SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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 Commission Only (as permitted by Rule
14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to [section]240.14a-11(c) or
[section]240.14a-12
ENERGYNORTH, INC.
- -------------------------------------------------------------------------------
(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.
[ ] 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.:
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3) Filing Party:
--------------------------------------------
4) Date Filed:
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<PAGE>
[Energy North logo]
EnergyNorth, Inc. (bullet) 1260 Elm Street (bullet) P.O. Box 329 (bullet)
Manchester, New Hampshire 03105-0329 (bullet) Telephone (603) 625-4000
December 20, 1996
To Our Stockholders:
You are cordially invited to attend the annual meeting of stockholders
of EnergyNorth, Inc. The meeting will be held at 11:00 a.m., local time, on
Wednesday, February 5, 1997, at the Merrimack Hotel and Conference Center, 4
Executive Park Drive, Merrimack, New Hampshire.
At this meeting, you will be asked to (1) elect four persons to the
Board of Directors, (2) ratify the appointment of independent public
accountants and (3) transact such other business that may lawfully come
before the meeting.
We hope that you will be able to attend the meeting. To make certain
that your vote is counted, please sign and date the enclosed proxy and return
it in the envelope provided. No postage is required. Sending in your proxy at
this time will not affect your right to vote in person, should you attend the
meeting.
We look forward to seeing you on February 5, 1997.
Sincerely,
/s/Robert R. Giordano
ROBERT R. GIORDANO, President
and Chief Executive Officer
<PAGE>
<PAGE>
ENERGYNORTH, INC.
1260 Elm Street
P.O. Box 329
Manchester, New Hampshire 03105
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held February 5, 1997
To the Stockholders of
ENERGYNORTH, INC.:
The annual meeting of stockholders of EnergyNorth, Inc. will be held at
the Merrimack Hotel and Conference Center, 4 Executive Park Drive, Merrimack,
New Hampshire, at 11:00 a.m. on Wednesday, February 5, 1997, for the
following purposes:
1. To elect four directors to the Board of Directors.
2. To ratify the appointment of independent public accountants for 1997.
3. To transact such other business as may lawfully come before the meeting
or any adjournments thereof.
Only stockholders of record at the close of business on December 17, 1996
will be eligible to vote at this meeting and any adjournments thereof.
BY ORDER OF THE BOARD OF DIRECTORS
Richard A. Samuels, Secretary
December 20, 1996
IMPORTANT
The interest and cooperation of all shareholders in the affairs of the
Company are considered to be of the greatest importance by your Company's
Board of Directors. If you do not expect to attend the annual meeting, it is
urgently requested that, even though your holdings of stock may not be large,
you promptly mark, sign, date and return the accompanying proxy in the
envelope enclosed for your use. If you do so now, the Company will be saved
the expense of follow-up solicitations.
<PAGE>
<PAGE>
ENERGYNORTH, INC.
1260 Elm Street
P.O. Box 329
Manchester, New Hampshire 03105
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation
by the Board of Directors of EnergyNorth, Inc. (hereinafter the "Company") of
proxies in the accompanying form, for use at the annual meeting of
stockholders to be held at the Merrimack Hotel and Conference Center, 4
Executive Park Drive, Merrimack, New Hampshire, at 11:00 a.m. on Wednesday,
February 5, 1997. This proxy statement and accompanying form of proxy are
being mailed to stockholders on or about December 20, 1996.
The cost of this solicitation is being borne by the Company. In addition
to the use of the mails, proxies may be solicited by advertisement,
telephone, facsimile, electronic message and personal interview.
SUBSIDIARIES
Some of the information contained in this proxy statement refers to the
Company's subsidiaries, EnergyNorth Natural Gas, Inc. ("ENGI"); EnergyNorth
Propane, Inc. ("ENPI"); and EnergyNorth Realty, Inc. ("ENRI").
