IMPORTANT
Stockholders are cordially invited to attend the annual stockholders'
meeting. If you will be unable to attend in person, it is important that
you fill out, sign and return the enclosed proxy promptly in order to insure
a proper representation at the meeting.
BANGOR HYDRO-ELECTRIC COMPANY
NOTICE OF ANNUAL MEETING
APRIL 24, 2002
To The Stockholders:
The Annual Meeting of the stockholders of Bangor Hydro-Electric Company will
be held on Wednesday, April 24, 2002 at 9:00 o'clock a.m. at the Sheraton
Four Points Hotel, 308 Godfrey Boulevard, Bangor, Maine (adjacent to Bangor
International Airport) for the following purposes:
1) To elect three directors to serve three year terms;
2) To amend the Articles of Incorporation of the Company to reduce the par
value of the Company's common stock from $5.00 to $0.00;
3) To amend the Articles of Incorporation of the Company to permit the
Company to make capital distributions or to repurchase common or preferred
shares out of the unreserved and unrestricted capital surplus of the
Company.
4) To transact such other business as may properly come before the meeting.
The Board of Directors has fixed the close of business on March 15,
2002 as the record date for the determination of stockholders of the Company
entitled to notice of and to vote at the Annual Meeting. Accordingly, only
stockholders of record at the close of business on March 15, 2002 will be
entitled to vote at said meeting.
IF YOU DO NOT PLAN TO ATTEND THE MEETING, YOU ARE URGED TO DATE, SIGN
and RETURN the enclosed proxy. An addressed envelope, which requires no
postage if mailed in the United States, is provided for your use.
By Order of the Board of Directors
Andrew Landry
Clerk
Bangor, Maine
March 15, 2002
BANGOR HYDRO-ELECTRIC COMPANY
33 State Street
Bangor, Maine 04401
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 24, 2002
The accompanying proxy to be mailed on or about March 15, 2002 is
solicited by the Board of Directors of Bangor Hydro-Electric Company and the
cost of such solicitation will be paid by the Company. The person giving the
proxy has the power to revoke it at any time before it is exercised (1) by
delivery to the Clerk of the Company of any written instrument which by its
terms revokes the proxy, (2) by duly executed proxy subsequent in time to
the original proxy, (3) by the presence of the stockholder at the Annual
Meeting and the giving of notice to the Clerk of the Company of such
revocation, or 4) by giving notice in open meeting at the Annual Meeting of
such revocation.
The Company will bear the cost of the solicitation of proxies,
including the charges and expenses of brokerage firms and others for
forwarding solicitation material to beneficial owners of shares of the
Company's Common Stock and Preferred Stock. In addition to the use of the
mail, proxies may be solicited by employees of the Company, by personal
interview, by telephone or by telegraph.
VOTING SECURITIES OUTSTANDING AND PRINCIPAL HOLDERS THEREOF
The Company has outstanding 47,340 shares of Preferred Stock having
general voting rights of one vote per share and 7,363,424 shares of Common
Stock having general voting rights of one-twelfth of one vote per share.
Stockholders of record at the close of business on March 15, 2002 will be
entitled to vote at the Annual Meeting.
The following table sets forth as of March 1, 2002 information with
respect to persons known to management to be the beneficial owners of more
than 5% of any class of voting securities of the Company:
Title of Class
- ---------------
Common Stock
Name and Address of Beneficial Owner
- -------------------------------------
BHE Holdings Inc.
