SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/(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/(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 Itsin its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X / $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).
/ /(X) No fee required
( ) 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:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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/ /( ) 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:
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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
================================================================================
NOTICE OF
ANNUAL MEETING
AND PROXY STATEMENT
BALTIMORE GAS AND ELECTRIC COMPANY
ANNUAL MEETING OF SHAREHOLDERS
APRIL 23, 1996
SHERATON INNER HARBOR HOTEL
300 SOUTH24, 1998
MORRIS MECHANIC THEATRE
1 NORTH CHARLES STREET
BALTIMORE, MARYLAND [LOGO]21201
[BGE LOGO]
CHRISTIAN H. POINDEXTER BALTIMORE GAS AND ELECTRIC COMPANY
CHAIRMAN OF THE BOARD P.O. BOX 1475
AND CHIEF EXECUTIVE OFFICER BALTIMORE, MARYLAND 21203-1475
======================================================================================
CHRISTIAN H. POINDEXTER BALTIMORE GAS AND ELECTRIC COMPANY
CHAIRMAN OF THE BOARD 39 W. LEXINGTON STREET
AND CHIEF EXECUTIVE OFFICER BALTIMORE, MARYLAND 21201
March 15, 1996
[LOGO]13, 1998
[BGE LOGO] Dear Shareholder:
I'd like to invite you to attend BGE's Annual Meetingour annual meeting of
Shareholdersshareholders to be held April 23, 1996,24, 1998, at 1010:00 a.m. at the
Sheraton Inner Harbor Hotel, 300 SouthMorris Mechanic Theatre located at 1 North Charles Street in
downtown Baltimore. We have enclosed a copy of our 1997 annual
report to shareholders for your review.
At the meeting, I will review 1995 company operations,our 1997 performance and answer
your questions,shareholder questions. In addition, shareholders will be
voting on the following business matters: the annual election
of directors, the ratification of our independent accountants
for 1998, and attend to other business
matters. The following pages provide additional details
about the meeting as well as other useful information.
Aone shareholder proposal.
We've enclosed a proxy card is enclosed that lists all matters that
needrequire your vote. PLEASE SIGNCOMPLETE YOUR PROXY CARD AND RETURN
THIS CARDIT PROMPTLY IN THE PRE-ADDRESSED, POSTAGE PAID ENVELOPE
PROVIDED. This will allow your shares to be voted whether or
not you plan to attend the meeting. If you plan to attendbe at the
meeting, please also check the box on theyour proxy card.
The Morris Mechanic Theatre is handicapped-accessible. In
addition, if you need any other special accommodations, please
indicate them on your proxy card.
Thank you for your continued support of the Baltimore Gas and
Electric Company.
Sincerely,
/s/ C. H. Poindexter
-------------------------
Chairman of the Board and
Chief Executive Officer
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
The================================================================================
BALTIMORE GAS AND ELECTRIC COMPANY
Notice of 1998 Annual Meeting of the Shareholders
Our annual meeting of Baltimore Gas and Electric Companyshareholders will be held on FRIDAY, APRIL 24, 1998
at 10:00 a.m., at the Sheraton Inner Harbor Hotel, 300 SouthMorris Mechanic Theatre at 1 North Charles Street,
Baltimore, Maryland, at 10:00 a.m. on April 23, 1996 for the following purposes:
1. The election of fourteenTo elect thirteen directors to serve on our board for the ensuingnext year and
until their successors are elected and qualified.
2. The electionTo ratify our selection of Coopers & Lybrand L.L.P. as our independent
auditorsaccountants for 1996.1998.
3. To act upon thevote on a shareholder proposal, set forth in the accompanying Proxy
Statement, if such proposal is brought before
the Annual Meeting.meeting.
4. The transaction of suchTo transact any other business as maythat properly comecomes before the Annual Meeting.
Each ofmeeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 AND 2 AND "AGAINST"
ITEM 3.
We discuss the above items is describedbusiness matters in more detail in the attached Proxy
Statement which
accompanies this Notice.Statement.
The stock transfer books will not be closed before the Annual Meeting.annual meeting.
Common shareholders of record at the close of business on March 5, 1996February 25, 1998 will
be entitled to noticevote.
David A. Brune
Secretary
March 13, 1998
================================================================================
BALTIMORE GAS AND ELECTRIC COMPANY
Proxy Statement
TABLE OF CONTENTS
Questions & Answers........................................................ 1
Business Matters To Be Voted On............................................ 4
Board of Directors......................................................... 5
Nominees for the Board of Directors................................... 5
Committees of the Board of Directors.................................. 7
Meetings of the Board of Directors and its Committees................. 8
Directors' Compensation............................................... 8
Certain Relationships and Transactions................................ 9
Section 16(a) Beneficial Ownership Reporting Compliance............... 9
Compensation Committee Interlocks and Insider Participation........... 9
Security Ownership.......................................................... 10
Executive Compensation...................................................... 11
Summary Compensation Table............................................. 11
Long-Term Incentive Plan Table......................................... 12
Pension Benefits....................................................... 14
Severance Agreements................................................... 15
Common Stock Performance Graph.............................................. 16
Report of Committee on Management on Executive Compensation................. 17
Shareholder Proposal........................................................ 20
QUESTIONS & ANSWERS
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Q: WHEN ARE THE ANNUAL REPORT TO SHAREHOLDERS AND THIS PROXY STATEMENT
FIRST BEING SENT TO SHAREHOLDERS?
A: The annual report to shareholders and this proxy statement are being
sent to shareholders beginning on or about March 13, 1998.
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Q: WHAT AM I VOTING ON?
A: 1. Election of 13 directors.
2. Ratification of Coopers & Lybrand L.L.P. as our independent
accountants.
3. A shareholder proposal (discussed on page 20).
4. Any other business that properly comes before the meeting for a vote.
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Q: HOW DO I VOTE?
A: You must be present, or represented by proxy, at the annual meeting in
order to vote atyour shares. Since many of our shareholders are unable to
attend the Annual Meeting.
C. W. Shivery
Secretary
March 15, 1996
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS -- APRIL 23, 1996 -- 10:00 A.M.
SHERATON INNER HARBOR HOTEL
300 SOUTH CHARLES STREET
BALTIMORE, MARYLAND
Thismeeting in person, we send proxy statementcards to all of our
shareholders.
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Q: WHAT IS A PROXY?
A: A proxy is provided in connection with the 1996 Annual Meeting
of Shareholders of Baltimore Gas and Electric Company (the Company or BGE).
BGE's principal executive offices are located at 39 West Lexington Street,
Baltimore, Maryland 21201.a person you appoint to vote on your behalf. Proxies are
solicited so that all common shares may be voted. Shares cannot be voted unless the owner of record is present or
represented by proxy at the Annual Meeting. By completingannual meeting.
You must complete and returningreturn the accompanyingenclosed proxy card the shareholder authorizes Messrs.to have your shares
voted by proxy.
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Q: BY COMPLETING AND RETURNING THE PROXY CARD, WHO AM I DESIGNATING AS MY
PROXY?
A: You will be designating: Jerome W. Geckle, George V. McGowan, orand
Christian H. Poindexter as designatedyour proxies.
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Q: HOW WILL MY PROXY VOTE MY SHARES?
A: Your proxy will vote according to the instructions on your proxy card.
If you complete and return your proxy card but do not indicate your vote
on the face of thebusiness matters, your proxy will vote "FOR" Items 1 and 2 and
"AGAINST" Item 3. Also, your proxy is authorized to vote, all shares forusing his or
her best judgment, on any other business that properly comes before 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 L.L.P. as independent auditors, 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 $13,500 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 15, 1996, together with the
1995 Annual Report to Shareholders.meeting.
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1
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Q: WHO IS ENTITLED TO VOTE AT THE ANNUAL MEETING, AND HOW MANY VOTES DO
THEY HAVE?
A: Common shareholders of record at the close of business on March 5, 1996,
will be entitled toFebruary 25,
1998 may vote at the Annual Meeting.meeting. Each share will be entitled tohas one vote. On March 5, 1996, the Company had outstanding 147,527,114There were
147,867,114 shares of common stock without par value.outstanding on February 25, 1998.
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Q: HOW DO I VOTE USING MY PROXY CARD?
A: There are three steps.
1. Vote on each of the business matters as follows:
(Bullet) ITEM 1. THE ELECTION OF 13 DIRECTORS. The names of all the
directors to be elected are listed on your proxy card. You
have three options:
(Bullet) OPTION 1. To vote for all directors, you check the
box marked "FOR."
(Bullet) OPTION 2. To vote for some of the directors and
against the rest, you check the box marked "FOR" and
then line through the names of the directors that
you are voting against.
(Bullet) OPTION 3. To abstain from voting for all directors
(that is, not vote for or against any of the
directors), you check the box marked "WITHHOLD
AUTHORITY."
(Bullet) ITEMS 2 AND 3. RATIFICATION OF SELECTION OF COOPERS & LYBRAND
L.L.P. AS OUR INDEPENDENT ACCOUNTANTS FOR 1998 AND A
SHAREHOLDER PROPOSAL. You check the box "FOR," or "AGAINST,"
or "ABSTAIN" (to cast no vote).
2. Sign and date your proxy card. IF YOU DO NOT SIGN YOUR PROXY CARD,
YOUR SHARES CANNOT BE VOTED.
3. Mail your proxy card in the pre-addressed, postage paid envelope.
REMEMBER TO CHECK THE BOX ON YOUR PROXY CARD IF YOU PLAN TO ATTEND THE ANNUAL
MEETING.
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Q: HOW DO I REVOKE MY PROXY?
A: You may revoke your proxy at any time before your shares are voted at
the annual meeting by:
(Bullet) notifying our Corporate Secretary, David A. Brune, in writing
at P.O. Box 1475, Baltimore, Maryland 21203-1475, that you are
revoking your proxy;
(Bullet) executing a later dated proxy card; or
(Bullet) attending and voting by ballot at the annual meeting.
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Q: WHAT IS A QUORUM OF SHAREHOLDERS, AND HOW MANY VOTES DOES IT TAKE TO
PASS EACH BUSINESS MATTER?
A: A quorum is the presence at the annual meeting in person or by proxy of
the holdersshareholders entitled to cast 73,763,558 votes (aa majority of all the votes entitled to be
cast at the meeting) will constitutecast. Since there were 147,867,114 shares of common stock outstanding on
February 25, 1998, 73,933,558 shares is a quorum. Broker non-votes,
abstentions and withhold-authority votes all countCOUNT for the purposepurposes of
determining a quorum. Each
item onAssuming a quorum of shareholders is present at
the agenda must receivemeeting, the affirmative vote of a majority of all the shares
voted at the meeting in ordervotes cast is
needed to pass.pass each business matter. Broker non-votes, abstentions and
withhold-authority votes DO NOT COUNT as votes cast.
