SCHEDULE 14A INFORMATION
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240.14a-12
Puget Sound Energy, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Merrill Corporation
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PUGET SOUND ENERGY, INC.
NOTICE OF ANNUAL MEETING
[LOGO]
MAY 16, 2000
MEYDENBAUER CENTER, BELLEVUE, WASHINGTON
To Puget Sound Energy Shareholders:
On May 16, 2000, Puget Sound Energy, Inc. will hold its 2000 Annual Meeting
of Shareholders at the Meydenbauer Center, located at 11100 N.E. 6th Street,
Bellevue, Washington. The meeting will begin at 10:00 a.m. At the annual
meeting, the shareholders will
1. Elect three directors.
2. Consider other matters properly presented at the meeting.
You are entitled to vote if you were a shareholder at the close of business
on March 15, 2000.
If your shares are registered in the name of a brokerage firm or trustee and
you plan to attend the meeting in person, please bring a letter, account
statement or other evidence of your beneficial ownership to the meeting. If you
participate in the Stock Purchase and Dividend Reinvestment Plan, the enclosed
proxy covers all your shares, including any shares you hold under the plan.
March 30, 2000
Bellevue, Washington
By Order of the Board of Directors
James W. Eldredge
CORPORATE SECRETARY
-------------------
CONTENTS
ANNUAL MEETING INFORMATION............ 1
WHO IS ENTITLED TO VOTE?............ 1
WHAT AM I VOTING ON?................ 1
WHAT IS A QUORUM?................... 1
HOW MANY VOTES DO I HAVE?........... 1
HOW MANY VOTES ARE REQUIRED TO ELECT
A DIRECTOR?....................... 1
CAN BROKERS VOTE ON THE ELECTION OF
DIRECTORS?........................ 1
HOW WILL MY PROXY BE VOTED?......... 1
WHO COUNTS THE VOTES?............... 2
WHAT IF OTHER MATTERS ARISE AT THE
MEETING AND I DO NOT ATTEND?...... 2
ELECTION OF DIRECTORS................. 2
HOW MANY DIRECTORS DOES PUGET SOUND
ENERGY HAVE?...................... 2
HOW MANY DIRECTORS ARE ELECTED EACH
YEAR?............................. 2
WHO ARE THE NOMINEES?............... 2
WHO ARE THE OTHER DIRECTORS?........ 3
STRUCTURE AND COMPENSATION OF BOARD OF
DIRECTORS........................... 4
Board of Directors Meetings......... 4
Audit Committee..................... 4
Director Affairs Committee.......... 4
Compensation and Retirement
Committee......................... 5
Strategic Opportunities Committee... 5
Director Compensation............... 5
SECURITY OWNERSHIP OF DIRECTORS AND
EXECUTIVE OFFICERS.................. 6
Beneficial Ownership Table.......... 6
EXECUTIVE COMPENSATION................ 7
Compensation and Retirement
Committee Report.................. 7
Stock Price Performance Graph....... 10
Summary Compensation Table.......... 11
Year-End Option/Stock Appreciation
Right Values...................... 14
Long-Term Incentive Plan Awards in
1999.............................. 14
Retirement Benefits Statement....... 15
EMPLOYMENT CONTRACTS, TERMINATION OF
EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS........................ 15
Certain Transactions................ 18
ADDITIONAL INFORMATION ABOUT THE
MEETING AND SHAREHOLDER PROPOSALS... 18
Independent Public Accountants...... 18
Shareholder Proposals............... 18
Solicitation of Proxies............. 18
-------------------
YOUR VOTE IS IMPORTANT
PUGET SOUND ENERGY HAS APPROXIMATELY 55,000 SHAREHOLDERS OF RECORD. MANY
SHAREHOLDERS OWN 100 SHARES OR LESS. REGARDLESS OF THE NUMBER OF SHARES YOU OWN,
PLEASE COMPLETE AND PROMPTLY RETURN THE ENCLOSED PROXY FORM, USING THE ENVELOPE
WE HAVE PROVIDED.
PROXY STATEMENT
ANNUAL MEETING INFORMATION
This proxy statement relates to the Annual Meeting of Shareholders of Puget
Sound Energy, Inc. to be held at 10:00 a.m. on May 16, 2000 at the Meydenbauer
Center, which is located at 11100 N.E. 6(th) Street, Bellevue, Washington. We
will mail this proxy statement and our Annual Report for 1999 to shareholders on
March 30, 2000.
The mailing address of the Company's principal executive offices is Puget
Sound Energy, Inc., P.O. Box 97034, Bellevue, Washington 98009-9734.
WHO IS ENTITLED TO VOTE?
Only holders of common stock may vote at the Annual Meeting. We had
approximately 85 million shares of common stock outstanding on March 15, 2000,
the record date for the Annual Meeting.
WHAT AM I VOTING ON?
You are being asked to elect three directors. We are not aware of any matter
to be presented for action at the Annual Meeting other than the election of
directors.
WHAT IS A QUORUM?
The holders of a majority of the shares of the common stock, present in
person or represented by proxy at the Annual Meeting, constitute a quorum for
the transaction of business. There must be a quorum for the meeting to be held.
HOW MANY VOTES DO I HAVE?
You are entitled to one vote for each share of common stock you held on the
record date. In electing directors, however, you have the right to cumulate your
votes. This means that you can multiply the number of votes you have by the
number of directors to be elected, and then cast all your votes for one
candidate or distribute them among any two or more candidates.
HOW MANY VOTES ARE REQUIRED TO ELECT A DIRECTOR?
If a quorum is present at the Annual Meeting, the three nominees for
election as directors who receive the greatest number of votes cast by the
shares present in person or represented by proxy at the Annual Meeting will be
elected directors.
CAN BROKERS VOTE ON THE ELECTION OF DIRECTORS?
Because brokers have discretion to vote shares they hold on behalf of
beneficial owners in the election of directors, if they do not receive
instructions, they will vote the shares as they see fit.
HOW WILL MY PROXY BE VOTED?
If we receive a proper proxy, your shares will be voted as you direct. If
you submit a proper proxy but do not provide any direction, your shares will be
voted for all management proposals. You may revoke a proxy card at any time
before it is voted by delivering a written notice to the Corporate Secretary or
by signing and delivering another proxy card that is dated later than the first
one but prior to the May 16, 2000 meeting. If you attend the Annual Meeting in
person, you may revoke the proxy by giving notice of revocation to an inspector
of election at the Annual Meeting or by voting at the Annual Meeting.
