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Previous: GENERAL MOTORS ACCEPTANCE CORP, 424B3, 1999-10-26 |
Next: NEUBERGER BERMAN EQUITY FUNDS, N-30D, 1999-10-26 |
Notice of Annual Meeting of Shareholders
And Proxy Statement
ENERGY WEST, Incorporated
October 25, 1999
Dear Shareholders,
The Board of Directors joins me in extending to you a cordial invitation to attend the 1999 Annual Meeting of Shareholders of ENERGY WEST Incorporated (the Company). The meeting will be held on: Thursday, November 18, 1999, at 12:30 Mountain Standard Time in the Missouri Room at the Civic Center, located at Park Drive and Central Avenue, Great Falls, Montana, for the following purposes:
Shareholders of record at the close of business on October 18, 1999 are entitled to be present and vote at the meeting; we welcome all shareholders.
YOUR VOTE IS IMPORTANT
Whether or not you expect to attend the Annual Meeting, it is important that your shares be represented. Please sign and date the enclosed proxy and return it promptly in the enclosed envelope (no postage required) to insure that your shares will be represented at the meeting. If you attend the meeting and wish to vote in person, you may, at that time, revoke your proxy and vote at the meeting.
BY
ORDER OF THE BOARD OF DIRECTORS
Larry D. Geske
President and Chief Executive Officer
ENERGY
WEST INCORPORATED
No. 1 First Avenue South,
P.O. Box 2229
Great Falls, Montana 59403-2229
The accompanying proxy is being solicited by the Board of Directors of ENERGY WEST Incorporated (the "Company") for the Annual Meeting of Shareholders to be held on November 18, 1999 at 12:30 Mountain Standard Time, in the Missouri Room of the Civic Center, located at Park Drive and Central Avenue in Great Falls, Montana and any and all adjournments or postponements thereof, for the purposes set forth in the accompanying Notice of Meeting. This Proxy Statement and a copy of the Company's Annual Report to Shareholders for the year ended June 30, 1999 are being mailed on or about October 25, 1999 to all shareholders of record on October 18, 1999. A shareholder giving a proxy for use at the meeting may revoke such proxy prior to its exercise either by written notice, to be received by the Secretary of the Company no later than the close of business on November 17, 1999, or by appearing in person at the Annual Meeting and revoking his proxy. If no direction is given, the proxy will be voted for the three proposals set forth in the accompanying Notice of Meeting. A shareholder who has revoked his proxy may choose to vote his shares by executing another proxy or by voting in person at the Annual Meeting or may abstain from voting. A shareholder may, if he deems it advisable, strike the names of management's proxy holders on the accompanying proxy and insert names of his own choosing. Only shareholders of record at the close of business on October 18, 1999 may vote at the meeting or any adjournment thereof. As of September 10, 1999, 2,449,893 shares of Common Stock of the Company were issued and outstanding, the only class of securities of the Company entitled to vote at the meeting. Each shareholder of record is entitled to one vote for each share registered in his or her name as of the record date, except that each shareholder is entitled to cumulate his votes in electing directors by multiplying the number of votes to which he may be entitled by the number of directors to be elected and casting all such votes for one candidate or distributing them among any two or more candidates. To vote cumulatively, the shareholder must write the words "cumulative for", followed by the number of shares to be voted and name of the nominee or nominees selected on the line provided under item No. 1 of the proxy. The eight nominees for director receiving the highest number of votes at the meeting will be elected. Expenses in connection with the solicitation of proxies will be paid by the Company. Proxies are being solicited primarily by mail but, in addition, officers and regular employees of the Company who will receive no extra compensation for their efforts may solicit proxies by telephone, telegraph, or personal calls. So far as the management of the Company is aware, no matters other than those described in this Proxy Statement will be acted upon at the meeting. In the event that any other matters properly come before the meeting calling for a vote of shareholders, the persons named as proxies in the enclosed form of proxy will vote in accordance with their best judgment on such other matters. For purposes of determining whether a proposal has received a majority vote, abstentions will not be included in the vote total, and, therefore, will have no effect on the outcome of the vote. For purposes of determining whether a proposal has received a majority vote, in instances where brokers are prohibited from exercising discretionary authority for beneficial owners of Common Stock who have not returned a proxy (so called "Broker Non Votes"), those shares will not be included in the vote totals, and, therefore, will have no effect on the outcome of the vote. Shares held by holders who are either present in person or represented by proxy who abstain or for whom the authority to vote is withheld on certain matters will, however, be treated as present for quorum purposes on all matters. The Board of Directors is comprised of between five and nine members. Eight directors are currently proposed for election, all of whom, with the exception of Mr. Geske are not employees of the Company. The business affairs of the Company are managed under the general direction of the Board, although it is not involved in day to day operations. The Directors met six times since the last annual meeting held November 19, 1998. Seven of the eight incumbent members of the Board are standing for reelection. Mr. Ian Davidson has elected not to stand for re-election after a period of over thirty years as a member of the Board of Directors. Proposed for the first time as a member of the Board is Mr. Andrew Davidson.
