IMPORTANT
Stockholders are cordially invited to attend the annual stockholders'
meeting. If you will be unable to attend the annual meeting in person, it is
important that you fill out, sign and return the enclosed proxy promptly in
order to insure a proper representation at the meeting.
BANGOR HYDRO-ELECTRIC COMPANY
NOTICE OF ANNUAL MEETING
MAY 18, 1994
To The Stockholders:
The Annual Meeting of the stockholders of Bangor Hydro-Electric Company will
be held on Wednesday, May 18, 1994 at 10:00 o'clock A.M. at the Rococo Room
of the Pilot's Grill restaurant, Hammond Street, Bangor, Maine for the
purpose of electing three directors to serve for three-year terms and to
transact such other business as may properly come before the meeting.
The Board of Directors has fixed the close of business on March 19, 1994 as
the record date for the determination of stockholders of the Company entitled
to notice of and to vote at the Annual Meeting. Accordingly, only
stockholders of record at the close of business on March 19, 1994 will be
entitled to vote at said meeting.
IF YOU DO NOT PLAN TO ATTEND THE MEETING, YOU ARE URGED TO DATE, SIGN and
RETURN the enclosed proxy. An addressed envelope, which requires no postage
if mailed in the United States, is provided for your use.
By Order of the Board of Directors
s/e Frederick S. Samp
Frederick S. Samp
Clerk
Bangor, Maine
March 31, 1994
BANGOR HYDRO-ELECTRIC COMPANY
33 State Street
Bangor, Maine 04401
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 18, 1994
The accompanying proxy to be mailed on or about March 31, 1994 is solicited
by the Board of Directors of Bangor Hydro-Electric Company and the cost of
such solicitation will be paid by the Company. The person giving the proxy
has the power to revoke it at any time before it is exercised (1) by delivery <PAGE>
to the Clerk of the Company of any written instrument which by its terms
revokes the proxy, (2) by duly executed proxy subsequent in time to the
original proxy, (3) by the presence of the stockholder at the Annual Meeting
and the giving of notice to the Clerk of the Company of such revocation, or
(4) by giving notice in open meeting at the Annual Meeting of such
revocation.
The Company will bear the cost of the solicitation of proxies, including the
charges and expenses of brokerage firms and others for forwarding
solicitation material to beneficial owners of shares of the Company's Common
Stock and Preferred Stock. In addition to the use of the mail, proxies may be
solicited by employees of the Company, by personal interview, by telephone or
by telegraph. Additional solicitation will be made in the same manner under
the special engagement and direction of Chemical Bank at an anticipated cost
to the Company of approximately $4,500 plus out-of-pocket expenses.
VOTING SECURITIES OUTSTANDING
The Company has outstanding 47,340 shares of Preferred Stock having general
voting rights of one vote per share, and, as of December 31, 1993, 6,225,394
shares of Common Stock having general voting rights of one-twelfth of one
vote per share. The Company also has 150,000 shares of outstanding Preferred
Stock that do not have general voting rights, but which are entitled to vote
on the proposal, described herein, to increase the amount of Preferred Stock
the Company is authorized to issue.
None of the directors or nominees for the office of director beneficially
owns as much as 1% of any class of the Company's stock. The directors,
nominees and officers as a group beneficially own 15,720 shares
(approximately 0.25%) of the Company's outstanding Common Stock and 21 shares
of the Company's outstanding Preferred Stock.
The following table sets forth as of December 31, 1993 information with
respect to persons known to management to be the beneficial owners of more
than 5% of any class of voting securities of the Company:
Amount and
Name and Address Nature of
Title of of Beneficial Beneficial Percent
Class Owner Ownership of Class
- ---------------------------------------------------------------------
Common Stock J.P. Morgan & Co, Inc. 778,800 shares 12.5%
60 Wall Street
New York, New York 10260
Preferred Stock First Colony Life 4,105 shares 8.7%
Insurance Company
700 Main Street
Lynchburg, Virginia 24504
In Schedules 13G filed with the Securities and Exchange Commission, J.P.
Morgan & Co., Inc. and First Colony Life Insurance Company have certified
that, to the best of their knowledge, the stock of the Company was acquired
in the ordinary course of business and not for the purpose of changing or
influencing the control of the Company.
