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 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
Northwest Natural 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):
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14a-6(i)(2) or Item 22(a)(2) of Schedule 14A
/ / $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3)
/ / Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11
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* Set forth the amount on which the filing fee is calculated
and state how it was determined.
/ / Check box if any part of the fee is offset as provided by
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NORTHWEST NATURAL GAS COMPANY
ONE PACIFIC SQUARE
220 N.W. SECOND AVENUE
PORTLAND, OREGON 97209
(503) 226-4211
NOTICE OF 1996 ANNUAL MEETING OF SHAREHOLDERS
Portland, Oregon, April 12, 1996
To the Shareholders:
The 1996 Annual Meeting of Shareholders of Northwest Natural
Gas Company will be held in the State Ballroom of the Hilton
Hotel, 921 S. W. Sixth Avenue, Portland, Oregon, on Thursday,
May 23, 1996, at two o'clock in the afternoon, Pacific Daylight
Time, for the following purposes:
(1) to elect four Class III directors to a term of three years;
(2) to elect independent auditors for the year 1996; and
(3) to transact such other business as may properly come before
the meeting or any adjournment thereof.
Holders of Common Stock of record at the close of business
on April 4, 1996 are entitled to vote upon all matters properly
submitted to shareholder vote at the meeting.
The Board of Directors of the Company is soliciting the
proxies of all holders of the Common Stock who may be unable to
attend the meeting in person. These proxies also will instruct
the Administrator, or its agent, under the Company's Dividend
Reinvestment and Stock Purchase Plan to vote any shares held for
shareholders' benefit under this Plan, as indicated on the
proxies. A proxy and a stamped return envelope are enclosed
herewith for your use. No postage is needed if mailed in the
United States.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THIS
MEETING.
WE URGE YOU TO EXERCISE YOUR RIGHT TO VOTE BY PROMPTLY
MARKING, SIGNING, DATING AND RETURNING THE ENCLOSED PROXY CARD.
THE PROMPT RETURN OF YOUR PROXY WILL SAVE YOUR COMPANY THE
ADDITIONAL EXPENSE OF FURTHER REQUESTS TO ENSURE THE PRESENCE OF
A QUORUM. YOU MAY VOTE IN PERSON AT THE MEETING WHETHER OR NOT
YOU PREVIOUSLY HAVE RETURNED YOUR PROXY.
By Order of the Board of Directors,
/s/ C. J. Rue
Secretary
NORTHWEST NATURAL GAS COMPANY
ONE PACIFIC SQUARE
220 N.W. SECOND AVENUE
PORTLAND, OREGON 97209
(503) 226-4211
1996 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 23, 1996
PROXY STATEMENT
The Board of Directors of Northwest Natural Gas Company is
soliciting the proxies of all holders of the Common Stock who may
be unable to attend in person the Annual Meeting of Shareholders
to be held in the State Ballroom of the Hilton Hotel, 921 S. W.
Sixth Avenue, Portland, Oregon, on Thursday, May 23, 1996, at two
o'clock in the afternoon, Pacific Daylight Time. The Company
requests that you sign and return the enclosed proxy promptly.
The Company's Annual Report for the fiscal year ended
December 31, 1995, including audited financial statements, has
been mailed to all shareholders. This proxy statement and the
accompanying proxy card are being mailed to shareholders
commencing April 12, 1996.
All shares represented by proxies which have been properly
executed and returned to the management will be voted at the
meeting. Where a shareholder eligible to vote specifies a choice
by means of the ballot space provided in the proxy, the shares
will be voted in accordance with the specification so made. If no
specification is made, such shares will be voted FOR Items 1 and
2, and may be cumulatively voted for the election of directors.
The proxy may be revoked by you at any time before it is
exercised by delivering to the Company a later dated proxy, by
giving written notice of revocation to the Secretary of the
Company at the address shown above, or by attending the meeting
and voting your shares in person.
The close of business on April 4, 1996 has been fixed as the
record date for the determination of shareholders entitled to
notice of and to vote at the meeting.
