The Berkshire Gas Company
115 Cheshire Road
Pittsfield, MA 01201-1879
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held November 13, 1996
Pittsfield, Massachusetts
October 11, 1996
Notice is hereby given that the Annual Meeting of Shareholders of The
Berkshire Gas Company, a Massachusetts corporation, will be held at the
Berkshire Hilton Inn, Pitts-field,Massachusetts on Wednesday, November 13,
1996 at 10:00 A.M. local time, for the following purposes, as more fully set
forth in the Proxy Statement which accompanies this Notice:
Proposal No. 1. To elect two (2) directors.
Proposal No. 2. To consider and act upon a proposal to ratify the
selection by the Board of Directors of Deloitte &
Touche LLP as auditors for the Company for the
fiscal year ending June 30, 1997.
Proposal No. 3. To consider and act upon a proposal to amend the
Charter, Agreement of Association and Articles of
Organization by increasing the authorized Common
Stock, $2.50 par value, of the Company from
2,600,000 to 4,600,000 shares.
To transact such other business as may properly come before the
meeting.
The stock transfer books will not be closed, but only Common
shareholders of record at the close of business on October 4, 1996 (the
Record Date) will be entitled to notice of and to vote at the meeting.
By Order of the Board of Directors,
CHERYL M. CLARK
Clerk of the Corporation
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. WHETHER OR NOT YOU
PLAN TO ATTEND, PLEASE DATE, SIGN AND MAIL THE ENCLOSED PROXY IN THE
ENCLOSED SELF-ADDRESSED ENVELOPE. A SHAREHOLDER 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.
The Berkshire Gas Company
115 Cheshire Road
Pittsfield, MA 01201-1879
October 11, 1996
PROXY STATEMENT
This Proxy Statement sets forth certain information with respect to
the accompanying proxy proposed to be used at the Annual Meeting of
Shareholders of The Berkshire Gas Company (hereinafter called the "Company")
to be held at the Berkshire Hilton Inn, Pittsfield, Massachusetts on
November 13, 1996 at 10:00 A.M. local time, or any adjournments or
postponements thereof, for the purposes set forth in the accompanying Notice
of Annual Meeting of Shareholders. THE BOARD OF DIRECTORS OF THE COMPANY
SOLICITS THIS PROXY AND URGES YOU TO INDICATE YOUR CHOICE ON THE PROXY, TO
SIGN AND DATE THE PROXY AND RETURN IT IMMEDIATELY. Your prompt cooperation
is necessary in order to ensure a quorum (a majority of issued and
outstanding Common Stock) and to avoid additional expense and delay.
Solicitation of proxies will be primarily by mail and the cost of
solicitation will be borne by the Company. Proxies may also be solicited
personally or by telephone by regular employees of the Company at nominal
cost.
The approximate date on which this Proxy Statement and the
accompanying proxy will first be mailed to shareholders is October 11, 1996.
The Company mails herewith to all shareholders entitled to vote a copy
of its Annual Report for the year ended June 30, 1996, which contains
detailed financial information concerning the Company. Upon the written
request of any shareholder, the Company will mail, without charge, a copy of
the Company's Annual Report on Form 10-K, as discussed further on page 15.
REVOCABILITY OF PROXY
The proxy is revocable on written instructions, signed in the same
manner as the proxy, received by the Clerk of the Corporation, at any time
at or before the balloting on the matter with respect to which such proxy is
to be used. If you attend the meeting you may, if you wish, revoke your
proxy and vote in person.
PROPOSALS OF SHAREHOLDERS
Shareholders' proposals intended to be presented at the 1997 Annual
Meeting must be received by the Office of the Clerk, The Berkshire Gas
Company, 115 Cheshire Road, Pittsfield, Massachusetts 01201-1879 by June 13,
1997.
VOTING SECURITIES
Holders of record of outstanding Common Stock, par value $2.50 per
share, of the Company at the close of business on October 4, 1996 (the
"Record Date") are the only persons entitled to notice of and to vote at the
meeting. As of the Record Date, there were shares outstanding and
entitled to vote. Each outstanding share entitles the holder thereof to one
vote.
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.