First Colony Life Insurance Company is a holder of term notes due 2008 in the
amount of $6,855,883 executed by Bangor-Pacific Hydro Associates ("BPHA").
BPHA is a partnership that was formed in 1986 for the purpose of redeveloping
and operating a hydroelectric project located within the Company's service
territory. Penobscot Hydro Co., Inc., a wholly owned subsidiary of Bangor
Hydro-Electric Company, is a 50% general partner of BPHA. During 1993, BPHA
paid $715,321 in interest and $32,941 in principal to First Colony Life
Insurance Company.
ELECTION OF DIRECTORS
Under the Company's Certificate of Organization, as amended, the Board of
Directors shall consist of not less than nine nor more than fifteen persons,
the exact number to be fixed from time to time by the Board of Directors. The
Certificate of Organization also requires that the directors be divided into
three classes with staggered three-year terms and that the classes be nearly
as equal in number as may be. Prior to the March 23 meeting of the Board, the
most recent action establishing the number of directors and the division of
the Board into classes called for ten directors, with three directors in
Class I (current terms expiring in 1996), four directors in Class II (current
terms expiring in 1994) and three directors in Class III (current terms
expiring in 1995).
In anticipation of his retirement from the Company on March 31, 1994, John P.
O'Sullivan, Vice President - Finance & Administration of the Company and a
director, resigned his seat on the Board of Directors effective March 31,
1994. Mr. O'Sullivan was a Class I director with a term expiring in 1996. At
its March 23, 1994 meeting, the Board of Directors voted to establish the
number of directors at nine, with three directors in Class I (current terms
expiring in 1996), three directors in Class II (current terms expiring in
1994) and three directors in Class III (current terms expiring in 1995).
Since there were four directors holding seats as directors in Class II, Alton
E. Cianchette resigned his seat as a Class II director effective March 31,
1994. Pursuant to the authority of the Certificate of Organization, the Board
of Directors at its March 23, 1994 meeting then elected Alton E. Cianchette
to serve as a director in Class I with a term expiring in 1996 effective
March 31, 1994.
It is intended, unless otherwise instructed in the enclosed proxy, to vote
the proxies in favor of the election of the nominees named in the table on
the following page as directors to hold office until the expiration of their
respective terms and until their successors shall have been duly elected and
qualified. The nominees are now members of the Board of Directors of the
Company, each having served continuously since first elected.
If, for any reason, any of the nominees are unable to serve (which event is
not now anticipated) it is intended that such proxies will be voted for the
election of such other person or persons as may be designated by a majority
of the directors.
The following table sets forth the nominees and the directors whose terms
continue, their ages, other positions held by them with the Company, the date
when they first became a director and their business experience during the
past five years (including any other directorship held by them in any company
with a class of securities registered pursuant to Section 12 of the
Securities Exchange Act of 1934 or subject to the requirements of Section
15(d) of that Act, or in any company registered as an investment company
under the Investment Company Act of 1940 (referred to in the table as
"Reporting Companies")):
BUSINESS EXPERIENCE DURING
BECAME LAST 5 YEARS AND DIRECTORSHIPS
NAME AND POSITION (AGE) DIRECTOR IN OTHER REPORTING COMPANIES
- -------------------------------------------------------------------------
CLASS II (NOMINEES FOR TERM EXPIRING IN 1997)
Robert S. Briggs (50) 1985 Chairman of the Board; President
Chairman of the Board, & Chief Executive Officer of the
President & Chief Executive Company; Director of Maine Yankee
Officer Atomic Power Company (a Reporting
Company); Trustee of Eastern Maine
Medical Center
William C. Bullock, Jr. (57) 1982 Chairman of the Board and
Director Director of Merrill Merchants Bank;
From June 1988 until October 1992
acted as Financial Consultant and
Private Investor; Trustee, Maine
State Retirement System; Director of
Eastern Maine Healthcare
G. Clifton Eames (66) 1984 Chairman of the Board of Trustees
Director of Bangor Savings Bank; Chairman of
the Board of Directors of N.H. Bragg
& Sons, a distributor of automotvive
and industrial supplies; Until May
of 1992, served as President of N.H.
