<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
<TABLE>
<S> <C>
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
</TABLE>
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted by Rule
14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
VALLEY NATIONAL GASES INCORPORATED
--------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (check the appropriate box):
<TABLE>
<S> <C> <C>
[ 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:
------------------------------------------------------------
</TABLE>
<PAGE> 2
[VALLEY NATIONAL GASES LOGO]
VALLEY NATIONAL GASES INCORPORATED
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF
VALLEY NATIONAL GASES INCORPORATED
The Annual Meeting of the Shareholders of Valley National Gases
Incorporated, a Pennsylvania corporation (the "Company"), will be held at the
Oglebay Resort and Conference Center, Wheeling, West Virginia 26003, on Tuesday,
October 24, 2000, commencing at 9:00 a.m., Wheeling time, for the following
purposes:
1. To elect three directors to hold office until the 2003 Annual
Meeting of Shareholders; and
2. To transact such other business, if any, as properly may be brought
before the meeting.
The close of business on September 15, 2000 has been designated as the
record date for the determination of Shareholders entitled to notice of and to
vote at the Annual Meeting or any adjournments or postponements thereof.
By order of the Board of Directors,
/s/ John R. Bushwack
-----------------------------------
John R. Bushwack, Secretary
Wheeling, West Virginia
September 25, 2000
A proxy for the annual meeting is enclosed herewith. Even though you may
plan to attend the meeting in person, please mark, date and execute the enclosed
proxy and mail it promptly. A postage-paid return envelope is enclosed for your
convenience.
<PAGE> 3
VALLEY NATIONAL GASES INCORPORATED
67 43RD STREET
WHEELING, WEST VIRGINIA 26003
------------------------
PROXY STATEMENT
SEPTEMBER 25, 2000
------------------------
This proxy statement is furnished to the holders of Common Stock of Valley
National Gases Incorporated (the "Company") in connection with the solicitation
of proxies for use in connection with the Annual Meeting of the Shareholders
(the "Annual Meeting") to be held at the Oglebay Resort and Conference Center,
Wheeling, West Virginia 26003, on October 24, 2000 at 9:00 a.m., Wheeling time,
and all adjournments or postponements thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of the Shareholders. Only holders of
record of the Company's Common Stock at the close of business on September 15,
2000 will be entitled to vote at the Annual Meeting. Such holders are
hereinafter referred to as the "Shareholders." The Company is first mailing this
proxy statement and the enclosed form of proxy to Shareholders on or about
September 25, 2000.
Whether or not you expect to be present in person at the meeting, you are
requested to complete, sign, date and return the enclosed form of proxy, and the
shares represented thereby will be voted in accordance with your instructions.
If you attend the meeting, you may vote by ballot. If you do not attend the
meeting, your shares of Common Stock can be voted only when represented by a
properly executed proxy.
Any person giving such a proxy has the right to revoke it at any time
before it is voted by giving written notice of revocation to the Secretary of
the Company, by duly executing and delivering a proxy bearing a later date, or
by attending the Annual Meeting and voting in person.
The close of business on September 15, 2000 has been fixed as the record
date for the determination of the Shareholders entitled to vote at the Annual
Meeting. As of the record date, 9,347,584 shares of Common Stock were
outstanding and entitled to be voted at the Annual Meeting, with 114 holders of
record. Shareholders will be entitled to cast one vote on all matters for each
share of Common Stock held of record on the record date.
A copy of the Company's Annual Report to Shareholders for the fiscal year
ended June 30, 2000 accompanies this proxy statement.
The Company's Audit and Finance Committee is recommending the selection of
Arthur Andersen LLP to the Board of Directors as the Company's principal
accountant for the fiscal year ending June 30, 2001. The Company's Board of
Directors will consider this recommendation at its next regularly scheduled
meeting on October 24, 2000. Arthur Andersen LLP has audited the Company's
financial statements since 1994. Its representatives are expected to be present
at the Annual Meeting with the opportunity to make a statement if they desire to
do so and are expected to be available to respond to appropriate questions.
The solicitation of this proxy is made by the Board of Directors of the
Company. The solicitation will be by mail and the expense thereof will be paid
by the Company. In addition, proxies may be solicited by telephone, telefax or
other means, or personal interview, by directors, officers or regular employees
of the Company who will receive no additional compensation for their services.
1
<PAGE> 4
ELECTION OF DIRECTORS
(ITEM 1 ON FORM OF PROXY)
NOMINEES AND CONTINUING DIRECTORS
The Board of Directors is divided into three classes, with the terms of
office of each class ending in successive years. At the Annual Meeting, three
directors of the Company are to be elected for a term expiring at the Annual
Meeting in 2003, or until their successors have been elected and have qualified.
Certain information with respect to the nominees for election as directors
proposed by the Company and the other directors whose terms of office as
directors will continue after the Annual Meeting is set forth below. Each of the
nominees and the directors has served in his principal occupation for the last
five fiscal years, unless otherwise indicated. Should a nominee be unable or
unwilling to serve (which is not expected), the proxies (except proxies marked
to the contrary) will be voted for such other person as the Board of Directors
of the Company may recommend.
<TABLE>
<CAPTION>
SERVED AS
DIRECTOR
NAME, AGE, PRINCIPAL OCCUPATION OR POSITION, OTHER DIRECTORSHIPS SINCE
---------------------------------------------------------------- -----
<S> <C>
TO BE ELECTED FOR TERM ENDING IN 2003:
Ben Exley, IV, 53............................................. 1997
Mr. Exley was elected a Director of the Company in January
1997. Since April 1998, he has served as a Marketing
Specialist for the Ohio Valley Industrial and Business
Development Corporation and served as its Interim Executive
Director during 1999. He served as the President of Ohio
Valley Clarksburg, Inc. since 1987 and Bailey Drug Company
from 1993 through 1997, both of which are pharmaceutical
distributors and wholly owned subsidiaries of Cardinal Health
Inc. Mr. Exley has also served on the board of directors of
several companies, including BankOne West Virginia N.A. since
1994, BankOne Wheeling-Steubenville N.A. since 1991 and Stone
& Thomas, a chain of clothing department stores, from 1991
through 1997. Mr. Exley is a graduate of West Virginia
Wesleyan College with a Bachelor of Science degree in Business
Administration. He also holds a Masters in Business
Administration degree from Northern Illinois University.
