<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Section 240.14a-11(c) or Section
240.14a-12
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
(Name of registrant as specified in its charter)
LAWRENCE J. GAGNON
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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: 1
(4) Proposed maximum aggregate value of transaction:
1 Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
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<PAGE> 2
[LETTERHEAD]
March 21, 1994
TO OUR COMMON SHAREHOLDERS:
Here are your Proxy, Proxy Statement, Notice of Annual Meeting and Annual
Report.
You are cordially invited to attend the Annual Shareholders Meeting on
April 19, 1994, at 2:00 p.m. at the McMorran Auditorium, 701 McMorran Boulevard,
Port Huron, Michigan (see map on back). The Proxy Statement and Notice of Annual
Meeting describe the formal matters to be acted upon at the meeting. In
addition, we will discuss current matters concerning the Company and review the
Company's operation during the past year. Light refreshments will be served
after the meeting.
We feel that representation of your shares at the meeting is very important
and urge you to date, SIGN AND RETURN THE ENCLOSED PROXY CARD PROMPTLY in the
envelope furnished, whether or not you plan to attend the meeting. If you do
attend the meeting, you may, if you wish, withdraw your Proxy and vote in
person.
I hope you will find it possible to attend the meeting.
Sincerely,
[SIG.]
Ward N. Kirby, President and C.E.O.
<PAGE> 3
[LETTERHEAD]
NOTICE OF ANNUAL MEETING OF COMMON SHAREHOLDERS
TO BE HELD ON APRIL 19, 1994
To the Common Shareholders of
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
NOTICE IS HEREBY GIVEN pursuant to call by the Board of Directors of the
Company in accordance with the laws of Michigan that the Annual Meeting of
Shareholders of Southeastern Michigan Gas Enterprises, Inc. (the Company) will
be held at the McMorran Auditorium, 701 McMorran Boulevard, Port Huron,
Michigan, on Tuesday, April 19, 1994 at 2:00 p.m., for the following purposes:
I. To elect four members to the Board of Directors.
II. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Common Shareholders of record at the close of business on February 21,
1994, will be entitled to notice of and to vote at the meeting or at any
adjournment thereof.
Whether or not you expect to attend the meeting, please sign, date and
return the accompanying proxy in the enclosed envelope, which requires no
postage if mailed in the United States. If you should attend, you may vote in
person, if you wish, whether or not you have sent in your proxy.
By order of the Board of Directors
[SIG.]
Lawrence J. Gagnon, Secretary
<PAGE> 4
[LETTERHEAD]
PROXY STATEMENT
The enclosed proxy, mailed on or about March 21, 1994, is solicited on
behalf of the Board of Directors of Southeastern Michigan Gas Enterprises, Inc.
(the Company) for use at the Annual Meeting of the Shareholders of the Company
on Tuesday, April 19, 1994, at 2:00 p.m., and any adjournments thereof.
A Shareholder giving the enclosed proxy (or his authorized representative)
may revoke it any time before it is exercised by executing a subsequent proxy,
or by oral or written notice to the Company or by voting in person at the
meeting.
The Company will bear the cost of management soliciting proxies, including
charges and expenses of brokerage firms and others for forwarding solicitation
material to beneficial owners of stock. In addition to mailings, proxies may be
solicited by personal interview, telephone or telegraph by certain of the
Company's employees without compensation. The Company may also retain and
compensate one or more outside organizations to assist in soliciting proxies.
A copy of the Company's 1993 Annual Report is enclosed.
STOCK OUTSTANDING, VOTING RIGHTS AND VOTES REQUIRED
Only Common Shareholders of record on the Company's stock transfer books at
the close of business on February 21, 1994 (the record date) will be entitled to
vote at the meeting.
The Company had approximately 10,491,000 shares of Common Stock, $1 Par
Value (Common Shares), outstanding on the record date. A majority of the Common
Shares entitled to vote constitutes a quorum.
Common Shareholders are entitled to cumulative voting for directors. Each
Common Shareholder may cast a number of votes equal to the number of shares held
on the record date multiplied by the number of directors to be elected. The
shareholder may cast all votes for a single director or distribute them among
the directors to be voted for, as the shareholder sees fit.
