECIFIED. IF NO SPECIFICATION IS MADE, VOTES WILL BE
CAST "FOR" ITEMS 1, 2, 3, 4 AND 5 AND "AGAINST" ITEM 6 ON THE REVERSE OF
THIS CARD.
(OVER)
<PAGE>
A Vote "FOR" Items 1, 2, 3, 4 and 5 is recommended:
1. THE ELECTION OF 14 DIRECTORS
/ / FOR all nominees, except / / WITHHOLD AUTHORITY
as lined through below (ABSTAIN) from voting
(To vote against any or all for all nominees
nominees line through
their names.)
H.F. Baldwin B.B. Byron J.O. Cole D.A. Colussy
E.A. Crooke J.R. Curtiss J.W. Geckle M.L. Grass
F.A. Hrabowski N. Lampton G.V. McGowan C.H. Poindexter
G.L. Russell, Jr. M.D. Sullivan
2. ELECTION OF COOPERS & FOR AGAINST ABSTAIN
LYBRAND AS AUDITORS / / / / / /
3. APPROVAL OF LONG-TERM FOR AGAINST ABSTAIN
INCENTIVE PLAN / / / / / /
4. PROPOSED CHARTER AMENDMENT TO FOR AGAINST ABSTAIN
ALLOW FOR UNCERTIFICATED / / / / / /
SECURITIES
5. PROPOSED CHARTER AMENDMENT TO FOR AGAINST ABSTAIN
ALLOW FOR PREFERENCE STOCK / / / / / /
WITH VARIABLE TERMS
A VOTE "AGAINST" ITEM 6 IS RECOMMENDED:
6. SHAREHOLDER PROPOSAL REGARDING FOR AGAINST ABSTAIN
DIRECTOR RETIREMENT BENEFITS / / / / / /
/ / Please check this box if you plan to attend the 1995 annual meeting.
BALTIMORE GAS AND ELECTRIC COMPANY
Please sign below, exactly as name appears at left. Joint owners should EACH
sign. Attorneys, executors, administrators, trustees and corporate officials
should give title or capacity in which they are signing.
Signature ______________________________________ Date ________________
Signature ______________________________________ Date ________________
<PAGE>
BALTIMORE GAS AND ELECTRIC COMPANY
P.O. Box 1642, Baltimore, Maryland 21203-1642
PREFERRED STOCK PROXY FOR ANNUAL MEETING OF SHAREHOLDERS - APRIL 18, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PLEASE VOTE AND SIGN ON REVERSE SIDE AND RETURN IN THE ENCLOSED ENVELOPE.
The undersigned appoints Jerome W. Geckle, George V. McGowan and Christian H.
Poindexter (or a majority of them or their substitutes, or one acting alone in
the absence of the others), as proxies, with power to each to appoint a
substitute and to revoke the appointment of such substitute, to vote all shares
of preferred stock of Baltimore Gas and Electric Company (the "Company") which
the undersigned is entitled to vote at the annual meeting to be held on April
18, 1995, and at any adjournments thereof, in the manner specified on the
reverse side of this card with respect to the proposed amendments to the
Company's Charter to 1) allow for uncertificated securities and 2) allow for
preference stock with variable terms (both as set forth in the Notice of Annual
Meeting and Proxy Statement).
SHARES REPRESENTED BY ALL PROPERLY EXECUTED PROXIES WILL BE VOTED AT THE ANNUAL
MEETING IN THE MANNER SPECIFIED. IF NO SPECIFICATION IS MADE, VOTES WILL BE
CAST "FOR" THE PROPOSED AMENDMENTS ON THE REVERSE SIDE OF THIS CARD.
(over)
<PAGE>
A VOTE "FOR" THE PROPOSED AMENDMENTS TO THE COMPANY'S CHARTER IS RECOMMENDED:
PROPOSED CHARTER AMENDMENT TO ALLOW FOR FOR AGAINST ABSTAIN
UNCERTIFICATED SECURITIES / / / / / /
PROPOSED CHARTER AMENDMENT TO ALLOW FOR
PREFERENCE STOCK WITH VARIABLE TERMS / / / / / /
If you plan to attend the 1995 annual meeting, please check this box: / /
Please sign below, exactly as name appears at left. Joint owners should EACH
sign. Attorneys, executors, administrators, trustees and corporate officials
should give title or capacity in which they are signing.
Signature_______________________________________________ Date_______________
Signature_______________________________________________ Date_______________
BALTIMORE GAS AND ELECTRIC COMPANY
<PAGE>
BALTIMORE GAS AND ELECTRIC COMPANY
P.O. Box 1642, Baltimore, Maryland 21203-1642
PREFERENCE STOCK PROXY FOR ANNUAL MEETING OF SHAREHOLDERS - APRIL 18, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PLEASE VOTE AND SIGN ON REVERSE SIDE AND RETURN IN THE ENCLOSED ENVELOPE.