William A. Indelicato, 61..................................... 1997
Mr. Indelicato was elected a Director of the Company in
January 1997. Mr. Indelicato has been President of ADE
Vantage, Inc., a business consulting firm which provides
certain services to the Company, since July 1992. From 1988 to
1991, Mr. Indelicato served as General Business Director of
Union Carbide Industrial Gases Inc. Mr. Indelicato is also an
associate professor of strategic management at Pace University
in New York. Mr. Indelicato received his Bachelor of Science
degree in Electrical Engineering from the University of Notre
Dame and his Masters in Business Administration degree from
Pace University.
August Maier, 71.............................................. 1997
Mr. Maier was elected a Director of the Company in January
1997. In September 1997, Mr. Maier became an employee of the
Company and he served as Corporate Director of Field
Operations until his retirement in July 1999. He currently is
Chief Operating Officer of TrackAbout, Inc., a venture capital
firm specializing in the tracking of assets via the internet.
He served as Chief Executive Officer of Houston Fearless 76, a
manufacturer of digital imaging and film processing equipment,
from May 1995 until August 1997. From October 1987 to May
1997, Mr. Maier was Chief Executive Officer of Holox, Inc., a
large distributor of industrial gases and welding equipment,
which is wholly owned by Hoeklos Ltd. of Holland. Mr. Maier
received his Bachelor of Science degree in Mechanical
Engineering from the Indiana Institute of Technology and his
Masters in Business Administration degree from the Harvard
Business School.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR
OF EACH NAMED NOMINEE.
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
SERVED AS
DIRECTOR
NAME, AGE, PRINCIPAL OCCUPATION OR POSITION, OTHER DIRECTORSHIPS SINCE
---------------------------------------------------------------- -----
<S> <C>
TO CONTINUE IN OFFICE UNTIL 2001:
Lawrence E. Bandi, 46......................................... 1997
Mr. Bandi has served as President and Chief Executive Officer
of the Company since March 1995 and April 1991, respectively,
and as a director of the Company or Valley National Gases,
Inc. since March 1984. Mr. Bandi has held various other
positions with the Company since joining it in 1974. Mr. Bandi
is a Director of the Ohio Valley Industrial and Business
Development Corporation, a private corporation established for
the purpose of attracting various business entities to West
Virginia. Mr. Bandi received his Bachelor of Science degree in
Accounting from Wheeling College and his Masters in Business
Administration degree from Wheeling Jesuit College.
F. Walter Riebenack, 61....................................... 1999
Mr. Riebenack was elected a Director of the Company in January
1999. He has served as the Chief Financial Officer, General
Counsel and as a member of the Board of Site-Blauvelt
Engineers, Inc. since 1990, a multi-disciplinary consulting
engineering firm offering transportation design, geotechnical
engineering, subsurface exploration, construction inspection
and materials testing services to a wide range of clients in
both the public and private sectors of the marketplace, with
offices in New Jersey, Pennsylvania, New York, Delaware,
Virginia, South Carolina and West Virginia. Mr. Riebenack
received his law degree along with his Bachelor of Business
Administration degree in Finance and Accounting from the
University of Notre Dame. Mr. Riebenack has served as an
instructor of Business Law at Indiana University and St.
Francis College in Fort Wayne, Indiana.
TO CONTINUE IN OFFICE UNTIL 2002:
Gary E. West, 63.............................................. 1997
Mr. West has served as Chairman of the Board of Directors of
the Company or Valley National Gases, Inc. since 1984. From
1970, when he purchased the Company, to March 1995 Mr. West
served as President of the Company. Mr. West is primarily
responsible for the growth and success of the Company. Mr.
West has also served as President of West Rentals, Inc. and
Equip Lease Corp. and Vice President of Acetylene Products
Corp. since 1992, 1988 and 1985, respectively. See "Executive
Compensation - Compensation Committee Interlocks and Insider
Participation." Since June 1993, he has served as a director
of WesBanco Wheeling, and since June 1990 he has served as a
director of H.E. Newmann Co., a plumbing, heating and
mechanical contracting company. Mr. West received his Bachelor
of Science degree in Business Administration from West Liberty
State College.
John R. Bushwack, 49.......................................... 1997
Mr. Bushwack has served as the Executive Vice President, the
Chief Operating Officer and a Director of the Company since
January 1997. From 1991 to 1996, Mr. Bushwack served in
various positions with the Company, including Executive Vice
President of Sales and Acquisitions, Vice President of Sales
and Acquisitions, Vice President of Sales and General Manager.
From 1987 to 1990, Mr. Bushwack served as President of the
Harvey Company, a gas distributor, and from 1990 to 1991 he
served as Vice President and Director of Linde Gases of the
Great Lakes, also a gas distributor. In addition, Mr. Bushwack
has been a Director of Convenient Care Products Group, Ltd., a
division of Westmoreland Health System, since 1991 and
Westmoreland Holding Company, Inc., since 1999.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
SERVED AS
DIRECTOR
NAME, AGE, PRINCIPAL OCCUPATION OR POSITION, OTHER DIRECTORSHIPS SINCE
---------------------------------------------------------------- -----
<S> <C>
James P. Hart, 46............................................. 1997
Mr. Hart was elected a Director of the Company in January
1997. He has been Vice President and Chief Financial Officer
of Industrial Scientific Corporation ("ISC"), a manufacturer
of portable instruments used for detecting and monitoring a
variety of gases, since August 1994. From March 1984 to August
1994, Mr. Hart was Treasurer and Controller of ISC. Mr. Hart
holds a Bachelor of Science degree in Accounting from the
University of Scranton.
