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__ No fee required.
[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 16, 1997 at 10:00 a.m. Boston time for the following
purposes:
1. To elect four Class I 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 February 28, 1997, 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, 1997
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 16, 1997 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, 1997.
The Company's Board of Directors set February 28, 1997 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 8,536,722
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) 322-3000).
ELECTION OF DIRECTORS
The Board of Directors consists of twelve Directors,
divided into three equal-sized classes. Four Directors of Class
I are to be elected at the Annual Meeting. Those individuals
elected Class I Directors shall serve until the 2000 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 indicated in the
following table. 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 2000:
Howard C. Homeyer (64) Director; Independent energy 1989
consultant since June 1988;
previously, 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 (72) Director; Consultant to and 1973
Director of Big Sandy Management
Company, Inc., coal lessors,
Manchester, Massachusetts;
previously, President of Big Sandy
Management Company, Inc.
Frederic L. Putnam, Jr. Director; Chairman of the Board of 1973
(72) * 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 Stavropoulos Director; Executive Vice President 1993
(39) * 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.
Continuing Directors
Directors of Class II to continue in office until 1998:
John P. Harrington Director; Senior Vice President- 1993
(54) * 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
(64) 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. Stapleton Director; Vice President of John 1983
(60) Hancock Mutual Life Insurance
Company, Boston, Massachusetts;
Miss Stapleton is also a Trustee
of Eastern Utilities Associates.
Charles O. Swanson Director; Retired; previously, 1986
(65) President of the Company from July
1990 until April 1994.
Directors of Class III to continue in office until 1999:
Victor W. Baur (53)* Director; President of Transgas 1993
Inc., the Company's energy
trucking subsidiary, since July
1990.
Daniel H. LeVan, Jr. Director; private investor. 1973
(72)
Frederic L. Putnam,III Director; President and Chief 1991
(51) * 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. He is Mr. Putnam,Jr.'s son.
Andrew B. Sides, Jr. Director; Retired; previously, 1978
(71) 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.
__________
* Member of the Executive Committee of the Board of Directors.
Meetings of the Directors
In 1996, the Directors held four Board meetings. Each of the
Directors who served in 1996 attended at least 75% of the
aggregate number of 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, except for Mr. LeVan who attended 71%.
Directors' Compensation
Directors who are not salaried officers of the Company
received an annual fee of $8,000 in 1996 payable quarterly, plus
$500 for each Board of Directors' meeting attended and
reimbursement of expenses incurred in connection with such
attendance. Effective January 1, 1997, this annual fee and
reimbursement amount became $9,000 and $600, respectively.
Members of the Audit, Compensation and Nominating Committees
of the Board of Directors received a fee of $500 in 1996 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 1996 was
$26,200.
Committees of the Directors
The Audit Committee of the Directors, which consists of
Richard L. Hull (Chairman), Howard C. Homeyer, and Margaret M.
Stapleton, held three meetings in 1996. 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 1996. 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, Daniel H.
LeVan, Jr., and Charles O. Swanson, held three meetings in 1996.
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,
1996 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 and Invest- and Invest- Common
of Beneficial Owner ment Power ment Power Stock
LaSalle National
Trust, N.A. (a) 635,521(b) 0 7.46%
Title of Class: Common
__________
(a) Information herein is based solely on a Schedule 13G
report dated February 13, 1997 as filed by LaSalle National
Trust, N.A with the Securities and Exchange Commission.
(b) These shares are held by LaSalle as Trustee under the
Company's Savings Plan pursuant to which participating employees
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, 1996 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 28,392(b) .333%
By Corporation 218,898(c) 2.570%
Frederic L. Putnam, III 8,407(d) .099%
Victor W. Baur 4,673(e) .055%
John P. Harrington 3,125(f) .037%
Nickolas Stavropoulos 5,460(f) .064%
Howard C. Homeyer 1,993(g) .023%
Richard L. Hull 558(g) .007%
Daniel H. LeVan, Jr. 210,774(g) 2.474%
John F. Reilly, Jr. 1,246(g) .015%
Andrew B. Sides, Jr. 13,458(g) .158%
Margaret M. Stapleton 407(g) .005%
Charles O. Swanson 4,645(h) .055%
3 other executive officers of the 9,841 .116%
Company
Directors and executive officers of
the Company 511,877 6.009%
as a group (15 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 1,539 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 20,542 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 8,395 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 12 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 92 shares owned jointly with spouse, over
which Mr. Baur has or shares the power to direct voting or
disposition, or both, and 4,581 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) Owner of record with sole voting and investment power.