To the Company's knowledge, only the following persons own beneficially
more than 5% of the common stock as of the record date:
<TABLE>
<CAPTION>
NUMBER
OF SHARES
TITLE OF NAME AND ADDRESS BENEFICIALLY PERCENT OF
CLASS OF BENEFICIAL OWNER OWNED CLASS
- --------------------------- ---------------------------------------------- ------------ -----------
<S> <C> <C> <C>
Common Stock, $1 Par Value Southeastern Michigan Gas Enterprises, Inc. 806,123* 7.7%
Employee Stock Ownership Trust
405 Water Street
Port Huron, Michigan 48060
</TABLE>
- ---------------------
(*) The Company's Employee Stock Ownership Trust (ESOT) has the following
trustees: Ward N. Kirby, George T. Ferris, Robert F. Caldwell, D. Kent
Herzer and Agnes M. Myron. The shares held by the ESOT will be voted by the
individual participant to the extent such shares are allocated to the
participant's account. The Trustees have the power to sell shares in the
ESOT and can vote unallocated shares (approximately 7,980 shares).
1
<PAGE> 5
Management's security ownership as of the record date is:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME OF BENEFICIAL PERCENT OF
TITLE OF CLASS BENEFICIAL OWNER OWNERSHIP(1) CLASS
---------------------------------------- --------------------------- ------------- ----------
<S> <C> <C> <C>
Common Stock, $1 Par Value Directors and Nominees --
Frank G. Andreoni 14,304 *
Daniel A. Burkhardt 500 *
Robert F. Caldwell 11,918(2) *
George T. Ferris 220,167 2.1
John T. Ferris(3) 14,447 *
Michael O. Frazer 4,791 *
Ward N. Kirby 6,263(2) *
Harvey I. Klein 403 *
William March 1,992 *
Edith A. Stotler 781 *
Robert J. Thomson 83,957 *
John W. Wirtz 11,508 *
All directors and
officers as a group 378,185(2) 3.6
Cumulative Preferred Stock of Directors and Nominees --
Subsidiary --
Southeastern Michigan Gas Company Robert F. Caldwell 43 *
Ward N. Kirby 32 *
All directors and
officers as a group 75 *
</TABLE>
- ---------------------
* Less than one percent.
(1) Each of the identified beneficial owners has sole voting and investment
power as to all of the shares shown with the exception of those held by
certain officers and directors jointly with their spouses or directly by
their spouses, minor children, or certain other relatives, and with the
exceptions described in (2) below. None of the shares shown is a share as to
which the person shown as the beneficial owner has the right to acquire
beneficial ownership in the future.
(2) Inclusive of the individual's beneficial interest in shares held by ESOT as
follows:
<TABLE>
<CAPTION>
COMMON SHARES
NAME HELD BY ESOT
--------------------------------------------------------------------------- -------------
<S> <C>
Ward N. Kirby.............................................................. 3,348
Robert F. Caldwell......................................................... 7,326
All directors and officers as a group...................................... 15,474
</TABLE>
Such persons may vote their shares held by ESOT. Such persons have no
investment power as to the shares held by the ESOT except for certain
limited rights of diversification required to be granted under the Internal
Revenue Code.
(3) Mr. John T. Ferris is the son of George T. Ferris, who retires as a director
effective April 19, 1994.
RESPECTING THE ELECTION OF DIRECTORS
The Company's Articles of Incorporation provide for three classes of
directors. The term of office of each class is three years and the term of one
class expires each year. The Company's Bylaws provide for a Board of Directors
with eleven members. The classes will be comprised of as nearly equal a number
of directors as possible. Therefore, approximately one-third of the Board of
Directors will be elected at each Annual Meeting of Shareholders. In case of a
vacancy in the Board of Directors, the remaining Directors, by a majority vote,
could elect a successor to serve until the next election of the class for which
the director was chosen.
Four directors are to be elected at this Annual Meeting, each to hold
office for a term of three years or until his successor shall have been fully
elected and qualified. It is the intention of the persons named in the
2
<PAGE> 6
enclosed Form of Proxy, unless otherwise instructed by the shareholder, to vote
for the election of the persons listed below.
John T. Ferris
Michael O. Frazer
Edith A. Stotler
Robert J. Thomson
Management does not contemplate that any nominee will become unavailable
for any reason. Should that occur before the meeting, however, proxies will be
voted for another person selected by management.
The persons named in the enclosed proxy form also reserve the right to vote
the proxies cumulatively and for less than all of management's nominees, but do
not intend to do so unless other nominees are nominated at the meeting. In any
case, the proxies will not vote for any nominees other than those named, unless
a nominee becomes unavailable as described above.
