<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held January 27, 1998
TO THE HOLDERS OF COMMON STOCK OF
CASCADE NATURAL GAS CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders of Cascade
Natural Gas Corporation will be held at offices of the Company located at 230
Fairview Avenue North, Seattle, Washington 98109, on Tuesday, January 27, 1998,
at 1:30 in the afternoon for the following purposes:
1. Elect directors to hold office until the next Annual Meeting and until
their successors are elected and qualified; and
2. Transact such other business as may properly come before the meeting or any
adjournments thereof.The close of business on November 25, 1997 has been fixed
as the record date for the determination of Shareholders entitled to notice of
and to vote at said Annual Meeting or any adjournments thereof.
Holders of the Common Stock of the Company are entitled to vote upon all the
matters set forth in this notice. By Order of the Board of Directors
Seattle, Washington LARRY C. ROSOK
December 3, 1997 Corporate Secretary
IMPORTANT
To assure a proper representation at the meeting, each shareholder is urged to
complete, sign and return the enclosed proxy promptly, using the accompanying
postage prepaid and addressed envelope.
<PAGE>
CASCADE NATURAL GAS CORPORATION
222 FAIRVIEW AVENUE NORTH, SEATTLE, WA 98109
PROXY STATEMENT
TO THE SHAREHOLDERS OF CASCADE NATURAL GAS CORPORATION
This proxy statement is furnished in connection with the solicitation by the
Board of Directors of the Company of proxies to be voted at the Annual Meeting
of the Shareholders ("Annual Meeting") to be held on Tuesday, January 27, 1998,
for the purposes set forth in the accompanying Notice of Annual Meeting, and
will be mailed on or about December 15, 1997.
A form of proxy is enclosed for use at the meeting. A Shareholder giving a proxy
has the power to revoke it at any time before it is exercised. A proxy may be
revoked by delivering written notice of revocation to Larry C. Rosok, Corporate
Secretary, Cascade Natural Gas Corporation, 222 Fairview Avenue North, Seattle,
Washington 98109, or by filing a duly executed proxy card bearing a later date.
The powers of the proxy holders will be suspended if the person executing the
proxy is present at the meeting and elects to vote in person. The persons named
in the accompanying proxy card will vote as directed by the proxy or, in the
absence of such direction, as set forth below with respect to the election of
directors and in their discretion as to other items of business which may come
before the meeting.
On November 25, 1997, the Company had outstanding 10,994,812 shares of $1 par
value Common Stock ("Common Stock"). Each holder of record of Common Stock
("Shareholder") at the close of business on November 25, 1997, is entitled to
one vote for each share then held and to cumulate votes in the election of
directors. A majority of the shares entitled to vote, represented in person or
by proxy, will constitute a quorum at the meeting. If a quorum is present,
shares represented at the meeting but not voted (such as shares held by a broker
or other nominee who does not have authority to vote on the matter) and shares
voted as abstaining will not affect the outcome of the matter.
ELECTION OF DIRECTORS
Nine directors will be elected at the Annual Meeting, each to hold office until
the next Annual Meeting or until his or her successor is elected and qualified.
The nominees elected will be those receiving the largest number of votes cast by
all shares entitled to vote in the election, up to the number of directors to be
elected. All of the nominees listed below presently are serving as directors
and, were elected at the l997 Annual Meeting by over 83% of the shares present
and voting at the meeting. In the event any of the nominees should be
unavailable or unable to serve, the proxy holders may vote for substitute
nominees in their discretion. No circumstances are presently known which would
render any nominee named herein unavailable.
The right to cumulate votes in an election of directors entitles a Shareholder
to as many votes as he or she has shares, multiplied by the number of directors
to be elected (in this case, 9), which votes may then be allocated among the
nominees in such proportion as the Shareholder decides, including casting all
the votes for one nominee. If a Shareholder wishes to cumulate his or her votes,
the proxy card should be marked in any way that the Shareholder desires in order
to (i) indicate clearly that the Shareholder is exercising the right to cumulate
votes and (ii) specify how the votes are to be allocated among the nominees for
director. For example, a Shareholder may write next to the name of each nominee
for whom the Shareholder desires to cast votes, the number of votes to be cast
for such nominee. There are no conditions precedent to the exercise of
cumulative voting rights.