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
The By-laws of the Company provide that the Board of Directors shall
consist of not less than five nor more than nine members and that the number
of directors to be elected each year shall be fixed by the Board of
Directors prior to the Annual Meeting. The Board of Directors has set the
number of directors for the ensuing year at seven. The Articles of
Organization and the By-laws of the Company provide that the Board of
Directors be divided into three classes, with staggered three-year terms, so
that the term of office of one class expires each year.
Currently, the Board of Directors is divided into three separate
classes, consisting of three Class A directors, three Class B directors and
three Class C directors, whose terms expire as set forth in the table below.
Except as noted, directors now serving in each class have been elected in
prior years by the shareholders to serve for a period of three years and
until election and qualification of their respective successors in office.
At each Annual Meeting of Shareholders, the shareholders of the Company have
the right to elect an appropriate number of persons to serve as directors of
the class whose three-year terms then expire. Any directorship which may
become vacant by reason of death, resignation or otherwise than by
expiration of term, may be filled solely by the Board of Directors, as
provided in the By-laws.
The terms for the Class C directors are scheduled to expire at the
1996 Annual Meeting and the Board has set at two the number of Class C
directors to be elected at this meeting. The Board has nominated for
election one incumbent Class C director, Robert B. Trask, and one incumbent
Class B director, James R. Keys(1), who was appointed a director on August
27, 1996 by the Board of Directors. The purpose of transferring Mr. Keys to
a Class C director is to provide a more equal balance among the three
classes of directors. It is the intention of the persons named below as
proxies, in the absence of contrary specification, to vote FOR the election
of each of such persons to serve as director for a term of three years and
until the election and qualification of his successor. In the event of a
vacancy in the list of such nominees prior to the 1996 Annual Meeting (which
the Board of Directors does not anticipate), the persons named as the
proxies will vote for a person acceptable to the Board, unless the Board
should reduce the number of directors to be elected in order to eliminate
the vacancy.
- - - -------------------
(1) Joseph T. Kelley and William S. Goedecke, currently Class C directors
whose terms expire at the 1996 Annual Meeting, will not stand for
reelection due to the Company's Retirement Policy. The Company's
current retirement policy states that no director shall stand for
reelection once he or she has attained age 69.
The following information is furnished with respect to each nominee
for election as a director, each director whose term of office will continue
after the meeting, the Chief Executive Officer of the Company and all
directors and officers of the Company as a group. No person or group of
persons owns of record or is known by the Company to own more than 5% of the
Company's outstanding Common Stock. Each of the individuals in the following
table has furnished the information appearing in the first column opposite
his name.
<TABLE>
<CAPTION>
Shares of Percentage of
Common Stock Shares of
Principal Occupation for Beneficially Common Stock
Preceding Five Years Owned as of Outstanding as
Name and Directorships June 30, 1996* of June 30, 1996+
- - - ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Nominees for election as Class C directors whose terms expire at the
1999 Annual Meeting:
James R. Keys President, J.R. Keys & Assoc., a --0-- --0--%
Age: 55 marketing & government relations
Director since: 1996 consulting firm. Formerly Executive
Board Committees: Director of State Government
Unassigned Relations, Tenneco, Inc.
Robert B. Trask(1) President, The Fitzpatrick Companies, 3,625(2) .17
Age: 50 Inc., formerly Country Curtains, Inc., a
Director since: 1994 retail firm dealing in household window
Board Committees: Audit treatments and accessories. Director, Lee
and Insurance-Pension National Banc Corp.
Class A directors whose terms expire at the 1997 Annual Meeting:
Paul L. Gioia Of Counsel, LeBoeuf, Lamb, Greene 2,752(3) .13
Age: 54 & MacRae, a law firm; formerly,
Director since: 1991 Senior Vice President, First Albany
Board Committees: Audit, Corporation, a securities brokerage
Insurance-Pension and and investment banking firm; formerly,
Compensation Chairman of New York State Public
Service Commission. Director, New
York State Electric & Gas Corporation.
Franklin M. Hundley Vice Chairman of the Board of Directors 2,356 .11
Age: 61 of the Company. Member and a Managing
Director since: 1987 Director, Rich, May, Bilodeau & Flaherty,
Board Committees: P.C., a law firm. Trustee, Commonwealth
Executive, Finance-Bank- Energy System.
ing and Compensation
Scott S. Robinson President and Chief Executive Officer 5,499(4) .26
Age: 56 of the Company.