Bragg & Sons; Director of Eastern
Maine Healthcare
CLASS III (DIRECTORS WHOSE TERMS EXPIRE IN 1995)
Carroll R. Lee (44) 1991 Vice President - Operations of
Vice President - the Company; Director of Maine
Operations and Director Yankee Atomic Power Company (a
Reporting Company); Director of
Maine Electric Power Company, Inc.
David M. Carlisle (55) 1989 President, Prentiss & Carlisle
Director Company, a timberland management
company; Director of Fleet Bank of
Maine; Director of Eastern Maine
Healthcare
Jane J. Bush (48) 1990 Vice President, Coastal Ventures,
Director a retailing company
CLASS I (DIRECTORS WHOSE TERMS EXPIRE IN 1996)
Alton E. Cianchette (63) 1991 Chairman of the Board of Cianbro
Director Corporation, a construction company;
Director of Key Bank of Maine (a
Reporting Company); Member of the
Maine State Senate
Helen S. Dudman (69) 1986 Chairman of Dudman Communications
Director Corporation, Licensee of WWMJ, WEZQ
and WDEA Radio; Director of Maine
Employers' Mutual Insurance Company;
Director, Finance Authority of
Maine; Trustee of Maine Public
Broadcasting
Robert H. Foster (59) 1985 Director and President of R.H.
Director Foster, Inc., a distributor of
petroleum products; Treasurer of
Maine Wild Blueberry, a blueberry
processor
In 1993, the Board of Directors met on twelve occasions. The Board of
Directors has four standing committees: an Executive Committee, an Audit
Committee, an Investment Committee and a Compensation Committee. The
Executive Committee consists of Mr. Bullock (Chair), Mr. Eames, Mrs. Bush and
Mrs. Dudman. Executive Committee functions include the monitoring of the
Company's corporate governance and the making of recommendations to the full
Board with respect to any modifications; ongoing review of the Company's
strategic plan and activities intended to implement that plan; and ongoing
consideration of the appropriate public interest focus of the Company. The
Executive Committee has not been delegated standing authority to act on
behalf of the full Board, although the Board could delegate such authority.
The Executive Committee met nine times in 1993. The Audit Committee,
consisting of Mr. Foster (Chair), Mrs. Bush, Mr. Carlisle and Mr. Cianchette,
reviews with the internal auditor and the independent public accountants the
scope and results of their audit and other services to the Company, reviews
the adequacy of the Company's internal accounting controls and reports to the
Board as necessary. The Audit Committee met four times in 1993. The
Compensation Committee, consisting of Mr. Eames (Chair), Mr. Foster and Mrs.
Dudman, reviews the Company's executive compensation and compensation
policies in general, and makes recommendations to the full Board of
Directors. The Compensation Committee met twice in 1993. The Investment
Committee, consisting of Mr. Bullock (Chair), Mr. Carlisle and (until March
31, 1994) Mr. O'Sullivan, oversees the investments of the Company's pension
programs. The Investment Committee met twice in 1993. Mr. Briggs, as Chairman
of the Board of Directors, serves ex officio on all standing committees
except the Audit Committee and the Compensation Committee. The Board does not
have a nominating or similar committee. Committee appointments will be
reviewed after the Annual Meeting. The Executive Committee is elected by a
majority of the full Board of Directors. Directors who are not employees of
the Company appoint from their own number the members of the Audit Committee
and the Compensation Committee. Other committee assignments are made by the
Chairman of the Board.
