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BALTIMORE GAS AND ELECTRIC
CHRISTIAN H. POINDEXTER COMPANY
CHAIRMAN OF THE BOARD 39 W. LEXINGTON STREET
AND CHIEF EXECUTIVE OFFICER BALTIMORE, MARYLAND 21201
September 10, 1997
[LOGO]
Dear Shareholder:
I'd like to invite you to attend BGE's Annual Meeting of
Shareholders to be held October 30, 1997, at 10:00 a.m. at
the Sheraton Inner Harbor Hotel, 300 South Charles Street in
downtown Baltimore.
At the meeting, I will review 1996 company operations,
answer your questions, and attend to other business matters.
The following pages provide additional details about the
meeting as well as other useful information.
A proxy card is enclosed that lists all matters that need
your vote. PLEASE SIGN AND RETURN THIS CARD PROMPTLY IN THE
ENVELOPE PROVIDED. This will allow your shares to be voted
whether or not you plan to attend the meeting. If you plan
to attend the meeting, please also check the box on the
proxy card.
The Sheraton Inner Harbor Hotel is handicapped-accessible,
but 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,
Chairman of the Board and
Chief Executive Officer
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BALTIMORE GAS AND ELECTRIC COMPANY
Notice of Annual Meeting of Shareholders
to be held October 30, 1997
The Annual Meeting of the Shareholders of Baltimore Gas and Electric Company
will be held at the Sheraton Inner Harbor Hotel, 300 South Charles Street,
Baltimore, Maryland, at 10:00 a.m. on October 30, 1997 for the following
purposes:
1. The election of thirteen directors to serve for the ensuing year and
until their successors are elected and qualified.
2. The ratification of BGE's appointment of Coopers & Lybrand L.L.P. as
independent auditors for 1997.
3. The transaction of such other business as may properly come before the
Annual Meeting.
Each of the above items is described in the Proxy Statement which
accompanies this Notice.
The stock transfer books will not be closed before the Annual Meeting.
Common shareholders of record at the close of business on September 2, 1997 will
be entitled to notice of and to vote at the Annual Meeting.
D. A. Brune
Secretary
September 10, 1997
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BALTIMORE GAS AND ELECTRIC COMPANY
39 W. Lexington Street
Baltimore, MD 21201
PROXY STATEMENT
for the Annual Meeting of Shareholders to be held on October 30, 1997
This proxy statement is provided in connection with the 1997 Annual Meeting
of Shareholders of Baltimore Gas and Electric Company (the Company or BGE). If
the proposed merger between BGE and PEPCO is completed prior to the scheduled
annual meeting date of October 30, 1997, the meeting will be canceled. BGE's
principal executive offices are located at 39 W. Lexington Street, Baltimore,
Maryland 21201. 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 completing and returning the accompanying proxy
card, the shareholder authorizes Messrs. Jerome W. Geckle, George V. McGowan, or
Christian H. Poindexter, as designated on the face of the proxy, to vote all
shares for the shareholder. All returned proxies which are properly executed
will be voted as the shareholder directs. If no direction is given, the executed
proxies will be voted FOR each of the directors and FOR the ratification of
BGE's appointment of Coopers & Lybrand L.L.P. as independent auditors. 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 September 10, 1997. The 1996 Annual
Report to shareholders was mailed in March, 1997.
Common shareholders of record at the close of business on September 2, 1997,
will be entitled to vote at the Annual Meeting. Each share will be entitled to
one vote. On July 1, 1997, the Company had outstanding 147,667,114 shares of
common stock, without par value. The presence in person or by proxy of the
holders entitled to cast 73,833,558 votes (a majority of all the votes entitled
to be cast at the meeting) will constitute a quorum. Broker non-votes,
abstentions and withhold-authority votes all count for the purpose of
determining a quorum. Each item on the agenda must receive the affirmative vote
of a majority of the shares voted at the meeting in order to pass. Broker
non-votes, abstentions and withhold-authority votes do not count as shares voted
at the meeting.
1
The Board of Directors is aware of only two items of business to be
considered at the Annual Meeting: Item 1, the election of thirteen directors;
and Item 2, the ratification of BGE's appointment of independent auditors for
1997.
ITEM 1. ELECTION OF 13 DIRECTORS
The entire Board of Directors is elected at the Annual Meeting. Each
director is elected for a term of one year and until a successor is elected and
qualified. Each of the nominees was elected a director at the 1996 Annual
Meeting of Shareholders.
Information concerning the nominees for election as directors is presented
below. Each of the nominees has consented to serve as a director if elected.
Should any nominee become unable to accept nomination or election, it is
intended that the enclosed proxy will be voted for the election of a nominee
designated by the Board of Directors, unless the Board of Directors reduces the
number of directors.
H. FURLONG BALDWIN, age 65, currently serves as Chairman of the Board and Chief
Executive Officer of Mercantile Bankshares Corporation (a bank holding
company), positions he has held since 1984 and 1976, respectively, and as
Chairman of the Board and Chief Executive Officer of Mercantile-Safe Deposit
and Trust Company, positions he attained in 1976. Mr. Baldwin also serves as a
director of GRC International, Inc., USF&G Corporation, Conrail, Inc.,
Offitbank, Wills Group, and Constellation Holdings, Inc. Mr. Baldwin has been
a director of the Company since 1988 and is a member of the Executive
Committee and is the Chairman of the Long Range Strategy Committee.