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2
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Q: WHY MIGHT I RECEIVE MORE THAN ONE PROXY CARD?
A: First, you may have various accounts with us that are registered
differently, perhaps in different names or different social security or
federal tax identification numbers. Second, you may own shares
indirectly through your broker or our employee savings plan. Your broker
or plan trustee will send you a proxy card for these shares.
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Q: CAN I VOTE BY PROXY EVEN IF I PLAN TO ATTEND THE ANNUAL MEETING?
A: Yes. If you vote by proxy, you do not count as shares votedneed to fill out a ballot at the
meeting.
1
Theannual meeting, unless you want to change your vote.
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Q: WHO IS SOLICITING MY PROXY, HOW IS IT BEING SOLICITED, AND WHO PAYS THE
COST?
A: BGE, on behalf of the Board of Directors, through its directors,
officers and employees, is awaresoliciting proxies primarily by mail.
However, proxies may also be solicited in person, by telephone or
facsimile. Georgeson & Co. Inc., a proxy solicitation firm, will be
assisting us for a fee of only three itemsapproximately $13,500, plus out-of-pocket
expenses. BGE pays the cost of businesssoliciting proxies.
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Q: WHEN IS THE DEADLINE FOR SHAREHOLDER PROPOSALS TO BE CONSIDERED FOR
INCLUSION IN BGE'S PROXY STATEMENT FOR ITS 1999 ANNUAL MEETING?
A: You must submit your proposal in writing to our Corporate Secretary,
David A. Brune, at P.O. Box 1475, Baltimore, Maryland 21203-1475, so
that he receives it by November 13, 1998. Proposals will not be considered at the Annual Meeting: Item 1, the election of fourteen directors;
Item 2, the election of independent auditors for 1996; and Itemaccepted
by facsimile.
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3
a shareholder
proposal regarding director retirement benefits if such proposal is brought
before the Annual Meeting.
BUSINESS MATTERS TO BE VOTED ON
ITEM 1. ELECTION OF 14 DIRECTORS
TheDIRECTORS.
Our entire Board of Directors is elected each year at the Annual Meeting. Each
director is electedannual meeting.
Directors serve for a term of one year and until a successor director is elected and
qualified. EachAll of the nominees waswere elected a director at the 1995 Annual
Meeting of Shareholders.
Information concerning the nominees for election as directors is presented
below.1997 annual
meeting. Each of the nominees has consentednominated directors agrees to serve as a director if elected. Should any nominee becomeHowever, if
for some reason one of them is unable to accept nomination or election, it is
intended that the enclosed proxyproxies 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. Biographical information for each of the nominees and other
information about them is presented beginning on page 5.
ITEM 2. RATIFICATION OF OUR SELECTION OF COOPERS & LYBRAND L.L.P. AS OUR
INDEPENDENT ACCOUNTANTS FOR 1998.
Coopers & Lybrand L.L.P., Certified Public Accountants, has been our
independent accountants since 1941. A member of their firm will be at the annual
meeting and will have the opportunity to make a statement and answer appropriate
questions.
Coopers & Lybrand audited our 1997 consolidated financial statements, as
well as the financial statements of our dividend reinvestment and stock purchase
plan and various employee benefit plans. As part of its audit function, they
also reviewed our 1997 annual report to shareholders and various filings with
the Securities and Exchange Commission and Federal Energy Regulatory Commission.
The Board's Audit Committee reviewed the non-audit services provided by
Coopers & Lybrand during 1997 and concluded that these services do not affect
Coopers & Lybrand's independence as our auditors.
ITEM 3. A SHAREHOLDER PROPOSAL.
A shareholder proposal and our Board of Directors' response are included
beginning on page 20.
ITEM 4. OTHER BUSINESS MATTERS.
The Board of Directors is not aware of any other business matters to be
presented for action at the annual meeting. However, (1) if any other matters
come before the meeting, (2) if any of the persons named to serve as directors
should be unable to serve or for good cause will not serve, (3) if any
shareholder proposal omitted from this proxy statement and the proxy card is
presented for action at the meeting, and (4) if any matters incident to the
conduct of the meeting are presented for action, shareholders present at the
meeting will vote on such items. If you are represented by proxy, your proxy
will vote your shares using his or her best judgment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 AND 2 AND A VOTE
"AGAINST" ITEM 3.
4
BOARD OF DIRECTORS
NOMINEES FOR THE BOARD OF DIRECTORS
The following are brief biographical sketches for each of our nominated
directors:
H. FURLONG BALDWIN, age 64, currently serves as66, is the 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 asrespectively. In addition, he is
Chairman of the Board and Chief Executive Officer of Mercantile-Safe Deposit
and& Trust Company, positions he attained in 1976. Mr. BaldwinHe is also serves asa director of the
following BGE subsidiaries: Constellation Enterprises, Inc., and its direct
subsidiaries, and Constellation Energy Solutions, Inc. In addition, he is a
director of GRC International, Inc., USF&G Corporation, Conrail, Inc.Consolidated Rail
Corp., Offitbank and Wills Group and Constellation Holdings, Inc. Mr. BaldwinLLC. He has been a director of the CompanyBGE since
1988, and is a member of theBGE's Executive Committee, and is the Chairman of theBGE's Long
Range Strategy Committee.Committee and a member of the Audit Committee for BGE's
subsidiaries.
BEVERLY B. BYRON, age 63,65, served for seven successive terms as a Maryland
Congresswoman toin the United States House of Representatives from 1978 to
1992. She is a director of McDonnell Douglas Corp.Blue Cross and Blue Shield of Maryland, Inc.,
Farmers & Mechanics National Bank and UNC
Incorporated. Mrs. ByronLogistics Management Institute. She
has been a director of the CompanyBGE since 1993, and is a member of the Audit Committee
and the Committee on Nuclear Power and is the Chairwoman of the Committee on
Workplace Diversity.
J. OWEN COLE, age 66, currently serves68, is a director of First Maryland Bancorp. (a bank holding
company) and The First National Bank of Maryland. At First Maryland Bancorp.
and The First National Bank of Maryland, he served as Chairman of the
Executive Committee from 1988 to 1994 and Chairman of the Trust Committee
from 1994 to 1997. In addition, from January 1995 to December 1996, he was
Chairman of the Board of Blue Cross and Blue Shield of Maryland, a position he has held since January 1995. In
addition, Mr. Cole 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. Mr. ColeInc. He 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 64, currently serves66, in January, 1998 became the Chairman of the Board of
Care First, Inc., the holding company for Care First of Maryland, Inc.
(formerly Blue Cross and Blue Shield of Maryland, Inc.) and Group
Hospitalization and Medical Services, Inc., after serving as Chairman of the
Board of Blue Cross and Blue Shield of Maryland since January, 1997, and
Chairman-Elect in 1996. He retired as Chairman of the Board, President and
Chief Executive Officer of UNC Incorporated (aviation services). He in November
1997. At UNC Incorporated, he was elected Chief Executive Officer and
President in 1984 and Chairman of the Board in 1989, served
as President from 1984 to September 1994, and currently serves as President
since October 1995. Mr. Colussy1989. He has been a director
of the CompanyBGE since 1992,
and is a member of the Committee on Management and the
Chairman of the Committee on Nuclear Power.
2
EDWARD A. CROOKE, age 57, currently serves as59, is the President and Chief Operating Officer of the Company. Mr. CrookeBGE.
He has been President of the CompanyBGE since 1988 and Chief Operating Officer since
1992. In addition, he serves as Chairman of the Board of both of BGE's
principal subsidiaries: Constellation Enterprises, Inc. (formed in January
1998 as the parent company for Constellation Holdings, Inc. and BGE Home
Products & Services, Inc.), a position he attained in January 1998, and
Constellation Energy Solutions, Inc. (formerly, BGE Corp.), a position he
attained in March 1997.
He is also serves on the Board of Directors of the subsidiaries of
Constellation Enterprises, Inc. and Constellation Energy Solutions, Inc. and
has served as Chairman of the Board of Constellation Holdings, Inc. since
1996 and Chairman of the Board of BGE Home Products & Services, Inc., and Chairman of the Board and Chief
Executive Officer of BNG, Inc., positions he attained in since
1994.
In addition,
Mr. Crooke5
He is Chairman of the Board of BGE Energy Projects & Services, Inc., a
position he attained in November 1995 and is Chairman of the Board of
Constellation Holdings, Inc., a position he attained in January 1996. Mr.
Crooke serves asalso a director of First Maryland Bancorp,Bancorp., The First National Bank of
Maryland, AEGIS Insurance Services, Inc., Associated Electric & Gas
Insurance Services, Limited, and Baltimore Equitable Insurance. Mr. CrookeSociety. He has been a
director of the CompanyBGE since 1988 and is a member of the Executive Committee.
JAMES R. CURTISS, age 42, currently44, 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. CurtissHe is also a director of
Cameco Corporation. He has been a director of the
CompanyBGE since 1994, and is a member of
the Committee on Nuclear Power, and the Committee on Workplace Diversity.Diversity and the
Long Range Strategy Committee.
JEROME W. GECKLE, age 66,68, was Chairman of the Board of PHH Corporation (vehicle,
relocation, and management services) from 1979 tountil he retired in 1989. Now retired, Mr.
Geckle serves asHe
is also a director of the following BGE subsidiaries: Constellation
Enterprises, Inc., and its direct subsidiaries, and Constellation Energy
Solutions, Inc. In addition, he is a director of First Maryland Bancorp,Bancorp. and
The First National Bank of Maryland, and Constellation Holdings, Inc. Mr. GeckleMaryland. He has been a director of the CompanyBGE since
1980, is the Chairman of BGE's Committee on Management, a member of BGE's
Long Range Strategy Committee and is the Chairman of the Committee on
Management and a member of the Long Range Strategy Committee.
MARTIN L. GRASS, age 42, currently serves as Chairman of the Board and Chief
Executive Officer of Rite Aid Corporation (retail drugs), positions he
attained in March 1995, and as a Director of Rite Aid Corporation, a position
he attained in 1982. From 1989 through March 1995, Mr. Grass served as
President and Chief Operating Officer of Rite Aid Corporation. In addition,
Mr. Grass was Vice Chairman, Treasurer and Director of Super Rite Corporation
(food wholesaler and retailer), from 1989 through October 1995. Mr. Grass is
also a director of Mercantile Bankshares Corporation and Tessco, Inc. He has
served as a director of the Company since 1995 and is a member of the Audit
and Long Range Strategy Committees.for BGE's subsidiaries.
DR. FREEMAN A. HRABOWSKI, III, age 45, currently serves as47, is the President of the University of
Maryland Baltimore County, a position he attained in 1993.