VOTING SECURITIES OF THE COMPANY
The 14,869,898 shares of Common Stock outstanding on
March 18, 1996 were held by about 11,500 shareholders residing in
50 states and a number of foreign countries.
Each holder of Common Stock of record at the close of
business on April 4, 1996 will be entitled to one vote for each
share of Common Stock so held on all matters properly submitted
at the meeting. Such holder will be entitled to cumulative
voting for directors; that is, to cast as many votes for one
candidate as shall equal the number of shares held of record
multiplied by the number of directors to be elected, or to
distribute such number of votes among any number of the
candidates.
A majority of the shares of Common Stock outstanding at the
close of business on April 4, 1996 must be represented at the
meeting, in person or by proxy, to constitute a quorum for the
transaction of business.
The holders of Preferred Stock do not participate in the
election of directors unless Preferred dividends are in arrears
(none are in arrears). The holders of the Preference Stock do not
participate in the election of directors.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE
MEETING. YOU ARE URGED, REGARDLESS OF THE NUMBER OF SHARES HELD,
TO SIGN AND RETURN YOUR PROXY.
Item (l) - ELECTION OF DIRECTORS
The Company's Restated Articles of Incorporation provide
that the Board of Directors be comprised of not less than nine
nor more than thirteen directors, with the exact number of
directors to be determined by resolution adopted by the Board.
The Board has fixed the number of directors at thirteen.
However, the number of directors will be reduced to twelve upon
the retirement, at the conclusion of this year's Annual Meeting,
of Mr. Carlton Woodard, who has served on the Board since 1976
and who has reached the mandatory retirement age for Board
service. The Restated Articles also provide that the Board of
Directors be divided into three classes and that the number of
directors in each class be as nearly equal in number as possible.
Members of each class are elected to serve a three-year term
with the terms of office of each class ending in successive
years. The term of Class III directors expires with this Annual
Meeting of Shareholders. Ms. Mary Arnstad and Messrs. Thomas E.
Dewey, Jr., Richard G. Reiten and Benjamin R. Whiteley are
nominees for election to the Board as Class III directors to
serve until the 1999 Annual Meeting or until their successors
have been duly elected and qualified. Ms. Arnstad and Messrs.
Dewey and Whiteley were elected by the shareholders at the 1993
Annual Meeting. Mr. Reiten was elected by the Board of Directors
in 1996 to fill a vacancy created by an increase in the size of
the Board. In case any of the nominees should become unavailable
for election for any reason, the persons named in the proxy will
have discretionary authority to vote for a substitute.
Management knows of no reason why any of the nominees would be
unable to serve if elected.
Under Oregon law, if a quorum of shareholders is present at
the Annual Meeting, the four nominees who receive the greatest
number of votes cast at the meeting shall be elected directors.
Abstentions and broker non-votes are counted for purposes of
determining whether a quorum exists at the Annual Meeting but are
not counted and have no effect on the results of the vote for
either directors or proposal 2.
THE BOARD OF DIRECTORS RECOMMENDS THE ELECTION OF THE
NOMINEES LISTED BELOW.
INFORMATION CONCERNING NOMINEES AND CONTINUING DIRECTORS
NOMINEES FOR ELECTION TO BOARD OF DIRECTORS
CLASS III
(For a three-year term ending 1999)
(Photo MARY ARNSTAD
appears President, The Heathman Management Group, Inc.,
here) Portland
Age: 47
Director since: 1992
Board Committees: Audit, Finance
Since January 1, 1992, Ms. Arnstad has served as President
of The Heathman Management Group, Inc., which owns and operates
The Heathman Hotel and the B. Moloch/Heathman Bakery and Pub,
both located in Portland, and The Greenwood Inn in Beaverton,
Oregon. The firm also is involved with other hotel projects in
the Pacific Northwest. She is also President and General Manager
of The Heathman Hotel. From 1992 until 1994, she served as Vice
Chairman of the Board of Directors of Preferred Hotels and
Resorts Worldwide, and is on the governing boards of the Portland
Oregon Visitors Association, the Portland Metropolitan Sports
Authority and the Northwest Business Committee for the Arts. She
is a graduate of Wittenberg University.
