<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
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 Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
FALL RIVER GAS COMPANY
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] 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: N/A.
(2) Aggregate number of securities to which transaction applies: N/A.
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): N/A.
(4) Proposed maximum aggregate value of transaction: N/A.
(5) Total fee paid: N/A.
[ ] Fee paid previously with preliminary materials.
[ ] 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.: Schedule 14A (definitive
proxy statement).
(3) Filing Party: Eric J. Krathwohl, Esq. of Rich, May, Bilodeau & Flaherty,
P.C. on behalf of Registrant.
(4) Date Filed: December 24, 1996.
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<PAGE> 2
FALL RIVER GAS COMPANY
155 NORTH MAIN STREET
POST OFFICE BOX 911
FALL RIVER, MASSACHUSETTS 02722-0911
NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, FEBRUARY 11, 1997
Fall River, Massachusetts
December 23, 1996
To the Common Stockholders of
FALL RIVER GAS COMPANY:
Notice is hereby given that the Annual Meeting of Stockholders of Fall
River Gas Company will be held at the office of the Company, 155 North Main
Street, Fall River, Massachusetts, on Tuesday, February 11, 1997, at 10:30 A.M.,
local time, for the following purposes:
(1) To consider and act upon a proposal to fix the number of Directors
at nine (9) and to elect three (3) Class C Directors.
(2) To designate auditors for the 1997 fiscal year.
(3) To transact such other business as may properly come before the
meeting.
The stock transfer books will not be closed, but only holders of record at
the close of business on December 13, 1996 (the "Record Date") will be entitled
to notice of and to vote at the meeting.
By Order of the Board of Directors,
ROBERT J. POLLOCK, Clerk
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.
<PAGE> 3
FALL RIVER GAS COMPANY
PROXY STATEMENT
December 23, 1996
By Whom Proxy Solicited and Solicitation Expenses. The accompanying proxy
is solicited by the Board of Directors of Fall River Gas Company (the "Company")
for use at the Annual Meeting of Stockholders to be held at the office of the
Company, 155 North Main Street, Fall River, Massachusetts, on Tuesday, February
11, 1997. Proxies in the accompanying form, properly executed and received prior
to the meeting and not revoked, will be voted. 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 December 23, 1996. In addition to
solicitation by mail, some solicitation may be made by employees or agents of
the Company by telephone or personal interview.
The Company mails herewith to all stockholders entitled to vote a copy of
its Annual Report for the fiscal year ended September 30, 1996, which contains
detailed financial information concerning the Company. Upon the written request
of any stockholder, the Company will mail, without charge, a copy of the
Company's Annual Report on Form 10-K, as discussed further on page 10.
Right to Revoke Proxy. Any stockholder giving the proxy enclosed with this
statement has the power to revoke the proxy at any time prior to the exercise
thereof. Such revocation may be by writing (which may include a later dated
proxy) received by the Clerk, Fall River Gas Company, 155 North Main Street,
Post Office Box 911, Fall River, Massachusetts 02722-0911, received no later
than February 10, 1997, if by mail, or prior to the exercise of the proxy if
delivered by hand. 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 Clerk, Fall River Gas Company, 155 North Main Street, Post Office
Box 911, Fall River, Massachusetts 02722-0911 by August 25, 1997.
Voting Securities Outstanding. There were 1,781,299 shares of common stock
outstanding and entitled to vote on December 13, 1996 (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 Annual Meeting of
Stockholders 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.