Previously, he served1993 after serving as
Interim President from 1992 to 1993 and Executive
Vice President from 1990 tosince 1992. Dr. HrabowskiHe is also a director of the Citizens Bancorp, Citizens Bank of Maryland, and Baltimore
Equitable Insurance.Society, McCormick & Company, Inc. and Mercantile Bankshares
Corporation. He has served asbeen a director of the CompanyBGE since 1994, and is a member of the
Audit andCommittee, the Executive CommitteesCommittee and the Committee on Workplace
Diversity.
NANCY LAMPTON, age 53, currently serves as55, is the Chairman and Chief Executive Officer of American
Life and Accident Insurance Company of Kentucky, a position she attained in
1971. Ms. LamptonShe is also a director of Bank One Kentucky, Brinly-Hardy Corporation,
and Duff & Phelps Utility Income Fund, Inc.Fund. She has served asbeen a director of the CompanyBGE since
1994, and is a member of the Long Range Strategy Committee and the Committee on
Workplace Diversity.
GEORGE V. MCGOWAN, age 68, served as70, has been Chairman of the Board and ChiefBGE's Executive OfficerCommittee since
1993. He is also a director of the Companyfollowing BGE subsidiaries: Constellation
Enterprises, Inc., and Chairman of the Board ofits direct subsidiaries, and Constellation Holdings,Energy
Solutions, Inc., from 1988 to 1992. Mr. McGowan In addition, he is a director of The Baltimore Life
Insurance Company,GTS Duratek Corp., Life of
Maryland, Inc., McCormick & Company, Inc., NationsBank, N.A., Organization
Resources Counselors, Inc., Scientech, Inc., and UNC Incorporated. Mr. McGowanThe Baltimore Life
Insurance Company. He has been a director of the CompanyBGE since 1980 and is the Chairman of the Executive Committee and a member
of the Committee on Nuclear Power.
3
CHRISTIAN H. POINDEXTER, age 57, currently serves as59, is the Chairman of the Board and Chief
Executive Officer of the Company,BGE, positions he attained in 1993, after serving as
Vice Chairman of the Board, a position he held since 1989. Mr.
PoindexterHe is on the
Board of Directors of the following BGE subsidiaries: Constellation
Enterprises, Inc., and its subsidiaries, and Constellation Energy Solutions,
Inc., and a subsidiary. In addition, he served as Chairman of the Board of
Constellation Holdings, Inc. from 1993 to 1996.
He is also a director of BGE Home Products & Services, Inc., a
position he attained in 1994, and is a director of BGE Energy Projects &
Services, Inc., a position he attained in November 1995. Currently, Mr.
Poindexter serves as a director of Constellation Holdings, Inc., after serving
as Chairman of theDome Corporation, Johns Hopkins Medicine Board, from 1993 to January 1996. In addition, Mr.
Poindexter serves as a director of
Mercantile Bankshares Corporation, Mercantile Mortgage Corporation,
and Mercantile-Safe Deposit & Trust Company, and Trust
Company. Mr. PoindexterNuclear Electric Insurance
Limited. He has been a director of the CompanyBGE since 1988 and is a member of the
Executive Committee.
6
GEORGE L. RUSSELL, JR., age 66, currently68, is a partner in the law firm of Piper & Marbury
L.L.P., a position he attained in 1986. Mr. RussellHe is also a director of the Federal
Reserve Bank of Richmond -- Baltimore Branch. He has been a director of the CompanyBGE
since 1988, and is a member of the Audit Committee and the Executive Committees.Committee.
MICHAEL D. SULLIVAN, age 56, currently58, is the Chairman of the Board of Golf America
Stores, Inc. (golf apparel retailing), a position he attained in October
1996, and Chairman of the Board of Jay Jacobs, Inc. (specialty apparel
retailing), a position he attained in December 1997. Since 1995, he has been
Chairman of the Board of ProAxom International, LLC (hair care products and
restoration) and Chairman of the Board and Chief Executive Officer of
Lombardi Research Group, LLC, (hair care products),
positions he attained in 1995. Mr. Sullivan was Chairman of the Board of Waye
Laboratories, Inc (hair restoration) from January 1995 to June 1995. In
addition, Mr. Sullivana holding company for ProAxom International,
LLC.
He was Chief Executive Officer and President from 1982 to
1994, of Merry-Go-Round Enterprises,
Inc. (specialty retailing). from 1982 to 1994. That company filed a
reorganization petition under Chapter XI of the Federal Bankruptcy law in
January 1994, and subsequently announced a bankruptcy liquidation.
Mr.
SullivanHe has been a director of the CompanyBGE since 1992, and is a member of the Committee on
Management and the Long Range Strategy Committee.
COMMITTEES MEETINGS, AND FEESOF THE BOARD OF DIRECTORS
EXECUTIVE COMMITTEE. The Executive Committee of the Board of Directors may exercise most of the powers of
the Board of Directors in the management of theBGE's business and affairs
of the Company in the intervals between
meetings of the full Board.board. The Committee,committee, however, may not declare dividends,
authorize the issuance of stock (unless the Board of Directors has already given
general authorization for such issuance), recommend to shareholders any action
requiring shareholders'shareholder approval, amend the by-laws, or approve mergers.mergers or share
exchanges which do not require shareholder approval.
AUDIT COMMITTEE. The Audit Committee, of the Board of Directors, comprisedmade up of outside directors who are not
former BGE employees, recommends an auditingindependent accounting firm to be engaged,
discusses the scope of the examination with that firm, and reviews the annual
financial statements with the auditingindependent accounting firm and with Management of the Company.BGE
management. Additionally, the Committeecommittee meets with the Managermanager of the Auditing Department of the CompanyBGE's auditing
department to ensure that an adequate program of internal auditing is being
carried out, and invites comments and recommendations from the auditingindependent
accounting firm concerning the system of internal controls and accounting
procedures. The Audit Committeecommittee reports on its activities periodically to the Board of
Directors.
COMMITTEE ON NUCLEAR POWER. The Committee on Nuclear Power monitors the
performance and safety of the
Company'sBGE's Calvert Cliffs Nuclear Power Plant. The
Committeecommittee meets periodically, usually on-site at the Calvert Cliffs plant, to
confertalk with Management,management, senior plant management, and other nuclear oversight
personnel. Following each meeting, the Committeecommittee reports the results of its
observations and findings to the Board of Directors and makes such recommendations as
it deems appropriate.
COMMITTEE ON MANAGEMENT. The Committee on Management's duties include
recommending to the Board of Directors nominees for officers and nominees for
election as directors and officersof BGE and making recommendations concerning remuneration arrangements for directors and officers
of the Company.their
compensation. This Committee,committee, which is comprised of outside directors, considers
nominees for directors recommended by shareholders; such recommendations should
be submitted in writing to the attention of the Corporate Secretary, Baltimore
Gas and Electric Company, 39 WestW. Lexington Street, Baltimore, Maryland 21201.
47
COMMITTEE ON WORKPLACE DIVERSITY. The Committee on Workplace Diversity provides
an ongoing Board of Directors' perspective of management's progress in achieving
employee diversity goals. The Committeecommittee 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 Diversitycommittee reports on
its activities periodically to the Board of Directors.
LONG RANGE STRATEGY COMMITTEE. The Long Range Strategy Committee provides an oversight role inoversees the
development of the Company'sBGE's long range strategic goals. The Committeecommittee meets
periodically to review the continued appropriateness of these goals and to
approve presentations to the Board of Directors regarding the implementation of
significant strategic initiatives. This Committeecommittee also reviews major regulatory,
environmental and public policy issues as well as technology advances which may
impact Companyaffect our operations. The Long Range Strategy Committeecommittee periodically reports on its activities periodically to the
Board of Directors.
TheMEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES
In 1997, the Board of Directors met nineten times during 1995 for regularly scheduled meetings and two times for special meetings.
The Committee on Management and the
Long Range Strategy Committee each met six times,In addition, the Audit Committee met fourthree times, the Committee on Nuclear Power
met three times, the Committee on Management met seven times, and the Committee
on Workplace Diversity each met two times, and the Executive Committee met one time.times. Each of the nominees with the exception of Mr. Grass, attended 75% or more
of the total number of meetings of the Boardboard and of any committees on which the nomineethey
served.
Each director,DIRECTORS' COMPENSATION
Directors who is not an officer or employeeare employees of the CompanyBGE or its subsidiaries receivesreceive no
additional compensation for serving on the Board of Directors or its committees.
Non-employee directors receive a $1,250 fee of $1,000 for each regular, committee, or
special board meeting attended. These directors may defer receipt of the Board attended and a retainer feesome or all
of $18,000 per year, payable
quarterly.their fees.
Non-employee directors also receive an annual $26,000 retainer. Each
committee chairmanchairperson receives an additional $3,500 annual retainer feeretainer. Half of
$3,000 per year, payable quarterly. Each directorthese retainers are invested in deferred stock units (explained below). These
directors may elect to invest some or all of the other half of their retainers
in deferred stock units.
Deferred stock units are bookkeeping entries that track the performance of
BGE common stock and are not actual shares of stock. The bookkeeping entries
reflect fluctuation based on BGE common stock price changes, dividends, stock
splits and other capital changes. At the end of their board service, directors
receive cash based on the value of their deferred stock units.
Non-employee directors may also 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 asour former 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. TheBGE. We
provide an automobile to him at an approximate yearly cost to us of $11,000.
Those non-employee directors who serve on the Company
is $7,300.boards of BGE's subsidiaries
also receive a $1,250 aggregate fee for regular, committee or special subsidiary
board meetings attended. These directors may defer receipt of some or all of
their fees.
8
Those non-employee directors who serve on the boards of BGE's subsidiaries
also receive a $20,000 aggregate annual retainer and an additional $3,500
aggregate annual retainer for chairing any committees. Similar to BGE's
directors' compensation program, half of these retainers are invested in
deferred stock units that track the performance of BGE common stock and are not
actual shares of stock. Each of these directors may elect to invest some or all
of the other half of their retainers in deferred stock units. At the end of
their subsidiary board service, these directors will receive cash based on the
value of their deferred stock units.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
The Company and certainOne of its subsidiaries paid legal fees toour directors, George L. Russell, Jr., is a partner at the law firm
of Piper & Marbury L. L.L.L.P. BGE and certain subsidiaries paid fees to this firm
for legal services rendered in 1997.
One of our directors, James P. Curtiss, is a partner at the law firm of
which Mr.Winston & Strawn. BGE paid fees to this firm for legal services rendered in
1997.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Gregory C. Martin, an executive officer of BGE, due to a clerical error was
one day late in filing his Form 3 to report his beneficial ownership of BGE
common stock upon his appointment as a Vice President in November 1997.