Unless contrary directions are set forth on the proxy card, proxies will be
voted in such a manner as to elect all or as many of the nominees listed as
possible. If either of the "For All Nominees Listed Above" or "Exception"
<PAGE>
boxes is marked or no instructions are given, the named proxies will have
discretionary authority to cumulate votes if they so choose and to allocate
votes among the nominees as they deem appropriate (except for any nominee
specifically excepted by the Shareholder), including not casting any votes for
one or more nominees. Brief statements appear below setting forth the age,
principal occupation, business experience and other information furnished by
each nominee and the year in which he or she first became a director.
CARL BURNHAM, JR. Director since 1990
Attorney at Law
Yturri, Rose, Burnham, Bentz & Helfrich
Mr. Burnham, 58, is an attorney at law and, since 1967, has been a partner of
Yturri, Rose, Burnham, Bentz & Helfrich of Ontario, Oregon, one of the Company's
Oregon counsel.
MELVIN C. CLAPP Director since 1981
Retired
Mr. Clapp, 64, was Chairman and Chief Executive Officer of the Company from
December 1988 until he retired February 1, 1995. Prior to that he was Executive
Vice President since August 1981. Mr. Clapp joined the Company in 1956 and held
positions in district management until moving to the general office in 1969.
THOMAS E. CRONIN Director since 1996
President
Whitman College
Dr. Cronin, 57, has served as President of Whitman College since the summer of
1993. Prior to that, he held the McHugh Professorship of American Institutions
and Leadership at the Colorado College in Colorado Springs. In 1991, he served
as acting President of the Colorado College.
DAVID A. EDERER Director since 1991
Partner
Ederer Investment Company
Mr. Ederer, 54, has been the managing partner since 1974 in Ederer Investment
Company, which invests in privately owned West Coast companies. Since 1978 he
has been the owner or part owner and officer of several privately owned
manufacturing, property management and retail companies.
HOWARD L. HUBBARD Director since 1981
Retired
Mr. Hubbard, 66, was President and a director of Washington Federal Savings Bank
in Hillsboro, Oregon from April 1982 until he retired in December 1991. Prior to
that, Mr. Hubbard was President and a director of Equitable Savings & Loan
Association, Portland, Oregon, since 1975.
<PAGE>
W. BRIAN MATSUYAMA Director since 1988
Chairman and Chief Executive Officer
Cascade Natural Gas Corporation
Mr. Matsuyama, 51, Chairman and Chief Executive Officer since February 1, 1995,
was President since 1988. From 1987 to 1988, he was Vice President and General
Counsel of the Company. Prior to 1987, he was a member of the law firm of Jones
Grey & Bayley, P.S., Seattle, Washington, with his principal client
representation being on behalf of the Company.
LARRY L. PINNT Director since 1995
Retired
Mr. Pinnt, 62, was Chief Financial Officer of US WEST Communications, Inc. from
1979 until he retired in September 1989. Mr. Pinnt currently serves on the Board
of Trustees of the following publicly held mutual fund trusts: SAFECO Common
Stock Trust, SAFECO Tax-Exempt Bond Trust, SAFECO Money Market Trust, SAFECO
Resource Series Trust, and SAFECO Institutional Series Trust.
BROOKS G. RAGEN Director since 1984
Chairman and Chief Executive Officer
Ragen MacKenzie Incorporated
Mr. Ragen, 64, has been a Director of Ragen MacKenzie Incorporated since April
1986. From November 1988 until April 1996 he served as Chairman and Chief
Executive Officer of Ragen MacKenzie Incorporated, an investment banking firm
headquartered in Seattle, Washington, since November 1988. Prior to that, he was
President of Cable, Howse & Ragen, the predecessor to Ragen MacKenzie
Incorporated, since July 1987 and was Managing Partner of Cable, Howse & Ragen
from July 1982.