STOCK OWNERSHIP
The ownership of Common and Preferred Stock of each director and executive
officer and of the directors and executive officers of the Company as a group
is as follows:
Shares
Title Name of beneficially
of class beneficial owner owned*
- ----------------------------------------------------------------------
Common Robert S. Briggs 3,329
Common William C. Bullock, Jr. 2,008
Common Jane J. Bush 238
Common David M. Carlisle 820
Common Alton E. Cianchette 788
Common Helen S. Dudman 2,672
Common G. Clifton Eames 600
Common Robert H. Foster 1,701
Common Carroll R. Lee 993
Common John P. O'Sullivan 2,006
Preferred John P. O'Sullivan 21
Common Directors & Executive Officers as a group (12) 15,350
Preferred Directors & Executive Officers as a group (12) 21
* The directors and executive officers of the Company as a group own a
beneficial interest in less than 1% of the Company's Common and
Preferred Stock.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table shows, for the fiscal years ending December 31, 1991,
1992 and 1993, the cash compensation paid by the Company to the Chief
Executive Officer and to the other two executive officers whose total salary
and bonus during 1993 exceeded $100,000:
Summary Compensation Table - Annual Compensation
Name and Principal Position Year Salary Bonus
- -------------------------------------------------------------
Robert S. Briggs 1993 $175,711 $1,137
Chairman of the Board, President 1992 154,465 9,181
and Chief Executive Officer 1991 135,499 0
Carroll R. Lee 1993 $124,748 $ 893
Vice President - Operations 1992 117,399 5,707
1991 102,932 0
John P. O'Sullivan 1993 $116,360 $ 859
Vice President - Finance 1992 112,515 5,674
and Administration 1991 101,381 0
None of the above named executive officers received "Other Annual
Compensation" that meets the threshold reporting requirements nor did they
receive any "Long-Term Compensation" or "Other Compensation".
The executive officers participate in a defined benefit pension plan that is
also applicable to all non-union employees. The following table sets forth
estimated annual benefit amounts payable upon retirement to persons in
specified compensation and benefit service classifications assuming their
retirement at the normal retirement age (65) in 1993.
- --------------------------------------------------------------------
Years of Benefit Service
-------------------------------------------------------
AVERAGE ANNUAL 5 10 15 20 25 30
COMPENSATION
- --------------
$ 50,000 $ 4,514 $ 9,028 $13,541 $18,055 $22,569 $27,083
75,000 7,014 14,028 21,041 28,055 35,069 42,083
100,000 9,514 19,028 28,541 38,055 47,569 57,083
150,000 14,514 29,028 43,541 58,055 72,569 87,083
and above*
*As of January 1, 1994, the OMNIBUS Budget Reconciliation Act of 1993
(OBRA '93) limited annual compensation to $150,000 for purposes of pension
calculations under tax-qualified pension plans.
Compensation covered by the plan is total basic compensation exclusive of
overtime, bonuses, and other extra, contingent or supplemental compensation,
and is cash compensation plus compensation deferred pursuant to the Company's
Section 401(k) Plan. The annual retirement benefit is the greater of the
following:
a. The benefit accrued as of December 31, 1988 under a prior plan
formula.
b. 2.0% "average annual compensation" minus 0.4% of "covered
compensation", times years of "benefit service".
The benefit may not be larger than limits set forth in IRC Section
415.
"Average annual compensation" is computed using the 36 consecutive months
yielding the highest average, and "benefit service" generally means years of
employment after age 21 and one year of service, up to a maximum of 30 years.
"Covered compensation" is the average (without indexing) of the Social
Security Taxable Wage Bases for the 35 calendar years ending with the year an
individual attains Social Security Normal Retirement Age. It is assumed that
the taxable wage base in effect at the beginning of the plan calculation year
will remain the same for all future years. The benefit amount is payable in a
life annuity form in full upon retirement at age 62 and in proportionately
reduced amounts upon termination down to age 55. The benefit service of the
persons named in the table on page six (rounded to the nearest year) is: Mr.
Briggs - 14 years; Mr. O'Sullivan - 14 years; and Mr. Lee - 20 years.
In early 1994, the Company amended its pension plans to provide an incentive
for early retirement. For those employees who were members of a pension plan
on February 1, 1994, for purposes of eligibility for early retirement, six
years were added to that member's age and benefit service. For each full
month of employment following February 28, 1994, the additional age and
benefit service will be reduced by one month. Any member who has attained age
52 prior to June 30, 1994, who has six years of benefit service as of
February 1, 1994 and who elects to terminate employment on or before April 1,
1994 will receive a supplemental monthly benefit of $700 until age 62. Mr.
O'Sullivan elected to retire as of March 31, 1994 and will receive the
enhanced benefits provided by the early retirement plan. If Mr. Briggs or Mr.
Lee were to retire before the additional age and benefit service provided by
the early retirement program is fully reduced, they too would receive
enhanced benefits from the program.
