-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Q8rFJUd4eR6tY/+MIUmkEGhQBIKSEgE/PEgjBq3xR1jk/39f51Lh59QuOS1q+xRS sJohXriNnybF7T6GrNud5Q== 0000009548-97-000012.txt : 19970329 0000009548-97-000012.hdr.sgml : 19970329 ACCESSION NUMBER: 0000009548-97-000012 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970328 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BANGOR HYDRO ELECTRIC CO CENTRAL INDEX KEY: 0000009548 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 010024370 STATE OF INCORPORATION: ME FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-10922 FILM NUMBER: 97566445 BUSINESS ADDRESS: STREET 1: 33 STATE ST CITY: BANGOR STATE: ME ZIP: 04401 BUSINESS PHONE: 2079455621 MAIL ADDRESS: STREET 1: PO BOX 932 CITY: BANGOR STATE: ME ZIP: 04401 DEF 14A 1 PROXY STMT FOR BANGOR HYDRO-ELECTRIC COMPANY SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a- 6(e)(2)) [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 - ----------------------------------------------------------------------------- BANGOR HYDRO-ELECTRIC COMPANY (Name of Registrant as Specified In Its Charter) - ----------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. 1) Title of each class of securities to which transaction applies: - ----------------------------------------------------------------------------- 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 (Set forth the amount on which the filing fee is calculated and state how it was determined): - ----------------------------------------------------------------------------- 4) Proposed maximum aggregate value of transaction: - ----------------------------------------------------------------------------- 5) Total fee paid: - ----------------------------------------------------------------------------- [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1) Amount Previously Paid: ----------------------------- 2) Form, Schedule or Registration Statement No.: -------------------------------------------------- 3) Filing Party: -------------------------------------------------- 4) Date Filed: -------------------------------------------------- IMPORTANT Stockholders are cordially invited to attend the annual stockholders' meeting. If you will be unable to attend the annual meeting in person, it is important that you fill out, sign and return the enclosed proxy promptly in order to insure a proper representation at the meeting. BANGOR HYDRO-ELECTRIC COMPANY NOTICE OF ANNUAL MEETING MAY 13, 1997 To The Stockholders: The Annual Meeting of the stockholders of Bangor Hydro-Electric Company will be held on Tuesday, May 13, 1997 at 10:00 o'clock a.m. at the Bangor Motor Inn, Hogan Road, Bangor, Maine for the purpose of electing three directors to serve for three-year terms and to transact such other business as may properly come before the meeting. The Board of Directors has fixed the close of business on March 21, 1997 as the record date for the determination of stockholders of the Company entitled to notice of and to vote at the Annual Meeting. Accordingly, only stockholders of record at the close of business on March 21, 1997 will be entitled to vote at said meeting. IF YOU DO NOT PLAN TO ATTEND THE MEETING, YOU ARE URGED TO DATE, SIGN and RETURN the enclosed proxy. An addressed envelope, which requires no postage if mailed in the United States, is provided for your use. By Order of the Board of Directors Andrew Landry Clerk Bangor, Maine March 31, 1997 BANGOR HYDRO-ELECTRIC COMPANY 33 State Street Bangor, Maine 04401 PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 13, 1997 The accompanying proxy to be mailed on or about March 31, 1997 is solicited by the Board of Directors of Bangor Hydro-Electric Company and the cost of such solicitation will be paid by the Company. The person giving the proxy has the power to revoke it at any time before it is exercised (1) by delivery to the Clerk of the Company of any written instrument which by its terms revokes the proxy, (2) by duly executed proxy subsequent in time to the original proxy, (3) by the presence of the stockholder at the Annual Meeting and the giving of notice to the Clerk of the Company of such revocation, or (4) by giving notice in open meeting at the Annual Meeting of such revocation. The Company will bear the cost of the solicitation of proxies, including the charges and expenses of brokerage firms and others for forwarding solicitation material to beneficial owners of shares of the Company's Common Stock and Preferred Stock. In addition to the use of the mail, proxies may be solicited by employees of the Company, by personal interview, by telephone or by telegraph. VOTING SECURITIES OUTSTANDING AND PRINCIPAL HOLDERS THEREOF The Company has outstanding 47,340 shares of Preferred Stock having general voting rights of one vote per share, and, as of December 31, 1996, 7,363,424 shares of Common Stock having general voting rights of one-twelfth of one vote per share. Stockholders of record at the close of business on March 21, 1997 will be entitled to vote at the Annual Meeting. The following table sets forth as of December 31, 1996 information with respect to persons known to management