MARY A. WILLIAMS Director since 1983
Retired
Mrs. Williams, 63, has been retired since 1996. Prior to that she was a
consultant since 1983. Prior to that she was a Vice President of Seattle Trust &
Savings Bank from 1977 to 1983.
BOARD AND COMMITTEE MEETINGS
The Board of Directors and the Executive Committee of the Board each met four
times during the fiscal year ended September 30, 1997. Directors standing for
election had excellent attendance records at meetings of the Board and
committees on which they served during fiscal year 1997.
The Board has established an Executive Committee, an Audit Committee, a
Nominating and Compensation Committee, a Long Range Planning Committee and a
Pension Committee, whose members are as follows:
<TABLE>
<CAPTION>
Nominating and
Executive Audit Compensation Pension Long Range Planning
<S> <C> <C> <C> <C>
W. Brian Matsuyama, Ch. Mary A. Williams, Ch. Brooks G. Ragen, Ch. M. C. Clapp, Ch. W. Brian Matsuyama, Ch.
M. C. Clapp Thomas E. Cronin Carl Burnham, Jr. Thomas E. Cronin Carl Burnham, Jr.
David A. Ederer Larry L. Pinnt David A. Ederer Howard L. Hubbard M. C. Clapp
Brooks G. Ragen Brooks G. Ragen Mary A. Williams Larry L. Pinnt Howard L. Hubbard
Mary A. Williams Brooks G. Ragen
</TABLE>
<PAGE>
The Audit Committee, which met four times during the fiscal year ended September
30, 1997, recommends the engagement of the Company's independent accountants,
reviews with the independent accountants the plan for and results of the
auditing engagement, reviews the scope and results of the Company's procedures
for internal auditing, and reviews the adequacy of the Company's system of
internal accounting controls.
The Nominating and Compensation Committee, which held three meetings during the
fiscal year ended September 30, 1997, is responsible for recommending candidates
for seats on the Board of Directors, as well as recommending compensation for
officers and directors. The Committee will consider nominees for director
recommended by Shareholders for the 1999 Annual Meeting if the nominations are
received at the Company's executive offices by August 17, 1998; provided that
such nominations are accompanied by a description of the nominee's
qualifications, relevant biographical information and the nominee's consent to
be nominated and to serve if elected.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership, as of November 25, 1997, of the Company's Common Stock by (a) each
director, the Chief Executive Officer and the other four most highly paid
executive officers of the Company and (b) all directors and executive officers
as a group. None of such persons owned any of the Company's outstanding
preferred shares at that date. The Company is not aware of any beneficial owner
of 5% or more of the Common Stock. The Company believes the beneficial owners of
the shares listed below have sole investment and voting power with respect to
the shares.
Directors and Shares Beneficially Percentage of
Executive Officers Owned (1) Common Stock
O. LeRoy Beaudry 13,215 *
Ralph E. Boyd 8,981 *
Carl Burnham, Jr. 6,494 *
Melvin C. Clapp 15,588(2) *
Thomas E. Cronin 1,072 *
David A. Ederer 22,839(3)(4) *
Howard L. Hubbard 20,900 *
W. Brian Matsuyama 11,072 *
Larry L. Pinnt 3,802 *
Brooks G. Ragen 4,385 (3) *
Jon T. Stoltz 2,965 *
J. D. Wessling 272 *
Mary A. Williams 6,538 *
All directors and
executive officers
as a group (18 persons) 125,818 1.15%
* Less than one percent.
(1) Includes shares held in the Company's Employee Retirement Savings Plan
and Trust (the "401(k) Plan") as follows:
<PAGE>
Mr. Beaudry, 4,901; Mr. Boyd, 2,680; Mr. Matsuyama, 3,560; Mr. Stoltz,
2,293; Mr. Wessling, 272; and all executive officers as a group, 20,249.
(2) Does not include 737 shares owned by the spouse of Mr. Clapp.