Director since: 1983
Board Committees:
Executive, Finance-Banking
and Insurance-Pension
Class B directors whose terms expire at the 1998 Annual Meeting:
George R. Baldwin Area Chairman, Arthur J. Gallagher & 2,105 .10
Age: 53 Co., a national insurance brokerage
Director since: 1982 firm. Formerly, President and Chief
Board Committees: Audit Executive Officer, Kaler Carney
and Finance-Banking Liffler & Co., Inc., a general insurance
agency. Director, Century Bank & Trust.
John W. Bond President, Kimbell Securities Corp., a 3,027(5) .14
Age: 66 securities broker/dealer; Real estate
Director since: 1965 management.
Board Committees:
Executive, Audit and
Insurance-Pension
All directors and officers 33,295(6) 1.55
of the Company, 13 persons
as a group
- - - -------------------
<F*> As used in this Proxy Statement, "beneficial ownership" means 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 indicated in
the footnotes below, the listed beneficial owners held direct and sole
voting and investment power with respect to the stated shares.
<F+> As of June 30, 1996, there were 2,152,591 shares of the Company's Common
Stock outstanding.
<F1> Elected by Board of Directors, August 29, 1994.
<F2> All of Mr. Trask's shares are held jointly with his spouse, with
shared voting and investment power over such shares.
<F3> All of Mr. Gioia's shares are held jointly with his spouse, with
shared voting and investment power over such shares.
<F4> Comprised of 5,499 shares held in trust, for which Mr. Robinson and
his spouse are joint Trustees, with shared voting and investment
power.
<F5> Includes 273 shares held by his spouse, who has sole voting and
investment power over such shares.
<F6> Aggregate record or imputed beneficial ownership, with sole or shared
voting and investment power. This amount includes shares owned by
Joseph T. Kelley and William S. Goedecke, the Class C directors whose
terms are expiring at this Annual Meeting.
</TABLE>
The Board of Directors of the Company has a standing Audit Committee,
of which Messrs. Baldwin, Bond, Gioia, Goedecke and Trask are members, which
recommends the selection of independent auditors, reviews the plan and
results of the independent audit, consults with the auditors on any matter
which the Audit Committee may deem relevant to the audit or which the
auditors may desire to bring to the attention of the Audit Committee, and
approves each professional service provided by the independent auditors. The
Audit Committee held two meetings during the past year.
The Board of Directors also has a standing Director and Executive
Compensation Committee (the "Compensation Committee"), of which Messrs.
Gioia, Goedecke, Hundley and Kelley are members. The Compensation Committee
periodically reviews the compensation and benefits of the directors and
executives of the Company, as well as industry trends in this area, reports
its findings to the Board of Directors and makes recommendations as to
appropriate compensation for the directors and executives of the Company.
The Compensation Committee held two meetings during the past year.
The Board of Directors does not have a standing nominating committee.
During the 1996 fiscal year, there were six meetings of the Board of
Directors. No member of the Board of Directors attended fewer than 75% of
the aggregate number of meetings of the Board and the committees on which he
served in fiscal year 1996, except Mr. Goedecke.
During the year ended June 30, 1996, fees of $158,264 were incurred
for legal services rendered by the law firm of Rich, May, Bilodeau &
Flaherty, P.C., which the Company has retained as counsel in the past and
intends to retain in the current fiscal year. Mr. Hundley is a member and
managing director of such firm. In addition, the Mansfield Consortium, a
purchasing group of which the Company is a member, during the last fiscal
year was represented by and made payments (and in the current fiscal year
intends to continue to be represented by and to make payments) to LeBoeuf,
Lamb, Greene & MacRae, a law firm at which Mr. Gioia is of counsel.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
As required by the Securities and Exchange Commission (the "SEC")
rules under Section 16 of the Securities Exchange Act of 1934, the Company
notes that during the Company's last fiscal year, Robert M. Allessio and
Donald P. Atwater, newly elected officers of the Company, each failed to
file on a timely basis with the SEC one report on Form 3 Initial Statement
of Beneficial Ownership of Securities with respect to his becoming an
officer of the Company. They have each filed subsequent reports in a timely
manner.
