SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSANT 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
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
ATLANTIC ENERGY INC.
(Name of Registrant as Specified In Its Charter)
ATLANTIC ENERGY INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
..............................................................
2) Aggregate number of securities to which transaction applies:
..............................................................
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11*
4) Proposed maximum aggregate value of transaction:
..............................................................
- -----------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
[ ] 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:
..............................................................
(2) Form, Schedule or Registration Statement No.:
..............................................................
(3) Filing Party:
..............................................................
(4) Date Filed:
..............................................................
Notes:
ATLANTIC ENERGY, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Dear Shareholder:
The Annual Meeting of Shareholders of Atlantic Energy, Inc. ("Company")
will be held in the Atlantic City Ballroom of Harrah's Casino Hotel, 1725
Brigantine Boulevard, Atlantic City, New Jersey, on Wednesday, April 26, 1995,
at 3:00 p.m. for the following purposes:
1. To elect a Board of Directors of ten members to hold office for one
year and until their successors have been elected and qualified.
2. To ratify the appointment of Deloitte & Touche as independent
public accountants for the year ending December 31, 1995.
3. To transact any other business as may properly come before the
meeting, or any adjournments thereof.
To assure your representation at the meeting, please sign, date and return
your proxy card in the enclosed envelope which requires no postage if mailed in
the United States. Directors and officers will be available to talk individually
with shareholders before and after the meeting. IF YOU ARE UNABLE TO ATTEND,
PLEASE PROMPTLY RETURN YOUR PROXY CARD SO THAT YOUR SHARES WILL BE REPRESENTED
AT THE MEETING.
By Order of the Board of Directors,
/s/ E. D. Huggard
E. D. Huggard
Chairman
March 15, 1995
PROXIES AND SOLICITATION
This proxy statement and accompanying proxy card were first mailed to
shareholders on or about March 15, 1995.
Your proxy is solicited on behalf of the Board of Directors of the Company.
If your executed proxy card is returned in advance of the meeting and is not
revoked, the shares it represents will be voted in the manner directed. If no
direction is given, your proxy will be voted for items 1 and 2. Your proxy may
be revoked in writing prior to its exercise. Under New Jersey law, the presence
at the meeting of a shareholder who has given a proxy does not revoke the proxy
unless the shareholder files written notice of such revocation with the
secretary of the meeting prior to the voting of the proxy.
Other than the election of Directors, which requires a plurality of the
votes cast, each matter to be submitted to the shareholders requires the
affirmative vote of the majority of the votes cast at the meeting. For purposes
of determining the number of votes cast with respect to a particular matter,
only votes cast "for" or "against" are included. Abstentions and broker
non-votes are counted only for purposes of determining whether a quorum is
present at the meeting.
The solicitation of proxies will be made at the expense of the Company.
Proxies will be solicited primarily by mail and may be solicited personally and
by telephone. The Company will reimburse banks and brokerage firms for their
expenses in forwarding proxy material.
VOTING SECURITIES
Record holders of Common Stock at the close of business March 6, 1995 will
be entitled to vote at the meeting. At the close of business on March 6, 1995,
there were 53,376,411 shares of Common Stock outstanding. Holders of shares of
Common Stock are entitled to one vote per share of Common Stock.
ELECTION OF DIRECTORS
At the meeting, ten Directors, constituting the entire Board of Directors,
are to be elected for a term of one year and until their successors have been
elected and qualified. Each of the nominees was elected as a Director at the
1994 Annual Meeting of Shareholders.
IT IS INTENDED THAT SHARES REPRESENTED BY THE PROXIES SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS WILL BE VOTED IN FAVOR OF THE ELECTION OF THE PERSONS
LISTED. The management knows of no reason why any nominee for Director would be
unavailable. If any nominee should become unavailable, the proxy may be voted
for a substitute nominee.
NOMINEES FOR ELECTION
DIRECTOR
OF THE COMPANY
OR ATLANTIC CITY
NAME, AGE, PRINCIPAL OCCUPATION AND ELECTRIC COMPANY
BUSINESS EXPERIENCE PAST FIVE YEARS SINCE
----------------------------------- ----------------
JOS. MICHAEL GALVIN, JR., 49, President and Chief
Executive Officer of South Jersey Health
[photo] Corporation, The Memorial Hospital of Salem County,
Salem, NJ. Director of Woodstown National Bank and
Center for Health Affairs ......................... 1978
Other Information: Mr. Galvin is Chairman of the Personnel and Benefits
Committee and a member of the Audit; Energy, Operations and Research; and
Pension and Insurance Committees of the Board of Directors.
GERALD A. HALE, 67, President of Hale Resources,
Inc., Summit, NJ, a health care, industrial/natural
[photo] resource company. Director: New Jersey
Manufacturers Insurance Company, New Jersey
Business and Industry Association and Hoke, Inc. .. 1983
Other Information: Mr. Hale is Chairman of the Corporate Development Committee
and a member of the Audit; Energy, Operations and Research; and Personnel and
Benefits Committees of the Board of Directors.
MATTHEW HOLDEN, JR., 63, Professor of Government
Affairs, University of Virginia, Charlottesville,
VA. Economic and political consultant; arbitrator.
[photo] Prior to 1982, Commissioner, Federal Energy
Regulatory Commission and Wisconsin Public Service
Commission ........................................ 1981
Other Information: Mr. Holden is Chairman of the Audit Committee and a member of
the Corporate Development; Pension and Insurance; and Personnel and Benefits
Committees of the Board of Directors.
2
DIRECTOR
OF THE COMPANY
OR ATLANTIC CITY
NAME, AGE, PRINCIPAL OCCUPATION AND ELECTRIC COMPANY
BUSINESS EXPERIENCE PAST FIVE YEARS SINCE
----------------------------------- ----------------
CYRUS H. HOLLEY, 58, President of Management
Consulting Services, Grapevine, TX. Former Chief
Operating Officer, Executive Vice President and
Director of Engelhard Corporation. Director of UGI
Corporation and Hexcel Corporation................. 1990
Other Information: Mr. Holley is Chairman of the Energy, Operations and Research
Committee and a member of the Corporate Development; Finance and Investor
Relations; and Personnel and Benefits Committees of the Board of Directors.
E. DOUGLAS HUGGARD, 61, Chairman of the Board.
Retired Chief Executive Officer of the Company and
[photo] Retired Chairman and Chief Executive Officer of
Atlantic City Electric Company. Former President
and Chief Operating Officer of the Company and
Atlantic City Electric Company .................... 1984
Other Information: Mr. Huggard is an ex officio member of all committees of the
Board of Directors except the Audit and Personnel and Benefits Committees.