INFORMATION ABOUT DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
NAME, POSITION WITH THE COMPANY* AND DIRECTOR
BUSINESS EXPERIENCE DURING PAST FIVE YEARS AGE SINCE*
- ----------------------------------------------------------------------------------------------------- --- --------
<S> <C> <C>
NOMINEES
John T. Ferris....................................................................................... 43 --
Senior Partner in law firm of Ferris & Schwedler, P.C. in Bad Axe, Michigan, former prosecutor for
Huron County, Michigan.
Michael O. Frazer.................................................................................... 55 1986
Director of the Company; Attorney.
Edith A. Stotler..................................................................................... 47 1987
Director of the Company; Partner, Stotler Grain Company; President, Homer Grain Company since 1990;
Vice President and Director, Utilities Group, Canadian Imperial Bank of Commerce, Inc., Chicago,
Illinois from December 1988 to February 1990 and Assistant General Manager -- Utilities Group prior
thereto.
Robert J. Thomson.................................................................................... 66 1964
Chairman of the Board of Directors of the Company; Retired as President of the Company in April
1993.
OTHER DIRECTORS (TERMS EXPIRING 1995)
Robert F. Caldwell................................................................................... 38 1992
Director of the Company; Executive Vice President of the Company since April 1993, Senior Vice
President of the Company from April 1991 to April 1993, Vice President from February 1989 to April
1991, Secretary from January 1985 to February 1991, Treasurer from January 1985 to February 1989.
Ward N. Kirby........................................................................................ 54 1992
Director of the Company; President of the Company since April 1993, Executive Vice President of the
Company from April 1991 to April 1993, Vice President from February 1989 to April 1991, President
of Southeastern Michigan Gas Company from April 1986 to February 1989.
John W. Wirtz........................................................................................ 68 1979
Director of the Company; Chairman and C.O.O. since 1991 and prior thereto President and C.E.O. of
Wirtz Manufacturing Co., Inc. at Port Huron, Michigan, a manufacturer of battery equipment and
rubber molds.
OTHER DIRECTORS (TERMS EXPIRING 1996)
Frank G. Andreoni.................................................................................... 64 1978
Director of the Company; Port Huron City President of Michigan National Bank.
Daniel A. Burkhardt.................................................................................. 46 1993
Associated with Edward D. Jones & Co., a securities brokerage firm, since 1978; Principal in
Investment Banking Department of Jones; Member of Jones' Investment Policy Committee; Director of:
Essex County Gas Co., Galaxy Cablevision Management, Dial Real Estate Investment Trust and St.
Joseph Light & Power Co.
Harvey I. Klein...................................................................................... 54 1993
Employed by Ford Motor Company since 1962 in positions of increasing responsibility including most
recently Manager of Ford's Advanced Vehicle and Safety Planning Department, which includes Ford's
Alternative Fuels Engineering and Planning Department.
William March........................................................................................ 68 1990
Director of the Company; President of Peninsular Gas Company, a gas utility serving a portion of
the upper peninsula of Michigan.
</TABLE>
- ---------------------
(*) Includes time prior to 1977 as director of subsidiary and predecessor
company, Southeastern Michigan Gas Company. Other than Messrs. Thomson,
Kirby and Caldwell, each director's and nominee's principal employment is
and has been with a company which is not affiliated with the Company.
3
<PAGE> 7
OTHER EXECUTIVE OFFICERS
Marcia M. Chmielewski (age 35) was elected Treasurer and Assistant
Secretary of the Company on August 20, 1992. She served as Assistant
Secretary-Assistant Treasurer since October 18, 1990, and has been with the
Company in other capacities since 1986.
Lawrence J. Gagnon (age 47) was elected Secretary and General Counsel of
the Company effective February 1, 1991. Prior thereto he was a partner in the
law firm of Loomis, Ewert, Ederer, Parsley, Davis and Gotting and acted as
outside counsel to the Company since 1977.
Gary E. Olmstead (age 37) was elected Director, Audit and Corporate
Services of the Company on August 20, 1992. He served as Treasurer and Assistant
Secretary since February 22, 1989, and as Assistant Secretary-Assistant
Treasurer since January 1, 1988, and has been with the Company and Southeastern
Michigan Gas Company in other capacities since 1981.
The term of each executive officer expires April 19, 1994, or when a
successor is elected and qualified.
