Item 1. BUSINESS
GENERAL
Additional information required by this Item, other than the information
disclosed below, is included in the "Management's Discussion and Analysis of
Consolidated Results of Operations and Financial Condition" section and the
"Notes to Consolidated Financial Statements," which are included in Exhibit 13.
Potomac Electric Power Company (Pepco or the Company) is engaged in
three principal lines of business. These business lines consist of
(1) the provision of regulated electric utility transmission and distribution
services, (2) the supply of telecommunications services including local and
long distance telephone, high speed Internet and cable television, and
(3) the supply of energy products and services in competitive retail markets.
The Company's regulated electric utility activities are referred to herein as
the "Utility" or "Utility Operations," and its telecommunications services
and competitive energy activities are referred to herein as "Competitive
Operations." Competitive Operations are derived from Pepco Holdings, Inc.
(PHI), a wholly owned subsidiary of the Company, and PHI's wholly owned
subsidiaries, Potomac Capital Investment Corporation (PCI), Pepco Energy
Services, Inc. (Pepco Energy Services), and PepMarket.com, LLC (PepMarket).
Additionally, the Company has a wholly owned Delaware statutory business
trust, Potomac Electric Power Company Trust I (Trust) and a wholly owned
Delaware Investment Holding Company, Edison Capital Reserves Corporation
(Edison).
The Utility successfully executed its business plan to exit the
electricity generating business by completing the divestiture of
substantially all of its generating assets on December 19, 2000 to Mirant
Corp., formerly Southern Energy Inc. (Southern Energy). The divestiture
resulted in the Company's recognition of a pre-tax gain of approximately
$423.8 million ($182 million net of income tax or $1.58 per share). Also in
December 2000, the Company recognized a pre-tax impairment loss of $40.3
million ($24.1 million net of income tax or 20 cents per share) on its
Benning Road and Buzzard Point generating stations, which were transferred to
a subsidiary of Pepco Energy Services in December 2000. The Company
determined that these stations were impaired when it performed an impairment
assessment in 2000. This impairment was warranted due to circumstances that
existed at the time, such as the divestiture of its generation assets as well
as the volatility of energy prices and the availability of current financial
information derived from the completion of the 2001 budgeting cycle. The
closing on the Company's sale of its 9.72% interest in the Conemaugh
Generating Station (Conemaugh) to PPL Global, Inc. and Allegheny Energy
Supply Company, LLC for $156 million took place on January 8, 2001, which
resulted in a pre-tax gain of approximately $39 million, which will be
recorded in the first quarter of 2001.
On February 12, 2001, the Company and Conectiv announced that their
boards of directors approved an agreement for a strategic transaction whereby
the Company will effectively acquire Conectiv for a combination of cash and
stock valued at approximately $2.2 billion. See Item 7., Management's
Discussion and Analysis of Financial Condition and Results of Operations, for
additional information.
SALES
The Utility's total kilowatt-hours delivered and electric revenue by
class of service for the periods 1998 through 2000 are presented below.
The Utility's sales of electric energy are seasonal, and, accordingly,
rates have been designed to closely reflect the daily and seasonal variations
in the cost of producing or acquiring energy, in part by raising summer rates
and lowering winter rates. Mild weather during the summer billing months of
June through October, when base rates are higher to encourage customer
conservation and peak load shifting, has an adverse effect on revenue and net
income and, conversely, hot weather during these months has a favorable
effect.
FUEL
The Maryland fuel clause was terminated effective July 1, 2000 (the date
of commencement of customer choice) and the D.C. fuel clause was terminated
on February 9, 2001 (one month after the completion of the sale of the
Company's interest in Conemaugh). Now that generation services have been
deregulated in both Maryland and D.C., and the Utility has exited the
generation business, the Utility will no longer incur fuel costs. Standard
Offer Services (SOS) will be provided through energy purchased from Southern
Energy. For additional information about SOS as well as the Transition Power
Agreement with Southern Energy, refer to the "Management's Discussion and
Analysis of Consolidated Results of Operations and Financial Condition"
section, which is included in Exhibit 13.
Item 3. LEGAL PROCEEDINGS
The information required by this Item is included in Note 13 to the
"Notes to Consolidated Financial Statements," which is included in Exhibit 13.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
Part II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The following table presents the dividends per share of Common Stock and
the high and low of the daily Common Stock transaction prices as reported in
The Wall Street Journal during each period. The New York Stock Exchange is
the principal market on which the Company's Common Stock is traded.
The number of holders of Common Stock was 60,159 at March 19, 2001, and
61,151 at December 31, 2000.
There were 109,892,976 shares of the Company's $1 par value Common Stock
outstanding at March 19, 2001, and 110,751,829 outstanding at December 31,
2000. A total of 200 million shares is authorized.
In January 2001, a dividend of 41.5 cents per share was declared payable
March 30, 2001, to shareholders of record of the Company's common stock on
March 12, 2001. The Company's dividend rate on common stock is determined by
the Board of Directors and takes into consideration, among other factors,
current and possible future developments which may affect the Company's
income and cash flows. On February 12, 2001, the Company announced
that it will reduce its annual dividend to $1.00 per share from $1.66 per
share, effective with the June 2001 dividend. The Company also announced its
plans to repurchase up to $450 million of its common stock in the open market
or in privately negotiated transactions over the next 12 months. See
Item 7., Management's Discussion and Analysis of Financial Condition and
Results of Operations, for additional information.
Item 6. SELECTED FINANCIAL DATA
The information required by this Item is included in the "Selected
Consolidated Financial Data" section, which is included in Exhibit 13.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Additional information required by this Item, other than the information
disclosed below, is included in the "Management's Discussion and Analysis of
Consolidated Results of Operations and Financial Condition" section, which is
included in Exhibit 13.
On February 12, 2001, Pepco, a corporation organized under the laws of
the District of Columbia and the Commonwealth of Virginia, and Conectiv, a
Delaware corporation, announced that they have entered into an Agreement and
Plan of Merger, dated as of February 9, 2001 (the Merger Agreement),
providing for a strategic transaction in which Pepco will effectively acquire
Conectiv for a combination of cash and stock (the Transaction). The Merger
Agreement provides that a new, as yet unnamed, holding company (HoldCo) will
be formed and that two wholly owned newly formed subsidiaries of HoldCo will
merge with and into Pepco and Conectiv such that Pepco and Conectiv will
become wholly owned subsidiaries of HoldCo. The common stockholders of Pepco
and Conectiv will together own all of the outstanding shares of common stock
of HoldCo, and each share of each other class of capital stock of Pepco and
Conectiv will be unaffected and remain outstanding. HoldCo will register
with the Securities and Exchange Commission under the Public Utility Holding
Company Act of 1935, as amended. In addition, Pepco announced that it will
reduce its annual dividend to $1.00 per share from $1.66 per share, effective
with the June 2001 dividend. The March 2001 dividend will remain at its
current level. Pepco has also authorized a share repurchase program of up to
$450 million and will repurchase its common stock in the open market or in
privately negotiated transactions from time to time over the next 12 months.