(h) 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 2,340 shares over which
Mr. Swanson exercises sole voting and investment power.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
On April 26, 1996, Mr. Swanson filed a Form 4 under Section
16(a) of the Securities Exchange Act of 1934 reporting
ownership of 61 shares of Company Common Stock that he had
rolled over from the Company's Savings Plan into IRA accounts
following his retirement in 1994. Those 61 shares should
have been reported in an earlier Form 4 filed by Mr. Swanson
on October 5, 1994, but were inadvertently omitted because
they had been placed in an IRA account separate from the
other 8,619 shares that he had rolled over from the Savings
Plan. Subsequent to the roll-overs, Mr. Swanson has sold a
total of 6,430 of those shares and timely reported such sales
under Section 16(a). The 61 shares were not included in the
number of shares reported as beneficially owned by Mr.
Swanson in the Company's two previous Proxy Statements, nor
did the previous Proxy Statement report 4,619 other shares
held as December 31, 1995 in his IRA accounts.
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, 1996, 1995 and 1994 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
Annual Compensation All Other
Name and Principal Year Salary Bonus Compensation(f)
Position
F. L. Putnam Jr., 1996 $139,169 - $8,755
Chairman and 1995 $186,018 - 8,468
Senior Executive 1994 $186,018 - 5,871
Officer
F.L Putnam, III, 1996 $199,000 $5,000 (a) $5,649
President and 1995 $191,360 3,000 (a) 4,850
Chief Executive 1994 $173,495 _ 4,244
Officer, and
Director
Nickolas 1996 $185,600 $5,953 (d) $3,106
Stavropoulos, 1995 $175,933 3,000 (a) 2,930
Executive Vice 1994 $156,637 - 2,787
President -
Finance, Marketing
and Chief
Financial Officer,
and Director
Victor W. Baur, 1996 $148,000 $19,000 (e) $4,491
President of 1995 $139,622 2,710 (b) 4,320
Transgas Inc., and 1994 $135,555 15,000 (e) 3,931
Director
John P. 1996 $137,668 $5,000 (a) $4,059
Harrington, Senior 1995 $129,875 8,144 (c) 4,027
Vice President - 1994 $128,589 - 3,751
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) Represents a merit lump sum bonus in lieu of a
merit percentage increase of $953 and a $5,000 bonus in
connection with the rate deferral program.
(e) Represents a special bonus based on the performance
of Transgas Inc.
(f) Includes (i) the Company's matching contribution to
the account of the executive in the Company's Savings Plan
(ranging from $2,798 to $4,500 in 1996) 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 $753 to $4,838 in 1996).
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 1996 at age 65.
Pension Plan Table
Average ANNUAL BENEFITS (Based on Years of Service)
Annual
Compensation 15 20 25 30 35
$100,000 $25,500 $34,000 $42,500 $47,500 $52,500
125,000 33,000 44,000 55,000 61,250 67,500
150,000 40,500 54,000 67,500 75,000 82,500
175,000 48,000 64,000 80,000 88,750 97,500
200,000 55,500 74,000 92,500 102,500 112,500
225,000 63,000 84,000 105,000 116,250 127,500
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, 1997, the credited years of service
under the Retirement Plan and, if applicable, the SERP were as
follows: Mr. Putnam, Jr., 43 years; Mr. Putnam, III, 21
years; Mr. Stavropoulos, 17 years; Mr. Baur, 24 years; and
Mr. Harrington, 30 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
$243,042. 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 $71,794.
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, 1992 through 1996. These calculations
assume $100 invested on January 1, 1992.
[ACTUAL GRAPH]
1991 1992 1993 1994 1995 1996
Colonial Gas Company 100 129 144 131 146 162
S&P 500 Stock Index 100 108 118 120 165 203
S&P 40 Utilities Index 100 108 124 114 161 167
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
1996.
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
1996.
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 1995 annual performance review was
used as a factor in determining where within the applicable
salary range the executive officer's compensation was set
for 1996.
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 1996, the
Compensation Committee considered such factors as: 3.5%
customer growth and cost containment efforts which led to a
6.2% decrease in operations and maintenance expenses in
1995. 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 1995 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
$5,000 each in 1996. 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. A special year-end
bonus of $19,000 was paid to Mr. Baur in 1996 in
recognition of the extraordinary demands placed on Transgas
Inc. and its superior performance in 1996.
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 1998 annual
meeting of stockholders must be received by the Company at its
principal executive office by November 10, 1997 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. 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 10, 1997
[END OF PROXY STATEMENT]
[PROXY CARD]
COLONIAL GAS COMPANY
THIS PROXY IS SOLICITED ON BEHALF OF THE
DIRECTORS FOR THE APRIL 16, 1997 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 16, 1997 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: H.C. Homeyer, R.L. Hull, F.L. Putnam Jr., Nickolas
Stavropoulos
FOR WITHHELD
ALL FROM ALL
NOMINEES NOMINEES
_______ _______
___________________________ For all nominees except as noted above
2. To transact such other business as may properly come
before the meeting or any adjournment thereof.
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]