The following persons have been nominated to serve one year terms or until their successors are elected and have qualified:
Andrew Davidson, Larry D. Geske, David A. Flitner, Thomas N. McGowen, Jr , G. Montgomery Mitchell, George D. Ruff, Richard J. Schulte, Dean A. South.
With the exception of Mr. Davidson, each of the nominees for director is a member of the present Board of Directors. It is intended that the proxies in the form enclosed will be voted for the election of the nominees named above by regular or cumulative voting, unless authority to do so is withheld as provided in the proxy. The persons named in the proxy have the right, under the conditions stated in "General Information," page 1, to cumulate their votes and distribute them among the nominees, at their discretion, unless otherwise specifically instructed. If for any reason one or more of the nominees should be unable to serve or refuse to serve as director (an event which is not anticipated), the proxies will be voted for such substitute nominees as the proxy holders may determine. The eight nominees for director receiving the highest number of votes will be elected. The eight nominees are submitted for election at this time in accordance with a resolution adopted by the directors at the Board meeting on September 9, 1999. The Board of Directors recommends approval of each nominee.
INFORMATION ABOUT DIRECTORS AS OF September 9, 1999 APPEARS BELOW:
Andrew. Davidson (32) is proposed as a Director for the first time. He is Vice President and Portfolio Manager for Financial Aims Corporation and a Financial Consultant for D. A. Davidson & Company. He has served in both capacities since 1993.
David A. Flitner (66) has been a Director of the Company since 1988. Mr. Flitner is owner of the Flitner Ranch and Hideout Adventures, inc. a recreational enterprise.
Larry D. Geske (60) has been employed by the Company since 1975. He became President and Director of the Company in 1978, and in 1979, he was appointed to the position of Chief Executive Officer of the Company. He is a past Director of American Gas Association as Chairman of the AGA Small Utilities Coordinating Council.
Thomas N. McGowen, Jr. (73) has been a Director of the Company since 1978. Mr. McGowen is a retired attorney and is past President and Chairman of the Board of Pabst Brewing Company. He is a Director of Federal Signal Corporation.
G. Montgomery Mitchell (71) has been a Director of the Company since 1984. Mr. Mitchell was Senior Vice President and Director of Stone and Webster Management Consultants, Inc. from August 1980 until his retirement in 1993. Mr. Mitchell is a Director of Energy South, Inc. (formerly Mobile Gas Service Corporation).
George D. Ruff (61) has been a member of the Board of Directors since November 1996. Mr. Ruff served as Vice-President of Montana Operations for U. S. West from June of 1983 until his retirement in 1997. He is a director of Norwest Bank, the Montana Taxpayers Association and the Montana Chamber Foundation Board.
Dean A. South (56) has been a member of the Board of Directors since August of 1996. He currently ranches north of Helena, Montana. Mr. South retired as Vice President of Western Operation for Heritage Propane Corporation in 1991. He served as President and Chief Operating Officer of Louis Dreyfus Propane Corporation from 1986 until 1989 and President of Northern Energy Company from 1981 until they merged with Louis Dreyfus in 1986.
Richard J. Schulte (59) has been a Director of the Company since 1997. Mr. Schulte is a principal in Schulte Associates LLC, a consulting firm providing management services to energy related businesses. Mr. Schulte was formerly President of International Approval Services, Inc and Senior Vice President of Laboratories for the American Gas Association. He also serves as the chairman of the Audit and Finance Committee for the American Society for Testing and Materials (ASTM).