The actual amount of stock repurchased will be determined by management
depending on market conditions.
Under the Merger Agreement, Pepco stockholders will receive one share of
common stock of HoldCo for each share of Pepco common stock that they hold.
Each share of Pepco preferred stock will remain outstanding as Pepco
preferred stock after the Transaction. For each share of Conectiv common
stock, Conectiv stockholders will receive either $25.00 in cash ($21.69 for
the Class A common stock) or HoldCo common stock with a market value of
$25.00 ($21.69 for the Class A common stock) as long as the average market
value of Pepco's common stock for 20 selected trading days in the 30 trading
day period immediately prior to the closing of the Transaction is between
$19.50 and $24.50. However, if the market value of Pepco's common stock at
that time is below $19.50, the number of shares of HoldCo common stock
received for each share of Conectiv common stock will be fixed at 1.28205
(1.11227 for the Class A common stock) and if the market value of Pepco's
common stock is above $24.50, the number of shares of HoldCo common stock
received for each share of Conectiv common stock will be fixed at 1.02041
(.88528 for the Class A common stock). Additionally, 50 percent of the
consideration payable to Conectiv stockholders will be paid in cash and 50
percent in HoldCo common stock, giving Conectiv stockholders a right to elect
their consideration with an allocation and proration formula in the event
either cash or stock is oversubscribed. Fractional shares will still be
cashed out. Based on the number of common shares of Pepco and Conectiv
currently outstanding on a fully diluted basis, Pepco stockholders will own
approximately 67 percent of the common equity of HoldCo, and Conectiv
stockholders will own approximately 33 percent. The transaction is expected
to be tax-free to the extent that stockholders receive stock for their
shares.
The Merger Agreement provides that the board of directors of HoldCo will
have 12 directors, at least two of whom will come from the current Conectiv
board. After the Transaction is completed, it is expected that John M.
Derrick, Jr., chairman and chief executive officer of Pepco, will be chairman
and chief executive officer of HoldCo, and Howard E. Cosgrove, chairman and
chief executive officer of Conectiv, will retire. In addition, HoldCo will
have its headquarters in Washington, D.C. while Conectiv will maintain its
headquarters in Wilmington, Delaware and will continue to have significant
operations in New Jersey and the Delmarva Peninsula. The Transaction is not
expected to result in significant workforce reductions and all union
contracts will be honored.
The Transaction is subject to customary closing conditions, including,
without limitation, the receipt of required stockholder approvals of Pepco
and Conectiv, the receipt of all necessary governmental approvals and the
making of all necessary governmental filings. The Transaction is also
subject to the receipt of opinions of counsel that the Transaction will
qualify for treatment under Section 351 of the Internal Revenue Code of 1986.
In addition, the Transaction is conditioned upon the effectiveness of a joint
registration statement and proxy statement to be filed by Pepco, Conectiv and
HoldCo with the Securities and Exchange Commission with respect to shares of
HoldCo common stock to be issued in the Transaction and the stockholder
meetings, and upon the approval of HoldCo common stock for listing on the New
York Stock Exchange. The meetings of the stockholders of Pepco and Conectiv
to vote on the Transaction will be convened as soon as is practicable. The
companies anticipate that the transaction will be completed in approximately
12 months.
The Merger Agreement may be terminated under certain circumstances,
including (1) by mutual consent of Pepco and Conectiv; (2) by either Pepco or
Conectiv if the Transaction is not consummated before the 18 month
anniversary of the date of the Merger Agreement (provided, however, that such
termination date shall be extended for an additional 6 months if any
statutory approvals that have not been obtained are being pursued diligently
and in good faith); (3) by either Pepco or Conectiv if either Pepco's or
Conectiv's stockholders vote against the Transaction or if any state or
federal law or court order prohibits the Transaction; (4) by either Pepco or
Conectiv if the Board of Directors of the other shall withdraw or adversely
modify its recommendation of the Transaction; (5) by a non-breaching party if
there exists a breach of any material representation, warranty or covenant
contained in the Merger Agreement which is not cured within 30 business days
after notice from the other party; or (6) by Conectiv, under certain
circumstances, as a result of a third-party tender offer or business
combination proposal which the Board of Directors of Conectiv in good faith
and pursuant to the exercise of its fiduciary duties determines to accept,
after Pepco has first been given an opportunity to make adjustments in the
terms of the Merger Agreement so as to enable the Transaction to proceed. In
addition, in the event that the market value of Pepco's common stock during
the pricing period discussed above is below $16.50, Conectiv may terminate
the Merger Agreement, provided that before such termination is effective,
Pepco will have the option to increase consideration to be paid to Conectiv
stockholders so that they will receive an amount equal to the amount they
would receive if the market value of Pepco's common stock is $16.50. If
Pepco exercises this option, the Merger Agreement will not be terminated and
the Transaction will proceed.
The Merger Agreement requires payment of a termination fee of $60
million in cash, by Conectiv to Pepco if (i) the Merger Agreement is
terminated as a result of the acceptance by Conectiv of a third-party tender
offer or business combination proposal, or (ii) following a failure of the
stockholders of Conectiv to approve the Transaction if at the time prior to
the meeting of Conectiv's stockholders there shall have been a third-party
tender offer or business combination proposal made public and a definitive
agreement is entered into with respect thereto (and is subsequently
consummated) or such proposal is consummated within 12 months after the
termination. Pepco is required to pay to Conectiv a termination fee of $60
million if Pepco's stockholders fail to approve the Transaction and at the
time prior to the meeting of Pepco's stockholders there shall have been made
public a third-party tender offer or business combination proposal and a
definitive agreement is entered into with respect thereto (and is
subsequently consummated) or such proposal is consummated within 12 months
after the termination. In addition, if either Pepco or Conectiv terminates
the Merger Agreement after the Board of Directors of the other party
withdraws or adversely modifies its recommendation of the Transaction, a
termination fee of $60 million is payable to the party that terminates the
Merger Agreement.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by this Item is included in the "Management's
Discussion and Analysis of Consolidated Results of Operations and Financial
Condition" section, which is included in Exhibit 13.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements, together with the report thereon
of PricewaterhouseCoopers LLP dated January 19, 2001, and supplementary data,
are included in Exhibit 13.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
Part III
Item 10
. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information with regard to the directors and executive officers of the
registrant as of March 23, 2001 is as follows:
Directors
Name and Age
Principal Occupation and Business
Experience for Past Five Years
Director Since
Roger R. Blunt, Sr.
Age 70 (a)(b)(e)
Chairman of the Board, President and Chief
Executive Officer of Blunt Enterprises, LLC
(general contracting and construction
management), a Washington-based holding company,
that includes Essex Construction, LLC, of which
he is Chairman of the Board, President and Chief
Executive Officer, and Tyroc Construction, LLC,
of which he is Chairman of the Board, President
and Chief Executive Officer. Mr. Blunt has
reached the mandatory age for retirement for
directors and will retire in April 2001.