VOTING OF PROXIES
Proxies will be voted in accordance with stockholders' directions. If no
directions are given, proxies will be voted in favor of the election as
directors of the four persons named as nominees under the caption "Election
of Directors" and in favor of the proposal to ratify the appointment of
independent public accountants. There is no reason to believe that any
nominee for director will not be a candidate or will be unwilling to serve,
but if either event occurs it is intended that the shares represented by the
proxies will be voted for any substitute nominee designated by the Board of
Directors.
At the meeting, each stockholder will be entitled to one vote for each
share of stock standing in the stockholder's name on the books of the Company
at the close of business on December 17, 1996. On that date, the Company had
outstanding and entitled to vote 3,243,543 shares of $1.00 par value Common
Stock.
A stockholder who has given a proxy may revoke it at any time prior to its
exercise. Filing of a duly executed proxy bearing a later date with the
Company's secretary or appearing at the meeting and voting in person will
constitute such revocation.
The Bylaws of the Company provide for the election of four directors to
the Board of ten Directors. The proxies cannot be voted for a greater number
than for the four vacancies to be filled.
BOARD OF DIRECTORS
The Board of Directors of the Company met six times during the most recent
fiscal year. Each director attended 75% or more of the aggregate of the total
number of Board meetings and total number of meetings of Committees on which
the director served.
The Compensation Committee of the Board consists of Sylvio L. Dupuis,
Chairman, Roger C. Avery and Richard B. Couser. This Committee reviews the
salary ranges of the officers and the benefit plans of the Company and makes
recommendations to the Board of Directors with respect to those matters. It
held three meetings during the fiscal year.
<PAGE>
The Audit Committee of the Board consists of Davis P. Thurber, Chairman,
Roger C. Avery and Joan P. Cudhea. It held two meetings during the fiscal
year. This Committee reviews the scope and results of the audit by the
independent public accountants, makes recommendations to the Board of
Directors as to the selection of independent public accountants for each
fiscal year, and approves services provided by the independent public
accountants and the fees for those services. It also reviews systems of
internal control and accounting policies and procedures, financial reporting,
and other matters relating to fiscal management of the Company.
The Board does not have a nominating committee.
PRINCIPAL SHAREHOLDERS
The following table sets forth information regarding beneficial ownership
of the Company's $1.00 par value Common Stock, its only class of securities,
by each director and nominee for director, certain executive officers (Ms.
Chicoine and Messrs. Childs, Demers and Hanlon), and all directors and
executive officers as a group, as of October 1, 1996, and by all persons
known to the Company to own more than 5% of the Company's stock, as of
September 30, 1996.
<TABLE>
<CAPTION>
Shares Owned Beneficially
---------------------------------
Sole Voting Shared Voting
And Investment And Investment % of
Name Power Power Total Class
- ------------------------------------------------- ---------------- ---------------- --------- --------
<S> <C> <C> <C> <C>
Dimensional Fund Advisors, Inc. 162,417(1) -- 162,417 5.01
- ------------------------------------------------- ---------------- ---------------- --------- --------
Roger C. Avery 2,647 28,846(2) 31,493 *
Edward T. Borer 14,126 6,588(3) 20,714 *
Richard J. Censits 2,000 -- 2,000 *
Michelle L. Chicoine 1,007 300 1,307 *
Frank L. Childs 341 103 444 *
Richard B. Couser 138 -- 138 *
Joan P. Cudhea 12,262 1,690(4) 13,952 *
Richard P. Demers 1,373 -- 1,373 *
Sylvio L. Dupuis 400 202 602 *
Robert R. Giordano 5,626 8,722(5) 14,348 *
Constance B. Girard-diCarlo 118 -- 118 *
Albert J. Hanlon 1,487 -- 1,487 *
N. George Mattaini 11,408 562(6) 11,970 *
Davis P. Thurber 6,007 64,902(7) 70,909 2.19
John E. Tulley, II -- -- -- --
All Directors, Nominees and Executive Officers
as a Group (16 in number at 12/1/96) 59,936 111,915 171,851 5.31
</TABLE>
*Less than 1% of class.