BEVERLY B. BYRON, age 64, served for seven successive terms as a Congresswoman
to the United States House of Representatives from 1978 to 1992. She is a
director of McDonnell Douglas Corp., Farmers & Mechanics Bank, and UNC
Incorporated. Mrs. Byron has been a director of the Company since 1993 and is
a member of the Audit Committee, the Committee on Nuclear Power and is the
Chairwoman of the Committee on Workplace Diversity.
J. OWEN COLE, age 67, is retired Chief Executive Officer of First Maryland
Bancorp (a bank holding company). 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. Cole has been a
director of the Company since 1977 and is the Chairman of the Audit Committee
and a member of the Committee on Management.
DAN A. COLUSSY, age 65, currently serves as Chairman of the Board, President and
Chief Executive Officer of UNC Incorporated (aviation services). He was
elected Chief Executive Officer in 1984, Chairman of the Board in 1989, served
as President from 1984 to September 1994, and currently serves as President
since October 1995. Mr. Colussy also serves as Chairman-Elect and director of
Blue Cross and Blue Shield of Maryland. He has been a director of the Company
since 1992 and is
2
a member of the Committee on Management and the Chairman of the Committee on
Nuclear Power.
EDWARD A. CROOKE, age 58, currently serves as President and Chief Operating
Officer of the Company. Mr. Crooke has been President of the Company since
1988 and Chief Operating Officer since 1992. He is also 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 1994, Chairman of the
Board of BGE Energy Projects & Services, Inc., a position he attained in
November 1995, Chairman of the Board of Constellation Holdings, Inc., a
position he attained in January 1996, and Chairman of the Board of BGE Corp.
and Constellation Power Source, Inc., positions he attained in February, 1997.
Mr. Crooke serves as a director of First Maryland Bancorp, The First National
Bank of Maryland, AEGIS Insurance Services, Associated Electric & Gas
Insurance Services, Limited, and Baltimore Equitable Society. Mr. Crooke has
been a director of the Company since 1988 and is a member of the Executive
Committee.
JAMES R. CURTISS, age 43, currently is a partner in the law firm of Winston &
Strawn, a position he attained in 1993. From 1988 to 1993, he served as a
Commissioner of the United States Nuclear Regulatory Commission. Mr. Curtiss
is also a director of Cameco Corporation. He has been a director of the
Company since 1994 and is a member of the Committee on Nuclear Power and the
Committee on Workplace Diversity.
JEROME W. GECKLE, age 67, was Chairman of the Board of PHH Corporation (vehicle,
relocation, and management services) from 1979 to 1989. Now retired, Mr.
Geckle serves as a director of First Maryland Bancorp, The First National Bank
of Maryland, and Constellation Holdings, Inc. Mr. Geckle has been a director
of the Company since 1980 and is the Chairman of the Committee on Management
and a member of the Long Range Strategy Committee.
DR. FREEMAN A. HRABOWSKI, III, age 46, currently serves as the President of the
University of Maryland Baltimore County, a position he attained in 1993.
Previously, he served as Interim President from 1992 to 1993 and Executive
Vice President from 1990 to 1992. Dr. Hrabowski is also a director of the
Baltimore Equitable Society, Mercantile Bankshares Corporation, and UNC
Incorporated. He has served as a director of the Company since 1994 and is a
member of the Audit and Executive Committees and the Committee on Workplace
Diversity.
NANCY LAMPTON, age 54, currently serves as Chairman and Chief Executive Officer
of American Life and Accident Insurance Company of Kentucky, a position she
attained in 1971. Ms. Lampton is also a director of Bank One Kentucky,
Brinly-Hardy, and Duff & Phelps Utility Income Fund, Inc. She has served as a
director of the Company since 1994 and is a member of the Long Range Strategy
Committee and the Committee on Workplace Diversity.
GEORGE V. MCGOWAN, age 69, served as Chairman of the Board and Chief Executive
Officer of the Company and Chairman of the Board of Constellation Holdings,
Inc., from 1988 to 1992. Mr.
3
McGowan is a director of The Baltimore Life Insurance Company, Constellation
Holdings, Inc., Life of Maryland, Inc., McCormick & Company, Inc.,
NationsBank, N.A., Organization Resources Counselors, Inc., and UNC
Incorporated. Mr. McGowan has been a director of the Company since 1980 and is
the Chairman of the Executive Committee and a member of the Committee on
Nuclear Power.
CHRISTIAN H. POINDEXTER, age 58, currently serves as Chairman of the Board and
Chief Executive Officer of the Company, positions he attained in 1993, after
serving as Vice Chairman of the Board, a position he held since 1989. Mr.
Poindexter is also a director of BGE Home Products & Services, Inc., a
position he attained in 1994, 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 the Board from 1993 to January 1996. In addition, Mr.
Poindexter serves as a director of Dome Corporation, Johns Hopkins Medicine
Board, Mercantile Bankshares Corporation, Mercantile Mortgage Corporation, and
Mercantile-Safe Deposit and Trust Company, Nuclear Electric Insurance Limited,
and Nuclear Mutual Limited Insurance Company. Mr. Poindexter has been a
director of the Company since 1988 and is a member of the Executive Committee.
GEORGE L. RUSSELL, JR., age 67, currently is a partner in the law firm of Piper
& Marbury L.L.P., a position he attained in 1986. Mr. Russell is also a
director of the Federal Reserve Bank of Richmond. He has been a director of
the Company since 1988 and is a member of the Audit and the Executive
Committees.