In addition to the foregoing, Mr. Briggs and Mr. Lee are parties to
Supplemental Retirement Agreements with the Company under which additional
retirement benefits are to be paid. The amount of the additional benefits
payable upon retirement at age 62 shall be 20% of the officer's final annual
salary per year for a period of fifteen years. The Agreements are funded by
the Company by means of whole life insurance policies covering each of the
lives of the named officers. Mr. O'Sullivan was also a party to a similar
agreement prior to his retirement from the Company.
Mr. Briggs and Mr. Lee are parties to agreements under which in the event 1)
of a change of control of the Company as defined in the agreements and 2) the
covered party leaves the employment of the Company within one year after the
change of control, he would be entitled to receive a payment equal to two
years' salary based upon his average salary over the past five years. He
would also be entitled to receive the Company's standard health, life
insurance and disability benefits for a period of two years after leaving his
employment as long as he remains unemployed. Mr. O'Sullivan was also a party
to a similar agreement prior to his retirement from the Company.
The executive officers also participate in a long-term disability income plan
which is also applicable to all non-union employees. Under the plan, after 90
days of disability, employees are entitled to receive 66 2/3% of their basic
monthly earnings up to a maximum monthly benefit of $5,000.
Directors who are not employees of the Company are paid a fee of $500 per
meeting for attendance at regular or special meetings of the Board, and $500
per meeting for attendance at committee meetings (unless the committee
meeting is held the same day as another meeting for which a full meeting fee
is paid, in which case the fee is $250). The directors are also paid an
annual retainer of $6,000. Directors who are employees of the Company receive
no fee for their services as directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1993, the Compensation Committee of the Company's Board of Directors
consisted of Mr. Eames, Mr. Foster and Mrs. Dudman.
The Company purchases automotive and industrial supplies from time to time
from N.H. Bragg & Sons, of which Mr. Eames is Chairman and a beneficial
equity owner. In 1993, the Company's purchases from N.H. Bragg & Sons
totalled approximately $71,378. The Company purchases petroleum products from
R. H. Foster, Inc., of which Mr. Foster is President and a beneficial equity
owner. In 1993, the Company's purchases from R. H. Foster, Inc. totalled
approximately $164,571. Because the Company is a regulated electric utility,
under Maine law these transactions have been specifically reviewed and
approved by the full Board of Directors and found not to be inconsistent with
the interests of the Company's ratepayers.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company manages its compensation programs in a manner intended to
attract, retain and motivate its people. Historically, salaries, including
executive salaries, have been intended to be established at competitive
levels, with progress within competitive ranges dependent upon
qualifications, experience and individual performance.
The Company has been shifting its compensation management to a system that
relies on base salaries that are competitive, but that, especially at
executive and senior management levels, depend more on incentive rewards for
the achievement of predetermined performance criteria in order to earn
compensation at higher levels within the competitive range.
Through 1993, the base salary of each executive officer was determined
primarily from a survey of electric utilities performed by the Edison
Electric Institute, a trade organization of the electric utility industry.
The Compensation Committee has attempted for each executive officer, and
specifically for Mr. Briggs, the Chief Executive Officer, to establish a base
salary that is competitive with those base salaries paid to executive
officers with comparable responsibilities at electric utilities of comparable
size. In addition, the Compensation Committee reviews the performance of the
CEO, and the CEO's review of the performance of the other executive officers,
and factors those reviews into the establishment of the base salaries. The
CEO and the other executive officers also participated in a peer review
process which, in the case of the CEO, was administered by the Compensation
Committee.
In 1991, the Board of Directors established an Incentive Bonus Plan
applicable essentially to all full-time employees of the Company who were
employed as of December 31, 1991 and who had completed at least six months of
continuous service. Bonuses under the plan were payable based upon the actual
spending in 1991 on operation and maintenance as compared to a predetermined
target. The Board approved a total bonus payment for 1991 of $291,000 which
was paid to employees in 1992. Under the plan, $50 was distributed to each
eligible employee, and the remainder of the funds was paid to eligible
employees as a percentage of their base earnings. Pursuant to the Plan, the
executive officers were awarded the following: Mr. Briggs, $2,181; Mr.
O'Sullivan, $1,674; and Mr. Lee, $1,707.
The 1991 compensation packages established by the Board of Directors for Mr.
