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.
[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 17, 1996 at 10:00 a.m. Boston time for the following
purposes:
1. To elect four Class III 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, 1996, 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 11, 1996
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 17, 1996 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 11, 1996.
The Company's Board of Directors set March 1, 1996 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 8,376,458 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 Boston EquiServe, L.P., P.O. Box 1719,
Boston, Massachusetts 02105-9905, or by attending and voting in
person 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
Effective on the date of the Annual Meeting, the Board of
Directors has reduced the number of Directors from fifteen to
twelve, divided into three classes. Four Directors of Class III
are to be elected at the Annual Meeting. Those individuals
elected Class III Directors shall serve until the 1999 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 four 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 III 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. Albert C. Dudley, Kenneth R.
Lydecker and George E. Wik, who are currently Class III
Directors, will not be standing for reelection. The Board of
Directors has nominated for election as Class III Directors
Victor W. Baur, who is currently a Class I Director, and Daniel
H. LeVan, Jr., who is currently a Class II Director.
Served as Director
Principal Occupation of the Company
Name and Age and Other Directorships Continuously Since
Nominees
Directors of Class III to be elected for a term expiring in 1999:
Victor W. Baur (52) Director; President of Transgas 1993
* Inc., the Company's energy
trucking subsidiary, since July
1990.
Daniel H. LeVan, Director; private investor. 1973
Jr. (71)
Frederic L. Putnam, Director; President and Chief 1991
III (50) (a) * Executive Officer of the Company
since February 1995; previously,
President of the Company from May
1994; Executive Vice President and
General Manager of the Company
from April 1993 until May 1994;
and before that, Vice President
and General Manager of the
Company.
Andrew B. Sides, Director; Retired; previously, 1978
Jr. (70) 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.
Continuing Directors
Directors of Class I to continue in office until 1997:
Howard C. Homeyer Director; Independent energy 1989
(63) 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 Director; Retired; previously, 1973
(71) President until 1994 of Big Sandy
Management Company, Inc., coal
lessors, Manchester, Massachusetts.
Frederic L. Putnam, Director; Chairman of the Board of 1973
Jr. (71) * 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 from April 1984.
Nickolas Director; Executive Vice President 1993
Stavropoulos (38) * - Finance, Marketing and Chief
Financial Officer of the Company
since February 1995; previously,
Vice President - Finance and Chief
Financial Officer of the Company
from August 1989.
Directors of Class II to continue in office until 1998:
John P. Harrington Director; Senior Vice President - 1993
(53) * Gas Supply and Assistant to the
President of the Company since
February 1995; previously, Vice
President - Gas Supply of the
Company from August 1989.
John F. Reilly, Jr. Director; President, Chief 1985
(63) Executive 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. Director; Vice President of John 1983
Stapleton (59) (b) Hancock Mutual Life Insurance
Company, Boston, Massachusetts;
Miss Stapleton is also a Trustee
of Eastern Utilities Associates.
Charles O. Swanson Director; Retired; previously, 1986
(64) President of the Company from July
1990 until April 1994.
__________
* Member of the Executive Committee of the Board of Directors.
(a) Mr. Putnam, III is Mr. Putnam, Jr.'s son.
(b) At December 31, 1995, $6,000,000 of the Company's long-
term debt was held by John Hancock Mutual Life Insurance Company,
of which Miss Stapleton is an officer.
Meetings of the Directors
In 1995, the Directors held four Board meetings. Each of the
Directors who served in 1995 attended at least 75% of 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. Putnam, III who attended half of the
meetings of the Board and all 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 1995 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 1995 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, if the amount deferred is at least $1,000
per year. Interest is credited on the amount deferred. The plan
provides for an election to receive the deferred fees in either
one lump sum or in semi-annual installments over a period of up
to 15 years. The amount deferred under this plan in 1995 was
$32,250.