566 Washington Road
Rye, New Hampshire 03870
Amount and Nature of Beneficial Ownership
- ------------------------------------------
7,363,424 shares
Percent of Class
- -----------------
100.0%
The following table sets forth as of March 1, 2002 information with
respect to the beneficial ownership of equity securities by directors,
nominees for the office of director and named executive officers:
Title of Class Name of Beneficial Owner Beneficially Owned*
- --------------------------------------------------------------------
Common Robert S. Briggs 1
Preferred Robert S. Briggs 28
Common Jane J. Bush 1
Common Christopher G. Huskilson 1
Common Paul A. LeBlanc 0
Common Norman A. Ledwin 1
Common Carroll R. Lee 1
Common Elizabeth A. MacDonald 1
Common David McD. Mann 1
Common Frederick S. Samp 0
Common Richard J. Smith 1
Common Ronald E. Smith 1
Common Directors & Executive
Officers as a group (11) 9
Preferred Directors & Executive
Officers as a group (11) 28
* The directors and executive officers of the Company as a group own a
beneficial interest in less than 1% of the Company's Common and Preferred
Stock.
ELECTION OF DIRECTORS
It is intended, unless otherwise instructed in the enclosed proxy, to
vote the proxies in favor of the election of the nominees named in the table
on the following page as directors to hold office until the expiration of
their respective terms and until their successors shall have been duly
elected and qualified. The nominees are now members of the Board of
Directors of the Company, each having served continuously since first
elected.
If, for any reason, any of the nominees are unable to serve (which
event is not now anticipated) it is intended that such proxies will be voted
for the election of such other person or persons as may be designated by a
majority of the directors.
The following table sets forth the nominees and the directors whose
terms continue, their ages, other positions held by them with the Company,
the date when they first became a director and their business experience
during the last five years (including any other directorship held by them in
any company with a class of securities registered pursuant to Section 12 of
the Securities Exchange Act of 1934 or subject to the requirements of
Section 15(d) of that Act, or in any company registered as an investment
company under the Investment Company Act of 1940 (referred to in the table
as "Reporting Companies")):
Name and Became Business Experience During Last 5 Years
Postion (Age) Director and Other Directorships
- ----------------------------------------------------------------------------
- -
CLASS I (NOMINEES FOR TERM EXPIRING IN 2005)
Robert S. Briggs (57)
Director 1985 Retired Chairman of the Board, President
and Chief Executive Officer of the Company;
Trustee of Eastern Maine Medical Center
Norman A. Ledwin (59)
Director 1996 President and Chief Executive
Officer and a Director of Eastern
Maine Healthcare, a healthcare
organization made up of not-for-
profit and for-profit entities
(including Eastern Maine Medical
Center, a not-for-profit regional
acute care hospital facility)
Elizabeth A. MacDonald (55)
Director 2001 Vice President, Human Resources of
Emera Inc., a parent of the Company;
From October 10, 1997 until November 9,
2001 was Vice President - Human
Resource of Nova Scotia Power Inc.;
Prior to October 10, 1997 was a self-
employed consultant
CLASS II (DIRECTORS WHOSE TERMS EXPIRE IN 2003)
Jane J. Bush (56)
Director 1990 President and co-owner of Coastal
Ventures, a retailing company
David McD. Mann (62)
Chairman 2001 President and Chief Executive Officer
and Director of Emera Inc., a parent
of the Company and a company traded
on the Toronto Stock Exchange;
President and Chief Executive Officer
and Director of Nova Scotia Power Inc.,
an affiliate of the Company and a company
with classes of securities traded
on the Toronto Stock Exchange; Director
of Logistec Corporation, a company
traded on the Toronto Stock Exchange;
Member of Maritimes and Northeast
Pipeline, LLC Management Committee;
Member of Maritimes and Northeast
Pipeline, LP Management Committee;
until July 22, 1996 was a senior
partner with the Halifax, Nova Scotia
law firm of Cox Downie
Richard J. Smith (50)
Director 2001 Corporate Secretary and General
Counsel of Emera Inc., a parent
of the Company; Corporate Secretary
and General Counsel of Nova Scotia
Power Inc., an affiliate of the Company
CLASS III (DIRECTORS WHOSE TERMS EXPIRE IN 2003 IN 2004)
Christopher G. Huskilson (44)
Vice Chairman 2001 Chief Operating Officer of Nova Scotia
Power Inc., an affiliate of the Company;
Member of the Planning Committee of the
Northeast Power Coordinating Council
Carroll R. Lee (52)
President & Chief Operating Officer
and Director 1991 President and Chief Operating
Officer of the Company; Former
President of the Board of Community
Health and Counseling Service, a not-for-
profit supplier of home and mental health
care services
Ronald E. Smith (51)
Director 2001 Senior Vice President and Chief
Financial Officer of Emera Inc.,
a parent of the Company; Director of
Clear Picture Corporation; Director
of CrossOff Inc., a company traded on
the Toronto Stock Exchange; Director and
Chair of Audit Committee of Atlantic Blue
Cross Care; from September 1999 to October
2000 was an independent consultant; from
March 1999 to September 1999 was Chief
Financial Officer, Telecommunications,
for Aliant Inc.; prior to March 1999 was
Chief Financial Officer for Maritime Tel
& Tel Co. Ltd.