<PAGE> 4
As of September 30, 1996, all Directors and executive officers of the
Company, 13 persons as a group, beneficially owned 282,175 shares or 15.8% of
the outstanding common stock of the Company. No person or group owns of record
or is known by the Company to own beneficially more than 5% of the Company's
outstanding common stock, other than as set forth in the following table.*
<TABLE>
<CAPTION>
SHARES OF COMMON
STOCK BENEFICIALLY PERCENT
NAME AND ADDRESS OF OWNED AS OF OF
BENEFICIAL OWNER SEPTEMBER 30, 1996 CLASS
------------------- ------------------ -------
<S> <C> <C>
Ronald J. Ferris 145,059 Shares(1) 8.1%
75 GAR Highway
Swansea, Massachusetts
Barbara N. Jarabek 304,714 Shares(2) 17.1%
103 South Washington Drive
Sarasota, Florida
</TABLE>
- ---------------
(1) Includes 5,852 shares owned jointly with Dale Ferris, 4,000 shares owned
jointly with children of Mr. Ferris, 36,990 shares owned by Lee's River
Realty, Inc., 3,926 shares held in trusts for the children of Mr. Ferris,
and 53,594 shares owned by the Swansea Lounge, Inc. Pension Trust for which
Mr. Ferris is a co-trustee. Mr. Ferris has shared voting and investment
power with respect to all shares beneficially owned by him except for 40,697
shares owned directly and of record by him, with respect to which he has
sole voting and investment power. Mr. Ferris disclaims beneficial ownership
with respect to the 3,926 shares held in trust for his children and the
53,594 shares owned by the Swansea Lounge, Inc. Pension Trust.
(2) Consists of shares held in two trusts for which Barbara N. Jarabek is
trustee, and with respect to which Mrs. Jarabek possesses sole power to vote
and sole investment power.
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
The By-laws of the Company provide that the number of Directors shall be
fixed at the Annual Meeting of Stockholders each year at a number not less than
three nor more than nine. The Board of Directors proposes that the number of
Directors for the ensuing year be set at nine. The Articles of Organization 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.
The Board of Directors is divided into three separate classes, currently
consisting of three Class A Directors, three Class B Directors and three Class C
Directors, the terms of which expire as set forth in the table below. Except as
noted, Directors serving in each class have been elected in prior years by the
stockholders to serve until the election and qualification of their respective
successors in office. At each annual meeting of stockholders, the stockholders
of the Company have the right to elect the appropriate number of persons to
serve for a three-year period as Directors of the class whose terms then expire,
the right to increase the number of Directors (not to exceed nine) and the right
to elect Directors to fill the new directorships
- ---------------
*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 to the tables
appearing on this page and on page 3 and 4, the listed beneficial owners held
direct and sole voting and investment power with respect to the stated shares.
2
<PAGE> 5
created by any such increase. Any directorship which may become vacant by reason
of death, resignation or otherwise than by expiration of term may be filled by
the Board of Directors, as provided in the By-laws.
The term of the Class C Directors is scheduled to expire at the 1997 Annual
Meeting of Stockholders and the Board has set at three the number of Class C
Directors to be elected at this meeting. The Board has nominated for election
the three incumbents in such class: Cindy L.J. Audette, Jack R. McCormick and
Donald R. Patnode. 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 the
foregoing persons to serve as director until the election and qualification of
his successor. In the event of any vacancy in the foregoing list of nominees
prior to the Annual Meeting of Stockholders (which the Board of Directors does
not anticipate), the persons named as the proxies will vote for such person or
persons acceptable to the Board of Directors.
The following information is furnished with respect to each nominee for
election as a director and for each director whose term of office will continue
after the meeting. Each of the individuals in the following table has furnished
the information opposite his or her name.
<TABLE>
<CAPTION>
SHARES OF COMMON
STOCK BENEFICIALLY PERCENT
OWNED AS OF OF
NAME SEPTEMBER 30, 1996 CLASS
---- ------------------ -------
<S> <C> <C>
NOMINEES FOR ELECTION AS CLASS C DIRECTORS FOR A TERM OF THREE
YEARS EXPIRING AT THE 2000 ANNUAL MEETING:
Cindy L. J. Audette, 34, Director and Vice President, Jack Realty,
Inc.; formerly, Loan Officer, Bank of Boston, Real Estate
Division, 1986-1990. A Director since 1992. Chair of the
Compensation Committee and member of the Audit and Executive
Committees. Sister-in-law of Gilbert C. Oliveira, Jr., a
Director of the Company. 7,857(4) *
Jack R. McCormick, 72, Financial Consultant to the Company.