EXECUTIVE COMPENSATION
Compensation of Executive Officers. The following table contains the
compensation paid or accrued by the Company during the years ended June 30,
1996, 1995 and 1994 to the Company's Chief Executive Officer and to each
executive officer whose total annual salary and bonus exceeded $100,000.
Although only principal positions 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)
<TABLE>
<CAPTION>
Name and Other Annual
Principal Position Year Salary Bonus Compensation
- - - ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Scott S. Robinson, 1996 $165,000 $28,050 $12,858
President and Chief 1995 154,750 0 9,100
Executive Officer 1994 138,125 15,000 8,650
Michael J. Marrone 1996 106,100 12,732 0
Vice President, Treasurer 1995 102,000 0 0
and Chief Financial Officer 1994 96,167 10,400 0
Les H. Hotman(2) 1996 99,200 11,904 0
Vice President
- - - -------------------
<F1> The Company did not pay any long-term compensation to its Chief
Executive Officer or to its executive officers during the fiscal years
ended June 30, 1996, 1995 and 1994.
<F2> Prior to fiscal year 1996, Mr. Hotman's total annual salary and bonus
from the Company was less than $100,000.
</TABLE>
Compensation Pursuant to Plans. The Company maintains two defined
benefit pension plans, one for union employees and one for non-union
employees, including executive officers. The following table shows the
annual benefits payable under the pension plan for non-union employees (the
"Pension Plan") upon retirement at age 65 to eligible employees in various
base salary groups and with various periods of service. The annual
retirement benefits formula is based on the number of years of service and
the employee's average base salary for the five years yielding the highest
such average.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
Years of Credited Service
------------------------------------
25 Years
Remuneration 15 Years 20 Years and Thereafter
- - - -----------------------------------------------------------------------
<C> <C> <C> <C>
$ 50,000 $12,081 $16,107 $20,134
65,000 16,288 21,717 27,147
80,000 20,496 27,327 34,159
95,000 24,703 32,937 41,172
110,000 28,911 38,547 48,184
125,000 33,118 44,157 55,197
140,000 37,326 49,767 62,209
155,000 41,533 55,377 69,222
170,000 45,741 60,987 76,234
</TABLE>
Messrs. Robinson, Marrone and Hotman, the individuals named in the
preceding Summary Compensation Table, have 26, 13 and 9 years, respectively,
of credited service under the Pension Plan. The compensation covered by the
Pension Plan is that shown in the Summary Compensation Table, excepting any
bonus amounts.
The Company also maintains a supplemental pension plan (the
"Supplemental Plan") for Mr. Robinson, Mr. Marrone, Mr. Hotman and certain
executive officers. Under the Supplemental Plan, upon retirement at age 62,
covered executives are assured that they will receive annually 75% of their
final year's base salary in the form of retirement income. The 75% of final
base salary benefit will be comprised of amounts received pursuant to the
Pension Plan, Social Security, vested benefits from any previous employers,
and payments under the Supplemental Plan as may be necessary to bring the
covered officer's benefit to 75% of such officer's final year's base salary.
The Supplemental Plan allows for earlier retirement at age 60, with a
corresponding reduction in benefits. The Supplemental Plan also will pay
disability benefits to covered officers in addition to those benefits paid
by the Company's Long Term Disability Insurance Plan. In addition, the
Supplemental Plan will provide a survivorship benefit to the selected
beneficiary of the covered officer in the event of such officer's death.
Moneys received under Supplemental Plans are in addition to amounts shown in
the Summary Compensation Table and the Pension Plan Table. As of June 30,
1996, it is not possible to compute the estimated annual benefits payable
under Mr. Robinson's, Mr. Marrone's, or Mr. Hotman's Supplemental Plan upon
their retirement at the normal retirement age.
The Company also maintains a Non-Qualified Retirement Savings Plan
(the "Savings Plan") for Mr. Robinson, Mr. Marrone, Mr. Hotman and certain
other executive officers who are not named in the Summary Compensation Table
above. Under the Savings Plan, the Executive is permitted to defer a portion
per year of salary up to an equivalent of 15-1/2% of gross wages, less the
maximum contribution allowable under the Company's Qualified 401(k) Plan.