</TABLE>
COMMON STOCK OWNERSHIP OF DIRECTORS, NOMINEES AND OFFICERS
The following table sets forth information regarding the amount of the
outstanding Common Stock as of September 1, 2000 beneficially owned by each
director and nominee, the Chief Executive Officer and the three other most
highly compensated executive officers of the Company (each a "Named Executive
Officer") and all of the directors and executive officers of the Company as a
group:
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF SHARES COMMON STOCK
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED OUTSTANDING(1)
------------------------ ------------------ --------------
<S> <C> <C>
Gary E. West................................................ 7,095,000(2) 75.2
Lawrence E. Bandi (3)....................................... 119,946 1.3
John R. Bushwack (3)........................................ 59,829 *
Robert D. Scherich (4)...................................... 13,799 *
William A. Indelicato (5)................................... 83,866 *
Ben Exley, IV (5)........................................... 6,600 *
James P. Hart (5)........................................... 9,200 *
August E. Maier (5)......................................... 7,000 *
F. Walter Riebenack......................................... 5,000 *
All directors and executive officers as a group (9
persons)(6)............................................... 7,400,240 78.5
</TABLE>
---------------
* Represents beneficial ownership of less than one percent.
(1) Percentages are determined in accordance with Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
(2) Gary E. West beneficially owns and controls a portion of the shares
indicated through six grantor retained annuity trusts.
(3) Includes options to purchase 25,000 shares of Common Stock exercisable
within sixty days of September 1, 2000.
(4) Includes options to purchase 9,000 shares of Common Stock exercisable within
sixty days of September 1, 2000.
(5) Includes options to purchase 5,000 shares of Common Stock exercisable within
sixty days of September 1, 2000.
(6) Includes options to purchase 79,000 shares of Common Stock exercisable
within sixty days of September 1, 2000.
4
<PAGE> 7
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information with respect to each
person known to the Company to be the beneficial owner of more than 5% of the
Company's outstanding Common Stock as of September 1, 2000:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS(1)
------------------------------------ -------------------- -----------
<S> <C> <C>
Gary E. West (2)............................................ 7,095,000 75.2
Entities affiliated with T. Rowe Price Associates, Inc.
(3)....................................................... 757,000 8.0
</TABLE>
---------------
(1) Percentages are determined in accordance with Rule 13d-3 under the Exchange
Act.
(2) Mr. West's address is c/o Valley National Gases Incorporated, 67 43rd
Street, Wheeling, West Virginia 26003. A portion of his shares are
beneficially owned and controlled through six grantor retained annuity
trusts.
(3) As provided in a Form 13G filed with the SEC on February 10, 2000. T. Rowe
Price Associates, Inc., a registered investment advisor, holds sole voting
power as to 47,000 shares and sole dispositive power as to 757,000 shares.
T. Rowe Price Small-Cap Value Fund, Inc., holds sole voting power as to
682,200 shares. Their address is 100 E. Pratt Street, Baltimore, Maryland,
21202.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors met six times during fiscal 2000. Each incumbent
director attended at least 75% of the meetings of the Board and committees on
which he served during fiscal 2000.
The Board of Directors has an Executive Committee, an Audit and Finance
Committee, and a Nominating and Compensation Committee, all of which were formed
in January 1997. The Executive Committee, of which Messrs. West, Bandi, Bushwack
and Indelicato are members, met 12 times in the past fiscal year. The Audit and
Finance Committee, of which Messrs. Hart, Bushwack and Riebenack were members,
met three times in the past fiscal year. This committee meets independently with
representatives of the Company's independent auditors and with representatives
of senior management. This committee reviews the general scope of the Company's
annual audit, the fee charged by the independent auditors and other matters
relating to the Company's internal controls. This committee is also responsible
for recommending a public accounting firm to be retained for the coming year.
The Company's Board of Directors has adopted a written charter for the Audit and
Finance Committee. The Audit and Finance Committee Charter is attached as an
exhibit to this proxy statement. The members of the Audit and Finance Committee
for fiscal 2001 are Messrs. Hart, Exley and Riebenack and are independent
pursuant to Section 121(A) of the American Stock Exchange listing standards. The
Nominating and Compensation Committee, consisting of Messrs. West, Indelicato
and Exley, establishes and oversees the compensation policies of the Company and
determines executive compensation. This committee held three meetings in the
past fiscal year. See "Compensation Committee Report on Executive Compensation"
and "Audit and Finance Committee Report."
DIRECTOR COMPENSATION
The Company pays each non-employee director a $1,000 fee for each Board
meeting attended and a $500 fee for each Committee meeting attended. Directors
are also reimbursed for certain reasonable expenses incurred in attending
meetings. Officers of the Company do not receive any additional compensation for
serving the Company as members of the Board of Directors or any of its
Committees.
On January 3, 2000, the Company granted to each of the five independent
directors options to purchase 2,500 shares of the Common Stock of the Company.
The options vest three years after the date of the grant and have a term of ten
years. The options are exercisable at a price equal to the fair market value of
the shares of Common Stock on the date of the grant.
5
<PAGE> 8
William A. Indelicato, a director of the Company, provides consulting
services to the Company concerning all aspects of the Company's acquisition
program. In addition, the Company retains ADE Vantage, Inc. to provide
consulting services. See "Executive Compensation - Compensation Committee
Interlocks and Insider Participation - Indelicato and ADE Vantage, Inc.
Consulting Arrangements."
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Gary E. West.............................. 63 Chairman of the Board of Directors
Lawrence E. Bandi......................... 46 President and Chief Executive Officer
John R. Bushwack.......................... 49 Executive Vice President, Chief Operating Officer
and Secretary
Robert D. Scherich........................ 40 Chief Financial Officer
</TABLE>
For more information about Messrs. West, Bandi and Bushwack, please see the
appropriate description under the above caption "Nominees and Continuing
Directors."