(Photo THOMAS E. DEWEY, JR.
appears General Partner, McFarland Dewey & Co. (investment
here) banking firm), New York, New York
Age: 63
Director since: 1986
Board Committees: Finance (Chairman), Audit
Since 1989, Mr. Dewey has been a general partner in the
investment banking firm of McFarland Dewey & Co., which provides
clients with independent financial advice, including advice on
matters such as corporate financial strategies and
recapitalization proposals. Prior to his association with this
firm, Mr. Dewey was President of Thomas E. Dewey Jr. & Co., Inc.
which provided services covering all aspects of corporate and
public finance. He is a director of InPhyNet Medical Management,
Inc., and serves on the Board of Trustees and is Chairman
Emeritus of Lenox Hill Hospital. He formerly served as a member
of the Board and as Vice Chairman of New York City Housing
Development Corporation. Mr. Dewey is a graduate of Princeton
University and the Harvard Business School.
(Photo RICHARD G. REITEN
appears President and Chief Operating Officer of the
here) Company, Portland
Age: 56
Director since: 1996
Board Committee: None
Mr. Reiten joined the Company as President and Chief
Operating Officer and was elected to the Board effective March 1,
1996. From August 1992 through December 1995, Mr. Reiten served
as President and Chief Operating Officer of Portland General
Electric Company (PGE) after having served as President of PGE's
parent company, Portland General Corporation (PGC), since January
1989. He also served as a director of PGC from 1990 until his
resignation in December 1995. He is a director of Blue Cross and
Blue Shield of Oregon and The Benchmark Group and formerly served
as a director of West One Bank, Oregon. He is the past Chair and
continues as a director of both the Portland Chamber of Commerce
and the Association for Portland Progress, and serves on the
advisory board of the University of Washington Graduate School of
Business. Mr. Reiten is a graduate of the University of
Washington and of the executive and board of directors programs
at the Stanford Business School.
(Photo BENJAMIN R. WHITELEY
appears Chairman of the Board, Standard Insurance Company,
here) and Lead Director of the Company, Portland
Age: 66
Director since: 1989
Board Committees: Executive (Chairman),
Organization and Executive Compensation, Nominating
Mr. Whiteley was appointed Chairman of the Board and Chief
Executive Officer of Standard Insurance Company effective
January 1, 1993, after having served as President and Chief
Executive Officer since 1983. He retired as Chief Executive
Officer of Standard in August 1994. He is also a director of
Standard Insurance Company, Gunderson, Inc., U. S. Bancorp, The
Greenbrier Companies, and Willamette Industries, Inc. In
September 1994, he was elected to the new position of Lead
Director of the Company's Board of Directors. Mr. Whiteley has
been active in numerous civic organizations and currently serves
on the boards of the Oregon Independent College Foundation,
Pacific University, the Oregon State University Foundation, the
Oregon Business Council, the Oregon Health Sciences Foundation,
and the St. Vincent Medical Foundation. He is a graduate of
Oregon State University, the University of Michigan, and the
advanced management program at the Harvard Business School.
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
CLASS I
(TERM ENDING 1997)
(Photo RICHARD B. KELLER
appears President, Keller Enterprises Inc., Portland
here) Age: 67
Director since: 1983
Board Committees: Executive, Pension (Chairman),
Retirement (Chairman), Nominating, Organization and
Executive Compensation
Since 1975, Mr. Keller has served as President of Keller
Enterprises Inc., a holding company which has a number of
investments, and as President of High Point Management, Inc., the
General Partner of High Point Keller Limited Partnership. For
many years, Keller Enterprises owned Western Paper Company, the
major independent distributor of paper and packaging in the
Northwest. Mr. Keller is a member of the Board of the Managing
General Partner of Crown Pacific Partners, L. P. He also is a
life trustee of both the Oregon Graduate Institute and Lewis &
Clark College. Mr. Keller is a graduate of the United States
Military Academy and the Harvard Business School.