CERTAIN BUSINESS RELATIONSHIPS OF DIRECTORS
In January 1994 the Company issued 747,500 shares of Common Stock in a
public offering. Edward D. Jones & Co. acted as one member of the selling group
for this offering and sold 75,000 of these shares. Mr. Burkhardt is a Principal
of Jones' Investment Banking Department and a member of Jones' Investment Policy
Committee.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company's Audit Committee members are Frank G. Andreoni, Chairman,
George T. Ferris, Michael O. Frazer and Harvey I. Klein. The committee held 3
formal meetings in 1993. The Audit Committee's functions are primarily to review
with the independent public accountants and the Company's internal auditors
their respective reports and audit findings and the scopes and plans of their
future audit programs and to meet with the officers of the Company and
separately with the independent public accountants and with the internal
auditors to review annual financial statements, accounting and financial
controls and compliance with appropriate codes of conduct. The committee also
recommends to the Board the independent public accountants.
The Company's Executive Compensation Committee members are John W. Wirtz,
Chairman, Frank G. Andreoni, William March and Edith A. Stotler. The committee
held 6 formal meetings in 1993. The Executive Compensation Committee, after
review and analysis of available data, recommends compensation of Executive
Officers and Directors to the Board of Directors.
The Company's Nominating Committee members are Edith A. Stotler, Chairman,
Daniel A. Burkhardt and John W. Wirtz. The committee held 3 meetings in 1993.
The functions of the Nominating Committee are to recommend to the Board:
directors to serve as chairmen and members of the Board committees, candidates
to serve as trustees of employee benefit plan trusts, candidates to fill Board
vacancies, the slate of director candidates for shareholder approval, personal
qualifications criteria for Board membership and general criteria regarding
Board committee composition. Recommendations by shareholders of candidates for
Board membership will be considered by the Nominating Committee. Such
recommendations should be sent to the Nominating Committee of the Board of
Directors at 405 Water Street, Port Huron, Michigan 48060.
The Board of Directors held 7 meetings during 1993. Each director attended
75% or more of the total meetings of the board and the committees on which each
served in 1993.
4
<PAGE> 8
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
Only the following four executive officers of the Company had salary and
bonus exceeding $100,000 in 1993.
<TABLE>
<CAPTION>
NAME AND PRINCIPAL OTHER ANNUAL ALL OTHER
POSITION YEAR SALARY(1) BONUS(2) COMPENSATION(3) COMPENSATION(4)
- ---------------------------------------------------- ----- --------- --------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Ward N. Kirby, President and CEO.................... 1993 $ 192,400 $ 64,251 $ 2,590 $ 8,912
1992 $ 181,000 $ 46,527 $ 2,590 $ 8,580
1991 $ 146,500 $ 47,484 $ 2,590 $ 7,196
Robert J. Thomson, Retired President and CEO........ 1993 $ 120,400 $ 35,011 $ 0 $ 7,638
1992 $ 292,600 $ 93,547 $ 7,740 $ 8,841
1991 $ 276,000 $ 106,966 $ 7,740 $ 8,520
Robert F. Caldwell, Executive Vice President and
COO............................................... 1993 $ 167,800 $ 53,483 $ 1,008 $ 7,990
1992 $ 158,000 $ 38,071 $ 1,008 $ 7,694
1991 $ 131,250 $ 39,950 $ 1,008 $ 6,535
Lawrence J. Gagnon, Vice President, Secretary and
General Counsel................................... 1993 $ 117,600 $ 39,778 $ 1,841 $ 5,353
1992 $ 111,000 $ 20,610 $ 1,841 $ 5,234
1991 $ 91,700 $ 25,409 $ 1,841 $ 2,736
</TABLE>
- ---------------------
(1) Actual salary earned during the year. Messrs. Kirby, Caldwell and Gagnon
received base salary increases when promoted to their present positions as
President, Executive Vice President and Vice President, respectively, on
April 20, 1993. Mr. Gagnon began employment on February 1, 1991.
(2) Cash incentive earned during the year pursuant to the Company's incentive
plan then in effect and bonus paid to reimburse the premium cost of a
$250,000 whole life insurance policy.
(3) Amount paid to reimburse the executive for taxes relating to the bonus for
life insurance discussed in the preceding note.
(4) Portion of the Company's contribution to the Employee Stock Ownership Trust
which is applicable to the executive plus the cost to the Company of
maintaining a term life insurance policy on the life of the executive.
EMPLOYMENT CONTRACTS
Each of the above executive officers (except Mr. Thomson) is a party to an
employment agreement with the Company. Each employment agreement provides for a
lump sum payment to the executive officer if the Company terminates the
executive's employment other than for "cause" or if the executive resigns due to
a required relocation of personal residence or a reduction in base salary.
