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Baycorp Holdings Ltd – ‘PRE 14A’ for 7/10/03

On: Wednesday, 5/28/03, at 12:41pm ET · For: 7/10/03 · Accession #: 950135-3-3275 · File #: 1-12527

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 5/28/03  Baycorp Holdings Ltd              PRE 14A     7/10/03    1:73K                                    Bowne of Boston/FA

Preliminary Proxy Solicitation Material — Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PRE 14A     Baycorp Holdings, Ltd.                                21    131K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Alexander Ellis III Employment Agreements Executive Compensation Frank W. Getman Jr Key Employee Retention and Incentive Plan Security Ownership of Certain Beneficial Owners and Management Summary Compensation Table
1	1st Page - Filing Submission
2	Frank W. Getman Jr
4	Security Ownership of Certain Beneficial Owners and Management
9	Executive Compensation
"	Summary Compensation Table
11	Employment Agreements
12	Key Employee Retention and Incentive Plan
13	Alexander Ellis III

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SCHEDULE 14A
(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934

FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]

--------------------------------------------------------------

Check the appropriate box:

[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 14a-11(c) or Rule 14a-2

BayCorp Holdings, Ltd.
(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):

[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:

[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.

1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:

--------------------------------------------------------------

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BAYCORP HOLDINGS, LTD.
1 NEW HAMPSHIRE AVENUE, SUITE 125
PORTSMOUTH, NEW HAMPSHIRE 03801

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON JULY 10, 2003

To the Stockholders:

The Annual Meeting of Stockholders of BayCorp Holdings, Ltd. (the
"Company") will be held at 1 New Hampshire Avenue, Suite 300, Portsmouth, New
Hampshire, on Thursday, July 10, 2003 at 10:30 a.m., local time, to consider and
act upon the following matters:

1. To elect a Board of Directors to serve until the next Annual Meeting
of Stockholders of the Company and until their successors are duly
elected and qualified.

2. To ratify the selection by the Audit Committee of Vitale, Caturano &
Company, PC as the Company's independent auditors for the fiscal
year 2003.

3. To amend the Company's Certificate of Incorporation to reduce the
authorized capital stock from 20,000,000 common shares and 5,000,000
preferred shares to 4,000,000 common shares and 1,000,000 preferred
shares.

4. To transact such other business as may properly come before the
meeting or any adjournment thereof.

Stockholders of record at the close of business on May 23, 2003 will be
entitled to notice of and to vote at the Meeting. The stock transfer books of
the Company will remain open for the purchase and sale of the Company's Common
Stock.

All stockholders are cordially invited to attend the Meeting.

By Order of the Board of Directors,

FRANK W. GETMAN JR.
President and Chief Executive Officer

Portsmouth, New Hampshire
June [ ], 2003

WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN
THE ENCLOSED PROXY CARD AND PROMPTLY MAIL IT IN THE ENCLOSED ENVELOPE IN ORDER
TO ASSURE REPRESENTATION OF YOUR SHARES AT THE MEETING. NO POSTAGE NEED BE
AFFIXED IF THE PROXY IS MAILED IN THE UNITED STATES.

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BAYCORP HOLDINGS, LTD.
1 NEW HAMPSHIRE AVENUE, SUITE 125
PORTSMOUTH, NEW HAMPSHIRE 03801

PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS

JULY 10, 2003

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of BayCorp Holdings, Ltd. (the "Company") for
use at the Annual Meeting of Stockholders to be held on July 10, 2003 and at any
adjournment of that meeting (the "Meeting"). All proxies will be voted in
accordance with the instructions contained therein, and if no choice is
specified, the proxies will be voted in favor of the proposals set forth in the
Notice of Meeting. Any proxy may be revoked by a stockholder at any time before
it is exercised by giving written notice to that effect to the Secretary of the
Company.

THE COMPANY'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002
(WHICH CONSISTS OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THAT YEAR AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION")) IS BEING
MAILED TO STOCKHOLDERS WITH THE MAILING OF THIS NOTICE AND PROXY STATEMENT ON OR
ABOUT JUNE [ ], 2003. A copy of the Exhibits to the Company's Annual Report on
Form 10-K for the year ended December 31, 2002 will be furnished to any
stockholder upon payment of an appropriate processing fee pursuant to a written
request sent to the Secretary, BayCorp Holdings, Ltd., 1 New Hampshire Avenue,
Suite 125, Portsmouth, New Hampshire 03801.

VOTING SECURITIES AND VOTES REQUIRED

On May 23, 2003, the record date for the determination of stockholders
entitled to notice of and to vote at the Meeting, there were outstanding and
entitled to vote an aggregate of 646,937 shares of Common Stock of the Company,
$.01 par value per share ("Common Stock"). Stockholders are entitled to one vote
per share.

The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of Common Stock entitled to vote at the meeting is necessary
to constitute a quorum for the transaction of business. Abstentions and "broker
non-votes" will be considered as present for quorum purposes but will not be
counted as votes cast. Accordingly, abstentions and broker non-votes will have
no effect on the voting on a matter that requires the affirmative vote of a
certain percentage or a plurality of the votes cast or shares voting on a
matter.

The affirmative vote of the holders of a plurality of the shares of Common
Stock present or represented at the meeting is required for the election of
directors. The affirmative vote of the holders of a majority of the shares of
Common Stock present or represented at the meeting is required for the
ratification of the Audit Committee's selection of Vitale, Caturano & Company,
PC as the Company's independent auditors for the current fiscal year. The
affirmative vote of the holders of a majority of the issued and outstanding
shares of the Common Stock is required for the amendment of the Company's
Certificate of Incorporation to reduce the authorized capital stock from
20,000,000 common shares and 5,000,000 preferred shares to 4,000,000 common
shares and 1,000,000 preferred shares.

BAYCORP HOLDINGS, LTD. AS SUCCESSOR TO GREAT BAY POWER CORPORATION

As a result of a corporate restructuring that was effective on January 24,
1997 (the "Restructuring Date"), the Company's principal asset at that date was
its 100% equity interest in Great Bay Power Corporation ("Great Bay"). As of the
Restructuring Date, Great Bay owned a 12.1% interest in the Seabrook Nuclear
Power Station in Seabrook, New Hampshire (the "Seabrook Project"). Great Bay was
dissolved on December 31, 2002, following the Company's sale of its interests in
the Seabrook Project in November 2002. Unless the context requires otherwise,
references in this Proxy Statement to the Company for events and time periods
before the Restructuring Date reflect treatment of the Company as the successor
to Great Bay.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding the ownership of the
Company's Common Stock as of May 19, 2003 (except as noted) by (i) the only
persons known by the Company to own more than five percent of the Company's
outstanding shares, (ii) all directors and director-nominees of the Company,
(iii) each of the executive officers of the Company named in the Summary
Compensation Table (the "Named Executive Officers") and (iv) all directors,
nominees and executive officers of the Company as a group.

[Download Table]

SHARES OF
COMMON STOCK PERCENTAGE OF
BENEFICIALLY COMMON STOCK
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED (1) OUTSTANDING (2)
------------------------------------ --------- ---------------

5% Stockholders
Group consisting of:
Peter M. Collery
Neil H. Koffler
SC Fundamental Value Fund, L.P. .............
SC Fundamental LLC
SC Fundamental Value BVI, Ltd. ..............
SC-BVI Partners
PMC-BVI, Inc. ...............................
SC Fundamental Value BVI, Inc. ..............
SC Fundamental LLC Employee Savings
and Profit Sharing Plan
(the "SC Fundamental Group") ................ 56,180(3) 8.7%
420 Lexington Avenue, Suite 2601
New York, New York 10170

Directors, Nominees and Executive Officers

Patrycia T. Barnard ........................... 4,400 *
Anthony M. Callendrello ....................... 41,037(4) 6.1%
Alexander Ellis III ........................... 14,602(5) 2.2%
Thomas C. Leonard ............................. -- *
Stanley I. Garnett II ......................... 12,470(6) 1.9%
Frank W. Getman Jr ............................ 71,129(7) 10.8%
James S. Gordon ............................... 16,268(8) 2.5%
Michael R. Latina ............................. 4,559(9) *
Lawrence M. Robbins ........................... 4,559(10) *
John A. Tillinghast ........................... 31,314(11) 4.7%

All directors and executive officers as a group
(10 individuals) ............................ 200,338(12) 26.8%

------------------
* Less than 1% of the total number of shares outstanding.