(1) According to a Statement on Schedule 13G filed with the Securities and
Exchange Commission on February 9, 1996 and a December 9, 1996 statement
from the beneficial owner. The beneficial owner, a registered investment
advisor, reported that it has dispositive power only with respect to
34,926 of such shares.
(2) 10,879 of these shares are held by Mr. Avery solely in a fiduciary
capacity and in which he disclaims beneficial ownership.
(3) Includes shares held by Mr. Borer solely in a fiduciary capacity and 213
shares held by his spouse in which he disclaims beneficial ownership.
2
<PAGE>
(4) These shares are held by Ms. Cudhea's daughter-in-law, in which she
disclaims beneficial ownership and over which she shares investment power
only.
(5) Includes 430 shares held by Mr. Giordano's spouse, in which he disclaims
beneficial ownership.
(6) These shares are held by Mr. Mattaini's spouse, in which he disclaims
beneficial ownership.
(7) These shares are held as trustee by Bank of New Hampshire, of which Mr.
Thurber is Chairman of the Board, and in which he disclaims beneficial
ownership.
ELECTION OF DIRECTORS
(Item 1 on Proxy)
The following information concerning the name, age at December 31, 1996,
and business experience of the four persons to be nominated for election as
directors and the six directors whose terms do not expire in 1997 has been
furnished to the Company by the nominees and directors(1). The election of
each nominee will require the affirmative votes of the holders of a majority
of the shares of common stock present at the meeting and entitled to vote.
Where proxies are marked "withhold authority," such shares are included in
determining the number of shares present and voting. "Broker non-votes" on
proxies returned by brokers holding shares for beneficial owners who have not
provided instructions as to voting for directors will be counted as a vote
for each nominee.
Each person nominated, if elected, will hold office until the annual
meeting to be held in the year in which his or her term expires and until his
or her successor is duly elected.
NOMINEES FOR ELECTION FOR TERM OF THREE YEARS EXPIRING IN 2000
<TABLE>
<CAPTION>
Name, Age and Other Served as
Positions Held With Director Principal Occupation or Employment
the Company Since During Last Five Years
- ----------------------- ----------- ----------------------------------------------------------
<S> <C> <C>
Roger C. Avery, 57 1984 President and Chief Executive Officer, Illinois Gas
Company; Adjunct Associate Professor (since 1991) and
Research Associate, Brown University
Robert R. Giordano, 58 1988 President and Chief Executive Officer of ENGI; formerly
President and Chief (until 1991) Executive Vice President of the Company
Executive Officer
N. George Mattaini, 71 1982 Chairman of ENGI; formerly (until 1991) President and
Vice Chairman of the Chief Executive Officer of the Company
Board
John E. Tulley, II, 42 -- President and Chief Executive Officer, Tulley Buick
Pontiac Co., Inc.
</TABLE>
3
<PAGE>
DIRECTORS TO CONTINUE IN OFFICE WITH TERMS EXPIRING IN 1999
<TABLE>
<CAPTION>
Name, Age and Other Served as
Positions Held With Director Principal Occupation or Employment
the Company Since During Last Five Years
- ----------------------- ----------- -----------------------------------------------------------
<S> <C> <C>
Edward T. Borer, 58(2) 1982 Chairman (and, until 1996, Chief Executive Officer; and,
Chairman of the Board until 1995, President) of Philadelphia Corporation for
Investment Services, a registered securities broker/
dealer and investment advisor
Richard B. Couser, 55 1985 Attorney with Orr & Reno, Professional Association
Constance B. 1994 President, Healthcare Support Services, a division of
Girard-diCarlo, 49(3) ARAMARK Corporation, which manages support service
departments in the healthcare industry
</TABLE>
DIRECTORS TO CONTINUE IN OFFICE WITH TERMS EXPIRING IN 1998
<TABLE>
<CAPTION>
Name, Age and Other Served as
Positions Held With Director Principal Occupation or Employment
the Company Since During Last Five Years
-------------------------------------- ---------------------------------------------------------
<S> <C> <C>
Richard J. Censits, 59(4) 1993 Consultant to Business; formerly, until 1996, Chairman
and Chief Financial Officer of Montech International,
Inc.; formerly (until 1995) Chairman and Chief
Executive Officer, MedQuist Inc.