WHO COUNTS THE VOTES?
ChaseMellon Shareholder Services, L.L.C. will tabulate the votes and will
act as inspector of election. No one will disclose the identity or vote of any
shareholder unless legally required to do so.
WHAT IF OTHER MATTERS ARISE AT THE MEETING AND I DO NOT ATTEND?
If any other matters are properly presented at the Annual Meeting, the
persons named in the proxy will vote in accordance with their judgment.
ELECTION OF DIRECTORS
HOW MANY DIRECTORS DOES PUGET SOUND ENERGY HAVE?
The number of directors is determined by the Board of Directors, but may be
changed by the shareholders. The Board of Directors has fixed the number of
directors at eleven.
HOW MANY DIRECTORS ARE ELECTED EACH YEAR?
The directors are divided into three classes so that approximately one-third
of the directors are elected each year for a three-year term. Directors are
elected to hold office until their successors are elected and qualified, or
until resignation or removal in the manner provided in our Bylaws. At the Annual
Meeting, the shareholders will elect three Class III directors to serve for a
term of three years expiring on the date of the 2003 Annual Meeting.
WHO ARE THE NOMINEES?
Proxies will be voted on the following nominees. If any nominee becomes
unavailable to serve as a director, the persons named in the enclosed proxy can
vote for or against any other nominee in accordance with their judgment.
CLASS III NOMINEES STANDING FOR ELECTION
TERMS EXPIRE 2003
DOUGLAS P. BEIGHLE
Mr. Beighle served as Senior Vice President of The Boeing Company (aerospace
manufacturing and sales) from 1986 until his retirement on May 1, 1997.
Mr. Beighle, age 67, has been a Director of the Company since 1981 and also
serves as a director of Washington Mutual, Inc., Active Voice Corporation and
Simpson Investment Company (privately held).
TOMIO MORIGUCHI
Mr. Moriguchi has been a Director of the Company since 1988. Mr. Moriguchi,
age 63, has served as Chairman and Chief Executive Officer of Uwajimaya, Inc.
(food and merchandise distributor), Seattle, Washington, since December 1994.
Previously, he served as President of Uwajimaya, Inc. from 1965 through
December 1994. He also serves as President, Town and Country Travel, Inc.,
Seattle, Washington and President and Chairman of the Board of North American
Post Publishing Company, Seattle, Washington.
CRAIG W. COLE
Mr. Cole has been President and Chief Executive Officer of Brown & Cole
Stores (retail grocery) in Bellingham, Washington since 1989. Mr. Cole, age 50,
is also Chairman of the Board of Associated
2
Grocers, Inc. and serves on the boards of the Washington Food Industry and the
Food Marketing Institute. Mr. Cole has served as a Director of the Company since
December 1999.
WHO ARE THE OTHER DIRECTORS?
The directors who are not standing for reelection at this time are
CHARLES W. BINGHAM
Mr. Bingham served as Executive Vice President of Weyerhaeuser Company
(forest products industry) from 1981 until his retirement in July 1995 and
Senior Vice President from 1972 to 1981. Mr. Bingham, age 66, has been a
director of the Company since 1978. Mr. Bingham's term expires in 2002.
PHYLLIS J. CAMPBELL
Ms. Campbell has been President of U.S. Bank, Washington (financial
institution) since 1993. She also served as Area President of U.S. Bank,
Washington for Seattle-King County from 1992 to 1993, Executive Vice President
and Manager from 1989 to 1992, and in various banking capacities since 1973.
Ms. Campbell, age 48, has been a Director of the Company since 1993 and also
serves as a director of SAFECO Corporation, and is a Regent of Washington State
University. Ms. Campbell's term expires in 2001.
DONALD J. COVEY
Mr. Covey has been a Director of the Company since 1982. Mr. Covey, age 71,
served as Chairman of the Board of Directors of UNICO Properties, Inc. (property
management), Seattle, Washington, from 1990 until his retirement in
December 1994. Prior to that he served UNICO as Chief Executive Officer from
1983 to 1992 and President from 1975 to 1990. Mr. Covey's term expires in 2001.
ROBERT L. DRYDEN
Mr. Dryden has been President, Chief Executive Officer and a director of
ConneXt, Inc.(a wholly-owned subsidiary of PSE) since April 1999. He also served
as Executive Vice President, Airplane Production, Boeing Commercial Airplane
Group, Seattle, Washington, from 1990 until May 1998. He has been a Director of
the Company since 1991. Mr. Dryden, age 66, also serves as a director of U.S.
Bancorp. Mr. Dryden's term expires in 2002.
JOHN D. DURBIN
Mr. Durbin has been President and Chief Executive Officer of a newly formed
unregulated subsidiary of PSE since February 2000. Prior to that, he was
Executive Director of Emerge Corporation and was a principal in Olympic Capital
Partners, Inc. (investment banking), Seattle, Washington, from 1996 to 1999. He
served as President and Chief Executive Officer of Hostar International, Inc.
from 1988 until his retirement in June 1995, and has been a General Partner of
John Durbin & Associates since 1969. Mr. Durbin, age 64, has been a Director of
the Company since 1984 and also serves as a director of ConneXt, Inc. (a
subsidiary of the Company) and UTILX Corporation. Mr. Durbin's term expires in
2002.
3
JOHN W. ELLIS
Mr. Ellis has been Chairman Emeritus of The Baseball Club of Seattle since
1999. Previously, he was Chairman of the Board and Chief Executive Officer of
The Baseball Club of Seattle from 1992 to 1999. He served as Chairman of the
Board of the Company from 1987 to 1993 and as Chief Executive Officer from 1976
to 1992. Mr. Ellis, age 71, has been a Director of the Company since 1969 and
also serves as a director of SAFECO Corporation, Washington Mutual, Inc., UTILX
Corporation and Associated Electric & Gas Insurance Services, Ltd. Mr. Ellis is
also Chairman of the Board of Trustees of Seattle University. Mr. Ellis will be
appointed to fill a vacancy for a term that expires in 2001.
SALLY G. NARODICK
Ms. Narodick, age 54, has been Chief Executive Officer and President of Apex
Learning, Inc., a venture-backed internet learning company, since 1998.
