SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
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BANGOR HYDRO-ELECTRIC COMPANY
(Name of Registrant as Specified In 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] 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:
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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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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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IMPORTANT
Stockholders are cordially invited to attend the annual stockholders'
meeting. If you will be unable to attend the annual meeting in person, it
is important that you fill out, sign and return the enclosed proxy
promptly in order to insure a proper representation at the meeting.
BANGOR HYDRO-ELECTRIC COMPANY
NOTICE OF ANNUAL MEETING
MAY 13, 1997
To The Stockholders:
The Annual Meeting of the stockholders of Bangor Hydro-Electric Company
will be held on Tuesday, May 13, 1997 at 10:00 o'clock a.m. at the Bangor
Motor Inn, Hogan Road, Bangor, Maine for the purpose of electing three
directors to serve for three-year terms and to transact such other
business as may properly come before the meeting.
The Board of Directors has fixed the close of business on March 21, 1997
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 21, 1997 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 31, 1997
BANGOR HYDRO-ELECTRIC COMPANY
33 State Street
Bangor, Maine 04401
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 13, 1997
The accompanying proxy to be mailed on or about March 31, 1997 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, as of December 31, 1996,
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 21, 1997 will be entitled to vote at the Annual Meeting.
The following table sets forth as of December 31, 1996 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:
Name and Address Amount and Nature Percent
Title of Class of Beneficial Owner of Beneficial Ownership of Class
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Preferred Stock First Colony Life 5,192 shares 11.0%
Insurance Company
700 Main Street
Lynchburg, Virginia 24504
First Colony Life Insurance Company is a holder of term notes due 2008 in
the amount of $6,729,779 executed by Bangor-Pacific Hydro Associates
(BPHA). BPHA is a partnership that was formed in 1986 for the purpose of
redeveloping and operating a hydroelectric project located within the
Company's service territory. Penobscot Hydro Co., Inc., a wholly owned
subsidiary of Bangor Hydro-Electric Company, is a 50% general partner of
BPHA. During 1996, BPHA paid $704,802 in interest and $72,059 in principal
to First Colony Life Insurance Company.
The table on the following page sets forth as of February 28, 1997
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*
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Common Robert S. Briggs 4,832
Preferred Robert S. Briggs 22
Common William C. Bullock, Jr. 2,000
Common Jane J. Bush 296
Common David M. Carlisle 912
Common Alton E. Cianchette 1,015
Common G. Clifton Eames 600
Common Marion M. Kane 260
Common Norman A. Ledwin 180
Common Carroll R. Lee 1,396
Common Directors & Executive Officers as a group (11) 12,434
Preferred Directors & Executive Officers as a group (11) 22
* 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 past five years:
Became
Name and Position (Age) Director Business Experience During Last 5 Years
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Class II (Nominees for term expiring in 2000)
Robert S. Briggs (53) 1985 Chairman of the Board; President
Chairman of the Board, & Chief Executive Officer of the
President & Chief Executive Company; Director of Maine Yankee
Officer Atomic Power Company; Trustee of
Eastern Maine Medical Center
William C. Bullock, Jr. (60) 1982 Chairman of the Board and Director
Director of Merrill Merchants Bank; Director
of Eastern Maine Healthcare
G. Clifton Eames (69) 1984 Chairman of the Board of Trustees of
Director Bangor Savings Bank; Chairman of the
Board of Directors of N.H. Bragg &
Sons, a distributor of automotive
and industrial supplies; Director of
Eastern Maine Healthcare
Class III (Directors whose terms expire in 1998)
Carroll R. Lee (47) 1991 Vice President - Operations of the
Senior Vice President Company; Director of Maine Yankee
& Chief Operating Officer Atomic Power Company; Director of
and Director Maine Electric Power Company, Inc.;
Director of Community Health and
Counseling Service, a not-for-profit
supplier of home and mental health
care services
David M. Carlisle (58) 1989 President, Prentiss & Carlisle
Director Companies, a timberland management
company; Director of Bangor Savings
Bank; Director of Eastern Maine
Healthcare
Jane J. Bush (51) 1990 Vice President and co-owner of
Director Coastal Ventures, a retailing
company