The undersigned appoints Jerome W. Geckle, George V. McGowan and Christian H.
Poindexter (or a majority of them or their substitutes, or one acting alone in
the absence of the others), as proxies, with power to each to appoint a
substitute and to revoke the appointment of such substitute, to vote all shares
of preference stock of Baltimore Gas and Electric Company (the "Company") which
the undersigned is entitled to vote at the annual meeting to be held on April
18, 1995, and at any adjournments thereof, in the manner specified on the
reverse side of this card with respect to the proposed amendment to the
Company's Charter to allow for preference stock with variable terms (as set
forth in the Notice of Annual Meeting and Proxy Statement).
SHARES REPRESENTED BY ALL PROPERLY EXECUTED PROXIES WILL BE VOTED AT THE ANNUAL
MEETING IN THE MANNER SPECIFIED. IF NO SPECIFICATION IS MADE, VOTES WILL BE
CAST "FOR" THE PROPOSED AMENDMENT ON THE REVERSE SIDE OF THIS CARD.
(over)
<PAGE>
A VOTE "FOR" THE PROPOSED AMENDMENT TO THE COMPANY'S CHARTER IS RECOMMENDED:
PROPOSED CHARTER AMENDMENT TO ALLOW FOR PREFERENCE FOR AGAINST ABSTAIN
STOCK WITH VARIABLE TERMS / / / / / /
If you plan to attend the 1995 annual meeting, please check this box: / /
Please sign below, exactly as name appears at left. Joint owners should EACH
sign. Attorneys, executors, administrators, trustees and corporate officials
should give title or capacity in which they are signing.
Signature ____________________________________________ Date _________________
Signature ____________________________________________ Date _________________
BALTIMORE GAS AND ELECTRIC COMPANY
<PAGE>
BALTIMORE GAS AND ELECTRIC COMPANY
EMPLOYEE SAVINGS PLAN
Bankers Trust Company, Trustee of the Employee Savings Plan, has not
received a Voting Instructions card for the shares that you hold in the Plan.
The Trustee is not permitted to vote shares of common stock unless Voting
Instructions have been received.
We appreciate the support of our shareholders and encourage you to vote
your Employee Savings Plan shares, regardless of the size of your holdings. We
have, therefore, enclosed a second Voting Instructions card so that you can vote
your shares. Whether or not you plan to attend the meeting, we would appreciate
your completing the Voting Instructions card and returning it to the Trustee in
the envelope provided by April 11, 1995.
Our initial mailing to you included a proxy statement and annual report.
If you would like to receive a duplicate copy of this information, simply
contact one of our shareholder representatives in metropolitan Baltimore at
783-5920, within Maryland at 1-800-492-2861, outside Maryland at 1-800-258-0499,
or TTY/TDD at 1-800-492-5539.
D.L. Featherstone
Plan Administrator
<PAGE>
CONFIDENTIAL VOTING INSTRUCTIONS TO TRUSTEE
PLEASE VOTE AND SIGN ON REVERSE SIDE AND RETURN IN THE ENCLOSED ENVELOPE
THESE VOTING INSTRUCTIONS ARE REQUESTED IN CONJUNCTION WITH A PROXY SOLICITATION
BY THE BOARD OF DIRECTORS OF BALTIMORE GAS AND ELECTRIC COMPANY.
TO: BANKERS TRUST COMPANY AS TRUSTEE UNDER THE BALTIMORE GAS AND ELECTRIC
COMPANY EMPLOYEE SAVINGS PLAN
I hereby instruct Bankers Trust Company, as Trustee under the Baltimore Gas and
Electric Company Employee Savings Plan (Plan), to vote, in person or by proxy,
all shares of common stock of Baltimore Gas and Electric Company (Company)
allocated to me under the Plan at the annual meeting of the shareholders of the
Company to be held on April 18, 1995, and at any adjournments thereof, in the
manner specified on the reverse side of this form with respect to each item
identified thereon (as set forth in the Notice of Annual Meeting and Proxy
Statement), and in its discretion on any shareholder proposal omitted from this
proxy and such other business as may properly come before the annual meeting.
The Trustee will vote the shares represented by this voting instructions card if
properly signed and received by April 11, 1995. IF NO INSTRUCTIONS ARE
SPECIFIED ON A SIGNED CARD, THE SHARES REPRESENTED THEREBY WILL BE VOTED IN
ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS OF THE COMPANY:
"FOR" ITEMS 1, 2, 3, 4 AND 5 AND "AGAINST" ITEM 6. The Trustee is not
permitted under the Plan to vote shares of common stock unless voting
instructions have been received.