Robert D. Scherich, Chief Financial Officer. Mr. Scherich has served as the
Company's Chief Financial Officer since May 1996. From January 1993 to April
1996, he served as Controller and General Manager of Wheeling Pittsburgh Steel
Corporation, a subsidiary of WHX Corporation, and from January 1988 to December
1993 he served as Division Controller of such corporation. Mr. Scherich was an
accountant with Ernst & Whinney from 1981 to 1984. Mr. Scherich received a
Bachelor of Science degree in Accounting from The Pennsylvania State University
and is a Certified Public Accountant.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and persons who beneficially own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership on Forms 3, 4 and 5 with the Securities and
Exchange Commission (the "SEC"). Directors, executive officers and greater than
ten percent beneficial shareholders are required by SEC regulation to furnish
the Company with copies of all Forms 3, 4 and 5 they file.
To the Company's knowledge, based solely on the Company's review of the
copies of such forms it has received and written representations that no other
reports were required, the Company believes that all its directors, executive
officers and greater than ten percent beneficial owners complied with all filing
requirements applicable to them with respect to transactions during its fiscal
year ended June 30, 2000, except that each executive officer and director other
than Mr. West failed to timely report the granting of an option received on
January 3, 2000 due to an administrative error at the Company.
6
<PAGE> 9
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain summary information for the fiscal
years ended June 30, 1998, 1999 and 2000 concerning the compensation awarded or
paid to, or earned by each of the Named Executive Officers during such fiscal
year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------------------- ------------
OTHER ANNUAL SECURITIES ALL OTHER
NAME AND COMPENSATION UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) ($)(2) OPTIONS(#) ($)(3)
------------------ ---- --------- ----------- ------ ---------- ------
<S> <C> <C> <C> <C> <C> <C>
Gary E. West................ 2000 82,404 196,224 -- -- 574
Chairman 1999 76,332 61,320 -- -- 5,662
1998 79,978 117,875 -- -- 8,107
Lawrence E. Bandi........... 2000 196,661 112,000 -- 15,750 8,310
President and 1999 178,000 35,000 -- 12,600 8,806
Chief Executive Officer 1998 161,718 67,280 -- -- 8,177
John R. Bushwack............ 2000 146,168 85,000 -- 9,250 8,045
Executive Vice President 1999 135,539 26,200 -- 7,400 8,541
and Chief Operating Officer 1998 124,656 48,720 -- -- 7,825
Robert D. Scherich.......... 2000 93,436 35,000 -- 5,000 5,147
Chief Financial Officer 1999 80,396 11,000 -- 3,565 4,378
1998 72,880 18,000 -- -- 2,799
</TABLE>
---------------
(1) Includes bonuses earned in the reported year. The payment of bonuses is at
the discretion of the Nominating and Compensation Committee of the Board of
Directors.
(2) The Company has not included in the Summary Compensation Table the value of
incidental personal perquisites furnished by the Company to the Named
Executive Officers since such value did not exceed the lesser of $50,000 or
10% of the total of annual salary and bonus reported for any of such Named
Executive Officers.
(3) Represents contributions made by the Company on behalf of the Named
Executive Officers under the Company's 401(k) Plan during fiscal 2000.
STOCK OPTION GRANTS AND EXERCISES
The Company grants options to its executive officers under its 1997 Stock
Option Plan (the "Plan"). The Company adopted the Plan in February 1997. The
Plan provides for the issuance of options to purchase up to 650,000 shares of
Common Stock to key employees, officers and directors of the Company and is
administered by the Nominating and Compensation Committee of the Board of
Directors. As of September 15, 2000, options to purchase a total of 291,350
shares were outstanding under the Plan and options to purchase 358,650 shares
remained available to grant thereunder.
7
<PAGE> 10
The following table shows for the fiscal year ended June 30, 2000, certain
information regarding options granted to and exercised by the Named Executive
Officers and the potential realizable valuable of options granted in fiscal 2000
at assumed rates of return:
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
OPTION/SAR
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
--------------------------- VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS/SARS PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM
OPTIONS/SARS EMPLOYEES IN EXERCISE OR BASE ---------------------
NAME GRANTED(#) FISCAL YEAR PRICE($/SH) EXPIRATION DATE 5%($) 10%($)
---- ---------- ----------- ----------- --------------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Lawrence E. Bandi.... 15,750 25 3.125 1/3/10 30,953 78,442
John R. Bushwack..... 9,250 15 3.125 1/3/10 18,179 46,069
Robert D. Scherich... 5,000 8 3.125 1/3/10 9,826 24,902
</TABLE>
STOCK OPTION EXERCISES AND HOLDINGS
The following table presents information with respect to stock options
exercised during the last fiscal year by the Named Executive Officers, as well
as the status and current value of unexercised stock options held as of June 30,
2000.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT JUNE 30, 2000 IN-THE-MONEY OPTIONS
ACQUIRED (# SHARES) AT JUNE 30, 2000 (1)
ON EXERCISE VALUE --------------------------- ---------------------------
NAME (# SHARES) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ---------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gary E. West................. 0 0 0 0 $0 $ 0
Lawrence E. Bandi............ 0 0 25,000 45,350 $0 $27,563
John R. Bushwack............. 0 0 25,000 16,650 $0 $16,188
Robert D. Scherich........... 0 0 9,000 8,565 $0 $ 8,750
</TABLE>
---------------
(1) Values have been determined based upon the difference between the per share
option exercise price and the closing price of the Company's Common Stock on
June 30, 2000.
BENEFIT PLANS
401(k) Plan. The Company has a qualified 401(k) savings and retirement
plan (the "401(k) Plan"). Eligibility to participate in the 401(k) Plan requires
an employee to have been employed with the Company for twelve months ("Eligible
Employees"). The 401(k) Plan allows Eligible Employees to defer into their plan
account a certain dollar amount or stated percentage of their salary, not to
exceed statutorily mandated annual limits (the "Employee Contributions").
Eligible Employees are 100% vested in their Employee Contributions. The Company
makes an annual contribution (the "Company Contribution") to all Eligible
Employees' plan
---------------
1 The options were granted on January 3, 2000. The options vest three years
after the date of the grant and have a term of ten years. The options are
exercisable at a price equal to the fair market value of the shares of Common
Stock on the date of the grant. In the case of key employees and officers,
unexercised options granted under the Plan are subject to forfeiture upon
termination of employment for any reason other than death, disability or
normal retirement.