Edmund B. Cronin, Jr.
Age 63 (a)(c)(d)(f)
Chairman of the Board, President and Chief
Executive Officer of Washington Real Estate
Investment Trust, based in Rockville, Maryland,
which owns income-producing real estate in the
mid-Atlantic Region.
John M. Derrick, Jr.
Age 61 (b)
See Executive Officers Below.
Terence C. Golden
Age 56 (a)(c)(e)(f)
Chairman of Bailey Capital Corporation in
Washington, D.C. Bailey Capital Corporation is a
private investment company. From 1995 until
2000, Mr. Golden was President, Chief Executive
Officer and a director of Host Marriott
Corporation. He continues to serve as a director
of Host Marriott Corporation. He is also a
director of Cousins Properties, Inc., American
Classic Voyages, Inc. and the Morris & Gwendolyn
Cafritz Foundation.
David O. Maxwell
Age 70 (c)(d)(e)
Retired Chairman of the Board and Chief Executive
Officer of Fannie Mae, a position he held from
1981-1991. He is a director of Financial
Security Assurance Holdings Ltd. Mr. Maxwell has
reached the mandatory age for retirement for
directors and will retire in April 2001.
Judith A. McHale
Age 54 (a)(d)(e)(f)
President and Chief Operating Officer of
Discovery Communications, Inc. (DCI), parent
company of cable television's Discovery Channel,
which is based in Bethesda, Maryland. She is a
director of John Hancock Financial Services, Inc.
and Polo Ralph Lauren Corporation.
Floretta D. McKenzie
Age 65 (a)(b)(d)(f)
Chairwoman and Chief Executive Officer of The
McKenzie Group, Inc., a District of Columbia
based educational consulting firm. Dr. McKenzie
is a director of Marriott International, Inc.
Edward F. Mitchell
Age 69 (b)(c)(e)
Retired Chairman of the Board of the Company, a
position he held from 1992-1999. He was Chief
Executive Officer from 1989-1997.
Lawrence C. Nussdorf
Age 54
Since 1998 has been President and Chief Operating
Officer of Clark Enterprises, Inc., a holding
company based in Bethesda, Maryland, which
includes The Clark Construction Group, a general
contracting company, of which Mr. Nussdorf has
been Vice President and Treasurer since 1977.
Nominee
Peter F. O'Malley
Age 62 (c)(d)(e)
Of Counsel to O'Malley, Miles, Nylen & Gilmore,
P.A., a law firm headquartered in Calverton,
Maryland. Mr. O'Malley currently serves as the
President of Aberdeen Creek Corp., a privately
held company engaged in investment, business
consulting and development activities.
Mr. O'Malley is a director of Legg Mason, Inc.
and FTI Consulting.
Pauline A. Schneider
Age 57
Joined the Washington office of the law firm of
Hunton & Williams in 1985 and has been a partner
there since 1987. In October 2000, Ms. Schneider
was elected as Chair of the Board of MedStar
Health, Inc., a community-based healthcare
organization that includes seven major hospitals
in the Washington, D.C./Baltimore area. Also,
since 1998, she has chaired the Board of The
Access Group, Inc., a not for profit student loan
provider headquartered in Wilmington, Delaware.
Nominee
Dennis R. Wraase
Age 57 (b)
See Executive Officers Below.
A. Thomas Young
Age 62 (a)(c)(d)(f)
Retired Executive Vice President of Lockheed
Martin Corporation. From 1990 until 1995, he was
President and Chief Operating Officer of Martin
Marietta Corporation. He is a director of the
B.F. Goodrich Company and Science Applications
International Corporation.
(a)
Mr. Blunt is Chairman of the Audit Committee. Messrs. Cronin, Golden
and Young, Ms. McHale and Dr. McKenzie are members of the Committee.
(b)
Mr. Mitchell is Chairman of the Executive Committee. Messrs. Blunt,
Derrick and Wraase and Dr. McKenzie are members of the Committee.
(c)
Messrs. Cronin, Golden, Maxwell, Mitchell, O'Malley and Young are
members of the Finance Committee.
(d)
Mr. O'Malley is Chairman of the Corporate Governance Committee.
Messrs. Cronin, Maxwell and Young, Ms. McHale and Dr. McKenzie are
members of the Committee.
(e)
Mr. Maxwell is Chairman of the Human Resources Committee. Messrs.
Blunt, Golden, Mitchell and O'Malley and Ms. McHale are members of the
Committee.
(f)
Dr. McKenzie is Chairman of the Nominating Committee. Messrs. Cronin,
Golden and Young and Ms. McHale are members of the Committee.
Executive Officers
Name
Position
Age
Served in such position since
John M. Derrick, Jr.
Chairman of the Board and Chief
Executive Officer
1999 (1)
Dennis R. Wraase
President and Chief Operating
Officer and Director
2001 (2)
William T. Torgerson
Executive Vice President -
External Affairs and General
Counsel
2001 (3)
Andrew W. Williams
Senior Vice President and Chief
Financial Officer
2001 (4)
William J. Sim
Senior Vice President - Power
Delivery
2001 (5)
Robert C. Grantley
Group Vice President - Customer
Care
1997 (6)
Earl K. Chism
Vice President and Comptroller
Kenneth P. Cohn
Vice President and Chief
Information Officer
1999 (7)
Kirk J. Emge
Vice President - Legal Services
William R. Gee, Jr.
Vice President - System Planning
Anthony J. Kamerick
Vice President, Finance and
Treasurer
Beverly L. Perry
Vice President - Government and
Corporate Affairs
1999 (8)
James S. Potts
Vice President - Environment
Section 16(a) Beneficial Ownership Reporting Compliance
The rules of the Securities and Exchange Commission require that the
Company disclose any late filing of the reports of stock ownership (and
changes in stock ownership), and any known failure to file these reports, by
its directors and executive officers. Mary Sharpe-Hayes, former Vice
President, Strategic Planning, who became the indirect owner of 500 shares of
Common Stock of the Company when her spouse purchased these shares in
February 2000 inadvertently failed to file a Form 4 by the March 10, 2000
deadline. She filed the form on March 16, 2000. To the best of the
Company's knowledge, all other filings required to be made by the Company's
directors and executive officers were made on a timely basis in 2000.
Item 11. EXECUTIVE COMPENSATION
Director Compensation
Each of the Company's non-employee directors is paid an annual retainer
of $26,000, plus a fee of $1,250 for each Board and Committee meeting
attended. Each director who is a Chairman of a Committee is paid an
additional retainer of $3,500.
