Corning Natural Gas Corporation
330 W. William Street
P.O. Box 58
Corning, New York 14830
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held on Thursday, February 13, 1997
Corning, New York
January 16, 1997
To the Common Stockholders of
Corning Natural Gas Corporation
Notice is hereby given that the Annual Meeting of
Stockholders of Corning
Natural Gas Corporation will be held at the office of the
Company, 330 W.
William Street, in the City of Corning, New York, on Thursday,
February 13, 1997
at 10:30 A.M., local time, for the following purposes:
(1) To fix the number of Directors at seven and to elect a
Board of
Directors for the ensuing year.
(2) To transact such other business as may properly come
before the
meeting.
The stock transfer books will not be closed, but only common
stockholders
of record at the close of business on January 9, 1997 will be
entitled to vote
at the meeting or any adjournment thereof.
You are cordially invited to attend the meeting and vote
your shares. In
the event that you cannot attend, please date, sign and mail the
enclosed proxy
in the enclosed self-addressed envelope. A stockholder who
executes and returns
a proxy in the accompanying form has the power to revoke such
proxy at any time
prior to the exercise thereof.
By Order of the Board of
Directors
PHYLLIS J. GROEGER, Secretary
CORNING NATURAL GAS CORPORATION
PROXY STATEMENT
January
16, 1997
By Whom Proxy Solicited and Solicitation Expenses. The
accompanying proxy
is solicited by the Board of Directors of the Company for use at
the Annual
Meeting of Stockholders to be held on Thursday, February 13,
1997. Proxies in
substantially the accompanying form, properly executed and
received prior to or
delivered at the meeting and not revoked, will be voted in
accordance with the
specification made. The expense of soliciting proxies will be
borne by the
Company.
The approximate date upon which this proxy statement and the
accompanying
proxy will first be mailed to stockholders is January 16, 1997.
Right to Revoke Proxy. Any stockholder giving the proxy
enclosed with this
statement has the power to revoke it at any time prior to the
exercise thereof.
Such revocation may be by writing (which may include a later
dated proxy)
received by the Office of the Secretary, Corning Natural Gas
Corporation, 330 W.
William Street, P.O. Box 58, Corning, New York, 14830, no later
than February
12, 1997 if by mail, or prior to the exercise thereof if
delivered by hand.
Such revocation may also be effected orally at the meeting prior
to the exercise
of the proxy.
Proposals of Stockholders. Stockholders' proposals intended
to be
presented at the 1998 Annual Meeting of Stockholders must be
received by the
Office of the Secretary, Corning Natural Gas Corporation, 330 W.
William Street,
P.O. Box 58, Corning, New York 14830, by September 5, 1997.
Voting Securities Outstanding. There were 460,000 shares of
common stock
outstanding and entitled to vote on January 9, 1997 (the "Record
Date"). Each
share of common stock is entitled to one vote. Only stockholders
of record on
the Record Date are entitled to notice of and to vote at the
meeting or any
adjournment thereof.
Abstentions and broker non-votes are each included in
calculating the
number of shares present and voting for purposes of determining
quorum
requirements. However, each is tabulated separately.
Abstentions are counted
in tabulating the votes cast on proposals presented to
shareholders, whereas
broker non-votes are not counted for purposes of determining
whether a proposal
has been approved.
The following table sets forth the shares of the Company's
common stock,
and the percent of total outstanding shares represented thereby,
beneficially
owned* by the nominees for director of the Company, the Chief
Executive Officer
of the Company, all directors and officers as a group, and all
persons or groups
known to the Company to beneficially own more than 5% of such
stock.
* As used in this Proxy Statement, "beneficial ownership"
includes direct or
indirect, sole or shared power to vote, or to direct the
voting of, and/or
investment power to dispose of, or to direct the disposition
of, shares of
the common stock of the Company. Except as otherwise
indicated in the
footnotes below, the listed beneficial owners held direct
and sole voting
and investment power with respect to the stated shares.
Shares of Stock
Beneficially Owned
Directly or Indirectly
Percent
Beneficial Owners as of September 30, 1996
of Class
J. Edward Barry (Director) 45,999(1)
10.0%
330 W. William Street
Corning, New York
Thomas K. Barry (Director and 14,181(2)
3.1%
Chief Executive Officer)
330 W. William Street
Corning, New York
Thomas H. Bilodeau (Director) 3,788(3)
0.8%
1648 Jupiter Cove Dr., Apt. 312
Jupiter, Florida
Bradford J. Faxon (Director) 26,210(4)
5.7%
225 Hix Bridge Road
Westport, Massachusetts
Jay A. Finley (Director) 13,900(5)
3.0%
27 Spring Terrace
Corning, New York
Liselotte R. Lull and 45,029(6)
9.8%
Robert E. Lull
231 Watauga Avenue
Corning, New York
Jack R. McCormick (Director) 1,469(7)
0.3%
2560 Riverside Avenue
Somerset, Massachusetts
Donald R. Patnode (Director) 13,753(8)
3.0%
91 Stage Harbor Road
Chatham, Massachusetts
All directors and officers 122,197(9)
26.4%
of the Company, twelve persons
as a group
(1) Includes 25,066 shares held in trust, with respect to which
J. Edward Barry
has shared voting and investment power, and 20,933 shares
beneficially
owned and held in trust on behalf of Virginia S. Barry, with
respect to
which J. Edward Barry also has shared voting and investment
power.