In 2001, the Board met on eleven occasions.
The Board of Directors has one standing committee, its Audit Committee.
The Audit Committee reviews with the independent public accountants the
scope and results of their audit and other services to the Company, reviews
the adequacy of the Company's internal accounting controls and reports to
the Board as necessary. The Audit Committee presently consists of Jane J.
Bush, Norman A. Ledwin, Richard J. Smith and Ronald E. Smith. Neither
Richard J. Smith nor Ronald E. Smith are independent under the listing
standards of the New York Stock Exchange since both are employees of Emera
Inc., a parent of the Company. With respect to Mr. Ledwin, the Board
determined that Mr. Ledwin's affiliation with Eastern Maine Healthcare,
which has an indirect business relationship with the Company, does not
interfere with his exercise of independent judgment. Prior to the
completion of the Company's merger with Emera Inc., the Audit Committee was
composed of Ms. Bush as Chair, and former Directors David M. Carlisle,
Marion M. Kane and James E. Rier, Jr., each of whom was independent under
the listing standards of the New York Stock Exchange. The Audit Committee
met four times during 2001. Audit Committee members and the Chair of the
Committee are appointed by the Chairman of the Board. The Board does not
have a compensation, investment or nominating committee.
AUDIT COMMITTEE REPORT
In overseeing the preparation of the Company's financial statements,
the Committee met with both management and the Company's outside auditors to
review and discuss all financial statements prior to their issuance and to
discuss significant accounting issues. Management advised the Committee
that all financial statements were prepared in accordance with generally
accepted accounting principles, and the Committee discussed the statements
with both management and the outside auditors. The Committee's review
included discussion with the outside auditors of matters required to be
discussed pursuant to Statement on Auditing Standards No. 61 (Communication
With Audit Committees).
With respect to the Company's outside auditors, the Committee, among
other things, discussed with Ernst & Young matters relating to its
independence, including the disclosures made to the Committee as required by
the Independence Standards Board Standard No. 1 (Independence Discussions
with Audit Committees).
On the basis of these reviews and discussions, the Committee
recommended to the Board of Directors that the Board approve the inclusion
of the Company's audited financial statements in the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 2001, for filing with
the Securities and Exchange Commission.