MICHAEL D. SULLIVAN, age 57, currently is Chairman of the Board of Golf America
Stores, Inc. (golf apparel retailing), a position he attained in October 1996.
He is also 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. Sullivan was
Chief Executive Officer and President, from 1982 to 1994, of Merry-Go-Round
Enterprises, Inc. (specialty retailing). That company filed a reorganization
petition under Chapter XI of the Federal Bankruptcy law in January 1994, and
subsequently announced a bankruptcy liquidation. Mr. Sullivan has been a
director of the Company since 1992 and is a member of the Committee on
Management and the Long Range Strategy Committee.
COMMITTEES, MEETINGS, AND FEES
The Executive Committee of the Board of Directors may exercise most of the
powers of the Board of Directors in the management of the business and affairs
of the Company in the intervals between meetings of the full Board. The
Committee, however, may not declare dividends, authorize the issuance of stock,
recommend to shareholders any action requiring shareholders' approval, amend the
by-laws, or approve mergers.
4
The Audit Committee of the Board of Directors, comprised of outside
directors, recommends an auditing firm to be engaged, discusses the scope of the
examination with that firm, and reviews the annual financial statements with the
auditing firm and with Management of the Company. Additionally, the Committee
meets with the Manager of the Auditing Department of the Company to ensure that
an adequate program of internal auditing is being carried out, and invites
comments and recommendations from the auditing firm concerning the system of
internal controls and accounting procedures. The Audit Committee reports on its
activities periodically to the Board of Directors.
The Committee on Nuclear Power monitors the performance and safety of the
Company's Calvert Cliffs Nuclear Power Plant. The Committee meets periodically,
usually on-site at the Calvert Cliffs plant, to confer with Management, senior
plant management, and other nuclear oversight personnel. Following each meeting,
the Committee reports the results of its observations and findings to the Board
of Directors and makes such recommendations as it deems appropriate.
The Committee on Management's duties include recommending to the Board of
Directors nominees for election as directors and officers and making
recommendations concerning remuneration arrangements for directors and officers
of the Company. This Committee, which is comprised of outside directors,
considers nominees recommended by shareholders; such recommendations should be
submitted in writing to the attention of the Corporate Secretary, Baltimore Gas
and Electric Company, 39 W. Lexington Street, Baltimore, Maryland 21201.
The Committee on Workplace Diversity provides an ongoing Board of Directors'
perspective of management's progress in achieving employee diversity goals. The
Committee provides input to management in setting goals and developing
strategies to increase goal attainment, provides oversight on implementation of
strategies, and evaluates results. The Committee on Workplace Diversity reports
on its activities periodically to the Board of Directors.
The Long Range Strategy Committee provides an oversight role in the
development of the Company's long range strategic goals. The Committee meets
periodically to review the continued appropriateness of these goals and to
approve presentations to the Board regarding the implementation of significant
strategic initiatives. This Committee also reviews major regulatory,
environmental and public policy issues as well as technology advances which may
impact Company operations. The Long Range Strategy Committee reports on its
activities periodically to the Board of Directors.
The Board of Directors met nine times during 1996 for regularly scheduled
meetings. The Committee on Management met five times, the Audit Committee met
four times, the Committee on Nuclear Power met three times, and the Committee on
Workplace Diversity and the Executive Committee each met two times. Each of the
nominees attended 75% or more of the total number of meetings of the Board and
of any committees on which the nominee served.
Each director, who is not an officer or employee of the Company or its
subsidiaries, receives a fee of $1,250 for each regular, committee, or special
meeting of the Board attended and a retainer
5
fee of $26,000 per year. Each committee chairman receives an additional annual
retainer fee of $3,500 per year. Both Board and Committee Chair retainers are
paid 1/2 in deferred stock units. The units' value fluctuates in relation to
market price, dividends paid, and other capital changes like stock splits.
Directors may elect to receive the other 1/2 of their retainers in cash or in
deferred stock units. Each director may be reimbursed for reasonable travel
expenses incidental to attendance at meetings. Each director who is not an
officer or employee may elect to defer receipt of any portion of the fees
earned. The Company also provides an automobile to Mr. McGowan, a director who
retired on December 31, 1992 as Chairman of the Board and Chief Executive
Officer of the Company and who continues to participate in civic and community
activities on behalf of the Company. The approximate yearly cost to the Company
is $7,908.
The Company terminated its directors retirement plan effective August 1,
1997. The decision to terminate the plan was based on surveys of other
companies' practices and shareholder feedback.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
The Company and certain of its subsidiaries paid legal fees during 1996 to
the law firm of Piper & Marbury L.L.P. of which Mr. George L. Russell, Jr., a
Company director, is a partner. It is expected that the Company and subsidiaries
will continue to do business with this firm in 1997.
SECURITY OWNERSHIP
The table on the next page sets forth the beneficial ownership of common
stock of the Company of each nominee for director, the five executive officers
shown in the Summary Compensation Table on page 9, and all directors and
executive officers as a group as of July 1, 1997. 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's outstanding common stock. None
of such persons beneficially owns shares of any other class of equity securities
of the Company.