Percentage reflects rounding; actual percentage is less than
10 percent.
(2) Includes indirect beneficial ownership of 1,000 shares owned
by children of
Thomas K. Barry, and as to which Thomas K. Barry has shared
voting and
investment power. Also includes 1,000 shares owned by a
daughter of Thomas
K. Barry, as to which shares Mr. Barry disclaims beneficial
ownership.
(3) All shares are held in trusts and Mr. Bilodeau is a
beneficiary or
contingent beneficiary of such trusts.
(4) Includes indirect beneficial ownership of 5,431 shares owned
by children of
Bradford J. Faxon, and as to which Bradford J. Faxon has
shared voting and
investment power.
(5) Includes indirect beneficial ownership of 6,900 shares owned
by Gertrude C.
Finley, who has sole voting and investment power over such
shares.
(6) Includes 23,378 shares owned by Liselotte R. Lull and 21,651
shares owned
by Robert E. Lull.
(7) All shares are owned jointly with Madeline McCormick.
(8) Includes 1,559 shares owned by spouse, who has sole voting
and investment
power over such shares. Also includes 6,994 shares held in
two trusts, of
which Donald R. Patnode is co-trustee.
(9) Aggregate record or imputed beneficial ownership, with sole
or shared
voting or investment power.
Election of Directors. (Proposal No. 1) It is the
intention of the
persons named in the enclosed proxy to vote the shares
represented by the proxy
to fix the number of directors at seven and to elect the nominees
listed below
to serve until the next Annual Meeting of Stockholders and until
their
successors are duly elected and qualified. In the event of a
vacancy in the
list of nominees, an event which the Board of Directors does not
anticipate, the
holders of the proxies will vote for the election of a nominee
acceptable to the
remaining nominees. The directors must be elected by a plurality
of votes cast.
The following is a brief description of each nominee, including
his principal
employment or professional experience for the past five years.
J. Edward Barry, 84, Consultant to the Company. Former
Chairman of
the Board of Directors 1975 - 1993. A Director since 1953
and Chairman of
the Executive and Pension Fund Committees. Father of Thomas
K. Barry,
Chairman of the Board, Chief Executive Officer and President
of the
Company.
Thomas K. Barry, 51, Chairman of the Board of Directors
since 1993,
President of the Company since 1983, Chief Executive Officer
since 1984. A
Director since 1983 and a member of the Executive and
Pension Fund
Committees. A Director of Fall River Gas Company. Son of
J. Edward Barry,
Consultant to the Company.
Thomas H. Bilodeau, 54, Vice President - Finance,
Medical &
Environmental Coolers, Inc. since 1990. A Director since
1984 and a member
of the Compensation and Audit Committees. A Director of
Fall River Gas
Company.
Bradford J. Faxon, 58, Chairman of the Board of
Directors, President
and Director of Fall River Gas Company since 1986. A
Director since 1984,
Chairman of the Compensation Committee and a member of the
Pension Fund
Committee.
Jay A. Finley, 81, Retired; former President of the
Company, 1977-
1983. A Director since 1975 and a member of the Executive
Committee.
Jack R. McCormick, 72, Utility Consultant; current
Director and former
President (1974-1986) of Fall River Gas Company. A Director
since 1985 and
a member of the Audit Committee.
Donald R. Patnode, 67, Retired; former President of
Industrial Filters
and Equipment Corporation 1989-1994. A Director since 1964,
Chairman of the
Audit Committee and a member of the Compensation Committee.
Director also
of Fall River Gas Company.
The Board of Directors does not have a standing nominating
committee, or
any committee performing similar functions. The Board of
Directors has a
standing Audit Committee, of which Messrs. D.R. Patnode, J.R.
McCormick and T.H.
Bilodeau are the members, the function of which is to recommend
the selection of
independent auditors, review the plan and results of the
independent audit and
approve each professional service provided by the independent
auditors. The
Audit Committee had one meeting in 1996. The Board of Directors
also has a
standing Compensation Committee, of which Messrs. D.R. Patnode,
B.J. Faxon and
T.H. Bilodeau are the members. This committee met once during
1996. This
committee reviews officer performance and duties and decides upon
appropriate
remuneration. The Board of Directors met four times in 1996.