8
<PAGE> 11
accounts in an amount equal to 5% of their salary or wages. Company
Contributions vest over a term of seven years. The Company also makes a
determination each year based upon performance as to the amount, if any, of
additional contributions to be made to Eligible Employees' plan accounts. If a
determination is made to make additional contributions in any year, such amounts
are contributed on a pro rata basis to the plan accounts of Eligible Employees
who made voluntary contributions during such year. Distributions under the
401(k) Plan may be made at retirement, death, permanent disability or other
termination of employment, in a lump sum.
CERTAIN AGREEMENTS WITH EXECUTIVE OFFICERS
Lawrence E. Bandi, John R. Bushwack and Robert D. Scherich have entered
into agreements with the Company whereby the Company has agreed to pay each of
them, or their respective beneficiaries, certain death, disability and/or
retirement benefits provided that they are employed with the Company until their
respective retirements or deaths, and that with respect to retirement benefits,
they do not thereafter compete with the Company. In the event of the death or
retirement of Mr. Bandi, Mr. Bushwack or Mr. Scherich, the Company is obligated
to make payments of $2,000, $1,000 and $1,000 per month, respectively, for
eighty-four months. In the event of disability, the Company is obligated to make
payments of $2,000, $1,000 and $1,000 per month, respectively, for the duration
of the disability, but not after 65 years of age.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As noted above, the Company's Nominating and Compensation Committee
consists of Messrs. West, Indelicato and Exley. Mr. West is the Chairman of the
Board of Directors of the Company. During the year ended June 30, 2000, no other
interlocking relationship existed between any member of the Company's
Compensation Committee and any other member of the Company's Board of Directors.
Mr. Indelicato and ADE Vantage, Inc. provide consulting services to the Company.
In addition, the Company leases certain buildings and equipment from West
Rentals, Inc., a Company owned by Mr. West. West Rentals, Inc. employees also
supply certain services for the Company. The Company rents an airplane from
EquipLease Corp., a corporation wholly owned by Mr. West, and leases certain
properties from RealEquip-Lease, LLC, a company owned by the daughters of Mr.
West. Mr. West is also a Director and shareholder of Acetylene Products Corp., a
company that leases space to the Company. These transactions are more fully
described below.
INDELICATO AND ADE VANTAGE, INC. CONSULTING ARRANGEMENTS
Mr. Indelicato provides consulting services to the Company concerning all
aspects of the Company's acquisition program. The agreement with Mr. Indelicato
provides for a monthly retainer fee of $4,225, reimbursement of out-of-pocket
expenses related to the performance of services, and a variable payment for each
acquisition completed in an amount based primarily upon the purchase price and
the annual sales of the business acquired. In addition, the Company retains ADE
Vantage, Inc. ("ADE") to provide consulting services. Mr. Indelicato is
President of ADE. This agreement has a one year term, is renewable each year for
one year and can be terminated by either party giving ninety day notice.
Payments to Mr. Indelicato and ADE for fiscal 2000 totaled $181,607.
WEST RENTALS, INC.
The Company leases 44 buildings from West Rentals, Inc., a West Virginia
corporation ("West Rentals"), 37 of which are leased pursuant to a Master Lease
Agreement (the "Master Lease") and seven of which are leased pursuant to
pass-through subleases. Mr. West is the sole shareholder of West Rentals. The
Master Lease terminates on July 31, 2007 and may be renewed for an additional
five-year term. Currently, the Company pays an aggregate of $171,576 a month to
West Rentals as rent for all real property leased. In addition, the Company pays
all utility bills and fees as well as all property and local taxes on the real
property leased from West Rentals. The Company also rents cylinders and trailers
from West Rentals and currently pays approximately $6,525 a month to West
Rentals for such rentals. Employees of the Company provide occasional
construction, maintenance and clerical related services to West Rentals. The
Company bills West Rentals for such services on an hourly basis. Aggregate
expenditures by the Company under the Master Lease and for rental of cylinders
and trailers was approximately $2,088,280 for the fiscal year ended June 30,
2000. The Company believes that the amounts it has
9
<PAGE> 12
paid for rental of real property, cylinders and trailers have not been less
favorable than could have been obtained in arms-length transactions with
unaffiliated third parties.
ACETYLENE PRODUCTS CORP.
The Company leases two buildings from Acetylene Products Corp. ("APC")
under ten-year leases expiring in March, 2008 for an aggregate amount of $11,575
per month. Mr. West is a Director and shareholder of APC. The Company also
leases approximately 1,400 square feet of space located in Wheeling, West
Virginia from APC for use as an employee training center at a cost of $50 per
day. The Company believes that the current arrangements with APC are not less
favorable than could be obtained in arms-length transactions with unaffiliated
third parties. During fiscal 2000, the Company paid APC $142,225.
EQUIPLEASE, CORP.
EquipLease Corp.("EquipLease"), a corporation wholly owned by Mr. West,
rents an airplane to the Company at a monthly rate of $7,157. The Company paid a
total of $85,884 to EquipLease for rental of the airplane during fiscal 2000.
The Company believes that the arrangements with EquipLease have not been less
favorable than could have been obtained in arms-length transactions with
unaffiliated third parties.
REALEQUIP-LEASE, LLC
RealEquip-Lease, LLC ("RealEquip"), a company wholly owned by the two
daughters of Mr. West, leases two properties to the Company for an aggregate
amount of $3,755 per month. Mr. West serves as a non-member manager of
RealEquip. During fiscal year 2000, the Company paid RealEquip $21,560. The
Company believes that the arrangements with RealEquip have not been less
favorable than could have been obtained in arms-length transactions with
unaffiliated third parties.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION(2)
The Company's executive compensation program is administered by the
Nominating and Compensation Committee of the Board of Directors, which is
comprised of two non-employee directors and one employee director. The
Nominating and Compensation Committee works with management to develop
compensation plans for the Company and is responsible for determining the
compensation of each executive officer and recommending such compensation to the
Board of Directors.