(3) Includes shares awarded under the 1991 Director Stock Award Plan to
Messrs. Ederer and Ragen of 2,175 and 839 shares, respectively, including
reinvested dividends, as to which receipt has been deferred until they are no
longer directors.
(4) Does not include 3,000 shares held in trust for benefit of family
members as to which Mr. Ederer acts as Trustee.
SECTION 16 (a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16 of the Securities Exchange Act of 1934, holders of more than 10
percent of the Common Stock and directors and certain officers of the Company
are required to file reports ("Section 16(a) Statements") of beneficial
ownership of Common Stock and changes in such ownership with the Securities and
Exchange Commission. The Company is required to identify in its proxy statements
those persons who to the Company's knowledge were required to file Section 16(a)
Statements and did not do so on a timely basis. Based solely on a review of
copies of Section 16(a) Statements furnished to the Company during and with
respect to its most recent fiscal year and on written representations from
reporting persons, the Company believes that each person who at any time during
the most recent fiscal year was a reporting person filed all required Section
16(a) Statements on a timely basis.
REPORT OF THE NOMINATING AND COMPENSATION COMMITTEETO THE SHAREHOLDERS
The Nominating and Compensation Committee of the Board of Directors is
responsible for reviewing the compensation levels for all officers of the
Company and making recommendations to the Board concerning officer salary
levels. The Committee is composed of four independent non-employee directors.The
Committee's review includes an assessment of the overall stewardship of the
Company and the officers' ability to achieve a reasonable net income under a
variety of conditions. In arriving at its recommendations regarding officer
salary levels, the Committee applied policies and principles which are
essentially subjective in nature, rather than embodying specific criteria. Such
policies and principles may be summarized as follows: Officer compensation
should be comparable with compensation paid to officers of like companies, and
particularly those with which the Company must compete in attracting and
retaining skilled and competent individuals. Officers should also be compensated
for their contributions to the performance of the Company. In evaluating
performance, the Committee considers net income and factors impacting net
income. In a regulated energy business, factors such as weather, interest rates
and regulatory requirements significantly impact net income but are generally
outside the control of management. The Committee also considers progress toward
achieving corporate goals.
In arriving at its most recent salary recommendations, the Committee considered
the compensation paid by other Northwest energy utility companies to their
officers. The Committee took into account the relatively larger size of the
other Northwest utility companies, the greater number of officers involved in
the various management functions of those companies, and the responsibilities of
those officers. The Committee also considered compensation paid by gas
distribution companies of relatively comparable size in other parts of the
country. In addition, the Committee reviewed the impact of the various forms of
incentive compensation, such as bonuses and stock options, utilized by other
utility companies in addition to base salaries. The Company does not have bonus,
stock option or other incentive compensation plans for its officers. Due to the
Company's compensation
<PAGE>
structure, the Committee has not deemed it necessary to adopt a policy regarding
the deductibility of certain executive compensation under federal tax laws.
In determining the fiscal 1997 salary level for W. Brian Matsuyama, Chairman and
Chief Executive Officer of the Company, the Committee considered his
contributions to the performance of the Company and overall effectiveness in
areas critical to the Company's success, such as dealing with the challenges of
rapid growth, resolving regulatory issues, attaining corporate goals, and
enhancing shareholder value as well as the factors affecting net income
discussed above. The Committee also considered Mr. Matsuyama's recommendation
that any salary increase granted to him reflect the same austerity being
practiced throughout the Company. Salary levels of all other named executives
for fiscal 1997 were based on the considerations described above.
Brooks G. Ragen, Chairman
Carl Burnham, Jr.
David A. Ederer
Mary A. Williams
STOCK PERFORMANCE GRAPH
The following graph compares the total cumulative returns to investors in the
Company's Common Stock, the Standard & Poors 500 Stock Index, the Standard &
Poors Utility Index and the Edward Jones Natural Gas Distribution Index for the
period from October 1, 1992 through September 30, 1997. The graph assumes that
$10,000 was invested on September 30, 1992, in the Common Stock and in each of
the above-mentioned indices and that all dividends were reinvested. The total
returns for the 31 companies (of which the Company is one) included in the
Edward Jones Natural Gas Distribution Index have been weighted by their
respective market capitalizations.