JERROLD L. JACOBS, 55, Director, President and
Chief Executive Officer of the Company and
[photo] Chairman, President and Chief Executive Officer of
Atlantic City Electric Company. Former Vice
President of the Company and Executive Vice
President of Atlantic City Electric Company ....... 1990
Other Information: Mr. Jacobs is an ex officio member of all committees of the
Board of Directors except the Audit and Personnel and Benefits Committees.
3
DIRECTOR
OF THE COMPANY
OR ATLANTIC CITY
NAME, AGE, PRINCIPAL OCCUPATION AND ELECTRIC COMPANY
BUSINESS EXPERIENCE PAST FIVE YEARS SINCE
----------------------------------- ----------------
KATHLEEN MacDONNELL, 46, Vice President, Campbell
Soup Company; Camden, NJ. President, Frozen Foods
[photo] Group, Campbell Soup Company; Former Sector Vice
President, Prepared Foods and Sector Vice
President, Grocery, Campbell Soup Company ......... 1993
Other Information: Ms. MacDonnell is a member of the Audit; Energy, Operations
and Research; Finance and Investor Relations; and Pension and Insurance
Committees of the Board of Directors.
RICHARD B. McGLYNN, 56, Attorney. Currently Vice
President and General Counsel of United Water
[photo] Resources, Inc., Harrington Park, NJ. During 1994,
Mr. McGlynn was a Partner with LeBoeuf, Lamb,
Greene & MacRae. Former Partner of Stryker, Tams &
Dill, Newark, NJ .................................. 1986
Other Information: Mr. McGlynn is Chairman of the Pension and Insurance
Committee and a member of the Corporate Development; Energy, Operations and
Research; and Finance and Investor Relations Committees of the Board of
Directors.
BERNARD J. MORGAN, 58, Financial Investor,
Southampton, PA. Former Vice Chairman of First
[photo] Fidelity Bancorporation, NJ/PA; Vice Chairman,
President, Chief Executive Officer and Chief
Operating Officer of Fidelcor, Inc.; Chairman,
Deputy Chairman, Chief Executive Officer, President
and Chief Operating Officer of Fidelity Bank, N.A. 1988
Other Information: Mr. Morgan is Chairman of the Finance and Investor Relations
Committee and a member of the Corporate Development; Pension and Insurance; and
Personnel and Benefits Committees of the Board of Directors.
4
DIRECTOR
OF THE COMPANY
OR ATLANTIC CITY
NAME, AGE, PRINCIPAL OCCUPATION AND ELECTRIC COMPANY
BUSINESS EXPERIENCE PAST FIVE YEARS SINCE
----------------------------------- ----------------
HAROLD J. RAVECHE, 51, President of Stevens
Institute of Technology, Hoboken, NJ. Director,
[photo] National Westminster Bancorp, Inc. Member, U. S.
Council on Competitiveness and Overall Economic
Development. Commissioner, Hudson County, N.J. and
Former Commissioner New Jersey Commission of
Science and Technology ............................ 1990
Other Information: Mr. Raveche is a member of the Audit; Corporate Development;
Energy, Operations and Research; and Finance and Investor Relations Committees
of the Board of Directors.
STOCK OWNERSHIP OF DIRECTORS AND OFFICERS
The following table sets forth the beneficial ownership of Common Stock of
the Company of each nominee for director, four executive officers, and all
directors and officers as a group as of December 31, 1994.
BENEFICIAL OWNERSHIP
(SHARES OF COMMON
NAME STOCK) (1)
----- -------------------
Jos. Michael Galvin, Jr. (a) .................. 3,299
Gerald A. Hale ................................ 4,629
Matthew Holden, Jr ............................ 3,445
Cyrus H. Holley ............................... 3,629
E. Douglas Huggard (b) ........................ 26,241
Jerrold L. Jacobs (c) ......................... 50,125
Kathleen MacDonnell ........................... 2,389
Richard B. McGlynn (d) ........................ 3,235
Bernard J. Morgan ............................. 4,129
Harold J. Raveche ............................. 2,910
Michael J. Chesser ............................ 23,682
Meredith I. Harlacher, Jr. (e) 27,535
Henry K. Levari, Jr. (f) ...................... 24,770
J. G. Salomone (g) ............................ 32,714
All Directors and Officers
as a Group (16 individuals) 230,718
- ------------
(1) Each of the individuals listed beneficially owned less than 1% of the
Company's outstanding Common Stock.
(a) Share ownership shown for Mr. Galvin excludes 4,358 shares beneficially
held in a trust.
(b) Share ownership shown for Mr. Huggard excludes 2,773 shares held by his
spouse.
(c) Share ownership shown for Mr. Jacobs includes 4,097 shares held jointly
with his spouse and 163 shares held in a custodial account for his child.
5
(d) Share ownership shown for Mr. McGlynn includes 200 shares held in a pension
trust of which Mr. McGlynn is the trustee.
(e) Share ownership for Mr. Harlacher includes 4,029 shares held jointly with
his spouse.
(f) Share ownership shown for Mr. Levari includes 3,572 shares held jointly
with his spouse and 775 shares held in custodial accounts for his children.
(g) Share ownership shown for Mr. Salomone includes 10,527 shares held jointly
with his spouse, excludes 400 shares held by his spouse and includes 404
shares held in a custodial account for his child.
MEETINGS OF THE BOARD OF DIRECTORS AND OF COMMITTEES OF THE BOARD
During 1994, 16 meetings of the Board of Directors were held. During 1994,
the committees of the Board of Directors met as follows:
NO. OF
COMMITTEE MEETINGS
---------- --------
Audit ........................................ 4
Corporate Development ........................ 2
Energy, Operations and Research .............. 3
Finance and Investor Relations ............... 3
Pension and Insurance ........................ 3
Personnel and Benefits ....................... 4
CORPORATE RESTRUCTURING AND CHANGES TO COMMITTEES EFFECTIVE JANUARY 1, 1995
On December 8, 1994, the Board of Directors approved the formation of
Atlantic Energy Enterprises, Inc. for the purpose of holding the shares of
capital stock of all of the Company's nonutility subsidiaries. Concurrently,
changes were implemented with respect to the functions and memberships of the
various committees of the Board of Directors of the Company to become effective
on January 1, 1995. The following committee descriptions reflect the functions
of the reorganized committees.
FUNCTIONS OF AUDIT COMMITTEE ARE AS FOLLOWS:
1. Recommends each year to the Board, the appointment of an independent
public accounting firm for Atlantic Energy, Inc. and its subsidiaries.
2. Reviews the scope, magnitude and cost of audit and non-audit services to
be performed by independent public accountants and makes recommendations to the
Board for approval of such services.
3. Reviews accounting, financial and operating controls with independent
public accountants, internal auditors and management.
4. Reviews periodic and annual audit reports of internal auditors and
independent public accountants, meets independently with each and with
management and ascertains whether the recommendations of the independent public
accountants have been implemented.