(1) The number of shares of Common Stock beneficially owned by each person or
entity is determined under rules promulgated by the Commission. Under such
rules, beneficial ownership includes any shares as to which the person or
entity has sole or shared voting power or investment power, and also
includes any shares of the Company that the person or entity has the right
to acquire within 60 days after May 19, 2003. Unless otherwise indicated,
each person or entity referred to above has sole voting and investment
power with respect to the shares listed. The inclusion herein of any
shares deemed beneficially owned does not constitute an admission of
beneficial ownership of such shares.

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(2) Number of shares deemed outstanding includes 646,937 shares outstanding as
of May 19, 2003, plus any shares subject to options held by the person or
entity in question that are currently exercisable or exercisable within 60
days after May 19, 2003.

(3) The information presented is based upon a Schedule 13D filed with the
Commission on April 3, 2003 by the indicated shareholders. Peter M.
Collery reported beneficial ownership of 56,180 shares, with sole voting
and dispositive power with respect to 239 of such shares and shared voting
and dispositive power with respect to 55,941 of such shares. Mr. Collery's
56,180 beneficially owned shares represent 8.7% of BayCorp's shares
outstanding as of May 19, 2003. SC Fundamental Value Fund, L.P. reported
beneficial ownership of 25,374 shares, with sole voting and dispositive
power as to such shares. SC Fundamental LLC reported beneficial ownership
of 25,374 shares, with shared voting and dispositive power as to such
shares. SC Fundamental Value BVI, Ltd. reported beneficial ownership of
30,567 shares, with sole voting and dispositive power as to such shares.
SC-BVI Partners reported beneficial ownership of 30,567 shares, with
shared voting and dispositive power as to such shares. PMC-BVI, Inc.
reported beneficial ownership of 30,567 shares, with shared voting and
dispositive power as to such shares. SC Fundamental Value BVI, Inc.
reported beneficial ownership of 30,567 shares, with shared voting and
dispositive power as to such shares. Neil H. Koffler reported beneficial
ownership of 55,941 shares, with shared voting and dispositive power as to
such shares. These shareholders may be deemed to be a group for purposes
of Rule 13d-3 promulgated under the Securities Exchange Act of 1934 (the
"Exchange Act"). Collectively, these shareholders and other affiliates of
Mr. Collery are referred to as the "SC Fundamental Group" or "SC
Fundamental Group entities."

(4) Includes 28,757 Shares issuable upon exercise of outstanding stock options
granted under the 1996 and 2001 Plans.

(5) Includes 14,559 Shares issuable upon exercise of outstanding stock options
granted under the 2001 Plan.

(6) Consists of 12,470 Shares issuable upon exercise of outstanding stock
options granted under the 2001 Plan.

(7) Includes 9,824 Shares issuable upon exercise of outstanding stock options
granted under the 2001 Plan.

(8) Includes 13,419 Shares issuable upon the exercise of outstanding stock
options granted under the 2001 Plan.

(9) Consists of 4,559 Shares issuable upon the exercise of outstanding stock
options granted under the 2001 Plan.

(10) Consists of 4,559 Shares issuable upon the exercise of outstanding stock
options granted under the 2001 Plan.

(11) Includes 13,419 Shares issuable upon exercise of outstanding stock options
granted under the 2001 Plan.

(12) Includes 101,566 Shares issuable upon exercise of outstanding stock
options granted under the 1996 and 2001 Plans.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company owns approximately 46.4% of HoustonStreet Exchange, Inc.
("HoustonStreet"), an Internet-based independent crude oil and refined products
trading exchange. Frank W. Getman Jr., a Company director, is an executive
officer of HoustonStreet. On March 30, 2001, HoustonStreet raised approximately
$2.9 million in additional funding, including $450,000 from the Company, by
selling senior secured notes, warrants to purchase HoustonStreet preferred stock
and warrants to purchase HoustonStreet common stock (collectively, the
"HoustonStreet Series C Units"). In April 2001, BayCorp authorized HoustonStreet
to convert BayCorp's $7,000,000 loan made in 2000, along with approximately
$1,000,000 in accrued interest and penalties on the note and past due management
fees, into $8,000,000 of Series C Units. The loan, accrued interest and
receivables from HoustonStreet had been written down to zero as of December 31,
2000 and as such, the conversion of these amounts into Series C units had no
accounting impact on BayCorp. The Company holds a senior secured promissory note
from HoustonStreet with a face value of $8,419,842, which is one of a series of
notes. These notes bear interest on the outstanding principal from the date
issued until the notes are paid in full at prime plus 5%. The largest aggregate
outstanding indebtedness of HoustonStreet to the Company since January 2002 has
been $10,194,000. As of May 23, 2003, HoustonStreet owed the Company
$10,194,000. Accrued interest is payable, at the sole option of the holder, in
cash or in warrants to purchase shares of Series C convertible preferred stock.
The notes are secured by a

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first priority security interest in all the assets of HoustonStreet. If the
holders of all the notes were to exercise all of the preferred warrants that
they hold, including those issuable for payment of interest due under the
notes, the Company would own approximately 64% of the voting shares of
HoustonStreet.

In March 2002, in connection with the exercise of stock options, the
Company received limited recourse promissory notes and stock pledge agreements
from its President, Frank Getman, and a director, John Tillinghast. Mr. Getman
borrowed $275,625 on March 27, 2002, pursuant to two promissory notes, one for
$167,502 and one for $108,123. On March 7, 2002, Mr. Tillinghast borrowed
$461,502 pursuant to a note. The loans were secured by stock pledge agreements
between the individuals and the Company. The notes, which were approved by the
Company's full Board of Directors, bore interest at 5%. The notes and agreements
were executed in order to allow Mr. Getman and Mr. Tillinghast to exercise
certain stock options before the options expired. The notes were given in lieu
of cash payments for the exercise price of the options. The exercise price of
Mr. Getman's options was $275,625 and the exercise price of Mr. Tillinghast's
options was $461,502. Mr. Getman pledged 56,250 Shares under his agreements and
Mr. Tillinghast pledged 94,184 Shares under his agreement, in each case to
secure repayment of the notes. The notes were due on the earlier of (i) December
31, 2003 or (ii) 30 days after the payment to Great Bay, Little Bay and BayCorp
or its common shareholders, as the case may be, of the proceeds of the sale of
(a) Great Bay's and Little Bay's interests in the Seabrook Project or (b)
BayCorp's shares of capital stock of Great Bay and Little Bay, or (c) the
outstanding Shares by merger, share exchange or otherwise. The security
agreements provided that the borrowers must maintain collateral having a value
of at least two times the remaining loan principal in the event of partial
repayments. The sale of Seabrook closed on November 1, 2002. The outstanding
balances of, and all accrued but unpaid interest on, the promissory notes issued
to Mr. Getman and Mr. Tillinghast were repaid in full within 30 days of the
Seabrook Closing.

In April 2002, the Company entered into a consulting agreement with
Michael Latina, one of its directors, under which Mr. Latina received $10,000
per month for six months in exchange for assisting the Company with financial
analysis and evaluation of business opportunities identified by the Company's
management.

ELECTION OF DIRECTORS
(ITEM 1)

The persons named in the enclosed proxy card (Frank W. Getman Jr. and
Anthony M. Callendrello) will vote to elect the seven nominees named below as
directors of the Company unless authority to vote for the election of any or all
of the nominees is withheld by marking the proxy card to that effect. Except for
Mr. Callendrello and Mr. Leonard, each nominee is presently serving as a
director. Each nominee has consented to being named in this Proxy Statement and
to serve if elected.

Each director will be elected to hold office until the next annual
meeting of stockholders or until his successor is elected and qualified. If for
any reason any nominee should become unavailable for election prior to the
Meeting, the person acting under the proxy may vote the proxy for the election
of a substitute. It is not presently expected that any of the nominees will be
unavailable.