The Company's executive compensation program is designed to align executive
compensation with the Company's business objectives and the executive's
individual performance and to enable the Company to attract, retain and reward
executive officers who contribute, and are expected to continue to contribute,
to the Company's long-term success. In establishing executive compensation, the
Committee is guided by the following principles: (i) the total compensation
payable to executive officers should be sufficiently competitive with the
compensation paid by competitive companies for officers in comparable positions
so that the Company can attract and retain qualified executives and (ii)
individual compensation should include components which reflect both the
financial performance of the Company and the performance of the individual.
The compensation of the Company's executive officers consists of a
combination of base salary, bonuses and equity-based compensation. In general,
the Company's compensation program attempts to limit increases in salaries and
favors bonuses based on revenues, operating profit and individual merit. The
Nominating and Compensation Committee believes that executive compensation
should be designed to motivate executives to increase shareholder value and
further believes that executive officers can best increase shareholder value by
managing the revenues and operating profit of the Company and by conceiving,
developing and positioning the leading products and services in the Company's
chosen markets.
---------------
2 The material in this report is not "soliciting material," is not deemed
"filed" with the SEC, and is not to be incorporated by reference into any
filing of the Company under the 1933 Act or 1934 Act, whether made before or
after the date hereof and irrespective of any general incorporation language
contained in such filing.
10
<PAGE> 13
Compensation payments in excess of $1 million to the Chief Executive
Officer or other executive officers are subject to a limitation of deductibility
for the Company under Section 162(m) of the Internal Revenue Code of 1986, as
amended. Certain performance-based compensation is not subject to the limitation
on deductibility. The Committee does not expect cash compensation to its Chief
Executive Officer or any other executive officer in the foreseeable future to be
in excess of $1 million.
BASE SALARY
The Nominating and Compensation Committee sets the base salary for
executives at the beginning of each fiscal year, based upon a review of the
salaries for comparable positions in companies in the Company's industry and
other related industries, the historical compensation levels of the Company's
executives and the individual performance of the executives in the preceding
year.
MERIT BONUS PROGRAM
Each year the Nominating and Compensation Committee intends to adopt
management incentive plans for the executive officers, which reflect the
Committee's belief that a portion of each executive officer's compensation
should be tied to the achievement by the Company of its revenue and profit goals
and balance sheet performance objectives, and by each executive officer of his
individual objectives as determined by the Nominating and Compensation
Committee. Merit bonus goals based on the fiscal 2000 operating plan were
determined by the Nominating and Compensation Committee and approved by the
Board of Directors at the beginning of the fiscal year based upon these
criteria. In addition, the plans for fiscal 2000 prescribed adjustments in the
merit bonus goals based upon the Company's actual operating profit. At the end
of the fiscal year, the Board of Directors allocated merit bonuses to individual
executives based on the operating performance of the Company and the executive's
performance relative to his or her individual performance objectives.
STOCK-BASED COMPENSATION
Awards of stock options under the Company's stock option plan are designed
to closely tie the long-term interests of the Company's executives and its
shareholders and to assist in the retention of executives. The Nominating and
Compensation Committee selects the executive officers, if any, to receive stock
options and determines the number of shares subject to each option. However, all
grants of stock options are ultimately authorized by the Company's Board of
Directors. The Nominating and Compensation Committee's determination of the size
of option grants is generally intended to reflect an executive's position with
the Company and his or her contributions to the Company. Options generally have
a three-year vesting period to encourage key employees to continue in the employ
of the Company. The Compensation Committee reviews the outstanding unvested
options of the key executives from time to time and may grant additional options
to encourage the retention of key executives. Options for 30,000 shares were
granted to executive officers in fiscal 2000 to reward the executive officers
for their performance and to establish appropriate incentives for these key
executives.
CHIEF EXECUTIVE OFFICER COMPENSATION
The Chief Executive Officer's compensation generally is based on the same
policies and criteria as the other executive officers. However, the bonus
portion of the compensation package represents a larger portion of total
compensation than other executive officers. In fiscal 2000, Mr. Bandi received a
base salary increase of $18,661 to $196,661, and an option to purchase 15,750
shares of the Company's Common Stock. The increase in his base salary was
intended to reflect both the increase in the cost of living in fiscal 2000 and
the increase in responsibility, which occurred as a result of the significant
change in the size of the Company as compared to fiscal 1999. The size of the
option grant was based on the Compensation Committee's subjective judgment that
this amount was appropriate to provide an incentive for continued growth and
high operating performance. The option vests three years after the date of grant
and is exercisable at a price equal to the fair market value of the Company's
Common Stock on the date of grant. In August 2000, the Compensation Committee
awarded Mr. Bandi a cash bonus for fiscal 2000 of $112,000 or approximately 57%
of his fiscal 2000 base salary. In awarding Mr. Bandi's 2000 cash bonus, the
Compensation Committee considered the significant growth in EBITDA (17%) over
fiscal 1999 performance and achievement of specific goals related to the
implementation of
11
<PAGE> 14
the Company's Strategic Plan. These objectives included improvement in same
store growth, staffing changes and sales training.
******
The foregoing report is provided by the following directors, who were
members of the Nominating and Compensation Committee on June 30, 2000:
William A. Indelicato, Chairman
Gary E. West
Ben Exley, IV
AUDIT AND FINANCE COMMITTEE REPORT(3)
The Audit and Finance Committee has reviewed and discussed with the
Company's management the Company's audited financial statements as of and for
the year ended June 30, 2000. The Committee has discussed with the independent
auditors the matters required to be discussed by Statement of Auditing Standards
No. 61 (Communication with Audit Committees). The Committee has received and
reviewed the written disclosures and the letter from the independent auditors
required by Independence Standard No. 1 (Independence Discussions with Audit
Committees) and has discussed with the auditors the auditors' independence.