CUMULATIVE RETURN TO INVESTORS
Cascade Natural Gas Corporation, S&P 500 Index, S&P Utility Index, and
Edward Jones Natural Gas Distribution Index
(Dividends Reinvested)
<TABLE>
<CAPTION>
Cascade Natural Edward Jones Natural S&P 500 Index S&P Utility Index
Gas Corporation Gas Distribution Index
<S> <C> <C> <C> <C>
Sep-92 $10,000 $10,000 $10,000 $10,000
Sep-93 $12,894 $12,512 $11,294 $12,425
Sep-94 $8,303 $8,816 $10,372 $8,699
Sep-95 $10,985 $11,336 $12,984 $12,750
Sep-96 $11,618 $12,113 $12,028 $10,741
Sep-97 $10,847 $11,815 $14,043 $11,438
</TABLE>
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE. The following table sets forth the compensation paid
to the Chief Executive Officer and each of the other four most highly
compensated executive officers of the Company for the periods indicated. The
Company does not provide compensation in the form of bonuses or long term
compensation. The amounts shown under All Other Compensation represent the
Company's matching contribution to the 401(k) Plan.
<TABLE>
<CAPTION>
Name and Fiscal All
Principal Years Year (a) Other
Position of Service 1997 Salary Compensation
<S> <C> <C> <C> <C>
W. Brian Matsuyama 10 1997 $206,670 $6,565
Chairman and 1996 152,085 3,538
Chief Executive Officer 1995 201,362 4,620
Ralph E. Boyd 32 1997 165,480 6,535
President and 1996 121,770 3,564
Chief Operating Officer 1995 158,569 4,504
Jon T. Stoltz 23 1997 117,720 0
Senior Vice President 1996 86,640 0
1995 117,727 0
O. LeRoy Beaudry 35 1997 113,730 4,697 (a)
Vice President 1996 83,685 2,511
Consumer & Public Affairs 1995 111,080 3,272
J. D. Wessling 3 1997 109,140 4,513
Vice President - Finance & 1996 79,110 2,373
Chief Financial Officer 1995 103,232 2,325
</TABLE>
(a) During 1996 the Company changed its fiscal year to a year ending September
30, 1996. Therefore, the fiscal 1996 compensation covers the nine month period
January 1, 1996 to September 30, 1996. The period commencing January 1, 1996 and
ending September 30, 1996 was the transition period for the change in fiscal
year. For 1997, compensation is for a 12-month period ending September 30, 1997.
Fiscal 1995 compensation is for the calendar year, January 1 through
December 31.
RETIREMENT PLAN. Effective January 1, 1962, the Company adopted a
noncontributory retirement plan for its employees. To be eligible for
participation in the plan, an employee must have one year of service and be 21
<PAGE>
years of age. Each participant's benefits are fully vested after 5 years of
employment. The level of benefits is determined by a formula, described below,
related to average monthly earnings over certain time periods and to years of
service. Covered earnings are straight salary or hourly compensation, plus 75%
of commissions or, for hourly employees, plus 20% of overtime pay. With respect
to the executive officers named in the summary compensation table above, covered
compensation levels are slightly less than, but at least 90% of, the amounts
shown under "Salary" in such table. Benefits are not subject to reduction for
social security or any other benefits. Accruals to the plan are computed on an
actuarial basis and aggregated $1,783,000 for all participants for the fiscal
year ended September 30, 1997.
The amount of the monthly past service benefit under the plan is equal to 1.5%
of the participant's average monthly earnings for the five-year period ended
December 31, 1994, multiplied by the participant's years of service before 1995.
The plan was amended in 1993 to increase the benefit for each year of future
service after 1994 to 2% of monthly compensation in lieu of the previous 1.5%.
The Company from time to time has updated the average monthly earnings used to
compute the benefit, and the plan may be similarly amended in the future.