AUDIT COMMITTEE
Jane J. Bush, Chair
Norman A. Ledwin
Richard J. Smith
Ronald E. Smith
AUDIT COMMITTEE CHARTER
On January 11, 2000, the Audit Committee of the Board of Directors
adopted a formal written Charter. The Charter sets forth the purpose of the
Audit Committee, established criteria for assuring the independence of the
Committee's members, and describes the duties of the Committee. A copy of
the Charter was included with the definitive proxy statement for the annual
meeting of stockholders held on December 19, 2001.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table shows, for the fiscal years ending December 31,
2001, 200, and 1999, the cash compensation paid by the Company to the Chief
Executive Officer and to the other executive officers whose total salary and
bonus exceeded $100,000:
SUMMARY COMPENSATION TABLE - ANNUAL COMPENSATION
Other Annual
Name and Principal Position Year Salary Bonus Compensation*
- -------------------------------------------------------------------------
Robert S. Briggs** 2001 $186,753 $140,000 $0
Chairman of the Board, President 2000 $236,102 $6,564 $3,400
& Chief Executive Officer 1999 $207,549 $66,499 $3,200
Carroll R. Lee** 2001 $190,131 $101,760 $3,400
President & Chief 2000 $180,289 $5,029 $3,400
Operating Officer 1999 $161,149 $37,968 $3,200
Frederick S. Samp 2001 $138,624 $61,283 $3,400
Vice President-Finance & Law 2000 $131,206 $3,664 $3,046
1999 $112,574 $21,457 $2,527
Paul A. LeBlanc 2001 $128,066 $51,186 $3,400
Vice President-Human Resources 2000 $121,285 $3,383 $2,800
& Information Services 1999 $101,031 $19,197 $2,246
* For each named executive officer, Other Annual Compensation consists of
the Company's matching contribution to a 401(k) Plan.
** On October 10, 2001, Mr. Briggs retired as Chairman of the Board,
President and Chief Executive Officer and Mr. Lee assumed the position of
President and Chief Operating Officer
The executive officers participate in a tax qualified defined benefit
pension plan that is also applicable to all employees. In addition, the
executive officers are parties to Supplemental Benefit Agreements with the
Company under which additional retirement benefits are to be paid. Said
agreements define the total pension amount to be paid to the executive
officer by the Company, with the supplemental amount defined as the
difference between this total amount due and the amount due to the executive
officer under the tax qualified pension plan applicable to all employees.
The total amount of pension benefit, as defined under the Supplemental
Benefit Agreements, is a function of the executive officer's age at
retirement and his average total compensation over a three-year period.
Under the Supplemental Benefit Agreements, no pension amount would be due
until the executive officer reaches age 55. At age 55, the executive
officer would be entitled to receive 50% of his or her average total
compensation over a three-year period. The total pension amount to be paid
upon retirement would increase proportionately until a retirement age of 62,
at which point the executive officer would be entitled to receive upon
retirement 75% of his or her average total compensation over a three-year
period. The following table sets forth estimated annual benefit amounts
payable upon retirement after age 55 to the executive officers:
Age at Retirement
- ----------------------------------------------------------------------------
- -
Average Total
Compensation 55 56 57 58 59 60 61 62+
$100,000 $50,000 $53,000 $57,000 $60,000 $64,000 $68,000 $72,000 $75,000
$150,000 75,000 79,500 85,500 90,000 96,000 102,000 108,000 112,500
$200,000 100,000 106,000 114,000 120,000 128,000 136,000 144,000 150,000
$250,000 125,000 132,500 142,500 150,000 160,000 170,000 180,000 187,500
$300,000 150,000 159,000 171,000 180,000 192,000 204,000 216,000 225,000
Compensation covered under the defined plan applicable to all employees
is total basic compensation exclusive of overtime, bonuses, and other extra,
contingent or supplemental compensation, and inclusive of compensation
deferred pursuant to the Company's Section 401(k) Plan. Compensation
covered under the tax qualified pension plan is limited to the amount set
forth in IRC Section 415. Subject to this limitation, it is essentially the
same as the amount shown as "Salary" in the Summary Compensation Table
above. Compensation covered by the Supplemental Benefit Agreements is total
compensation inclusive of bonuses, and other, contingent or supplemental
compensation, and compensation deferred pursuant to the Company's Section
401(k) Plan.
"Average Total Compensation" for both plans is computed using the
average of the total annual compensation actually paid by the Company to the
Executive during the thirty-six consecutive calendar months in which the
Executive's total compensation from the Company was the highest.