to be the beneficial owners of more than 5% of any class of voting securities of the Company: Name and Address Amount and Nature Percent Title of Class of Beneficial Owner of Beneficial Ownership of Class - -------------------------------------------------------------------------- Preferred Stock First Colony Life 5,192 shares 11.0% Insurance Company 700 Main Street Lynchburg, Virginia 24504 First Colony Life Insurance Company is a holder of term notes due 2008 in the amount of $6,729,779 executed by Bangor-Pacific Hydro Associates (BPHA). BPHA is a partnership that was formed in 1986 for the purpose of redeveloping and operating a hydroelectric project located within the Company's service territory. Penobscot Hydro Co., Inc., a wholly owned subsidiary of Bangor Hydro-Electric Company, is a 50% general partner of BPHA. During 1996, BPHA paid $704,802 in interest and $72,059 in principal to First Colony Life Insurance Company. The table on the following page sets forth as of February 28, 1997 information with respect to the beneficial ownership of equity securities by directors, nominees for the office of director and named executive officers: Title of Class Name of Beneficial Owner Beneficially Owned* - -------------------------------------------------------------------------- Common Robert S. Briggs 4,832 Preferred Robert S. Briggs 22 Common William C. Bullock, Jr. 2,000 Common Jane J. Bush 296 Common David M. Carlisle 912 Common Alton E. Cianchette 1,015 Common G. Clifton Eames 600 Common Marion M. Kane 260 Common Norman A. Ledwin 180 Common Carroll R. Lee 1,396 Common Directors & Executive Officers as a group (11) 12,434 Preferred Directors & Executive Officers as a group (11) 22 * The directors and executive officers of the Company as a group own a beneficial interest in less than 1% of the Company's Common and Preferred Stock. ELECTION OF DIRECTORS It is intended, unless otherwise instructed in the enclosed proxy, to vote the proxies in favor of the election of the nominees named in the table on the following page as directors to hold office until the expiration of their respective terms and until their successors shall have been duly elected and qualified. The nominees are now members of the Board of Directors of the Company, each having served continuously since first elected. If, for any reason, any of the nominees are unable to serve (which event is not now anticipated) it is intended that such proxies will be voted for the election of such other person or persons as may be designated by a majority of the directors. The following table sets forth the nominees and the directors whose terms continue, their ages, other positions held by them with the Company, the date when they first became a director and their business experience during the past five years: Became Name and Position (Age) Director Business Experience During Last 5 Years - -------------------------------------------------------------------------- Class II (Nominees for term expiring in 2000) Robert S. Briggs (53) 1985 Chairman of the Board; President Chairman of the Board, & Chief Executive Officer of the President & Chief Executive Company; Director of Maine Yankee Officer Atomic Power Company; Trustee of Eastern Maine Medical Center William C. Bullock, Jr. (60) 1982 Chairman of the Board and Director Director of Merrill Merchants Bank; Director of Eastern Maine Healthcare G. Clifton Eames (69) 1984 Chairman of the Board of Trustees of Director Bangor Savings Bank; Chairman of the Board of Directors of N.H. Bragg & Sons, a distributor of automotive and industrial supplies; Director of Eastern Maine Healthcare Class III (Directors whose terms expire in 1998) Carroll R. Lee (47) 1991 Vice President - Operations of the Senior Vice President Company; Director of Maine Yankee & Chief Operating Officer Atomic Power Company; Director of and Director Maine Electric Power Company, Inc.; Director of Community Health and Counseling Service, a not-for-profit supplier of home and mental health care services David M. Carlisle (58) 1989 President, Prentiss & Carlisle Director Companies, a timberland management company; Director of Bangor Savings Bank; Director of Eastern Maine Healthcare Jane J. Bush (51) 1990 Vice President and co-owner of Director Coastal Ventures, a retailing company Class I (Directors whose terms expire in 1999) Alton E. Cianchette (66) 1991 Chairman of the Board of Cianbro Director Corporation, a construction company Marion M. Kane (52) 1996 President of Maine Community Director Foundation, a not-for-profit charitable foundation that manages a pool of individual charitable funds Norman A. Ledwin (55) 1996 Since 1993, President and Chief Director Executive Officer and a Director of Eastern Maine Healthcare, a healthcare organization made up of not-for-profit and for-profit entities (including Eastern Maine Medical Center, a not-for-profit regional acute care hospital facility); 1992-1993, President and Chief Executive Officer of Metro-Health Saint Luke's Medical Center and Saint Luke's Hospital Association In 1996, the Board of Directors met on eleven occasions. The Board of Directors has three standing