THE BOARD AND COMMITTEES OF THE BOARD
The Company has a Compensation Committee consisting, during the fiscal year, of Messrs. Davidson, McGowen, Flitner and Ruff. The Compensation Committee met four times during the year. It has the responsibility to make recommendations to the full board regarding base salaries of officers and certain pay for performance plans or other compensation matters. The Company also has an Audit Committee consisting, during the fiscal year, of Messrs. Mitchell, South and Schulte. The Audit Committee met four times during the year and has responsibility for reviewing the annual audit and making recommendations to the full board regarding accounting matters that come to its attention. Executive officers of the Company are elected by and serve at the discretion of the Board of Directors. Directors of the Company are elected at the Annual Meeting of Shareholders and serve until their successors are duly elected and qualified. No director attended fewer than 75% of the board and committee meetings on which he served. The Company paid its outside directors the following fees in the fiscal year:
| Annual Retainer | $3,000 per year; | |
| Board Meeting Fee |
|
$750 per Meeting; |
| Committee Meeting |
|
$375 per Committee Meeting, unless held in conjunction with a Board Meeting, in which case the fee for the meeting is $100. For Board or Committee meetings held by telephone conference the rate is one half the regular rate indicated. Furthermore, each Director receives an annual award of Company Stock. The amount of stock purchased is determined by an amount equal to a percentage of Director's compensation equivalent to the highest percentage of compensation paid in incentives to any member of the management incentive plan. For example, if the highest percentage of compensation paid out as incentive under the management incentive plan was 30%, that same 30% would be applied to the total compensation paid to each director during the fiscal year to arrive at a dollar amount. Those incentive dollars would then be utilized to purchase ENERGY WEST stock on behalf of each director. 1,862 shares were issued to Directors as a result of the plan for the fiscal year ending June 30, 1999. Those shares were issued at a price of $9.125. The Company also provides natural gas service at a 50% discount to those Directors who reside within the Company's service area. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table following sets forth certain information regarding the beneficial ownership of the Common Stock of the Company on or about September 30, 1999 (i) by each shareholder who is known by the Company to own beneficially more than 5% of the outstanding Common Stock, (ii) by each director, and (iii) by all executive officers and directors as a group.
| Name And Address (where applicable) Of Beneficial Owner |
Number of shares of Stock Beneficially Owned |
Percent of Ownership |
|
||||
|---|---|---|---|---|---|---|---|
| Ian Davidson #8 3rd St. N. Great Falls, Mt |
478,082 | 20 | %(a) | ||||
| Turkey Vulture Fund XIII, Ltd., 7001 Center St. Mentor Ohio |
122,700 | 5 | % | ||||
| Cedar Grove Cemetery Association P.O. Box 228, Flushing New York |
121,700 | 5 | % | ||||
| Larry Geske #1 1st Ave. S Great Falls, Mt |
118,693 | 5 | %(b)(c)(d) | ||||
| Andrew Davidson | 25,000 | ||||||
| David Flitner | 4,932 | ||||||
| Thomas N. McGowen, Jr | 4,773 | ||||||
| G. Montgomer Mitchell | 11,116 | ||||||
| George Ruff | 3,380 | ||||||
| Richard Schulte | 2,790 | ||||||
| Dean South | 1,145 | ||||||
| John C. Allen | 17,476 | (c)(d) | |||||
| Edward Bernica | 16,168 | (c)(d) | |||||
| Tim Good | 19,210 | (c)(d) | |||||
| All Directors and Executive Officers as a group (16 in number) | 677,756 | (28 | )%(c) (d) |
Section 16(a) Beneficial Ownership Reporting Compliance.
Under the securities laws of the United States, the Company's directors, its executive officers, and any persons holding more than ten percent of the Company's stock are required to report their ownership of the Company's common stock and any changes in that ownership to the Securities Exchange Commission. Specific due dates for these reports have been established and the Company is required to report in this proxy statement any failure to file on these dates. All these filing requirements were satisfied by its directors, officers and ten percent holders in the fiscal year ending June 30, 1999.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee") reviews each salary adjustment for the Company's officers and recommends those adjustments to the full board. The Committee also provides recommendations to the full Board regarding contributions to the Company's Management Incentive Plan, the Company's Incentive Stock Option Plan, as well as the Employee Stock Ownership Plan (ESOP). It also provides recommendations regarding Director Compensation.
The Committee's objectives are as follows:
The committee believes its CEO compensation plan, the Employee Stock Ownership Plan and the Company's Incentive Stock Option Plan promote these objectives. Total Compensation for executive officers is determined by marketplace survey data, Company performance and individual performance. A control point and a salary range is established for each executive based on market information of companies in the gas utility industry. Each executive receives a base salary and annual incentive award which, when combined, place the executive within the salary range for the position. The amount of the incentive award varies based upon the Company's performance. Incentive awards have traditionally ranged from 12% to 50% of base salary. Compensation for the Chief Executive Officer is accomplished through a combination of annual incentive awards pursuant to the Company's Management Incentive Plan and a deferred cash incentive plan. The Management Incentive Plan provides for the payment of a cash bonus depending on two criteria, earnings per share relative to a predetermined target and achieving a predetermined Economic Value Added (EVA) goal. Incentives awarded under this plan increase as the Company's performance, as measured by these two criteria, improves. The deferred cash incentive plan (applicable only to the CEO) was approved by the Compensation committee effective July 1, 1995. The cash amount is calculated by a formula that is governed by the total return to the ENERGY WEST shareholder (dividends and stock price appreciation). It is designed to be equivalent to 3% of base compensation each year if the Company's growth in total return is commensurate with the total return growth of 7.93%, which was equivalent to the Standards and Poor's (S&P Utility) average growth over the five year period ending June 30, 1995. The cash contributions calculated by that formula are deferred for three years from the year in which they are earned and paid out in that third year. If the CEO retires at or after age 65 he is entitled to the total cash balance existing in his deferral account at the time of his retirement. The plan, therefore, provides an incentive tied to increases in shareholder value.