5. Reviews annual financial reports with the independent public accountants
prior to release.
6
6. Reviews and makes recommendations concerning security measures required
to protect vital records of Atlantic Energy, Inc. and its subsidiaries.
7. Inquires about any aspect of the business of Atlantic Energy, Inc. and
its subsidiaries, whenever it deems such desirable, to help ensure employees
comply with local, state and federal laws and regulations and with the Company's
Code of Ethics and Business Conduct Policy.
FUNCTIONS OF PERSONNEL AND BENEFITS COMMITTEE ARE AS FOLLOWS:
1. Reviews and makes recommendations to the Board with respect to selection
of officers of Atlantic Energy, Inc. and Atlantic City Electric Company.
2. Reviews the performance of officers of Atlantic Energy, Inc., Atlantic
City Electric Company and the President of Atlantic Energy Enterprises, Inc. and
recommends to the Board appropriate compensation levels.
3. Reviews the compensation paid to outside Directors of the Board of
Directors of the Company and Atlantic Energy Enterprises, Inc. and makes
recommendations for adjustments.
4. Monitors the Chief Executive Officer's program of executive development
and plans for officer succession at Atlantic Energy, Inc. and Atlantic City
Electric Company, monitors the management plan of organization and makes
recommendations to the Board as required.
5. Identifies prospective director candidates, establishes procedures for
shareholders to recommend director candidates and recommends to the Board
nominees for election.
6. Considers and makes recommendations to the Board regarding all
retirement plans, including the retirement policy for directors, and post
employment benefit plans.
7. Reviews and makes recommendations regarding the adequacy of all forms of
insurance coverage for Atlantic Energy, Inc. and its subsidiaries.
8. Reviews the funding status of the nuclear plant decommissioning trust of
Atlantic City Electric Company.
The Personnel and Benefits Committee (the "Committee") will consider
nominees for Director recommended by shareholders. Any nomination should be
submitted to the Secretary, Atlantic Energy, Inc., 6801 Black Horse Pike,
Pleasantville, NJ 08232, no later than February 26, 1996 for consideration in
advance of the 1996 Annual Meeting of Shareholders and should include the
following information: (a) as to each nominee whom the shareholder proposes to
nominate, (i) the name, age, business address and residence address of the
nominee, (ii) any other information concerning the nominee that would be
required, under the rules of the Securities and Exchange Commission, in a proxy
statement soliciting proxies for the election of such nominee, (iii) the consent
of the nominee to serve as a director, and (b) as to the shareholder giving the
suggestion, (i) the name, business address and residence address of the
shareholder, (ii) a statement that the shareholder is a shareholder of record,
entitled to vote at the meeting, and intends to nominate each nominee in person
or by proxy and (iii) a description of all arrangements or understandings among
shareholder and each nominee and any other persons (naming such persons)
pursuant to which the nomination is made by the shareholder.
7
DIRECTOR COMPENSATION
1994 COMPENSATION
During 1994, non-employee Directors received fees in accordance with the
following compensation schedule:
Retainer Fee .................................. $ 20,000 Annually
Board Meeting Fee ............................. 1,000 Per Meeting Attended
Committee Meeting Fee*
(if held same day as board meeting) ......... 1,000 Per Meeting Attended
Committee Meeting Fee*
(if held other than board meeting date) ..... 1,150 Per Meeting Attended
Committee or Board Meeting Fee via Telephone .. 150 Per Conference
- ------------
* Paid to committee members only
Actual receipt of such amounts may be deferred, with interest, until a time
selected by the non-employee Director.
In 1994, each non-employee Director received a per meeting fee of $1,000
for attendance at strategic planning sessions with management and staff of the
Company and its subsidiaries. In 1994, Mr. Raveche received $1,000; Messrs.
Holden, Huggard and McGlynn and Ms. MacDonnell each received $2,000; Mr. Galvin
received $3,000, and Messrs. Hale, Holley and Morgan each received $4,000 for
attendance at such sessions.
RIGHT TO RECEIVE STOCK OPTIONS IN LIEU OF RETAINER
Pursuant to the EQUITY INCENTIVE PLAN ("EIP") no later than June 30 of each
year, a non-employee Director may elect to receive an option to purchase Common
Stock in lieu of all or a portion of the non-employee Director's annual cash
retainer for the following year. The number of shares subject to option is
determined pursuant to the following formula:
number of shares = amount of retainer foregone
---------------------------
50% of fair market value of shares
on first business day of the year
Non-employee Directors who elect to receive stock options in lieu of
retainer will pay 100% of the fair market value of the Company's Common Stock
when the foregone compensation is added to the exercise price. In 1995, no
options in lieu of retainer will be issued.
DIRECTOR RETIREMENT PLAN
The Company has established a retirement plan for non-employee Directors
("Director Retirement Plan"). Under the Director Retirement Plan each
non-employee Director who has five years of service is eligible to receive
benefits for the longer of life or the full number of years the non-employee
Director served on the Board. Non-employee Directors who satisfy the service
requirement receive an annual benefit starting in the year they terminate
service. The annual benefit equals 100% of the annual retainer in effect in the
year in which the non-employee Director ended service, less 10% for each year
less than ten years of total service as a non-employee Director. In the event of
the death of an eligible non-employee Director prior to receiving payments for
the number of full years of his or her service, the designated beneficiary of
such non-employee Director shall be entitled to a lump-sum payment equal to the
difference between the amount the non-employee Director has already received and
the amount that would have been received if payments were made for the full
number of years of the non-employee Director's service.
8
RESTRICTED STOCK PLANS
Shares of restricted stock are granted to non-employee Directors to enhance
recruitment and retention of highly qualified individuals and to strengthen the
commonality of interests between non-employee Directors and shareholders.
Under the EIP, approved by shareholders in 1994, each non-employee
Director receives a grant of 1,000 shares every five years, subject to certain
restrictions. On January 1 of each year of the five year period, 200 shares
vest. While a non-employee Director serves as an active member of the Board of
Directors, certificates are held by the Company. If a non-employee Director
terminates service because of death, disability, retirement from the Board at
age 70 or later, or upon failure to be re-elected after being nominated, all
shares (vested and nonvested) are delivered to him/her or his/her designated
beneficiary, free of restrictions. Non-employee Directors who terminate service
for other reasons are delivered only shares that have vested. Commencing on the
date of grant, each non-employee Director has the right to vote such shares of
Common Stock.
Grants under the EIP commence in the year following a non-employee
Director's full vesting in grants previously received by each non-employee
Director under the Director Restricted Stock Plan. The Director Restricted Stock
Plan was terminated in 1994. Outstanding grants under the Director Restricted
Stock Plan remain in effect and vest at the rate of 200 shares per year for the
10-year period. The Director Restricted Stock Plan provided for the one-time
grant of 2,000 shares, subject to certain restrictions, to each non-employee
Director. The restrictions on shares granted under the Director Restricted Stock
Plan are identical to the EIP described above.