The total annual pension amounts shown in the Pension Plan Table above
are payable for the remainder of the executive officer's life after
retirement. If the executive officer's spouse survives the executive
officer, the spouse will receive an annual benefit for the remainder of her
life equal to 50% of the annual benefit to the executive officer. The total
annual pension amounts shown in the Pension Plan Table are not subject to
any deduction for Social Security or other offset amounts.
Mr. Briggs was a party to such a Supplemental Benefit Agreement at the
time of his retirement effective October 10, 2001.
The named executive officers are parties to agreements under which in
the event 1) of a change of control of the Company as defined in the
agreements and 2) the covered party leaves the employment of the Company
within one year after the change of control, he would be entitled to receive
a payment equal to two years' salary based upon his average salary over the
past three years. He would also be entitled to receive the Company's
standard health, life insurance and disability benefits for a period of two
years. Based upon the completion of the Company's merger with Emera Inc.,
the named executive officers would be entitled to receive this benefit upon
leaving the employment of the Company prior to October 10, 2002. Mr.
Briggs' retirement effective October 10, 2001 constituted such a termination
of employment pursuant to the terms of such an agreement.
The executive officers also participate in a long-term disability
income plan which is also applicable to all employees. Under the plan, after
90 days of disability, employees are entitled to receive 66 2/3% of their
basic monthly earnings up to a maximum monthly benefit of $5,000.
Directors who are not employees of the Company, Emera Inc. or other
Emera affiliates are paid a fee of $500 per meeting for attendance at
regular or special meetings of the Board, and $500 per meeting for
attendance at committee meetings (unless the committee meeting is held the
same day as another meeting for which a full meeting fee is paid, in which
case the fee is $250). The directors are also paid an annual retainer of
$6,000. Directors who are employees of the Company, Emera Inc. or other
Emera affiliates receive no fee for their services as directors.
COMPENSATION COMMITTEE INTERLOCKS
During 2001, Mr. Briggs served as a Trustee of Eastern Maine Medical
Center, a hospital facility located in Bangor, Maine. Mr. Ledwin, who serves
on the Board's Compensation Committee, is President, Chief Executive Officer
and a Director of Eastern Maine Healthcare, the organization that owns and
operates Eastern Maine Medical Center.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 2001, the Company made payments to Eastern Maine Healthcare, its
subsidiaries and affiliates, of $604,395. Mr. Ledwin, who serves on the
Company's Board of Directors, is President, Chief Executive Officer and a
Director of Eastern Maine Healthcare. Prior to the Company's merger with
Emera Inc. on October 10, 2001, Mr. Ledwin also served on the Compensation
Committee of the Company's Board of Directors. Subsequent to the Company's
merger with Emera Inc., Mr. Ledwin began serving on the Audit Committee of
the Company's Board of Directors.
Eastern Maine Healthcare owns and operates Eastern Maine Medical
Center, the second largest hospital in the State of Maine and the largest in
the region served by the Company, as well as several other health care
organizations in the region. The Company provides health care benefits to
its employees through a self insured managed care plan. An independent plan
administrator negotiates on behalf of the Company the rates for health care
services paid to individual providers under the plan, including Eastern
Maine Healthcare and its affiliates.
REPORT ON EXECUTIVE COMPENSATION
The Company manages its compensation programs in a manner intended to
attract, retain and motivate its people. Compensation, including executive
compensation, is intended to be established at competitive levels, with
progress within competitive ranges dependent upon qualifications, experience
and individual performance. In considering salary adjustments for the
president, the Board's determination is based upon its qualitative judgment
with respect to the president's performance in attending to the Company's
strategic priorities, and the Company's financial results as measured
against reasonable expectations.
The Company has been evolving toward a system that relies on base
salaries that are competitive, but that, especially at executive and senior
management levels, depends increasingly on incentive awards for the
achievement of predetermined performance criteria in order to earn
compensation at higher levels within the applicable competitive range.