6
BENEFICIAL OWNERSHIP
(SHARES OF COMMON
NAME STOCK) (1)
- ----------------------------------------------------- ----------------------
Bruce M. Ambler 44,560(2)
H. Furlong Baldwin 750
Beverly B. Byron 1,000
J. Owen Cole 4,393
Dan A. Colussy 1,500
George C. Creel 37,037(3)
Edward A. Crooke 74,679(4)
James R. Curtiss 300
Robert E. Denton 30,272
Jerome W. Geckle 7,173
Freeman A. Hrabowski, III 550
Nancy Lampton 2,516
George V. McGowan 104,667(5)
Christian H. Poindexter 110,006(6)
George L. Russell, Jr. 1,310
Michael D. Sullivan 1,500
All Directors and Executive Officers
as a Group (28 Individuals) 682,530
(1) If the individual participates in the Company's Dividend Reinvestment and
Stock Purchase Plan or the Company's Employee Savings Plan those shares are
included.
(2) Includes shares awarded under the Company's Long-Term Incentive Plan.
(3) Includes shares awarded under the Company's Long-Term Incentive Plan. Of the
total shares, 11,848 shares are held in the name of Mr. Creel's wife of
which Mr. Creel disclaims beneficial ownership.
7
(4) Includes shares awarded under the Company's Long-Term Incentive Plan. Of the
total shares, 1,090 shares are beneficially owned by Mr. Crooke with his
wife, and 3,000 shares are held in trust which Mr. Crooke votes.
(5) 1,521 shares are beneficially owned by Mr. McGowan with his wife. He owns
the other shares directly.
(6) Includes shares awarded under the Company's Long-Term Incentive Plan. Of the
total shares, 18,655 shares are held in the name of Mr. Poindexter's wife,
and 12,000 shares are held as trustee.
On September 22, 1995, BGE and Potomac Electric Power Company ("PEPCO")
signed reciprocal stock option agreements in connection with the proposed merger
("the proposed merger") 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 dated as of September 22, 1995 ("the Merger Agreement") becomes
terminable.
COMPENSATION OF EXECUTIVE OFFICERS BY THE COMPANY
The summary compensation table on the next page 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.
8
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
LONG-TERM COMPENSATION
ALL OTHER
COMPENSATION
(INCLUDES
ONE-TIME PAYMENT
RESTRICTED FOR YEARS
STOCK AWARD LTIP PAYOUT 1988-1996, SEE
NAME AND PRINCIPAL POSITION (SEE NOTE 1 (SEE NOTE 2 NOTE 3 ON NEXT
@ 12/31/96 FISCAL YEAR SALARY BONUS BELOW) ON NEXT PAGE) PAGE)
Christian H. Poindexter 1996 $ 567,300 $ 212,500 -0- $ 181,500 $ 324,799
Chairman of the Board & 1995 $ 537,233 $ 247,400* -0- N/A $ 31,611
Chief Executive Officer 1994 $ 498,533 $ 163,000 -0- N/A $ 26,436
Edward A. Crooke 1996 $ 403,400 $ 150,000 -0- $ 118,800 $ 252,504
President & Chief
Operating 1995 $ 400,567 $ 184,200* -0- N/A $ 25,217
Officer, Chairman of the 1994 $ 385,067 $ 125,000 -0- N/A $ 19,089
Board of all non-utility
subsidiaries
George C. Creel 1996 $ 316,600 $ 118,000 -0- $ 72,600 $ 138,842
Executive Vice President & 1995 $ 265,600 $ 72,900 -0- N/A $ 17,292
Acting Chief Operating 1994 $ 248,867 $ 55,000 -0- N/A $ 11,754
Officer
Bruce M. Ambler 1996 $ 315,100 $ 120,000 -0- $ 180,000 $ 117,101
President & Chief
Executive 1995 $ 298,933 $ 108,600 -0- N/A $ 17,033
Officer of Constellation 1994 $ 280,133 $ 69,000 -0- N/A $ 11,443
Holdings, Inc.
Robert E. Denton 1996 $ 230,567 $ 75,100 -0- $ 38,500 $ 70,899
Senior Vice President - 1995 $ 196,933 $ 55,000 -0- N/A $ 10,785
Generation 1994 $ 172,467 $ 36,000 $ 126,875 N/A $ 7,090
* These amounts include a $100,000 bonus for Mr. Poindexter and a $75,000
bonus for Mr. Crooke for their work in connection with the proposed merger.
NOTES TO SUMMARY COMPENSATION TABLE
(1) At December 31, 1996, Mr. Poindexter held 26,635 shares of performance-based
Restricted Stock with a value of $712,486, Mr. Crooke held 19,085 shares of
performance-based Restricted Stock with a value of $510,524, Mr. Creel held
17,224 shares of performance-based Restricted Stock with a value of
$460,742, Mr. Ambler held 16,401 shares of performance-based Restricted
Stock with a value of $438,727, and Mr. Denton held 12,952 shares of
performance-based Restricted Stock with a value of $346,466. Dividends on
performance-based Restricted Stock Awards are accumulated during the
performance period, reinvested in BGE shares, and reflected in the preceding
shares and values. Additional awards were granted effective February 12,
1997 as described on page 11 in the Long-Term Incentive Plan Table.
9
NOTES TO SUMMARY COMPENSATION TABLE-CONTINUED
(2) The amounts in the LTIP PAYOUT column were paid for performance during the
1994-1996 period.