Based on these reviews and discussions, the Committee recommended to the
Company's Board of Directors that the audited financial statements be included
in the Company's Annual Report on Form 10-K for the fiscal year ended June 30,
2000.
******
The foregoing report is provided by the following directors, who were
members of the Audit and Finance Committee on June 30, 2000:
James P. Hart
John R. Bushwack
F. Walter Riebenack
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See "Executive Compensation - Compensation Committee Interlocks and Insider
Participation."
---------------
3 This Section is not "soliciting material," is not deemed "filed" with the SEC
and is not to be incorporated by reference in any filing of the Company under
the 1933 Act or the 1934 Act whether made before or after the date hereof and
irrespective of any general incorporation language in any such filing.
12
<PAGE> 15
PERFORMANCE GRAPH(4)
The following graph sets forth a comparison for the period beginning April
10, 1997 (the date the Company first became subject to the reporting
requirements of the Exchange Act) and ending June 30, 2000, of the cumulative
total return on a $100.00 investment in the Company's Common Stock, based on the
market price of the Common Stock, with the cumulative total return, assuming
reinvestment of dividends, on an investment of $100.00 for the same period in
companies on the Nasdaq Stock Market (U.S.) and on the S&P 500 Index. The
indices are included for comparative purposes only. They do not necessarily
reflect management's opinion that such indices are an appropriate measure of the
relative performance of the Company's Common Stock and are not intended to
forecast or be indicative of future performance of the Common Stock.
TOTAL RETURN TO SHAREHOLDERS
(DIVIDENDS REINVESTED MONTHLY)
<TABLE>
<CAPTION>
MONTH ENDING VALLEY NATIONAL GASES INC. S&P 500 INDEX S&P CHEMICALS COMPOSITE
------------ -------------------------- ------------- -----------------------
<S> <C> <C> <C>
10 April 97 100.00 100.00 100.00
June 97 131.25 129.81 109.43
June 98 137.50 168.97 127.00
June 99 53.13 207.42 125.28
June 00 60.94 222.45 98.10
</TABLE>
VOTING
A plurality of the votes cast are required to elect the directors. The
Company's Articles of Incorporation do not provide for cumulative voting. The
affirmative vote of the holders of a majority of the shares of the Company's
Common Stock entitled to vote which are present in person or represented by
proxy at the 2000 Annual Meeting is required to act on any other matters
properly brought before the meeting. Shares represented by proxies which are
marked "withhold authority" with respect to the election of the nominees for
election as directors and proxies which are marked to deny discretionary
authority on other matters will be counted for the purpose of determining the
number of shares represented by proxy at the meeting. Such proxies will thus
have the same effect as if the shares represented thereby were voted against
such other matters. Votes withheld for director nominees will not be counted. If
a broker indicates on the proxy that it does not have discretionary authority as
to certain shares to vote on a particular matter, those shares will not be
considered as present and entitled to vote with respect to that matter. If no
specification is made on a duly executed proxy, the proxy will be voted FOR the
election of the directors nominated by the Board of Directors and in the
discretion of the persons named as proxies on such other business as may
properly come before the meeting or any adjournment or postponement thereof.
---------------
4 This Section is not "soliciting material," is not deemed "filed" with the SEC
and is not to be incorporated by reference in any filing of the Company under
the 1933 Act or the 1934 Act whether made before or after the date hereof and
irrespective of any general incorporation language in any such filing.
13
<PAGE> 16
SHAREHOLDER PROPOSALS
Proposals of Shareholders intended to be presented at the 2001 Annual
Meeting must be received by the Company by May 26, 2001, for inclusion in the
Company's proxy statement and proxy relating to that meeting. Upon receipt of
any such proposal, the Company will determine whether or not to include such
proposal in the proxy statement and proxy in accordance with regulations
governing the solicitation of proxies.
In order for a Shareholder to nominate a candidate for director, under the
Company's Bylaws, timely notice of the nomination must be given to the Company
in advance of the meeting. Ordinarily, such notice must be given not less than
60 nor more than 90 days prior to the date of any meeting of the shareholders at
which directors are to be elected. The Shareholder filing the notice of
nomination must describe various matters related to the nominee and the
Shareholder filing the notice, as specified in the Company's Bylaws, including
such information as name, address, occupation, and number of shares held.
In order for a Shareholder to bring other business before a Shareholder
meeting, timely notice must be given to the Company. To be timely, such notice
must be delivered to or mailed and received at the Company's principal executive
offices not less than 60 days nor more than 90 days prior to the meeting.
However, if the meeting is not held on the first Tuesday in August, and less
than 60 days' notice or prior public disclosure of the meeting date is given or
made to shareholders, then the notice from the shareholder must be received by
the close of business on the 15th day following the day on which such notice of
the meeting date was mailed or such public disclosure was made, whichever occurs
first. Such notice must include a description of the proposed business, the
reasons therefor and other matters specified in the Company's Bylaws. The Board
or the presiding officer at the Annual Meeting may reject any such proposals
that are not made in accordance with these procedures or that are not a proper
subject for Shareholder action in accordance with applicable law. These
requirements are separate from and in addition to the requirements a Shareholder
must meet to have a proposal included in the Company's proxy statement.
In each case the notice must be given to the Secretary of the Company,
whose address is 67 43rd Street, Wheeling, West Virginia 26003. Any Shareholder
desiring a copy of the Company's Restated Articles of Incorporation, as amended,
or Bylaws will be furnished a copy without charge upon written request to the
Secretary.
MISCELLANEOUS
Even if you plan to attend the meeting in person, please complete, sign,
date and return the enclosed proxy promptly. Should you attend the meeting, you
may revoke the proxy and vote in person. A postage-paid, return-addressed
envelope is enclosed for your convenience. No postage need be affixed if mailed
in the United States. Your cooperation in giving this your immediate attention
will be appreciated.