However, the Company has had to maintain the competitiveness of the
compensation for management and employees at other levels in order to retain
talented people in critical functions. While the Board believed that this
concern should apply to the executive officers as well, the Board deferred
to the willingness of the Company's executives to forego attempts to keep
their compensation at competitive levels while the Company recovered its
financial health. In 1999 and 2000, adjustments were made to the base
salaries of the executives in order to move them closer to the competitive
range for such salaries. In addition, in 1999 the Compensation Committee of
the Board completed a long-pending project to implement revised supplemental
executive retirement plans to replace plans that are no longer appropriate,
a project that had been delayed in view of the more pressing priorities.
The Company has not included a long-term incentive component to its
compensation program, but anticipates that its 2002 incentive compensation
program will begin to incorporate such an incentive.
Since 1991, the Company has maintained an annual incentive bonus
program applicable to all employees including executive officers. For the
periods presented in the compensation table, the plan included objective
targets for all employees in the areas of cost control, customer
satisfaction, and workplace safety. In addition, as in prior years, there
was an employee satisfaction target for all management people. For the
senior management group (including the executive officers), which develops
and oversees the accomplishment of the Company's annual strategic plan,
additional targets were established with respect to the accomplishment of
components of the annual plan. The potential bonus opportunity ranged from
4% of wages and salaries generally, to 5% of salaries for middle management,
to 8% of salaries for senior management. Performance for 1998 and 1999
resulted in payouts of approximately 7% and 6.5% of salaries for senior
management (inclusive of executive officers) during these respective years.
Performance for 2000 resulted in payouts of approximately 5.7% for senior
manager (exclusive of executive officers) and 2.8% for executive officers.
Performance for 2001 resulted in payouts of 0.93% of salaries for senior
management (inclusive of executive officers).
In attempting to advance the goal discussed above of having a greater
portion of executive compensation be derived from incentive compensation,
for the periods presented in the compensation table the Compensation
Committee of the Board recommended, and the Board approved, discretionary
bonus plans for the executive officers. In 1998, the Board adopted a
revised plan establishing Mr. Briggs' potential award as chief executive
officer at 30% of salary, Mr. Lee's potential award as senior vice president
and chief operating officer at 20% of salary, and the remaining executive
officers at 15% of salary. Awards were once again dependent upon a review
of progress with respect to enumerated priorities. In addition, payments
were conditional upon the Company's 1998 financial performance and the
status of common dividend reinstatement at year-end. The Board was of the
opinion that the efforts of these executives contributed substantially to
the Company's progress in 1998, and that their maximum award potentials had
been earned. However, in view of the then-continuing suspension of common
dividends, the award payments to these officers under this plan were limited
to one-half of their respective award potentials. For 1999, 2000 and 2001
similar plans with the same award potentials was adopted for these
executives. The Committee evaluated the executives' performance soon after
the end of each of these years, and determined that they had earned an award
equal to 85% of their respective award potentials for 1999. For 2000 and
2001, the threshold level of earnings per share was not attained and thus no
payouts were made under the plan. In 2001, however, to reflect the
successful completion of the merger transaction with Emera, Inc., prior to
the closing the Board authorized bonuses to the executive officers as
follows: Mr. Briggs, 59.3%; Mr. Lee, 52.6%; Mr. Samp, 43.5%; and Mr.
LeBlanc, 39.2%.
March 15, 2002 BOARD OF DIRECTORS*
Jane J. Bush
Christopher G. Huskilson
Norman A. Ledwin
Elizabeth A. MacDonald
David McD. Mann
Richard J. Smith
Ronald E. Smith
* - During the period 1998 though 2002, neither Mr. Briggs nor Mr. Lee
participated in any deliberations of the Company's Board of Directors
concerning executive officer compensation.
INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP, P.O. Box 2007, Station CRO, 13th Floor, 1959 Upper
Water Street, Halifax, N.S. B3J 2Z1 has been appointed for the 2001 and 2002
fiscal years. Ernst & Young serves as independent auditors to Emera Inc., a
parent of the Company. The Company does not expect that representatives of
Ernst & Young will be present at the Annual Meeting, have the opportunity to
make a statement, or be available to respond to appropriate questions.
At a regularly scheduled meeting of the Board of Directors held on
November 21, 2001, the Board appointed Ernst & Young LLP to serve as the
Company's Independent Public Accountants for the Company's 2001 and 2002
fiscal years, thereby dismissing PricewaterhouseCoopers, LLP. For a full
disclosure regarding this change in accountants, please refer to the
Company's Report on Form 8-K dated for events occurring on November 21, 2002
which is incorporated herein by reference
VOTING PROCEDURES
Under the Company's Certificate of Organization, as amended, the Board
of Directors shall consist of not less than three nor more than fifteen
persons, the exact number to be fixed from time to time by the Board of
Directors. The Certificate of Organization also requires that the directors
be divided into three classes with staggered three-year terms and that the
classes be nearly as equal in number as may be. At a meeting on February 6,
2002, the Board of Directors fixed the number of Directors at nine and
divided them into three classes with three Directors in each class. The
terms of the three Directors in Class I will expire at the time of the
Annual Meeting. Under Maine law, those candidates who receive the greatest
number of votes cast at the meeting, even if they do not receive a majority
of the votes cast, shall be deemed elected. Consequently, as long as votes
are cast for at least three candidates, abstentions and broker non-votes
will have no effect on the outcome of the election of Directors.
PERFORMANCE GRAPH
Securities and Exchange Commission Regulation S-K, Item 402(l) requires
the inclusion of a performance graph for "a class of common stock registered
under section 12 of the Exchange Act". On October 10, 2001, all shares of
the common stock of the Company were acquired by Emera Inc. of Halifax, Nova
Scotia. On October 23, 2001, the Company filed Form 15 with the Securities
and Exchange Commission deregistering its common stock. The Company has no
remaining class of common stock registered under section 12 of the Exchange
Act. This item is therefore omitted.
ITEMS TO BE VOTED UPON
The following additional matters will be presented by the management at
the meeting:
Item 1. Amend the Articles of Incorporation of the Company to reduce the
par value of the Company's common stock from $5.00 to $0.00.
The purpose of this proposed amendment is to provide the Board of
Directors with a greater degree of flexibility including, for instance
flexibility in the distribution of shares in exchange for property and
services and flexibility in the distribution of the Company's capital
surplus.
Item 2. Amend the Articles of Incorporation of the Company to permit the
Company to use its unreserved and unrestricted capital surplus, as defined
in the Maine Business Corporation Act, to make capital distributions as
permitted by Section 517 of the Maine Business Corporation Act or to
repurchase its own common or preferred shares as permitted by Section 518 of
the Maine Business Corporation Act, and to authorize the Company's Board of
Directors to direct such a capital distribution or such a repurchase of
common or preferred shares from time-to-time, to the extent such a
distribution or repurchase is not contrary to any other provision of these
Articles, on such terms as they deem reasonable and in the best interests of
the Company.
The purpose of this proposed amendment is to permit the Company to make
capital distributions and to repurchase its common and preferred shares out
of the unreserved and unrestricted capital surplus of the Company. Pursuant
to generally accepted accounting principles, at the effective time of the
Company's acquisition by Emera, Inc. the Company reallocated its retained
earnings as of such effective time to other capital surplus. However, the
Maine Business Corporation Act (the "MBCA") may prohibit the Company from
paying common dividends or, unless provided in the Company's Articles of
Incorporation or by vote of the Company's shareholders, from making capital
distributions and from repurchasing its own common or preferred shares
except from its unrestricted and unreserved earned surplus, as defined in
the MBCA, or from its net earnings from its current or next preceding fiscal
year. As a result, the Company may face restrictions to the extent that it
desires to make capital distributions or to repurchase its own common or
preferred shares. This amendment will allow the Company to use the
unreserved and unrestricted capital surplus to make capital distributions
and to repurchase its own common or preferred shares.