The Stock Compensation Plan for Directors requires each director who is
not an employee of the Company to receive half of his or her $26,000 annual
retainer either (i) in shares of Common Stock or (ii) as a Common Stock
equivalent deferral under the Company's Deferred Compensation Plan, the value
of which corresponds to the market price of the Company's Common Stock. A
director may elect to receive up to 100% of his or her retainer and meeting
fees in shares of Common Stock or Common Stock equivalents. Common Stock
equivalents are credited with additional amounts equal to the dividend payout
on the corresponding number of shares of Common Stock, which amounts are
deemed reinvested in additional Common Stock equivalents. Common Stock
equivalents have no voting rights. A director alternatively may elect to be
paid in cash or to defer under the Deferred Compensation Plan the portion of
his or her annual retainer and meeting fee payments not required to be
invested in Common Stock or Common Stock equivalents. Such deferrals are
credited, at the election of the director, with a return equal to the prime
rate, a return on a specified group of funds or a combination of both.
Balances under the Deferred Compensation Plan, including Common Stock
equivalent balances, are paid out in cash, in either a lump sum or
installments, commencing at a time selected by the director.
On May 1 of each year, each non-employee director is granted an option to
purchase 1,000 shares of Common Stock. Each option has an exercise price
equal to the market price of the Common Stock on the date of grant. Options
granted prior to 2000 become exercisable at the earlier of (i) four years
after date of grant or (ii) fifty percent upon attainment of a target price
and the remaining fifty percent upon the attainment of a higher target price.
Options granted in 2000 become exercisable at the rate of twenty-five percent
on each of the first four anniversaries of the date of grant. Upon a "change
in control," all options become immediately exercisable. Options expire ten
years after the date of grant or at such earlier date as specified by the
Plan in the event of retirement, death, disability or after termination of
service of the director.
The Company also provides directors with travel accident insurance for
Company-related travel and directors' and officers' liability insurance
coverage.
Executive Compensation
(1) Other Annual Compensation
Amounts in this column for each year represent above-market earnings on
deferred compensation funded by Company-owned life insurance policies held
in trust, assuming the expected retirement at age 65. The amounts are
reduced if the executive terminates employment prior to age 62 for any
reason other than death, total or permanent disability or a change in
control of the Company. In the event of a change in control and termination
of the participant's employment, a lump sum payment will be made equal to
the net present value of the expected payments at age 65 discounted using
the Pension Benefit Guaranty Corporation immediate payment interest rate
plus one-half of one percent. The Company has purchased such policies on
participating individuals under a program designed so that if assumptions as
to mortality experience, policy return and other factors are realized, the
compensation deferred and the death benefits payable to the Company under
such insurance policies will cover all premium payments and benefit payments
projected under this program, plus a factor for the use of Company funds.
(2) Restricted Stock
Amounts in this column for each year represent the aggregate market
price on the grant date of restricted shares of Common Stock. These shares
vest over a four-year period: 20% vested on the first anniversary of the
grant date, 20% vested on the second anniversary of the grant date, 20% vest
on the third anniversary of the grant date, and the remaining 40% vest on
the fourth anniversary of the grant date. The market price does not reflect
that the shares are restricted. Dividends are paid on the restricted
shares. Dollar amounts shown are for executives who received restricted
shares of Common Stock in the year indicated. The number and aggregate
market value of the non-vested restricted shares of Common Stock at
December 31, 2000 for the five named executives are: 3,000 shares, $74,130
for Mr. Derrick; 1,560 shares, $38,547 for Mr. Wraase; 1,440 shares, $35,582
for Mr. Torgerson; and 960 shares, $23,722 each for Messrs. Williams and
Sim.
(3) Options
Amounts in this column represent the number of stock options granted for
each year. The shareholders approved the Long-Term Incentive Plan in April
1998 and options were granted for the first time in May 1998. Additional
options were granted in January 2000. Fifty percent of the options granted
in 1998 became exercisable on October 9, 1998 and the remaining 50% became
exercisable on June 11, 1999. Twenty-five percent of the options granted in
2000 became exercisable on January 1, 2001. The remaining options will
become exercisable at the rate of twenty-five percent on January 1 of each
year until January 1, 2004.
(4) Incentive Plan Payouts
All amounts in this column represent the value of vested Common Stock
under the Company's Performance Restricted Stock Program. The amount shown
for 2000 consists of 33-1/3% of the Common Stock award from the one-year
performance cycle ended December 31, 1999, 33-1/3% of the Common Stock award
from the eight-month performance cycle ended December 31, 1999, and 50% of
the Common Stock award from the performance cycle ended December 31, 1998
(the "1998 Cycle"), that vested on January 1, 2001. The amounts shown for
1999 consist of 33-1/3% of the Common Stock award from the eight-month
performance cycle ended December 31, 1999, 50% of the Common Stock award
for the 1998 Cycle, and 50% of the Common Stock award from the performance
cycle ended December 31, 1997 (the "1997 Cycle"), that vested on January 1,
2000. For 1999, amounts also include cash awards for the Performance Share
Plan, which was applicable to the years 1997 through 1999 (the "1999
Cycle"). The cash amounts awarded for the 1999 Cycle for Messrs. Derrick,
Wraase, Torgerson, Williams and Sim were $119,722, $57,221, $53,482, $38,355
and $37,940, respectively. The amount shown for 1998 consists of 50% of the
Common Stock award for the 1997 Cycle and 50% of the Common Stock award for
the performance cycle ended December 31, 1996 (the "1996 Cycle"), that
vested on January 1, 1999. The value of the vested Common Stock was
calculated based on the market price of the Common Stock on the day
preceding the vesting date. Dollar amounts shown are for executives who were
eligible to participate in the Performance Restricted Stock Program in the
years indicated.
(5) All Other Compensation
Amounts in this column for 2000 consist of (i) Company contributions to
the Savings Plan for Exempt Employees of $7,900, $7,804, $7,900, $4,232 and
$7,900 for Messrs. Derrick, Wraase, Torgerson, Williams and Sim,
respectively, (ii) Company contributions to the Executive Deferred
Compensation Plan due to Internal Revenue Service limitations on maximum
contributions to the Savings Plan for Exempt Employees of $13,069, $7,860,
$5,790, $5,732 and $1,766 for Messrs. Derrick, Wraase, Torgerson, Williams
and Sim, respectively, (iii) the term life insurance portion of life
insurance written on a split-dollar basis of $4,111, $2,398, $1,953, $1,040
and $1,517 for Messrs. Derrick, Wraase, Torgerson, Williams and Sim,
respectively, and (iv) the interest on employer paid premiums for split-
dollar life insurance of $32,448, $18,328, $14,371, $12,594 and $10,674 for
Messrs. Derrick, Wraase, Torgerson, Williams and Sim, respectively. The
split-dollar life insurance contract provides death benefits to the
executive's beneficiaries of approximately three times the executive's
annual salary. The split-dollar program is designed so that, if the
assumptions made as to mortality experience, policy return and other factors
are realized, the Company will recover all plan costs, including a factor
for the use of Company funds. The split-dollar policy provides a cash
surrender value to each participant in excess of any premiums paid.