Set forth below are the name and age of each person nominated to serve on
the Company's Board of Directors and the positions and offices held by him, his
principal occupation and business experience during the past five years, the
names of other publicly held companies of which he serves as a director, and the
year of the commencement of his term as a director of the Company. Information
with respect to the number of shares of Common Stock beneficially owned by each
director and director nominee, directly or indirectly, as of May 19, 2003,
appears under "Security Ownership of Certain Beneficial Owners and Management."

ANTHONY M. CALLENDRELLO, age 51, has served as the Company's Chief
Operating Officer since April 2000 and as the Secretary of the Company since May
2000. Mr. Callendrello has over 20 years experience in the nuclear industry.
With over 16 years at the Seabrook Project, Mr. Callendrello most recently
served as the plant's Manager of Environmental, Government and Owner Relations.
From 1980 to 1983, Mr. Callendrello was employed with Stone & Webster
Engineering Corporation, which provided engineer and architect services to
utility and other industries. Mr. Callendrello holds a Master of Engineering --
Mechanical degree and a Bachelor of Engineering degree from Stevens Institute of
Technology.

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ALEXANDER ELLIS, III, age 53, has served as a director of the Company
since May 2000. Since January 1999, Mr. Ellis has been a member of RockPort
Partners, LLC, a merchant banking firm serving the electric and energy
industries. Mr. Ellis is a founding member of RockPort Capital Partners, LLC, a
private equity fund established in May 2000. Since May 1996, Mr. Ellis has been
a member of Acadia Bay Energy Co., LLC, a developer of electric power generating
stations. Mr. Ellis was also, until December 2002, a director of Wattage
Monitor, Inc., a web-based electric rate and service information provider, and
Brazilian Resources, Inc., an energy resources company. Mr. Ellis holds a B.A.
in Political Science from Colorado College and an M.B.A. from Yale School of
Management.

STANLEY I. GARNETT, II, age 59, has served as a director of the Company
since June 1997. Mr. Garnett is a member of the Management Group of the PA
Consulting Group ("PA Consulting"), an international management, systems, and
technology consulting firm. Mr. Garnett was a senior advisor to PHB Hagler
Bailly ("PHB"), an economic and management consulting firm, from September 1998
until November 2000 when PA Consulting acquired PHB. Mr. Garnett was an
Executive Vice President of Florida Progress Corporation, an electric utility,
from April 1997 to August 1998. From March 1996 until March 1997, Mr. Garnett
was a senior advisor with Putnam, Hayes & Bartlett, an economic and management
consulting firm. From September 1981 until December 1995, he was a senior
executive at Allegheny Power System, Inc., an electric utility, serving as the
company's chief legal officer and CFO from 1990 until December 1995. Mr. Garnett
holds a B.A. in Business Administration from Colby College, an M.B.A. from the
Wharton Graduate School of Commerce and Finance, and a J.D. from New York
University School of Law.

FRANK W. GETMAN JR., age 39, has served as Chairman of the Company's Board
of Directors since May 2000 and as its President and Chief Executive Officer
since May 1998. From September 1996 to May 1998, Mr. Getman was Chief Operating
Officer of the Company and Great Bay. Mr. Getman served as Vice President,
Secretary and General Counsel of Great Bay from August 1995 to May 1998. From
September 1991 to August 1995, Mr. Getman was an attorney with the law firm of
Hale and Dorr LLP, Boston, Massachusetts. Mr. Getman is President and a director
of HoustonStreet, a crude oil and refined products trading exchange in which
BayCorp holds a 46.4% equity interest. Mr. Getman holds J.D. and M.B.A. degrees
from Boston College and a B.A. in Political Science from Tufts University.

JAMES S. GORDON, age 48, has served as a director of the Company since May
2001. Mr. Gordon has served as President of Energy Management, Inc., a privately
held independent power company, since 1975. Energy Management, Inc. developed
seven power plants in New England. Mr. Gordon is the President of Cape Wind
Associates, a partnership working to permit, finance and operate an offshore
wind farm approximately five miles off the coast of Nantucket, Massachusetts.
Mr. Gordon founded the Competitive Power Coalition of New England and formerly
served as its Chairman. Mr. Gordon holds a B.S. in Broadcasting and Film from
Boston University.

THOMAS C. LEONARD, age 49, has been a Managing Director in the Financial &
Economic Consulting team at Huron Consulting Group LLC ("Huron"), a private
consulting firm, since December 2002. Mr. Leonard has over 25 years of
experience in providing financial services to global and national organizations.
Before joining Huron, Mr. Leonard was a Senior Partner at Arthur Anderson LLP
from 1996 through 2002 and served as the Partner-In-Charge of its New England
Assurance and Business Advisory practice. Mr. Leonard has worked with the top
management, external counsel and board of directors of clients in many
industries including high technology, manufacturing and energy companies. Mr.
Leonard holds a B.S. in accounting and finance from the University of Wisconsin
at Madison and is a Certified Public Accountant.

JOHN A. TILLINGHAST, age 75, has served as a director of the Company since
November 1994 and was the President and Chief Executive Officer of the Company
from April 1995 until May 1998. Mr. Tillinghast served as the Company's Chief
Engineer from April 1995 through May 2000. Since 1987, Mr. Tillinghast has
served as President and the sole stockholder of Tillinghast Technology
Interests, Inc. ("TILTEC"), a private consulting firm. From 1986 to 1993, Mr.
Tillinghast served as Chairman of the Energy Engineering Board of the National
Academy of Sciences. Mr. Tillinghast holds an M.S. in Mechanical Engineering
from Columbia University.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and holders of more than 10% of the Company's Common Stock to
file with the Commission initial reports of ownership and reports of

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changes in ownership of Common Stock and other equity securities of the Company.
Such persons are required by Commission regulations to furnish the Company with
copies of all Section 16(a) forms filed by such person with respect to the
Company.

Based solely on the Company's review of such forms furnished to the
Company and written representations from certain reporting persons, the Company
believes that during 2002, its directors, executive officers, and holders of
more than 10% of the Company's Common Stock complied with all Section 16(a)
filing requirements.

BOARD AND COMMITTEE MEETINGS

The Board of Directors met ten times (including by telephone conference
and by written consent) during 2002. All directors attended at least 75% of the
meetings of the Board of Directors and of the committees on which they served.

The Board of Directors has a Compensation Committee, which makes
recommendations concerning salaries and incentive compensation for employees of
and consultants to the Company and administers and grants stock options pursuant
to the Company's 1996 Stock Option Plan, as amended, and the Company's 2001
Non-Statutory Stock Option Plan. The Compensation Committee met in October 2002
to review and consider officer compensation for 2002 and establish compensation
policies for 2003. The current members of the Compensation Committee are Messrs.
Ellis, Garnett, Gordon and Robbins.

The Board of Directors has an Audit Committee that appoints the Company's
independent public accountants and reviews the results and scope of the audit
and other services provided by the Company's independent public accountants. The
Audit Committee met quarterly during 2002 to review the Company's quarterly
unaudited financial results in accordance with Statement of Accounting Standards
No. 71, which requires the Audit Committee to review the Company's quarterly
unaudited financial statements before they are filed by the Company with the
Commission. In addition, the Audit Committee met in February 2003 to review the
results of the audit of fiscal year 2002. The current members of the Audit
Committee are Messrs. Ellis, Garnett, Gordon and Robbins.

The Company has no nominating committee of the Board of Directors.

COMPENSATION OF DIRECTORS

Employee directors do not receive any compensation for serving on the
Board. Non-employee directors receive $2,500 per quarter, plus reasonable
expenses. Non-employee directors were also eligible to receive stock option
grants in accordance with a formula specified in the Company's 1996 Stock Option
Plan, as amended. The Plan provided for grants to each director of options to
purchase 20,000 shares upon a director's initial election and two subsequent
reelections to the Board. The Board amended the Plan to eliminate that automatic
grant provision in April 2003. In October 2001, the Company granted each
director options to purchase 10,000 shares pursuant to the Company's 2001
Nonstatutory Stock Option Plan that were exercisable, once vested, at $9.05 per
share. As part of the Company's Retention and Incentive Plan, each of these
options was exercisable upon and only upon the closing of the sale of the
Company's interests in the Seabrook Project, which occurred in November 2002.