Previously served as President of the Company, 1973-1986 A
Director since 1974. Chair of the Audit Committee and member of
the Compensation Committee. Director also of Corning Natural Gas
Corporation. 4,700(2) *
Donald R. Patnode, 68, Retired. Formerly, Business Consultant;
President of Industrial Filters & Equipment Corporation
1989-1994; President of North East Water Service, 1957-1989. A
Director since 1984. Member of the Audit and Executive
Committees. Director also of Corning Natural Gas Corporation. 1,750 *
CLASS A DIRECTORS WHOSE TERMS EXPIRE AT THE 1998 ANNUAL MEETING:
Thomas K. Barry, 51, President and Chief Executive Officer of
Corning Natural Gas Corporation since 1984. A Director since
1992. Member of the Audit Committee. Director also of Corning
Natural Gas Corporation. 1,200 *
Thomas H. Bilodeau, 54, Vice President-Finance, Medical &
Environmental Coolers, Inc. since 1990; formerly, Partner, R. A.
Kingrey Co., 1988-1990. A Director since 1987. Member of the
Pension Committee. Director also of Corning Natural Gas
Corporation. 9,006(3) 0.1%
Gilbert C. Oliveira, Jr., 40, Vice President, Gilbert C. Oliveira
Insurance Agency, and President, G. Curt Oliveira Insurance
Agency since 1988. A Director since 1992. Member of the Pension
and Compensation Committees. Brother-in-law of Cindy L. J.
Audette, a Director of the Company. 9,529(4) 0.1%
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
SHARES OF COMMON
STOCK BENEFICIALLY PERCENT
OWNED AS OF OF
NAME SEPTEMBER 30, 1996 CLASS
---- ------------------ -------
<S> <C> <C>
CLASS B DIRECTORS WHOSE TERMS EXPIRE AT THE 1999 ANNUAL MEETING:
Bradford J. Faxon, 58, President of the Company since 1986. Chair
of the Board of Directors and of the Pension Committee; member
of the Audit and Executive Committees. A Director since 1978.
Formerly, Executive Vice-President and Vice-President of
Commercial and Industrial Sales. Son of Raymond H. Faxon, a
Director of the Company. Director also of Corning Natural Gas
Corporation. 37,992(5) 2.1%
Raymond H. Faxon, 89, Financial Consultant since before 1988. A
Director since 1955. Vice Chair of the Board, Chair of the
Executive Committee and member of the Pension Committee. Father
of Bradford J. Faxon, President and a Director of the Company. 57,370(6) 3.2%
Ronald J. Ferris, 54, President of Venus de Milo, Inc., Interstate
Motel Corp. and Ferris Realty since before 1988. A Director
since 1984. Member of the Pension and Compensation Committees. 145,059(7) 8.1%
</TABLE>
- ---------------
* Less than one percent.
(1) Includes 660 shares held jointly with spouse (with shared voting and
investment power).
(2) Includes 1,100 shares held jointly with spouse (with shared voting and
investment power).
(3) Includes 7,746 shares held in trust for Thomas H. Bilodeau's children.
(4) Comprised of 9,529 shares held by Mr. Oliveira's spouse as custodian for a
minor child of Mr. Oliveira.
(5) Includes 4,952 shares held as custodian for Bradford J. Faxon's children.
(6) Comprised of 57,370 shares held in trust, for which Raymond H. Faxon is a
trustee.
(7) Includes 5,852 shares owned jointly with Dale Ferris, 4,000 shares owned
jointly with children of Mr. Ferris, 36,990 shares owned by Lee's River
Realty, Inc., 3,926 shares held in trusts for the children of Mr. Ferris,
and 53,594 shares owned by the Swansea Lounge, Inc. Pension Trust for which
Mr. Ferris is a co-trustee. Mr. Ferris has shared voting and investment
power with respect to all shares beneficially owned by him except for
40,697 shares owned directly and of record by him, with respect to which he
has sole voting and investment power. Mr. Ferris disclaims beneficial
ownership with respect to the 3,926 shares held in trust for his children
and the 53,594 shares owned by the Swansea Lounge, Inc. Pension Trust.