Briggs, Mr. O'Sullivan and Mr. Lee included contingent compensation payable
if the Company's 1991 operation and maintenance expense was below the target
budget referred to above. Base salaries for 1991 were established at a level
somewhat below those generally paid at comparably sized electric utilities in
recognition of the severe downturn in the Northern New England economy and
the need to control operation and maintenance expenses. In consideration of
those facts, if the goal were met, Mr. Briggs was to be paid an additional
$7,000, Mr. O'Sullivan an additional $4,000 and Mr. Lee an additional $4,000.
Since the goal was met, those executive officers were paid those designated
amounts during 1992.
For 1992, the Board of Directors established a new Incentive Bonus Plan based
upon the attainment of pre-determined goals for service outages, customer
satisfaction, earnings per share and expenses. During 1992, the Company met
its performance objectives for service outages and partially succeeded in
meeting the target for 1992 expenses. The other performance objectives for
earnings per share and customer satisfaction were not met. In early 1993, the
named executive officers were awarded the following under the 1992 Plan: Mr.
Briggs, $1,137; Mr. Lee, $893; and Mr. O'Sullivan, $859.
In 1993, the Board established a separate Executive Bonus Plan applicable
only to Mr. Briggs, Mr. Lee and Mr. O'Sullivan. For all three, performance
targets for customer satisfaction, cost control and employee satisfaction
were established, the achievement of which carried a maximum bonus of 1% of
base earnings for each target. Additionally, targets were established for
earnings and total stockholder return. For Mr. Briggs, achievement of those
targets carried a potential maximum bonus of 3.5% of base earnings each and
for Mr. Lee and Mr. O'Sullivan, achievement of them carried a potential
maximum bonus of 2.5% each. No bonuses were paid pursuant to the cost
control, earnings or total stockholder return targets. Partial awards were
made under the customer satisfaction and employee satisfaction targets. In
early 1994, the named executive officers were awarded the following under the
1993 Plan: Mr. Briggs, $1,588; Mr. Lee, $1,134; and Mr. O'Sullivan, $1,055.
COMPENSATION COMMITTEE
G. Clifton Eames (Chair)
Robert H. Foster
Helen S. Dudman
February 16, 1994
Performance Graph
As shown in the line graph on the following page, for a period beginning
December 31, 1988 through December 31, 1993, a comparison is made of the
cumulative total returns for the Company, the Russell 2000 Index (a
comparative broad market index) and the Edison Electric Institute ("EEI")
Index of 100 investor-owned electric utilities (a comparative peer group
index). The Russell 2000 index is an index composed of the smallest 2000
companies in a universe of the 3000 largest domestic publicly traded
companies in terms of market capitalization. The average market
capitalization of the Russell 2000 index is approximately $188 million. The
market capitalization of the Company is about $106 million.
Bangor Hydro-Electric Company
Comparison of Five-Year Cumulative Total Return
The Company, the Russell 2000 Index and the EEI Index
-------------------------------------------------------------------
| NOTE: Included on the proxy sent to shareholders was a line |
| graph that depicted a Comparison of Five-Year Cumulative Total |
| Return for Bangor Hydro-Electric Company, the Russell 2000 Index |
| and the EEI Index, based upon the information in the following |
| table. This graph is not shown herein due to limitations of the |
| EDGAR system. |
-------------------------------------------------------------------
-----------------December 31, ----------------------
1988 1989 1990 1991 1992 1993
Bangor Hydro $100.00 125.571 135.973 161.823 194.580 187.703
25.6% 8.3% 19.0% 20.2% -3.5%
Russell 2000 $100.00 116.243 93.566 136.655 161.816 192.411
16.2% -19.5% 46.1% 18.4% 18.9%
EEI Index $100.00 129.92 131.52 169.39 182.09 202.82
29.9% 1.2% 28.8% 7.5% 11.4%
AUTHORIZATION OF ADDITIONAL CAPITAL STOCK
The Board of Directors has adopted the following resolutions, and they are
herewith submitted to the stockholders to be voted upon at the Annual
Meeting:
RESOLVED that the Articles of Incorporation of the Company, as amended to
date, be further amended to increase the Company's authorized capital stock
by $32,500,000, such increase to be represented by 200,000 shares of
Preferred Stock of the par value of $100 each and 2,500,000 shares of Common
Stock of the par value of $5 each, so that the total amount of authorized
capital stock of the Company will be $110,000,000 represented by 600,000
shares of Preferred Stock of the par value of $100 each and 10,000,000 shares
of Common Stock of the par value of $5 each; and further
RESOLVED that Article XI, Section 1 of the By-Laws of the Company be amended
to reflect the foregoing increase in the amount of Preferred Stock, $100 par
value, and Common Stock, $5 par value, which the Company is authorized to
issue, so that the same shall read as follows:
Section 1. The authorized capital stock of the Company shall be $110,000,000
represented by 600,000 shares of Preferred Stock of the par value of $100
each, and 10,000,000 shares of Common Stock of the par value of $5 each.