EXECUTIVE SUPPLEMENTAL RETIREMENT INCOME PLAN. Effective July 1, 1983, the Board
of Directors adopted a plan to provide executive officers, including those
listed in the foregoing summary compensation table, with retirement, death and
disability benefits supplementing the coverage payable under the Company's
retirement plan. This plan was established to enable the Company to attract and
retain highly competent persons in key executive positions. The supplemental
plan is designed so that each participant will receive retirement plan payments,
primary social security benefits and supplemental plan payments each year equal,
in the aggregate, to 70% of the participant's highest annual salary during any
of the five years preceding the participant's retirement. Accruals for the plan
are computed on an actuarial basis and totaled $208,000 for the 1997 fiscal
year.
The plan also contains provisions for early retirement and total and permanent
disability. The Board of Directors may approve early retirement under the plan
without the normally required reduction in the amount of the supplemental
benefit. Participants whose age and number of years of service, when added
together, equal at least 90 are automatically eligible for early retirement
benefits without reduction.
If a participant dies before receiving 120 monthly payments from the plan, the
participant's designated beneficiaries will receive the remaining balance of the
120 payments. The monthly payment is the amount the participant was receiving or
was entitled to receive before death, or, if the participant was employed by the
Company at death and the result would be larger, a monthly amount ranging from
$4,000 to $12,000, depending on the officer. This monthly death benefit is
reduced by any monthly benefit payable to the participant's surviving spouse.
The surviving spouse is entitled to a monthly benefit for life equal to one-half
the benefit to which the participant was entitled before death.
The plan was amended in 1996 to permit newly eligible employees to participate
on the first of the month after they become eligible, to determine vesting based
on years of participation that are measured from the date an employee becomes a
participant, to provide full and immediate vesting in the event of a change in
control (as defined), to provide severance benefits that would otherwise be
payable under the employment agreements (described below) following a change in
control and to update the death benefits payable if the participant dies while
still employed by the Company.
The plan was revised in 1997 to provide for partial vesting on a stepped basis,
with full vesting based on age and years of employment. The executive fully
vests when he or she reaches age 55 and has completed five years of
participation under the plan or seventeen years of employment with the Company,
upon death, or a change in control.
<PAGE>
The following table illustrates the estimated combined annual benefits that
would be received under the Company's Retirement Plan and the Executive
Supplemental Retirement Income Plan for the executives named in the Summary
Compensation Table above assuming that annual salaries increase at the annual
rate of 5% until retirement and that they retire at age 65. Amounts shown are
reduced by the estimated amount of social security benefits.
Present Estimated Combined
Name Age Annual Benefit
W. Brian Matsuyama 51 $255,000
Ralph E. Boyd 60 $127,000
Jon T. Stoltz 51 $138,000
O. LeRoy Beaudry 59 $ 87,000
J. D. Wessling 54 $103,000
EMPLOYMENT AGREEMENTS. The Company has employment agreements with seven of the
Company's executive officers, including the persons named in the summary
compensation table above other than Messrs. Boyd and Beaudry. The purpose of the
agreements is to assure that key management personnel will continue to function
effectively and without distraction if uncertainties regarding the future
control of the Company should arise. Upon a change in control of the Company or
during the pendency of certain offers for a change in control, as these terms
are defined in the agreements, each such officer is entitled to receive the
severance benefits described below if the Company terminates the officer's
employment other than for cause as defined in the agreements. In addition, for a
period of three years after a change in control of the Company, the officer
shall be entitled to receive severance benefits if the Company terminates the
officer's employment other than for cause or if the officer terminates his or
her employment with good reason. The payments on severance are equal to three
times the officer's base salary and incentive compensation at the time the
change in control occurs, but are reduced to the extent required to avoid
subjecting the payments to penalty taxes on parachute payments. In addition, the
employee is entitled to continue to participate in health, life, and disability
plans in which the officer could participate when employment terminated. The
entitlement to severance payments terminates upon the vesting of the officer's
benefits under the Executive Supplemental Retirement Income Plan. As a result of
the changes in 1996 to the Executive Supplemental Retirement Income Plan
regarding vesting, severance payments will be made under the plan, rather than
under the employment agreements.