George L. Russell, Jr., a Company
director is a partner. It is expected thatof BGE, did not timely report the
Companyinheritance by his wife of shares of BGE common stock.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Christian H. Poindexter, Chairman of the Board and subsidiaries will
continue to do business with this firm in 1996.
The Company and certainChief Executive Officer
of its subsidiaries maintain a banking relationship
with Mercantile-Safe Deposit and Trust Company,BGE, serves on the Compensation Committee of which Mr.Mercantile Bankshares
Corporation. H. Furlong Baldwin, a Company director of BGE, is Chairman of the Board and
Chief Executive Officer. AsOfficer of December 31, 1995, loans to certain of the Company's subsidiaries were
outstanding in the amount of $12,152,000. The loans were obtained on competitive
terms and in the ordinary course of business.
5Mercantile Bankshares Corporation.
9
SECURITY OWNERSHIP
The following table sets forthshows as of January 23, 1998 the beneficial ownership
of BGE common stock of
the Company of each nominee for director, the fivesix executive officers
shown in the Summary Compensation TableSUMMARY COMPENSATION TABLE on page 7,11, and all directors and
executive officers as a group as of January 19, 1996. None of such persons beneficially
owns shares of any other class of equity securities of the Company.
BENEFICIAL OWNERSHIP
NAME (SHARES OF COMMON STOCK) (1)
- --------------------------------- ----------------------------
Bruce M. Ambler 32,184(2)
H. Furlong Baldwin 750
Beverly B. Byron 1,000
J. Owen Cole 4,025
Dan A. Colussy 1,500
George C. Creel 23,241(3)
Edward A. Crooke 59,370(4)
James R. Curtiss 300
Jerome W. Geckle 6,572
Martin L. Grass 700
Freeman A. Hrabowski, III 550
Nancy Lampton 1,737
George V. McGowan 102,212(5)
Christian H. Poindexter 87,504(6)
George L. Russell, Jr. 1,200
Charles W. Shivery 23,140(7)
Michael D. Sullivan 1,500
All Directors and Executive
Officers as a Group (28
Individuals) 513,810
(1)group. Each of the individuals listed in the table, as
well as all directors and executive officers as a group, beneficially owned less
than 1% of the Company'sBGE's outstanding common stock. None of them beneficially own shares
of any other class of our equity securities.
BENEFICIAL OWNERSHIP DEFERRED
NAME (SHARES OF COMMON STOCK)(1) STOCK UNITS(3)
- ---- --------------------------- ---------------
Bruce M. Ambler......................... 41,357 -0-
H. Furlong Baldwin...................... 750 2,120
Beverly B. Byron........................ 1,500 662
J. Owen Cole............................ 4,511 662
Dan A. Colussy.......................... 1,500 1,323
George C. Creel......................... 33,717(2) -0-
Edward A. Crooke........................ 69,949 -0-
James R. Curtiss........................ 300 1,166
Robert E. Denton........................ 29,959 -0-
Jerome W. Geckle........................ 7,366 1,380
Freeman A. Hrabowski, III............... 550 1,166
Nancy Lampton........................... 2,797 583
George V. McGowan....................... 105,457 1,076
Christian H. Poindexter................. 107,648 -0-
George L. Russell, Jr................... 1,874 1,166
Charles W. Shivery...................... 39,007 -0-
Michael D. Sullivan..................... 1,500 583
All Directors and Executive Officers
as a Group (27 Individuals)........... 614,861
(1) If the individual participates in the Company'sBGE's Dividend Reinvestment
and Stock Purchase Plan, BGE's Long-Term Incentive Plan or the Company'sBGE's
Employee Savings Plan, those shares are included.
(2) IncludesMr. Creel retired from BGE on November 1, 1997. Of these 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 shares11,848 are held in the name of Mr. Creel's wife of which Mr. Creelhe
disclaims beneficial ownership.
(4) Includes shares awarded(3) Deferred stock units are discussed under DIRECTORS' COMPENSATION
on page 8.
10
EXECUTIVE COMPENSATION
The following table summarizes the Company's Long-Term
Incentive Plan. Of the total shares, 998 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, 1,394 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, 18,500 shares are held in
the namecompensation 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 211 shares
are beneficially owned by Mr. Shivery with his son.
6
On September 22, 1995, BGE and Potomac Electric Power Company ("PEPCO")
signed reciprocal stock option agreements in connection with the proposed merger
("the Merger")certain of BGE and PEPCO with and into Constellation Energy Corporation
(formerly named RH Acquisition Corp.). Pursuant to the stock option agreements,
BGE granted PEPCO an irrevocable option to purchase up to 29,357,896 shares of
BGE common stock under certain circumstances if the Agreement and Plan of Merger
datedour executives as
of September 22, 1995 ("the Merger Agreement") becomes terminable.
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.December 31, 1997.
SUMMARY COMPENSATION TABLE
----------------------------------------------
ANNUAL LONG-TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------------------------------
COMPENSATION(1)
- ---------------------------------------------------------------------------------------------------------------------
INCENTIVE PLAN ALL OTHER
NAME AND PRINCIPAL POSITION FISCAL RESTRICTED ALL OTHER
@ 12/31/95 YEAR SALARY ($) BONUS STOCK AWARD (1,2)($) PAYOUT ($) COMPENSATION ($)(3)
- -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Christian H. Poindexter 1995 $ 537,233 $ 247,400(5)1997 608,533 -0- $ 31,611425,436(2) 42,283
Chairman of the Board and 1994 $ 498,533 $ 163,000 -0- $ 26,4361996 567,300 212,500 181,500 324,799
Chief Executive Officer 1993 $ 465,533 $ 124,000 $ 81,813 $ 36,8441995 537,233 247,400 N/A 31,611
Edward A. Crooke 1995 $ 400,567 $ 184,200(5)1997 420,667 -0- $ 25,217298,799(2) 40,658
President and Chief Operating 1994 $ 385,067 $ 125,000 -0- $ 19,0891996 403,400 150,000 118,800 252,504
Officer Chairman of the Board 1993 $ 361,267 $ 83,000 -0- $ 30,335
of all non-utility subsidiaries1995 400,567 184,200 N/A 25,217
Bruce M. Ambler 1995 $ 298,933 $ 108,6001997 330,400 -0- $ 17,033172,843(2) 27,841
President and Chief Executive 1994 $ 280,133 $ 69,000 -0- $ 11,4431996 315,100 120,000 180,000 117,101
Officer of Constellation 1993 $ 264,000 $ 139,267(4) -0- $ 15,9021995 298,933 108,600 N/A 17,033
Holdings, Inc.
Charles W. Shivery 1997 233,900 55,000 151,856(2) 13,982
President of Constellation 1996 218,700 77,000 33,000 38,302
Energy Solutions, Inc. and 1995 203,333 96,400 N/A 10,803
Constellation Power
Source, Inc.
George C. Creel 1995 $ 265,600 $ 72,9001997 284,566 -0- $ 17,292246,758(2) 187,187
Retired Executive Vice 1996 316,600 118,000 72,600 138,842
President 1994 $ 248,867 $ 55,000 -0- $ 11,754 and Acting 1995 265,600 72,900 N/A 17,292
Chief Operating 1993 $ 230,233 $ 47,000Officer
Robert E. Denton 1997 248,533 -0- $ 19,079
Officer
Charles W. Shivery 1995 $ 203,333 $ 96,400(5) -0- $ 10,803178,917(2) 18,786
Senior Vice President -- Finance 1994 $ 188,300 $ 44,500 -0- $ 7,441
and Accounting, Chief 1993 $ 178,100 $ 34,500 -0- $ 10,889
Financial Officer and Secretary1996 230,567 75,100 38,500 70,899
Generation 1995 196,933 55,000 N/A 10,785
- ---------------------------------------------------------------------------------------------------------------------
NOTES TO SUMMARY COMPENSATION TABLE:
(1) At December 31, 1995, Mr. PoindexterThe following executives held 15,200 shares of time-based
Restricted Stock with a value of $433,200, Mr. Crooke held 10,200 shares of
time-based Restricted Stock with a value of $290,700, Mr. Ambler held 8,700
shares of time-based Restricted Stock with a value of $247,950, Mr. Creel
held 6,750 shares of time-based Restricted Stock with a value of $192,375,
and Mr. Shivery held 3,750 shares of time-based Restricted Stock with a
value of $106,875. Dividends on time-based Restricted Stock Awards are paid
directly to the named executive officers from the record date following the
date of grant.
7
(2) At December 31, 1995, Mr. Poindexter held 10,614 shares of performance-based Restricted Stock with a value of $302,499, Mr.restricted stock
listed below at December 31, 1997:
SHARES MARKET VALUE
------ ------------
C. H. Poindexter 24,667 $841,758
E. A. Crooke held 7,430 shares of
performance-based Restricted Stock with a value of $211,755, Mr.17,162 $585,663
B. M. Ambler held
6,368 shares of performance-based Restricted Stock with a value of $181,488,
Mr.13,964 $476,512
C. W. Shivery 15,900 $542,584
G. C. Creel held 4,776 shares of performance-based Restricted Stock with a
value of $136,116, and Mr. Shivery held 3,715 shares of performance-based
Restricted Stock with a value of $105,878. Dividends on performance-based
Restricted Stock Awards are accumulated during17,162 $585,663
R. E. Denton 10,211 $348,464
During the performance period, reinvested in BGEdividends on performance-based restricted
stock are accumulated and used to purchase additional shares andthat are
reflected in the precedingabove share amounts.numbers and market values. The market value for
the shares held is based on the closing price per share for BGE common stock
as listed in the WALL STREET JOURNAL. Additional awards wereperformance-based
restricted stock was granted effective March 1, 1996early in 1998 as described below in the Long-Term Incentive Plan Table.
(3)LONG-TERM
INCENTIVE PLAN TABLE section beginning on page 12.
11
NOTES TO SUMMARY COMPENSATION TABLE CONTINUED:
(2) These amounts representwere paid in BGE common stock for performance during the
Company match1995-1997 period.
(3) For 1995, 1996 and 1997, the amounts in the ALL OTHER COMPENSATION column
include BGE's matching contributions under the Company'sits 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). (4) $80,000For 1997, the amounts also include
the following benefits provided to Mr. Creel under his severance agreement
(described on page 15): the first two of the 24 monthly installments (for
November and December) and a one-time lump sum payment for medical and
dental benefits; and Mr. Ambler's 1993 bonus relates to 1993 performance,Creel's payment for accrued vacation and
$59,267
relates to performance initiated in 1992 and completed in 1993.