Class I (Directors whose terms expire in 1999)
Alton E. Cianchette (66) 1991 Chairman of the Board of Cianbro
Director Corporation, a construction company
Marion M. Kane (52) 1996 President of Maine Community
Director Foundation, a not-for-profit
charitable foundation that manages
a pool of individual charitable
funds
Norman A. Ledwin (55) 1996 Since 1993, President and Chief
Director 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); 1992-1993, President
and Chief Executive Officer of
Metro-Health Saint Luke's Medical
Center and Saint Luke's Hospital
Association
In 1996, the Board of Directors met on eleven occasions. The Board of
Directors has three standing committees: an Audit Committee, an Investment
Committee and a Compensation Committee. The Audit Committee, consisting of
Mrs. Bush (Chair), Mr. Carlisle, Mr. Cianchette and Ms. Kane 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 met twice in 1996. The Compensation Committee, consisting
of Mr. Eames (Chair), Mr. Bullock and Mr. Ledwin, reviews the Company's
executive compensation and compensation policies in general, and makes
recommendations to the full Board of Directors. The Compensation Committee
met twice in 1996. The Investment Committee, consisting of Mr. Bullock
(Chair), Mr. Carlisle, Mr. Briggs and other non-director members of
management, oversees the investments of the Company's pension funds. The
Investment Committee met twice in 1996. The Board does not have a
nominating or similar committee. Committee appointments will be reviewed
after the Annual Meeting. Directors who are not employees of the Company
appoint from their own number the members of the Audit Committee and the
Compensation Committee. Other committee assignments are made by the
Chairman of the Board.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table shows, for the fiscal years ending December 31, 1996,
1995 and 1994, the cash compensation paid by the Company to the Chief
Executive Officer and to the only other executive officer whose total
salary and bonus during 1996 exceeded $100,000:
Summary Compensation Table - Annual Compensation
Name and Principal Position Year Salary Bonus
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Robert S. Briggs 1996 $175,895 $ 0
Chairman of the Board, President 1995 176,601 0
and Chief Executive Officer 1994 176,120 1,588
Carroll R. Lee 1996 $125,422 $ 0
Executive Vice President and 1995 125,072 0
Chief Operating Officer 1994 125,095 1,134
Neither of the above named executive officers received "Other Annual
Compensation" that meets the threshold reporting requirements nor did they
receive any "Long-Term Compensation" or "Other Compensation".
The executive officers participate in a defined benefit pension plan that
is also applicable to all employees. The following table sets forth
estimated annual benefit amounts payable upon retirement to persons in
specified compensation and benefit service classifications assuming their
retirement at the normal retirement age (65) in 1997.
Years of Benefit Service
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Average Annual
Compensation 5 10 15 20 25 30
$ 50,000 $ 4,414 $ 8,828 $13,242 $17,656 $22,070 $26,484
75,000 6,914 13,828 20,742 27,656 34,570 41,484
100,000 9,414 18,828 28,242 37,656 47,070 56,484
150,000 14,414 28,828 43,242 57,656 72,070 86,484
200,000 14,414 28,828 43,242 57,656 72,070 86,484
Compensation covered by the plan is total basic compensation exclusive of
overtime, bonuses, and other extra, contingent or supplemental
compensation, and is cash compensation plus compensation deferred pursuant
to the Company's Section 401(k) Plan. It is essentially the same as the
amount shown as "Salary" in the Summary Compensation Table above. The
annual retirement benefit is the greater of the following:
a. The benefit accrued as of December 31, 1988 under a prior plan formula.
b. 2.0% "average annual compensation" minus 0.4% of "covered compensation",
times years of "benefit service".
The benefit may not be larger than limits set forth in IRC Section 415.
"Average annual compensation" is computed using the 36 consecutive months
yielding the highest average, and "benefit service" generally means years
of employment after age 21 and one year of service, up to a maximum of 30
years. "Covered compensation" is the average (without indexing) of the
Social Security Taxable Wage Bases for the 35 calendar years ending with
the year an individual attains Social Security Normal Retirement Age. It
is assumed that the taxable wage base in effect at the beginning of the
plan calculation year will remain the same for all future years. The
benefit amount is payable in a life annuity form in full upon retirement
at age 62 and in proportionately reduced amounts upon termination down to
age 55. The benefit service of the persons named in the Summary
Compensation Table above (rounded to the nearest year) is: Mr. Briggs-17
years and Mr. Lee-23 years.