(OVER)
<PAGE>
PLEASE MARK YOUR CHOICE LIKE THIS [X] IN DARK INK.
A VOTE "FOR" ITEMS 1, 2, 3, 4 AND 5 IS RECOMMENDED:
1. THE ELECTION OF 14 DIRECTORS
/ / FOR ALL NOMINEES, except as marked [X] / / WITHHOLD AUTHORITY
to the contrary (To vote against any or (ABSTAIN)FROM VOTING
all nominees mark [X] next to their names.) FOR ALL NOMINEES
[ ] H.F. Baldwin [ ] B.B. Byron [ ] J.O. Cole [ ] D.A. Colussy
[ ] E.A. Crooke [ ] J.R. Curtiss [ ] J.W. Geckle [ ] M.L. Grass
[ ] F.A. Hrabowski [ ] N. Lampton [ ] G.V. McGowan [ ] C.H. Poindexter
[ ] G.L. Russell, Jr. [ ] M.D. Sullivan
2. ELECTION OF COOPERS & FOR AGAINST ABSTAIN
LYBRAND AS AUDITORS / / / / / /
3. APPROVAL OF LONG-TERM FOR AGAINST ABSTAIN
INCENTIVE PLAN / / / / / /
4. PROPOSED CHARTER AMENDMENT TO ALLOW FOR AGAINST ABSTAIN
FOR UNCERTIFICATED SECURITIES / / / / / /
5. PROPOSED CHARTER AMENDMENT FOR AGAINST ABSTAIN
TO ALLOW FOR PREFERENCE STOCK / / / / / /
WITH VARIABLE TERMS
A VOTE "AGAINST" ITEM 6 IS RECOMMENDED:
6. SHAREHOLDER PROPOSAL REGARDING FOR AGAINST ABSTAIN
DIRECTOR RETIREMENT BENEFITS / / / / / /
PLEASE SIGN BELOW, EXACTLY AS YOUR NAME APPEARS ON THE REVERSE SIDE OF THIS
FORM.
______________________________________________________ _________________
SIGNATURE DATE
BALTIMORE GAS AND ELECTRIC COMPANY
<PAGE>
BALTIMORE GAS AND ELECTRIC COMPANY
TO PARTICIPANTS IN THE
EMPLOYEE SAVINGS PLAN (THE PLAN):
The enclosed Notice of Annual Meeting of Shareholders, Proxy Statement and
Voting Instructions for the Annual Meeting of Shareholders of the Company, to be
held on April 18, 1995, are being furnished to you by the Company on behalf of
Bankers Trust Company, New York, Trustee under the Plan.
In accordance with the Plan and the Trust Agreement between the Company and
the Trustee, you may instruct the Trustee how to vote the shares of common stock
held for you under the Plan. Therefore, please complete the enclosed Voting
Instructions and return it in the accompanying envelope by April 11, 1995. After
receipt of the properly executed Voting Instructions, the Trustee will vote as
directed by those instructions. The Trustee is not permitted to vote shares of
common stock unless Voting Instructions have been received.
Each participant in the Plan who is a holder of record of other shares of
Company stock will continue to receive, separately, a proxy and accompanying
proxy material to vote the shares of common stock registered in his or her name.
D. L. Featherstone
Plan Administrator
<PAGE>
CHARLES CENTER P.O. BOX 1642
BALTIMORE, MARYLAND 21203-1642
Thank you for your returned proxy. However, we could not vote your shares
because your proxy was not signed.
We would appreciate your signing and returning the proxy in the enclosed
envelope.
Thank you
Shareholder Services
<PAGE>
CHRISTIAN H. POINDEXTER BALTIMORE GAS AND ELECTRIC COMPANY
CHAIRMAN OF THE BOARD P.O. BOX 1475
AND CHIEF EXECUTIVE OFFICER BALTIMORE, MARYLAND 21203
March 29, 1995
Dear Shareholder:
As of March 27, 1995, we had not received your proxy for the 1995
shareholders meeting to be held April 18th.
We appreciate the support of our shareholders and encourage you to vote your
proxy, regardless of the size of your holdings. We have, therefore, enclosed
a second proxy so that you can vote your shares. Whether or not you plan to
attend the meeting, we would appreciate your executing the proxy and
returning it promptly to assure that your vote will be counted at the
meeting.
Our initial mailing to you also included a proxy statement and an annual
report. If you would like to receive a duplicate copy of this information,
simply contact one of our shareholder representatives in metropolitan
Baltimore at 783-5920, within Maryland at 1-800-492-2861, outside Maryland at
1-800-258-0499, or TTY/TDD at 1-800-492-5539.
Sincerely,
Chairman of the Board
Enclosures