(1) Individual Grants
The exercise price of options is the market price of the Common Stock on
the grant date (January 1, 2000). Twenty-five percent of the options became
exercisable on January 1, 2001. The remaining options will become
exercisable at the rate of twenty-five percent on January 1 of each year
until January 1, 2004.
(2) Grant Date Present Value
The values in this column were determined based on the Black-Scholes
option pricing model and are calculated at the time of grant. The following
assumptions were used in the calculation: (a) expected price volatility -
twenty percent (20%), (b) options will be exercised in the tenth year, (c) an
interest rate based upon the corresponding yield of a U.S. Treasury note
maturing ten years from the date of grant, (d) dividends at the rate in
effect on the date of grant, and (e) no adjustments for transferability. The
fact that the Company used the Black-Scholes model does not necessarily mean
that the Company believes or acknowledges that the model can accurately
determine the value of options. The ultimate value of the option, if any,
will depend on the future market price of the Company's Common Stock and the
optionee's individual investment decisions, neither of which can be predicted
with any degree of certainty.
(3) Value of Unexercised In-the-Money Options at End of Fiscal Year
The value of unexercised in-the-money options at December 29, 2000 is
calculated by multiplying the number of shares by the amount by which the
fair market value of the Common Stock on the last trading day of 2000, as
reported by the New York Stock Exchange, exceeds the option exercise price.
The preceding table reflects the share awards available under the
Company's Performance Restricted Stock Program established under the
Company's Long-Term Incentive Plan. Under the Program, performance cycles
will be measured over three-year periods commencing January 1 of each year.
The Program provides for the earning of Common Stock based on the Company's
total shareholder return compared to other companies in a peer group
comprised of 20 gas and electric distribution companies. If, during the
course of a performance period, a significant event occurs, as determined in
the sole discretion of the Board of Directors, which the Board of Directors
expects to have a substantial effect on total shareholder performance during
the period, the Board of Directors may revise such measures.
Under the Program, a target performance is established. Each award
provides that, following completion of the performance period, the
participant will be eligible to earn a number of shares of Common Stock
ranging from 0% to 200% of the target performance award to the extent that
performance objectives are achieved. The shares of Common Stock earned
by a participant will vest immediately on the date that the performance award
is earned.
The Company's General Retirement Plan provides participants benefits
after five years of service based on the average salary (the term salary
being equal to the amounts contained in the Salary column of the Summary
Compensation Table) for the final three years of employment and years of
credited service under the Plan at time of retirement. Normal retirement
under the Plan is at age 65. Plan benefits are subject to an offset for any
Social Security benefits. Benefits under the Plan may be reduced under
certain provisions of the Internal Revenue Code, as amended, and by salary
deferrals under the Company's deferred compensation plans (other than CODA
contributions made under the Savings Plan). Where any such limitations
occur, the Company will pay a supplemental retirement benefit to eligible
executives designed to maintain total retirement benefits at the formula
level of the Plan. In addition, for executives who retire under the terms of
the General Retirement Plan and are at least 59 years of age, their
retirement benefit will be calculated on the basis of average salary, plus
the average of the highest three annual incentive awards in the last five
consecutive years. The annual incentive amounts are equal to the amounts
shown in the Bonus column of the Summary Compensation Table. The current
age, years of credited service and compensation used to determine retirement
benefits (including supplemental benefits) for the above-named officers are
as follows: Mr. Derrick, 61 and 39 years of credit, $709,685; Mr. Wraase, 57
and 31 years of credit, $458,240; Mr. Torgerson, 56 and 31 years of credit,
$386,031; Mr. Williams, 51 and 26 years of credit, $292,776; and Mr. Sim, 56
and 31 years of credit, $275,864. Annual benefits at age 65 (including the
effect of the Social Security offset and the supplemental retirement benefit)
are illustrated in the table above.
Employment Agreements and Severance Agreements
Messrs. Derrick, Wraase and Torgerson each have entered into employment
agreements with the Company that provide for his employment through
December 10, 2004, and that automatically extend for successive periods of
five years thereafter unless the Company or the executive has given notice
that it shall not be so extended. Each of the employment agreements provides
that the executive (i) will receive an annual base salary in an amount not
less than his salary in effect as of December 10, 1999, and incentive
compensation as determined by the Board of Directors and (ii) will be
entitled to participate in retirement and other benefit plans, and receive
fringe benefits on the same basis as other senior executives of the Company.
Under each of the employment agreements, the executive is entitled to
certain benefits if his employment is terminated prior to the expiration of
the initial term of the agreement (or as extended) either (i) by the Company
other than for cause, death or disability or (ii) by the executive if his
salary is reduced, he is not in good faith considered for incentive awards,
the Company fails to provide him with retirement benefits and other benefits
provided to similarly situated executives, he is required to relocate by more
than 50 miles from Washington, D.C., or he is demoted from a senior
management position. These benefits include: (i) a lump sum payment in cash
equal to three times (x) the sum of the executive's highest base salary rate
in effect during the three-year period preceding termination and (y) the
higher of (1) the annual target bonus for the year in which the termination
of employment occurs or (2) the highest annual bonus received by the
executive in any of the three preceding calendar years and (ii) the
executive's annual cash incentive award for the year preceding termination of
employment, if not yet paid, and a pro rata portion of the executive's annual
incentive award for the year in which the executive's employment terminates.
In addition, any outstanding shares of restricted stock will become
immediately vested, and the executive will be entitled to receive unpaid
salary through the date of termination, certain supplemental retirement
benefits under existing plans of the Company, and a continuation of premium
payments under the Company's split-dollar life insurance policy. The
agreements also provide that each executive is entitled to receive a gross-up
payment equal to the amount of any federal excise taxes imposed upon
compensation payable upon termination and the additional taxes that result
from such payment.
Messrs. Williams and Sim have entered into severance agreements with the
Company. Each severance agreement provides for the payment of severance
benefits to the executive if, within two years following a change in control,
which in the case of Mr. Sim includes a sale of all or substantially all of
the generation assets, of the Company, any of the following events occur:
(i) termination of the employment of the executive by the Company (or a
successor company), other than for cause, death, disability or voluntary
normal retirement; (ii) termination of employment by the executive for "good
reason," defined as the assignment of duties materially inconsistent with the
executive's duties prior to the change in control or a material reduction or
alteration of his duties, a reduction in the executive's salary or relocation
of the executive by more than 50 miles; (iii) the failure or refusal by a
successor company to assume the Company's obligations under the agreement; or
(iv) a material breach of the agreement by the Company (or a successor
company). The executive also is entitled to severance benefits upon (i) the
termination of the executive's employment without cause in contemplation of,
but prior to, a change in control or (ii) the occurrence of an event, in
contemplation of, but prior to a change in control, constituting "good
reason" followed by the executive's voluntary termination of employment
within two years after a change in control. The severance benefits consist
of: (i) an amount equal to two times the executive's annual base salary (in
effect at the time of termination) and annual bonus (average of annual target
bonuses during the three years prior to termination) paid in 24 equal monthly
installments and (ii) certain welfare benefits for a three-year period after
the date of termination. The agreements also provide that each executive is
entitled to receive a gross-up payment equal to the amount of any federal
excise taxes imposed upon compensation payable upon termination and the
additional taxes that result from such payment.