(Photo ROBERT L. RIDGLEY
appears Chairman of the Board and Chief Executive Officer of
here) the Company, Portland
Age: 62
Director since: 1984
Board Committee: None
Mr. Ridgley was elected Chairman of the Board and Chief
Executive Officer of the Company effective March 1, 1996, after
having served as its President and Chief Executive Officer since
January 1, 1985. Prior to joining the Company as Executive Vice
President in 1984, Mr. Ridgley was a senior partner in a large
Portland law firm with a business and utility law practice. He
is a director of Kaiser Foundation Hospitals and the Kaiser
Foundation Health Plan. He is the immediate past Chairman of the
Oregon Business Council, and a past Chairman of both the American
Gas Association and the Pacific Coast Gas Association. Mr.
Ridgley serves as a director of the Association for Portland
Progress and the Oregon Independent College Foundation, as a
Trustee and Vice Chair of the Oregon Chapter of The Nature
Conservancy and as a Trustee of the Oregon Health Sciences
Foundation. He is a graduate of Cornell University and the
Harvard Law School.
(Photo DWIGHT A. SANGREY
appears President and Chief Executive Officer, Fraction
here) Biologics, LLC, Tualatin, Oregon
Age: 55
Director since: 1992
Board Committees: Environmental Policy (Chairman),
Pension, Retirement
In 1995, Mr. Sangrey was appointed President and Chief
Executive Officer of Fraction Biologics, LLC, an advanced
biotechnology firm which produces and markets pharmaceutical
products. The firm has businesses in the United States and
China. From 1988 until 1994, he was President of the Oregon
Graduate Institute of Science & Technology (OGI), and was
Professor of Environmental Science and Engineering at OGI until
1995. He is a board member of Precision Castparts, Pacific
University and Saturday Academy and also serves on several
national education and science policy committees. Mr. Sangrey is
a graduate of Lafayette College, the University of Massachusetts
and Cornell University.
(Photo WILLIAM R. WILEY
appears Senior Vice President for Science and Technology
here) Policy, Battelle Memorial Institute, Richland,
Washington
Age: 64
Director since: 1994
Board Committees: Environmental Policy, Finance
Dr. Wiley has been a Senior Vice President of Battelle
Memorial Institute, an independent, science-based organization,
since 1984. From 1984 until 1994, he also was Director of
Battelle's Pacific Northwest Laboratories. He is a member and
former President of the Board of Regents of Washington State
University, a Foundation Associate of Seattle's Pacific Science
Center, and a member of the boards of directors of the Seattle
Branch of the Federal Reserve Bank of San Francisco, Safeco
Corporation, Forward Washington and The Washington Roundtable.
Dr. Wiley is a graduate of Tougaloo College, the University of
Illinois-Urbana and Washington State University.
CLASS II
(TERM ENDING 1998)
(Photo TOD R. HAMACHEK
appears President and Chief Executive Officer, Penwest, Ltd.
here) Bellevue, Washington
Age: 50
Director since: 1986
Board Committees: Pension, Retirement, Organization
and Executive Compensation (Chairman)
Since 1985, Mr. Hamachek has served as President and Chief
Executive Officer of Penwest, Ltd., a diversified producer of
specialty chemicals and food and pharmaceutical ingredients. He
is a director of Penwest, Ltd., The Seattle Times Company, The
Blethen Corporation (the majority owner of The Seattle Times),
and DEKALB Genetics Corporation. Mr. Hamachek is a trustee
and/or director of the Virginia Mason Medical Center, the Pacific
Science Center, the Seattle Foundation, The Washington Roundtable
and Lakeside School. He also serves on the advisory board of the
University of Washington Graduate School of Business. He is a
graduate of Williams College and the Harvard Business School.
(Photo WAYNE D. KUNI
appears President, Kuni Enterprises, Beaverton, Oregon
here) Age: 65
Director since: 1980
Board Committees: Executive, Audit (Chairman),
Finance, Organization and Executive Compensation
Mr. Kuni is the founder, President and principal shareholder
of Kuni Enterprises, which owns Cadillac, Lexus, BMW and other
automobile dealerships in Oregon, Colorado and California. He is
past president of the Oregon Automobile Dealers Association, the
Portland Chamber of Commerce and the Arlington Club. He is a
member of the Boards of Trustees of Linfield College and the
Oregon Health Sciences Foundation, and serves on the Board of
Keller Enterprises. He is Chairman Emeritus of the Board of
Governors of the Portland Shriners Hospital. Mr. Kuni is a
graduate in business administration from the General Motors
Institute, Flint, Michigan.