Joan P. Cudhea, 64 1984 Certified Financial Planner and Registered Investment
Adviser
Sylvio L. Dupuis, 62 1982 Optometrist; Executive Director of McLane, Graf,
Raulerson & Middleton, Professional Association law
firm; formerly (until 1996) Commissioner of Insurance -
State of New Hampshire; formerly (until 1994) President
and Chief Executive Officer, Catholic Medical Center, a
hospital
</TABLE>
(1) Davis P. Thurber, 71, has been a Director of the Company since 1982. He
is Chairman of Bank of New Hampshire Corporation, a bank holding company
and Bank of New Hampshire, a commercial bank. Mr. Thurber's term of
office as a Director of the Company expires at the 1997 Annual Meeting.
Pursuant to the Company's retirement policy for Directors, Mr. Thurber is
not eligible for reelection at the 1997 Annual Meeting.
(2) Mr. Borer is a director of Philadelphia Corporation for Investment
Services.
(3) Ms. Girard-diCarlo is a director of The Multicare Companies, Inc.
(4) Mr. Censits is a director of Checkpoint Systems, Inc. and of MedQuist Inc.
4
<PAGE>
Compensation of Directors
The Chairman of the Board of Directors receives an annual retainer of $38,000
and the Vice Chairman receives an annual retainer of $21,000. All other
Directors receive annual retainers of $8,500. Committee Chairmen receive
additional annual retainers of $2,000, and Executive Committee members,
except the Chairman and Vice Chairman, receive additional annual retainers of
$2,000. Directors, other than the Chairman and Vice Chairman, receive fees of
$600 for each Board meeting attended and $500 for each committee meeting
attended, with the exception of multiple meetings of the Board of Directors
held on the day of the annual meeting of the Board of Directors. Directors
who are employees receive no annual retainers or meeting fees.
Directors may elect to have portions of their retainers and fees credited
each year to a deferred compensation account pursuant to a plan that provides
for accrual of interest and distribution of the deferral accounts in lump sum
amounts or in equal installments over ten years, at the option of each
Director, beginning on a date designated by the Director.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Richard B. Couser, a director and a member of the Compensation Committee,
is a director of Orr & Reno, Professional Association, a law firm that
provides legal services to the Company and its subsidiaries. It is
management's opinion that such services were obtained on terms as favorable
to the Company and its subsidiaries as those that could have been obtained
from unaffiliated persons.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires that each
director and certain officers of the Company file reports of initial
beneficial ownership and changes in beneficial ownership of the Company's
common stock with the Securities and Exchange Commission. To the Company's
knowledge, during 1996 all directors and officers filed all such required
notices.
EXECUTIVE COMPENSATION
The following Summary Compensation Table shows compensation paid by the
Company for services rendered in all capacities during the fiscal years ended
September 30, 1996, 1995 and 1994 to the Chief Executive Officer and the four
other executive officers of the Company whose salary and cash incentive
compensation award for the 1996 fiscal year exceeded $100,000.