(5) Thesesupplemental pension benefits. For 1996, the amounts also include a
$100,000 bonus for Mr. Poindexter,contribution by BGE to a $75,000 bonus
for Mr. Crooke,trust securing the executives' supplemental pension
benefits, and a $40,000 bonus for Mr. Shivery for their workone-time contribution by BGE to fund a trust that was
established in connection with1996 to secure executives' deferred compensation plan
benefits. A breakdown of the Merger.1997 amounts in the ALL OTHER COMPENSATION
column is shown below.
- ----------------------------------------------------------------------------------------------------------------------------
SEVERANCE
SEVERANCE AGREEMENT
BGE'S SPLIT- AGREEMENT MEDICAL AND PAYMENT
MATCHING DOLLAR MONTHLY DENTAL FOR ACCRUED SUPPLEMENTAL
CONTRIBUTIONS AMOUNTS INSTALLMENTS PAYMENT VACATION PENSION BENEFITS TOTAL
------------- ------- ------------ ----------- ----------- ---------------- --------
C. H. Poindexter $18,085 $24,198 N/A N/A N/A N/A $ 42,283
E. A. Crooke $12,500 $28,158 N/A N/A N/A N/A $ 40,658
B. M. Ambler $ 9,825 $18,016 N/A N/A N/A N/A $ 27,841
C. W. Shivery $ 6,975 $ 7,007 N/A N/A N/A N/A $ 13,982
G. C. Creel $ 8,375 $20,993 $ 72,575 $ 1,230 $56,232 $ 27,782 $187,187
R. E. Denton $ 7,405 $11,381 N/A N/A N/A N/A $ 18,786
- ----------------------------------------------------------------------------------------------------------------------------
LONG-TERM INCENTIVE PLAN TABLE
The Committee on Management, effective March 1, 1996,early in 1998, made grants of performance-based restricted sharesBGE
common stock under the Long-Term Incentive Plan. For each named executive, theGrants under this plan were not
made during 1998 to Mr. Creel (who retired from BGE on November 1, 1997). The
grants are subject to both performance and time (3 years) contingencies.
For all buteach named executive, except for Mr. Ambler and Mr. Shivery,
performance will be measured over a three-year period by comparing BGE's total
shareholder return to the Dow Jones Electric Utilities Index. Both are shown in
the performance graph on page 11.16. A thresholdminimum award will be earned if the BGE three-year
cumulative total shareholder return percentile rank is at the 50th percentile,
progressing to athe maximum award for aif the return is at or above the 75th
percentile. At the Merger effective date, theRestricted shares of restricted BGE stock outstanding will be converted to shares of restricted
Constellation Energy Corporation common stock, using the Merger conversion
ratio: one share of Constellation Energy Corporation common stock for each share
of BGE common stock. After the Merger effective date, the total shareholder
return measure will be based upon the return taking into account the growth in
common stock value of Constellation Energy Corporation and dividends. For Mr.
Ambler, the performance measure relates to improvement in Constellation
Holdings' net income over the performance period.
Pursuant to the grants, restricted sharesgranted were issued equivalentequal to the number of shares of BGE
common stock that will be earned if "target" performance (62.5th percentile) is
achieved.
TheseFor Mr. Ambler and Mr. Shivery, performance will be measured based on both
BGE's total shareholder return (as described above), and also by comparing
subsidiary business value appreciation to targets established by the Committee
on Management. For Mr. Ambler, the business value appreciation formula is based
on the cumulative net income, book value, and derived market value of
Constellation Power, Inc. For Mr. Shivery, the formula is based on the same
factors for Constellation Power Source. Restricted shares were granted equal to
the number of shares of BGE common stock that will be earned if "target"
performance is achieved, and there is no maximum award limit. However, no awards
will be made unless the subsidiary cumulative net income threshold is achieved
for the performance measurement period. The measurement period for grants to Mr.
Ambler and Mr. Shivery is three years, although Mr. Shivery will have the option
prior to the end of the three-year period to extend the performance measurement
period for an additional two years for the portion of his grant that is tied to
Constellation Power Source performance.
12
For all named executives, all or a portion of 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 awardedtarget at the end of the performance
period. Additional shares will be awarded if performance is above target at the
end of the performance period. However, the total shares awarded will not exceed
any maximum noted in the table below.
During the performance period, dividends on restricted shares will be
accumulated and reinvested in additional shares. At the end of the performance
period, actual dividends awarded will be based upon performance and paid in BGE
common 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 1996-1998 performance period.
Dividend equivalents
from the date of the grant will be paid in stock for any additional shares that
are awarded. Shares earned through reinvested dividends are not counted toward
any maximum award limit.
- ----------------------------------------------------------------------------
PERFORMANCE
NAME PERIOD MINIMUM (A) TARGET (A) MAXIMUM
(A) PERIOD
- ----------------------------------------------- --------------- ----------- --------------- -------------------- ------ -------
C.H.C. H. Poindexter 5,000 10,000 14,000 3 years E.A.6,500 13,000 19,500
E. A. Crooke 4,000 7,000 10,000 3 years B.M.4,500 9,000 13,500
B. M. Ambler 3,000 6,000 8,000 3 years G.C. Creel 4,000 7,000 10,000N/A 7,700 N/A
C. W. Shivery 3 (or 5) years N/A 9,600 N/A
R. E. Denton 3 years C.W. Shivery 2,000 3,500 5,500 3 years2,900 5,800 8,700
- ----------------------------------------------------------------------------
- --------------------------
(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.
813
PENSION BENEFITS
The following table below shows annual pension benefits payable uponat normal retirement
to executives, including the five individuals named in the Summary
Compensation Table.SUMMARY COMPENSATION TABLE
on page 11. Normal retirement occurs at age 65 for Messrs. Poindexter, Crooke,
and Ambler, and at age 62 for all other executives. 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%50% of total final average salary plus bonus for Mr. Shivery and,
when he attains 30 years of service in 2001, will be computed at 55%. Pension
benefits are computed at 50% of total final average salary plus bonus for Mr.
Denton and, when he attains 30 years of service in 2000, will be computed at
55%.
When Mr. Creel retired on November 1, 1997, his pension benefits were
computed at 60% of total final average salary plus bonus, instead of 55%, in
recognition of his service since January 1996 as Executive Vice President and
Acting Chief Operating Officer.
- ----------------------------------------------------------------------
PERCENTAGE OF FINAL AVERAGE TOTAL FINAL SALARY AND BONUS
TOTAL FINAL AVERAGE --------------------------------------------
SALARY AND -------------------------------
BONUS 45%50% 55% 60%
- ----------- --------- --------- -------------------------------------------------------------------------------
$ 275,000300,000 $ 123,750 $ 151,250150,000 $ 165,000 300,000 135,000 165,000$ 180,000
325,000 146,250162,500 178,750 195,000
350,000 157,500175,000 192,500 210,000
400,000 180,000200,000 220,000 240,000
425,000 191,250212,500 233,750 255,000
450,000 202,500225,000 247,500 270,000
475,000 237,500 261,250 285,000
500,000 225,000250,000 275,000 300,000
550,000 247,500275,000 302,500 330,000
575,000 258,750287,500 316,250 345,000
600,000 270,000300,000 330,000 360,000
650,000 292,500325,000 357,500 390,000
700,000 315,000350,000 385,000 420,000
750,000 337,500375,000 412,500 450,000
775,000 348,750 426,250 465,000
800,000 360,000400,000 440,000 480,000
825,000 412,500 453,750 495,000
850,000 382,500425,000 467,500 510,000
900,000 405,000450,000 495,000 540,000
950,000 427,500475,000 522,500 570,000
1,000,000 500,000 550,000 600,000
1,025,000 512,500 563,750 615,000
- ----------------------------------------------------------------------
Salary and bonus areused to compute pension benefits is salary earned during the
preceding year. Salary is calculated in the same manner as shown in the Summary
Compensation Table.SUMMARY
COMPENSATION TABLE on page 11. The bonus amount used to compute pension benefits
is the average of the two highest annual bonus percentages paid during the
preceding five years, multiplied by final annual salary. Bonus used in the
calculation is based on the amounts shown in the SUMMARY COMPENSATION TABLE on
page 11. There is no offset of pension benefits for social
14
security or other amounts. During 1994,Compensation used to compute pension benefits for the
Company implementedindividuals named in the SUMMARY COMPENSATION TABLE on page 11 as of December
31, 1997 is as follows:
C. H. Poindexter $846,156
E. A. Crooke $587,120
B. M. Ambler $469,388
C. W. Shivery $303,772
G. C. Creel $434,124
R. E. Denton $319,323
BGE has a program to secure the supplemental pension benefits for each
executive officer, and a program to secure deferred compensation of theeach
executive officers,officer, including those listed in the Summary Compensation Table. The program doesSUMMARY COMPENSATION TABLE on
page 11. These programs do 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.or deferred compensation. To provide security, accrued supplemental
pension benefits and deferred compensation are now being funded through a trust at the
time they are earned. An executive officer's accrued benefits in the
supplemental pension 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 CompanyBGE 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 supplemental pension
trust upon the later of age 55 or employment termination. To
date, noAn executive's
benefits under the deferred compensation plan always are fully vested and are
payable at employment termination. Any payments have been made to the trust. Future payments will bethese trusts are included in
the Summary Compensation Table.
9
SUMMARY COMPENSATION TABLE in the ALL OTHER COMPENSATION column.
SEVERANCE AGREEMENTS
RELATING TO THE MERGER
InDuring 1995, in connection with the Merger,proposed merger with Potomac Electric
Power Company (PEPCO), employment agreements were executed with Messrs.
Poindexter and Crooke, each signed an
employment agreement dated as of September 22, 1995 with Constellation Energy
Corporation. Mr. Poindexter's agreement provides that he will serve as Chief
Executive Officer from the time the Merger is completed and that he will become
Chairman one year after the Merger is completed. Mr. Crooke's agreement provides
that he will serve as Vice Chairman of Constellation Energy Corporation and also
as Chairman of all the non-utility subsidiaries. These agreements remain in
effect for five years after the Merger is completed.
In December 1995, BGE entered into severance agreements were executed with 15 key
employees.
Mr. Creel and 4 other key employees who had severance agreements terminated
their employment with BGE, which entitled them to benefits under their severance
agreements. The agreements become bindingprovide benefits equal to two times the sum of (1)
annual base salary and (2) the average of the two highest annual incentive
awards paid in the last five years. The severance benefits are being paid in 24
monthly equal installments beginning on Constellation Energy Corporation at
the timefirst day of the Merger is completedmonth after
employment ceased. The agreements also provide for retirement, medical and
remaindental benefits that are computed without any penalty for early retirement.
The employment agreements with Messrs. Poindexter and Crooke, and the
severance agreements for the remaining 10 key employees, were terminated in
effect for two years thereafter.December, 1997, when BGE and PEPCO mutually terminated the proposed merger.