and further
RESOLVED that the first sentence of Article XI, Section 2 of the By-Laws of
the Company be amended to reflect the foregoing increase in the amount of
Preferred Stock, $100 par value, which the Company is authorized to issue, so
that the same shall read as follows:
Section 2. The 600,000 shares of Preferred Stock shall be available for
classification and reclassification in different classes or series from time
to time.
and further
RESOLVED that the second paragraph of Article XI, Section 2 of the By-Laws of
the Company be amended to reflect the foregoing increase in the amount of
Preferred Stock, $100 par value, which the Company is authorized to issue, so
that the same shall read as follows:
The remaining shares, 402,660 in number, plus additional shares equal in
number to any shares now outstanding or hereafter issued which may be retired
by redemption or otherwise may be issued as additional shares of any class or
series heretofore or hereafter authorized, or may be issued in one or more
new classes or series which (subject to the provisions hereof) shall have
such designations, preferences and voting powers, or restrictions or
qualifications thereof as shall be fixed and determined by the Board of
Directors in the By-Laws, including provisions (among others) with respect to
dividends; redemption, conversion rights, if any; sinking fund, if any;
restrictions or limitations, if any, upon the payment of dividends, issuance
of capital stock, incurring of indebtedness and such other matters as the
Board of Directors may determine; and voting powers, if any, which voting
powers, if any, may be either general voting powers or special voting powers,
or both.
DISCUSSION
Under the Company's Articles of Incorporation, as amended to date, the
Company has authority to issue 400,000 shares of Preferred Stock, $100 par
value, and 7,500,000 shares of Common Stock, $5 par value. As indicated in
the above resolutions, the Company proposes to further amend its Articles of
Incorporation and its By-Laws to increase the amount of Preferred Stock it is
authorized to issue to 600,000 shares and the amount of Common Stock it is
authorized to issue to 10,000,000 shares.
There are already issued and outstanding 197,340 shares of Preferred Stock.
The Company intends to register with the Securities and Exchange Commission
an additional 200,000 shares of Preferred Stock in the near future for
issuance from time to time as market conditions warrant. Upon completion of
that registration, only 2,660 shares of Preferred Stock will remain available
for issuance as part of any other series. The Company anticipates that it
will be necessary to issue additional shares of Preferred Stock from time to
time in order to accomplish the financing of the Company's capital
construction program and maintain a reasonably balanced capital structure. No
authorization by a vote of the stockholders is required, and none is expected
to be solicited, relative to the actual issuance of additional Preferred
Stock as these transactions may from time to time arise, and stockholders
have no preemptive right to subscribe for additional Preferred Stock as it is
issued. The terms of the Preferred Stock to be authorized, including dividend
rates, conversion prices, voting rights, redemption prices, and similar
matters will be determined by the Board of Directors at the time of the
issuance of additional Preferred Stock.
As of December 31, 1993, there were already issued and outstanding 6,225,394
shares of Common Stock. The Company has registered with the Securities and
Exchange Commission an additional 899,875 shares (including 117,375 shares
issuable upon the exercise of the Underwriters' option to purchase shares
solely to cover over-allotments). Sale of these shares will substantially
deplete all of the Company's authorized but unissued Common Stock. There are
as yet no transactions pending or contemplated as a result of which shares
out of the proposed increase in the authorized Common Stock are to be issued.