By Order of the Board of Directors
/s/ John R. Bushwack
----------------------------------
John R. Bushwack, Secretary
Wheeling, West Virginia
September 25, 2000
14
<PAGE> 17
ANNEX A
VALLEY NATIONAL GASES INCORPORATED
AUDIT AND FINANCE COMMITTEE CHARTER
The Audit Committee is appointed by the Board to assist the Board in
monitoring (1) the integrity of the financial statements of the Company, (2)
compliance by the Company with legal and regulatory requirements, and (3) the
independence and performance of the Company's external auditors.
The members of the Audit Committee shall meet the independence and
experience requirements of the American Stock Exchange.
The Audit Committee shall have the authority to retain special legal,
accounting, financial, information systems or other consultants to advise the
Committee. The Audit Committee may request any officer or employee of the
Company or the Company's outside counsel or independent auditor to attend a
meeting of the Committee or to meet with any members of, or consultants to, the
Committee.
The Audit Committee shall meet at least twice annually, or more frequently
as circumstances dictate.
The Audit Committee shall make regular reports to the Board.
The Audit Committee shall:
1. Review and reassess the adequacy of this Charter annually and recommend any
proposed changes to the Board for approval.
2. Review the annual audited financial statements with management and the
independent auditor, including major issues regarding accounting and
auditing principles and practices as well as the adequacy of internal
controls that could significantly affect the Company's financial statements.
3. Review with management and the independent auditor any significant financial
reporting issues and judgments made in connection with the preparation of
the company's financial statements.
4. Review with management and the independent auditor the Company's quarterly
financial statements prior to the release of quarterly earnings.
5. Meet periodically with management to review the Company's major financial
risk exposures and the steps management has taken to monitor and control
such exposures.
6. Review major changes to the Company's auditing and accounting principles and
practices as suggested by the independent auditor or management prior to
such changes being implemented.
7. Recommend to the Board the appointment of the independent auditor, which
firm is ultimately accountable to the Audit Committee and the Board.
8. Review and approve all contracts with the independent auditor. Approve the
fees to be paid to the independent auditor prior to engagement.
9. Receive periodic reports from the independent auditor regarding the
auditor's independence, discuss such reports with the auditor, and if so
determined by the Audit Committee, recommend that the Board take appropriate
action to satisfy itself of the independence of the auditor.
10. Evaluate together with the Board the performance of the independent auditor
and, if so determined by the Audit Committee, recommend that the Board
replace the independent auditor.
11. Meet with the independent auditor prior to the audit to review the planning
and staffing of the audit.
12. Discuss with the independent auditor the matters required to be discussed
by Statement on Auditing Standards No. 61 relating to the conduct of the
audit.
13. Review with the independent auditor any problems or difficulties the
auditor may have encountered and any management letter provided by the
auditor and the Company's response to that letter. Such review should
include:
A-1
<PAGE> 18
(a) Any difficulties encountered in the course of the audit work,
including any restrictions on the scope of activities or access to
required information.
(b) Any changes required in the planned scope of the internal audit.
14. Prepare the report required by the rules of the Securities and Exchange
Commission to be included in the Company's annual proxy statement.
15. Advise the Board with respect to the Company's policies and procedures
regarding compliance with applicable laws and regulations.
16. Review with the Company's general counsel legal matters that may have a
material impact on the financial statements, the Company's compliance
policies and any material reports or inquiries received from regulators or
governmental agencies.
17. Meet at least annually with the chief financial officer and the independent
auditor in separate executive sessions, with no other parties present.
While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements are complete and
accurate and are in accordance with generally accepted accounting principles.
This is the responsibility of management and the independent auditor. Nor is it
the duty of the Audit Committee to conduct investigations, to resolve
disagreements, if any, between management and the independent auditor or to
assure compliance with laws and regulations.
Approved by the Audit Committee of Valley National Gases June 2, 2000.
A-2
<PAGE> 19
ANNEX B
FORM OF PROXY
[FRONT]
VALLEY NATIONAL GASES INCORPORATED
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Robert D. Scherich and Lawrence E. Bandi, or
either of them, the true and lawful attorneys in fact, agents and proxies of the
undersigned to represent the undersigned at the Annual Meeting of the
Shareholders of VALLEY NATIONAL GASES INCORPORATED (the "Company") to be held on
Tuesday, October 24, 2000, commencing at 9:00 a.m., Wheeling time, at Oglebay
Resort and Conference Center, Wheeling, West Virginia 26003, and at any
postponement or adjournment of said meeting, and to vote all the shares of
Common Stock of the Company standing on the books of the Company in the name of
the undersigned as specified below and in the discretion of any such person on
such other business as may properly come before the meeting and any postponement
or adjournment thereof.
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF SAID NOMINEES AS DIRECTORS AND IN THE
DISCRETION OF THE PROXIES ON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING AND ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
(continued and to be signed on reverse side)
FOLD AND DETACH HERE
<PAGE> 20
FORM OF PROXY
[BACK]
MARK CHOICE AS INDICATED IN THIS EXAMPLE [X]
MANAGEMENT RECOMMENDS A VOTE FOR THE FOLLOWING:
1. Election of Three Directors
FOR NOMINEES LISTED (EXCEPT AS MARKED TO THE CONTRARY) [ ]
WITHHOLD AUTHORITY TO VOTE FOR NOMINEES LISTED [ ]
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR A NOMINEE, STRIKE A LINE
THROUGH THE NOMINEE'S NAME ON THE LIST BELOW.)
Nominees: For term expiring in 2003:
Ben Exley, IV
William A. Indelicato
August Maier
The undersigned hereby acknowledges receipt of the 2000 Annual Report to
Shareholders and the Notice of said Annual Meeting and accompanying Proxy
Statement.
Please sign as registered and return promptly in the enclosed envelope to:
Valley National Gases Incorporated, c/o American Stock Transfer Company, 40 Wall
Street, 46th Floor, New York, New York 100005.
Dated this day of , 2000
--------------------------------------
(If Stock is owned in
joint names, both owners
must sign, or if owned
by a corporation,
partnership or trust,
this Proxy must be
signed by an authorized
officer, partner or
trustee.) If the address
at left is incorrect,
please write in the
correct information.
FOLD AND DETACH HERE