Committees of the Directors
The Audit Committee of the Directors, which effective with
the Annual Meeting will consist of Richard L. Hull (Chairman),
Margaret M. Stapleton and such other Directors as the Board may
designate, held three meetings in 1995. 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 once in 1995. 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 one meeting in 1995. 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,
1995 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
LaSalle National Common 606,362(b) 0 7.2%
Trust N.A. (a)
__________
(a) Information herein is based solely on a Schedule 13G
report dated February 21, 1996 and filed by LaSalle with the
Securities and Exchange Commission.
(b) LaSalle National Trust, N.A holds 606,362 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.
Management Ownership
The following table sets forth (i) the number of shares of
Common Stock beneficially owned as of December 31, 1995 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.
Amount and
Nature of
Beneficial Percent
Name of Individual Ownership of of
or Number of Common Stock Common
Persons in Group (a) Stock
Frederic L. Putnam, Jr.
Individually 26,588(b) .323%
By Corporation 218,898(c) 2.661%
Frederic L. Putnam, III 7,919(d) .096%
Victor W. Baur 4,323(e) .053%
John P. Harrington 2,829(f) .034%
Nickolas Stavropoulos 5,145(f) .063%
Albert C. Dudley 824(g) .010%
Howard C. Homeyer 1,711(h) .021%
Richard L. Hull 525(h) .006%
Daniel H. LeVan, Jr. 210,774(h) 2.562%
Kenneth R. Lydecker 1,883(i) .023%
John F. Reilly, Jr. 1,173(h) .014%
Andrew B. Sides, Jr. 12,673(h) .154%
Margaret M. Stapleton 384(h) .005%
Charles O. Swanson 2,305(j) .028%
George E. Wik 118(k) .001%
3 other executive officers of the 8,373 .102%
Company
Directors and executive officers of
the Company 506,446 6.156%
as a group (18 persons)
__________
(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 742 shares owned solely, 4,811 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 19,535 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 7,910 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 9 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 86 shares owned jointly
with spouse, over which Mr. Baur has or shares the power to
direct voting or disposition, or both, and 4,237 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 613 shares owned solely and 211 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. Mr. Dudley is not standing for reelection as a Director.
(h) Owner of record with sole voting and investment power.
(i) Consisting of 575 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. Mr. Lydecker is not standing for reelection
as a Director.
(j) These shares are owned jointly with spouse, over which
Mr. Swanson 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. Mr. Wik is not standing for reelection as a Director.
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, 1995, 1994 and 1993 for the Company's Chief
Executive Officer and the 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
All Other
Name and Principal Annual Compensation Compensation
Position Year Salary Bonus (d)
F. L. Putnam Jr., 1995 $186,018 - $8,468
Chairman and 1994 186,018 - 5,871
Senior Executive 1993 175,000 - 8,727
Officer
F. L. Putnam, III, 1995 191,360 $3,000 (a) 4,850
President and 1994 173,495 - 4,244
Chief Executive 1993 142,508 - 6,315
Officer, and
Director
Nickolas 1995 175,993 3,000 (a) 2,930
Stavropoulos, 1994 156,637 - 2,787
Executive Vice 1993 145,034 15,000 5,652
President -
Finance, Marketing
and Chief
Financial Officer,
and Director
Victor W. Baur, 1995 139,622 2,710 (b) 4,320
President of 1994 135,555 15,000 3,931
Transgas Inc., and 1993 121,958 - 5,272
Director
John P. Harrington, 1995 129,875 8,144 (c) 4,027
Senior 1994 128,589 - 3,751
Vice President - 1993 119,064 - 3,506
Gas Supply and
Assistant to the
President, and
Director
__________
(a) Represents a bonus in connection with the rate deferral
incentive program as described in the "Compensation Committee
Report on Executive Compensation".
(b) Represents a merit lump sum bonus in lieu of a merit
percentage increase.
(c) Represents a merit lump sum bonus in lieu of a merit
percentage increase of $5,144 and a $3,000 bonus in connection
with the rate deferral incentive program.
(d) Includes (i) the Company's matching contribution to the
account of the executive in the Company's Savings Plan (ranging
from $2,640 to $3,750 in 1995) 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 $289
to $4,718 in 1995).
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 1995 at age
65.