The Executive may select the assets in which the funds are to be invested.
The Savings Plan allows for the benefits to be paid at retirement and if the
Executive is at least 62 years of age. In addition, the Savings Plan
provides a survivorship benefit to the selected beneficiary of the
Executive, equal to the balance in the account, in the event of the
Executive's death. The amounts deferred by Messrs. Robinson, Marrone and
Hotman are included in the salary column in the Summary Compensation Table
above.
Employment Contracts, Termination of Employment and Change-in-Control
Arrangements. The Company has entered into an employment agreement with its
President and Chief Executive Officer, Scott S. Robinson. Under the terms of
this employment agreement, Mr. Robinson is compensated for his duties as an
officer and director with a salary in an amount determined from time to time
by the Board of Directors. The term of Mr. Robinson's employment contract is
five years, unless earlier terminated by either the Company or Mr. Robinson
and, unless so terminated, is renewed automatically at the expiration of
each year to provide for a continuous five-year term. In no event, however,
may Mr. Robinson's employment under his employment agreement be extended
beyond the year 2005. Mr. Robinson's employment contract also provides that
in the event Mr. Robinson is unable to perform his duties as the result of
any disability, the Company may terminate Mr. Robinson's employment, and
shall pay him (or his beneficiary) for a period of 60 months at a rate equal
to 60% of Mr. Robinson's "basic monthly earnings" as set forth in the
Company's Long Term Disability Insurance Plan.
The Company entered into severance agreements with certain of its
executive officers and key personnel during the 1994 fiscal year (each, a
"Severance Agreement"). Pursuant to the Severance Agreements, the Company
has agreed to pay such covered executive officers and key personnel certain
benefits in the event of a change in control of the Company leading to the
termination of the covered employee's employment with the Company. For the
purposes of the Severance Agreements, a "change in control" of the Company
is defined as: (i) the acquisition by any person, group, corporation or
other entity of 25% or more of the outstanding Common Stock of the Company,
whether or not pursuant to a tender or exchange offer; (ii) the approval by
the shareholders of the Company of (a) any consolidation or merger of the
Company in which the Company will not be the continuing or surviving
corporation or pursuant to which shares of the Company's Common Stock would
be converted into cash, securities or other property, (b) any acquisition,
combination or merger of the Company by or with another corporation in which
less than a majority of the outstanding voting shares of the surviving
corporation will be owned by the owners of the Common Stock of the Company
outstanding immediately prior to such acquisition, combination or merger;
(iii) a complete liquidation or dissolution of the Company; or (iv) any
sale, lease, exchange or other transfer of all or substantially all the
assets of the Company. Under the Severance Agreements, during the 24 months
following a change in control of the Company, should a covered employee be
discharged without cause or resign in the face of any diminution of salary,
substantial change in responsibilities, geographical relocation or the like,
the covered employee is entitled to receive a severance benefit in the
amount of his or her salary for a period of up to 24 months, subject to
partial set-off from any compensation received from any new employment
obtained by the covered employee during the period during which any
severance benefits are received. At present, five executive officers or key
employees of the Company, including two named executive officers (Mr.
Marrone and Mr. Hotman) are covered by Severance Agreements.
Compensation of Directors. The annual retainer for a director is
$5,500. In addition, directors are paid $575 for attendance at each regular
meeting of the Board of Directors and $525 for attendance at committee
meetings, except for attendance at Executive Committee meetings for which no
fee is paid. Compensation for serving on the Executive Committee is $3,800
annually. Further, the chairmen of the Finance-Banking, Insurance-Pension
and Compensation Committees each receive an annual fee of $500 for such
services; the Audit Committee Chairman receives an annual fee of $1,000. Mr.
Kelley received $12,000 annually as Chairman of the Board of Directors.
The Company maintains a Non-Qualified Retirement Savings Plan (the
"Plan") for the Board of Directors. Under the Plan, the Directors are
permitted to defer up to 100% of their fees. The Director may select the
assets in which the funds are to be invested. The Plan allows for the
benefits to be paid at age
70-1/2. In addition, the Plan provides a survivorship benefit, equal to the
balance in the account, to the selected beneficiary of the Director in the
event of the Director's death.