Previously she served as a Consultant on Strategic Planning for Educational
Technology software for IBM Corporation and was Chairman and Chief Executive
Officer of Edmark Corporation from October 1989 to September 1996. She also
serves as a director of Penford Corporation, Click2Learn.com and Apex
Learning, Inc. Ms. Narodick has been a Director of the Company since 1989.
Ms. Narodick's term expires in 2002.
WILLIAM S. WEAVER
Mr. Weaver has been President and Chief Executive Officer of the Company
since January 13, 1998. He has also served as Vice Chairman and Chairman of
Unregulated Subsidiaries from February 10, 1997 to January 13, 1998. Prior to
that he served as Executive Vice President and Chief Financial Officer of PSE
beginning in 1991. Before joining PSE, he was a partner in the law firm of
Perkins Coie LLP. Mr. Weaver, age 56, has been a director of the Company since
1991. Mr. Weaver's term expires in 2001.
STRUCTURE AND COMPENSATION OF BOARD OF DIRECTORS
The PSE board of directors has four standing committees, which meet in
addition to regular board of directors meetings. The names of these committees,
their current memberships and a brief statement of their principal
responsibilities are presented below.
BOARD OF DIRECTORS MEETINGS
The board of directors met eight times during 1999. Each director attended
at least 78% of these meetings and the meetings of committees on which he or she
served. Directors attended, on average, 96% of all board and committee meetings
during 1999.
AUDIT COMMITTEE
Douglas P. Beighle (Chairperson), Charles W. Bingham, Donald J. Covey,
Daniel J. Evans and Tomio Moriguchi currently serve on the audit committee. The
audit committee reviews the annual report of the independent auditors, evaluates
our external and internal audit functions, recommends to the full board of
directors the retention of independent auditors and oversees other auditing
matters. The audit committee met five times during 1999.
DIRECTOR AFFAIRS COMMITTEE
Daniel J. Evans (Chairperson, until the expiration of his term on May 16,
2000), Phyllis J. Campbell and Donald J. Covey currently serve on the director
affairs committee. The director affairs committee makes recommendations to the
Board regarding selection of director candidates, director
4
tenure, committee assignments and director compensation. Shareholders may
nominate candidates for election to the board of directors by notifying the
corporate secretary. The committee seeks director candidates with recognized
achievements, skills and experience that will enhance the board of directors.
The director affairs committee met twice during 1999.
COMPENSATION AND RETIREMENT COMMITTEE
Sally G. Narodick (Chairperson), Douglas P. Beighle, Phyllis J. Campbell,
Robert L. Dryden and John D. Durbin currently serve on the compensation and
retirement committee, which acts and makes recommendations to the board of
directors with respect to executive compensation, the Company's retirement plans
and other benefit plans for employees. The compensation and retirement committee
met five times during 1999.
STRATEGIC OPPORTUNITIES COMMITTEE
Douglas P. Beighle, Phyllis J. Campbell, Robert L. Dryden, John D. Durbin
and Sally G. Narodick currently serve on the strategic opportunities committee,
which acts and makes recommendations to the board of directors with respect to
new business development matters. The strategic opportunities committee met two
times during 1999.
DIRECTOR COMPENSATION
PSE pays directors who are not PSE employees a quarterly retainer of $6,250
plus $800 for each board and committee meeting the director attends. At least
40% of quarterly retainer payments are made in common stock. Directors can elect
to receive 100% of their retainer payments in common stock, or to defer receipt
of shares under the PSE Directors' Stock Plan. Directors can also elect to defer
cash compensation under the PSE Deferred Compensation Plan for Non-Employee
Directors. We also pay the chairpersons of the board committees additional
quarterly retainers of $500 each. We do not pay any compensation to Mr. Weaver
for his services on the Board.
5
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
BENEFICIAL OWNERSHIP TABLE
The following table shows the number of shares of common stock beneficially
owned on March 15, 2000 by each director and nominee, by each executive officer
named in the Summary Compensation Table and by the directors and executive
officers as a group. No director or executive officer owns more than 1% of the
outstanding shares of common stock. We are not aware of any person who
beneficially owns 5% or more of the common stock.
NUMBER OF NUMBER OF
BENEFICIALLY SHARE INTERESTS
NAME OWNED SHARES HELD
- ---- ------------ ---------------
Douglas P. Beighle........................................ 4,022 855(1)
Charles W. Bingham........................................ 4,052 411(1)
Phyllis J. Campbell....................................... 1,000 1,106(1)
Craig W. Cole............................................. 200 69(1)
Donald J. Covey........................................... 5,898 3,044(1)
Robert L. Dryden.......................................... 4,440 2,103(1)
John D. Durbin............................................ 2,999 2,680(1)(3)
John W. Ellis............................................. 34,081(2) 885(1)
Daniel J. Evans........................................... 1,000 1,596(1)
Tomio Moriguchi........................................... 775 3,883(1)(3)
Sally G. Narodick......................................... 258 2,709(1)
William S. Weaver......................................... 30,079(2) 13,459(3)
Richard L. Hawley......................................... 11,544(2) 4,146(3)
Timothy J. Hogan.......................................... 7,567(2) 19,553(3)(4)
Stephen A. McKeon......................................... 13,937(2) 4,722(3)
Joseph Quintana........................................... 458 0
Gary B. Swofford.......................................... 9,523(2) 9,030(3)
All Directors and executive officers...................... 152,871 75,296
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(1) Shares represent stock units under the Puget Sound Energy Directors' Stock
Plan.
(2) Includes shares owned in the Puget Sound Energy Investment Plan for
Employees through March 15, 2000.
(3) Represents vested and unvested stock units under the PSE Deferred
Compensation Plan.
(4) Includes 15,667 shares subject to unexercised stock options granted by WECo
prior to the Merger, which were converted into options to purchase common
stock at the Merger exchange ratio of .86 to 1.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
our directors and officers and holders of more than 10% of the common stock to
report their stock holdings and transactions to the Securities and Exchange
Commission. Based on a review of Section 16 forms filed by its reporting persons
during 1999, the Company believes that its reporting persons complied with all
applicable Section 16 requirements, except Mr. McKeon. Mr. McKeon did not report
shares purchased in the Investment Plan for Employees on a Form 4 for
August 1999; the purchase was subsequently reported on the Form 4 in
November 1999 which was timely filed.