The Board of Directors has a standing Audit Committee, consisting of
Mr. J. McCormick, as Chair, and Ms. C. Audette and Messrs. T. Barry, B. Faxon
and D. Patnode, which recommends the selection of independent auditors and
reviews the plan and results of the independent audit. The Audit Committee held
one meeting during the fiscal year ended September 30, 1996. The Board of
Directors also has a standing Compensation Committee consisting of Ms. Audette,
as Chair, and Messrs. R. Ferris, J. McCormick and G. Oliveira, to consider and
recommend to the Board of Directors the amount and terms of compensation paid
to the officers of the Company. The Compensation Committee met one time during
the fiscal year ended September 30, 1996. The Board of Directors does not have
a standing nominating committee, nor a committee performing similar functions.
The Board of Directors met five times during fiscal year 1996. No director
attended less than 75% of the aggregate number of meetings of the Board of
Directors and committees on which he or she served during the fiscal year.
4
<PAGE> 7
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
executive officers and Directors, and persons who beneficially own more than ten
percent (10%) of the Company's stock, to file initial reports of ownership on
Form 3 and reports of changes in ownership on Form 4 with the Securities and
Exchange Commission (the "Commission") and any national securities exchange on
which the Company's securities are registered. Executive officers, Directors and
greater than ten percent (10%) beneficial owners are required by the
Commission's regulations to furnish the Company with copies of all Section 16(a)
forms they file.
Based solely on a review of the copies of such forms furnished to the
Company and written representations from the executive officers and Directors,
the Company believes that all Section 16(a) filing requirements applicable to
its executive officers, Directors and greater than ten percent (10%) beneficial
owners were complied with for Fiscal 1996.
EXECUTIVE COMPENSATION
Compensation of Executive Officers. The following table contains the
compensation paid or accrued by the Company and its subsidiary during the three
consecutive fiscal years ended September 30, 1996 to the Company's Chief
Executive Officer and to each executive officer whose total annual salary and
bonus exceeded $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)
<TABLE>
<CAPTION>
NAME AND ALL OTHER
PRINCIPAL POSITION YEAR SALARY(2) BONUS COMPENSATION(3)
------------------ ---- --------- ----- ---------------
<S> <C> <C> <C> <C>
Bradford J. Faxon
President 1996 $197,581 0 $19,481
1995 182,600 0 21,592
1994 159,501 0 20,761
Peter H. Thanas
Senior Vice President and Treasurer 1996 $139,685 0 $ 9,461
1995 126,125 0 9,045
1994 104,150 0 7,965
</TABLE>
- ---------------
(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
September 30, 1996, 1995 and 1994.
(2) The amounts in this column represent the aggregate of cash compensation
received and compensation deferred by the named executive officers.
(3) Consists of director's fees paid to the named executive officers by the
Company and its subsidiary, as well as matching contributions made by the
Company on behalf of the named executive officers to the Company's 401(k)
savings plan (the "Savings Plan").
5
<PAGE> 8
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
the age of 65 to eligible employees in various base salary groups and with
various periods of service. The annual benefits formula is based on the number
of years of service and the employee's average base salary for the four
consecutive years yielding the highest such average, subject, however, to the
$150,000 per year statutory maximum. Although service may be credited beyond the
normal retirement age (i.e., 65), benefits received under the Pension Plan are
computed on the basis of earnings received at age 65.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
15 20 25 30 YEARS
REMUNERATION YEARS YEARS YEARS AND THEREAFTER
- ------------ ------- ------- ------- --------------
<S> <C> <C> <C> <C>
$ 50,000 $15,000 $20,000 $25,000 $30,000
65,000 19,500 26,000 32,500 39,000
80,000 24,000 32,000 40,000 48,000
95,000 28,500 38,000 47,500 57,000
110,000 33,000 44,000 55,000 66,000
125,000 37,500 50,000 62,500 75,000
140,000 42,000 56,000 70,000 84,000
155,000 45,000 60,000 75,000 90,000
170,000 45,000 60,000 75,000 90,000
</TABLE>
Messrs. B. Faxon and P. Thanas, the individuals named in the preceding
Summary Compensation Table, have 33 years and 19 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.