EXECUTIVE OFFICERS

Frank W. Getman Jr. has served as Chief Executive Officer and President of
the Company since May 1998.

Anthony M. Callendrello has served as the Company's Chief Operating
Officer since April 2000 and as the Secretary of the Company since May 2000.

Patrycia T. Barnard has served as Vice President of Finance and Treasurer
of the Company since January 2001. Ms. Barnard served as Director of Accounting
since May 1996 and has served as Treasurer since 1998. Ms. Barnard has over 20
years experience in multi-national, corporate accounting and finance. From 1978
until 1993, Ms. Barnard was employed by BTR, Plc., a conglomerate of highly
diversified manufacturing companies, most recently as Assistant Controller for
Clarostat Mfg. Co. Inc., a vertically integrated electronic manufacturing

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company located in Plano, TX and Juarez, Mexico. Ms. Barnard holds an M.B.A and
a Masters in Accounting from New Hampshire College. She also holds a B.S. in
Business Administration from the University of New Hampshire.

EXECUTIVE COMPENSATION

Summary Compensation Table. The following table sets forth certain
information concerning the compensation of the Company's Chief Executive
Officer, the Company's Chief Operating Officer and the Company's Vice President
of Finance (together, the "Named Executive Officers"). As of December 31, 2002,
the Company did not have any other executive officers.

SUMMARY COMPENSATION TABLE

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ANNUAL COMPENSATION
---------------------------------------------------------------------------------------
LONG-TERM
COMPENSATION AWARDS
----------------------
SALARY BONUS SECURITIES UNDERLYING
------ ----- OTHER ANNUAL OPTIONS/SARS
NAME AND PRINCIPAL POSITION YEAR ($)(1)(10) ($)(1) COMPENSATION ($) (NO. OF SHARES, (#)(2)
--------------------------- ---- ---------- ------ ---------------- ----------------------

Frank W. Getman Jr 2002 207,582 856,573(9) 0 70,000
President and 2001 169,673 0(3) 0 20,000
Chief Executive Officer 2000 160,000 100,000(4) 12,500(5) 20,000

Anthony M. Callendrello(7) 2002 158,050 478,287(9) 0 40,000
Chief Operating Officer 2001 136,019 30,000 0 50,000
and Secretary 2000 89,508 30,000(8) 0 30,000

Patrycia T. Barnard(6) 2002 158,050 75,000 0 20,000
Vice President of Finance 2001 136,019 30,000 0 0

------------------

(1) Amounts shown represent cash compensation earned by the Named Executive
Officers for the fiscal years presented. Excludes amounts paid by
HoustonStreet to Mr. Getman in 2000, 2001 or 2002. See "Employment
Agreements."

(2) The option exercise price is equal to the fair market value of the Common
Stock on the date of grant. In addition, in October 2001, the Company
granted Contingent Options to each of the Named Executive Officers. The
Company granted Contingent Options to acquire 50,000 shares to Mr. Getman,
Contingent Options to acquire 40,000 shares to Mr. Callendrello and
Contingent Options to acquire 20,000 shares to Ms. Barnard, in each case
exercisable, once vested, at $9.05 per share. Each of these options was
exercisable upon and only upon the closing of the sale of the Company's
interests in the Seabrook Project. In accordance with the rules of the
Commission relating to beneficial ownership of options that are contingent
on external events, the occurrence of which is uncertain and the timing of
which is unknown, the Contingent Options are excluded in 2001 and included
in 2002.

(3) In January 2002, the Company paid a bonus of $100,000 to Mr. Getman to
recognize his performance in 2001.

(4) Represents payment received in 2000 for Mr. Getman's performance in 1999.

(5) Amount shown represents compensation in the form of partial forgiveness of
a loan to Mr. Getman. See "Employment Agreements."

(6) Ms. Barnard was promoted to Vice President of Finance in January 2001 and
became a Named Executive Officer at that time.

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(7) Mr. Callendrello joined the Company on April 3, 2000.

(8) Represents payment received in 2001 for Mr. Callendrello's performance in
2000.

(9) Includes (i) bonus of $100,000 paid to Mr. Getman in January 2002 for his
performance in 2001, and (ii) $756,573 paid to Mr. Getman and $378,206
paid to Mr. Callendrello under the Company's incentive compensation
program established by the Board for achieving specific objectives and
creation of $7,565,731 of incremental value above certain benchmarks
established by the Board. See "Employment Agreements - Key Employee
Retention and Incentive Plan".

(10) Mr. Getman and Mr. Callendrello have voluntarily agreed to a reduction in
their annual base salaries to $100,000 as of May 1, 2003.

Option/SAR Grant Table. The following table sets forth certain information
regarding options and SARs granted during 2002 by the Company to its executive
officers.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

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INDIVIDUAL GRANTS
-------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE
NUMBER OF PERCENT OF VALUE AT ASSUMED
SECURITIES TOTAL RATES OF STOCK
UNDERLYING OPTION/SARS PRICE APPRECIATION
OPTION/SARS GRANTED TO EXERCISE OR FOR OPTION TERM (3)
GRANTED AND EMPLOYEES IN BASE PRICE EXPIRATION -------------------
NAME COMPANY (1) FISCAL YEAR ($/SH)(2) DATE 5% 10%
---- ----------- ----------- ----------- ---------- -- ---

Frank W. Getman Jr 20,000(4) 50% $ 12.22 4/24/09 $ 99,677 $232,829
50,000(5) $ 9.05 10/22/08 $184,423 $430,408
Anthony M. Callendrello 40,000(5) 28.6% $ 9.05 10/22/08 $144,265 $339,788
Patrycia T. Barnard 20,000(5) 14.3% $ 9.05 10/22/08 $ 73,769 $172,163

------------------

(1) Options granted pursuant to the Company's 2001 Nonstatutory Stock Option
Plan (the "2001 Plan"). All options granted are non-transferable except by
will or the laws of descent or pursuant to a Qualified Domestic Relations
Order, in accordance with the terms and conditions of the 2001 Plan and
the individual Nonstatutory Stock Option Agreements.

(2) The exercise price of the options is equal to the fair market value of the
Company's Common Stock on the date of grant. The exercisability of these
options is accelerated upon the occurrence of a change in control (as
defined in the 2001 Plan).

(3) The amounts shown on this table represent hypothetical gains that could be
achieved for the respective options if exercised at the end of the option
term. These gains are based on assumed rates of stock appreciation of 5%
and 10%, compounded annually from the dates the respective options were
granted to their expiration dates. The gains shown are net of the option
exercise price, but do not include deductions for taxes or other expenses
associated with the exercise. These options were exercised and the shares
received upon exercise tendered in connection with the Company's issuer
tender offer that expired on March 18, 2003. The purchase price for
tendered shares was $14.85 per share and shares tendered, including
director, officer and employee options, were subject to proration. Mr.
Getman tendered these 70,000 options to the Company; 60,176 options were
accepted for payment after proration. Mr. Getman realized value of
approximately $316,800. Mr. Callendrello exercised these 40,000 options
and tendered the shares in the tender offer; 37,720 shares were accepted
for payment in the tender offer. Mr. Callendrello realized value of
approximately $218,800. Ms. Barnard exercised these 20,000 options and
tendered the shares; 18,860 shares were accepted for payment in the tender
offer. Ms. Barnard realized value of approximately $109,400.

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(4) Options granted on April 24, 2002. Subject to the terms of the
Nonstatutory Stock Option Agreements, the option was immediately
exercisable.

(5) Contingent Options granted on October 22, 2001. See "Executive
Compensation - Summary Compensation Table - Note 2." Subject to the terms
of the Nonstatutory Stock Option Agreements, each option became
exercisable upon the Closing of the sale of the Company's interests in the
Seabrook Project (and would also have become exercisable in the event of a
"change of control" of the Company as defined in the 2001 Plan.)