(Photo MELODY C. TEPPOLA
appears Managing Partner, National Builders Hardware
here) Company, Portland
Age: 53
Director since: 1987
Board Committees: Pension, Retirement, Nominating,
Environmental Policy
Ms. Teppola has been associated with National Builders
Hardware Company, a regional and national distributor of builders
hardware, woodworking machinery and decorative plumbing, since
1965. Her community activities have focused on art, education and
advocacy for women and children. She is currently a member of
the Salvation Army Advisory Council and a director of the Bonnie
Bronson Fund of the Oregon Community Foundation and the Bosco-Milligan
Foundation for Historic Preservation. Ms. Teppola is a
Mills College graduate.
(Photo RUSSELL F. TROMLEY
appears President and Chief Executive Officer, Tromley
here) Industrial Holdings, Inc., Tualatin, Oregon
Age: 56
Director since: 1994
Board Committees: Audit, Finance
In 1990, Mr. Tromley formed Tromley Industrial Holdings,
Inc., and, since then, has served as its President and Chief
Executive Officer. Tromley Industrial Holdings is involved in
nonferrous metals alloying and distribution, the manufacture and
sale of equipment for the foundry and steel industry, industrial
equipment leasing and industrial and retail business property
investments. Mr. Tromley is a past president of the Casting
Industry Suppliers Association, a past president of the Arlington
Club and is a non-lawyer arbitrator for the Oregon State Bar
Association. He also serves as a director of the Evans Scholars
Foundation and the Western Golf Association, both located in
Golf, Illinois. Mr. Tromley attended the University of
Washington, Northwestern University and the Harvard Business
School.
INFORMATION CONCERNING THE BOARD OF DIRECTORS AND ITS COMMITTEES:
There are eight standing committees of the Board: the Audit,
Retirement, Pension, Organization and Executive Compensation,
Nominating, Environmental Policy, Finance and Executive
Committees.
The Audit Committee is comprised of directors Arnstad,
Dewey, Kuni and Tromley, each of whom is an outside director.
The Committee approves the work program of the Company's internal
audit staff and reviews the corporate audit and other internal
accounting control matters with the independent certified public
accountants elected by the shareholders. It reports regularly to
the Board. The Committee held four meetings during 1995.
The Retirement Committee and the Pension Committee oversee
the administration of the Company's two defined benefit plans,
its Retirement Plan for Non-Bargaining Unit Employees and its
Retirement Plan for Bargaining Unit Employees. The Retirement
Committee consists of directors Hamachek, Keller, Teppola and
Sangrey. These directors, together with a representative chosen
by the bargaining unit members, also constitute the Pension
Committee. The two Committees, in aggregate, met seven times
during 1995.
The Organization and Executive Compensation Committee, which
is comprised of directors Hamachek, Keller, Kuni and Whiteley,
each of whom is an outside director, reviews the performance of
executive officers, considers executive compensation survey data
in making recommendations to the Board relating to the Company's
executive compensation program and benefit plans, and administers
the 1985 Stock Option Plan. This Committee also makes
recommendations to the Board on organization and executive
succession matters. Four meetings of this Committee were held
during 1995.
The Nominating Committee is comprised of directors Keller,
Teppola, Whiteley and Woodard. The Committee recommends to the
Board of Directors nominees for election as directors. No
meetings of this Committee were held during 1995. Shareholders'
suggestions for director-nominees may be submitted to the
Secretary of the Company for consideration by the Nominating
Committee. The Company's Restated Articles of Incorporation
provide that no person, except those nominated by the Board,
shall be eligible for election as a director unless a written
request that his or her name be placed in nomination, together
with the written consent of the nominee, shall be received from a
shareholder of record entitled to vote at such election by the
Secretary of the Company on or before the later of (a) the
thirtieth day prior to the date fixed for the meeting, or (b) the
tenth day after the mailing of the notice of that meeting.