"Cause" is limited to certain intentional misconduct. The lump sum payment will
equal the executive's present salary for the remainder of the term of the
agreement, provided that not less than six nor more than twelve months salary
shall be paid. The Company also agrees to continue insurance, medical, dental
and similar benefit plans for the term of the agreement. Certain other
limitations apply. In addition, the agreements give each officer the right to
resign in case of a change of control and receive severance compensation equal
to 2.99 times his average annual compensation over the last five years.
PENSION PLAN
The Company retirement plan is a non-contributory plan. Substantially all
employees are eligible to participate. All above-named executive officers
participate. The plan covers base salary excluding overtime, bonuses, etc., and
is based on three years average salary.
Under the retirement plan, at normal retirement (age 65) a member will
receive an annual retirement income equal to 1.5% of his highest average
earnings over a three-year period multiplied by years of credited service prior
to November 1, 1970 and 1.75% of such average earnings multiplied by years of
credited service after October 31, 1970. As of January 1, 1994, Messrs. Kirby,
Caldwell and Gagnon had 19, 14 and 3 years of credited service, respectively.
Mr. Thomson retired in 1993 with 34 years of service. The following table is
meant to illustrate the level of annual retirement incomes available under the
plan at normal retirement age,
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based on the accrual rate for years of service after October 31, 1970 and the
highest three year average annual remuneration.
<TABLE>
<CAPTION>
YEARS OF CREDITED SERVICE
ANNUAL ------------------------------------------------------------------------------------------------------------------
REMUNERATION 5 10 15 20 25 30 35
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
90,000 7,875 15,750 23,625 31,500 39,375 47,250 55,125
120,000 10,500 21,000 31,500 42,000 52,500 63,000 73,500
150,000 13,125 26,250 39,375 52,500 65,625 78,750 91,875
180,000 15,750 31,500 47,250 63,000 78,750 94,500 110,250
210,000 18,375 36,750 55,125 73,500 91,875 110,250 128,625
270,000 23,625 47,250 70,875 94,500 118,125 141,750 165,375
300,000 26,250 52,500 78,750 105,000 131,250 157,500 183,750
<CAPTION>
ANNUAL
REMUNERATION 40
- ------------ ------------
<S> <C>
90,000 63,000
120,000 84,000
150,000 105,000
180,000 126,000
210,000 147,000
270,000 189,000
300,000 210,000
</TABLE>
Employees who are directors receive no additional compensation for service
as directors. All other directors were paid $1,000 per month and $550 for each
directors' meeting attended in 1993 except that the chairman of the board was
paid $2,000 per month and $750 per meeting attended after retiring as an
employee. Non-employee directors received $550 for each committee meeting
attended except that committee chairmen were paid $750. Non-employee directors
also receive $3,000 per year in the form of deferred compensation.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As previously mentioned, Ms. Stotler and Messrs. Wirtz, March and Andreoni
are members of the Executive Compensation Committee. The Company from time to
time makes short-term and long-term borrowings from Michigan National Bank, of
which Mr. Andreoni is Port Huron City President. During 1993, the maximum amount
of such indebtedness at any one time outstanding was $35,000,000 at an interest
rate of approximately 4.0% per annum which was used for working capital for the
Company and its subsidiaries. Such borrowings were at rates considered to be
competitive and were on terms and conditions similar to other like loans made by
such bank. At December 31, 1993 the outstanding indebtedness to such bank was
$17,650,000.
Prior to his retirement as Chief Executive Officer in April 1993, Mr.
Thomson served as a member of the Executive Compensation Committee. While Mr.
Thomson was allowed to participate in most Executive Compensation Committee
discussions, he could not vote on any matters before that Committee.
Notwithstanding anything to the contrary set forth in any of the Company's
filings under the Securities Act of 1933, or the Securities Exchange Act of
1934, the following report and the Performance Graph shall not be deemed to be
incorporated by reference into any such filings except to the extent that they
are specifically incorporated.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Executive Compensation Committee (ECC) is responsible for recommending
to the full Board the pay rates of the executive officers. The ECC is composed
of four non-employee directors. The ECC has adopted a strategy to adjust all
compensation elements for an executive to reflect an average of compensation
packages for executives with similar experience, responsibilities and authority
in other companies. The elements of compensation include base salary, benefits,
perquisites and incentive. An independent consulting firm was employed by the
ECC to assist in developing and implementing this strategy and in developing an
incentive plan. This plan is meant to provide an executive with an opportunity
for above-average total compensation but only if his performance is above
average and the corporate income targets, which also reward the shareholder, are
achieved. This plan replaces the executive incentive plan which was in effect
through 1991. The incentive plan for 1993 provided for cash bonuses to the
Company's executives based on the degree of achievement of the Company's income
target for 1993 which was established by the Board of Directors and the
executive's individual performance which is monitored by the ECC. All the
incentive awards for 1993 are included in the above compensation table in the
"Bonus" column. The 1993 base salary amounts were determined by the
6
<PAGE> 10
ECC after consultation with an outside consulting firm. Mr. Kirby's base salary
was increased by 4% effective April 1993 when he was promoted to President.