The Company also maintains a Retirement Plan for Directors, pursuant
to which directors of the Company are entitled to certain limited benefits
upon their retirement as directors of the Company. Eligibility for
participation in the Retirement Plan is limited to directors having served
as such for a period of at least five years. Under the plan, directors are
entitled to receive an annual retirement benefit equal to one-half of the
annual retainer fee for directors plus an additional amount based on 10% of
the annual retainer fee for every year in excess of five, but not exceeding
ten, years of service as director. Benefits under the Retirement Plan are
payable for a ten-year period, and may, in certain circumstances, be paid to
a participant's beneficiary.
Compensation Committee Interlocks and Insider Participation. Directors
Gioia, Goedecke, Hundley and Kelley served on the Company's Director and
Executive Compensation Committee during the Company's last fiscal year. Mr.
Kelley, a former executive officer of the Company, served as chairman of the
Committee. The law firm of which Mr. Hundley is a member and a managing
director received fees of $158,264 from the Company during the Company's
most recent fiscal year; the Company intends to retain such firm in the
current fiscal year.
Report of the Director and Executive Compensation Committee. The
Company's Director and Executive Compensation Committee has submitted the
following report concerning executive compensation.
The compensation of executive officers of the Company, including that
of the executive officers named in the Summary Compensation Table, is
formally reviewed and established annually by the Director and Executive
Compensation Committee of the Board of Directors, subject to approval by the
Board.
During the fiscal year ended June 30, 1996, the compensation of the
executive officers of the Company, including that of the President and Chief
Executive Officer, the Vice President, Treasurer and Chief Financial Officer
and Vice President, Supply, Rates and Planning, consisted of base salary, a
bonus determined under the Company's Incentive Compensation Plan, as
described below, and director's fees as to Mr. Robinson. In its annual
review and in setting compensation for the President and Chief Executive
Officer and other executives, the Compensation Committee considered and gave
weight to financial and operating results, earnings levels and return on
common equity, development and implementation of short term and long term
planning objectives, achievement of cost containment in the Company's
operations, the state of relations between the Company and its customers,
regulatory authorities and the public generally and the degree of
achievement of individual and management goals established from time to
time. In this regard, the Compensation Committee gave greater weight to the
degree of achievement of earnings and common equity return objectives than
to other goals, with appropriate consideration of the impact of variable
weather conditions and the condition of the local economy upon the Company's
earnings and common equity return during the last fiscal year.
The Compensation Committee, using information provided by independent
sources, publicly available information concerning other public utilities
similar in size to the Company and information from industry organizations,
reviewed earnings levels and return on common equity realized by the Company
on a comparative basis with other similar companies. The Compensation
Committee also reviewed information concerning executive compensation paid
by other gas distribution companies in Massachusetts and the New England
area.
The Company adopted some years ago, and the Compensation Committee
reviews periodically, with the assistance of Company personnel and outside
consultants as necessary, salary ranges for each executive officer,
including the President and Chief Executive Officer, of the Company. In
determining salary ranges, reference is made in part to information
concerning salaries paid by other regional utility companies. The
Compensation Committee established what it believed to be an appropriate
compensation level for each executive within the salary range by reference
to an assessment of each executive's responsibilities and job performance
and the factors set forth above.
The Company adopted, in 1994, a corporate Incentive Compensation Plan
("ICP") as part of an ongoing review of executive compensation, in order to
provide a discretionary and variable component of overall compensation that
will acknowledge exceptional service and achievement, and at the same time
will encourage continuing improvement in the Company's performance, promote
the interests of the Company's shareholders and ratepayers by incorporating
criteria of financial performance and comparative measures of operating
performance, and reinforce a sense of commitment to the achievement of
longer term objectives by the achievement of short-term goals. It is
intended that cash awards through the ICP will encourage executives to
increase their equity ownership in the Company through the purchase of
Common Stock on a voluntary basis.
The ICP, which is administered by the Committee, subject to Board
review and approval, will be discretionary in any given year and may be
suspended, amended or terminated at any time by the Company. For each year
in which the ICP operates, designated executives and other key management
personnel will be eligible to receive an award from a fund not to exceed in
the aggregate 3.5% of the Company's income available for its shareholders.