MEMBERS OF THE COMPENSATION COMMITTEE:
Ian B. Davidson, Chairman; Thomas N. McGowen, Jr.; David A. Flitner, George D. Ruff
The table following sets forth the cash compensation of the Chief Executive Officer and the executive officers of the Company earning compensation in excess of $100,000 in the fiscal year.
Summary Compensation Table
| |
Annual Compensation |
Long Term Compensation |
|
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Name and Principal Position |
Year |
Salary |
Bonus |
Securities Underlying Options |
LTIP Payouts |
All Other Compensation |
|||||||
| Larry D. Geske | 1999 1998 1997 |
114,967 109,970 104,971 |
9,518 40,595 0 |
10,000 10,000 10,000 |
(1) (1) (1) |
17,909 | (3) | 21,480 15,605 21,614 |
(2) (2) (2) |
||||
| Edward Bernica |
|
1999 1998 1997 |
|
97,760 90,801 85,411 |
|
8,092 36,787 0 |
|
14,820 10,000 10,000 |
(1) (1) (1) |
|
|
18,413 12,798 11,580 |
(2) (2) (2) |
| Tim Good |
|
1999 1998 1997 |
|
92,057 90,801 86.977 |
|
10,520 11,302 14,756 |
|
4,000 3,600 8,000 |
(1) (1) (1) |
|
|
14,834 14,163 13,586 |
(2) (2) (2) |
| John Allen |
|
1999 1998 1997 |
|
84,625 80,044 73,890 |
|
20,788 14,049 12,396 |
|
5,000 5,000 9,400 |
(1) (1) (1) |
|
|
15,724 13,010 11,569 |
(2) (2) (2) |
The following graph sets forth the cumulative total shareholder return (assuming reinvestment of dividends) to shareholders of ENERGY WEST Incorporated during the five year period ended June 30, 1999, as well as an overall stock market index (S&P 500 Index) and the peer group index (S&P Utility Index).
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
| COMPARISON OF FIVE YEAR CUMMULATIVE RETURNS |
|
|
|
|||
|---|---|---|---|---|---|---|
| Energy West | S&P Utilities | S&P 500 | ||||
| 1994 | $10,000 | $10,000 | $10,000 | |||
| 1995 | $10,169 | $11,525 | $12,604 | |||
| 1996 | $10,327 | $14,258 | $15,879 | |||
| 1997 | $11,198 | $15,037 | $21,387 | |||
| 1998 | $12,309 | $19,585 | $27,835 | |||
| 1999 | $12,955 | $21,272 | $34,170 |
The following table provides information concerning Stock Option grants to named executives in the fiscal year ended June 30, 1999.
Options/SAR Grants in Last Fiscal Year
| |
Individual Grants |
Grant Date Value |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Name |
Number of Securities Underlying Options Granted |
Percent of Total Options Granted to employees in Fiscal Year |
Exercise or Base Price |
Expiration date |
Grant Date Present Value |
|||||||
| Larry Geske | 0 | 0 | — | — | — | |||||||
| Edward Bernica |
|
4,820 |
|
1.1 |
% |
9.187 |
|
5-19-2004 |
|
$ |
5,591 |
(2) |
| Tim Good |
|
4,000 |
|
.93 |
% |
9.187 |
|
5-19-2004 |
|
$ |
4,640 |
(2) |
| John Allen |
|
0 |
|
0 |
|
— |
|
— |
|
|
— |
|
The following table provides information with respect to the named executive officers, concerning any exercise of stock options during the fiscal year.