Item 12
. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 7, 2001, for each director,
the five executive officers named in the Summary Compensation Table on
page 18 and all directors and officers as a group (i) the number of shares of
Common Stock beneficially owned, (ii) the number of shares acquirable within
60 days pursuant to exercise of stock options, (iii) credited Common Stock
equivalents and (iv) the total stock-based holdings. None of such persons
beneficially owns shares of any other class of equity securities of the
Company. Each of the individuals, as well as all directors and executive
officers as a group, beneficially owned less than 1% of the Company's
outstanding Common Stock. The following table also sets forth, as of
March 7, 2001, the number and percentage of shares of Common Stock owned
by all persons known by the Company to own beneficially 5% or more of the
Common Stock.
Name of Beneficial Owner
Shares of
Common Stock Owned (1)
Common Stock
Acquirable
Within 60 Days (2)
Deferred
Common Stock Equivalents (3)
Total
Stock-Based Holdings (4)
Roger R. Blunt, Sr.
1,000
1,252
2,630
Edmund B. Cronin, Jr.
1,123
1,000
5,450
7,573
John M. Derrick, Jr.
44,467
138,360
-
182,827
Terence C. Golden
1,942
-
4,577
6,519
David O. Maxwell
1,000
1,549
3,049
Judith A. McHale
4,683
-
-
4,683
Floretta D. McKenzie
2,696
1,000
-
3,696
Edward F. Mitchell
70,356
1,000
1,549
72,905
Lawrence C. Nussdorf
1,000
-
-
1,000
Peter F. O'Malley
1,828
1,000
1,549
4,377
Pauline A. Schneider
-
-
William J. Sim
15,423
16,509
-
31,932
William T. Torgerson
20,871
29,343
-
50,214
Andrew W. Williams
24,863
16,509
-
41,372
Dennis R. Wraase
29,633
33,843
-
63,476
A. Thomas Young
1,000
1,000
6,328
8,328
All Directors and
Executive Officers
as a Group (24 Individuals)
313,693
266,998
22,254
602,945
Name and Address
of Beneficial Owner
Shares of
Common Stock Owned
(5)
Percent of
Common Stock Outstanding
Franklin Resources, Inc.
777 Mariners Island Boulevard
San Mateo, CA 94404
11,006,264
9.9%
(1) Includes shares held under the Company's Dividend Reinvestment Plan and
the Employee Savings Plan. Also includes shares awarded under the Company's
Long-Term Incentive Plan which will vest over time.
(2) Consists of Common Stock issuable upon the exercise of stock options.
(3) Consists of Common Stock equivalents acquired under the Directors'
Deferred Compensation Plan.
(4) Consists of the sum of the three preceding columns.
(5) According to a Schedule 13G, dated February 2, 2001, filed with the
Securities and Exchange Commission jointly by Franklin Resources, Inc.,
Templeton Global Advisors Limited, a subsidiary of Franklin Resources, Inc.,
and Charles B. Johnson and Rupert H. Johnson, Jr., each a principal
shareholder of Franklin Resources, Inc., the Common Stock is beneficially
owned by one or more open or closed-end investment companies or other managed
accounts that are advised by direct and indirect advisory subsidiaries of
Franklin Resources, Inc. Sole power to vote or to direct the voting of the
Common Stock is reported as follows: Templeton Global Advisors Limited:
8,457,369; Franklin Advisers, Inc.: 2,080,000; Franklin Templeton Investment
Management Limited: 413,853; and Templeton Investment Counsel, LLC: 42,362.
Sole power to dispose or to direct the disposition of the Common Stock is
reported as follows: Templeton Global Advisors Limited: 8,470,049; Franklin
Advisers, Inc.: 2,080,000; Franklin Templeton Investment Management Limited:
413,853; and Templeton Investment Counsel, LLC: 42,362.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Clark Construction Group, Inc., of which Mr. Nussdorf, a nominee for
director, is Vice President and Treasurer, serves as the general contractor
with a joint venture partner for the base building and interior construction
of the Company's new headquarters in Washington, D.C.
Pauline Schneider, a nominee for director, is a partner in the law firm
of Hunton & Williams. Hunton & Williams rendered legal services to the
Company and its subsidiaries in 2000 and is expected to render services to
the Company and its subsidiaries in 2001.
Part IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Documents List
1. Financial Statements
The following documents are included within this document as Exhibit 13
on the pages identified below:
Page Reference
Form 10-K
(Exhibit 13)
Consolidated Balance Sheets -
December 31, 2000 and 1999
Consolidated Statements of Earnings -
for the years ended December 31, 2000,
1999 and 1998
Consolidated Statements of Shareholders'
Equity and Comprehensive Income - for
the years ended December 31, 2000,
1999 and 1998
Consolidated Statements of Cash Flows -
for the years ended December 31, 2000,
1999 and 1998
Notes to Consolidated Financial Statements
Report of Independent Accountants
2. Financial Statement Schedules
Unaudited supplementary data entitled "Quarterly Financial Summary
(Unaudited)" is included herein in Exhibit 13 (included in "Notes to
Consolidated Financial Statements" as Note 16).
Schedule II (Valuation and Qualifying Accounts) and the Report of
Independent Accountants on Consolidated Financial Statement Schedule are
submitted pursuant to Item 14(d).
All other schedules are omitted because they are not applicable, or the
required information is presented in the financial statements.
3. Exhibits required by Securities and Exchange Commission Regulation S-K
(summarized below).
Exhibit
No.
Description of Exhibit
Reference*
3.1
Charter of the Company. . . . . . . .
Exh. 3.1 to Form 10-K,
3/27/00.
3.2
By-Laws of the Company. . . . . . . .
Filed herewith.
Mortgage and Deed of Trust dated
July 1, 1936, of the Company to
The Bank of New York as Successor
Trustee, securing First Mortgage
Bonds of the Company, and
Supplemental Indenture dated
July 1, 1936. . . . . . . . . . . . .
Exh. B-4 to First Amendment,
6/19/36, to Registration
Statement No. 2-2232.
Supplemental Indentures, to the
aforesaid Mortgage and Deed of
Trust, dated -
December 1, 1939 and December 10,
1939. . . . . . . . . . . . . . . . .
Exhs. A & B to Form 8-K,
1/3/40.
August 1, 1940. . . . . . . . . . . .
Exh. A to Form 8-K, 9/25/40.
July 15, 1942 and August 10,
1942. . . . . . . . . . . . . . . . .
Exh. B-1 to Amendment No. 2,
8/24/42, and B-3 to Post-
Effective Amendment,
8/31/42, to Registration
Statement No. 2-5032.