Pension Plan Table
Average ANNUAL BENEFITS (Based on Years of Service)
Annual
Compensation 15 20 25 30 35
$100,000 $25,599 $34,132 $42,665 $47,665 $52,665
125,000 33,099 44,132 55,165 61,415 67,665
150,000 40,599 54,132 67,665 75,165 82,665
175,000 48,099 64,132 80,165 88,915 97,665
200,000 55,599 74,132 92,665 102,665 112,665
225,000 63,099 84,132 105,165 116,415 127,665
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.
Messrs. Putnam, Jr., Putnam, 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, 1996, the credited years of service under
the Retirement Plan and, if applicable, the SERP were as follows:
Mr. Putnam, Jr., 42 years; Mr. Putnam, III, 20 years; Mr.
Stavropoulos, 16 years; Mr. Baur, 23 years; and Mr. Harrington,
29 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 $231,585. 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 $13,507.
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, 1991 through 1995. These calculations assume $100
invested on January 1, 1991.
[ACTUAL GRAPH]
1990 1991 1992 1993 1994 1995
Colonial Gas Company [Symbol] 100 126 162 181 164 184
S&P 500 Stock Index [Symbol] 100 130 140 154 156 215
S&P Utilities 40 Index [Symbol] 100 115 124 142 130 185
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The duties of the Compensation Committee of the Board of
Directors 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. The
Compensation Committee met once in 1995.
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. The Compensation Committee periodically reviews
surveys of comparable positions at other utilities to review the
Company's executive pay practices. The other utilities are not
necessarily those included in the S&P 40 Utilities Index included
in the Performance Graph. In addition, information is also
gathered from other outside sources and reviewed by the
Compensation Committee 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 1995.
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 and Chief Executive Officer. In the
case of the President, his performance is first evaluated by the
Chairman who then reports to the Compensation Committee. The
Chairman's performance is evaluated by the Compensation
Committee. Each executive officer's 1994 annual performance
review was used as a factor in determining where within the
applicable salary range the executive officer's compensation was
set for 1995.
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 (adjusting that performance
for uncontrollable events such as weather). In determining the
total amount of funds available for compensation increases for
1995, the Compensation Committee considered such factors as: the
favorable performance in 1994 of the Company's Common Stock in
comparison to other local distribution companies; 3% customer
growth; cost containment efforts and the Company's other
operational accomplishments in 1994. Given the aforementioned
studies and the Company's performance and accomplishments, the
Compensation Committee recommended merit raises or bonuses for
the Company's executive officers, including the merit raises and
bonuses for the named executive officers as shown in the Summary
Compensation Table.
In determining the President's salary, the Compensation
Committee took into account the evaluation by the Chairman, as
well as the Company's performance and accomplishments in 1994 as
described in the preceding paragraph.
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.
Messrs. Putnam, III, Stavropoulos, and Harrington received $3,000
each in 1995. 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
addition, from time to time, the Company awards one-time bonuses
based on merit.
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 1997 annual
meeting of stockholders must be received by the Company at its
principal executive office by November 11, 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 11, 1996
[END OF PROXY STATEMENT]
[PROXY CARD]
COLONIAL GAS COMPANY
THIS PROXY IS SOLICITED ON BEHALF OF THE DIRECTORS
FOR THE APRIL 17, 1996 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 17, 1996 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: V.W. Baur, D.H. LeVan, Jr., F.L. Putnam, III,
A.B. Sides, Jr.
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]
[COVER LETTER]
COLONIAL GAS COMPANY
40 MARKET STREET
LOWELL, MA 01852
March 7, 1996
Securities and Exchange Commission
450 Fifth St., N.W.
Washington, D.C. 20549
RE: Filing of Definitive Proxy Materials by Colonial
Gas Company
Dear Sir/Madam:
Colonial Gas Company ("Colonial") is hereby filing electronically
its Notice, Proxy Statement and Proxy which will be mailed
to stockholders starting on March 11, 1996 in connection with
Colonial's April 17, 1996 Annual Meeting of Stockholders.
Please do not hesitate to contact the undersigned if you have any
questions about this filing.
Very truly yours,
Timothy A. Clark
Assistant General Counsel
[END OF COVER LETTER]