Each agreement is automatically extended one year on December 31 of each year
unless by 30 days notice prior to year end either party elects not to extend the
term. The term of the agreements is extended automatically for a period of three
years upon a change in control of the Company. Notwithstanding the foregoing,
each agreement terminates if the employment of the officer who is a party is
terminated before a change in control occurs and while there is no offer pending
for a change in control.
SUPPLEMENTAL BENEFIT TRUST. Although not obligated to do so, the Company
established a trust to fund some of the benefits which may be payable under the
Executive Supplemental Retirement Income Plan. The trust also funds severance
benefits which may be payable under the above described employment agreements
with certain executives. The Company has contributed to the trust life insurance
policies on the lives of participants. If the assumptions as to mortality
experience, interest and policy dividends are correct, the Company will
recapture the premiums and net cost of benefits paid under the supplemental plan
through operation of the insurance contracts.
The Company is obligated to pay any benefits not paid out of the trust. In the
event of certain circumstances,
<PAGE>
including a change in control, as defined, the Company may be obligated to fund
the trust with additional amounts for some or all of the following purposes: to
permit payment of benefits from the supplemental plan and the employment
agreements due in the following 12 months, to fund separate subtrusts for legal
expenses (including certain legal expenses to require the Company to make
required contributions to the trust), and to permit payment of insurance
premiums and policy loan interest.
DIRECTOR COMPENSATION. For the fiscal year ended September 30, 1997, the Company
paid each non-employee director an annual stipend of $5,000 as well as a fee of
$500 for each Board or Committee meeting attended, except that the Committee fee
was $250 if the meeting was held on the same day as a Board meeting. Employee
directors receive no additional compensation for serving as directors. Each
non-employee director was also entitled to receive 300 shares of the Company's
common stock for service in fiscal 1997 pursuant to the 1991 Director Stock
Award Plan. Pursuant to the plan, each non-employee director may elect to defer
receipt of his or her shares until he or she is no longer a member of the Board
of Directors; Mr. Ederer so elected for 1997. Pursuant to a policy adopted by
the Board of Directors in 1995, each non-employee director used his or her
annual stipend to purchase the Company's common stock.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1997, Messrs. Burnham, Ederer and Ragen and Ms. Williams served on the
Nominating and Compensation Committee.
Carl Burnham, Jr., a director, is a partner in the law firm of Yturri, Rose,
Burnham, Bentz & Helfrich, one of the Company's Oregon counsel, which firm
received $1,072.25 in 1997 for legal services to the Company.
INDEPENDENT PUBLIC ACCOUNTANTS
The Company has selected the firm of Deloitte & Touche LLP as its principal
independent public accountant for the current year. Deloitte & Touche LLP and
its predecessor Touche Ross & Co. has served as the Company's principal
independent accountant since 1953. It is anticipated that representatives of
Deloitte & Touche LLP will be present at the Annual Meeting. They will be
afforded an opportunity to make a statement if they desire to do so and will be
available to respond to questions from the Shareholders.
SOLICITATION OF PROXIES
The solicitation of proxies will be principally by use of the mails. In
following up the original mail solicitation, the Company will arrange with
banks, brokerage houses, and other custodians, nominees and fiduciaries, to
forward copies of the proxy, proxy statement and annual report to persons for
whom they hold stock of the Company and to request authority for the execution
of proxies. In such cases, the Company will reimburse such banks, brokerage
houses, custodians, nominees and fiduciaries for their expenses incurred in
connection therewith. The entire cost of soliciting proxies will be borne by the
Company. The Company may also use its regular employees to solicit proxies from
Shareholders either personally or by telephone or letter without additional
compensation.
ANNUAL REPORT
The Company's annual report for the fiscal year ended September 30, 1997 is
enclosed. Information for the nine months ended September 30, 1996 and the
calendar year 1995 is included in the report. The report also provides
information for 12-month periods ending September 30, 1996 and 1995.