August 1, 1942. . . . . . . . . . . .
Exh. B-4 to Form 8-A,
10/8/42.
October 15, 1942. . . . . . . . . . .
Exh. A to Form 8-K, 12/7/42.
October 15, 1947. . . . . . . . . . .
Exh. A to Form 8-K, 12/8/47.
Exhibit
No.
Description of Exhibit
Reference*
4 (cont.)
January 1, 1948 . . . . . . . . . . .
Exh. 7-B to Post-Effective
Amendment No. 2, 1/28/48, to
Registration Statement
No. 2-7349.
December 31, 1948 . . . . . . . . . .
Exh. A-2 to Form 10-K,
4/13/49.
May 1, 1949 . . . . . . . . . . . . .
Exh. 7-B to Post-Effective
Amendment No. 1, 5/10/49, to
Registration Statement
No. 2-7948.
December 31, 1949 . . . . . . . . . .
Exh. (a)-1 to Form 8-K,
2/8/50.
May 1, 1950 . . . . . . . . . . . . .
Exh. 7-B to Amendment No. 2,
5/8/50, to Registration
Statement No. 2-8430.
February 15, 1951 . . . . . . . . . .
Exh. (a) to Form 8-K,
3/9/51.
March 1, 1952 . . . . . . . . . . . .
Exh. 4-C to Post-Effective
Amendment No. 1, 3/12/52, to
Registration Statement No.
2-9435.
February 16, 1953 . . . . . . . . . .
Exh. (a)-1 to Form 8-K,
3/5/53.
May 15, 1953. . . . . . . . . . . . .
Exh. 4-C to Post-Effective
Amendment No. 1, 5/26/53, to
Registration Statement
No. 2-10246.
March 15, 1954 and March 15,
1955. . . . . . . . . . . . . . . . .
Exh. 4-B to Registration
Statement No. 2-11627,
5/2/55.
May 16, 1955. . . . . . . . . . . . .
Exh. A to Form 8-K, 7/6/55.
March 15, 1956. . . . . . . . . . . .
Exh. C to Form 10-K, 4/4/56.
June 1, 1956. . . . . . . . . . . . .
Exh. A to Form 8-K, 7/2/56.
April 1, 1957 . . . . . . . . . . . .
Exh. 4-B to Registration
Statement No. 2-13884,
2/5/58.
May 1, 1958 . . . . . . . . . . . . .
Exh. 2-B to Registration
Statement No. 2-14518,
11/10/58.
December 1, 1958. . . . . . . . . . .
Exh. A to Form 8-K, 1/2/59.
May 1, 1959 . . . . . . . . . . . . .
Exh. 4-B to Amendment No. 1,
5/13/59, to Registration
Statement No. 2-15027.
November 16, 1959 . . . . . . . . . .
Exh. A to Form 8-K, 1/4/60.
May 2, 1960 . . . . . . . . . . . . .
Exh. 2-B to Registration
Statement No. 2-17286,
11/9/60.
December 1, 1960 and April 3,
1961. . . . . . . . . . . . . . . . .
Exh. A-1 to Form 10-K,
4/24/61.
May 1, 1962 . . . . . . . . . . . . .
Exh. 2-B to Registration
Statement No. 2-21037,
1/25/63.
Exhibit
No.
Description of Exhibit
Reference*
4 (cont.)
February 15, 1963 . . . . . . . . . .
Exh. A to Form 8-K, 3/4/63.
May 1, 1963 . . . . . . . . . . . . .
Exh. 4-B to Registration
Statement No. 2-21961,
12/19/63.
April 23, 1964. . . . . . . . . . . .
Exh. 2-B to Registration
Statement No. 2-22344,
4/24/64.
May 15, 1964. . . . . . . . . . . . .
Exh. A to Form 8-K, 6/2/64.
May 3, 1965 . . . . . . . . . . . . .
Exh. 2-B to Registration
Statement No. 2-24655,
3/16/66.
April 1, 1966 . . . . . . . . . . . .
Exh. A to Form 10-K,
4/21/66.
June 1, 1966. . . . . . . . . . . . .
Exh. 1 to Form 10-K,
4/11/67.
April 28, 1967. . . . . . . . . . . .
Exh. 2-B to Post-Effective
Amendment No. 1 to
Registration Statement No.
2-26356, 5/3/67.
May 1, 1967 . . . . . . . . . . . . .
Exh. A to Form 8-K, 6/1/67.
July 3, 1967. . . . . . . . . . . . .
Exh. 2-B to Registration
Statement No. 2-28080,
1/25/68.
February 15, 1968 . . . . . . . . . .
Exh. II-I to Form 8-K,
3/7/68.
May 1, 1968 . . . . . . . . . . . . .
Exh. 2-B to Registration
Statement No. 2-31896,
2/28/69.
March 15, 1969. . . . . . . . . . . .
Exh. A-2 to Form 8-K,
4/8/69.
June 16, 1969 . . . . . . . . . . . .
Exh. 2-B to Registration
Statement No. 2-36094,
1/27/70.
February 15, 1970 . . . . . . . . . .
Exh. A-2 to Form 8-K,
3/9/70.
May 15, 1970. . . . . . . . . . . . .
Exh. 2-B to Registration
Statement No. 2-38038,
7/27/70.
August 15, 1970 . . . . . . . . . . .
Exh. 2-D to Registration
Statement No. 2-38038,
7/27/70.
September 1, 1971 . . . . . . . . . .
Exh. 2-C to Registration
Statement No. 2-45591,
9/1/72.
September 15, 1972. . . . . . . . . .
Exh. 2-E to Registration
Statement No. 2-45591,
9/1/72.
April 1, 1973 . . . . . . . . . . . .
Exh. A to Form 8-K, 5/9/73.
January 2, 1974 . . . . . . . . . . .
Exh. 2-D to Registration
Statement No. 2-49803,
12/5/73.
Exhibit
No.
Description of Exhibit
Reference*
4. (cont.)
August 15, 1974 . . . . . . . . . . .
Exhs. 2-G and 2-H to
Amendment No. 1 to
Registration Statement No.
2-51698, 8/14/74.
June 15, 1977 . . . . . . . . . . . .
Exh. 4-A to Form 10-K,
3/19/81.
July 1, 1979. . . . . . . . . . . . .
Exh. 4-B to Form 10-K,
3/19/81.
June 16, 1981 . . . . . . . . . . . .
Exh. 4-A to Form 10-K,
3/19/82.
June 17, 1981 . . . . . . . . . . . .
Exh. 2 to Amendment No. 1,
6/18/81, to Form 8-A.
December 1, 1981. . . . . . . . . . .
Exh. 4-C to Form 10-K,
3/19/82.
August 1, 1982. . . . . . . . . . . .
Exh. 4-C to Amendment No. 1
to Registration Statement
No. 2-78731, 8/17/82.
October 1, 1982 . . . . . . . . . . .