Option Exercises and Year-End Values. The following table sets forth
certain information concerning each exercise of stock options during the fiscal
year ended December 31, 2002 by each of the Company's executive officers and the
number and value of unexercised options held by each of the these executive
officers on December 31, 2002.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES

[Enlarge/Download Table]

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTION/SARS AT FISCAL OPTIONS/SARS AT FISCAL
YEAR-END (#)(1) YEAR-END ($)(2)
SHARES ---------------------- ----------------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
---- ------------ ------------ ------------- -------------

Frank W. Getman Jr............ 56,250 $244,688 (3) 311,500/0 $2,200,860/$0

Patrycia T. Barnard............ 0 0 60,000/0 $484,212/$0

Anthony M. Callendrello....... 0 0 76,667/43,333 $419,735/$208,315

------------------

(1) Includes Contingent Options. See "Executive Compensation - Summary
Compensation Table - Note 2."

(2) Based on the fair market value of the Company's Common Stock on December
31, 2002 ($14.74 per share).

(3) Based on the fair market value of the Company's Common Stock upon exercise
on March 27, 2002 ($9.25 per share).

EMPLOYMENT AGREEMENTS

On May 25, 2000, the Company entered into an employment agreement with
Frank W. Getman Jr. (the "Getman Employment Agreement") pursuant to which Mr.
Getman agreed to serve as the Company's Chairman, President and Chief Executive
Officer through July 31, 2003. The Getman Employment Agreement provides for an
annual salary of $200,000 as of May 25, 2002. Mr. Getman voluntarily agreed to a
reduction in salary as of May 1, 2003 to $100,000 in view of the Company's
change in business operations and assets as a result of the sale of the Seabrook
Project in November 2002 and distribution of cash through the tender offer and
repurchase of shares in March 2003. Separately, on May 5, 1998, the Company
loaned Mr. Getman $25,000 to purchase shares of the Company's Common Stock. In
accordance with the terms of this loan, the Company forgave $12,500 of the loan
on each of May 5, 1999 and May 5, 2000.

If Mr. Getman's employment with the Company terminates in a "Qualifying
Termination" in connection with a "Change in Control" (each as defined in the
Getman Employment Agreement), (i) Mr. Getman is entitled to receive in cash an
amount equal to the greater of the sum of his annual salary from the date of
termination until the date of expiration of the Getman Employment Agreement or
twice his annual salary at the date of such Change in Control; (ii) all
outstanding stock options shall become immediately exercisable, and (iii) the
non-competition and non-solicitation clauses contained in Subsections 5.c and
5.d of the Getman Employment Agreement shall cease to

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apply. Under certain circumstances identified in the Getman Employment
Agreement, the Company may be required to pay to Mr. Getman additional
compensation such that the total of the amounts payable under clause (i) above
and the value of Mr. Getman's options (as defined in the Getman Employment
Agreement) is $500,000. A Qualifying Termination will be treated as having
occurred if, prior to the second anniversary of a Change in Control, (i) Mr.
Getman's employment is terminated other than for cause or (ii) Mr. Getman
voluntarily resigns following, generally, any material impairment or material
adverse change in his working conditions, authority, position or compensation as
compared with that in effect immediately prior to the Change in Control.

On September 1, 2000, HoustonStreet entered into an employment agreement
with Frank W. Getman Jr. (the "Getman/HSE Employment Agreement") pursuant to
which Mr. Getman agreed to serve as HoustonStreet's President and Chief
Executive Officer through August 31, 2003. Under the Getman/HSE Employment
Agreement, Mr. Getman earned $52,923 in salary in 2000, $165,577 in salary in
2001, $199,083 in 2002 and will earn additional salary in future years. Other
terms of the Getman/HSE Employment Agreement are substantially similar to the
terms of Mr. Getman's employment agreement with BayCorp.

Key Employee Retention and Incentive Plan. In October 2001, at which time
the Seabrook Project auction process actively began and joint owners
representing aproximately 88% of the ownership formally agreed to participate
in the auction that would result in the Company's sale of substantially all of
its assets, the Board approved its Compensation Committee's recommendation that
the Board adopt a Key Employee Retention and Incentive Plan (the "Retention and
Incentive Plan"). The purpose of the Retention and Incentive Plan was to
accomplish the sale of the Company's interests in the Seabrook Project,
maximize the results to the Company of that sale, and retain key employees
through the successful completion of the Seabrook sale and thereafter if
desired by the Board. Under the Retention and Incentive Plan, the officers,
directors, and key employees received stock options and officers and key
employees received other incentives under Retention and Incentive Agreements.
Pursuant to such Retention and Incentive Agreements officers and key employees
have received cash payments based upon the achievement of particular objectives
that created incremental value for the Company and have the ability to receive
additional cash payments based on the incremental value created.

On November 21, 2001, the Company entered into a Retention and Incentive
Agreement with Patrycia T. Barnard, the Company's Vice President of Finance and
Treasurer. The agreement provides that in the event that Ms. Barnard continues
to be an employee of the Company through final liquidation of substantially all
of the assets of the Company and the approval of a plan of distribution of the
Company's assets net liabilities to its shareholders, the Company will pay to
Ms. Barnard bonus compensation in an amount equivalent to one year of Ms.
Barnard's salary at the time of any such liquidation and distribution, or
approximately $145,000.

On November 30, 2001, the Company also entered into a Retention and
Incentive Agreement with Anthony M. Callendrello, the Company's Chief Operating
Officer. The agreement also provides a six-month severance payment
(approximately $73,000) to Mr. Callendrello that is payable upon and only upon a
final liquidation of substantially all of the assets of the Company and the
approval of a plan of distribution of the Company's assets net liabilities to
its shareholders. In addition, the agreement establishes goals and financial
incentives for achieving certain specific objectives that created incremental
value for the Company and addresses constructive termination issues. The
agreement provided a $100,000 bonus to Mr. Callendrello upon the closing of the
sale of the Company's interests in the Seabrook Project. The Board based the
financial incentives on a concept of sharing incremental value created by
employees above certain benchmarks set by the Board. The potential incentive
payment will be calculated as (i) five percent of the savings from the reduction
of certain identified liabilities, and (ii) one percent of the incremental value
realized from identified assets, such that Mr. Callendrello will benefit only in
the event of demonstrable financial benefit to the Company. None of the
incentive payments were to be made unless and until the closing of the Seabrook
sale and unless Mr. Callendrello continued as an employee through that date.
Total incentive payments of $378,286 were made to Mr. Callendrello in 2002, as a
result of $7,565,731 of increased value to the Company.

On December 5, 2001, the Company entered into a similar Retention and
Incentive Agreement with Frank W. Getman Jr., the Company's President and Chief
Executive Officer, which established goals and financial incentives for
achieving certain specific objectives that created incremental value for the
Company. The Board based the financial incentives on a concept of sharing
incremental value created by employees above certain benchmarks set by the
Board. The potential incentive payment is calculated as a (i) ten percent of the
savings from the reduction of certain identified liabilities, and (ii) two
percent of the incremental value realized from identified

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assets, such that Mr. Getman will benefit only in the event of demonstrable
financial benefit to the Company. None of the incentive payments were to be made
unless and until the closing of the Seabrook sale and unless Mr. Getman
continued as an employee through that date. Total incentive payments of $756,573
were made to Mr. Getman in 2002, as a result of $7,565,731 of increased value to
the Company. Mr. Getman's agreement does not contain a retention bonus component
or any constructive termination provisions. Mr. Getman is entitled to a
retention bonus under the Getman Employment Agreement.