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EXECUTIVE COMPENSATION
COMPENSATION AND RETIREMENT COMMITTEE REPORT
The board of directors delegates responsibility for executive compensation
to the compensation and retirement committee. The committee's members are Sally
G. Narodick (Chairperson), Douglas P. Beighle, Phyllis J. Campbell, Robert L.
Dryden and John D. Durbin, none of whom is an employee of PSE or participates in
the compensation programs described here for executives. Mr. Dryden has served
as an executive officer of ConneXt, Inc., a wholly owned subsidiary of PSE,
since April 1999, and Mr. Durbin has served as an executive officer of a newly
formed non-regulated subsidiary of PSE since February 2000. The committee
establishes compensation for the President and Chief Executive Officer and
reviews and approves the President and Chief Executive Officer's recommendations
regarding compensation of the other executive officers.
In determining executive compensation, the committee considers the pay
practices in comparable companies in the electric and combination gas and
electric utility industries. The committee believes that executive compensation
packages should do the following:
- attract and retain outstanding executives by providing compensation
opportunities consistent with those offered by the electric and
combination gas and electric utility industries for similar positions;
- place a significant portion of each executive's total pay at risk to
motivate executives to achieve Company and individual performance goals;
and
- tie incentive compensation to favorable operating results and align the
interests of executive officers with the long-term interests of the
shareholders.
In making compensation decisions, the committee reviews appropriate market
compensation indices. The principal source of this data is a selection of
comparable companies from the Edison Electric Institute's ("EEI") comprehensive,
industry-wide annual survey of management pay. Many of these companies are part
of the Edison Electric Institute's ("EEI") Combination Gas & Electric
Investor-Owned Utilities Index presented in the Stock Price Performance Graph on
page 10.
The committee's compensation policies encompass a mix of BASE SALARY and
ANNUAL and LONG-TERM INCENTIVE COMPENSATION programs. The committee designs the
total package to provide participants with appropriate incentives to achieve
current performance goals as well as the long-term objective of enhancing
shareholder value. Long-term incentives are designed to comprise the largest
portion of each executive's incentive pay. Total Cash Compensation is targeted
at the 50(th) percentile of total compensation for the comparator group if
annual performance goals are achieved. If performance goals are achieved at the
highest level, total cash compensation will be leveraged to reach the 60(th)
percentile or higher.
BASE SALARY
Generally, base salaries for executives are administered on a subjective
individual basis by the committee using as a guideline median salary levels of a
select group of electric and combination gas and electric companies that are
most similar in scope and size to PSE. The select group of comparator companies
is chosen from the EEI survey.
ANNUAL INCENTIVE COMPENSATION
All executive officers participate in the annual Pay at Risk Plan. This plan
is designed to provide financial incentives to executives for achieving desired
annual operating results. For 1999, the targeted
7
opportunity for awards from this plan varied by executive officer: Mr. Weaver's
target was 45% of base salary; Messrs. Hawley, McKeon and Swofford were 35% and
Messrs. Hogan and Quintana were 30%.
The primary measure for the named executive officers was earnings per share.
For Messrs. Weaver, Hawley and McKeon, 100% of the award was based on EPS
performance. For Messrs. Hogan and Swofford, 50% of the award was based on EPS
and 50% was based on the weather-adjusted earnings contribution of the business
units they each lead. For Mr. Quintana, 50% of the award was based on EPS, with
the remaining 50% divided among five other specific goals. EPS results were
achieved at the outstanding funding level. For Messrs. Hogan and Swofford the
applicable weather-adjusted business unit earnings contribution did not achieve
minimum funding levels. Two of the five additional goals that comprise 50% of
Mr. Quintana's award did achieve funding status.
LONG-TERM INCENTIVE COMPENSATION
The 1995 Long-Term Incentive Compensation Plan, approved by shareholders in
1995, links compensation to the relative total shareholder return. Under this
plan, the committee awarded contingent grants of common stock to executives and
key employees. PSE will pay 1999 awards in stock at the end of a four-year
period ending December 31, 2002, based on PSE's cumulative four-year total
shareholder return relative to the EEI Combination Gas & Electric Investor-Owned
Utilities Index. The number of shares delivered at the end of the four-year
cycle will range from zero to 175% of the contingent grant. Dividend equivalents
are accrued during the performance period and paid out in cash when and to the
extent the related performance shares are paid. The Long-Term Incentive Plan
Awards in 1999 table on page 14 shows the awards made in 1999 to the named
executive officers for the four-year performance cycle ending December 31, 2002.
The Summary Compensation Table on page 11 shows the payout of awards for the
four-year cycle ended December 31, 1999. During their service as executive
officers of subsidiaries of the Company, Mr. Dryden and Mr. Durbin will not
participate in any decisions regarding awards under the 1995 Long-Term Incentive
Compensation Plan.
As part of its long-term incentive program, the committee has also
established stock ownership guidelines to be achieved over a five-year period
commencing in 1998 for officers and key managers that range from 50% of base
salary to two times base salary for the named executive officers.
Before 1995, participants in PSE's Long Term Incentive Program for Senior
Management could receive Performance Share Units and Stock Appreciation Rights,
both of which are payable only in cash. The Summary Compensation Table shows the
last payout of PSUs for the participating named executives, which was for the
four-year performance period ended on December 31, 1997. The Year-End Option/SAR
Values table shows the year-end values of all outstanding SARs held by the
participating named executive officers.
CHIEF EXECUTIVE OFFICER COMPENSATION
In February 1999, Mr. Weaver's base salary as Chief Executive Officer was
determined to be below median for CEOs in comparable companies in the EEI
survey, and was increased from $550,000 per year to the market median salary of
$575,000.
During 1999, Mr. Weaver's leadership and focus on company wide strategic and
operating goals resulted in continued, significant improvement in financial
results with a net increase in EPS of 11% over the prior year. This level of
achievement resulted in Mr. Weaver's 1999 target annual incentive payment being
paid at twice the target of 45% of base salary. As a result, Mr. Weaver's total
cash compensation for 1999 was above the 50(th) percentile for chief executive
officers of comparable companies in the EEI survey, which is in keeping with the
committee's philosophy for total cash compensation at the 60(th) percentile or
higher when results are achieved at this outstanding level.