After these agreements were terminated, BGE entered into new severance
agreements in December, 1997 with Messrs. Poindexter, Crooke, Ambler, Shivery,
Denton, and one other key employee. The new severance agreements provide
forbenefits if (1) there is a change in control of BGE, and (2) within two years of
the payment of severance benefits to the
executive under certain circumstances including, but not limited to, the
following (i) upon termination of employment (other than for cause, death,
disability orchange in control, the executive's voluntary termination of employment without "good
reason") within the two year period following the time the Merger is completed
or (ii) termination of the executive's employmentterminated without cause,
or the executive's voluntary termination following the occurrence of certain events
that constitute "good reason" prior to the time the Merger is completed.
If the employment of all executives withexecutive resigns for good reason.
The new severance agreements had been
terminated as of December 31, 1995, under circumstances giving riseprovide benefits to an entitlementexecutive who is
ineligible to retire equal to two and one-fourth times the sum of (1) the
executive's annual base salary and (2) the average of the executive's two
highest annual incentive awards paid in the last five years. These payments are
made in 24 equal monthly installments beginning on the first day of the month
after employment ceases. The agreements also
15
provide for 36 months of medical and dental benefits thereunder,on the aggregate valuesame terms as those
benefits are provided to any actively employed executive, and further provide
for continued life insurance benefits. For an executive who is eligible to
retire, the severance agreements provide benefits equal to two times the sum of
such(1) the executive's annual base salary and (2) the average of the executive's
two highest annual incentive awards paid in the last five years, also payable in
24 equal monthly installments after employment ceases. The executive's
retirement benefits would
have been approximately $9,105,478. For Mr. Ambler such value would have been
$993,909,will be computed without any penalty for Mr. Creel $632,000,early retirement,
and medical and dental benefits will be based on the same terms as any retiree
who is at least age 65 with 20 or more years of service. Further, for Mr. Shivery $616,292.
10
purposes
of other benefit plans, the executive will be treated as retiring at BGE's
request.
COMMON STOCK PERFORMANCE GRAPH
The following graph assumes $100 was invested on December 31, 19901992 in Baltimore Gas and Electric CompanyBGE
common stock, the S&P 500 Index and the 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.5-Year Performance Graph
EDGAR REPRESENTATION OF DATA[GRAPH APPEARS HERE--SEE PLOT POINTS USED IN PRINTED GRAPHIC
BGE DJ ELEC. UTIL. INDEX S&P 500
12/31/90 100 100 100
12/31/91 131 130 130
12/31/92 143 138 140
12/31/93 165 155 155
12/31/94 153 136 157
12/31/95 201 178 212
BELOW]
BGE S&P 500 DJ Elec. Util. Index
----- ------- --------------------
1992 100 100 100
1993 114.95 110.08 111.67
1994 107.19 111.53 97.92
1995 146.92 153.45 128.83
1996 146.24 188.68 130.15
1997 197.94 251.63 164.63
16
REPORT OF COMMITTEE ON
MANAGEMENT REGARDINGON EXECUTIVE
COMPENSATION
The members of the Committee on Management made up completely ofare all outside Directors,Directors. The
Committee is responsible for executive compensation policies. In addition to establishing
policies, theThe Committee also
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 CompanyBGE and its subsidiaries 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.
11
The Committee determined that the relevant labor market for executives is
the utility industry. Utilities used for comparison in 1995 were electric
utilities and combination electric/gas utilities that have annual revenues in
the $2-5 billion range, 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.
The Committee determined that the relevant labor market for BGE
executives is the utility industry. Utilities used for comparison in 1997 were
electric utilities and combination electric/gas utilities that have annual
revenues in the $2-5 billion range, analyzed 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 on page 16. For subsidiary executives, the Committee also used
labor market data from various industries that are similar to their diversified
businesses.
Total compensation is made up of three components: base salary,
short-term incentive awards, and long-term incentive awards. The Committee's
philosophy is that base salary should approximate the median level of the
relevant labor market. Base salary ranges did not changeand short-term incentive awards should
approximate the median level of the relevant labor market for Messrs.average
performance, and the 75th percentile for superior performance. Long-term
incentive awards for superior performance should bring total compensation to
approximately the 75th percentile of the labor market. As described below,
corporate and/or diversified business performance are among the criteria used by
the Committee in determining base salary, and are key components in determining
both short-term and long-term incentive awards.
Base salary range increases for Mr. Poindexter and Crooke in 1995.
Forthe other named
executives in 1995 base salary range increases1997 were based upon survey data from the relevant labor market and the policies mentioned above.
SalaryBase salary increases during 19951997 for Mr. Poindexter and the other named
executives were based upon 1994determined by the Committee taking into account 1996 corporate
and/or diversified business performance, (consolidated corporate
earnings from ongoing operations increased 8.1% or $.15 per shareeach executive's position in 1994
compared to 1993, and utility earnings from ongoing operations increased 6.2%,
or $.11 per share in 1994 compared to 1993),the salary
range, individual performance, and the corporate response to changes in the
industry and the regulatory environment. No specific weights were assigned to
the various factors. Mr. Poindexter's base salary increase of 8% moved him to6.0% maintained
his position in the mid-pointmiddle third of his salary range.
Bonus payments toamounts for Mr. Poindexter and other executives represent the
short-term incentive component of executive compensation. The Committee setsFor 1997 short-term
incentive amounts, as well as the mix among base salary, short-term
incentive compensationawards for Messrs. Poindexter, Crooke, Ambler, Creel and long-term incentive compensation, to bring total
compensation in line with survey data for the relevant labor market. For 1995
short-term incentive awards,Denton, the
Committee determined that the appropriate
measure foran earnings was earnings from ongoing operations, which had the effect
of eliminating the $.07 per share reduction related to the write-off of $9.7
million of assetsgate based on the balance sheet, which comprised the remaining
construction work in progress costs associated with the first combined cycle
unit at the Company's Perryman site (in September 1995 BGE determined it would
not build the second combustion turbine for the first combined cycle unit at
Perryman Site). Both Mr. Poindexter's and Mr. Crooke's short-term bonuses were
based upon corporate performance measured by the following factors: highereither consolidated
corporate earnings from ongoing operations (an increaseor utility earnings applicable to common stock would be used
to determine whether any award would be paid. Because applicable 1997 earnings
were below the gate amounts, no awards were paid to these executives. Mr.
Shivery was not subject to an earnings gate, due to the Committee's desire that
he focus his
17
efforts on the successful start-up of 3.89% or
$.078 per share,Constellation Power Source, which was
formed in 1995 comparedFebruary, 1997. In recognition of Mr. Shivery's significant
accomplishments, an award was paid to 1994), weighted at 70%; and corporate
business plan performancehim, as shown in the following areas: customer satisfaction,
innovation, and internal business perspectives, together weighted at 30%.
Messrs. Creel's and Shivery's short-term incentive bonuses were based upon two
factors of equal importance: higher consolidated corporate earnings as described
above, and achievement of operational targets contained in their respective
divisional (nuclear and fossil for Mr. Creel and finance and accounting for Mr.
Shivery) business plans. Mr. Ambler's bonus was based upon net income from
Constellation Holdings ($27.1 million in 1995, up from $13.8 million in 1994)
weighted at 50%; higher consolidated corporate earnings as described above,
weighted at 20%; and operational targets contained in Constellation Holdings'
business plan weighted at 30%.
12
The last component of executive compensation is long-term incentive pay. For
many years, restrictedSUMMARY COMPENSATION
TABLE on page 11.
Shareholders approved the BGE common stock awards with only a continued-service
contingency under the former Long-Term Incentive Plan was the only form of
long-term incentive pay for executives. The former Plan was approved by
shareholders at the 1985 Annual Meeting of Shareholders and was in effect from
1985 until 1995. Such service-based 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 service-based
restricted stock awards were made to the named executives in 1995 under the
former Long-Term Incentive Plan, which expired in October 1995.
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 only awards
made to date under the 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 1995 Long-Term Incentive Plan was approved by the shareholders at the 1995 Annual
Meeting of Shareholders andShareholders. The Plan will be in effect until 2005. The Committee
specifically included numerousmany 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 in 1995 of performance-basedPerformance-based restricted stock weregenerally
with three-year performance periods was granted under the Plan in 1995, 1996,
1997 and 1998 to the named executivesexecutives. The performance period for the 1995
grants ended in 1997 and the award payouts are includeddescribed below. The 1996 and
1997 grants are shown in footnote 21 to the Summary Compensation TableSUMMARY COMPENSATION TABLE on page
7. Awards of performance-based restricted
stock granted in 1996 to the named executives11. The 1998 grants are shown on the Long-Term Incentive Plan table on page 8.13.
The awards are subject to forfeiture if
corporate performance criteria are not satisfied
or if the executive's employment terminates for certain reasons during the
1995-1997 and 1996-1998applicable performance periods.period.
The corporate performance criteria for the 1998 grants for all named executives
except Mr. Ambler
for both periods are measured byinclude a corporate total shareholder return overmeasure for the three-year
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:performance graph). For this criterion, the award payout can range from a
threshold award at the 50th percentile, progressing to a maximum payout if
percentile rank for total shareholder return equals or exceeds the 75th
percentile. For BGE executives, total shareholder return has been the only
performance criterion since the 1995 grants.
For Mr. Ambler, the performance objectives for both
theShivery's 1995 and 1996 awardsgrants, corporate total shareholder
return was the sole performance criterion. For his 1997 and 1998 grants, the
Committee determined that it was also appropriate to establish a Constellation
Power Source (CPS) performance criterion for a portion of each award, to more
closely tie his long-term incentive compensation to CPS performance. The CPS
performance criterion is a business value appreciation formula, utilizing CPS
cumulative net income, book value, and derived market value. A cumulative net
income threshold will be established for each performance measurement period.
Since the business value appreciation formula is intended to measure a surrogate
market value, no maximum award amount will be established. The number of shares
granted at the beginning of each performance period equals the targeted value of
the long-term incentive award. Because of the potential volatility of
performance in a business such as CPS, Mr. Shivery will have the option before
the end of the three years to extend the performance measurement period for an
additional two years for the portion of his grants tied to CPS performance.
Since Mr. Shivery was previously granted restricted stock under the BGE
Long-Term Incentive Plan for 1997 reflecting his then-current role as BGE Chief
Financial Officer, his 1997 grant was retroactively increased to reflect the
higher level of targeted long-term compensation associated with his position as
President of CPS.