In 1994, the Company amended its pension plans to provide an incentive for
early retirement. For those employees who were members of a pension plan
on February 1, 1994, six years were added to that member's age and benefit
service. For each full month of employment following February 28, 1994,
the additional age and benefit service will be reduced by one month. If
Mr. Briggs or Mr. Lee were to retire before the additional age and benefit
service provided by the early retirement program is fully reduced, they
would receive enhanced benefits from the program.
In addition to the foregoing, Mr. Briggs and Mr. Lee are parties to
Supplemental Retirement Agreements with the Company under which additional
retirement benefits are to be paid. The amount of the additional benefits
payable upon retirement at age 62 would be 20% of the officer's final
annual salary per year for a period of fifteen years. These supplemental
benefits are not funded, although the Company maintains insurance policies
on the lives of Mr. Briggs and Mr. Lee that would reimburse the Company
for the cost of the benefits upon the death of the covered officer.
Mr. Briggs and Mr. Lee are parties to agreements under which in the event
1) of a change of control of the Company as defined in the agreements and
2) the covered party leaves the employment of the Company within one year
after the change of control, he would be entitled to receive a payment
equal to two years' salary based upon his average salary over the past
five years. He would also be entitled to receive the Company's standard
health, life insurance and disability benefits for a period of two years
after leaving his employment as long as he remains unemployed.
The executive officers also participate in a long-term disability income
plan that is 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 are paid a fee of $500 per
meeting for attendance at regular or special meetings of the Board, and
$500 per meeting for attendance at committee meetings (unless the
committee meeting is held the same day as another meeting for which a full
meeting fee is paid, in which case the fee is $250). The directors are
also paid an annual retainer of $6,000. Directors who are employees of the
Company receive no fee for their services as directors.
Compensation Committee Interlocks and Insider Participation
During 1996, the Compensation Committee of the Company's Board of
Directors consisted of Mr. Eames, Mr. Bullock and Mr. Ledwin.
During 1996, Mr. Briggs, the Chairman of the Company's Board of Directors
and its President and Chief Executive Officer, served as a trustee and
Vice Chairman of the Board of Trustees 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.
Compensation Committee Report on Executive Compensation
The Company manages its compensation programs in a manner intended to
attract, retain and motivate its people. Historically, salaries, including
executive salaries, have been intended to be established at competitive
levels, with progress within competitive ranges dependent upon
qualifications, experience and individual performance.
The Company has been shifting its compensation management to a system that
relies on base salaries that are competitive, but that, especially at
executive and senior management levels, depend more on incentive rewards
for the achievement of predetermined performance criteria in order to earn
compensation at higher levels within the competitive range.
Although it is the Committee's policy to ensure that executive
compensation remains competitive, the executive officers named in the
foregoing table have not sought and did not receive any adjustments to
their salaries during the years presented.
Since 1991, the Board of Directors has maintained an Incentive Bonus Plan
applicable essentially to all employees of the Company who have completed
at least six months of continuous service by the end of the plan year.
Payments under the Plan Bonuses have been contingent upon the attainment
of certain pre-determined goals relating to service outages, customer
satisfaction, earnings, expenses and employee safety that have varied from
year to year.
In 1993, the Board established a separate Executive Bonus Plan applicable
only to named executive officers. Performance targets for customer
satisfaction, cost control and employee satisfaction were established, the
achievement of which carried a maximum bonus of 1% of base earnings for
each target. Additionally, targets were established for earnings and total
stockholder return. For Mr. Briggs, achievement of those targets carried a
potential maximum bonus of 3.5% of base earnings each and for Mr. Lee, the
potential maximum bonus was 2.5%. No bonuses were paid pursuant to the
cost control, earnings or total stockholder return targets. Partial awards
were made under the customer satisfaction and employee satisfaction
targets. In early 1994, the named executive officers were awarded the
following under the 1993 Plan: Mr. Briggs, $1,588 and Mr. Lee, $1,134.