The Environmental Policy Committee develops and recommends
to the Board appropriate environmental policies and advises the
Board concerning the status of the Company's compliance with
environmental regulations. The Committee is comprised of
directors Sangrey, Teppola, Wiley and Woodard. This Committee
held three meetings in 1995.
The Finance Committee is responsible for reviewing
strategies and making recommendations to the Board with respect
to the Company's financing programs, financial policy matters and
material regulatory issues. The Committee consists of directors
Arnstad, Dewey, Kuni, Tromley and Wiley. The Committee held
three meetings in 1995.
The Executive Committee is empowered, during intervals
between Board meetings, to exercise all of the authority of the
Board in the management of the Company, except as otherwise may
be provided by law. This Committee, which is comprised of
directors Keller, Kuni, Whiteley and Woodard, held two meetings
during 1995.
In 1994, the Board created the new position of Lead Director
and elected Mr. Whiteley to the position. The Lead Director
consults with the chief executive officer on board organization
matters, including the selection of committee members and chairs.
The Lead Director also chairs meetings of the Executive Committee
of the Board as well as regularly scheduled meetings of outside
directors, which are held at least twice each year, and
coordinates the annual evaluation by outside directors of the
Board's performance.
Directors who are not employees of the Company receive an
annual retainer of $8,000, and a fee of $800 for each Board and
Committee meeting attended. Non-employee directors who retire
from the Board at age 72 with at least ten years of service are
eligible to receive an annual retirement benefit equal to the
annual retainer. The benefit is payable for life. In addition,
an annual retainer of $6,000 is paid to each Committee chair,
except the chair of the Executive Committee/Lead Director who is
paid $2,000 per month for his services in these capacities.
Non-employee directors who also serve as directors of Oregon
Natural Gas Development Corporation, a subsidiary of the Company,
also receive a fee of $800 for each board meeting attended.
Non-employee directors who serve as directors of NNG Financial
Corporation, also a subsidiary of the Company, also receive a fee
of $250 for each board meeting attended.
During 1995, there were eight meetings of the Company's
Board, an aggregate of six meetings of the boards of the above-
mentioned subsidiaries, and an aggregate of 23 committee
meetings. No director attended fewer than 75 percent of the
total meetings of the Board, subsidiary boards, and committees on
which he or she served, except Dr. Wiley who attended 67 percent
of such meetings.
DIRECTORS DEFERRED COMPENSATION PLAN
Directors may elect to defer the receipt of all or a part of
their directors' fees under the Company's Directors Deferred
Compensation Plan. Deferred amounts are credited to a deferred
compensation account to which interest is credited quarterly at a
rate equal to the annual rate of interest paid on 30-year U.S.
Treasury securities plus three percentage points, subject to a
six percent minimum rate. The rate is adjusted quarterly. A
participant may elect to receive deferred amounts and accrued
interest in a lump sum, in installments over a period not to
exceed ten years, or in a combination of lump sum and installment
payments.
The Company's obligations under the Plan are unfunded and
benefits will be paid from the general funds of the Company. The
Company has purchased life insurance policies on the lives of the
participants, the proceeds from which will be used to reimburse
the Company for the payment of Plan benefits. This insurance is
designed so that, if the assumptions made as to mortality
experience, policy dividends and other factors are realized,
insurance policy proceeds paid to the Company will be at least
equal to all the premium payments and benefits paid under the
Plan. The cost of any one individual participant cannot be
properly allocated or determined because of overall Plan
assumptions.
In connection with this Plan, the Company has established
the Umbrella Trust for Directors, with Bank of America Oregon
serving as the trustee. The Company may from time to time
transfer assets to the trustee to hold in trust for the benefit
of Plan participants. The Company's obligations under the Plan
are not limited to trust assets, and Plan participants will have
a claim against the Company for any payments not made by the
trustee. The Company instructs the trustee as to the investment
of the trust's assets and the trustee's fees and expenses are
paid by the Company.