5
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
-------------------------------------------------------------------------------------------------------------------
Long-Term
Annual Compensation Compensation
------------------------------------------- ----------------
Cash Incentive Other Annual Restricted Stock All Other
Name and Principal Position Year Salary(1) Compensation Compensation Awards(2) Compensation(3)
----------------------------- ------ --------- ---------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Robert R. Giordano 1996 $200,334 $59,103 $2,492 $19,677 $7,961
President and CEO of the 1995 191,021 19,002 3,124 18,989 7,197
Company and ENGI; Chairman 1994 181,369 13,808 2,459 13,805 7,131
and CEO of ENPI
----------------------------- ------ --------- ---------------- --------------- ---------------- ----------------
Albert J. Hanlon 1996 $114,917 $25,835 $1,346 $ 8,593 $4,555
Senior Vice President of the 1995 111,866 9,279 1,448 9,248 4,560
Company and ENGI 1994 106,635 6,962 813 6,937 4,136
----------------------------- ------ --------- ---------------- --------------- ---------------- ----------------
Richard P. Demers 1996 $ 95,333 $20,959 $ 0 $ 6,971 $4,397
Vice President of the 1995 91,927 7,721 827 7,718 4,250
Company and ENGI; President 1994 88,203 5,686 757 5,665 3,377
of ENPI
----------------------------- ------ --------- ---------------- --------------- ---------------- ----------------
Frank L. Childs(4) 1996 $ 93,750 $22,062 $ 0 $ 7,338 $1,946
Vice President of the 1995 68,981 5,613 0 5,610 645
Company and ENGI 1994 0 0 0 0 0
----------------------------- ------ --------- ---------------- --------------- ---------------- ----------------
Michelle L. Chicoine 1996 $ 85,584 $21,550 $1,053 $ 7,164 $4,095
Vice President, Treasurer 1995 81,041 6,222 927 6,222 3,729
and CFO of the Company, ENGI 1994 76,816 4,647 968 4,619 2,369
and ENPI
----------------------------- ------ --------- ---------------- --------------- ---------------- ----------------
</TABLE>
(1) Includes amounts earned and deferred without election by the officer and
amounts deferred pursuant to Deferred Compensation Agreements and the
Company's 401(k) plan.
(2) The aggregate number of shares of restricted stock holdings of the
above-named officers, as of September 30, 1996, is 7,250 shares, having a
value of $138,656.
(3) All other compensation paid in 1996 includes: Employer contributions to
the Company's 401(k) plan for Mr. Giordano ($4,882), Mr. Hanlon ($2,946),
Mr. Demers ($3,063), Mr. Childs ($721) and Ms. Chicoine ($2,919); value
of term life insurance premiums paid for Mr. Giordano ($2,040), Mr.
Hanlon ($1,609), Mr. Demers ($1,334), Mr. Childs ($1,225) and Ms.
Chicoine ($1,176); portion of interest earned in a deferred compensation
account by Mr. Giordano in excess of 120% of federal long-term rate
($1,039).
(4) Mr. Childs joined the Company in January 1995.
6
<PAGE>
The following Pension Plan Table sets forth estimated annual benefits
payable under the Company's Retirement Plan and Supplemental Executive
Retirement Plan ("SERP") at age 65 to persons in specified compensation and
years of service classifications, and combined annual benefits payable under
the Retirement Plan and SERP upon such retirement to persons in those
compensation classifications. Combined annual benefits shown in the table do
not reflect offsets for benefits of Social Security and for retirement
benefits received from other employers.