The Plans established for 1994, 1995 and 1996 included targets similar to
those established for 1993. However, under the terms of those Plans, no
awards could be made to selected members of management, including the
named executive officers, unless the Company achieved stated thresholds
for return on common equity. Since the Company did not earn the threshold
returns on equity in any of those years, no payments were made pursuant to
the Plans.
COMPENSATION COMMITTEE
G. Clifton Eames (Chair)
William C. Bullock, Jr.
Norman A. Ledwin
PERFORMANCE GRAPH
As shown in the line graph on the following page, for a period beginning
December 31, 1991 through December 31, 1996, a comparison is made of the
cumulative total returns for the Company, the Russell 2000 Index (a
comparative broad market index) and the Edison Electric Institute (EEI)
Index of 100 investor-owned electric utilities (a comparative peer group
index). The Russell 2000 index is an index composed of the smallest 2000
companies in a universe of the 3000 largest domestic publicly traded
companies in terms of market capitalization.
Bangor Hydro-Electric Company
Comparison of Five-Year Cumulative Total Return
The Company, the EEI Index and the Russell 2000 Index
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NOTE: Included on the proxy sent to shareholders was a line
graph that depicted a Comparison of Five-Year Cumulative Total
Return for Bangor Hydro-Electric Company, the Russell 2000 Index
and the EEI Index, based upon the information in the following
table. This graph is not shown herein due to limitations of the
EDGAR system.
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December 31,
1991 1992 1993 1994 1995 1996
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Bangor Hydro $100.00 $120.24 $115.99 $ 68.43 $ 88.68 $ 76.18
20.24% -3.53% -41.01% 29.60% -14.10%
EEI Index $100.00 $107.59 $119.58 $105.74 $138.55 $140.22
7.59% 11.14% -11.57% 31.03% 1.21%
Russell 2000 $100.00 $118.41 $140.80 $138.23 $177.55 $206.83
18.41% 18.91% -1.82% 28.44% 16.49%
INDEPENDENT PUBLIC ACCOUNTANTS
Coopers & Lybrand, One Post Office Square, Boston, Massachusetts 02109,
were the independent public accountants for the Company for the 1996
fiscal year and have been selected for the 1997 fiscal year. The Company
expects that representatives of Coopers & Lybrand will be present at the
Annual Meeting, will have the opportunity to make a statement, and will be
available to respond to appropriate questions.
VOTING PROCEDURES
Under the Company's Certificate of Organization, as amended, the Board of
Directors shall consist of not less than nine nor more than fifteen
persons, the exact number to be fixed from time to time by the Board of
Directors. The Certificate of Organization also requires that the
directors be divided into three classes with staggered three-year terms
and that the classes be nearly as equal in number as may be. At a meeting
on March 23, 1994, 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 II will expire at the
time of the Annual Meeting. Under Maine law, those three 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.
OTHER MATTERS
The management has no knowledge of any other matter to come before or to
be acted upon at the meeting. If, however, any other matter properly comes
before the meeting, it is the intention of the persons named in the proxy
to vote thereon in accordance with their judgment.
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Any proposals of stockholders of the Company intended to be presented at
the 1998 Annual Meeting must be received by the Company on or before
December 2, 1997 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 31, 1997
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 Robert S. Briggs and Frederick S. Samp each
or either of them, with full power of substitution, proxies to vote all of
the stock of Bangor Hydro-Electric Company which the undersigned is entitled
to vote at the Annual Meeting of the Stockholders May 13, 1997 or at any
adjournment thereof.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
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.
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1. Election of Directors:
Nominees: Robert S. Briggs, William C. Bullock, Jr.,
G. Clifton Eames
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| | ALL | | WITHHELD FROM
| | NOMINEES | | ALL NOMINEES
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In their discretion, the proxies
are authorized to vote upon such
other business as may properly
come before the meeting.
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| |
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FOR ALL NOMINEES EXCEPT AS NOTED ABOVE
--- 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. Join owners should each
sign.
Signature: __________________________ Date:_________
Signature: __________________________ Date:_________