EXECUTIVE COMPENSATION COMMITTEE
John W. Wirtz, Chair
Frank G. Andreoni
William March
Edith A. Stotler
PERFORMANCE GRAPH
The following graph compares cumulative total returns (assuming
reinvestment of dividends). The stock price performance shown on the graph below
is not necessarily indicative of future price performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.,
S&P 500 INDEX AND
EDWARD D. JONES & CO. NATURAL GAS DISTRIBUTION COMPANY INDEX
<TABLE>
<CAPTION>
SOUTHEASTERN
MEASUREMENT PERIOD MICHIGAN GAS EDJ UTILITIES
(FISCAL YEAR COVERED) ENTERPRISES WEIGHTED S&P 500 INDEX
<S> <C> <C> <C>
1988 100 100 100
1989 124 134 132
1990 100 133 128
1991 120 161 166
1992 165 195 179
1993 215 227 197
</TABLE>
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen & Co. have been the auditors for the Company and
Southeastern Michigan Gas Company for over thirty (30) years and have been
appointed by the Board of Directors to continue in that capacity during 1994. A
member of Arthur Andersen & Co. will be available at the Shareholders Meeting to
make a statement if he so desires and to answer appropriate questions.
SHAREHOLDER PROPOSALS
A proposal to be included in the proxy statement or form of proxy for the
Company's next annual meeting of shareholders must be received at the Company's
principal executive office not later than November 18, 1994.
7
<PAGE> 11
OTHER BUSINESS
The management of the Company knows of no matters other than those above
stated which are to be brought before the meeting. However, if any other such
matters should be presented for action, it is the intention of the persons named
in the enclosed form of proxy to vote in accordance with their judgment on such
matters.
It is important that proxies be returned promptly to avoid unnecessary
expenses. Therefore, all Common Shareholders (even those planning to attend the
meeting) are urged, regardless of the number of shares of stock owned, to sign,
date and return the enclosed proxy in the business-reply envelope, also
enclosed. Shareholders attending in person may withdraw their proxies and vote
in person.
By order of the Board of Directors
[SIG.]
Lawrence J. Gagnon, Secretary
8
<PAGE> 12
[MAP]
<PAGE> 13
APPENDIX
Map on back cover shows area where meeting place will take place; and the
specific street and building.
<PAGE> 14
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
SOUTHEASTERN THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
MICHIGAN GAS DIRECTORS.
ENTERPRISES, INC. PROXY The undersigned hereby appoints Allan E. Peattie, Gary E.
405 WATER STREET, PORT HURON, MICHIGAN 48060 Olmstead and Edward K. Corry, or any one of them, with
powers of substitution in each, proxies to vote all Common
Shares of SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC. (the
Company) which the undersigned may be entitled to vote at
the annual meeting of the Shareholders of the Company to be
held Tuesday, April 19, 1994, and at all adjournments
thereof:
</TABLE>
I. ELECTION OF DIRECTORS
(CHECK ONLY ONE BOX)
A. For all nominees / /
B. For none of the nominees / /
C. For all nominees except names crossed out / /
John T. Ferris Michael O. Frazer Edith A.
Stotler Robert J. Thomson
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
- --------------------------------------------------------------------------------
<PAGE> 15
- --------------------------------------------------------------------------------
II. IN THEIR DISCRETION, UPON SUCH OTHER MATTERS THAT MAY PROPERLY
COME BEFORE THE MEETING.
Shares will be voted as specified. IF NO SPECIFICATION IS MADE
SHARES WILL BE VOTED FOR THE BOARD OF DIRECTORS AS PROPOSED. If
any other matters arise, the proxies or substitutes may vote
according to their best judgment.
Shareholder, please sign this proxy exactly as your name appears
hereon, including the title "Executor", "Trustee", etc., if the
same is indicated. If stock is held by a corporation, this proxy
should be executed by a proper officer thereof.
PLEASE MARK, SIGN, DATE AND
RETURN THE PROXY CARD
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Dated: , 1994
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