committees: an Audit Committee, an Investment Committee and a Compensation Committee. The Audit Committee, consisting of Mrs. Bush (Chair), Mr. Carlisle, Mr. Cianchette and Ms. Kane reviews with the independent public accountants the scope and results of their audit and other services to the Company, reviews the adequacy of the Company's internal accounting controls and reports to the Board as necessary. The Audit Committee met twice in 1996. The Compensation Committee, consisting of Mr. Eames (Chair), Mr. Bullock and Mr. Ledwin, reviews the Company's executive compensation and compensation policies in general, and makes recommendations to the full Board of Directors. The Compensation Committee met twice in 1996. The Investment Committee, consisting of Mr. Bullock (Chair), Mr. Carlisle, Mr. Briggs and other non-director members of management, oversees the investments of the Company's pension funds. The Investment Committee met twice in 1996. The Board does not have a nominating or similar committee. Committee appointments will be reviewed after the Annual Meeting. Directors who are not employees of the Company appoint from their own number the members of the Audit Committee and the Compensation Committee. Other committee assignments are made by the Chairman of the Board. EXECUTIVE COMPENSATION AND OTHER INFORMATION The following table shows, for the fiscal years ending December 31, 1996, 1995 and 1994, the cash compensation paid by the Company to the Chief Executive Officer and to the only other executive officer whose total salary and bonus during 1996 exceeded $100,000: Summary Compensation Table - Annual Compensation Name and Principal Position Year Salary Bonus - ----------------------------------------------------------------------- Robert S. Briggs 1996 $175,895 $ 0 Chairman of the Board, President 1995 176,601 0 and Chief Executive Officer 1994 176,120 1,588 Carroll R. Lee 1996 $125,422 $ 0 Executive Vice President and 1995 125,072 0 Chief Operating Officer 1994 125,095 1,134 Neither of the above named executive officers received "Other Annual Compensation" that meets the threshold reporting requirements nor did they receive any "Long-Term Compensation" or "Other Compensation". The executive officers participate in a defined benefit pension plan that is also applicable to all employees. The following table sets forth estimated annual benefit amounts payable upon retirement to persons in specified compensation and benefit service classifications assuming their retirement at the normal retirement age (65) in 1997. Years of Benefit Service - -------------------------------------------------------------------------- Average Annual Compensation 5 10 15 20 25 30 $ 50,000 $ 4,414 $ 8,828 $13,242 $17,656 $22,070 $26,484 75,000 6,914 13,828 20,742 27,656 34,570 41,484 100,000 9,414 18,828 28,242 37,656 47,070 56,484 150,000 14,414 28,828 43,242 57,656 72,070 86,484 200,000 14,414 28,828 43,242 57,656 72,070 86,484 Compensation covered by the plan is total basic compensation exclusive of overtime, bonuses, and other extra, contingent or supplemental compensation, and is cash compensation plus compensation deferred pursuant to the Company's Section 401(k) Plan. It is essentially the same as the amount shown as "Salary" in the Summary Compensation Table above. The annual retirement benefit is the greater of the following: a. The benefit accrued as of December 31, 1988 under a prior plan formula. b. 2.0% "average annual compensation" minus 0.4% of "covered compensation", times years of "benefit service". The benefit may not be larger than limits set forth in IRC Section 415. "Average annual compensation" is computed using the 36 consecutive months yielding the highest average, and "benefit service" generally means years of employment after age 21 and one year of service, up to a maximum of 30 years. "Covered compensation" is the average (without indexing) of the Social Security Taxable Wage Bases for the 35 calendar years ending with the year an individual attains Social Security Normal Retirement Age. It is assumed that the taxable wage base in effect at the beginning of the plan calculation year will remain the same for all future years. The benefit amount is payable in a life annuity form in full upon retirement at age 62 and in proportionately reduced amounts upon termination down to age 55. The benefit service of the persons named in the Summary Compensation Table above (rounded to the nearest year) is: Mr. Briggs-17 years and Mr. Lee-23 years. In 1994, the Company amended its pension plans to provide an incentive for early retirement. For those employees who were members of a pension plan on February 1, 1994, six years were added to that member's age and benefit service. For each full month of employment following February 28, 1994, the additional age and benefit service will be reduced by one month. If Mr. Briggs or Mr. Lee were to retire before the additional age and benefit service provided by the early retirement program is fully reduced, they would receive enhanced benefits from the program. In addition to the foregoing, Mr. Briggs and Mr. Lee are parties to Supplemental Retirement