Additionally, the Company has entered into agreements with each of Messrs.
B. Faxon and P. Thanas (collectively, the "Supplemental Benefits Agreements"),
which provide that the officer covered thereby and retiring after the age of 60
is entitled to receive monthly payments equal to thirty-five percent (35%) of
the officer's monthly salary at retirement for either life or 180 months,
whichever is longer.* Retirement benefits otherwise available upon retirement at
age 60 under the Supplemental Benefits Agreements are reduced cumulatively by
four percent (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. The Supplemental Benefits Agreements further
provide that in the event that an officer covered by such an agreement dies
prior to retirement, such officer's designated beneficiary is entitled to
receive monthly payments equal to fifty percent (50%) of the officer's monthly
salary at death for 180 months. Benefits payable under the Supplemental Benefits
Agreements increase by four percent (4%) annually.
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, Messrs. B. Faxon and P. Thanas are the only officers of the Company
covered by Supplemental Benefits Agreements, and no payments have been made to
date under such
- ---------------
*The age at which employees normally become eligible to receive pension
benefits is 65. However, employees of the Company are not required to retire in
order to receive such benefits.
6
<PAGE> 9
agreements. The Supplemental Benefits Agreements are in addition to the amounts
shown in the Summary Compensation Table and are not subject to limitation.
The Company maintains a deferred compensation plan which is available to
all officers. Eligible officers may elect to defer receiving any portion of
their salary until the termination of their employment with the Company.
Interest accrues on amounts deferred at a rate fixed by the Board of Directors;
currently, such rate is the (variable) prime rate of a Boston bank. Upon
termination of employment, participants receive amounts accrued under the plan.
The participants may elect to receive amounts over a period of not less than one
year nor longer than their contribution period. The amounts deferred by Messrs.
B. Faxon and P. Thanas in fiscal year 1996 are included in the compensation
figures in the table on page 5.
The Company has established the Fall River Gas Company 401(k) Savings Plan
(the "Savings Plan"). All full-time, salaried and non-union hourly employees of
the Company 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 12% of their compensation. The Company will
match 100% of the participant's contributions up to a total of 4% of the
participant's compensation. Company matching contributions become fully vested
to the participants after five years of service. Participants may select one of
four investment plans for their account or a combination thereof. Distribution
of amounts accumulated under the Savings Plan occurs upon the termination of
employment or the death of the participant. The Savings Plan also contains loan
and hardship withdrawal provisions. During the fiscal year ended September 30,
1996, no amounts were distributed to executive officers under the Savings Plan.
The amounts accrued under the Savings Plan by Messrs. B. Faxon and P. Thanas in
fiscal 1996 are included in the compensation figures in the table on page 5.
Employment Contracts, Termination of Employment and Change-in-Control
Arrangements. Effective September 30, 1991, the Company entered into employment
contracts with its President and Chief Executive Officer, Mr. Bradford J. Faxon
and with its Senior Vice President, Treasurer and Chief Financial Officer, Mr.
Peter H. Thanas. Under the terms of such employment contracts, Mr. Faxon is
compensated for his duties as an officer and director and Mr. Thanas is
compensated for his duties as an officer with respective salaries in amounts
determined from time to time by the Board of Directors. The term of each
employment contract was initially five years, unless earlier terminated by an
act of either the Company or the respective officer. Beginning in September 1993
and annually thereafter, the remaining term of each employment contract is
automatically extended for an additional one-year period. The employment
contracts further provide that upon any change in control of the Company leading
to the termination of the subject officer's employment with the Company, the
Company shall pay such officer three times the officer's then present annual
salary, or such lesser amount in order to avoid certain adverse tax consequences
under the Internal Revenue Code.
