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 12, 1998
Corning, New York
January 15, 1998
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 12, 1998 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 8, 1998 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 15, 1998
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 12, 1998. 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 15, 1998.
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 11, 1998 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 1999 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 17, 1998.
Voting Securities Outstanding. There were 460,000 shares of common stock
outstanding and entitled to vote on January 8, 1998 (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, 1997 of Class
J. Edward Barry (Director) 45,999(1) 10.0%
330 W. William Street
Corning, New York
Thomas K. Barry (Director and 15,300(2) 3.3%
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) 27,210(4) 5.9%
225 Hix Bridge Road
Westport, Massachusetts
Jay A. Finley (Director) 15,900(5) 3.5%
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) 1,969(7) 0.4%
2560 Riverside Avenue
Somerset, Massachusetts
Donald R. Patnode (Director) 14,194(8) 3.1%
91 Stage Harbor Road
Chatham, Massachusetts
All directors and officers 128,638(9) 28.0%
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 1,100 shares owned by children
of Thomas K. Barry, and as to which Thomas K. Barry has shared voting and
investment power. Also includes 1,200 shares owned by two daughters 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 7,900 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 2,000 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 remiaining 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, 85, Consultant to the Company. Former Chairman of
the Board of Directors 1975 - 1993; former Chief Executive Officer,
President, Executive Vice President, Vice President and Secretary of the
Company. 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, 52, 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, 55, 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, 59, 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, 82, Retired; former President of the Company,
1977-1983. A Director since 1975 and a member of the Executive Committee.
Jack R. McCormick, 73, 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, 69, 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 1997. 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 1997. This committee reviews officer performance
and duties and decides upon appropriate remuneration. The Board of
Directors met five times in 1997. 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
February 13, 1997, out of a total of 460,000 shares entitled to vote at the
meeting, 404,457 shares (87.9% 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, 1995, September 30, 1996 and
September 30, 1997 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 1997 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 1997 $150,167 --- $ 4,220
President and Chief 1996 106,800(2) --- 2,970(2)
Executive Officer 1995 134,967 --- 3,721
(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, 1995, September 30, 1996 and September 30, 1997.
(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 53) 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 6 years.
Edgar F. Lewis (age 60) 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 25 years; 17 years in his current position.
Thomas S. Roye (age 44) is Vice President - Administration. Mr. Roye has
served 6 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 43) 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
6 years.
Phyllis J. Groeger (age 57) 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
10 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 Benefit
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, 1997, the estimated
annual benefits payable under a Supplemental Benefits Agreement upon
retirement at the normal retirement age for Mr. Thomas K. Barry are $ 51,800.
The Company also maintains the Corning Natural Gas Corporation Employees
Savings Plan (the "Savings Plan"). All 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. For non-union employees, 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 account at a rate
of 20% per year and become fully vested after five years. All 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 termination of employment or death of the participant. The Savings
Plan also contains loan and hardship withdrawal provisions. During the
fiscal year ended September 30, 1997 no amounts were distributed to executive
officers under the Savings Plan. Mr. Thomas K. Barry had $4,220 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 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, 1997, 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, 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