Upon the occurrence of certain events, such as a change in
control of the Company, termination of the Plan or the failure by
the Company to provide the trust with adequate funds to pay
current benefits, the Company may be required under the terms of
the trust to contribute to the trust the amount by which the
present value of all benefits payable under the Plan exceeds the
value of the trust's assets.
NON-EMPLOYEE DIRECTORS STOCK COMPENSATION PLAN
Non-employee directors of the Company are awarded
approximately $15,000 worth of the Company's Common Stock every
five years pursuant to the Company's Non-Employee Directors Stock
Compensation Plan. Shares awarded under this Plan vest in
monthly installments over the five-year period following the
award. Unvested shares are forfeited if the recipient ceases to
be a director. The shares awarded are purchased in the open
market by the Company at the time of award. Certificates
representing a director's vested shares are held by the Company
until the director leaves the Board at which time they are
transferred to the director. Non-employee directors continuing
in office have been awarded an aggregate of 7,899 shares under
this Plan.
COMPLIANCE WITH OWNERSHIP REPORTING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's directors and executive officers to file
reports of ownership and changes in ownership of Company Common
Stock with the Securities and Exchange Commission. The Company
is required to disclose in this proxy statement any late filings
of those reports made by its directors and executive officers
during 1995. Based solely upon a review of the copies of such
reports furnished to it and written representations that no other
such reports were required, the Company believes that during 1995
all directors and executive officers timely filed all such
required reports.
BENEFICIAL OWNERSHIP OF COMMON STOCK BY DIRECTORS AND EXECUTIVE
OFFICERS
Set forth below is certain information with respect
to beneficial ownership of the Company's Common Stock as of
February 29, 1996 (except as otherwise noted) by all directors
and nominees, each of the executive officers named in the Summary
Compensation Table on page 13 and all directors and executive
officers as a group.
<TABLE>
<CAPTION>
Percent of
Names of Outstanding
Beneficial Owner Number of Shares(1) Common Stock
---------------- ------------------- ------------
<S> <C> <C>
Mary Arnstad 621 (2) *
Bruce R. DeBolt 17,848 (3) *
Thomas E. Dewey, Jr. 1,301 (4) *
Dwayne L. Foley 14,632 (5) *
Tod R. Hamachek 1,540 (4) *
Richard B. Keller 8,340 (4),(6) *
Wayne D. Kuni 3,636 (4),(7) *
Michael S. McCoy 11,970 (8) *
Richard G. Reiten 0
Robert L. Ridgley 30,727 (9) *
Bruce B. Samson 14,347 (10) *
Dwight A. Sangrey 613 (2) *
Melody C. Teppola 1,662 (11) *
Russell F. Tromley 2,249 (12) *
Benjamin R. Whiteley 1,760 (13) *
William R. Wiley 519 (14) *
All directors and officers
as a group (20 in number) 149,293 (15) 1.0
_______________________
<FN>
* The total for each individual is less than 1.0 percent and
the total for all directors and executive officers as a
group is 1.0 percent of the shares of Common Stock
outstanding.
(1) Unless otherwise indicated, beneficial ownership includes
both sole voting power and sole investment power.
(2) Includes 521 shares awarded and subject to vesting under the
Non-Employee Directors Stock Compensation Plan (NEDSCP) of
which 338 were vested on February 29, 1996 and 183 will vest
over the subsequent 21 months.
(3) Includes 4,122 shares held jointly with wife and 12,000
shares which Mr. DeBolt has the right to acquire within 60
days through the exercise of options under the 1985 Stock
Option Plan (1985 SOP).
(4) Includes 1,001 shares awarded and subject to vesting under
the NEDSCP of which 752 were vested on February 29, 1996 and
249 will vest over the subsequent 34 months.
(5) Consists of 6,134 shares held jointly with wife and 8,498
shares which Mr. Foley has the right to acquire within 60
days through the exercise of options under the 1985 SOP.
(6) Includes 6,000 shares held by Keller Enterprises.
(7) Includes 2,562 shares held in trust.