The management has no knowledge of any other matter to come before or
to be acted upon at the meeting. If, however, any other matter properly
comes before the meeting, it is the intention of the persons named in the
proxy to vote thereon in accordance with their judgment.
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Any proposals of stockholders of the Company intended to be presented
at the 2003 Annual Meeting must be received by the Company on or before
December 31, 2002 for inclusion in the proxy statement and form of proxy
relating to that meeting.
By Order of the Board of Directors,
Andrew Landry
Clerk
Bangor, Maine
March 15, 2002
BANGOR HYDRO-ELECTRIC COMPANY
P.O. BOX 1599
BANGOR, ME 04402-1599
PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints David McD. Mann and Andrew Landry each
or either of them, with full power of substitution, proxies to vote all of
the stock of Bangor Hydro-Electric Company which the undersigned is entitled
to vote at the Annual Meeting of the Stockholders December 19, 2001, or at
any
adjournment thereof.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
BANGOR HYDRO-ELECTRIC COMPANY
C/O EquiServe
P.O. Box 43010
Providence, RI 02940-3010
THIS IS YOUR PROXY.
YOUR VOTE IS IMPORTANT
Regardless of whether you plan to attend the Annual Meeting of Shareholders,
you can be sure your shares are represented at the meeting by promptly
returning your proxy (attached below) in the enclosed envelope. Thank you
for your attention to this important matter.
---
| X | Please mark vote as in example.
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THIS PROXY WILL BE VOTED IN ACCORDANCE WITH YOUR SPECIFIC DIRECTIONS BELOW.
IF THE PROXY IS SIGNED AND RETURNED WITHOUT SUCH DIRECTIONS, IT WILL BE VOTED
FOR ALL NOMINEES AND IN FAVOR OF THE RESOLUTIONS DESCRIBED HEREIN. RETURNING
YOUR SIGNED PROXY SHALL ALSO AUTHORIZE THE PROXIES TO VOTE OTHER MATTERS
THAT MAY PROPERLY COME BEFORE THE MEETING IN THEIR DISCRETION.
1. Election of Directors
Nominees:
Class I: Robert S. Briggs, Norman A. Ledwin, Elizabeth A. MacDonald
FOR --- WITHHELD ---
ALL | | FROM ALL | |
NOMINEES | | NOMINEES | |
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| |
| |
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FOR ALL NOMINEES EXCEPT AS NOTED ABOVE
2. Resolved to amend the Articles of Incorporation
of the Company to reduce the par value of the Company's
common stock from $5.00 to $0.00.
FOR --- AGAINST ---
THE | | THE | |
RESOLUTION | | RESOLUTION | |
--- ---
3. Resolved to amend the Articles of Incorporation of the
Company to permit the Company to use its unreserved and
unrestricted capital surplus, as defined in the Maine
Business Corporation Act, to make capital distributions
as permitted by Section 517 of the Maine Business
Corporation Act or to repurchase its own common or preferred
shares as permitted by Section 518 of the Maine Business
Corporation Act, and to authorize the Company's Board of
Directors to direct such a capital distribution or such a
repurchase of common or preferred shares from time-to-time,
to the extent such a distribution or repurchase is not
contrary to any other provision of these Articles, on
such terms as they deem reasonable and in the best
interests of the Company.
FOR --- AGAINST ---
THE | | THE | |
RESOLUTION | | RESOLUTION | |
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--- MARK HERE
| | FOR ADDRESS
| | CHANGE AND
--- NOTE AT LEFT
Please sign exactly as name appears hereon. Executors, Administrators,
Trustees, etc. should so indicate when signing. Joint owners should each
sign.
Signature: Date:
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Signature: Date:
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