<TABLE>
<CAPTION>
PENSION PLAN TABLE
- ------------------------------------------------------------------------------------------
Estimated Annual Benefits Under Retirement Plan
Upon Retirement with Years of Service Indicated
- ------------------------------------------------------------------------------------------
Combined Annual Benefits
Average Annual Earnings Under Retirement Plan
During Highest Five Years 20 Years 30 Years 40 Years and SERP Upon Retirement
-------------------------------------- ----------- ----------- --------------------------
<S> <C> <C> <C> <C>
$125,000 $ 45,000 $ 59,375 $ 65,625 $ 93,750
-------------------------------------- ----------- ----------- --------------------------
150,000 54,000 71,250 78,750 112,500
-------------------------------------- ----------- ----------- --------------------------
175,000 63,000 83,125 91,875 131,250
-------------------------------------- ----------- ----------- --------------------------
200,000 72,000 95,000 105,000 150,000
-------------------------------------- ----------- ----------- --------------------------
225,000 81,000 106,875 118,125 168,750
-------------------------------------- ----------- ----------- --------------------------
250,000 90,000 118,750 131,250 187,500
-------------------------------------- ----------- ----------- --------------------------
300,000 108,000 142,500 157,500 225,000
-------------------------------------- ----------- ----------- --------------------------
</TABLE>
Non-Contributory Retirement Plan
All full-time salaried employees, including officers and certain part-time
employees, are eligible to participate in the Company's Retirement Plan,
provided an employee has reached the age of 21 and has completed one year of
service. The SERP is a non-contributory plan intended to supplement benefits
of the Retirement Plan for certain named executive officers, effective
January 1, 1985. Under both plans normal retirement is at age 65 with a
provision for early retirement. Benefits under the Retirement Plan vest after
five years of service and under the SERP vest after ten years of service.
Earnings under the plans for the executive officers named in the Summary
Compensation Table consist of regular annual compensation, excluding bonuses
or severance pay, and is the same as the Annual Compensation and Long-Term
Compensation shown in the Summary Compensation Table. Mr. Giordano has 31
credited years of service under the plans, Mr. Hanlon 24 years, Mr. Demers 8
years, Mr. Childs one year and Ms. Chicoine 6 years.
Funding of the Retirement Plan is based on actuarial computations and
results in a pool of assets held in trust that is unallocated with respect to
any particular individual. Benefits payable under the Retirement Plan are
calculated on the basis of straight life annuity amounts, accrued over a
25-year period and are not subject to any deduction for Social Security
Benefits or other offset.
Benefits under the SERP are unfunded, accrue over a 15-year period and
once they are fully vested do not vary with years of service, except that
SERP participants who are included in the plan after September 30, 1995 will
have benefits reduced if they retire prior to normal retirement date under
the Retirement Plan. For an individual retiring at age 65, benefits are
calculated on the basis of 75% of the average of the five highest consecutive
years' earnings, less any amounts receivable for benefits of Social Security,
the Retirement Plan, and other qualified plans of the Company and other
employers.
7
<PAGE>
Employment Agreements
The Company has employment agreements with Messrs. Giordano and Hanlon
under which the Company has agreed to employ them for five and two-year
periods, respectively, and which may be extended annually for an additional
year. If the Company terminates the employment of either of these individuals
other than for his breach of the agreement or misconduct, it is required to
continue salary payments including average incentive compensation, deferred
compensation and amounts the employee has elected to defer, through the term
of the agreement. Such termination payments will not be made following any
termination of employment that gives rise to payments under the management
continuity agreements described below.
Management Continuity Agreements
The Company has management continuity agreements (the "Continuity
Agreements") with Messrs. Giordano, Hanlon, Demers, Childs and Ms. Chicoine.
The Continuity Agreements provide that in the event of termination of
employment or a reduction in compensation, position or other conditions of
employment within a specified period following a Change in Control of the
Company, as defined in the Continuity Agreements, or termination by the
employee for Good Reason, as defined in the Continuity Agreements, following
a Change in Control, the Company shall pay to the employee a lump sum
severance benefit and certain other benefits. The severance benefit payable
to Mr. Giordano is five times his annual salary and incentive and deferred
compensation, and to Messrs. Hanlon and Childs and Ms. Chicoine 2.95 times
each of their annual salaries and incentive and deferred compensation. The
severance benefit payable to Mr. Demers is the greater of two times his
annual salary or 2.75 times his five-year average taxable compensation. In
each Continuity Agreement, except for Mr. Giordano's, no severance benefits
are paid to the extent that such benefits, aggregated with other benefits
paid to the employee, constitute "excess parachute payments" within the
meaning of Section 280G of the Internal Revenue Code of 1986.