(3) The amounts in the ALL OTHER COMPENSATION column include the Company match
under the Company's savings plans; 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); and a contribution to a trust securing the executives' supplemental
pension benefits. These amounts also include a one-time contribution by BGE
to fund a trust that was established in 1996 to secure executives'
nonqualified deferred compensation plan benefits. The nonqualified deferred
compensation plan was put in place in 1988 to permit executives to defer
compensation and establish phantom investment accounts equivalent to the
compensation being deferred. The amount of the funding is equal to the
interest, dividends and capital appreciation recorded in those accounts
since 1988. A breakdown of the 1996 amounts in the ALL OTHER COMPENSATION
column is shown on the chart below. Notes (a), (b), and (c) under the chart
include important background data. Both the chart and the background data
are needed to understand the numbers in the ALL OTHER COMPENSATION column.
DEFERRED
COMPANY MATCH SUPPLEMENTAL COMPENSATION
AND SPLIT DOLLAR PENSION TRUST TRUST
AMOUNTS CONTRIBUTION CONTRIBUTION
(a) (b) (c) TOTAL
----------------- ------------- ------------- ---------
Christian H. Poindexter $ 41,541 $ 53,999 $ 229,259 $ 324,799
Edward A. Crooke $ 33,387 $ 53,999 $ 165,118 $ 252,504
George C. Creel $ 24,477 $ 53,999 $ 60,366 $ 138,842
Bruce M. Ambler $ 22,442 $ 53,999 $ 40,660 $ 117,101
Robert E. Denton $ 14,985 $ 53,999 $ 1,915 $ 70,899
(a) The Company match and split-dollar amounts shown in column (a) above were
the only items included in the ALL OTHER COMPENSATION column for 1995 and
1994.
(b) An initial contribution to the trust securing supplemental pension benefits
shown in column (b) above was made during 1996. Therefore, there were no
trust contributions included in the ALL OTHER COMPENSATION column for 1995
or 1994.
(c) A ONE-TIME contribution was made during 1996 to the trust securing deferred
compensation plan benefits equal to the interest, dividends and capital
appreciation on plan accounts SINCE 1988. Therefore, there were no trust
contributions included in the ALL OTHER COMPENSATION column for 1995 or
1994.
10
LONG-TERM INCENTIVE PLAN TABLE
The Committee on Management, effective February 12, 1997, made grants of
performance-based restricted shares under the Long-Term Incentive Plan.
For each named executive, the grants are subject to both performance and
time (3 years) contingencies. For all but Mr. Ambler, performance will be
measured by comparing BGE's total shareholder return to the Dow Jones Electric
Utilities Index. Both are shown in the performance graph on page 14. A threshold
award will be earned if the BGE three-year cumulative total shareholder return
percentile rank is at the 50th percentile, progressing to a maximum award for a
return at or above the 75th percentile. At the proposed merger effective date,
the shares of restricted BGE stock outstanding will be converted to shares of
restricted Constellation Energy Corporation common stock, using the proposed
merger conversion ratio: one share of Constellation Energy Corporation common
stock for each share of BGE common stock. After the proposed 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 shares were issued equivalent to the
number of shares that will be earned if "target" performance (62.5th percentile)
is achieved. These restricted shares will be forfeited in whole or part, if
performance is below target. Dividends on the restricted shares will be
accumulated during the performance period and reinvested in BGE shares. Actual
dividends awarded at the end of the performance period will be based upon
performance and paid in stock (except that the recipients may elect to have a
portion of the shares withheld to satisfy tax withholding requirements).
Additional shares, up to the maximum number noted below, will be awarded if
performance is above target at the end of the 1997-1999 performance period.
Dividend equivalents from the date of the grant will be paid for any additional
shares that are awarded.
PERFORMANCE
NAME MINIMUM(A) TARGET(A) MAXIMUM(A) PERIOD
- ----------------------------------- --------------- ----------- --------------- -------------
C.H. Poindexter 6,500 13,000 19,500 3 years
E.A. Crooke 4,500 9,000 13,500 3 years
G.C. Creel 4,500 9,000 13,500 3 years
B.M. Ambler 3,500 7,000 10,500 3 years
R.E. Denton 2,500 5,000 7,500 3 years
(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.
11
PENSION BENEFITS
The following table shows annual pension benefits payable upon normal
retirement to executives, including the five individuals named in the Summary
Compensation Table. 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
50% of total final average salary plus bonus for Mr. Denton and, when he attains
30 years service in 2000, will be computed at 55%.
TOTAL
FINAL PERCENTAGE OF FINAL AVERAGE
SALARY SALARY AND BONUS
AND -------------------------------
BONUS 50% 55% 60%
- --------- --------- --------- ---------
$300,000 $ 150,000 $ 165,000 $ 180,000
325,000 162,500 178,750 195,000
350,000 175,000 192,500 210,000
400,000 200,000 220,000 240,000
425,000 212,500 233,750 255,000
450,000 225,000 247,500 270,000
500,000 250,000 275,000 300,000
550,000 275,000 302,500 330,000
575,000 287,500 316,250 345,000
600,000 300,000 330,000 360,000
650,000 325,000 357,500 390,000
700,000 350,000 385,000 420,000
750,000 375,000 412,500 450,000
775,000 387,500 426,250 465,000
800,000 400,000 440,000 480,000
850,000 425,000 467,500 510,000
900,000 450,000 495,000 540,000
950,000 475,000 522,500 570,000
Salary and bonus are calculated in the same manner shown in the Summary
Compensation Table. There is no offset of pension benefits for social security
or other amounts.