SHAREHOLDER PROPOSALS
<PAGE>
Proposals of Shareholders for presentation at the 1999 Annual Meeting of
Shareholders must be received by the Company by August 17, 1998, for inclusion
in the Company's proxy statement and form of proxy relating to that meeting.
Such proposals must also comply with the requirements of the Securities and
Exchange Commission relating to proposals of security holders.
OTHER MATTERS
The Company does not know of any matters to come before the meeting, other than
those set forth in the proxy statement. If any further business is presented to
the meeting, the holders of the proxies solicited hereby will vote on behalf of
the Shareholders they represent in their discretion.
By Order of the Board of Directors
Seattle, Washington LARRY C. ROSOK
December 3, 1997 Corporate Secretary
CASCADE NATURAL GAS CORPORATION
222 Fairview Avenue North
Seattle, Washington 98109
<PAGE>
W. B. MATSUYAMA
CHAIRMAN & CEO
CASCADE NATURAL GAS CORPORATION
Dear Shareholders:
It is my pleasure to invite you to the 1998 Annual Meeting of Shareholders of
Cascade Natural Gas Corporation. The meeting will be held at 1:30 p.m. on
Tuesday, January 27, 1998 at the offices of the Corporation, 230 Fairview
Avenue North, Seattle, Washington. Limited parking is available at our 222
Fairview Avenue North building, next door to the meeting location.
A map is printed on the reverse side of this form to assist you in locating
our office and the available parking areas.
The Notice of the meeting and the Proxy Statement on the following pages
cover the formal business of the meeting, which includes election of
Directors, and any other business to properly come before the meeting.
It is important that your shares are represented at this meeting, whether or
not you attend the meeting in person, and regardless of the number of shares
you own. To be sure your shares are represented, we urge you to complete and
mail the attached proxy card as soon as possible.
Sincerely,
/s/ W. Brian Matsuyama
December 3, 1997
W. Brian Matsuyama
PLEASE DETACH PROXY CARD HERE
TRIANGLE TRIANGLE
/ /
1. Election of Directors
FOR all nominees / /
listed below
WITHHOLD AUTHORITY to vote / /
for all nominees listed below
*EXCEPTIONS / /
Nominees: C. Burnham, Jr., M. C. Clapp, T. E. Cronin, D. A. Ederer, H. L.
Hubbard, W. B. Matsuyama, L. L. Pinnt, B. G. Ragen and M. A. Williams
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
THE "EXCEPTIONS" BOX AND STRIKE A LINE THROUGH THAT NOMINEE'S NAME.)
2. Transaction of such other business as may properly come before the meeting
or any adjournments thereof.
CHANGE OF ADDRESS AND
OR COMMENTS MARK HERE
Please Read Other Side Before Signing.
Sign exactly as name appears hereon.
Attorneys-in-fact, executors, trustees,
guardians, corporate officers etc. should
give full title. If shares are held jointly,
each holder should sign.
Dated , 199
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(Signature)
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(Signature)
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[MAP]
CASCADE NATURAL GAS CORPORATION
222 FAIRVIEW AVENUE NORTH, SEATTLE, WASHINGTON 98109
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Ralph E. Boyd and W. Brian Matsuyama, and
each or any of them proxies for the undersigned, with power of substitution,
to vote with the same force and effect as the undersigned at the Annual
Meeting of the Common Shareholders of Cascade Natural Gas Corporation, 230
Fairview Avenue North, Seattle, Washington, on Tuesday, January 27, 1998, and
at any adjournments thereof, upon the matters more fully set forth in the
accompanying Notice of Annual Meeting.
THE SHARES REPRESENTED BY THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN
THE MANNER DIRECTED ON THE OTHER SIDE BY THE UNDERSIGNED SHAREHOLDER. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS. If
any other business properly comes before the meeting, the proxies named above
will have discretionary authority to vote thereon in accordance with their
best judgment.
CASCADE NATURAL GAS CORPORATION
P.O. BOX 11297
NEW YORK, N.Y. 10203-0297