8
<PAGE>
PERFORMANCE GRAPH
The following graph compares the performance of the Company's common stock
to the S&P 500 Index and a natural gas industry peer group, consisting of 64
companies published by Media General Financial Services, Inc., for the last
five years. The graph assumes an investment of $100 at September 30, 1991
with all dividends reinvested.
Comparison of Five Year Cumulative Total Return
[typeset representation of line chart]
9/91 9/92 9/93 9/94 9/95 9/96
S&P 500 Index $100 $111 $125 $130 $169 $203
EnergyNorth, Inc. 100 114 150 126 133 161
Industry Peer Group 100 102 129 117 123 158
[end line chart]
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The compensation program for executive officers of the Company is
administered by the Compensation Committee of the Board of Directors. The
Committee's philosophy is to link executive compensation to improvements in
corporate performance and enhanced profitability and shareholder value. The
compensation program objectives are to (1) provide a competitive,
market-based total compensation package that enables the Company to attract
and retain key executives; (2) integrate all compensation programs with the
Company's annual and long-term business objectives and focus executive
efforts on the fulfillment of those objectives; and (3) provide variable
compensation opportunities that are directly linked with the performance of
the Company and that align executive remuneration with the interests of
shareholders and utility subsidiary ratepayers.
Base Salary
The base salary component of executive compensation reflects the first
objective stated above of attracting and retaining qualified executives.
9
<PAGE>
The salary range for each executive officer ("officer") position,
including the Chief Executive Officer ("CEO"), and the actual base salary of
each officer is reviewed annually. The salary ranges are based upon
independent regional and industry salary surveys, including peer groups, for
comparable positions. These surveys are reviewed and analyzed by the
Company's Human Resources Department with the assistance of outside
consultants from time to time. Specific salary levels are established through
an evaluation of each officer's performance relating to duties and individual
achievements. For fiscal year 1996, the salary range and specific officer
salary recommendations were reviewed and approved by the Compensation
Committee.
In establishing the CEO's 1996 base salary, the Compensation Committee
reviewed the competitive market data and also reviewed performance relating
to the Company's earnings level and return on equity, cost containment
efforts, involvement in community and industry leadership activities and
development of relations with customers. The Committee's evaluation of the
CEO's success in meeting these goals resulted in the determination of his
base salary. The Compensation Committee recommended a base salary, which was
approved by the Board of Directors.
Key Employee Incentive Plan
Each officer participates in the Company's Key Employee Performance and
Equity Incentive Plan. The Plan is intended to compensate key employees based
upon performance standards and objectives and to reward performance with
share ownership in the Company. The Company seeks to align the interests of
key employees with the interests of shareholders and utility ratepayers. In
1996 the annual performance criteria which determined eligibility for awards
under the plan were (1) earnings levels compared to forecast, (2) total
average shareholder return over a rolling three-year period compared to a
peer group of comparable natural gas distribution companies, (3) operations
and maintenance expenses per customer benchmarks compared to inflation, and
(4) evaluation of individual performance. Success in meeting these goals
determines the amount of annual incentive compensation an officer will
receive. Targeted awards for the CEO under the program range up to 40% of the
midpoint of the market interval and up to 30% for other participating
officers. Three-quarters of the Incentive Plan award is paid in cash and
one-quarter is paid in the form of awards of Company Common Stock that are
subject to forfeiture and restrictions on transferability for a period of
three years. The Key Employee Performance and Equity Incentive Plan was
adopted and approved by the shareholders in February 1993.
The Compensation Committee believes that the total compensation program
for executives of the Company is competitive with the compensation programs
provided by similarly sized utilities. The Compensation Committee believes
that any amounts paid under the annual incentive plan are appropriately
related to corporate and individual performance, yielding awards that are
directly linked to annual financial and operational results of the Company.