Exh. 4 to Form 8-K, 11/8/82.
April 15, 1983. . . . . . . . . . . .
Exh. 4 to Form 10-K,
3/23/84.
November 1, 1985. . . . . . . . . . .
Exh. 2-B to Form 8-A,
11/1/85.
March 1, 1986 . . . . . . . . . . . .
Exh. 4 to Form 10-K,
3/28/86.
November 1, 1986. . . . . . . . . . .
Exh. 2-B to Form 8-A,
11/5/86.
March 1, 1987 . . . . . . . . . . . .
Exh. 2-B to Form 8-A,
3/2/87.
September 16, 1987. . . . . . . . . .
Exh. 4-B to Registration
Statement No. 33-18229,
10/30/87.
May 1, 1989 . . . . . . . . . . . . .
Exh. 4-C to Registration
Statement No. 33-29382,
6/16/89.
August 1, 1989. . . . . . . . . . . .
Exh. 4 to Form 10-K,
3/23/90.
April 5, 1990 . . . . . . . . . . . .
Exh. 4 to Form 10-K,
3/29/91.
May 21, 1991. . . . . . . . . . . . .
Exh. 4 to Form 10-K,
3/27/92.
May 7, 1992 . . . . . . . . . . . . .
Exh. 4 to Form 10-K,
3/26/93.
September 1, 1992 . . . . . . . . . .
Exh. 4 to Form 10-K,
3/26/93.
November 1, 1992. . . . . . . . . . .
Exh. 4 to Form 10-K,
3/26/93.
March 1, 1993 . . . . . . . . . . . .
Exh. 4 to Form 10-K,
3/26/93.
March 2, 1993 . . . . . . . . . . . .
Exh. 4 to Form 10-K,
3/26/93.
July 1, 1993. . . . . . . . . . . . .
Exh. 4.4 to Registration
Statement No. 33-49973,
8/11/93.
Exhibit
No.
Description of Exhibit
Reference*
4 (cont.)
August 20, 1993 . . . . . . . . . . .
Exh. 4.4 to Registration
Statement No. 33-50377,
9/23/93.
September 29, 1993. . . . . . . . . .
Exh. 4 to Form 10-K,
3/25/94.
September 30, 1993. . . . . . . . . .
Exh. 4 to Form 10-K,
3/25/94.
October 1, 1993 . . . . . . . . . . .
Exh. 4 to Form 10-K,
3/25/94.
February 10, 1994 . . . . . . . . . .
Exh. 4 to Form 10-K,
3/25/94.
February 11, 1994 . . . . . . . . . .
Exh. 4 to Form 10-K,
3/25/94.
March 10, 1995. . . . . . . . . . . .
Exh. 4.3 to Registration
Statement No. 61379,
7/28/95.
September 6, 1995 . . . . . . . . . .
Exh. 4 to Form 10-K, 4/1/96.
September 7, 1995 . . . . . . . . . .
Exh. 4 to Form 10-K, 4/1/96.
October 2, 1997 . . . . . . . . . . .
Exh. 4 to Form 10-K,
3/26/98.
March 17, 1999. . . . . . . . . . . .
Exh. 4 to Form 10-K,
3/27/00.
4-A
Indenture, dated as of July 28, 1989, between the Company and The Bank of New York, Trustee, with respect to
the Company's Medium-Term Note
Program . . . . . . . . . . . . . . .
Exh. 4 to Form 8-K, 6/21/90.
Agreement, effective December 8, 1998, between the Company and the International Brotherhood of Electrical Workers (Local Union
No. 1900). . . . . . . .
Exh. 10 to Form 10-K,
3/26/99.
10.1
Employment Agreement of
John M. Derrick, Jr.**. . . . . . .
Exh. 10.1 to Form 10-K,
3/27/00.
10.2
Employment Agreement of
Dennis R. Wraase**. . . . . . . . .
Exh. 10.2 to Form 10-K,
3/27/00.
10.3
Employment Agreement of
William T. Torgerson**. . . . . . .
Exh. 10.3 to Form 10-K,
3/27/00.
10.4
Severance Agreement of
Robert C. Grantley**. . . . . . . .
Exh. 10.4 to Form 10-K,
3/27/00.
10.5
Severance Agreement of
William J. Sim** . . . . . . . . .
Exh. 10.5 to Form 10-K,
3/27/00.
10.6
Severance Agreement of
Andrew W. Williams** . . . . . . .
Exh. 10.6 to Form 10-K,
3/27/00.
10.7
Severance Agreement of
Earl K. Chism** . . . . . . . . .
Exh. 10.7 to Form 10-K,
3/27/00.
Exhibit
No.
Description of Exhibit
Reference*
10.8
Severance Agreement of
Kenneth P. Cohn** . . . . . . . .
Exh. 10.8 to Form 10-K,
3/27/00.
10.9
Severance Agreement of
Kirk J. Emge** . . . . . . . . .
Exh. 10.9 to Form 10-K,
3/27/00.
10.11
Severance Agreement of
William R. Gee** . . . . . . . .
Exh. 10.11 to Form 10-K,
3/27/00.
10.12
Severance Agreement of
Anthony J. Kamerick** . . . . . . . .
Exh. 10.12 to Form 10-K,
3/27/00.
10.13
Severance Agreement of
Beverly L. Perry** . . . . . . . .
Exh. 10.13 to Form 10-K,
3/27/00.
10.14
Severance Agreement of
James S. Potts** . . . . . . . .
Exh. 10.14 to Form 10-K,
3/27/00.
10.16
1999 General Memorandum of Understanding, dated December 8,
1998 between the Company and the International Brotherhood of Electrical Workers (Local Union
No. 1900) . . . . . . . . . . . . . .
Exh. 10.2 to Form 10-K,
3/26/99.
10.17
Potomac Electric Power Company Long-Term Incentive Plan** . . . . . . . .
Exh. 4 to Form S-8, 6/12/98
Statements Re. Computation of
Earnings Per Common Share . . . . .
Filed herewith.
Statements Re. Computation of
Ratios. . . . . . . . . . . . . . .
Filed herewith.
Financial Information Section of
Annual Report . . . . . . . . . . .
Filed herewith.
Subsidiaries of the Registrant. . . .
Filed herewith.
Consent of Independent Accountants. .
Filed herewith.
*The exhibits referred to in this column by specific designations and date
have heretofore been filed with the Securities and Exchange Commission
under such designations and are hereby incorporated herein by reference.
The Forms 8-A, 8-K and 10-K referred to were filed by the Company under the
Commission's File No. 1-1072 and the Registration Statements referred to
are registration statements of the Company.
**These exhibits are submitted pursuant to Item 14(c).
(b) Reports on Form 8-K
A Current Report on Form 8-K was filed by the Company on December 19,
2000, providing details on the completion of the divestiture of substantially
all of the Company's generation assets to Mirant Corp., formerly Southern
Energy Inc. The items reported on such Form 8-K were Item 2