The amount of the fund shall be determined by reference to (a) a pre-
designated level of return on common equity and (b) the level of growth of
certain operating and maintenance expenses, as compared to a peer group. The
ICP provides that awards shall be made only for a year in which the
designated return on common equity is achieved or exceeded, irrespective of
the degree to which other criteria may be satisfied. Although individual
awards will be determined primarily by reference to the foregoing two
measures, the ICP also provides for the establishment of individual annual
performance goals. Awards, if any, are to be made as a percentage of base
salary and could range from a low of 1% to a high of 25%, depending upon the
degree to which the performance measures are met or exceeded. During the
fiscal year ended June 30, 1996, the designated return on common equity was
achieved and, accordingly, awards were made under the ICP as shown in the
Summary Compensation Table under "Bonus".
THE DIRECTOR AND EXECUTIVE COMPENSATION COMMITTEE
Joseph T. Kelley, Chairman
Paul L. Gioia
William S. Goedecke
Franklin M. Hundley
Performance Graph. The following graph illustrates the return that
would have been realized (assuming reinvestment of dividends) by an investor
who invested on June 30, 1991 in each of (i) the Company's Common Stock,
(ii) the Nasdaq Stock Market - U.S. Index, and (iii) a peer group consisting
of 12 companies within the Company's Standard Industrial Classification Code
(SIC), the "Peer Group".
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG THE BERKSHIRE GAS COMPANY, THE NASDAQ STOCK MARKET-US INDEX
AND A PEER GROUP
Cumulative Total Return
6/91 6/92 6/93 6/94 6/95 6/96
Berkshire Gas Co. 100 116 152 158 151 166
Peer Group 100 120 156 148 156 175
Nasdaq Stock Market-US 100 120 151 153 204 261
- - - -------------------
* $100 invested on 06/30/91 in stock or index_including reinvestment of
dividends. Fiscal Year ending June 30.
Source: Resource Data Group
RATIFICATION OF THE SELECTION OF AUDITORS
(PROPOSAL NO. 2)
There will be submitted to the Annual Meeting a proposal to ratify the
action of the Board of Directors in selecting the firm of Deloitte & Touche
LLP, Independent Certified Public Accountants, as auditors for the Company
for the fiscal year ending June 30, 1997. In the event of non-ratification,
the Board of Directors would reconsider its selection.
Representatives of Deloitte & Touche LLP, which has served as
principal accountant for the Company during the past fiscal year, are
expected to be present at the Annual Meeting to respond to appropriate
questions and to make a statement if they so desire.
CHARTER AMENDMENT TO INCREASE AUTHORIZED COMMON STOCK
(PROPOSAL NO. 3)
The Company proposes an amendment to the Charter, Agreement of
Association and Articles of Organization of the Company (the "Charter") to
increase the authorized Common Stock, $2.50 par value, of the Company by
2,000,000 shares. The Company's Charter, as amended to date, authorizes the
issuance of 2,600,000 shares of Common Stock, of which shares are
presently issued and outstanding. Shares of the Company's Common Stock have
no preemptive rights. The additional shares of Common Stock for which
authorization is sought would be identical to the shares of Common Stock now
outstanding. Such increase in the Company's authorized Common Stock is
proposed to provide 2,000,000 additional shares to be held for issuance and
sale in the future, as set forth in the following resolution which will be
submitted for shareholder approval at the Annual Meeting:
Resolved: That the Charter, Agreement of Association and Articles of
Organization of The Berkshire Gas Company (the "Company") be,
and the same hereby are, amended to increase the authorized
capital stock of the Company by creating an additional
2,000,000 shares of the Company's Common Stock, $2.50 par
value, thereby increasing the number of authorized shares of
said Common Stock from 2,600,000 to 4,600,000, such shares to
be issued as authorized by the Board of Directors for proper
corporate purposes, subject to the requisite approval of the
Massachusetts Department of Public Utilities.
Authorization at the Annual Meeting of the additional shares to be
issued in the future would avoid the time and expense of a special
shareholders' meeting which otherwise would be necessary. The issuance and
sale of all 2,000,000 shares would not be subject to further shareholder
action, but would be subject to approval by the Massachusetts Department of
Public Utilities. An affirmative vote of a majority of the outstanding
shares of the Company's Common Stock is required for approval of this
proposal. There are no rights of appraisal or similar rights of dissenters
with respect to this proposal.