Each Director
attended more than 75% of the aggregate number of meetings of the
Board and
committees on which he served during the year.
At the most recent annual meeting of stockholders of the
Company, held on
April 23, 1996, out of a total of 460,000 shares entitled to vote
at the
meeting, 425,756 shares (92.6% of the total) were actually voted
at the meeting
with respect to the election of Directors. Nominees proposed for
election by
the Board of Directors were elected by requisite vote at such
meeting. Each
nominee received an affirmative vote of over 99% of the votes
cast.
Cash Compensation of Executive Officers. The following
table sets forth
the compensation paid or accrued by the Company and its
subsidiary during the
fiscal years ended December 31, 1994, 1995 and September 30, 1996
to the
Company's Chief Executive Officer. Other than the Chief
Executive Officer, no
other executive officer of the Company was paid an annual salary
and bonus in
1996 that aggregated $100,000. Although only principal
capacities are listed,
the compensation figures include all compensation received in any
capacity,
including directorships, for services rendered during the fiscal
years
indicated.
SUMMARY COMPENSATION TABLE
Annual Compensation(1)
Name and
Other Annual
Principal Position Year Salary Bonus
Compensation
Thomas K. Barry 1996 $106,800(2) ---
$ 2,970 (2)
President and Chief 1995 134,967 ---
3,721
Executive Officer 1994 126,667 ---
3,512
(1) The Company did not pay any long-term compensation to its
Chief Executive
Officer or to its other executive officers during the fiscal
years ended
December 31, 1994, 1995 and September 30, 1996.
(2) 1996 amounts reflect compensation received with respect to
the Company's nine month 1996 fiscal year (ended September
30, 1996) that result from the adoption by the Company of a
fiscal year-end of September 30 instead of December 31 each
year.
A description of the executive officers, other than Mr.
Thomas K. Barry,
for whom a description is provided above, is set forth below.
Kenneth J. Robinson (age 52) is Executive Vice President.
Mr. Robinson
joined the Company in 1978 as an accountant. Most recently he
served as
Financial Vice President and Treasurer for 4 years and in his
current position
for 5 years.
Edgar F. Lewis (age 59) is Senior Vice President -
Operations. Mr. Lewis'
career with the Company dates back to 1956. He has been in
charge of operations
for the past 24 years; 16 years in his current position.
Thomas S. Roye (age 42) is Vice President - Administration.
Mr. Roye has
served 5 years in his current position and was previously
Assistant Treasurer &
Assistant Secretary. He has prior utility experience and
accounting education
and has been employed since 1978.
Gary K. Earley (age 42) is Treasurer. Mr. Earley has been a
practicing
accountant since 1976. He joined the firm in 1987 as an
accountant in the rates
and regulations department and has served as Treasurer for the
past 5 years.
Phyllis J. Groeger (age 55) is Corporate Secretary. Mrs.
Groeger has been
employed since 1973 in a number of positions advancing to
Assistant Secretary in
1986 and has been Secretary of the Company for the past 9 years.
Compensation Pursuant to Plans. The Company has entered
into separate
supplemental benefits agreements with Thomas K. Barry and one
other executive
officer (collectively, the "Supplemental Benefits Agreements"),
which provide
that the officer covered thereby and retiring after the age of 62
is entitled to
receive monthly payments equal to 35% of such officer's monthly
salary at
retirement for either life or 180 months, whichever is longer.
Such amount
payable shall increase by 4% annually on the anniversary date of
such officer's
retirement. Retirement benefits otherwise available upon
retirement at age 62
under the Supplemental Benefits Agreements are reduced
cumulatively by 4% for
each year prior to age 60 in which the covered officer retires;
provided,
however, that an officer covered under a Supplemental Benefits
Agreement
receives no retirement benefits thereunder in the event that such
officer
retires before age 55. Furthermore, the Supplemental Benefits
Agreements
provide that in the event that an officer covered by a
Supplemental Benefits
Agreement dies prior to retirement, such officer's designated
beneficiary is
entitled to receive monthly payments equal to 50% of such
officer's monthly
salary at death for 180 months.
The Company has also entered into an additional, more
limited, Supplemental
Benefits Agreement with one other employee, which contains terms
similar to the
foregoing agreements. However, such limited Supplemental
Benefits Agreement
provides for monthly payments equal to 20% of the subject
employee's monthly
salary in the event of retirement, monthly payments equal to 35%
of his monthly
salary in the event of his death prior to retirement, and does
not include an
annual escalator.
