SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ___)
Filed by the registrant __x__
Filed by a party other than the registrant ___
Check the appropriate box:
_____ Preliminary proxy statement
__x__ Definitive proxy statement
_____ Definitive additional materials
_____ Soliciting material pursuant to Rule 14a-11(c) or
Rule 14a-12
COLONIAL GAS COMPANY
________________________________________________________________
(Name of Registrant as Specified in Its Charter)
Timothy A. Clark, Corporate Counsel
________________________________________________________________
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
__x__ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-
6(i)(1), or 14a-6(j)(2).
[END OF SCHEDULE 14A]
COLONIAL GAS COMPANY
40 MARKET STREET
LOWELL, MASSACHUSETTS 01852
_________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders:
You are hereby notified that the Annual Meeting of
Stockholders of Colonial Gas Company (the "Company") will be held
at The First National Bank of Boston, 100 Federal Street, Boston,
Massachusetts in the Auditorium on the First Floor, on Wednesday,
April 20, 1994 at 10:00 a.m. Boston time for the following
purposes:
1. To elect five Directors of the Company.
2. To transact such other business as may properly come
before the meeting or any adjournment thereof.
Stockholders entitled to notice of and to vote at the Annual
Meeting are holders of Common Stock of record at the close of
business on March 1, 1994, as fixed by action of the Board of
Directors.
The Company's Proxy Statement is submitted herewith.
It is sincerely hoped that you will attend the Annual
Meeting. HOWEVER, YOU ARE REQUESTED TO FILL IN, DATE, SIGN AND
MAIL THE ENCLOSED PROXY WHETHER OR NOT YOU EXPECT TO BE PRESENT
IN PERSON. A self-addressed postage paid envelope is enclosed
for this purpose. Your proxy is revocable by giving written
notice to the Clerk or Transfer Agent of the Company and will not
affect your right to vote in person in the event you attend the
Annual Meeting.
By order of the Board of Directors,
CAROL E. ELDEN
Clerk
March 10, 1994
YOU ARE SINCERELY REQUESTED TO COOPERATE IN ASSURING A
QUORUM BY FILLING IN, SIGNING AND DATING THE ENCLOSED PROXY AND
PROMPTLY MAILING IT IN THE RETURN ENVELOPE. THANK YOU.
[END OF NOTICE OF ANNUAL MEETING]
COLONIAL GAS COMPANY
40 MARKET STREET
LOWELL, MASSACHUSETTS 01852
______________
PROXY STATEMENT
_____________
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Colonial Gas
Company (the "Company") for use at the Annual Meeting of the
holders of its Common Stock, $3.33 par value per share, to be
held on Wednesday, April 20, 1994 at the time and place set forth
in the Notice of Annual Meeting of Stockholders and at any
adjournment thereof. The approximate date on which this Proxy
Statement and form of proxy are first being sent to Stockholders
is March 10, 1994.
The Company's Board of Directors has set March 1, 1994 as the
record date for the determination of stockholders entitled to
notice of and to vote at the Annual Meeting. As of such date, the
Company had issued and outstanding 8,047,768 shares of Common
Stock. Holders of record of Common Stock on such date are
entitled to one vote per share at the Annual Meeting and any
adjournment thereof. Abstentions and broker non-votes will be
considered as shares present for purposes of determining the
existence of a quorum.
The costs of proxy solicitation shall be borne by the
Company. Such costs will include a $4,500 fee to Morrow & Co.,
Inc., which has been retained to assist with proxy solicitations,
as well as reimbursement for postage and clerical expenses to
brokerage houses, custodians, nominees or other fiduciaries for
forwarding documents to beneficial owners of Common Stock held in
their names. In addition, Directors, officers or employees of the
Company (none of whom will receive any extra compensation for
their activities) may solicit proxies by telephone or in person,
the expense of which is anticipated to be nominal.
If the enclosed proxy is properly executed and returned, it
will be voted in the manner directed by the stockholder. If no
instructions are specified with respect to any particular matter
to be acted upon, proxies will be voted in favor thereof. The
proxy may be revoked by the stockholder at any time prior to the
voting thereof, by written notice of revocation to either the
Clerk of the Company or The First National Bank of Boston, P.O.
Box 1719, Boston, Massachusetts 02105-9905, or by attending and
voting at the meeting.
The principal executive offices of the Company are located at
40 Market Street, Lowell, Massachusetts 01852 (telephone number
(508) 458-3171).
ELECTION OF DIRECTORS
On the date of the Annual Meeting, the Board of Directors
will consist of fifteen Directors divided into three classes.
Five Directors of Class I are to be elected at the Annual
Meeting. Those individuals elected Class I Directors shall serve
until the 1997 Annual Meeting or until a successor is duly
elected and qualified.
It is the intention of the persons named in the accompanying
form of proxy to vote at the Annual Meeting for the election of
the five nominees named on the next page. All the nominees are
presently serving as Directors. If any nominee should be unable
to serve, an event not now anticipated, the proxies will be voted
for such person, if any, as may be designated by the Board of
Directors to replace such nominee.
Directors will be elected by a plurality of the votes
properly cast at the meeting. Votes withheld and broker non-votes
will not be treated as votes cast for this purpose.
The names of the nominees for election as Class I Directors
and the names of the other Directors whose current terms continue
after the Annual Meeting are shown below, together with certain
information relating to principal occupation during the last five
years and other business experience.
Served as Director
Principal Occupation of the Company
Name and Age and Other Directorships Continuously Since
Nominees
Directors of Class I to be elected for a term expiring in 1997:
Victor W. Baur (50) Director; President of Transgas 1993
Inc., the Company's energy
trucking subsidiary, since July
1990; previously, Executive Vice
President of Transgas Inc.
Howard C. Homeyer (61) Director; Independent Energy 1989
Consultant since June 1988;
Senior Vice President of Texas
Eastern Corporation, Houston,
Texas from May 1985 until June
1988; President, Algonquin Energy
Corporation from January until
September 1987; and President,
Texas Eastern Gas Pipeline Company
from May 1985 until September 1987
(each of said companies is in the
natural gas transmission business).
Richard L. Hull (69) Director; President of Big Sandy 1973
Management Company, Inc., coal
lessors, Manchester, Massachusetts;
President of R. L. Hull & Co., Inc.,
Manchester, Massachusetts, management
consultants.
Frederic L. Putnam, Jr. Director; Chairman of the Board of 1973
(69) * Directors and CEO of the Company
since April 1984.
Nickolas Stavropoulos Director; Vice President Finance 1993
(36) * and Chief Financial Officer of
the Company since August 1989;
previously, Vice President of Rates
and Planning.
Continuing Directors
Directors of Class II to continue in office until 1995:
John P. Harrington Director; Vice President - Gas 1993
(51) * Supply of the Company since August
1989; previously, Vice President
and General Manager of the Lowell
Division.
Daniel H. LeVan, Jr. Director; private investor. 1973
(69)
John F. Reilly, Jr. Director; President, Chief Executive 1985
(61) Officer and Director of Fred C. Church,
Inc., Lowell, Massachusetts, a general
insurance agency; Mr. Reilly is also a
Director of Massachusetts Electric
Company, a wholly-owned subsidiary of
New England Electric System.
Margaret M. Stapleton Director; Vice President of John Hancock 1983
(57) (a) Mutual Life Insurance Company, Boston,
Massachusetts; Miss Stapleton is also a
Trustee of Eastern Utilities Associates.
Charles O. Swanson Director; President of the Company since 1986
(62) * July 1990, with retirement scheduled on
May 1, 1994; previously, Executive Vice
President.
Directors of Class III to continue in office until 1996:
Albert C. Dudley (65) Director; Retired; Senior Vice President 1991
of the Company from August 1989 until
December 1990; previously, Senior Vice
President - Gas Supply.
Kenneth R. Lydecker Director; Retired; Executive Vice 1985
(69) President and General Manager of
Cape Cod Division until 1980.
Frederic L. Putnam, III Director; Executive Vice President 1991
(48) (b) * and General Manager of the Company
since April 1993; elected President
effective May 1, 1994; previously, Vice
President and General Manager of the
Company.
Andrew B. Sides, Jr. Director; Business Consultant; 1978
(68) previously, Chairman and Treasurer
until 1984 of Rhode Island Tool
Company, Inc., Providence, Rhode Island;
Mr. Sides is also a Director of L.S.
Starrett Company.
George E. Wik (61) Director; Business Consultant; 1993
previously,Vice President and Senior
Public Utility Account Officer of
Chase Manhattan Bank, New York, New York.
__________
* Member of the Executive Committee of the Board of Directors.
(a) At December 31, 1993, $10,750,000 of the Company's long-term debt was
held by John Hancock Mutual Life Insurance Company, of which Miss Stapleton is
an officer.
(b) Mr. Putnam, III is Mr. Putnam, Jr.'s son.
Meetings of the Directors
In 1993, the Directors held four Board meetings. Each of the
Directors who served in 1993 attended all the meetings of the
Board and of the committees of the Board on which he or she
served which were held during the time he or she served.
Directors' Compensation
Directors who are not salaried officers of the Company
received an annual fee of $8,000 in 1993 payable quarterly, plus
$500 for each Board of Directors' meeting attended and
reimbursement of expenses incurred in connection with such
attendance.
Members of the Audit, Compensation and Nominating Committees
of the Board of Directors received a fee of $500 in 1993 for each
committee meeting attended and reimbursement of expenses incurred
in connection with such attendance.
The Company has a plan which allows the members of the Board
of Directors to defer receipt of all or part of their fees for
services as a Director. The amount of fees deferred must be at
least $1,000 per year. Interest is credited on the amount
deferred. Fees deferred are payable as designated by the
irrevocable election of a Director or at such earlier date as the
Director ceases to be a Director. The plan provides for an
election to receive the deferred fees in either one lump sum, in
semi-annual installments over a period of up to 15 years or, in
the event of death of a Director, payments accrued will be made
to the beneficiary designated by the Director. The amount
deferred under this plan in 1993 was $12,500.
The Company has an arrangement with Mr. Homeyer pursuant to
which he provides consulting services in connection with the
Company's gas supply activities and related matters. In 1993, Mr.
Homeyer received additional compensation of $36,800 for providing
such services.
Committees of the Directors
The Audit Committee of the Directors, consisting of Richard
L. Hull (Chairman), Albert C. Dudley, Kenneth R. Lydecker,
Margaret M. Stapleton and George E. Wik, held three meetings in
1993. The duties of this Committee encompass making
recommendations on the selection of the Company's independent
auditors; conferring with such auditors regarding, among other
things, the scope of their examination, with particular emphasis
on areas where special attention should be directed; reviewing
the accounting principles and practices being followed by the
Company as they relate to those prevailing in the utility
industry; assessing the adequacy of the Company's interim and
annual financial statements; reviewing the Company's internal
controls; performing such other duties as are appropriate to
monitor the accounting and auditing policies and procedures of
the Company; and reporting to the Directors from time to time.
The Compensation Committee of the Directors, consisting of
Andrew B. Sides, Jr. (Chairman), Richard L. Hull, John F. Reilly,
Jr., and Margaret M. Stapleton, met twice in 1993. The duties of
this Committee include studying and making recommendations to the
Directors with respect to salaries and other benefits to be paid
to the officers of the Company. The "Compensation Committee
Report on Executive Compensation" is included in this Proxy
Statement.
The Nominating Committee of the Directors, consisting of
Andrew B. Sides, Jr. (Chairman), Howard C. Homeyer and Daniel H.
LeVan, Jr., held three meetings in 1993. The Nominating Committee
will consider recommendations for Director nominations submitted
timely by stockholders in writing to the Clerk of the Company.
The Company's By-Laws contain provisions dealing with
requirements for nomination of Directors by stockholders,
including the time when such nominations may be made and the
information required to be submitted.
AMENDMENT OF BY-LAWS
In connection with the adoption by the Company of a
Shareholder Rights Plan, on November 9, 1993, the Board of
Directors amended Article XV of the By-Laws of the Company to
provide that the Massachusetts Control Share Acquisition Statute
would not apply to the Company. The Company retained the right to
redeem shares acquired in a control share acquisition under
certain circumstances should that Statute at any time apply to
the Company. The Shareholder Rights Plan is designed to protect
the Company's stockholders against unsolicited attempts to
acquire control of the Company in a transaction that does not
maximize stockholders' value. The purpose of the amendment to the
By-Laws is to have the Shareholder Rights Plan, rather than the
less-protective Massachusetts Control Share Acquisition Statute,
govern such transactions.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Beneficial Owners of More Than 5% of Outstanding Securities
The following table sets forth information as of March 1,
1994 with respect to any person or group known to the Company to
be the beneficial owner of more than five percent of the Common
Stock.
Amount and Nature of
Beneficial ownership
(A) (B) Percent
Sole Voting Shared Voting of Aggregate
Name and Address Title of and Invest- and Invest- Common
of Beneficial Owner Class ment Power ment Power Stock
BayBank (a) Common 604,595 (b) 0 7.53%
7 New England Executive
Park, Burlington, MA 01803
__________
(a) Information herein is based solely on a Schedule 13G
report dated January 28, 1994 and filed by BayBank with the
Securities and Exchange Commission.
(b) BayBank holds 599,540 shares as the Trustee under the
Company's Savings Plans pursuant to which the employees who are
beneficial owners have rights to direct how they wish to invest
their individual accounts among the plan investments and how they
wish to have voted the shares of the Company's Common Stock
allocated to their accounts.
Management Ownership
The following table sets forth (i) the number of shares of
Common Stock beneficially owned as of January 3, 1994 by each of
the Company's Directors, by each of the named executive officers
listed in the Summary Compensation Table and by the Company's
Directors and executive officers as a group, and (ii) the
percentage which such shares bear to the total number of
outstanding shares as of that date.
Name of Individual Amount and Nature of Percent
or Number of Beneficial Ownership of Common Stock
Persons in Group Common Stock (a)
Frederic L. Putnam, Jr.
Individually 22,881(b) .285%
By Corporation 218,898(c) 2.726%
Charles O. Swanson 10,621(d) .132%
Frederic L. Putnam, III 6,327(e) .079%
Victor W. Baur 3,426(f) .043%
John P. Harrington 1,616(g) .020%
Nickolas Stavropoulos 3,188(g) .040%
Albert C. Dudley 726(h) .009%
Howard C. Homeyer 1,287(i) .016%
Richard L. Hull 462(i) .006%
Daniel H. LeVan, Jr. 210,774(i) 2.625%
Kenneth R. Lydecker 1,814(j) .023%
John F. Reilly, Jr. 1,031(i) .013%
Andrew B. Sides, Jr. 10,908(i) .136%
Margaret M. Stapleton 337(i) .004%
George E. Wik 104(k) .001%
2 other executive officers of the 1,283 .016%
Company
Directors and executive officers of
the Company as a group (17 persons) 495,683 6.174%
__________
(a) Number of shares based on information furnished to
the Company by its Directors and officers and by the Trustee
of the Company's Savings Plan.
(b) Consisting of 4,448 shares owned jointly with
spouse, 1,500 shares owned of record by spouse over which
Mr. Putnam, Jr. has or shares the power to direct voting or
disposition, or both, and 16,933 shares held in trust for
Mr. Putnam, Jr. under the Company's Savings Plan pursuant to
which Mr. Putnam, Jr. has the power to direct the
disposition and the voting of such shares.
(c) These shares are held by F. L. Putnam Securities
Company, Inc., of which Mr. Putnam, Jr. is a director and
owner of approximately 16% of the voting common stock.
Brothers of Mr. Putnam, Jr. are the other directors and
stockholders of that corporation. Mr. Putnam, Jr. disclaims
beneficial ownership of these shares.
(d) Consisting of 2,305 shares owned jointly with
spouse, over which Mr. Swanson has or shares the power to
direct voting or disposition, or both, and 8,316 shares held
in trust for Mr. Swanson under the Company's Savings Plan
pursuant to which Mr. Swanson has the power to direct the
disposition and the voting of such shares.
(e) Consisting of 6,324 shares held in trust for Mr.
Putnam, III under the Company's Savings Plan pursuant to
which Mr. Putnam, III has the power to direct the
disposition and the voting of such shares and 3 shares held
by Mr. Putnam, III as custodian for his minor child pursuant
to which Mr. Putnam, III has the power to direct the
disposition and the voting of such shares.
(f) Consisting of 76 shares owned jointly with spouse,
over which Mr. Baur has or shares the power to direct voting
or disposition, or both, and 3,350 shares held in trust for
Mr. Baur under the Company's Savings Plan pursuant to which
Mr. Baur has the power to direct the disposition and the
voting of such shares.
(g) These shares are held in trust for the named
individual under the Company's Savings Plan pursuant to
which the named individual has the power to direct the
disposition and the voting of such shares.
(h) Consisting of 537 shares owned solely and 189
shares held in trust for Mr. Dudley under the Company's
Savings Plan pursuant to which Mr. Dudley has the power to
direct the disposition and the voting of such shares.
(i) Owner of record with sole voting and investment
power.
(j) Consisting of 506 shares owned solely, 1,125 shares
owned jointly with spouse, and 183 shares owned of record by
spouse, over which Mr. Lydecker has or shares the power to
direct voting or disposition, or both.
(k) These shares are owned jointly with spouse, over
which Mr. Wik has or shares the power to direct voting or
disposition, or both.
Based solely on the Company's review of reports under
Section 16(a) of the Securities Exchange Act of 1934 received by
it and certain written representations, the Company believes that
during 1993 all Section 16 (a) filing requirements applicable to
persons required to report under that section were complied with
except that Mr. Wik's Initial Statement of Beneficial Ownership
on Form 3 upon his becoming a director on February 11, 1993
(which reported no ownership) was filed late. Mr. Wik purchased
100 shares on March 16, 1993 and timely reported the purchase of
those shares.
EXECUTIVE COMPENSATION
Shown below is the compensation paid by the Company and its
wholly-owned subsidiary, Transgas Inc., during each of the years
ending December 31 for the Company's Chief Executive Officer and
four other most highly compensated executive officers of the
Company whose aggregate cash compensation exceeded $100,000
during the most recent fiscal year.
Summary Compensation Table
Annual Compensation All Other
Name and Principal Position Year Salary Bonus Compensation**
F. L. Putnam Jr., 1993 $175,000 - $8,727
Chairman and Chief 1992 170,033 - 7,243
Executive Officer 1991 165,700 - 6,943
Charles O. Swanson, 1993 186,419 - 6,797
President and Director 1992 176,700 - 6,814
1991 155,000 - 7,048
F. L. Putnam, III, 1993 142,508 - 6,315
Executive Vice President 1992 125,600 - 5,123
and General Manager, 1991 118,450 - 4,912
and Director
Nickolas Stavropoulos, 1993 145,034 $15,000* 5,652
Vice President - Finance 1992 123,600 - 4,624
and Chief Financial Officer, 1991 114,964 - 4,234
and Director
Victor W. Baur, President 1993 121,958 - 5,272
of Transgas Inc., and 1992 115,600 - 2,484
Director 1991 108,000 - 3,463
__________
* Represents a special one-time bonus as described in the
"Compensation Committee Report on Executive Compensation".
** Includes (i) the Company's matching contribution to the
account of the executive in the Company's Savings Plan (ranging
from $2,947 to $4,497 in 1993), (ii) Company-provided group term
life insurance coverage in excess of the Internal Revenue
Service's allowable amount of $50,000 (valued at from $207 to
$3,042 in 1993), and (iii) if applicable, amounts received for a
waiver of medical benefits (ranging from $1,310 to $1,819 in
1993).
The following table sets forth the current estimated annual
benefits payable upon retirement to participants in the Colonial
Gas Company Retirement Plan (the "Retirement Plan") in specified
compensation and years of service classifications, assuming (i)
continued service until retirement at normal retirement age under
the Retirement Plan, and (ii) retirement occurred in 1993 at age
65.
Pension Plan Table
Average Annual ANNUAL BENEFITS (Based on Years of Service)
Compensation 15 20 25 30 35
$100,000 $25,867 $34,490 $43,112 $48,112 $53,112
125,000 33,367 44,490 55,612 61,862 68,112
150,000 40,867 54,490 68,112 75,612 83,112
175,000 48,367 64,490 80,612 89,362 98,112
200,000 55,867 74,490 93,112 103,112 113,112
225,000 63,367 84,490 105,612 115,641 115,641
The Company maintains the Retirement Plan for non-union
employees, including all officers, who have attained the age of
21 and who have completed one thousand hours of service in a
year. The formula for determining annual benefits under the
Retirement Plan's life annuity option for employees with at least
25 years of service is 50% of the employee's highest average
annual earnings (salary and bonus) received in any 60 consecutive
months during the last 10 years prior to retirement plus an
additional 1% of final average compensation for each year of
service in excess of 25, less 50% of the primary social security
benefit, as defined in the Retirement Plan. An employee with less
than 25 years of service receives proportionately less according
to the ratio of actual years of service to 25 years. If the
employee was an actively employed plan participant during 1989,
the employee may be entitled to a different benefit.
Messrs. Putnam, Jr. and Swanson have separate supplemental
retirement plans (collectively, the "Supplemental Plan").
Benefits under the Supplemental Plan are paid in the form of an
annual stipend equal to a fixed dollar amount, which ranges
between $500 and $1,000, multiplied by the years of service with
the Company, or, assuming at least 25 years of service with the
Company, 40% of the individual's highest annual salary, whichever
is greater. Each participant in the Supplemental Plan will
receive upon retirement the greater of the amount of benefits
calculated under the Retirement Plan or the amount of benefits
calculated under the Supplemental Plan. As of the end of 1993,
the benefits Messrs. Putnam, Jr. and Swanson would each be
entitled to receive under the Retirement Plan formula exceeded
the respective benefits each would be entitled to receive under
the Supplemental Plan formula.
As of January 1, 1994, the credited years of service under
the Retirement Plan and, if applicable, the Supplemental Plan
were as follows: Mr. Putnam, Jr., 40 years; Mr. Putnam, III, 18
years; Mr. Stavropoulos, 14 years; and Mr. Baur, 21 years. Mr.
Swanson has announced that he plans to retire on May 1, 1994 and
the Board of Directors has voted to calculate his credited years
of service effective at that time as 25 years (his credited years
of service would otherwise have been 22 years).
Mr. Putnam, Jr.'s average annual compensation for the most
recent 60 month period for purposes of determining his benefit
under the Retirement Plan is considered to be $202,194. The
difference between this amount and the amounts set forth in the
Summary Compensation Table is attributable to salary which Mr.
Putnam, Jr. was authorized to receive but did not accept. The
average annual amount of salary he declined during that period
was $12,340.
Change In Control Agreements
The Company has entered into agreements with a number of its
key employees, including each of the five executive officers
named in the Summary Compensation Table, providing that in the
event of termination of employment within a specified period
following a Change in Control (as defined) of the Company (other
than termination for cause, death, disability or retirement), or
termination by the employee for Good Reason (as defined)
following a Change in Control, the employee will become entitled
to certain severance payments, service credits under the
Retirement Plan based on anticipated salary increases to the date
of normal retirement if terminated after the executive is 55
years old, and certain other benefits. All the agreements
continue in effect unless terminated by the Company before a
Change in Control upon 90 days' prior notice. In the cases of
Messrs. Putnam, Jr. and Swanson, the agreements cover termination
within a three year period following a Change in Control and the
amount payable is equal to three years' salary. In the case of
Messrs. Putnam, III, Stavropoulos and Baur, the applicable period
is two years and the amount payable is equal to two years'
salary. In all cases there is a limitation on total benefits so
as to conform to the limitation on the deductibility of such
termination benefits imposed by the Federal tax laws.
Performance Graph
The graph below compares the cumulative total return, based
on stock price appreciation and reinvested dividends, of Colonial
Gas Company's Common Stock to the Standard & Poor's (S&P) 500
Stock Index and the S&P 40 Utilities Index for the years ended
December 31, 1988 through 1993. These calculations assume $100
invested on January 1, 1989.
[ACTUAL GRAPH]
1988 1989 1990 1991 1992 1993
Colonial Gas Company [Symbol] 100 122 136 170 220 245
S&P 500 Stock Index [Symbol] 100 132 91 119 128 140
S&P Utilities 40 Index [Symbol] 100 147 143 165 178 204
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors met
twice in 1993. The duties of the Compensation Committee include
evaluating and making recommendations to the Directors with
respect to salaries and other benefits to be paid to the
Company's officers, including its executive officers.
In its evaluation process, the Compensation Committee works
within the Company's Performance Planning and Incentive
Compensation Program (the "Program") for determining salaries.
The Program's components include salary ranges based on position
descriptions, individual annual performance reviews and ranges of
available merit increases.
Under the Program, a position description has been
established for all non-union positions at the Company, including
executive officer positions. Salary ranges are assigned to each
position using a point system which measures (i) the knowledge
required to perform the job, (ii) the range of discretion
inherent within the job, and (iii) the financial or other type of
impact of the job on the Company's performance or
accomplishments. Periodically, the Company conducts surveys of
comparable positions at other utilities to review the Company's
executive pay practices. In addition, information is also
gathered from other outside sources and reviewed to ensure the
integrity of the Company's compensation program. The Compensation
Committee reviewed and approved the salary ranges utilized for
the Company's executive officers in 1993.
The Program also includes annual performance reviews for
executive officers, other than the Chairman and Chief Executive
Officer (the "Chairman"). These performance reviews are conducted
by the executive officer to whom the officer reports, which
generally is the President or the Chairman. The Chairman's
performance is evaluated by the Compensation Committee. Each
executive officer's 1992 annual performance review was used as a
factor in determining where within the applicable salary range
the executive officer's compensation was set for 1993.
As part of the Program, the Compensation Committee also
examines the total amount of funds available for non-union
personnel, including executive officers. The amount of
compensation increases to be made from these funds is based in
part upon studies of comparable positions at utilities and other
companies and, like the total amount available, is also based in
part upon overall Company performance (factoring into that
performance uncontrollable events such as weather). In
determining the total amount of funds available for compensation
increases for 1993, the Compensation Committee considered such
factors as: the favorable performance in 1992 of the market value
of the Company's Common Stock in comparison to other local gas
distribution companies; the increase in the Company's 1992 net
income to $10,643,000; the 4,800 firm utility customers added by
the Company in 1992; the recovery of insurance proceeds to offset
certain environmental response costs; and the Company's other
operational accomplishments in 1992. Given the aforementioned
studies and the Company's performance and accomplishments, the
Compensation Committee recommended merit raises for the Company's
executive officers, including the merit raises for the named
executive officers as shown in the Summary Compensation Table.
In determining the Chairman's salary, the Compensation
Committee took into account its evaluation of the Chairman's
performance, as well as the Company's performance and
accomplishments in 1992 as described in the preceding paragraph.
As of the end of 1992, the Company had no formal bonus or
long-term incentive compensation programs in place for its
executive officers. As part of its ongoing evaluation of
compensation for the Company's officers, the Compensation
Committee periodically reviews such programs. A special, one-time
bonus of $15,000 was paid to Mr. Stavropoulos in 1993 in
connection with his role as lead negotiator on behalf of the
Company in obtaining settlement payments from insurers for coal
gas manufacturing liabilities. Such settlement payments benefited
both the Company's gas customers and its stockholders pursuant to
an allocation formula approved by the Massachusetts Department of
Public Utilities.
By the Compensation Committee,
Andrew B. Sides, Jr. (Chairman)
Richard L. Hull
John F. Reilly, Jr.
Margaret M. Stapleton
STOCKHOLDER PROPOSALS
Any stockholder proposals for the Company's 1995 annual
meeting of stockholders must be received by the Company by
November 19, 1994 in order to be included in the proxy statement
for that meeting. The proposals also must comply with applicable
statutes and regulations and the provisions of the by-laws of the
Company.
OTHER MATTERS
Management is aware of no other matters which are to be
presented for action at the meeting. If, however, any other
business should properly come before the meeting, the persons
named in the enclosed proxy intend to vote said proxy in
accordance with their best judgment.
INDEPENDENT AUDITORS
Grant Thornton are the independent certified public
accountants for the Company and representatives of Grant Thornton
are expected to be available to make statements or respond to
appropriate questions at the Annual Meeting.
By Order of the Board of Directors,
CAROL E. ELDEN
Clerk
March 10, 1994
APPENDIX
The performance graph required by Item 8 of Rule 14a-101
and Item 402(l) of Regulation S-K has been filed pursuant to the
provisions of Item 304(d)(1) of Regulation S-T and is not provided
or described in this submission.
[END OF PROXY STATEMENT]
[PROXY CARD]
COLONIAL GAS COMPANY
THIS PROXY IS SOLICITED ON BEHALF OF THE DIRECTORS
FOR THE APRIL 20, 1994 ANNUAL MEETING
The undersigned stockholder of Colonial Gas Company (the
"Company") hereby appoints Carol E. Elden and Dennis W. Carroll
(each with power to act without the other and with power of
substitution) proxies to represent the undersigned at the Annual
Meeting of Stockholders of the Company to be held on Wednesday,
April 20, 1994 in the Auditorium on the First Floor of The First
National Bank of Boston, 100 Federal Street, Boston,
Massachusetts and at any adjournment thereof, with all the power
the undersigned would possess if personally present, and to vote,
as designated below, all shares of Common Stock of the Company
which the undersigned may be entitled to vote at said Meeting,
hereby revoking any proxy heretofore given. In their discretion,
the proxies are authorized to vote upon such other business as
may properly come before the meeting. [Preceeding Sentence in
Bold Type]
The matters referred to on the reverse side are more fully
described in the Notice of and Proxy Statement for the Annual
Meeting, receipt of which is hereby acknowledged. THE DIRECTORS
RECOMMEND THAT YOU GRANT AUTHORITY FOR THE ELECTION OF THE
NOMINATED DIRECTORS. THE SHARES REPRESENTED BY THIS PROXY WILL
BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE ON THE
REVERSE SIDE. IF NO SPECIFICATION IS MADE, THE PROXY WILL BE
VOTED IN ACCORDANCE WITH THE DIRECTORS' RECOMMENDATIONS.
(IMPORTANT - TO BE SIGNED AND DATED ON REVERSE SIDE)
[END OF FACING PART OF PROXY CARD]
1. Election of Directors
Nominees: V.W. Baur, H.C. Homeyer, R.L. Hull, F.L. Putnam, Jr.,
N. Stavropoulos
FOR WITHHELD
_______ _______
MARK HERE MARK HERE
FOR ADDRESS IF YOU PLAN
CHANGE AND TO ATTEND
NOTE AT LEFT _____ THE MEETING_____
NOTE: Please sign exactly as your name(s) appear. If shares are
held jointly, both holders should sign. When signing as
attorney, executor, administrator, trustee or guardian, please
give full title as such. If a corporation, please sign in full
corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized
person.
Signature:______________________________Date_____________
Signature:______________________________Date_____________
[END OF REVERSE SIDE OF PROXY CARD]