For Mr. Ambler's 1995 and 1996 grants, the performance criterion measures
improvement in Constellation Holdings' cumulative net income over each
three-year period. For his 1997 grant, the performance criteria measure
corporate total shareholder return and Constellation Holdings' average return on
equity over the three-year period. For his 1998 grant, the criteria include both
corporate total shareholder return, and a business value appreciation formula
for Constellation Power, Inc. (CPI), the largest Constellation Holdings'
subsidiary. The business value appreciation formula for CPI is similar to the
formula for CPS described above. No maximum award amount will be established for
Mr. Ambler's 1998 grant.
The named executives earned awards of BGE common stock under the BGE
Long-Term Incentive Plan, based on the 1995-1997 performance period. Awards for
Messrs. Poindexter, Crooke, Shivery, Creel and Denton were above target based on
BGE total shareholder return during the three-year performance
18
period at the 64th percentile, which exceeded the target of the 62.5th
percentile. Mr. Creel and Mr. Denton were also awarded additional shares
reflecting their higher level executive responsibilities due to their promotions
during the performance period, and Mr. Creel's award was prorated to reflect his
November 1, 1997 retirement. Mr. Ambler's award was below target because
Constellation Holdings' cumulative net income over the same three yearthree-year performance
period was below target. All awards included BGE stock purchased with dividends
paid on award shares throughout the performance 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 incentiveThese awards to the
named 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. If such awards are granted, the Committee expects the same types
of criteria will be considered.
13
The Committee is evaluating the total director compensation package and
expects to make recommendationsshown in the future as tocolumn of the compensation package
that makes the most sense for the new company. Matters under consideration
include whether compensation should be paid in stock, cash or a mix and whether
the current structure (a retainer, meeting fees, and retirement benefits) is
optimal.SUMMARY COMPENSATION TABLE on
page 11 titled LONG-TERM COMPENSATION -- LONG-TERM INCENTIVE PLAN PAYOUT.
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 has considered annually whether it
should adopt a policy regarding 162(m) and concluded it was not appropriate to
do so during
1995.so. One reason for the conclusion is that, assuming the current compensation
policies and philosophy remain in place, the limitations of Section 162(m) will not be applicablehave
only minimal applicability currently and in the near term for any executive's compensation. However, thefuture. The Committee also
notes that while generally it wishes to maximize the deductibility of
compensation, the Committee believes the 162(m) requirements are not fully
consistent with sound executive compensation policy and incentives to improve
shareholder value. Therefore, the Committee may in the future approve incentive payments that
do not qualify for deduction if the recipient's compensation exceeds the $1
million limit.
Jerome W. Geckle, Chairman Dan A. Colussy
J. Owen Cole Michael D. Sullivan
ITEM 2. ELECTION OF AUDITORS
Coopers & Lybrand L.L.P., Certified Public Accountants,19
SHAREHOLDER PROPOSAL
We 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 L.L.P. AS INDEPENDENT
AUDITORS FOR THE COMPANY FOR THE YEAR 1996. A member of Coopers & Lybrand L.L.P.
will be present at the Annual Meeting and will be given an opportunity to makeadvised by Charles F. Dobry, Jr., 783 Riverdale Avenue,
Baltimore, Maryland 21237, a statement and answer appropriate questions.
The consolidated financial statements for the previous fiscal year were
examined by Coopers & Lybrand L.L.P. In connection with the auditor function,
Coopers & Lybrand L.L.P. 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 L.L.P. 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 L.L.P. as auditors for the Company.
ITEM 3. 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. The Board of Directors
objection to the proposal is set forth on page 16.
14
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 the
Company'swho beneficially owns common stock with
a market value of at least $1,000, has advised the
Company that they intendhe intends to submit the following
proposal for action at the Annual Meeting.annual meeting.
THE BOARD OF DIRECTORS OPPOSES THE PROPOSAL AND RECOMMENDS A VOTE
"AGAINST" IT. The Board of Directors' objection is on page 21.
The following proposal is presented word-for-word as it was submitted to
us by the shareholder:
BALTIMORE GAS & ELECTRIC COMPANY (BGE)
SHAREHOLDER PROPOSAL CONCERNING
CONFIDENTIAL VOTING
BE IT RESOLVED: That the shareholdersstockholders of Baltimore Gas & Electric Co. (the "Company"Company
(BGE). ("Company") request the, recommend that our Board of Directors take the steps
necessary to refrain inadopt and implement a policy of CONFIDENTIAL VOTING at all meetings
of its stockholders, which includes the future from providing pensionfollowing provisions:
1. That the voting of all proxies, consents and authorizations be secret,
and that no such document shall be available for examination nor shall
the vote or other retirement benefits to
non-employee or outside Directors unless such benefits are
specifically submittedidentity of any shareholder be disclosed except 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 onextent necessary to meet the Board, Directors owe their fundamental allegiance to the
shareholderslegal requirements, if any, of the
Company --Corporation's state of incorporation; and
2. That the receipt, certification and tabulation of such votes shall be
performed by independent election inspectors.
SUPPORTING STATEMENT:
It is the proponents' belief that it is vitally important that a system of
CONFIDENTIAL PROXY VOTING be established at BGE. Confidential balloting is a
basic tenet of our political electoral process ensuring its integrity. The
integrity of corporate board elections should also be protected against
potential abuses given the importance of corporate policies and practices to
corporate owners who elect them --(stockholders) and notour national economy.
The implementation of a CONFIDENTIAL VOTING SYSTEM would enhance
shareholder rights in several ways. First, in protecting the confidentiality of
the corporate ballot, shareholders would feel free to management.
We believe, however, that certain business or financial
relationships can adversely affect the abilityoppose management nominees
and issue positions without fear of Directors to
function in their appropriate oversight role.retribution. This is especially criticalimportant
for so-called outside or independent Directors who are
not employeesprofessional money managers whose business relationships can be jeopardized
by their voting positions.
A second important benefit of CONFIDENTIAL VOTING would be to invigorate
the Company and who should bring a certain
arms-length objectivity to Board deliberations. According to a
recent Company 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 effectcorporate governance process 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 effect of compromising their
independence and impartiality.Corporation. We believe that this additional
layershareholder
activism would be promoted within the Corporation. It is our belief that
shareholders empowered with a free and protected vote would be more active in
the proposing of compensation to outside Directors may influence their
ability to exercisecorporate policy resolutions and alternate board candidates.
Finally, it is our belief that degree of independent from management
which is critical to the proper functioningenhancement of the Board.
Because of our strong concern for maximizingproxy voting process
would change the ability of
the Board of Directorssystem where too often shareholders vote "with their feet," not
with their ballots. This change would help to actdevelop a long-term investment
perspective where corporate assets could be deployed, and used 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,a more
effective and they need not be "double-dipping" at our Company.
15efficient manner.
THE VAST MAJORITY OF MAJOR CORPORATIONS HAVE ADOPTED a CONFIDENTIAL VOTING
POLICY and IT'S TIME FOR BGE TO JOIN THEM.
WE URGE YOU TO VOTE FOR THIS PROPOSAL.
20
This resolution was supported by 36% of the shareholders
voting on the proposal at the last annual meeting.
We urge you to vote for this resolution!
BOARD OF DIRECTORS' OBJECTIONS TO THE SHAREHOLDER PROPOSAL
TheBGE's Board of Directors and Management recommend athat shareholders vote
AGAINST thethis proposal. Both Management and the Board share the proponents "strong concern for
maximizingA confidential voting policy would substantially limit
the ability of shareholders and BGE to communicate with each other, and would
not significantly enhance the confidentiality already available to shareholders.
BGE's existing proxy solicitation system allows shareholders the freedom to
choose whether to vote on a confidential basis. A shareholder who wants
anonymity and confidentiality may hold shares in street name through a bank,
broker, or other nominee who cannot disclose the names of the shareholder
without the shareholder's permission. Shares held by employees in BGE's employee
savings plan are held in trust and voted by the plan trustee. BGE has no access
to the voting instructions employees provide to the trustee. Under the terms of
a trust agreement, plan participants confidentially direct the trustee how to
vote.
Shareholders who choose not to vote on a confidential basis may openly
communicate with Management. Large institutional shareholders use their votes on
particular issues to send messages to Management. Other shareholders use proxy
cards to write comments to Management. The Board of Directors must be able to
use these extremely valuable sources of information to learn the viewpoints of
its shareholders.
A confidential voting policy would impair BGE's ability to contact
shareholders on issues that are important to BGE's success. The Board of
Directors must be able to clarify directly with shareholders issues of
importance to BGE and shareholders, and when necessary to counter false
statements in proxy contests. BGE may need to contact shareholders who have not
voted their proxies to encourage them to vote on important issues. BGE also may
contact shareholders whose proxy cards aren't correctly completed, so that their
shares will be voted as they intended. Contact with shareholders is critical in
these situations so that the Board of Directors to actcan proceed in the shareholders'
interests...". In orderbest interest
of BGE and all of its shareholders, and a confidential voting policy would limit
the Board of Directors' ability to best servedo this.
The proponent argues that confidential voting is necessary to ensure the
interestsintegrity of board elections and protect shareholders from retribution. This is
a farfetched notion for corporate governance and has no historical basis at BGE.
BGE is a good corporate citizen as many long-time shareholders know, and has
always conducted its shareholder solicitations in a fair and equitable manner,
without any threat of retribution. Further, contrary to the Company
believesproponent's claim
that shareholder activism would be promoted with confidential voting, it must attract and retain qualified directors who possess a broad
rangehas not
been the experience of leadership qualities and experience. As adequate compensation is
requiredBGE that its shareholders are reluctant to retain appropriate leadership, the Company has designed its director
compensation policies to meet this objective.
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 recommendationscommunicate
with Management because of the Committee onabsence of confidential voting. Activist
shareholders want Management to know who they are adopted only after discussion by the Board, and such action is
permitted by Maryland corporate lawwhat they stand for.
BGE's existing proxy solicitation system encourages open communication with
shareholders. It permits confidentiality for those who desire it, but does not
mandate it for all shareholders. The existing system has served shareholders
fairly for many years, and BGE's charter and by-laws.
Based on the above review, both the payment ofhas been a retirement benefit and the
amount of BGE's benefit are typical in other public companies. Hencevaluable tool to help 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 infers that
the independence and impartiality of directors is somehow compromised by the
knowledge that they may receive future compensation in the form of retirement
benefits. Management and the Board reject this inference as unsupported and
believe that compensation for current service paid out after retirement is an
effective method to ensure that directors serve the long-term interests of
shareholders. 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 ofsuccessfully run 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.
1621
OTHER MATTERS
The Board of Directors knows of no matters to be presented for action at the
Annual Meeting other than the three items 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[RECYCLE LOGO] This Statement was printed
entirely on such matters in accordance with
their best judgment.