In 1994, two non-employee Directors received a grant under the EIP of 642
and 414 fully vested shares, respectively. These non-employee Directors were
fully vested in the 2,000 share grant provided to each Director under the
original Director Restricted Stock Plan, upon its adoption, due to their years
of prior service. The 642 and 414 shares reflect shares and dividends they would
have been awarded under the original plan had they been awarded 200 shares in
each year of its existence.
The stock ownership reported for each non-employee Director includes shares
granted to them and subject to forfeiture under the EIP and Director Restricted
Stock Plan.
PERSONNEL AND BENEFITS COMMITTEE REPORT ON EXECUTIVE COMPENSATION
KEY COMPENSATION POLICIES
The executive compensation policies adopted by the Committee are designed
to achieve three objectives:
* To create a pay-for-performance linkage that makes a significant
portion of the total compensation opportunity for executive officers,
including the CEO, dependent on achieving key performance objectives
set at the corporate, business unit (for unit executives) and
individual executive levels.
* To structure the total compensation package so that it provides a
median level of pay in comparison to industry practice when results
approximate industry average, while paying significantly above or below
these market levels when performance falls significantly above or below
the industry average, respectively.
* To structure the incentive components of compensation for executive
officers, including the CEO, so that the creation of long-term
shareholder value is the primary focus of incentive opportunity.
(Note: the term executive officers refers to the individuals listed in Table 1 -
Summary Compensation Table on page 14 of this proxy statement.)
9
To achieve these objectives, the Company follows a total compensation
philosophy in its approach to executive compensation, including compensation
paid to the CEO. Total compensation is comprised of three primary elements: base
salary, an annual incentive award ("bonus") and a long-term equity based
incentive. Executive officers' total compensation is significantly at risk based
upon the financial performance of the Company. If the performance of the Company
fails to meet certain predetermined criteria and specific numeric goals, the
opportunity to earn incentive compensation is significantly reduced.
COMPETITIVE COMPENSATION
Beginning in 1994 and reviewed annually thereafter, target levels of
executive compensation, including compensation paid to the CEO, are approved by
the Committee. These target levels are equivalent to the median compensation
levels for comparable executive positions among a panel of similar revenue and
asset-sized electric utilities in the eastern United States. This panel is
referred to as the peer group which is subject to adjustment as a result of
mergers or acquisitions. Each year, target levels are established for base
salaries and for short-term performance incentive awards based on median levels
of the peer group supplemented by median data from the Edison Electric
Institute's (EEI) executive compensation survey covering comparable size
utilities in the eastern U.S. EEI survey data are used where matches to
comparable positions require this supplemental data. Every two years, median
target levels are reviewed for long-term performance incentive awards based on
median levels of the peer group.
PERFORMANCE BASED COMPENSATION
The Company's compensation policy is also designed to reward exceptional
performance. To this end, the Committee approves objective short-term and
long-term performance criteria and specific numeric goals that are largely
linked to the creation of shareholder value. Actual results are measured against
goals and awards are made according to established formulas.
The performance graph on page 17 compares the cumulative total return to
shareholders of the Company to that of the peer group.
INDEPENDENCE OF THE COMMITTEE
The Committee consists of six outside Directors as defined for the
purposes of Section 162(m) of the Internal Revenue Code.
The Committee is responsible for developing and administering the policies
which govern the total compensation program for executive officers , including
the CEO. The Committee also administers the Company's Equity Incentive Plan (see
"Long-Term Incentive Compensation" below) for all participants, including the
awards to the executive officers of the Company and its subsidiaries. The
Committee determines the performance criteria and specific numeric goals for
both long-term and short-term incentive compensation to be paid to executive
officers, including the CEO.
The Committee utilizes the services of a qualified compensation consultant
in connection with its annual review of the competitiveness and effectiveness of
the executive compensation program.
POLICY ON DEDUCTIBILITY OF COMPENSATION
Section 162(m) of the Internal Revenue Code limits the tax deduction to $1
million for compensation paid to each of the executive officers listed on page
14. The Committee has carefully reviewed the requirements of Section 162(m) and
intends to comply with its requirements. Qualifying performance-based
compensation is not subject to the deduction limit if certain requirements are
met. In 1994, all compensation paid to the executive officers was deductible.
For 1995, the Committee does not contemplate that there will be nondeductible
compensation.
10
BASE SALARIES
HOW BASE SALARIES ARE DETERMINED
Base salary guidelines for the executive officers of the Company, including
the CEO, are based on the salaries paid to executive officers in positions with
responsibilities similar to the Company's positions. Using median market data
from the peer group and the EEI survey, a competitive salary range is assigned
to each executive position. Within these ranges, a "market" salary level is
defined for each position that approximates the median survey data. Executive
officers, including the CEO, can progress up to this market level through
sustained proficiency in their position and can advance into the remaining
salary range through continuous excellent performance in the areas of leadership
competencies and financial and operational achievements.
Adjustments to base salary are generally considered each December. The size
of the base salary adjustment for each individual executive officer, other than
the CEO, is recommended by the CEO to the Committee on the basis of individual
performance evaluations. Executive officers are assessed on relative achievement
of objectives assigned to them for the period, their overall leadership
competencies and managerial effectiveness and other significant corporate and
business unit accomplishments. In 1994, certain executive officers' individual
performance evaluations were based, in part, on the level of support provided in
the achievement of corporate financial objectives. The CEO's performance
evaluation is conducted by the Committee and reviewed by the full Board. The
CEO's performance is assessed on leadership competencies and achievements in the
areas of strategic planning, organizational restructuring, succession planning,
communications internal and external to the Company and the financial and
operating performance of the Company and Atlantic City Electric Company.
In December 1994, the Committee determined that it would be appropriate to
delay adjustments to the 1994 base salary paid to executive officers in the
Company, including the CEO, until an unspecified date in 1995. Adjustments may
be retroactive at the discretion of the Board. No decisions as to such
adjustments have yet been made. In taking this action, the Committee recognized
that the results of several major strategic initiatives underway late in the
fourth quarter of 1994, including a corporate-wide downsizing and restructuring,
would be measurable in 1995 and acting on management's recommendation, agreed
that such a delay would be appropriate.
At the same time, the Committee adjusted the salary rate of each executive
officer, including the CEO, to an amount equal to the 1993 base salary plus the
lump-sum merit payment made in 1994 in lieu of base salary increases. In 1993,
an amount equal to a specified percentage of all executive officers' base
salaries had been made available for distribution to them in the form of
lump-sum merit payments. Such lump-sum merit payments were in lieu of base
salary increases. The specified percentage had been based on then current
electric utility practices for salary merit increases to executive officers as
identified by the Committee's compensation consultant. The Committee determined
that such action was necessary and appropriate at this time in order to 1)
maintain the executive officers' base salaries, including the base salary paid
to the CEO, within the market guidelines established in 1994, 2) hold the 1995
base salary rate at a level equivalent to the 1994 base salary rate and 3)
provide equitable base salary treatment among executive officers.