REPORT OF THE COMPENSATION COMMITTEE

The Compensation Committee of the Company's Board of Directors is
responsible for establishing compensation policies with respect to the Company's
executive officers. As of December 31, 2002, the Company had three executive
officers: its President/Chief Executive Officer, its Chief Operating
Officer/Secretary and its Vice President of Finance. The objectives of the
Company's executive compensation program are to establish compensation levels
designed to enable the Company to attract, retain and reward executive officers
who contribute to the long-term success of the Company so as to enhance
stockholder value. Base salary and benefits are intended to adequately reward
officers and employees for capable performance within their respective job
descriptions, consistent with keeping the Company competitive within the
industry and market areas. Stock options granted under the 1996 Plan and the
2001 Non-Statutory Plan are a key component of the executive compensation
program and are intended to provide executives with an equity interest in the
Company so as to link a meaningful portion of the compensation of the Company's
executives with the performance of the Company's Common Stock. In addition, the
Committee may determine that the executive officers should be rewarded based on
the achievement of financial objectives that create incremental value for the
Company. The Retention and Incentive Plan and Agreements described immediately
above and the Contingent Options discussed in Note 2 to the "Summary
Compensation Table" and Note 5 to the "Options/SARs Granted Table" were intended
to result in and reward executives' accomplishments of identified objectives
that would financially benefit the Company. Under the Retention and Incentive
Plan, executive officers do not receive payment unless and until the Company
realizes incremental value above benchmarks established by the Board.

Chief Executive Officer Compensation. The Committee employed the general
executive compensation objectives described above in establishing Mr. Getman's
base salary, incentive compensation arrangements and option grants in 2002. As
described under "Employment Agreements," the Getman Employment Agreement set Mr.
Getman's annual base salary of $200,000 as of May 25, 2002. In addition, Mr.
Getman earned bonus incentive compensation of $756,573 under his Retention and
Incentive Agreement, described under "Employment Agreements," directly based
upon his contributions to the Company's increase in value of $7,565,731 due to
reductions of certain liabilities and increased incremental value of certain
assets primarily related directly or indirectly to the sale of the Company's
Seabrook Project assets. Mr. Getman also realized value from the Contingent
Options that became exercisable upon the Company's successful completion of the
sale of its interests in the Seabrook Project.

Effect of Section 162(m) on Deductibility. Section 162(m) of the Internal
Revenue Code (the "Code") generally disallows a tax deduction to public
companies for compensation in excess of $1,000,000 paid to its chief executive
officer and each of its four other most highly compensated executive officers.
Qualifying performance-based compensation will not be subject to the deduction
limit if certain requirements are met. The Committee periodically reviews the
potential consequences of Section 162(m) and may structure the performance-based
portion of its executive compensation to comply with certain exemptions to
Section 162(m). However, the Committee reserves the right to use its judgment to
authorize compensation payments that do not comply with the exemptions to
Section 162(m). In any event, there can be no assurance that compensation
attributable to stock options granted under the 1996 Plan or the 2001 Plan will
be exempt from Section 162(m).

COMPENSATION COMMITTEE

Alexander Ellis III
Stanley I. Garnett, II
James S. Gordon
Lawrence M. Robbins

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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The current members of the Company's Compensation Committee are Messrs.
Ellis, Garnett, Gordon and Robbins. No executive officer of the Company has
served as a director or member of the compensation committee (or other committee
serving an equivalent function) of any other entity, whose executive officers
served as a director of or member of the Compensation Committee of the Company.

REPORT OF THE AUDIT COMMITTEE

The Audit Committee oversees the Company's financial reporting process on
behalf of the Board of Directors. The Audit Committee meets with the Company's
independent auditors, with and without management present, to discuss the
results of their examinations, their evaluations of the Company's internal
controls, and the overall quality of the Company's financial reporting. The
Audit Committee met five times during 2002 to review the Company's unaudited
quarterly financial results in accordance with Statement of Accounting Standards
No. 71 and to consider other matters including the selection of independent
auditors. In addition, the Audit Committee met in February 2003 to review the
results of the audit of fiscal year 2002 and to consider other matters.

The current members of the Audit Committee are Messrs. Ellis, Garnett,
Gordon and Robbins. Messrs. Ellis, Garnett and Gordon are independent as that
term is defined in Section 121 of the Company Guide of the American Stock
Exchange ("AMEX"), where the Company's shares are listed. Under the AMEX
independence standards, a director is not considered independent for audit
committee purposes if he is employed by the Company or any of its affiliates
during the current year or any of the past three years. The AMEX independence
standards provide that a stockholder holding 10% or more of the Company's
outstanding shares may be deemed an affiliate of the Company. From January 1995
to September 2000, Mr. Robbins was a general partner of Omega Advisors, Inc.,
where he also served as a portfolio manager. As of March 28, 2003, Omega
Advisors, Inc. and its affiliates owned approximately 19.3% of the Company's
shares outstanding. As such, until September 2003, Mr. Robbins, who has served
as a director and a member of the audit committee since February 1999, may be
considered an affiliate of the Company and therefore, would not meet the AMEX
standard of independence for audit committee purposes. Nevertheless, the
Company's Board of Directors determined that Mr. Robbins' membership on the
Audit Committee was in the best interests of the Company and its stockholders
because of his financial proficiency from experience as an analyst, portfolio
manager, and Certified Public Accountant. As of May 19, 2003, Omega Advisors,
Inc. and its affiliates did not own any of the Company's shares outstanding.

Pursuant to the AMEX listing requirements, the Audit Committee operates
under a written charter approved by the Board of Directors. The Audit
Committee's current charter was attached as Annex A to the Company's Proxy
Statement filed with the Commission on April 3, 2001.

In fulfilling its oversight responsibilities regarding the Company's
financial statements for the year ended December 31, 2002, the Audit Committee
reviewed with management the audited financial statements included in the
Company's Annual Report. This review included a discussion of the quality, and
not just the acceptability, of the accounting principles, the reasonableness of
significant judgments, and the clarity of disclosures in the financial
statements.

The Audit Committee reviewed with the independent auditors their
judgments as to the quality, and not just the acceptability, of the Company's
accounting principles and other matters required for discussion under Statement
of Accounting Standards No. 61.

The Audit Committee received and reviewed the written disclosures and the
letter from the independent auditors required by Independence Standards Board
Standard No. 1. Further, the Audit Committee discussed with the independent
auditors the auditors' independence from management and the Company.

In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Company's Board of Directors, and the Board
approved, that the Company's audited financial statements for the year ended
December 31, 2002 be included in the Annual Report on Form 10-K as filed with
the Securities and Exchange Commission. In addition, the Audit Committee
selected Vitale, Caturano & Company as the Company's independent public
accountants for the Company's 2002 fiscal year.

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AUDIT COMMITTEE

Alexander Ellis III
Stanley I. Garnett, II
James S. Gordon
Lawrence M. Robbins

MATTERS RELATING TO THE INDEPENDENT AUDITORS

Dismissal of Arthur Andersen LLP; Engagement of Deloitte & Touch LLP. As
disclosed on the Current Report on Form 8-K/A filed on July 26, 2002, the
Company engaged Deloitte & Touche LLP as the Company's independent public
accountants for the 2002 fiscal year, and dismissed Arthur Andersen LLP
("Andersen"), which served as the Company's independent public accountants for
the 2000 and 2001 fiscal years. The decision to change accountants was
recommended by the Company's Audit Committee and approved by the Company's Board
of Directors.

The audit reports issued by Andersen on the consolidated financial
statements for the years ended December 31, 2001 and 2000 did not contain an
adverse opinion or disclaimer of opinion nor were they qualified or modified as
to uncertainty, audit scope or accounting principles.

During each of the years ended December 31, 2001 and 2000, and during the
subsequent interim period through July 25, 2002, there were no disagreements
between the Company and Andersen on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to Andersen's satisfaction, would have caused
Andersen to make reference to the subject matter of the disagreement in
connection with its reports on the Company's consolidated financial statements
for such periods.

Resignation of Deloitte & Touche LLP; Engagement of Vitale, Caturano &
Company. As reported on the Current Report on Form 8-K filed on January 16,
2003, as amended on Form 8-K/A filed on January 17, 2003, on January 9, 2003,
Deloitte & Touche LLP ("Deloitte") notified BayCorp Holdings, Ltd. (the
"Company") that Deloitte resigned as the Company's independent auditor. Deloitte
had been engaged as the Company's independent public accountants since July 25,
2002. On January 14, 2003, the Company engaged Vitale, Caturano & Company
("Vitale") as the Company's independent public accountants to conduct the audit
for the Company's 2002 fiscal year and a re-audit for the 2001 and 2000 fiscal
years. The reasons for the change in accountants are explained below.