Compensation of Directors. The current annual director's compensation is
$5,500. In addition, Directors are paid $400 for each Board of Directors'
meeting attended, and $300 for each Audit, Compensation or Pension Committee
meeting attended. Furthermore, those Directors who are members of the Executive
Committee are paid $2,000 annually for their services on the committee, and
those Directors who are members of the Audit, Compensation and Pension
Committees are paid an additional $500 annually for their services on those
committees. In addition to the aforementioned compensation, the chairs of the
Audit, Executive, Compensation and Pension Committees receive annual payments of
$1,000, $2,500, $500 and $500, respectively.
Compensation Committee Interlocks and Insider Participation. Directors
Audette, Ferris, McCormick and Oliveira served on the Company's Compensation
Committee during the Company's last fiscal year. Ms. Audette is the daughter of
Mrs. Barbara N. Jarabek, who beneficially owns 17.1% of the voting securities of
7
<PAGE> 10
the Company; Mr. Oliveira is the son-in-law of Mrs. Jarabek. Mr. Ferris
beneficially owns 8.4% of the voting securities of the Company. Mr. McCormick is
a former executive officer of the Company.
Director B. Faxon, the president and an executive officer and director of
the Company, is a member of the Compensation Committee of Corning Natural Gas
Corporation's Board of Directors. Thomas Barry, the president of Corning Natural
Gas Corporation, is a director of the Company.
Report of the Director and Executive Compensation Committee. The Director
and Executive Compensation Committee of the Company's Board of Directors has
furnished the following report concerning executive compensation:
The compensation of executive officers of the Company is formally reviewed
and established annually by the Compensation Committee of the Board of
Directors, subject to approval by the Board. The Company does not have in effect
any separately existing incentive plan for executive compensation. In its annual
review and in setting compensation for 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
personal and management goals established from time to time.
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 of the Company. In
determining salary ranges for each executive officer, reference is made in part
to information concerning salaries paid by other regional utility companies and
to such executive officer's comparative responsibilities. 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 job performance and the factors set forth above. In setting
executive compensation for the past year, the Compensation Committee gave
greater weight to salaries of executive officers of comparable public utility
companies and other gas distribution companies in Massachusetts and the New
England region, as well as the degree of achievement by the executive officers
of personal and management goals.
THE DIRECTOR AND EXECUTIVE
COMPENSATION COMMITTEE
Cindy L. J. Audette, Chair
Ronald J. Ferris
Jack R. McCormick
Gilbert C. Oliveira, Jr.
8
<PAGE> 11
Performance Graph. The following graph illustrates the return that would
have been realized (assuming reinvestment of dividends) by an investor who
invested on September 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 15
companies within the Company's Standard Industrial Classification Code (SIC),
the "Peer Group".
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG FALL RIVER GAS COMPANY, THE NASDAQ STOCK MARKET-US INDEX
AND A PEER GROUP
<CAPTION>
DATE FALL RIVER GAS COMPANY PEER GROUP NASDAQ STOCK MARKET-US
<S> <C> <C> <C>
9/91 100 100 100
9/92 104 130 112
9/93 119 161 147
9/94 166 142 148
9/95 163 150 204
9/96 129 182 243
<FN>
* $100 INVESTED ON 9/30/91 IN STOCK OR INDEX - INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING SEPTEMBER 30.
</TABLE>
SELECTION OF AUDITORS
(PROPOSAL NO. 2)
It is recommended that Arthur Andersen LLP, Certified Public Accountants,
of Boston, Massachusetts, be designated as auditors for the Company for the
fiscal year ending September 30, 1997. Arthur Andersen LLP has no direct or
indirect financial interest in the Company or any of its subsidiaries and has
never had any connection with the Company or any of its subsidiaries in the
capacity of promoter, underwriter, voting trustee, director, officer or
employee. A representative of Arthur Andersen LLP, which has served as principal
accountant for the Company for the past fiscal year, is expected to be present
at the Annual Meeting of Stockholders, with the opportunity to make a statement
if such representative desires to do so, and is expected to be available to
respond to appropriate questions.