Agreements with the Company under which additional retirement benefits are to be paid. The amount of the additional benefits payable upon retirement at age 62 would be 20% of the officer's final annual salary per year for a period of fifteen years. These supplemental benefits are not funded, although the Company maintains insurance policies on the lives of Mr. Briggs and Mr. Lee that would reimburse the Company for the cost of the benefits upon the death of the covered officer. Mr. Briggs and Mr. Lee are parties to agreements under which in the event 1) of a change of control of the Company as defined in the agreements and 2) the covered party leaves the employment of the Company within one year after the change of control, he would be entitled to receive a payment equal to two years' salary based upon his average salary over the past five years. He would also be entitled to receive the Company's standard health, life insurance and disability benefits for a period of two years after leaving his employment as long as he remains unemployed. The executive officers also participate in a long-term disability income plan that is applicable to all employees. Under the plan, after 90 days of disability, employees are entitled to receive 66 2/3% of their basic monthly earnings up to a maximum monthly benefit of $5,000. Directors who are not employees of the Company are paid a fee of $500 per meeting for attendance at regular or special meetings of the Board, and $500 per meeting for attendance at committee meetings (unless the committee meeting is held the same day as another meeting for which a full meeting fee is paid, in which case the fee is $250). The directors are also paid an annual retainer of $6,000. Directors who are employees of the Company receive no fee for their services as directors. Compensation Committee Interlocks and Insider Participation During 1996, the Compensation Committee of the Company's Board of Directors consisted of Mr. Eames, Mr. Bullock and Mr. Ledwin. During 1996, Mr. Briggs, the Chairman of the Company's Board of Directors and its President and Chief Executive Officer, served as a trustee and Vice Chairman of the Board of Trustees of Eastern Maine Medical Center, a hospital facility located in Bangor, Maine. Mr. Ledwin, who serves on the Board's Compensation Committee, is President, Chief Executive Officer and a Director of Eastern Maine Healthcare, the organization that owns and operates Eastern Maine Medical Center. Compensation Committee Report on Executive Compensation The Company manages its compensation programs in a manner intended to attract, retain and motivate its people. Historically, salaries, including executive salaries, have been intended to be established at competitive levels, with progress within competitive ranges dependent upon qualifications, experience and individual performance. The Company has been shifting its compensation management to a system that relies on base salaries that are competitive, but that, especially at executive and senior management levels, depend more on incentive rewards for the achievement of predetermined performance criteria in order to earn compensation at higher levels within the competitive range. Although it is the Committee's policy to ensure that executive compensation remains competitive, the executive officers named in the foregoing table have not sought and did not receive any adjustments to their salaries during the years presented. Since 1991, the Board of Directors has maintained an Incentive Bonus Plan applicable essentially to all employees of the Company who have completed at least six months of continuous service by the end of the plan year. Payments under the Plan Bonuses have been contingent upon the attainment of certain pre-determined goals relating to service outages, customer satisfaction, earnings, expenses and employee safety that have varied from year to year. In 1993, the Board established a separate Executive Bonus Plan applicable only to named executive officers. Performance targets for customer satisfaction, cost control and employee satisfaction were established, the achievement of which carried a maximum bonus of 1% of base earnings for each target. Additionally, targets were established for earnings and total stockholder return. For Mr. Briggs, achievement of those targets carried a potential maximum bonus of 3.5% of base earnings each and for Mr. Lee, the potential maximum bonus was 2.5%. No bonuses were paid pursuant to the cost control, earnings or total stockholder return targets. Partial awards were made under the customer satisfaction and employee satisfaction targets. In early 1994, the named executive officers were awarded the following under the 1993 Plan: Mr. Briggs, $1,588 and Mr. Lee, $1,134. The Plans established for 1994, 1995 and 1996 included targets similar to those established for 1993. However, under the terms of those Plans, no awards could be made to selected members of management, including the named executive officers, unless the Company achieved stated thresholds for return on common equity. Since the Company did not earn the threshold returns on equity in any of