During 1994, the Company implemented a program to secure the supplemental
pension benefits for each of the executive officers, including those listed in
the Summary Compensation Table. During 1996, the Company implemented a program
to secure deferred compensation of executive officers including those listed in
the Summary Compensation Table. These programs do not increase the amount of
supplemental pension benefits or deferred compensation. In the past, both
supplemental pension benefits and deferred compensation 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
12
general funds when the executive retired. 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 Company followed within
two years by the executive's demotion, termination or loss of benefit
eligibility; or reduction of previously accrued benefits. As a result of
becoming vested, the executive would be entitled to a payout of the vested
amount from the supplemental pension trust upon the later of age 55 or
employment termination. An executive's benefits under the deferred compensation
plan always are fully vested and are payable at employment termination. Payments
to these trusts are included in the Summary Compensation Table in the ALL OTHER
COMPENSATION column.
AGREEMENTS RELATING TO THE PROPOSED MERGER
In connection with the proposed merger, 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 proposed merger is completed and that
he will become Chairman one year after the proposed 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 proposed merger is
completed.
In December 1995, BGE entered into severance agreements with 15 key
employees. The agreements become binding on Constellation Energy Corporation at
the time the proposed merger is completed and remain in effect for two years
thereafter. The severance agreements provide for 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 or the executive's voluntary termination of employment without
"good reason") within the two year period following the time the proposed merger
is completed or (ii) termination of the executive's employment without cause or
the executive's voluntary termination following the occurrence of certain events
that constitute "good reason" prior to the time the proposed merger is
completed.
Four of the 15 key employees who have severance agreements with BGE are
retiring when the proposed merger closes and are entitled to severance benefits.
All other key employees who have severance agreements have been offered, and
accepted, executive positions with Constellation Energy Corporation and will not
be eligible for severance benefits when the proposed merger closes. If the four
retiring employees had been terminated as of December 31, 1996, under
circumstances giving rise to an entitlement to benefits thereunder, the
aggregate value of such benefits would have been approximately: $750,000 for Mr.
Creel, and an aggregate of $2 million for the other executives, none of whom is
named in the Summary Compensation Table.
13
PERFORMANCE GRAPH
The following graph assumes $100 was invested on December 31, 1991 in
Baltimore Gas and Electric Company common stock, S&P 500 Index and Dow Jones
Electric Utilities Index. Total return is computed assuming reinvestment of
dividends.
Additional, more detailed information about earnings is included in the
Company's Annual Report to Shareholders, particularly in the MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, which
we sent to shareholders in March, 1997.
PERFORMANCE GRAPH
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
DJ ELEC. UTIL.
BGE S&P 500 INDEX
1991 $100.00 $100.00 $100.00
1992 $109.27 $107.62 $106.85
1993 $125.61 $118.47 $119.32
1994 $117.12 $120.03 $104.62
1995 $160.53 $165.14 $137.66
1996 $159.80 $203.06 $139.07
REPORT OF COMMITTEE ON MANAGEMENT
REGARDING EXECUTIVE COMPENSATION
The Committee on Management, made up completely of outside Directors, is
responsible for executive compensation policies. In addition to establishing
policies, the Committee approves all compensation plans and recommends to the
Board of Directors specific salary amounts and other compensation awards for
individual executives.
14
The Committee designs compensation policies to encourage executives to
manage BGE 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.
The Committee determined that the relevant labor market for executives is
the utility industry. Utilities used for comparison in 1996 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 superior performance should bring total compensation to
approximately the 75th percentile of the labor market. Total compensation is
made up of three components: base salary, short-term incentive awards, and
long-term incentive awards. As described below, corporate performance is one of
the criteria used by the Committee in determining base salary, and it is a key
component in determining both short-term and long-term incentive awards.
The Committee has retained an outside executive compensation consultant
since 1993. He provides information and advice on a regular basis. In addition,
internal compensation analysts (certified by the American Compensation
Association) use survey data, outside consultants, and other resources to make
recommendations to the Committee.
Base salary ranges did not change for the named executives in 1996 except
Mr. Creel. He was elected Executive Vice President and named acting Chief
Operating Officer during 1996 to allow Mr. Crooke time for leading the proposed
merger transition team. Both his salary range and his base salary were increased
to reflect these new responsibilities.
Salary increases during 1996 for Mr. Poindexter and the other named
executives were based upon 1995 corporate performance (consolidated corporate
earnings from ongoing operations increased 4.5%, or $.09 per share, in 1995
compared to 1994, and utility earnings from ongoing operations increased 1.6%,
or $0.03 per share, in 1995 compared to 1994), and the corporate response to
changes in the industry and the regulatory environment. Mr. Poindexter's base
salary increase of 5.6% moved him to the middle third of his salary range.
Bonus payments to Mr. Poindexter and other executives represent the
short-term incentive component of executive compensation. The Committee sets
short-term incentive amounts, as well as the mix among base salary, short-term
incentive compensation and long-term incentive compensation, to bring total
compensation in line with survey data for the relevant labor market. For 1996
short-term incentive awards, the Committee determined that the appropriate
measure for earnings was earnings from ongoing operations. This had the effect
of eliminating the $.42 per share reduction
15
related to the write-off of $83 million for deferred fuel costs from the
extended 1989-1991 outage at BGE's Calvert Cliff's Nuclear Power Plant. In
making this decision, the Committee gave weight to the following facts: (a) the
$118 million settlement amount (the $83 million written off in 1996 plus the $35
million reserve taken in 1990) is considerably lower than initial demands of
People's Counsel ($458 million) and PSC Staff ($200 million), (b) the total
maintenance performed during the extended outage resulted in the plant being in
excellent operating condition, as evidenced by its good operating history since
the end of the extended outage, (c) leadership provided by the executives to the
team that handled the litigation and negotiated the settlement. Mr.