ANNUAL INCENTIVE (BONUS) COMPENSATION
The annual incentive compensation program is designed to provide executive
officers, including the CEO, with the opportunity to earn annual bonuses
equivalent to median competitive practices when performance matches targeted
goals and to increase or decrease significantly from target levels when
performance similarly falls above or below the target goals.
11
For 1994, bonuses were paid to each executive officer of the Company,
including the CEO. Such bonuses ranged from 21% to 37% of an executive officer's
base salary.
In 1994, the CEO earned a bonus equivalent to 31% of his base salary. The
amount of bonus paid to the CEO is determined solely by the achievement of
corporate performance indicators.
The amount of bonus paid to executive officers other than the CEO is based
on a combination of corporate performance indicators, business unit specific
goal achievement and individual performance rating.
For 1994, the target corporate performance indicators and relative
weighting of each criteria at the target level were:
* 54.5% related to return on equity of Atlantic City Electric Company;
* 9.5% related to non-regulated activity profitability;
* 18% related to internal cash generation coverage of Atlantic City
Electric Company's construction costs, and
* 18% related to Atlantic City Electric Company customer satisfaction.
In 1994, the Company exceeded the target level for three performance
indicators (return on equity of Atlantic City Electric Company, internal cash
generation coverage of Atlantic City Electric Company's construction costs and
non-regulated activity profitability) and did not meet the target level of one
performance indicator (Atlantic City Electric Company customer satisfaction).
HOW BONUS AMOUNTS ARE DETERMINED
At the beginning of each year, a target level bonus pool is established.
The bonus pool is determined by applying a predetermined percentage to the
mid-point of the position rate of executive officers, including the CEO. In
1994, the percentages applied to position rate mid-points ranged from 20% - 30%.
These predetermined percentages represent the median compensation practices of
the peer group supplemented by EEI survey data. The results are summed and the
target bonus pool amount is established. At the end of year, a
performance-adjusted bonus pool is calculated by adjusting the target bonus pool
upward or downward based on the achievement of corporate performance indicators.
The amount of bonus paid to the CEO is based solely on the achievement of
corporate performance indicators. The amount of bonus paid to executive
officers, other than the CEO, is based on the achievement of corporate
performance indicators and may be further modified by the achievement of
business unit goals and individual performance ratings. The total amount of
bonuses paid out may, with the approval of the Committee, exceed the amount of
the performance-adjusted bonus pool if business unit performance and personal
performance results are exceptional. In 1994, 100% of the performance-adjusted
bonus pool was paid out.
At the discretion of the Committee, a bonus allocation may be in a
combination of cash and restricted stock. In 1994, all bonuses were paid in
cash.
LONG-TERM INCENTIVE COMPENSATION
The Company uses an equity-based long-term incentive program, Equity
Incentive Plan ("EIP"), to link a major portion of executive compensation
directly to the creation of shareholder value. This linkage is accomplished
through the granting of stock options, where the award value is based solely on
share price appreciation, and the granting of performance-vested restricted
12
stock, where the performance requirements reflect shareholder value creation. In
addition, the EIP is structured to emphasize the accumulation of significant
share ownership by management that the Committee believes is an incentive for
executive officers to make decisions as owners. In 1994, each executive officer,
including the CEO, was granted stock options and restricted stock. (See Tables 2
and 4 on pages 14 and 16, respectively).
STOCK OPTIONS
The value of stock options is entirely dependent on the share price
appreciation of the Company's stock. In 1994, the exercise price of the options
granted to the executive officers, including the CEO, was $21.125, the fair
market value of the stock on April 27, 1994. In 1994, the Committee awarded the
CEO an option to purchase 36,000 shares of Common Stock at its fair market value
on April 27, 1994. Stock options granted in 1994 become exercisable on April 27,
1997 and will expire on April 27, 2004.
PERFORMANCE-VESTED RESTRICTED STOCK
Restricted stock grants will be earned if, and only if, certain long-term
performance criteria are met. One half (50%) of the restricted shares may be
earned and vested if, over a three-year period ending January 1, 1997 known as a
performance cycle, total shareholder return (stock price appreciation plus
reinvested dividends) equals the median or better of the total shareholder
return achieved by the peer group. The other half of restricted shares may be
earned if cumulative return on shareholder equity over the same performance
cycle is at a preapproved standard or better. The award levels can increase up
to 100% of the total restricted shares if total shareholder return and
cumulative return on shareholder equity reaches higher goal levels
pre-established by the Committee. In 1994, the Committee granted to the CEO
36,000 shares of restricted stock. The market value of the stock on April 27,
1994, the date of grant, was $760,500. Executive officers, including the CEO,
are entitled to vote the stock. Dividends earned on the restricted shares are
reinvested and subject to identical restrictions during the three-year
performance cycle.
Jos. Michael Galvin, Jr., Chairman
Gerald A. Hale
Matthew Holden, Jr.
Cyrus H. Holley
Kathleen MacDonnell
Richard B. McGlynn
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1994, the Company and its subsidiaries employed the services of
LeBoeuf, Lamb, Greene & MacRae. Mr. McGlynn was a partner in LeBoeuf, Lamb,
Green & MacRae in 1994. Mr. McGlynn did not serve as a member of the Committee
in 1994.