8
ADDITIONAL INFORMATION
Section 162(m) of the Internal Revenue Code of 1986 generally disallows a
tax deduction to public companies for compensation over $1 million paid to a
company's chief executive officer and four other most highly compensated
executive officers, unless that compensation is deferred or is considered
performance-based. Our policy is to structure executive officer compensation to
achieve maximum deductibility under Section 162(m) with minimal sacrifices in
flexibility and corporate objectives.
Sally G. Narodick, Chairperson
Douglas P. Beighle
Phyllis J. Campbell
Robert L. Dryden
John D. Durbin
9
STOCK PRICE PERFORMANCE GRAPH
The chart below compares the five-year cumulative total shareholder return
(share price appreciation plus reinvested dividends) on our common stock to the
cumulative total return of the Standard & Poor's 500 Stock Index and the EEI
Combination Gas & Electric Investor-owned Utilities Index.
FIVE-YEAR CUMULATIVE TOTAL RETURN
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
PUGET SOUND ENERGY S&P 500 INDEX EEI GAS & ELECTRIC INDEX
1994 100.00 100.00 100.00
1995 125.30 137.60 127.40
1996 139.50 169.20 126.60
1997 187.70 225.60 163.60
1998 185.20 290.10 190.10
1999 139.80 351.10 154.50
FIVE-YEAR CUMULATIVE TOTAL RETURN
This comparison assumes $100 was invested on December 31, 1994 in (a) our
common stock, (b) the S&P 500 Stock Index, and (c) the EEI Combination Gas &
Electric Investor-owned Utilities Index. The graph then observes, in each case,
stock price growth and dividends paid (assuming dividends were reinvested) over
five years.
The Board of Directors and its compensation and retirement committee
recognize that many factors influence the market price of stock, one of which is
company performance. The returns shown on the graph do not necessarily predict
future performance.
10
SUMMARY COMPENSATION TABLE
The following information is furnished for the years ended December 31,
1999, 1998 and 1997 with respect to the Company's President and Chief Executive
Officer and each of the five most highly compensated executive officers of the
Company during 1999, each of whose salary and bonus exceeded $100,000. Annual
compensation includes amounts deferred at the officer's election.
ANNUAL COMPENSATION LONG-TERM
------------------------------------- COMPENSATION
OTHER ANNUAL ------------ ALL OTHER
NAME AND PRINCIPAL COMPENSATION LTIP PAYOUTS COMPENSATION
POSITION IN 1999(1) YEAR SALARY ($) BONUS ($) ($)(2) ($)(6) ($)
------------------- -------- ---------- --------- ------------ ------------ ------------
W. Weaver........................... 1999 $570,208 $517,500 $ 38,933(3) $ 44,198(8)
President and 1998 532,971 0 109,933(4) 35,456
Chief Executive Officer 1997 299,598 0 208,046(5) 128,549
R. Hawley........................... 1999 316,167 224,000 20,964(3) 53,462(9)
Vice President and 1998 225,000 0 21,987(4) 81,985
Chief Financial Officer
T. Hogan............................ 1999 191,888 57,900 14,488(3) 14,546(10)
Vice President 1998 184,309 0 26,384(4) 13,458
System Operations 1997 161,144 27,100 $31,360 84,329(7) 24,249
S. McKeon........................... 1999 316,167 224,000 25,142(3) 22,588(11)
Vice President and 1998 283,941 25,800 43,516(4) 21,038
General Counsel 1997 140,320 22,750 29,154
G. Swofford......................... 1999 238,960 87,500 19,841(3) 17,300(12)
Vice President and Chief 1998 189,429 0 54,967(4) 13,337
Operating Officer--Delivery 1997 181,333 13,875 132,719(5) 130,851
J. Quintana......................... 1999 192,125 70,200 45,432(3) 16,812(13)
Vice President 1998 121,957 27,000 9,894(4) 9,415
External Relations
- ---------
(1) Mr. Weaver became President and Chief Executive Officer of PSE in
January 1998. Mr. McKeon became an executive officer of the Company in
June 1997. Mr. Hawley became an executive officer of PSE in March 1998.
Mr. Hogan became an executive officer of PSE in February 1997. The table
includes the following amounts paid to Mr. Hogan in 1997 by the Washington
Energy Company prior to its merger with PSE: Salary $11,334; Bonus,
$13,600, and LTIP payouts, $84,329. Mr. Quintana was an executive officer
of the Company from March 1998 until December 1999.
(2) Except as noted in the table, the aggregate amount of perquisites or
personal benefits was less than the required reporting threshold (the
lesser of $50,000 and 10% of annual salary and bonus for the named
executive officer). The amount shown for Mr. Hogan includes $27,200 for a
one-time-only vehicle allowance associated with the Company's policy of not
providing executives with Company-purchased automobiles.
(3) The amounts for 1999 represent payment of LTIP awards for the four-year
performance cycle ended on December 31, 1999, which consist of
(a) unrestricted shares and restricted shares, valued as of the
December 31, 1999 closing price of $19.38, plus (b) a total dividend amount
of $7.36 per share during the four-year performance period multiplied by
the total number of restricted and unrestricted shares, except that the
amount for Mr. Quintana represents a cash payment for the pro-rata portion
of Mr. Quintana's four outstanding target LTIP awards (based on the portion
of each award cycle elapsed as of December 31, 1999) in connection with the
11
termination of his employment. The number and value of restricted and
unrestricted shares for each of the named executive officers, other than
Mr. Quintana, are as follows:
UNRESTRICTED SHARES RESTRICTED SHARES
------------------- -------------------
NAME NUMBER VALUE NUMBER VALUE
---- -------- -------- -------- --------
W. Weaver............................................ 728 $14,109 728 $14,109
R. Hawley............................................ 392 7,597 392 7,597
T. Hogan............................................. 271 5,250 271 5,250
S. McKeon............................................ 470 9,111 470 9,111
G. Swofford.......................................... 371 7,190 371 7,190
(4) The amounts for 1998 represent payment of LTIP awards for the four-year
performance cycle ended on December 31, 1998, which consist of
(a) unrestricted shares and restricted shares, valued as of the
December 31, 1998 closing price of $27.875, plus (b) a total dividend
amount of $7.36 per share during the four-year performance period
multiplied by the total number of restricted and unrestricted shares. The
number and value of restricted and unrestricted shares for each of the
named executive officers are as follows:
UNRESTRICTED SHARES RESTRICTED SHARES
------------------- -------------------
NAME NUMBER VALUE NUMBER VALUE
---- -------- -------- -------- --------
W. Weaver............................................ 1,560 $43,485 1,560 $43,485
R. Hawley............................................ 312 8,697 312 8,697
T. Hogan............................................. 374 10,425 374 10,425
S. McKeon............................................ 617 17,199 617 17,199
J. Quintana.......................................... 140 3,914 140 3,914
G. Swofford.......................................... 780 21,743 780 21,743
(5) The amounts for 1997 represent payment of a performance share unit award
for the four-year cycle ended on December 31, 1997. The PSU award entitled
the holder to receive a cash payment equal to (a) the average market price
of one share of common stock during the month of December of the last year
of the four-year cycle, plus (b) the aggregate dividends with respect to
one share of common stock from January 1 of the year in which the PSU award
is made until the last day of the last month of the four-year cycle. The
number of PSUs on which values were paid was based on PSE's four-year
average total shareholder return relative to the companies in the EEI 100
Index of Investor-Owned Electrics.