Poindexter's, Mr. Crooke's, and Mr. Creel's short-term bonuses were based on two
factors of equal importance: corporate earnings (an increase of 8.6%, or $.18
per share, in 1996 compared to 1995); and corporate business plan performance in
the following areas: customer satisfaction, innovation, and internal business
perspectives. Mr. Denton's short-term incentive bonus was based upon two factors
of equal importance: higher consolidated corporate earnings as described above,
and achievement of operational targets contained in the Fossil Energy and
Nuclear Energy divisions' business plans. Mr. Ambler's bonus was based upon net
income from Constellation Holdings ($42.3 million in 1996, an increase of 56.1%,
compared to $27.1 million in 1995) 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%.
Early this year the named executives received cash long-term bonuses for the
1994-1996 performance period. These awards were earned under a cash Long-Term
Performance Program for executive officers, including Mr. Poindexter, adopted in
1993. The Program was designed to tie the awards directly to total shareholder
return. These awards were the only awards made under the Program. Program
objectives for Messrs. Poindexter, Crooke, Creel, and Denton 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). Performance
(61st percentile) exceeded the target of (60th percentile) and produced awards
that were slightly above target. For Mr. Ambler, the performance objectives
measured improvement in Constellation Holdings' net income over the same three
year period. He received a maximum award based upon an improvement in net income
of 255%. Awards to the named executives are disclosed in the column of the
Summary Compensation Table titled LONG-TERM COMPENSATION-LTIP PAYOUT.
The current Long-Term Incentive Plan was approved by the shareholders at the
1995 Annual Meeting of Shareholders and will be in effect until 2005. The
Committee specifically included numerous features in the 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 and 1996 of performance-based restricted stock
were granted under the Plan to the named executives and are included in footnote
1 to the Summary Compensation Table on page 9. Awards of performance-based
restricted stock granted in 1997 to the named
16
executives are shown on the Long-Term Incentive Plan table on page 11. The
awards are subject to forfeiture if corporate performance criteria are not
satisfied or if the executive's employment terminates during the applicable
three year performance periods. The corporate performance criteria for all named
executives except Mr. Ambler for each period is measured by total shareholder
return over the performance period compared to total shareholder return for the
other companies included in the Dow Jones Electric Utilities Index (one of the
indices used in the Performance Graph) and are as follows: a threshold award at
the 50th percentile, progressing to a maximum payout if percentile rank for
total shareholder return exceeds the 75th percentile. For Mr. Ambler, the
performance objectives for all the awards measure improvement in Constellation
Holdings' net income over the same three year period.
In making long-term incentive awards the Committee considers the desired
amount of total compensation and the appropriate mix among base salary,
short-term incentive compensation, and long-term incentive compensation. The
Committee sets long-term incentive target amounts to bring total compensation in
line with survey data for the relevant labor market. Measures for performance-
based long-term incentive awards are based upon total shareholder return.
The Committee evaluated the total director compensation package and,
together with their counterparts from PEPCO, will recommend 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 what structure (a retainer, meeting fees, and other benefits, if any)
is optimal. The Board, on the Committee's recommendation, terminated the
directors retirement plan August 1, 1997. The decision to terminate the plan was
based on surveys of other companies' practices and shareholder feedback.
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. One reason for the conclusion is that, assuming the current compensation
policies and philosophy remain in place, Section 162(m) will not be applicable
in the near term for any executive's compensation. However, 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
17
ITEM 2. RATIFICATION OF BGE'S APPOINTMENT OF AUDITORS
Coopers & Lybrand L.L.P., Certified Public Accountants, have been the
Company's independent auditors since 1941. UNLESS THE COMMON STOCK SHAREHOLDER
OTHERWISE SPECIFIES IN THE PROXY, THE VOTES REPRESENTED BY THE COMMON STOCK
PROXIES WILL BE CAST FOR THE RATIFICATION OF BGE'S APPOINTMENT OF COOPERS &
LYBRAND L.L.P. AS INDEPENDENT AUDITORS FOR THE COMPANY FOR THE YEAR 1997. A
member of Coopers & Lybrand L.L.P. will be present at the Annual Meeting and
will be given an opportunity to make a statement and answer appropriate
questions.
The consolidated financial statements for the previous fiscal year were
examined by Coopers & Lybrand 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.
OTHER MATTERS
The Board of Directors knows of no matters to be presented for action at the
Annual Meeting other than the two 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 on such matters in accordance with
their best judgment.
SHAREHOLDER PROPOSALS FOR 1998
Proposals by shareholders intended to be presented at the 1998 Annual
Meeting must be received no later than November 6, 1997 for inclusion in the
proxy materials. Proposals should be mailed to the attention of the Corporate
Secretary, Baltimore Gas and Electric Company, 39 W. 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.
18
This statement was printed
[LOGO] entirely on recycled paper.