Aggregated option /SAR exercises in Last Fiscal Year and FY-End Option/SAR Values
| |
|
|
|
Value of unexpired in-the-money options at fiscal year-end |
||||||
|---|---|---|---|---|---|---|---|---|---|---|
| |
|
|
Number of unexercised options at fiscal year end |
|||||||
| |
Shares Acquired On Exercise |
|
||||||||
| Name |
Value realized ($) |
Exercisable Unexercisable |
||||||||
| Exercisable/Unexercisable |
||||||||||
| Larry Geske | 0 | 0 | 6,000/4,000 | $ $ |
7,080 4,720 |
(2) (2) |
||||
| Edward Bernica | 0 | 0 | 9,964/4,856 | 0 0 |
||||||
| Tim Good | 0 | 0 | 800/3,200 | 0 0 |
||||||
| John Allen | 0 | 0 | 3,000/2,000 | 3,540 2,360 |
(2) (2) |
|||||
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Ernst & Young LLP, as independent public accountants for the Company, to examine the Company's financial statements for the current year ending June 30, 2000 and to perform other appropriate accounting services and recommends that the shareholders of the Company ratify that appointment. Ernst & Young LLP has served as the Company's independent accountants for more than thirty years, including fiscal years ended June 30, 1999, 1998, and 1997 and have no relationship with the Company other than that arising from their employment as independent public accountants. While representatives of Ernst & Young LLP will not be available to make a statement or answer questions at the meeting, the Company will, upon request, forward any shareholder inquiries to Ernst & Young LLP and forward responses thereto to interested shareholders subsequent to the meeting. It is intended that the proxies will be voted for the ratification of the appointment of such firm unless otherwise indicated. If the appointment is not ratified by shareholders, the Board of Directors is not obligated to appoint other auditors, but the Board of Directors will give consideration to such unfavorable vote.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS APPROVAL OF THE SELECTION OF ERNST AND YOUNG LLP AS AUDITORS FOR FISCAL YEAR 2000.
Stockholder Proposals for 2000 Annual Meeting
In order for proposals for stockholders to be considered for inclusion in the proxy statement for the 2000 Annual Meeting of Shareholders of ENERGY WEST, such proposals must be received by the Secretary of ENERGY WEST before September 1, 2000.
Your immediate attention to completing and mailing this proxy will be greatly appreciated.
Dated:
October 21, 1999
By Order of the Board of Directors
Great Falls, Montana
| /s/ John C. Allen | ||
| John C. Allen, Corporate Secretary (406) 791-7503 |
PROXY
ENERGY WEST INCORPORATED
Proxy for the Annual Meeting to be held November 18, 1999, at 12:30 P.M., M.S.T in the Missouri Room of the Great Falls Civic Center in Great Falls, Montana. Larry D. Geske, Thomas N. McGowen, Jr. and G. Montgomery Mitchell or any of them with full power of substitution, are hereby authorized to represent and to vote the stock of the undersigned at the Annual Meeting of the shareholders of ENERGY WEST on November 18, 1999 and any adjournments thereof, upon the matters set forth below. The Board of Directors recommends a vote FOR Proposals 1, 2, and 3.
| The Nominees are as follows: | ||||||||
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Andrew Davidson |
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David A. Flitner |
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Larry D. Geske |
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Thomas N. McGowen Jr. |
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G. Montgomery Mitchell |
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George D. Ruff |
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Dean South |
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Richard J. Schulte |
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Instruction: To withhold authority to vote for any individual nominee, write that nominee's name on the space provided below. Witholding authority for any individual nominee will be counted as if you voted against that nominee. |
||||||
| FOR THE SLATE AS PROPOSED | / / | ||
| AGAINST THE SLATE AS PROPOSED | / / | ||
| ABSTAIN | / / |
| Withheld for: | |
| 2. |
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To ratify the appointment of Ernst & Young, LLP as auditors. |
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FOR AGAINST ABSTAIN |
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/ / / / / / |
| 3. |
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To transact such other business as may properly come before the meeting or any adjournment or postponement thereof. |
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FOR AGAINST ABSTAIN |
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/ / / / / / |
This
proxy is solicited by the Board of Directors of the Corporation. The Proxy will be voted in the manner directed hereon. If no direction is made, this proxy will be voted FOR Proposals 1, 2, and
3.
Please sign exactly as name appears below.
| Dated: | , 1999 | |||
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Signatures: |
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Where shares are jointly held, each holder should sign. Executors, administrators, trustees and guardians should give full title as such. If signer is corporation, please sign the full corporate name by an authorized officer.
PLEASE SIGN AND RETURN IN THE ENCLOSED POSTAGE-PAID ENVELOPE
GENERAL INFORMATION
ELECTION OF DIRECTORS
INFORMATION ABOUT DIRECTORS AS OF September 9, 1999 APPEARS BELOW:
THE BOARD AND COMMITTEES OF THE BOARD
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Section 16(a) Beneficial Ownership Reporting Compliance.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
MEMBERS OF THE COMPENSATION COMMITTEE:
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Stockholder Proposals for 2000 Annual Meeting
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