13
TABLE 1 - SUMMARY COMPENSATION TABLE
- ------------------------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------- ----------------------
AWARDS PAYOUTS
------ -------
OTHER RE-
ANNUAL STRICTED SECURITIES ALL OTHER
COMPEN- STOCK UNDERLYING LTIP COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS SATION(1) ($) (2) OPTIONS(#) PAYOUTS SATION(3)
------------------------- ---- ------ ----- --------- -------- ---------- ------- ---------
J. L. Jacobs ............................... 1994 $390,583 $120,100 $ 19,895 -- 36,000 -- $ 4,620
President and Chief ...................... 1993 284,670 70,400 10,575 -- -- -- 4,497
Executive Officer ........................ 1992 233,233 39,290 12,696 -- -- $35,13 4,523
of the Company and
Chairman, President and
Chief Executive Officer of
Atlantic City Electric
Company
- ------------------------------------------------------------------------------------------------------------------------------------
M. J. Chesser (4) .......................... 1994 200,000 89,500 69,299 -- 18,300 -- 79,021
Vice President of ........................ 1993 -- -- -- -- -- -- --
the Company and .......................... 1992 -- -- -- -- -- -- --
Executive Vice President and
Chief Operating Officer of
Atlantic City Electric
Company
- ------------------------------------------------------------------------------------------------------------------------------------
J. G. Salomone (5) ......................... 1994 184,200 39,000 8,868 -- 14,800 -- 4,620
Vice President, .......................... 1993 178,092 33,600 7,793 -- -- -- 4,497
Treasurer and ............................ 1992 169,650 22,585 9,770 -- -- 25,824 4,231
Secretary of the Company and
Senior Vice President--
Finance and Administration
of Atlantic City Electric
Company
- ------------------------------------------------------------------------------------------------------------------------------------
M. I. Harlacher, Jr. ....................... 1994 181,100 58,500 9,167 -- 14,800 -- 4,620
Vice President of ........................ 1993 175,067 43,100 7,358 -- -- -- 4,497
the Company and ......................... 1992 165,667 22,935 8,426 -- -- 21,581 4,523
Senior Vice President--
Energy Supply of Atlantic
City Electric Company
- ------------------------------------------------------------------------------------------------------------------------------------
H. K. Levari, Jr ............................ 1994 154,983 40,000 6,854 -- 14,800 -- 4,424
Vice President of ........................ 1993 141,883 34,400 5,987 -- -- -- 3,552
the Company and ......................... 1992 133,000 21,030 7,215 -- -- 17,725 3,830
Senior Vice President--
Customer Operations of
Atlantic City Electric
Company
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Includes dividends paid on shares of restricted stock under the Long-Term
Incentive Plan ("LTIP") and tax reimbursement payments.
(2) See Table 4 - Long Term Plan Awards in Last Fiscal Year on page 16.
(3) "All Other Compensation" consists of contributions by Atlantic City Electric
Company in 1994 under the Atlantic Electric 401(k) Savings and Investment
Plan-A, a defined contribution plan. The amount reported for Mr. Chesser also
includes a one-time payment for relocation expenses.
(4) Mr. Chesser joined the Company on February 1, 1994.
(5) Mr. Salomone retired effective at the close of business on
January 31, 1995.
14
TABLE 2 - OPTION GRANTS IN THE LAST FISCAL YEAR
- ------------------------------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS EXERCISE
UNDERLYING GRANTED TO OR BASE EXPIRA-
OPTIONS EMPLOYEES IN PRICE TION
NAME GRANTED FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
----- ----------- ---------- -------- ------- -------- ----------
(1) (2) (3)
J. L. Jacobs ................. 36,000 21.52% $21.125 4/27/04 $478,274 $1,212,041
M . J. Chesser ............... 18,300 10.94% 21.125 4/27/04 243,123 616,121
J. G. Salomone ............... 14,800 8.85% 21.125 4/27/04 196,624 498,283
M. I. Harlacher, Jr. ......... 14,800 8.85% 21.125 4/27/04 196,624 498,283
H. K. Levari, Jr. ............ 14,800 8.85% 21.125 4/27/04 196,624 498,283
- ------------------------------------------------------------------------------------------------------------------------------------
1. Options granted under the EIP on April 27, 1994 are exercisable starting 36
months after the grant date with 100% of the shares covered becoming
exercisable at that time.
2. Under the terms of the EIP, the Committee retains discretion, subject to
plan limits, to modify the terms of outstanding options.
3. The options granted in 1994 are for a term of ten (10) years subject to
earlier termination upon events related to termination of employment. The
option price for any options granted under the EIP will not be less than
100% of the fair market value of Company Common Stock as of the date of
grant.
TABLE 3 - AGGREGATED FISCAL YEAR-END OPTION VALUES
- --------------------------------------------------------------------------------
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE MONEY OPTIONS
OPTIONS AT FY-END(#) AT FY-END($)
- --------------------------------------------------------------------------------
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE
----- ------------ ------------
J. L. Jacobs 0 / 36,000 --
M. J. Chesser 0 / 18,300 --
J. G. Salomone 0 / 14,800 --
M. I. Harlacher, Jr. 0 / 14,800 --
H. K. Levari, Jr. 0 / 14,800 --
- --------------------------------------------------------------------------------
15
TABLE 4 - LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
- --------------------------------------------------------------------------------
ESTIMATED
FUTURE PAYOUTS
UNDER NON-STOCK
PRICE BASED PLAN
- --------------------------------------------------------------------------------
PERFORMANCE
NUMBER OF PERIOD UNTIL
SHARES MATURATION THRESHOLD TARGET MAXIMUM
NAME (#) (1) OR PAYOUT (#) (#) (#)
---- ---------- ------------ --------- -------- -------
J. L. Jacobs ......... 36,000 3 years 6,012 24,012 36,000
M. J. Chesser ........ 18,300 3 years 3,056 12,206 18,300
J. G. Salomone (2) ... 14,800 3 years 2,472 9,872 14,800
M. I. Harlacher, Jr .. 14,800 3 years 2,472 9,872 14,800
H. K. Levari, Jr ..... 14,800 3 years 2,472 9,872 14,800
- --------------------------------------------------------------------------------
(1) Awards listed are in shares of restricted stock granted under the EIP on
April 27, 1994. All awards listed are performance based. Delivery of
shares granted under the EIP depends entirely upon attainment of two
equally weighted financial performance indicators approved by the
Committee and the Board: cumulative return on average shareholder's equity
and total shareholder return compared to the peer group. Under the EIP,
regular quarterly dividends are reinvested in additional shares of
restricted stock that are subject to the same restrictions. The table
below shows the aggregate shares of restricted stock that were held and
remain restricted at December 31, 1994, the value of such shares on
December 31, 1994 and the number of shares granted in 1993 and 1994.
MARKET
RESTRICTED VALUE
STOCK HELD OF
AT AGGREGATE
DECEMBER 31, RESTRICTED GRANTS
NAME 1994 STOCK (A) 1993 (B) 1994
---- ------------ ----------- -------- ------
J. L. Jacobs ........ 42,773 $753,874 6,773 36,000
M. J. Chesser ....... 22,871 403,101 4,571 18,300
J. G. Salomone ...... 19,794 348,869 4,994 14,800
M. I. Harlacher, Jr. 19,710 347,389 4,910 14,800
H. K. Levari, Jr .... 18,783 331,050 3,983 14,800
(a) Market value is determined by reference to the per share closing
price on December 30, 1994 of $17.625 times the maximum number of
shares that could be awarded to each of the executive officers.
(b) Awards listed are in shares of restricted stock granted in 1993
under the Long-Term Incentive Plan ("LTIP"). The LTIP was
terminated in 1994 with the final three-year restriction period
lapsing on December 31, 1995. Delivery of shares granted under the
LTIP depends on stock price performance of the Company (price
appreciation plus dividends paid) and the price of electricity
charged to residential consumers by Atlantic City Electric
Company, each of which are compared to a group of 28 utilities
with credit ratings similar to Atlantic City Electric Company.