Compensation Committee
of the Board of Directors
Sylvio L. Dupuis, Chairman
Roger C. Avery
Richard B. Couser
10
<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
(Item 2 on Proxy)
Subject to shareholder ratification, the Board of Directors, upon
recommendation of the Audit Committee, has reappointed Arthur Andersen LLP to
serve as independent public accountants for the Company for the year 1997.
Arthur Andersen LLP were the Company's principal accountants in 1996.
Ratification of the appointment of independent public accountants will
require the affirmative vote of the holders of a majority of the shares of
Common Stock present at the meeting and entitled to vote. The Board of
Directors recommends that the shareholders vote for such ratification.
Representatives of Arthur Andersen LLP are expected to be present at the
meeting and will have an opportunity to make a statement and be available to
respond to appropriate questions.
STOCKHOLDERS' PROPOSALS
Stockholders may submit proposals to be considered for stockholder action
at the 1998 annual meeting if they do so in accordance with appropriate
regulations of the Securities and Exchange Commission. Any such proposals
must be received by the Company no later than August 22, 1997 in order to be
considered for inclusion in the 1998 materials.
OTHER MATTERS
Management knows of no matters to be presented at the meeting other than
those set forth in the accompanying proxy. However, if any other matters are
properly presented for action, it is the intention of the persons named in
the proxy to vote upon such matters in accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
RICHARD A. SAMUELS, Secretary
December 20, 1996
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE URGED TO
EXECUTE THE ACCOMPANYING PROXY AND RETURN IT PROMPTLY IN THE ACCOMPANYING
ENVELOPE.
AVAILABILITY OF FORM 10-K
A copy of the Company's annual report for the last fiscal year filed on
Form 10-K with the Securities and Exchange Commission will be furnished to
stockholders without charge upon written request to Michael J. Netkovick,
Manager, Public and Investor Relations, EnergyNorth, Inc., P.O. Box 329,
Manchester, NH 03105.
11
<PAGE>
<PAGE>
[ENERGYNORTH PROXY CARD FOLLOWS.]
DETACH HERE
Proxy for the Annual Meeting of Stockholders of EnergyNorth, Inc.
P To Be Held February 5, 1996
R THIS PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS
O
X
Y
The undersigned hereby appoints Edward T. Borer, Robert R. Giordano, and
N. George Mattaini, and each of them, proxies for the undersigned, with power of
substitution, to vote on behalf of the undersigned at the annual meeting of
stockholders to be held February 5, 1997, and any adjournments thereof, upon the
matters set forth in the notice of said meeting and as stated below. The proxies
are further authorized to vote, in their discretion, upon such other business as
may properly come before the meeting and any adjournments thereof.
UNLESS OTHERWISE INDICATED, THIS PROXY WILL BE VOTED IN FAVOR OF THE
PROPOSALS SET FORTH ON THE REVERSE SIDE.
PLEASE DATE AND SIGN ON THE REVERSE SIDE SEE REVERSE
AND MAIL IN THE ENCLOSED POSTAGE PAID ENVELOPE. SIDE
<PAGE>
EnergyNorth's new site
on the World Wide Web:
http://www.emergynorth.com
DETACH HERE
X Please mark
- ------ votes as in
this example.
The Board of Directors recommends a vote FOR the election of all nominees for
director and FOR the appointment of independent public accountants.
1. To elect the following nominees as directors:
Nominees: Robert C. Avery, Robert R. Giordano,
N. George Mattaini, John E. Tulley, II
FOR WITHHELD
---------- -------
[ ]
- --------------------------------------------------------
For all nominees except as noted above
FOR AGAINST ABSTAIN
2. To ratify the appointment
of independent public
accountants for 1997. ---- ---- ----
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT ----
The undersigned also hereby acknowledges receipt of
notice of said meeting and the related proxy statement.
NOTE: Attorneys, executors, administrators, trustees and
others signing in a representative capacity should indicate
that capacity. If shares are held jointly, EACH holder must
sign.
Signature: ---------------------------------- Date ----------------
Signature: ---------------------------------- Date ----------------