OTHER MATTERS
As of the date hereof, the Board of Directors has not been informed of
any matters to be presented for action at the Annual Meeting other than
those listed in the Notice of Annual Meeting and referred to herein. If any
other matters properly come before the Annual Meeting or any adjournment
thereof, it is intended that the proxies will be voted in respect thereof in
accordance with the judgment of the persons named therein.
PLEASE DATE, SIGN AND RETURN THE ENCLOSED PROXY.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED JUNE 30, 1996, WHICH HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, MAY BE OBTAINED WITHOUT CHARGE BY ANY SHAREHOLDER OF THE COMPANY
UPON WRITTEN REQUEST ADDRESSED TO: OFFICE OF THE CLERK, THE BERKSHIRE GAS
COMPANY, 115 CHESHIRE ROAD, PITTSFIELD, MASSACHUSETTS 01201-1879.
By Order of the Board of Directors,
CHERYL M. CLARK
Clerk of the Corporation
THE BERKSHIRE GAS COMPANY
Common Stock Proxy
The undersigned, revoking any previous instructions, hereby acknowledges
receipt of the Notice and Proxy Statement dated October 11, 1996, in
connection with the Annual Meeting mentioned below and appoints Joseph T.
Kelley, Scott S. Robinson and John W. Bond as Proxies, each with power to
act alone and to appoint his substitute and authorizes them to represent and
to vote, as indicated on the reverse side hereof, all of the shares of
Common Stock of The Berkshire Gas Company held of record by the undersigned
on October 4, 1996, at the Annual Meeting of Shareholders to be held on
November 13, 1996, and any adjournments or postponements thereof.
This proxy is solicited on behalf of the Board of Directors. When this Proxy
is properly executed, the shares represented hereby will be voted as
specified by the Shareholder on the reverse side hereof. If no specification
is made, such shares will be voted "FOR" the nominees named herein and "FOR"
each of the proposals.
PLEASE VOTE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
Please sign this proxy card exactly as your name or names appear hereon.
Joint owners should each sign personally. Trustees and other fiduciaries
should indicate the capacity in which they sign, and where more than one
name appears, a majority must sign. If a corporation, this signature should
be that of an authorized officer who should state his or her title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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x PLEASE MARK VOTES
AS IN THIS EXAMPLE
<TABLE>
<CAPTION>
With- For All
For hold Except For Against Abstain
<S> <C> <C> <C> <S> <C> <C> <C>
Proposal No. 1 [ ] [ ] [ ] Proposal No. 2 [ ] [ ] [ ]
To elect two (2) directors. To ratify the selection by the Board of
Directors of Deloitte & Touche LLP as
James R. Keys and Robert B. Trask auditors for the Company for the fiscal
year ending June 30, 1997.
If you do not wish your shares voted "For" any Proposal No. 3 For Against Abstain
particular nominee, mark the "For All Except" To amend the Charter, Agreement of [ ] [ ] [ ]
box and strike a line through that nominee's Association and Articles of Organi-
name. Your shares shall be voted for the zation by increasing the authorized
remaining nominee. Common Stock, $2.50 par value, of the
Company from 2,600,000 to 4,600,000
shares as proposed by the Board of
Directors.
To act upon such other matters as may properly come before the
meeting.
</TABLE>
RECORD DATE SHARES:
<TABLE>
<S> <S> <S>
Please be sure to sign and date this Proxy. Date Mark box at right if comments or address change has
been noted on the reverse side of this card. [ ]
Shareholder sign here Co-owner sign here
</TABLE>
DETACH CARD DETACH CARD
THE BERKSHIRE GAS COMPANY
Common Stock Proxy
Dear Shareholder:
Please take note of the important information enclosed with this Proxy Card.
The Proposals require your immediate attention and approval and are
discussed in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to
vote your shares.
Please mark the boxes on the proxy card to indicate how your shares shall be
voted. Then sign and date the card, detach it and return your proxy vote in
the enclosed postage paid envelope.
Your vote must be received prior to the Annual Meeting of Shareholders,
November 13, 1996.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
The Berkshire Gas Company