those years, no payments were made pursuant to the Plans. COMPENSATION COMMITTEE G. Clifton Eames (Chair) William C. Bullock, Jr. Norman A. Ledwin PERFORMANCE GRAPH As shown in the line graph on the following page, for a period beginning December 31, 1991 through December 31, 1996, a comparison is made of the cumulative total returns for the Company, the Russell 2000 Index (a comparative broad market index) and the Edison Electric Institute (EEI) Index of 100 investor-owned electric utilities (a comparative peer group index). The Russell 2000 index is an index composed of the smallest 2000 companies in a universe of the 3000 largest domestic publicly traded companies in terms of market capitalization. Bangor Hydro-Electric Company Comparison of Five-Year Cumulative Total Return The Company, the EEI Index and the Russell 2000 Index - ------------------------------------------------------------------- NOTE: Included on the proxy sent to shareholders was a line graph that depicted a Comparison of Five-Year Cumulative Total Return for Bangor Hydro-Electric Company, the Russell 2000 Index and the EEI Index, based upon the information in the following table. This graph is not shown herein due to limitations of the EDGAR system. - ------------------------------------------------------------------- December 31, 1991 1992 1993 1994 1995 1996 - -------------------------------------------------------------------------- Bangor Hydro $100.00 $120.24 $115.99 $ 68.43 $ 88.68 $ 76.18 20.24% -3.53% -41.01% 29.60% -14.10% EEI Index $100.00 $107.59 $119.58 $105.74 $138.55 $140.22 7.59% 11.14% -11.57% 31.03% 1.21% Russell 2000 $100.00 $118.41 $140.80 $138.23 $177.55 $206.83 18.41% 18.91% -1.82% 28.44% 16.49% INDEPENDENT PUBLIC ACCOUNTANTS Coopers & Lybrand, One Post Office Square, Boston, Massachusetts 02109, were the independent public accountants for the Company for the 1996 fiscal year and have been selected for the 1997 fiscal year. The Company expects that representatives of Coopers & Lybrand will be present at the Annual Meeting, will have the opportunity to make a statement, and will be available to respond to appropriate questions. VOTING PROCEDURES Under the Company's Certificate of Organization, as amended, the Board of Directors shall consist of not less than nine nor more than fifteen persons, the exact number to be fixed from time to time by the Board of Directors. The Certificate of Organization also requires that the directors be divided into three classes with staggered three-year terms and that the classes be nearly as equal in number as may be. At a meeting on March 23, 1994, the Board of Directors fixed the number of Directors at nine and divided them into three classes with three Directors in each class. The terms of the three Directors in Class II will expire at the time of the Annual Meeting. Under Maine law, those three candidates who receive the greatest number of votes cast at the meeting, even if they do not receive a majority of the votes cast, shall be deemed elected. Consequently, as long as votes are cast for at least three candidates, abstentions and broker non-votes will have no effect on the outcome of the election of Directors. OTHER MATTERS The management has no knowledge of any other matter to come before or to be acted upon at the meeting. If, however, any other matter properly comes before the meeting, it is the intention of the persons named in the proxy to vote thereon in accordance with their judgment. STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING Any proposals of stockholders of the Company intended to be presented at the 1998 Annual Meeting must be received by the Company on or before December 2, 1997 for inclusion in the proxy statement and form of proxy relating to that meeting. By Order of the Board of Directors Andrew Landry Clerk Bangor, Maine March 31, 1997 BANGOR HYDRO-ELECTRIC COMPANY P.O. BOX 1599, BANGOR, ME 04402-1599 PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints Robert S. Briggs and Frederick S. Samp each or either of them, with full power of substitution, proxies to vote all of the stock of Bangor Hydro-Electric Company which the undersigned is entitled to vote at the Annual Meeting of the Stockholders May 13, 1997 or at any adjournment thereof. (CONTINUED AND TO BE SIGNED ON REVERSE SIDE) THIS PROXY WILL BE VOTED IN ACCORDANCE WITH YOUR SPECIFIC DIRECTIONS BELOW. IF THE PROXY IS SIGNED AND RETURNED WITHOUT SUCH DIRECTIONS, IT WILL BE VOTED FOR ALL NOMINEES. --- 1. Election of Directors: Nominees: Robert S. Briggs, William C. Bullock, Jr., G. Clifton Eames --- FOR --- | | ALL | | WITHHELD FROM | | NOMINEES | | ALL NOMINEES --- --- In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting. --- | | | | --- -------------------------------- FOR ALL NOMINEES EXCEPT AS NOTED ABOVE --- MARK HERE | | FOR ADDRESS | | CHANGE AND --- NOTE AT LEFT Please sign exactly as name appears hereon. Executors, Administrators, Trustees, etc. should so indicate when signing. Join owners should each sign. Signature: __________________________ Date:_________ Signature: __________________________ Date:_________ -----END PRIVACY-ENHANCED MESSAGE-----