Eligibility to enter into a Supplemental Benefits Agreement,
or equivalent
thereof, is based upon employee performance, service and value to
the Company;
such eligibility is determined on an individual basis by the
Board of Directors.
Currently, Mr. Thomas K. Barry and two other executive officers
(as discussed,
above) are the only employees of the Company covered by a
Supplemental Benefits
Agreement, and no payments have been made to date under such
agreements. The
Supplemental Benefits Agreements are in addition to the amounts
shown in the
Summary Compensation Table and are not subject to limitation. As
of September
30, 1996, the estimated annual benefits payable under a
Supplemental Benefits
Agreement upon retirement at the normal retirement age for Mr.
Thomas K. Barry
are $ 45,413.
The Company also maintains the Corning Natural Gas
Corporation Employees
Savings Plan (the "Savings Plan"). All non-union employees of
the Company who
work for more than 1,000 hours per year and who have completed
one year of
service may participate in the Savings Plan as of the following
January 1 or
July 1. Under the Savings Plan, participants may contribute up
to 15% of their
wages. The Company will match one-half of the participant's
contributions up to
a total of 3% of the participant's wages. Company matching
contributions vest
in the participants at a rate of 20% per year and become fully
vested after five
years. Participants may select one of five investment plans, or
a combination
thereof, for their account. Distribution of amounts accumulated
under the
Savings Plan occurs upon the termination of employment or death
of the
participant. The Savings Plan also contains loan and hardship
withdrawal
provisions. During the nine month fiscal year ended September
30, 1996, no
amounts were distributed to executive officers under the Savings
Plan. Mr.
Thomas K. Barry had $2,970 accrued to his account under the
Savings Plan during
said period. This accrual is included in the figures appearing
in the summary
compensation table on page 4.
Compensation of Directors. The current annual Director's
compensation is
$5,000. In addition, Directors are paid $300 for each Board
meeting attended.
Additionally, the chairmen of the Board's Executive, Audit,
Compensation and
Pension Fund committees and those directors who serve on more
than one committee
receive an annual fee of $1,500 for such services. Committee
members other than
the chairmen are paid $1,000 annually for their services, subject
to the
limitation that no committee chairman or member may receive more
than $1,500
annually for such services regardless of the number of committees
on which he
serves.
As allowed by New York law, the Company currently has in
effect an
insurance policy, with an effective date of June 1, 1996, with
National Union
Fire Insurance Company for the indemnification of officers and
directors at an
annual premium cost of $ 43,000.
Employment Contracts and Termination of Employment and
Change-in-Control
Arrangements. In January of 1992, the Company entered into an
employment
contract with its President and Chief Executive Officer, Mr.
Thomas K. Barry.
Under the terms of such employment contract, Mr. Barry is
compensated for his
duties as an officer and director with such salary as is
determined from time to
time by the Board of Directors. The term of Mr. Barry's
employment contract is
five years, unless earlier terminated by an act of either the
Company or Mr.
Barry. Beginning in 1994, however, the remaining term of Mr.
Barry's employment
contract is automatically extended for an additional one-year
period. Mr.
Barry's employment contract further provides that upon any change
in control of
the Company leading to the termination of Mr. Barry's employment
with the
Company, the Company shall pay Mr. Barry three times his
then-present annual
salary, or such lesser amount as may be required to comply with
certain
provisions of the Internal Revenue Code.
Selection of Auditors. KPMG Peat Marwick, Certified Public
Accountants of
Rochester, New York, have been selected as auditors for the
Company for the
ensuing year. KPMG Peat Marwick, who served as principal
accountants for the
Company for the past fiscal year, have no direct or indirect
financial interest
in the Company or its subsidiaries in the capacity of promoter,
underwriter,
voting director, officer or employee. A representative of KPMG
Peat Marwick
will be present at the meeting, with the opportunity to make a
statement if such
representative desires to do so, and will be available to respond
to appropriate
questions.
Other Matters. Except for the matters set forth above, the
Board of
Directors knows of no matters which may be presented to the
meeting, but if any
other matters properly come before the meeting, it is the
intention of the
persons named in the accompanying form of proxy to vote such
proxy in accordance
with their judgment in such matters.
PLEASE DATE, SIGN AND RETURN THE ENCLOSED PROXY.
By Order of the Board of
Directors,
PHYLLIS J. GROEGER,
Secretary
Persons whose proxies are solicited by the Board of Directors of
the Company may
obtain, without charge, a copy of the Company's Annual Report on
Form 10-KSB,
including the financial statements and schedules thereto,
required to be filed
with the Securities and Exchange Commission for the Company's
most recent fiscal
year. The report will be furnished upon request made in writing
to:
Thomas K. Barry
Chairman of the Board of Directors
Corning Natural Gas Corporation
330 W. William Street
P.O. Box 58
Corning, New York 14830