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OTHER MATTERS
Except for the matters set forth above, the Board of Directors knows of no
other matters which may be presented to the Annual Meeting of Stockholders, but
if any other matters properly come before such meeting, it is the intention of
the persons named in the accompanying form of proxy to vote such proxies in
accordance with their judgment.
PLEASE DATE, SIGN AND RETURN THE ENCLOSED PROXY.
By Order of the Board of Directors,
Robert J. Pollock, Clerk
All holders of common stock of the Company may obtain, without charge, a
copy of the Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1996, including the financial statements and schedules thereto,
required to be filed with the Securities and Exchange Commission. The report
will be furnished upon request made in writing to:
Bradford J. Faxon, President
Fall River Gas Company
155 North Main Street
Post Office Box 911
Fall River, Massachusetts 02722-0911
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<PAGE> 13
PROXY FALL RIVER GAS COMPANY PROXY
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ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 11, 1997
The undersigned, having received the Notice of the Annual Meeting of
Stockholders and Proxy Statement of Fall River Gas Company (the "Company"),
dated December 23, 1996, hereby appoints Cindy L. J. Audette, Bradford J. Faxon,
Raymond H. Faxon and Donald R. Patnode, and any of them, as proxy or proxies of
the undersigned, to vote the shares of the common stock of the Company owned by
the undersigned, at the Annual Meeting of Stockholders of the Company to be held
at the offices of the Company in Fall River, Massachusetts on Tuesday, February
11, 1997, at 10:30 A.M. local time and at any adjournment(s) thereof, with all
powers the undersigned would possess if personally present at said meeting with
full power of substitution or revocation. The following purposes for which this
proxy may be exercised are set forth in the Notice of the Annual Meeting of
Stockholders and are more fully set forth in the Proxy Statement.
1. FOR [ ] AGAINST [ ] ABSTAIN [ ] The proposal to fix the number of
Directors at nine and the election as Class C Directors the nominees of
Cindy L. J. Audette, Jack R. McCormick and Donald R. Patnode, except as
written in the space below.
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WITHHOLD AUTHORITY TO VOTE ON [ ] The election of all nominees listed
above, as a group.
2. FOR [ ] AGAINST [ ] ABSTAIN [ ] The designation of Arthur Andersen LLP,
Certified Public Accountants, as auditors for the Company for the fiscal
year ending September 30, 1997.
3. To act upon such other matters as may come before the meeting.
The undersigned ratifies and confirms all that said proxy(ies) may do by
virtue hereof. The proxies are authorized to vote in their discretion with
respect to matters not known or determined at the date of the Proxy Statement. A
majority of said proxies as shall be present and acting at the meeting shall
have and may exercise all of the powers of proxies hereunder, or if only one be
present and acting, then that one shall have and may exercise all of said
powers.
(OVER)
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS MADE ABOVE IN REGARD TO THE PROPOSALS NUMBERED 1 AND 2. IN THE
ABSENCE OF A SPECIFICATION, THIS PROXY WILL BE VOTED FOR THE NOMINEES NAMED
HEREIN AND FOR THE PROPOSAL NUMBERED 2.
DATED: , 199
------------------------------------
------------------------------ (L.S.)
------------------------------ (L.S.)
STOCKHOLDERS SHOULD SIGN HERE
EXACTLY AS THE NAME OR NAMES ARE
PRINTED. WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE OR
GUARDIAN, PLEASE GIVE YOUR FULL
TITLE AS SUCH. JOINT OWNERS SHOULD
EACH SIGN PERSONALLY.
IMPORTANT
PLEASE DATE, SIGN AND MAIL PROMPTLY IN THE ENCLOSED ENVELOPE.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