SHAREHOLDER PROPOSALS FOR 1997
Proposals by shareholders intended to be presented at the 1997 Annual
Meeting must be received no later than November 9, 1996 for inclusion in the
proxy materials. Proposals should be mailed to the attention of the Corporate
Secretary, Baltimore Gas and Electric Company, 39 West Lexington Street,
Baltimore, Maryland 21201. Proposals will not be accepted by facsimile.
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.
17recycled paper.
TEAR HERE ALONG PERFORATION
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
[BGE LOGO] BALTIMORE GAS AND ELECTRIC COMPANY
P.O.P. O. BOX 1642, BALTIMORE, MARYLAND 21203-1642
COMMON STOCK PROXY FOR ANNUAL MEETING OF SHAREHOLDERS - APRIL 23, 1996Common Stock Proxy for Annual Meeting of Shareholders -- April 24, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PLEASE VOTE AND SIGN ON THE 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 23,
1996,24, 1998, 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 AND& 2 AND "AGAINST" ITEM 3 ON THE REVERSE OF THIS CARD.
(OVER)(over)
THIS IS YOUR PROXY FOR THE NORMAL
ANNUAL MEETING OF SHAREHOLDERSCARD
TEAR HERE, VOTE, SIGN
&AND RETURN IN THE PRE-ADDRESSED
POSTAGE PAID ENVELOPE
TEAR HERE ALONG PERFORATION
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 AND& 2 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 / / / / / /
A VOTEAND "AGAINST" ITEM 3
IS RECOMMENDED:
3. SHAREHOLDER PROPOSAL REGARDING FOR AGAINST ABSTAIN
DIRECTOR RETIREMENT BENEFITS / / / / / /
/ /
1. THE ELECTION OF 13 DIRECTORS FOR AGAINST ABSTAIN
| | FOR all nominees, except as | | WITHHOLD AUTHORITY 2. RATIFICATION OF THE SELECTION OF | | | | | |
lined through below. (To vote (ABSTAIN) from voting COOPERS & LYBRAND L.L.P. AS OUR
AGAINST any or all nominees for all nominees. INDEPENDENT ACCOUNTANTS FOR 1998
line through their names.)
H.F. Baldwin B.B. Byron J.O. Cole D.A. Colussy 3. SHAREHOLDER PROPOSAL REGARDING | | | | | |
E.A. Crooke J.R. Curtiss J.W. Geckle F.A. Hrabowski, III CONFIDENTIAL VOTING
N. Lampton G.V. McGowan C.H. Poindexter G.L. Russell, Jr.
M.D. Sullivan
| | Please check this box if you plan to attend the 1998 annual meeting.
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 ________________________
BALTIMORE GAS AND ELECTRIC COMPANY Signature ____________________________________ Date ________________________
CHRISTIAN H. POINDEXTER Baltimore Gas and Electric Company
Chairman of the Board 39 W. Lexington Street
and Chief Executive Officer Baltimore, Maryland 21201
April 7, 1998
[LOGO]
Dear Shareholder:
As of April 3, 1998, we had not received your proxy card for the 1998 annual
shareholders meeting to be held April 24th.
We appreciate the support of our shareholders and encourage you to vote your
shares, regardless of the size of your holdings. We have, therefore, enclosed a
second proxy card so that you can vote your shares. Whether or not you plan to
attend the 1996meeting, please complete and return the enclosed proxy card to ensure
that your vote will be counted at the meeting.
Our initial mailing to you also included a proxy statement and our 1997 annual
meeting.
BALTIMORE GAS AND ELECTRIC COMPANYreport to shareholders. If you would like to receive a duplicate copy of these
documents, simply contact one of our shareholder representatives in metropolitan
Baltimore at 410-783-5920, within Maryland at 1-800-492-2861, or outside
Maryland at 1-800-258-0499.
Sincerely,
/s/ C.H. Poindexter
Chairman of the Board
Enclosures
Please sign below, exactly as name appearsfold and detach card 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 ________________
perforation before mailing
- --------------------------------------------------------------------------------
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: T. ROWE PRICE TRUST COMPANY, AS TRUSTEE UNDER THE BALTIMORE GAS AND ELECTRIC
COMPANY EMPLOYEE SAVINGS PLAN
I hereby instruct T. Rowe Price Trust Company, as Trustee under the Baltimore
Gas and Electric Company Employee Savings Plan (Plan), to vote, by proxy, all
shares of common stock of Baltimore Gas and Electric Company (Company)(BGE) allocated to
me under the Plan at the annual meeting of the shareholders of the CompanyBGE to be held on
April 23, 1996,24, 1998, 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 Jerome W.
Geckle, George V. McGowan and Christian H. Poindexter, in their discretion,
shall vote in person 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 cardVoting Instructions Card if
properly signed and received by April 16, 1996.17, 1998. 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:BGE: "FOR" ITEMS 1 AND 2,
AND "AGAINST" ITEM 3. The Trustee is not permitted under the Plan to vote shares
of common stock unless voting instructions have been received.
(over)
------------------
From: | First Class Mail |
T. ROWE PRICE RETIREMENT PLAN SERVICES, INC. | U.S. Postage |
BGE PST | PAID |
P.O. Box 17215 | Baltimore MD |
Baltimore, MD 21297-0354 | Permit #250 |
------------------
Please fold and detach card at perforation before mailing
- --------------------------------------------------------------------------------
PLEASE MARK YOUR CHOICE LIKE THIS [X]VOTE BY FILLING IN DARK INK.THE APPROPRIATE BOX(ES) BELOW.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 AND 2 IS RECOMMENDED:
/ / FOR all nominees listed at left (except as marked to the contrary - see
INSTRUCTION)
/ / WITHHOLD AUTHORITY to vote for all nominees listed at left
1. THE ELECTION OF 14 DIRECTORS
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
(INSTRUCTION: To vote against any individual nominee, strike a line through that
nominee's name.)
FOR / / AGAINST / / ABSTAIN / /
2.
ELECTION OF COOPERS & LYBRAND AS AUDITORS
A VOTE "AGAINST" ITEM 3 IS RECOMMENDED:
FOR / / AGAINST / / ABSTAIN / /
3. SHAREHOLDER PROPOSAL REGARDING DIRECTOR RETIREMENT BENEFITS
Date
-------------------------
Please sign below, exactly as your name appears to the left.
- ------------------------------
1. THE ELECTION OF 13 DIRECTORS FOR all nominees listed at WITHHOLD AUTHORITY
left, except as lined through (ABSTAIN) from voting
H.F. Baldwin, B.B. Byron, J.O. Cole, D.A. Colussy, E.A. Crooke, (To vote AGAINST any or all for all nominees.
J.R. Curtiss, J.W. Geckle, F.A. Hrabowski, III, N. Lampton, nominees line through their names.)
G.V. McGowan, C.H. Poindexter, G.L. Russell, Jr., M.D. Sullivan | | | |
2. RATIFICATION OF THE SELECTION OF FOR AGAINST ABSTAIN
COOPERS & LYBRAND L.L.P. AS OUR | | | | | |
INDEPENDENT ACCOUNTANTS FOR 1998
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEM 3.
3. SHAREHOLDER PROPOSAL REGARDING CONFIDENTIAL VOTING | | | | | |
BALTIMORE GAS AND ELECTRIC COMPANY
Date _____________
Please sign below, exactly as your name appears to the left.
| |
| |
SIGNATURE
BALTIMORE GAS AND ELECTRIC COMPANY
[LOGO] SM BALTIMORE GAS AND ELECTRIC COMPANY
ANNUAL MEETING OF SHAREHOLDERS
APRIL 23, 1996, 10:00 A.M.
SHERATON INNER HARBOR HOTEL
300 South Charles Street, Baltimore, Maryland 21201
IF YOU PLAN TO ATTEND THE MEETING, PLEASE MARK THE BOX PROVIDED ON YOUR
PROXY. ADMISSION TICKETS ARE NOT REQUIRED FOR ENTRANCE TO THE MEETING. The
Sheraton Inner Harbor Hotel is handicapped-accessible. We want to make every
reasonable effort to accommodate shareholders with special needs relating to:
(1) access to the meeting facilities; or (2) their ability to participate in
the meeting. If you need special accommodations, please fill out and return
this card with your proxy. We will contact you promptly to let you know what
arrangement, if any, we are able to make.
Name: ________________________________ Daytime Phone #: _________________
General Nature of Accommodation Requested: _________________________________
____________________________________________________________________________
If you have any questions, please call us between 8:00 a.m. and 4:45 p.m.
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.
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 Card for the Annual Meeting of Shareholders, of the
Company, to be held
on April 23, 1996,24, 1998, are being furnished to you by theBaltimore Gas and Electric
Company (BGE) on behalf of T. Rowe Price Trust Company, Trustee under the Plan.
In accordance with the Plan and the Trust Agreement between the CompanyBGE 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 Card and return it in the accompanying envelope by April 16, 1996.17, 1998.
After receipt of the properly executed Voting Instructions Card, the Trustee
will vote as directed by those instructions. The Trustee is not permitted to
vote your shares of common stock unless Voting Instructionsvoting instructions have been received.
Each participant in the Plan who is a holder of record of other shares
of CompanyBGE stock will continue to receive, separately, a proxy card and accompanying
proxy material to vote the shares of common stock registered in his or her name.
D.L. FeatherstoneElaine W. Johnston
Plan Administrator
BALTIMORE GAS AND ELECTRIC COMPANY
EMPLOYEE SAVINGS PLAN
T. Rowe Price Trust Company, Trustee of the Employee Savings Plan, has not
received a Voting Instructions cardCard for the 1998 meeting for the shares that you
hold in the Plan. The Trustee is not permitted to vote your shares of common
stock unless Voting Instructionsvoting 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 cardCard so that you can vote your
shares. Whether or not you plan to attend the meeting, we
would appreciate your completingplease complete the
Voting Instructions cardCard and returningreturn it to the Trustee in the envelope provided
by April 16, 1996.17, 1998.
Our initial mailing to you included a proxy statement and annual report.statement. If you would like to
receive a duplicate copy, of this information, please contact one of our shareholder representatives
in metropolitan Baltimore at 783-5920,410-783-5920, within Maryland at 1-800-492-2861,
outside Maryland at 1-800-258-0499, or TTY/TTD at 1-800-492-5539.
D. L. Featherstone1-800-258-0499.
Elaine W. Johnston
Plan Administrator
CHRISTIAN H. POINDEXTER Baltimore Gas and Electric Company
Chairman of the Board 39 W. Lexington Street
and Chief Executive Officer Baltimore, Maryland 21201
April 5, 1996
[LOGO]
Dear Shareholder:
As of April 3, 1996, we had not received your proxy for the 1996 annual
shareholders meeting to be held April 23rd.
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 you 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,
/s/ CH POINDEXTER
Chairman of the Board
Enclosures