(6) The aggregate number and value of all outstanding restricted stock held by
each of the named executive officers as of December 31, 1999, based on the
closing price of the PSE stock on that date of $19.38, are as follows: W.
Weaver, 2,288 shares, $44,341; R. Hawley, 704 shares, $13,644; T. Hogan,
644.9 shares, $12,498; S. McKeon, 1,087.12 shares, $21,068; G. Swofford,
1,151 shares, $22,306; and J. Quintana, 0.
(7) The amount for 1997 represents payment of performance shares granted by the
Washington Energy Company prior to its merger with PSE, whose vesting was
accelerated upon consummation of the merger.
(8) Represents $9,600 match under Investment Plan for Employees; $20,510 match
under the Investment Plan make-up; and $14,088 imputed income on life
insurance.
(9) Represents $9,208 match under Investment Plan for Employees; $11,443 match
under the Investment Plan make-up; $3,775 imputed income on life insurance;
and $29,036 pursuant to Mr. Hawley's employment agreement to compensate for
LTIP payouts below $50,000.
12
(10) Represents $5,699 match under Investment Plan for Employees; $7,423 match
under the Investment Plan make-up; and $1,424 imputed income on life
insurance.
(11) Represents $9,167 match under Investment Plan for Employees; $11,351 match
under the Investment Plan make-up; and $2,070 imputed income on life
insurance.
(12) Represents $5,930 match under Investment Plan for Employees; $10,007 match
under the Investment Plan make-up; and $1,363 imputed income on life
insurance.
(13) Represents $5,367 match under Investment Plan for Employees; $8,048 match
under the Investment Plan make-up; and $3,397 imputed income on life
insurance.
13
YEAR-END OPTION/STOCK APPRECIATION RIGHTS VALUES
The following table shows the number of outstanding unexercised options and
SARs held by the participating named executive officers at the end of 1999. No
options or SARs were granted or exercised in 1999.
NUMBER OF SHARES UNDERLYING VALUE OF UNEXERCISED IN-THE-MONEY
UNEXERCISED OPTIONS/SARS AT FISCAL OPTIONS/SARS AT
NAME YEAR-END (#) EXERCISABLE FISCAL YEAR-END ($) EXERCISABLE (1)
- ---- ---------------------------------- -----------------------------------
W. Weaver............................ 18,700 $ 0
R. Hawley............................ -- --
T. Hogan............................. 15,667 $25,807
S. McKeon............................ -- --
G. Swofford.......................... 5,600 $ 0
J. Quintana.......................... -- --
- ---------
(1) Amounts are the number of options/SARs multiplied by the difference between
the closing price of the common stock on December 31, 1999 of $19.38 per
share, minus the exercise or base price for that option/SAR. There is no
guarantee that these options/SARs will have this value when and if they are
exercised.
LONG-TERM INCENTIVE PLAN AWARDS IN 1999
The following table presents grants we made to the named executive officers
under our 1995 Long-Term Incentive Compensation Plan during 1999.
ESTIMATED FUTURE SHARE PAYOUTS
NUMBER OF PERIOD UNTIL -------------------------------
SHARES MATURATION OR THRESHOLD TARGET MAXIMUM
NAME (#)(1) PAYOUT (#) (#) (#)
- ---- --------- ------------- --------- -------- --------
W. Weaver................................. 35,080 4 years 0 35,080 61,390
R. Hawley................................. 14,190 4 years 0 14,190 24,833
T. Hogan.................................. 4,820 4 years 0 4,820 8,435
S. McKeon................................. 14,190 4 years 0 14,190 24,833
G. Swofford............................... 8,680 4 years 0 8,680 15,190
J. Quintana(2)............................ 4,880 4 years 0 4,880 8,540
- ---------
(1) Awards are contingent grants of common stock. The number of shares delivered
at the end of the four-year cycle will range from zero to 175% of the
contingent grant. The actual payout depends on our four-year total
shareholder return compared to the returns reported in the EEI Combination
Gas & Electric Investor-owned Utilities Index. To receive 100% of the grant,
we must perform at the 55(th) percentile among EEI's Gas & Electric
companies. To receive 175% of the grant, we must perform at or above the
85(th) percentile ranking. Dividend equivalents are accrued during the
performance period and paid out in cash when and to the extent the
performance shares are paid.
(2) Mr. Quintana's 1999 LTIP award was cancelled in exchange for the payment of
a prorata portion of the award in connection with the termination of his
employment. See footnote (3) to the Summary Compensation Table.
14
RETIREMENT BENEFITS STATEMENT
The table below presents estimated retirement benefits for the named
executive officers, assuming retirement on January 1, 2000 at age 62 after
selected periods of service. The table lists the estimated aggregate values
under our funded pension plan, Supplemental Executive Retirement Plan,
Washington Natural Gas Nonqualified Retirement Plan benefits, the SERP
pension-type rollover accounts in the Deferred Compensation Plan and the Cash
Balance Restoration Matching Account within the Deferred Compensation Plan.
Social Security benefits will not be deducted from the amounts shown in the
table.