Under the LTIP, regular quarterly dividends are paid and
distributed.
(2) Award granted to Mr. Salomone will be prorated to reflect his retirement
effective at the close of business on January 31, 1995.
- --------------------------------------------------------------------------------
16
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG ATLANTIC ENERGY, INC., THE S&P 500 INDEX AND A PEER GROUP
[comparison graph represented in tabular format below]
*$100invested on 12/31/89 in stock or index--including reinvestment of
dividends. Fiscal year ended December 31.
CUMULATIVE TOTAL RETURN
----------------------------------------
1990 1991 1992 1993 1994
---- ---- ---- ---- ----
ATLANTIC ENERGY, INC .............. 96 126 151 152 134
PEER GROUP ........................ 100 132 148 164 140
S&P 500 ........................... 97 126 136 150 152
The above graph compares the performance of Atlantic Energy, Inc. with that
of the S&P 500 Index and a peer group of utility companies with the investment
weighted based on market capitalization. The peer group is comprised of the
following companies:
Boston Edison Company, Central Hudson Gas & Electric Corp., Central Maine
Power Company, Commonwealth Energy System, Delmarva Power & Light Co., DPL Inc.,
DQE Inc., New York State Electric & Gas Corporation, Orange & Rockland
Utilities, Incorporated, Potomac Electric Power Company, Rochester Gas &
Electric Corp., SCANA Corporation, UGI Corporation and United Illuminating
Company.
EMPLOYMENT AGREEMENTS AND TERMINATION ARRANGEMENTS
The Company and Atlantic City Electric Company have entered into employment
agreements with each of the executive officers listed in Table 1 - Summary
Compensation Table on page 14. Under the terms of the agreements each executive
17
officer is entitled to receive 1) a base salary, 2) incentive compensation at
the discretion of the Board of Directors based upon the recommendation of the
Committee, and 3) any other benefits that are available from time to time to
officers of the Company. Each agreement also provides that each executive
officer's base salary shall continue until the termination date of the agreement
if his service to the Company or its subsidiaries is terminated without cause or
if there is a change in control and if under certain circumstances his business
address or responsibilities are materially changed. Pursuant to the terms of the
agreement with J. L. Jacobs, in the event of his death, his designated
beneficiary shall be paid, in addition to any other benefits payable, 25% of Mr.
Jacobs's base salary from the date of his death until April 24, 1996, the
termination date of his employment agreement.
J. G. Salomone retired from service effective at the close of business
January 31, 1995 pursuant to an Employment Separation and Release Agreement.
Under the terms of this agreement, Mr. Salomone will be paid 1) his current base
salary in periodic installments for 62-weeks commencing February 1, 1995; 2) an
incentive award for performance achievements in 1994, and 3) all other benefits
to which he is entitled by reason of his having been an employee of Atlantic
City Electric Company. He also will participate on a pro rata basis, in any
incentive awards earned during 1995. In addition, the retirement benefits paid
to Mr. Salomone under the Supplemental Executive Retirement Plan would be
adjusted to reflect any base salary increases that might be earned by the
executive officers in 1995.
PENSION PLANS
The following table describes the combined estimated annual retirement
benefit payable under the Retirement Plan that is qualified under Section 401(a)
of the Internal Revenue Code ("Qualified Plan") and the Excess Benefit
Retirement Income Program (`'Excess Plan"). The Internal Revenue Code places
certain limitations on the amount of pension benefits that may be paid under the
Qualified Plan. Any benefits payable in excess of those limitations will be paid
under the Excess Plan. The estimated retirement benefits paid to an employee
assume a straight life annuity to the employee, retirement at age 65, the
average of the highest earnings in five of the ten years preceding retirement
and years of service specified.
The credited full years of service at December 31, 1994 under the
Retirement Plan are as follows for the individuals named in the cash
compensation table: Mr. Jacobs--33 years; Mr. Chesser - one year, Mr.
Salomone--18 years; Mr. Harlacher--29 years and Mr. Levari--23 years
TABLE 5 -PENSION PLAN TABLE
YEARS OF SERVICE
--------------------------------------------------------
REMUNERATION 25 30 35 40 45
------------ -------- -------- -------- -------- --------
$130,000 $ 52,000 $ 62,000 $ 73,000 $ 83,000 $ 94,000
190,000 76,000 91,000 106,000 122,000 137,000
250,000 100,000 120,000 140,000 160,000 180,000
310,000 124,000 149,000 174,000 198,000 223,000
370,000 148,000 178,000 207,000 237,000 266,000
430,000 172,000 206,000 241,000 275,000 310,000
490,000 196,000 235,000 274,000 314,000 353,000
550,000 220,000 264,000 308,000 352,000 396,000
Compensation covered for the executive officers named in Table 1 - Summary
Compensation Table on page 14 is the same as the total salary and bonus shown in
that table. Employees, including executive officers, may elect lump-sum
distributions in lieu of the receipt of annual retirement benefits.
In addition the Company maintains a Supplemental Executive Retirement Plan
("SERP"). The SERP, which has been in effect since January 1983, provides at age
60 and retirement: 1) the annual payment of 25% of final compensation for the
longer of 15 years or life and 2) the one time payment of 75% of final
18
compensation in the year of death. For purposes of the SERP, "final
compensation" is an amount equal to the executive officer's then current base
salary plus the average of the two most recent years' bonuses. Executive
officers after five (5) years are fully vested in the SERP. The Board may
commence payout of SERP retirement benefits at any time after the qualified
executive officer has attained age 55 and retired. Executive officers may elect
lump-sum distribution in lieu of the receipt of annual payments. The Plan
provides for the Company to gross-up for federal and state taxes on the SERP
payments. Approximately twenty-seven (27) former and current officers of
Atlantic City Electric Company, including the five (5) executive officers named
in Table 1 - Summary Compensation Table, participate in the SERP. Annual
benefits payable to the executive officers who are participants in the SERP,
based on current base salaries and bonuses for the years ended December 31, 1993
and 1994, would upon retirement, be as follows: Mr. Jacobs $122,813; Mr. Chesser
$71,188; Mr. Salomone $55,125; Mr. Harlacher, $57,975 and Mr. Levari $48,225.
These amounts are in addition to the amounts shown in the Pension Plan Table
above.
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Upon the recommendation of the Audit Committee, the Board of Directors has
appointed Deloitte & Touche as independent public accountants of the Company for
the year ending December 31, 1995. Representatives of Deloitte & Touche will be
present at the Annual Meeting, will be available to respond to appropriate
questions and will have the opportunity to make a statement if they so desire.
None of the members of the Audit Committee is an executive officer of the
Company.