In September 2002, the Commission notified the Company that it planned to
conduct a routine review of the Company's Annual Report on Form 10-K for the
year ended December 31, 2001 (the "2001 Annual Report") and the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 2002. During the
review process, the Company received and responded to comments made by
Commission staff ("Staff") about those reports. The Commission and the Company
agreed to certain adjustments that the Company would make to its 2001 Annual
Report in response to Staff's comments. The Company had to then file a Form
10-K/A containing amendments (the "Amendments") to its 2001 Annual Report after
the Company's independent auditors completed an audit of the restated financial
statements for 2001 and 2000 and issued their opinion that was to be included in
the Form 10-K/A.

On November 15, 2002, the Company announced its intention to commence an
issuer tender offer for its own shares (the "Tender Offer") in January 2003. The
Company determined that it was in the Company's best interests that the
Amendments be filed before the Company commenced the Tender Offer. The Company's
goal was to commence the Tender Offer as soon as possible. However, Deloitte
informed the Company that because of the significance to the Company of its
interest in the Seabrook Project in 2000 and 2001, Deloitte would not be willing
to report on an audit of the Company's 2002 financial statements unless the
re-audits for 2000 and 2001 were conducted in a manner that placed no reliance
on the 2000 and 2001 audit reports on Seabrook's financial statements issued by
Arthur Andersen. Moreover, Deloitte indicated that they would be unable to
complete their audit of the Company's 2002 financial statements and re-audit of
2001 and 2000 within a time frame that would allow the Company to commence the
Tender Offer before March 2003. None of the Commission's comments related to the
Company's reporting of Seabrook financial information. A partner at Vitale was
the concurring partner at Arthur Andersen for the Seabrook audit for the periods
covered by the Amendments. This partner has also been involved

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with the Company's audits since 1994. Because of that partner's experience with
audits of the Company and of Seabrook, Vitale undertook to conduct the re-audits
of the Company for 2001 and 2000 in a time frame that would allow the Company to
commence the Tender Offer as planned. In addition, the cost to the Company would
be substantially reduced based on estimates received from both firms.

Deloitte's resignation followed the Company's discussion with Deloitte of
its intention to dismiss Deloitte as the Company's auditor. The Chairman of the
Company's Audit Committee discussed this matter with Deloitte and the Company
authorized Deloitte to respond fully to inquiries of Vitale concerning this
matter. Deloitte had been engaged by the Company since July 2002 and had not
issued a report on any of the Company's financial statements and, therefore,
there has been no report containing an adverse opinion or disclaimer of opinion,
or a report that was qualified or modified as to uncertainty, audit scope, or
accounting principles. There have been no disagreements between the Company and
Deloitte on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure which disagreements, if not
resolved to Deloitte's satisfaction, would have caused Deloitte to make
reference to the subject matter of the disagreement in connection with its
reports on the Company's consolidated financial statements for any period.

The Company believed that the change in accountants was in the best
interests of the Company and its shareholders. The decision to engage Vitale was
recommended by the Company's Audit Committee and approved by the Company's Board
of Directors.

Audit Fees. The aggregate fees billed by Vitale for professional services
rendered for the reaudit of the Company's consolidated financial statements for
the years ended December 31, 2000 and December 31, 2001, for the audit of the
Company's consolidated financial statements for the year ended December 31,
2002, and for the reviews of the Company's consolidated financial statements
included in its Quarterly Reports on Form 10-Q for that year were $103,000. The
aggregate fees billed by Deloitte for professional services rendered in
preparation for the audit of the Company's consolidated financial statements for
the year ended December 31, 2002 and for the reviews of the Company's
consolidated financial statements included in its Quarterly Reports on Form 10-Q
for the year ended December 31, 2002 were $56,000.

Financial Information Systems Design and Implementation Fees. During 2002,
Vitale did not perform any services for the Company relating to the design or
implementation of the Company's financial information systems.

All Other Fees. Vitale billed $19,000 in aggregate fees for services
rendered in 2002, exclusive of the audit fees described above. The Audit
Committee of the Board of Directors considered whether providing these non-audit
services was compatible with maintaining Vitale's independence. The Audit
Committee determined that Vitale's objectivity in performing the Company's
audits were not impaired by the provision of non-audit services by Vitale,
particularly in light of the relationship between Vitale's non-audit services
and Vitale's annual revenues.

STOCK PERFORMANCE GRAPH

The following graph compares cumulative total stockholder return on the
Company's Common Stock with the cumulative total return for the S&P 500 Stock
Index and the Philadelphia Stock Exchange Utility Index. This graph assumes the
investment of $100 on December 31, 1997 in the Company's Common Stock, the S&P
500 Stock Index and UTY Philadelphia Stock Exchange Utility Index and assumes
dividends are reinvested. Measurement points are at December 31, 1997, December
31, 1998, December 31, 1999, December 29, 2000, December 31, 2001 and December
31, 2002.

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COMPARATIVE TOTAL RETURNS(1)
BAYCORP HOLDINGS, LTD. S&P 500, UTY UTILITY INDEX
(PERFORMANCE RESULTS THROUGH DECEMBER 31, 2002)

[LINE CHART]

[Enlarge/Download Table]

12/31/1997 12/31/1998 12/31/1999 12/31/2000 12/31/2001 12/31/2002
---------- ---------- ---------- ---------- ---------- ----------

BAYCORP HOLDINGS, LTD. 100.00 52.79 146.15 100.00 141.78 222.32
S&P 500 100.00 128.58 155.63 141.46 124.65 67.74
UTY INDEX 100.00 111.92 88.97 125.64 105.50 79.38

------------------

(1) Assumes $100 invested at the close of trading on December 31, 1997 in the
Common Stock of the Company, the S&P 500, and the UTY Utility Index.
Cumulative total return assumes reinvestment of dividends.

RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
(ITEM 2)

The Audit Committee has selected the firm of Vitale, Caturano & Company
("Vitale"), independent public accountants, as accountants of the Company for
the fiscal year ending December 31, 2003. Although stockholder approval of the
Audit Committee's selection of Vitale is not required by law, the Board of
Directors believes that it is advisable to give stockholders an opportunity to
ratify this selection. If this proposal is not approved at the Meeting, the
Audit Committee will reconsider its selection of Vitale.

A representative of Vitale is expected to be present at the Meeting. The
representative will have the opportunity to make a statement if he or she
desires to do so and will also be available to respond to appropriate questions
from stockholders.

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AMENDMENT TO CERTIFICATE OF INCORPORATION
TO REDUCE AUTHORIZED SHARES
(ITEM 3)

On March 24, 2003, the Company concluded an issuer tender offer pursuant
to which it purchased 8,673,887 outstanding shares of Common Stock and
exercisable options to purchase shares of Common Stock from its shareholders and
option holders. Following the tender offer, the Company has 646,874 shares and
36,442 options outstanding. The Company's current authorized capital consists of
20,000,000 shares of Common Stock and 5,000,000 shares of Preferred Stock, the
terms of which may be set by the Board. The Company's Board of Directors
recommends amending the Company's Certificate of Incorporation to reduce the
authorized capital to 4,000,000 shares of Common Stock and 1,000,000 shares of
Preferred Stock.