ESTIMATED ANNUAL BENEFIT UPON RETIREMENT AT AGE 62
YEARS OF CREDITED SERVICE
FINAL AVERAGE ------------------------------
COMPENSATION 5 10 15+
- ------------ -------- -------- --------
$100,000....................................... $16,667 $33,333 $50,000
200,000....................................... 33,333 66,667 100,000
300,000....................................... 50,000 100,000 150,000
400,000....................................... 66,667 133,333 200,000
500,000....................................... 83,333 166,667 250,000
600,000....................................... 100,000 200,000 300,000
The named executive officers have the following years of credited service as
of December 31, 1999: W. Weaver, 31.5; R. Hawley, 1.75; T. Hogan, 23.33; S.
McKeon, 2.58; G. Swofford, 32.42; and J. Quintana, 1.7. Under their employment
agreements, if Mr. Hawley and Mr. McKeon complete five years of service they
will be treated as if they have completed 15 years of credited service. Under
Mr. Quintana's termination agreement, he will be treated as if he has
5.25 years of credited service.
Estimated aggregate benefits are based on the following formula: 3 1/3%
times years of credited service times average annual compensation (salary plus
bonus) for the highest three calendar years in the last five complete calendar
years prior to retirement, except that Mr. Weaver's benefits are based on the
average of his highest 24 consecutive months of compensation and Mr. Hawley's
and Mr. McKeon's benefits are based on the annual average of their highest 36
consecutive months of salary paid or payable plus the average of their highest
three annual bonuses paid or payable. Also, $50,000 of Mr. Hawley's LTIP-related
payouts are treated as salary. See the section called "Employment Contracts,
Termination of Employment and Change-in-Control Arrangements" below.
The three-year averages (24-consecutive-month average for Mr. Weaver;
21-consecutive-month average for Mr. Hawley; 31-consecutive-month average for
Mr. McKeon; and 20.8-month average for Mr. Quintana as of December 31, 1999) for
the named executive officers were: $551,589 for Mr. Weaver; $333,238 for
Mr. Hawley; $190,487 for Mr. Hogan; $305,410 for Mr. McKeon; $222,865 for
Mr. Swofford; and $199,657 for Mr. Quintana.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
AGREEMENTS
In October 1996 PSE entered into an agreement with Mr. Weaver under which he
will receive the following payments and benefits if his employment terminates
for any reason sooner than his normal retirement date, which, in accordance with
PSE's policy, is when Mr. Weaver reaches the age of 62.
a. annual base salary and accrued benefits earned through termination,
plus a pro rata share of any incentive compensation accrued through the date
of termination, regardless of whether such amounts are vested or payable on
that date;
15
b. an amount equal to three times annual base salary and bonus;
c. continued participation for three years in employee benefit plans or
provision for substantially similar benefits;
d. a cash payment at normal retirement date of the actuarial equivalent
of the additional retirement compensation he would have earned had
employment continued for three more years;
e. a payment equal to the difference between the exercise prices of any
outstanding options or similar rights (whether or not then fully
exercisable) and the higher of (a) the market price of the common stock on
the date of termination and (b) the highest price per share actually paid in
connection with any change in control;
f. a payment equal to the value of the target number of shares payable
upon full vesting of all outstanding performance awards, whether or not such
awards were then fully vested or payable; and
g. a cash payment equal to any excise taxes payable by him due to
excess parachute payments, plus the tax expense to him resulting from this
payment.
In addition, Mr. Weaver's agreement provides that his benefits under the
SERP will be based on his average compensation for his highest consecutive
24 months of service.
Effective March 16, 1998, PSE entered into an employment agreement with
Mr. Hawley to secure his services as Vice President and Chief Financial Officer.
The agreement has a term of five years. Mr. Hawley will receive a minimum annual
base salary of $300,000. He also will participate in PSE's Pay at Risk Plan,
with a target award of at least 35% of base salary, and in PSE's 1995 Long-Term
Incentive Compensation Plan, with a target of at least 40% of base salary and
grants of 1,200 performance units for the 1995-1998 cycle, 2,800 performance
units for the 1996-1999 cycle, 4,400 performance units for the 1997-2000 cycle
and 6,400 performance units for the 1998-2001 cycle, and a cash payment equal to
the difference between $50,000 and any lesser settlement value for such awards.
In addition, Mr. Hawley's agreement provides that if he completes five years
of service to the Company, then his benefits under the SERP will be calculated
as if he had completed 15 years of service to the Company. His agreement also
provides that his benefits under the SERP will be based on the sum of (a) the
annual average of his highest 36 consecutive months of salary paid or payable
and (b) the average of his highest three annual bonuses paid or payable. Under
his agreement, the $50,000 minimum annual award to which Mr. Hawley is entitled
with respect to the 1995 Long-Term Incentive Compensation Plan will be treated
as salary for purposes of calculating his SERP benefits.
If PSE terminates Mr. Hawley's employment without cause prior to the end of
the term of the agreement, Mr. Hawley will receive:
a. annual base salary and accrued benefits earned through termination,
plus a pro rata share of any incentive compensation accrued through the date
of termination, regardless of whether such amounts are vested or payable on
that date, and
b. continuation of his base salary for two years, plus $50,000 per
year.
If Mr. Hawley's employment terminates for any reason within three years
after a change in control, Mr. Hawley will receive, in lieu of the benefits
described above, substantially the same type of payments and benefits as
described above for Mr. Weaver.
Mr. Hogan entered into an agreement effective as of August 17, 1995 with the
Washington Energy Company that PSE has assumed. Under that agreement, as amended
on June 30, 1999, if prior to the
16
earlier of June 30, 2002 or a change of control of PSE Mr. Hogan terminates his
employment for good reason or PSE terminates his employment without cause, he
would receive the same type of payments and benefits as described above for
Mr. Weaver.
In October 1996 PSE entered into an agreement with Mr. Swofford under which
he will be paid a retention incentive benefit based on continued employment for
an extended period following the merger of PSE and the Washington Energy Company
in February 1997, equal to three times his annual base salary in 1996, plus the
bonus paid in 1996. The incentive benefit vests in three equal installments
after one year, three years and five years of continued employment after the
merger. The vested portion of the incentive benefit will be paid in equal
monthly installments over a three-year period beginning on the date his
employment terminates.
In 1999 PSE entered into-change of control agreements with Mr. Swofford and
Mr. Hogan that provided for the same type of payments and benefits described
above for Mr. Weaver in the event that their employment is terminated by the
Company without cause or by the employee for good reason within two years
following a change of control of PSE, except that the payments in sections
(c) and (d) are based on two rather than three years.