Although not required, the Board of Directors proposes to submit at the
meeting a proposal that the appointment of Deloitte & Touche be ratified. If the
shareholders do not ratify the appointment of Deloitte & Touche, the selection
of independent public accountants will be reconsidered and made by the Board of
Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
SELECTION OF DELOITTE & TOUCHE.
FUTURE PROPOSALS OF SHAREHOLDERS
To be included in the proxy materials for the 1996 Annual Meeting of
Shareholders, any shareholder proposal intended to be submitted for action at
that meeting must be received by the Secretary, Atlantic Energy, Inc., 6801
Black Horse Pike, Pleasantville, NJ 08232 on or before November 15, 1995.
OTHER MATTERS
The Company has mailed a 1994 Annual Report to Shareholders and a proxy
card together with this proxy statement to all shareholders of record and
persons who, according to the records of the Company, hold shares of Common
Stock in the Dividend Reinvestment and Stock Purchase Plan or Employee Stock
Ownership Plan but do not own any other shares at the close of business on March
6, 1995.
The Board of Directors does not intend to bring before the meeting any
business other than the matters referred to in this proxy statement, and at the
date of this proxy statement, the Board of Directors is not aware that any other
matters are to be presented for action at the meeting. However, if any other
matters properly come before the meeting, or any adjournments thereof, the
persons named in the accompanying proxy card will vote in accordance with their
discretion on such matters.
UPON RECEIPT OF A WRITTEN REQUEST OF A BENEFICIAL OWNER OF SECURITIES
ENTITLED TO VOTE AT THE MEETING, THE COMPANY WILL PROVIDE, WITHOUT CHARGE, A
COPY OF ITS FORM 10-K ANNUAL REPORT AFTER IT IS FILED, ON OR BEFORE MARCH 31,
1995, WITH THE SECURITIES AND EXCHANGE COMMISSION. THE REQUEST SHOULD BE
DIRECTED TO INVESTOR RECORDS, ATLANTIC ENERGY, INC., P.O. BOX 1334, 6801 BLACK
HORSE PIKE, PLEASANTVILLE, NEW JERSEY 08232.
19
MARCH 15, 1995
[photo]
E. D. Huggard
Chairman Of The Board Of Directors
You Are Cordially Invited To Join Us At The 1995 Annual Meeting Of Shareholders
Of Atlantic Energy, Inc. This Year The Meeting Will Be Held In The Atlantic City
Ballroom Of Harrah's Casino Hotel, 1725 Brigantine Boulevard, In Atlantic City,
New Jersey, On Wednesday, April 26, 1995, Starting At 3:00 P.m. I Hope You Will
Be Able To Attend. At The Meeting, In Addition To Considering And Acting On The
Matters Described In The Attached Proxy Statement, A Current Report On The
Business Operations Of The Company And Its Subsidiaries Will Be Given.
It Is Important That Your Shares Be Voted Whether Or Not You Plan To Be Present
At The Meeting. You Should Specify Your Choices By Marking The Appropriate Boxes
On The Proxy Form Below And Date, Sign And Return Your Proxy Form In The
Enclosed, Postpaid Return Envelope As Promptly As Possible. If You Date, Sign
And Return Your Proxy Form Without Specifying Your Choices, Your Shares Will Be
Voted In Accordance With The Recommendations Of Your Directors.
I Welcome Your Comments And Suggestions. Time Will Be Provided During The
Meeting For Your Questions. For Your Convenience, Directions To The Meeting Site
Have Been Printed On The Reverse Side Of This Letter.
I Look Forward To Seeing You.
SINCERELY,
s/s E. D. Huggard
E. D. Huggard
TEAR HERE TEAR HERE
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE LISTED PROPOSALS
ACCOUNT NO.
SIGNATURE(S)_________________________________________________________________
[ ] I plan to attend the meeting on April 26, 1995
[ ] Check Box To Eliminate Sending Future Annual Reports For This Account.
Date________________________, 1995
Please sign exactly as your name appears on the
left. Each joint owner must sign. When signing as
trustee, guardian, executor, administrator or
corporate officer, please give full title.
The undersigned appoint(s) J. M. Galvin, Jr., E. D. Huggard, and J. L.
Jacobs or any of them, proxies with full power of substitution to vote all of
the shares of Atlantic Energy, Inc. Common Stock, which the undersigned is
entitled to vote at the Annual Meeting of Shareholders to be held on April 26,
1995 or any adjournments thereof.
1. ELECTION OF DIRECTORS nominees below:
Jos. Michael Galvin, Jr.; Gerald A. Hale; Matthew Holden, Jr.; Cyrus H. Holley;
E. Douglas Huggard; Jerrold L. Jacobs; Richard B. McGlynn; Kathleen MacDonnell;
Bernard J. Morgan and Harold J. Raveche.
[ ] FOR [ ] AGAINST FOR ALL NOMINEES EXCEPT:_________________________
2. To ratify the appointment of Deloitte & Touche as independent public
accountants.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ABOVE PROPOSALS.
3. Upon such other business as may properly be brought before the meeting,
or any adjournment thereof.
PLEASE DATE AND SIGN ON THE REVERSE SIDE
DIRECTIONS TO HARRAH'S CASINO HOTEL
FROM NEW YORK: Take the New Jersey Turnpike to Exit 11 (Garden State Parkway).
Take the Garden State Parkway South to Exit 40 (White Horse Pike - Route 30).
Take Route 30 East and follow the signs for Brigantine. Exit Route 30 at Dr.
Martin Luther King Blvd. (Illinois Ave.). Follow the signs to Harrah's.
(approximately 2 hours 20 minutes)
FROM PHILADELPHIA: Take the Ben Franklin or the Walt Whitman Bridge to the North
South Freeway (Route 42). Take the North South Freeway to the Atlantic City
Expressway. Take the Atlantic City Expressway to Exit 9 (Brigantine). Follow
Delilah Road (646) to Route 30 East. Exit Route 30 East at Dr. Martin Luther
King Blvd. (Illinois Ave.). Follow the signs to Harrah's. (approximately 65
minutes)
FROM BALTIMORE/WASHINGTON, D.C.: Take I-95 North to the Walt Whitman Bridge to
the North South Freeway (Route 42). Take the North South Freeway to the Atlantic
City Expressway. Take the Atlantic City Expressway to Exit 9 (Brigantine).
Follow Delilah Road (646) to Route 30 East. Exit Route 30 East at Dr. Martin
Luther King Blvd. (Illinois Ave.). Follow the signs to Harrah's. (approximately
3 hours 45 minutes from Washington, D.C.)
FROM THE SOUTH: Take the Garden State Parkway North to Exit 38 (Atlantic City
Expressway). Take the Atlantic City Expressway straight into Atlantic City. At
the end of the Expressway, turn left onto Arctic Avenue and drive to Dr. Martin
Luther King Boulevard (Illinois Avenue) where you will turn left again. Follow
the signs to Harrah's.