NOTICE OF
ANNUAL
MEETING
OF SHAREHOLDERS
OCTOBER 30, 1997
AND
PROXY
STATEMENT
[LOGO]
BALTIMORE GAS AND ELECTRIC COMPANY
39 W. LEXINGTON STREET
BALTIMORE, MARYLAND 21201
[LOGO]
BALTIMORE GAS AND ELECTRIC COMPANY
P.O. BOX 1642, BALTIMORE, MARYLAND 21203-1642
Common Stock Proxy for Annual Meeting of Shareholders--October 30, 1997
This Proxy is solicited on behalf of the Board of Directors
PLEASE VOTE AND SIGN ON REVERSE SIDE AND RETURN IN THE ENCLOSED ENVELOPE.
The undersigned appoints Jerome W. Geckle, George V. McGowan and Christian H.
Poindexter (or a majority of them or their substitutes, or one acting alone in
the absence of the others), as proxies, with power to each to appoint a
substitute and to revoke the appointment of such substitute, to vote all shares
of common stock of Baltimore Gas and Electric Company which the undersigned is
entitled to vote at the annual meeting to be held on October 30, 1997, 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 on the reverse side of this card.
(OVER)
A VOTE "FOR" ITEMS 1 AND 2 IS RECOMMENDED:
1. THE ELECTION OF 13 DIRECTORS
/ / FOR all nominees, except as / / WITHHOLD AUTHORITY (ABSTAIN) 2. RATIFICATION OF THE FOR AGAINST ABSTAIN
lined through below (To vote from voting for all nominees APPOINTMENT OF COOPERS & / / / / / /
against any or all nominees LYBRAND L.L.P. AS AUDITORS
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 F.A. Hrabowski
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 1997 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 ---------------
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) allocated
to me under the Plan at the annual meeting of the shareholders of the Company to
be held on October 30, 1997, 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 card if
properly signed and received by October 23, 1997. IF NO INSTRUCTIONS ARE
SPECIFIED ON A SIGNED CARD, THE SHARES REPRESENTED THEREBY WILL BE VOTED IN
ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS OF THE COMPANY:
"FOR" ITEMS 1 AND 2. The Trustee is not permitted under the Plan to vote shares
of common stock unless voting instructions have been received.
(over)
PLEASE VOTE BY PLACING AN X IN THE APPROPRIATE BOX(ES) BELOW.
A VOTE "FOR" ITEMS 1 AND 2 IS RECOMMENDED:
1. THE ELECTION OF 13 DIRECTORS FOR all nominees WITHHOLD
H.F. Baldwin, B.B. Byron, J.O. Cole, D.A. Colussy, E.A. Crooke, J. R. listed at left (except AUTHORITY to vote
Curtiss, J.W. Geckle, F.A. Hrabowski, N. Lampton, G.V. McGowan, C.H. as for all nominees
Poindexter, G.L. Russell, Jr., M.D. Sullivan noted to the contrary listed at left
(INSTRUCTION: To vote against any individual nominee(s), write their --see INSTRUCTION)
name(s) on the line below.)
/ / / /
----------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS / / / / / /
AUDITORS
IF YOU PLAN TO ATTEND THE 1997 ANNUAL MEETING PLEASE CHECK THIS BOX / /
BALTIMORE GAS AND ELECTRIC COMPANY
PLEASE SIGN BELOW, EXACTLY AS YOUR NAME
APPEARS TO THE LEFT.
SIGNATURE
-----------------------
DATE
-----------------------
vot-inst.esp
BALTIMORE GAS AND ELECTRIC COMPANY
TO PARTICIPANTS IN THE
EMPLOYEE SAVINGS PLAN (THE PLAN)
The enclosed Notice of Annual Meeting of Shareholders, Proxy Statement, and
Voting Instructions for the Annual Meeting of Shareholders of the Company, to be
held on October 30, 1997, are being furnished to you by the Company on behalf of
T. Rowe Price Trust Company, Trustee under the Plan.
In accordance with the Plan and the Trust Agreement between the Company and the
Trustee, you may instruct the Trustee how to vote the shares of common stock
held for you under the Plan. Therefore, please complete the enclosed Voting
Instructions and return it in the envelope provided by OCTOBER 23, 1997. After
receipt of the properly executed Voting Instructions, the Trustee will vote as
directed by those instructions. The Trustee is not permitted to vote shares of
common stock unless Voting Instructions have been received.
Each participant in the Plan who is a holder of record of other shares of
Company stock will continue to receive, separately, a proxy and accompanying
proxy material to vote the shares of common stock registered in his or her name.
Elaine 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 card for the shares that you hold in the Plan.
The Trustee is not permitted to vote shares of common stock unless Voting
Instructions have been received.
We appreciate the support of our shareholders and encourage you to vote your
Employee Savings Plan shares, regardless of the size of your holdings. We have,
therefore, enclosed a second Voting Instructions card so that you can vote your
shares. Whether or not you plan to attend the meeting, we would appreciate your
completing the Voting Instructions card and returning it to the Trustee in the
envelope provided by OCTOBER 23, 1997.
Our initial mailing to you included a proxy statement. If you would like to
receive a duplicate copy of this document, please contact one of our shareholder
representatives in metropolitan Baltimore at 410-783-5920, within Maryland at
1-800-492-2861, outside Maryland at 1-800-258-0499.
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
October 7, 1997
[LOGO]
Dear Shareholder:
As of October 3, 1997, we had not received your proxy for
the 1997 annual shareholders meeting to be held October
30th.
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. If you would like to receive a duplicate copy
of this document, 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,
Chairman of the Board
ENCLOSURES