Effective June 2, 1997, PSE entered into an employment agreement with
Mr. McKeon to secure his services as Vice President and General Counsel. The
agreement has an initial term of three years and will be extended for two more
one-year periods unless Mr. McKeon or we give written notice of termination not
less than six months before the applicable anniversary date. Mr. McKeon will
receive a minimum annual base salary of $260,000. He also will participate in
PSE's Pay at Risk Plan, with a target award of at least 35% of base salary, and
in PSE's 1995 Long-Term Incentive Compensation Plan, with a target of at least
35% of base salary and grants of 2,375 performance units for the 1995-1998
cycle, 3,358 performance units for the 1996-1999 cycle and 5,240 performance
units for the 1997-2000 cycle.
Mr. McKeon's agreement provides that if he completes five years of service
to the Company, then his benefits under the SERP will be calculated as if he had
completed 15 years of service to the Company. His agreement also provides that
his benefits under the SERP will be based on the sum of (a) the annual average
of his highest 36 consecutive months of salary paid or payable and (b) the
average of his highest three annual bonuses paid or payable. If PSE terminates
his employment without cause prior to the end of the term of the agreement,
Mr. McKeon would receive his annual base salary and accrued benefits earned
through termination, plus a pro rata share of any incentive compensation accrued
through the date of termination, regardless of whether such amounts are vested
or payable on that date, and continuation of his base salary for two years. If
Mr. McKeon's employment terminates for any reason within three years after a
change in control, he would receive substantially the same type of payments and
benefits as described above for Mr. Weaver.
PSE entered into a severance agreement with Mr. Quintana as of December 31,
1999. The agreement supersedes an employment agreement between Mr. Quintana and
PSE dated as of March 20, 1998. The severance agreement provides that
Mr. Quintana will receive a lump-sum severance payment of $151,685 and a payment
of $45,432 in settlement of the pro rata portion of his four outstanding LTIP
awards. The agreement also provides that Mr. Quintana's benefits under the SERP
will be calculated as if he had completed 5.25 years of service to the Company.
1995 LONG-TERM INCENTIVE COMPENSATION PLAN
Under the PSE 1995 Long-Term Incentive Compensation Plan, in the event of a
change of control of PSE, each stock award that is at the time outstanding will
automatically accelerate and become
17
100% vested. The plan administrator may, at any time before a corporate
transaction, take further action to ensure fair and equitable treatment of
awards.
STOCK APPRECIATION RIGHTS
Upon a change of control of PSE, all SARs will terminate. Each holder may
exercise his or her SARs immediately prior to the transaction, whether or not
the SARs have vested.
CERTAIN TRANSACTIONS
Mr. Dryden, a director of the Company, has served as Chief Executive Officer
of ConneXt, Inc., a wholly owned subsidiary of PSE, since April 1999. His
aggregate compensation for such service in 1999 was $294,776.
ADDITIONAL INFORMATION ABOUT THE MEETING AND SHAREHOLDER PROPOSALS
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of PricewaterhouseCoopers LLP has audited the financial statements
of the Company since 1933. Representatives of the firm will attend the Annual
Meeting, with the opportunity to make a statement and answer appropriate
shareholder questions.
SHAREHOLDER PROPOSALS
Shareholders who intend to have a proposal considered for inclusion in our
proxy materials for the 2001 Annual Meeting of Shareholders must submit the
proposal at our principal executive office no later than November 30, 2000. In
accordance with the Company's Bylaws, shareholders who intend to present a
proposal at the 2001 Annual Meeting without inclusion of the proposal in our
proxy materials must provide written notice of such proposal, in the manner
required by the Company's Bylaws, no later than January 8, 2001.
SOLICITATION OF PROXIES
The Board of Directors is soliciting the proxies in the form enclosed.
William S. Weaver and James W. Eldredge, and each or either of them, are named
as proxies. We may solicit your proxy by mail, personal interview, telephone and
fax. We will request that banks, brokerage houses and other custodians, nominees
or fiduciaries forward soliciting materials to their principals and obtain
authorization for the execution of proxies. We will reimburse them for their
expenses in forwarding and collecting proxies. Our officers, directors,
employees and other agents may solicit proxies without compensation, except for
reimbursement of expenses. Puget Sound Energy will pay all costs of solicitation
of proxies.
March 30, 2000
Bellevue, Washington
By Order of the Board of Directors
William S. Weaver
PRESIDENT AND CHIEF EXECUTIVE OFFICER
18
[LOGO]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
This undersigned hereby appoints WILLIAM S. WEAVER and JAMES W.
ELDREDGE, and each or either of them, as Proxies, each with the power to
appoint his substitute, and hereby authorizes them to represent and to vote,
as designated below, all the shares of Common Stock of PUGET SOUND ENERGY, INC.
held of record by the undersigned on March 15, 2000, at the Annual Meeting of
Shareholders to be held on May 16, 2000, or any adjournment thereof.
(Continued, and to be marked, dated and signed, on the other side)
- -------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
- ---------------------------------------------------------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED "FOR" THE PROPOSALS Please mark
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. your votes as /X/
indicated in
this example
FOR all nominees
listed below WITHHOLD AUTHORITY
(except as marked to to vote for all
the contrary below) nominees listed below
1. Election of Directors / / / /
DOUGLAS P. BEIGHLE TOMIO MORIGUCHI CRAIG W. COLE
(INSTRUCTION: To withhold authority to vote for any
individual nominee, write that nominee's name in this
space).
- ------------------------------------------------------ This proxy when properly executed will be voted in
the manner directed herein by the undersigned
shareholder. PROXY CARDS PROPERLY EXECUTED AND
RETURNED WITHOUT DIRECTION WILL BE VOTED FOR PROPOSAL
1. In their discretion, the Proxies are authorized to
vote upon such other business as may properly come
before the meeting and any adjournment thereof.
Please sign exactly as name appears below. When
shares are held by joint tenants, both should sign.
When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
If a corporation, please sign in full corporate name
by President or other authorized officer. If a
partnership, please sign in partnership name by
authorized person.
Signature(s) Dated , 2000
----------------------------------------------- ------------------
PLEASE COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE
- ---------------------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE