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
_____ Confidential for Use of the Commmission Only (as
permitted by Rule 14a-6(e)(2))
__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)
________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other
than the Registrant)
Payment of Filing Fee (Check the appropriate box):
__x__ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-
6(i)(1), 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
_____ $500 per each party to the controversy pursuant pursuant to
Exchange Act Rule 14a-6(i)(3).
_____ Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
__________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
__________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
__________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
___________________________________________________________________________
(5) Total fee paid:
___________________________________________________________________________
_____ 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.:
___________________________________________________________________________
(3) Filing Party:
___________________________________________________________________________
(4) Date Field:
___________________________________________________________________________
[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 19, 1995 at 10:00 a.m. Boston time for the following
purposes:
1. To elect five Class II Directors of the Company to serve
for a term of three years.
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, 1995, 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 14, 1995
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 19, 1995 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 14, 1995.
The Company's Board of Directors set March 1, 1995 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 8,237,641 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 and 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 II are to be elected at the Annual
Meeting. Those individuals elected Class II Directors shall serve
until the 1998 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 II 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 II to be elected for a term expiring
in 1998:
John P. Harrington Director; Senior Vice President- 1993
(52) * Gas Supply and Assistant to the
President of the Company since
February 1995; previously, Vice
President-Gas Supply of the Company
from August 1989 until February 1995.
Daniel H. LeVan, Jr. Director; private investor. 1973
(70)
John F. Reilly, Jr. Director; President, Chief Executive 1985
(62) 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
(58) (a) Mutual Life Insurance Company, Boston,
Massachusetts; Miss Stapleton is also a
Trustee of Eastern Utilities Associates.
Charles O. Swanson Director; Retired; previously, President 1986
(63) of the Company from July 1990 until April
1994; previously, Executive Vice
President of the Company.
Continuing Directors
Directors of Class I to continue in office until 1997:
Victor W. Baur (51)* 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 (62) 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 (70) Director; Retired; previously, 1973
President until 1994 of Big
Sandy Management Company, Inc.,
coal lessors, Manchester,
Massachusetts.
Frederic L. Putnam, Jr. Director; Chairman of the Board of 1973
(70) * Directors and Senior Executive
Officer of the Company since February
1995; previously, Chairman of the
Board of Directors and Chief
Executive Officer of the Company
since April 1984.
Nickolas Stavropoulos Director; Executive Vice President- 1993
(37) * Finance, Marketing and Chief
Financial Officer of the Company
since February 1995; previously,
Vice President-Finance and Chief
Financial Officer of the Company
since August 1989.
Directors of Class III to continue in office until 1996:
Albert C. Dudley (66) Director; Retired; previously, Senior 1991
Vice President of the Company
until December 1990.
Kenneth R. Lydecker Director; Retired; previously, 1985
(70) Executive Vice President and
General Manager of Cape Cod
Division until 1980.
Frederic L. Putnam, III Director; President and Chief 1991
(49)(b) * Executive Officer of the Company
since February 1995; previously,
President of the Company since May
1994; Executive Vice President and
General Manager of the Company
from April 1993 until May 1994;
previously, Vice President and General
Manager of the Company.
Andrew B. Sides, Jr. Director; Retired; previously, Chairman 1993
(69) 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 (62) Director; Retired; previously, 1993
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, 1994, $7,500,000 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 1994, the Directors held four Board meetings. Each of the
Directors who served in 1994 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 with the
exception of Mr. LeVan who attended half of the meetings of the Board
and none of the meetings of the committee on which he served.
Directors' Compensation
Directors who are not salaried officers of the Company
received an annual fee of $8,000 in 1994 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 1994 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 1994 was $17,908.
The Company has an arrangement with Mr. Homeyer pursuant to
which he provides consulting services on an as requested basis
in connection with the Company's gas supply activities and related
matters. In 1994, Mr. Homeyer received additional compensation of
$1,622 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
1994. 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 1994. 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 two meetings in 1994. 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.
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 December 31,
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 667,115 (b) 0 8.11%
7 New England Executive
Park, Burlington, MA 01803
__________
(a) Information herein is based solely on a Schedule 13G
report dated February 2, 1995 and filed by BayBank with the
Securities and Exchange Commission.
(b) BayBank held 667,115 shares as the Trustee under the
Company's Savings Plan 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. Effective January 1, 1995, LaSalle
National Trust, N.A. became the Trustee of the Company's Savings
Plan.
Management Ownership
The following table sets forth (i) the number of shares of
Common Stock beneficially owned as of December 31, 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 of
or Number of Beneficial Ownership of Common Stock
Persons in Group Common Stock (a)
Frederic L. Putnam, Jr.
Individually 24,837(b) .302%
By Corporation 218,898(c) 2.661%
Frederic L. Putnam, III 7,450(d) .091%
Victor W. Baur 3,914(e) .048%
John P. Harrington 2,352(f) .029%
Nickolas Stavropoulos 3,836(f) .047%
Albert C. Dudley 774(g) .009%
Howard C. Homeyer 1,602(h) .019%
Richard L. Hull 492(h) .006%
Daniel H. LeVan, Jr. 210,774(h) 2.562%
Kenneth R. Lydecker 1,847(i) .022%
John F. Reilly, Jr. 1,098(h) .013%
Andrew B. Sides, Jr. 11,865(h) .144%
Margaret M. Stapleton 359(h) .004%
Charles O. Swanson 6,924(j) .084%
George E. Wik 111(k) .001%
3 other executive officers of the 7,484 .091%
Company
Directors and executive officers of
the Company as a group (18 persons) 504,617 6.133%
__________
(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 4,736 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 18,601 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 7,442 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 8 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.
(e) Consisting of 81 shares owned jointly with spouse,
over which Mr. Baur has or shares the power to direct voting
or disposition, or both, and 3,883 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.
(f) 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.
(g) Consisting of 574 shares owned solely and 200
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.
(h) Owner of record with sole voting and investment
power.
(i) Consisting of 539 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.
(j) 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 4,619 shares owned
solely.
(k) These shares are owned jointly with spouse, over
which Mr. Wik has or shares the power to direct voting or
disposition, or both.
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, 1994, 1993 and 1992 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(c)
F. L. Putnam Jr., 1994 $186,018 - $5,871
Chairman and Senior 1993 175,000 - 8,727
Executive Officer 1992 170,033 - 7,243
F. L. Putnam, III, 1994 173,495 - 4,244
President and Chief 1993 142,508 - 6,315
Executive Officer, 1992 125,600 - 5,123
and Director
Nickolas Stavropoulos, 1994 156,637 2,787
Executive Vice President- 1993 145,034 $15,000(a) 5,652
Finance, Marketing and 1992 123,600 - 4,624
Chief Financial Officer,
and Director
Victor W. Baur, President 1994 135,555 $15,000(b) 3,931
of Transgas Inc., and 1993 121,958 - 5,272
Director 1992 115,600 - 2,484
John P. Harrington, Senior 1994 128,589 - 3,751
Vice President-Gas Supply 1993 119,064 - 3,506
and Assistant to the President, 1992 105,132 - 3,215
and Director
__________
(a) Represents a special one-time bonus based upon particular
achievements in 1993.
(b) Represents a special one-time bonus as described in the
"Compensation Committee Report on Executive Compensation".
(c) Includes (i) the Company's matching contribution to the
account of the executive in the Company's Savings Plan (ranging
from $2,611 to $3,750 in 1994)and (ii) Company-provided group term
life insurance coverage in excess of the Internal Revenue
Service Code's non-taxable amount of $50,000 (valued at from $176 to
$2,121 in 1994).
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") and Supplemental
Executive Retirement Plan ("SERP") 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 1994 at age 65.
Pension Plan Table
Average Annual ANNUAL BENEFITS (Based on Years of Service)
Compensation 15 20 25 30 35
$100,000 $25,684 $34,245 $42,806 $47,806 $52,806
125,000 33,184 44,245 55,306 61,556 67,806
150,000 40,684 54,245 67,806 75,306 82,806
175,000 48,184 64,245 80,306 89,056 97,806
200,000 55,684 74,245 92,806 102,806 112,806
225,000 63,184 84,245 105,306 116,556 120,000
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 merit lump sum payment) 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., Putman, III and Stavropoulos
participate in the SERP, which was adopted in 1994 and replaces
all other supplemental retirement benefit plans and agreements.
Under the SERP, participants will receive upon retirement an
annual benefit equal to the benefit that would be paid from the
Retirement Plan if the qualified plan benefit and compensation
restrictions did not apply, less the actual benefit paid from
the Retirement Plan. The SERP also provides an annual accrual
while a participant is actively employed equal to the amount of
Company match that would have been credited to the participant
under the Savings Plan if the qualified plan benefit and
compensation restrictions did not apply, less the actual
Company match credited under the Savings Plan. In addition,
the participant may defer under the SERP the amount of
compensation that could not be deferred in the Savings Plan due
to the qualified plan benefit and compensation restrictions.
The annual accruals and deferrals are credited with interest
each year and paid to the participant at retirement.
As of January 1, 1995, the credited years of service under
the Retirement Plan and, if applicable, the SERP
were as follows: Mr. Putnam, Jr., 41 years; Mr. Putnam, III, 19
years; Mr. Stavropoulos, 15 years; Mr. Baur, 22 years; and Mr.
Harrington, 28 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 $216,854. 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 $11,556.
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 case of
Mr. Putnam, Jr., the agreement covers termination within a three
year period following a Change in Control and the amount payable
is equal to three years' salary. In the cases of Messrs. Putnam,
III, Stavropoulos, Baur and Harrington, 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, 1989 through 1994. These calculations assume $100
invested on January 1, 1990.
[ACTUAL GRAPH]
1989 1990 1991 1992 1993 1994
Colonial Gas Company [Symbol] 100 111 139 179 200 182
S&P 500 Stock Index [Symbol] 100 97 126 136 150 152
S&P 40 Utilities Index [Symbol] 100 97 112 121 138 127
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors met
twice in 1994. 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 1994.
The Program also includes annual performance reviews for
executive officers, other than the Chairman and Senior 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 1993 annual performance review was used as a
factor in determining where within the applicable salary range
the executive officer's compensation was set for 1994.
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 1994, the Compensation Committee considered such
factors as: the favorable performance in 1993 of the Company's
Common Stock in comparison to other local distribution companies;
3% customer growth; the recovery of insurance proceeds to offset
certain environmental response costs; cost containment efforts
and the Company's other operational accomplishments in 1993.
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 1993 as described in the preceding paragraph.
As of the end of 1994, the Company had no formal bonus or
long-term incentive compensation programs in place for its
executive officers. A special one-time bonus of $15,000 was
paid to Mr. Baur in 1994 in recognition of the extraordinary
demands placed on Transgas and its superior performance in 1994.
As part of its ongoing evaluation of compensation for the
Company's officers, the Compensation Committee periodically
reviews its incentive programs. Effective in 1995, the Company
established an incentive compensation program to reward
individuals who have direct control over budgetary
expenditures for each year that the Company is able to defer
a rate increase. Under the program, the bonuses for executive
officers could range up to $10,000 per person per year depending
upon the number of years a rate increase is deferred.
In 1994, the Company adopted a Supplemental Executive
Retirement Plan (SERP) in order to provide additional
retirement benefits for certain executive officers whose
qualified plan benefits are restricted under applicable tax
law and to replace, without material change, the supplemental
retirement benefit plan for the Chairman.
The Company does not expect to have compensation exceeding
the $1 million limitation for deductibility under Section 162(m) of
the Internal Revenue Code.
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 1996 annual
meeting of stockholders must be received by the Company at
its principal executive office not later than 120 days prior to
March 14, 1996 in order to be included in the proxy statement
for that meeting. To be considered for inclusion the proposals
also must comply with applicable statutes and regulations and the
provisions of the by-laws of the Company which include requirements
relating to the time when proposals may be submitted and the
information that must be provided.
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 LLP are the independent certified public
accountants for the Company and representatives of Grant Thornton LLP
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 14, 1995
[END OF PROXY STATEMENT]
[PROXY CARD]
COLONIAL GAS COMPANY
THIS PROXY IS SOLICITED ON BEHALF OF THE DIRECTORS
FOR THE APRIL 19, 1995 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 19, 1995 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]
The Board of Directors recommends a vote "FOR" election of
the nominees listed below.
1. Election of Directors
Nominees: J.P. Harrington, D.H. LeVan, Jr., J.F. Reilly, Jr.,
M.M. Stapleton, C.O. Swanson
FOR WITHHELD
ALL FROM ALL
NOMINEES NOMINEES
_______ _______
___________________________ For all nominees except as noted above
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]