However, in order to accomplish the financing of the Company's necessary
capital construction program over the next several years and to maintain a
reasonably balanced capital structure, additional issues of Common Stock,
over and above that which the Company is presently authorized to issue, may
be required. No authorization by a vote of the stockholders is required, and
none is expected to be solicited relative to the actual issuance of
additional Common Stock as these transactions may from time to time arise,
and stockholders have no preemptive right to subscribe for additional Common
Stock as it is issued unless the Board of Directors grants such rights at the
time of the issuance thereof.
The financial statements contained in the Annual Report of the Company for
the year 1993 which has been furnished or is being furnished simultaneously
herewith are incorporated herein by reference.
In addition to the usual requirement of a majority of the votes cast by all
classes of voting stockholders (assuming a quorum is present, see below), the
proposed increase in authorized Preferred Stock requires a majority vote of
the preferred stockholders voting as a class (both voting and non-voting
shares). Likewise, the proposed increase in authorized Common Stock requires
a majority vote of the Common Stockholders voting as a class. The Company's
By-Laws (with an exception not applicable to this proposal) provide that the
holders of one-third of the stock of the Company issued and outstanding shall
constitute a quorum for the transaction of business, and this quorum
requirement applies to the Preferred Stock and the Common Stock separately
for the purposes of the class voting on this proposal. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR THESE AMENDMENTS.
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INDEPENDENT PUBLIC ACCOUNTANTS
Coopers & Lybrand, 130 Middle Street, Portland, Maine 04101, were the
independent public accountants for the Company for the 1993 fiscal year and
have been selected for the 1994 fiscal year. The Company expects that
representatives of Coopers & Lybrand will be present at the Annual Meeting,
will have the opportunity to make a statement, and will be available to
respond to appropriate questions.
OTHER MATTERS
The management has no knowledge of any other matter to come before or to be
acted upon at the meeting. If, however, any other matter properly comes
before the meeting, it is the intention of the persons named in the proxy to
vote thereon in accordance with their judgment.
STOCKHOLDER PROPOSALS FOR 1995 ANNUAL MEETING
Any proposals of stockholders of the Company intended to be presented at the
1995 Annual Meeting must be received by the Company on or before January 1,
1995 for inclusion in the proxy statement and form of proxy relating to that
meeting.
By Order of the Board of Directors,
s/e Frederick S. Samp
Frederick S. Samp
Clerk
Bangor, Maine
March 31, 1994
BANGOR HYDRO-ELECTRIC COMPANY PROXY P.O. BOX 1599, BANGOR, ME 04402-1599
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert S. Briggs and Frederick S. Samp
each or either of them, with full power of substitution, proxies to vote all
of the stock of Bangor Hydro-Electric Company which the undersigned is
entitled to vote at the annual meeting of the stockholders May 18, 1994, or
at any adjournment thereof.
1. Election of directors:
_ _
FOR all nominees - |_| WITHHOLD AUTHORITY to vote for all nominees- |_|
(except as noted below)
(INSTRUCTION: TO VOTE FOR SOME BUT NOT ALL OF THE NOMINEES, MARK THE
FOR BOX AND STRIKE A LINE THROUGH THE NAMES OF THE NOMINEES FOR WHOM YOU WISH <PAGE>
TO WITHHOLD AUTHORITY TO VOTE.)
Robert S. Briggs William C. Bullock, Jr. G. Clifton Eames
2. Proposal to amend the articles of incorporation and the by-laws to
increase the number of shares of preferred stock the Company is authorized to
issue from 400,000 shares to 600,000 shares.
_ _ _
|_| FOR |_| AGAINST |_| ABSTAIN
3. Proposal to amend the articles of incorporation and the by-laws to
increase the number of shares of common stock the Company is authorized to
issue from 7,500,000 shares to 10,000,000 shares.
_ _ _
|_| FOR |_| AGAINST |_| ABSTAIN
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH YOUR SPECIFIC DIRECTIONS
ABOVE. IF THE PROXY IS SIGNED AND RETURNED WITHOUT SUCH DIRECTIONS, IT
WILL BE VOTED FOR ITEMS 1, 2 AND 3.
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Date:---------------------1994
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Please sign exactly as name appears on back.
Executors, Administrators, Trustees, etc.
should so indicate when signing. Joint owners
should each sign.