While the Company requires reserves of authorized but unissued shares for
potential purposes of raising capital through the sale of such shares, issuing
shares in acquisition transactions, and issuing shares upon the exercise of
options already granted as well as options to be granted in the future, the
current number of authorized but unissued shares far exceeds these anticipated
needs and subjects the Company to higher statutory franchise fees. The Company
is a Delaware corporation and is required to pay annual franchise fees to the
State of Delaware that are based, either solely or in part, upon the number of
authorized capital shares. Under the current calculation method, the Company
paid approximately $85,000 in annual franchise fees to Delaware for 2002; with
the reduction in authorized shares, the Company would likely realize
approximately $74,000 in savings per year based upon the 2002 calculation
method. The Board of Directors believes that such savings are material in
relation to the Company's current capital resources, income, and operations and
believes that authorized capital of 4,000,000 shares of Common Stock and
1,000,000 shares of Preferred Stock, the terms of which may be set by the
Board, afford the Company an adequate reserve of authorized but unissued shares
for potential use in the foreseeable future. Other than as permitted or
required under the Company's existing option plans and outstanding options,
the Board of Directors has no immediate plans, understandings, agreements or
commitments to issue additional shares of capital stock for any purposes.
Moreover, should the need for additional authorized shares of capital stock
arise in the future, the Company would then seek shareholder approval for an
appropriate increase. The Board of Directors believes that the need for
shareholder approval of a subsequent increase in authorized capital will not
as a practical matter impose an undue burden on the Company or materially
reduce its flexibility. Regardless of the availability of authorized shares
for issuance, under current American Stock Exchange rules, shareholder approval
is required for any acquisition in which the Company will issue Common Stock,
as consideration in the transaction, that would result in an increase in the
outstanding Common Stock of 20% or more, and for any issuance other than in a
public offering of Common Stock at a price less than the greater of book or
market value that would result in such a 20% increase.

The Company cannot predict that this type of savings will be realized in
the future, as the State of Delaware may change the methods for calculating the
franchise fees. Similarly, the Company's assets or shares outstanding may change
in such a manner as to reduce or eliminate this savings.

OTHER MATTERS

The Board of Directors does not know of any other matters which may come
before the meeting. However, if any other matters are properly presented to the
meeting, it is the intention of the persons named in the accompanying proxy to
vote, or otherwise act, in accordance with their judgment on such matters.

All costs of solicitation of proxies will be borne by the Company. In
addition to solicitations by mail, the Company's directors, officers and regular
employees, without additional remuneration, may solicit proxies by telephone,
telegraph, facsimile and personal interviews. Brokers, custodians and
fiduciaries will be requested to forward proxy soliciting material to the owners
of stock held in their names. The Company will reimburse banks and brokers for
their reasonable out-of-pocket expenses incurred in connection with the
distribution of proxy materials.

DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS FOR THE 2004 ANNUAL MEETING

Proposals of stockholders intended to be presented at the 2004 Annual
Meeting of Stockholders must be received by the Company at its principal office
in Portsmouth, New Hampshire no later than [120 days prior to

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anniversary of mailing date] for inclusion in the proxy statement for that
meeting. Pursuant to Rule 14a-4 under the Exchange Act, if a stockholder
notifies the Company after [45 days prior to anniversary of mailing date] of an
intent to present a proposal at the Company's 2004 Annual Meeting (and for any
reason the proposal is voted upon at that Annual Meeting), the Company's proxy
holders will have the right to exercise discretionary voting authority with
respect to the proposal, if presented at the meeting, without including
information regarding the proposal in the Company's proxy materials.

By Order of the Board of Directors,

FRANK W. GETMAN JR.,
President and Chief Executive Officer

June [ ], 2003

THE MANAGEMENT HOPES THAT STOCKHOLDERS WILL ATTEND THE MEETING. WHETHER
OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. A PROMPT RESPONSE WILL GREATLY
FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION IS APPRECIATED.
STOCKHOLDERS WHO ATTEND THE MEETING MAY VOTE THEIR STOCK PERSONALLY EVEN THOUGH
THEY HAVE SENT IN THEIR PROXY.

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BAYCORP HOLDINGS, LTD.

PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 10, 2003
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE
COMPANY AND SHOULD BE RETURNED AS SOON AS POSSIBLE TO
AMERICAN STOCK TRANSFER & TRUST COMPANY

The undersigned, having received notice of the meeting and management's proxy
statement therefor, and revoking all prior proxies, hereby appoint(s) Frank W.
Getman Jr. and Anthony M. Callendrello, and each of them, attorney (with full
power of substitution) for and in the name(s) of the undersigned to attend the
Annual Meeting of Stockholders of BAYCORP HOLDINGS, LTD. (the "Company") to be
held at 1 New Hampshire Avenue, Suite 300, Portsmouth, New Hampshire on
Thursday, July 10, 2003, at 10:30 a.m., Eastern Time, and any adjourned sessions
thereof, and there to vote and act upon the following matters in respect of all
shares of stock of the Company which the undersigned will be entitled to vote or
act upon.

In their discretion, the proxies are authorized to vote upon such other matters
as they may properly come before the meeting or any adjournment thereof.

The proxy when properly executed will be voted in the manner directed herein by
the undersigned stockholder. The shares represented by this Proxy will be voted
as directed by the undersigned. If no direction is given with respect to any
proposal, this proxy will be voted for such proposal. Attendance of the
undersigned at the meeting or at any adjournment thereof will not be deemed to
revoke this proxy unless the undersigned shall revoke this proxy in writing.

WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE URGED TO COMPLETE,
DATE, SIGN, AND RETURN THIS PROXY IN THE ACCOMPANYING ENVELOPE.

(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)

-----------
SEE REVERSE
SIDE
-----------

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[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE

1. To elect the following Directors

FOR WITHHELD
[ ] [ ]

NOMINEES: Anthony M. Callendrello, Alexander Ellis III, Stanley I. Garnett II,
Frank W. Getman Jr., James S. Gordon, Thomas C. Leonard, John A. Tillinghast

For, except withheld from the following nominees(s):

----------------------------------------------------------------------------

2. To ratify the selection by the Audit Committee of Vitale, Caturano & Company,
PC as the Company's independent auditors for the fiscal year 2003.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

3. To amend the Company's Certificate of Incorporation to reduce the authorized
capital stock from 20,000,000 common shares and 5,000,000 preferred shares to
4,000,000 common shares and 1,000,000 preferred shares.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

Mark box at right if you plan to attend the meeting. [ ]

Mark box at right if comments or address change have been noted on the reverse
side of this card. [ ]

STOCKHOLDER DATE
------------------------------------------- -------------------
CO-HOLDER (IF ANY)
--------------------------------------------------------------

NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘PRE 14A’ Filing	Date	First	Last	Other Filings

	12/31/03	6	17	10-K, 8-K
	8/31/03	12
	7/31/03	11
For Period End:	7/10/03	2	20	3, 4, DEF 14A, SC 13G/A
Filed on:	5/28/03
	5/23/03	2	5
	5/19/03	4	14
	5/1/03	10	11
	4/3/03	5		SC 13G
	3/28/03	14		SC 13D/A
	3/24/03	18		4, SC TO-I/A
	3/18/03	10
	1/17/03	15		8-K/A
	1/16/03	15		8-K, SC TO-C
	1/14/03	15
	1/9/03	15		8-K, 8-K/A, SC 13D/A
	12/31/02	3	17	10-K, 10-K/A
	11/15/02	15		8-K, SC TO-C
	11/1/02	6		8-K, 8-K/A
	7/26/02	15		8-K/A
	7/25/02	15		8-K, 8-K/A
	6/30/02	15		10-Q, 10-Q/A
	5/25/02	11	13
	4/24/02	11		DEF 14A
	3/27/02	6	11
	3/7/02	6
	12/31/01	15	16	10-K, 10-K/A
	12/5/01	12
	11/30/01	12
	11/21/01	12
	10/22/01	11		S-8
	4/3/01	14		DEF 14A
	3/30/01	5		10-K
	12/31/00	5	16	10-K, 4
	12/29/00	16
	9/1/00	12
	5/25/00	11		4, DEF 14A
	5/5/00	11
	4/3/00	10
	12/31/99	16		10-K405
	5/5/99	11
	12/31/98	16		10-K, 5
	5/5/98	11		DEF 14A
	12/31/97	16	17	10-K, 10-K/A
	1/24/97	3
				List all Filings

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Filing Submission 0000950135-03-003275 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Baycorp Holdings Ltd – ‘PRE 14A’ for 7/10/03

On: Wednesday, 5/28/03, at 12:41pm ET · For: 7/10/03 · Accession #: 950135-3-3275 · File #: 1-12527

Preliminary Proxy Solicitation Material — Schedule 14AFiling Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Preliminary Proxy Solicitation Material — Schedule 14A
Filing Table of Contents