(8) Consists of 6,421 shares held jointly with wife and 5,549
shares which Mr. McCoy has the right to acquire within 60
days through the exercise of options under the 1985 SOP.
(9) Includes 16,279 shares which Mr. Ridgley has the right to
acquire within 60 days through the exercise of options under
the 1985 SOP.
(10) Includes 300 shares held jointly with wife, 1,462 shares
held indirectly by Mr. Samson under the Retirement K Savings
Plan (RKSP) at October 31, 1995 and 10,000 shares which
Mr. Samson has the right to acquire within 60 days through
the exercise of options under the 1985 SOP.
(11) Includes 1,001 shares awarded and subject to vesting under
the NEDSCP of which 752 (including 563 held in trust) were
vested on February 29, 1996 and 249 will vest over the
subsequent 34 months, and an additional 603 shares held in
trust.
(12) Includes 438 shares awarded and subject to vesting under the
NEDSCP of which 189 were vested on February 29, 1996 and
249 will vest over the subsequent 34 months.
(13) Includes 1,001 shares awarded and subject to vesting under
the NEDSCP of which 657 were vested on February 29, 1996 and
344 will vest over the subsequent 42 months.
(14) Includes 413 shares awarded and subject to vesting under the
NEDSCP of which 172 were vested on February 29, 1996 and 241
will vest over the subsequent 35 months.
(15) Includes 18,203 shares of which 10,003 shares are held
jointly with spouses; 2,266 shares held indirectly under the
RKSP at October 31, 1995; and 17,059 shares which the
executive officers not named above have the right to acquire
within 60 days through the exercise of options under the
1985 SOP.
</TABLE>
EXECUTIVE COMPENSATION
Shown below is information concerning the annual and other
compensation for services in all capacities to the Company for
the years ended December 31, 1995, 1994 and 1993, of those
persons who were, during 1995 and at December 31, 1995 (i) the
chief executive officer and (ii) the other four most highly
compensated executive officers of the Company (the Named
Executive Officers):
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-term
Compensation
Annual Compensation ------------
--------------------------------- Securities
Other Annual Underlying All Other
Name and Principal Compensation Options/ Compensation
Position Year Salary Bonus (1) Sars(#) (2)
-------------------- ---- ------ ----- ------------ --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Ridgley 1995 $378,803 $160,000 $4,207 0 $14,359
President and Chief 1994 360,800 153,200 2,476 3,182 11,180
Executive Officer 1993 344,233 186,000 0 0 11,889
Bruce R. DeBolt 1995 181,900 56,400 0 0 7,203
Senior Vice President 1994 177,067 55,300 0 4,000 6,970
and Chief Financial
Officer 1993 172,117 65,000 0 0 6,562
Dwayne L. Foley 1995 181,900 52,600 0 0 4,076
Senior Vice President 1994 177,067 53,800 0 5,250 3,290
1993 172,117 64,000 0 0 3,662
Bruce B. Samson 1995 164,017 52,500 0 0 5,641
Senior Vice President 1994 156,883 52,900 0 2,000 6,138
and General Counsel 1993 147,633 62,000 0 0 5,201
Michael S. McCoy 1995 160,917 53,400 0 0 4,323
Senior Vice President 1994 142,617 53,000 0 4,750 6,002
1993 130,100 61,000 0 0 5,232
- ----------------------
<FN>
(1) Amounts for the years 1994 and 1995 represent the employee
portion of the Medicare Hospital Insurance Tax liability
paid by the Company on the present value increase in those
years of Mr. Ridgley's benefit under the Executive
Supplemental Retirement Income Plan.
(2) Amounts for the year 1995 consist of: (1) amounts
contributed or accrued for the year 1995 for the Named
Executive Officers under the Company's Executive Deferred
Compensation Plan (EDCP) ($10,640 for Mr. Ridgley, $4,744
for Mr. DeBolt, $4,029 for Mr. Foley, $3,280 for Mr. Samson,
and $4,278 for Mr. McCoy) and its Retirement K Savings Plan
($3,015 for Mr. Ridgley, $2,310 each for Messrs. DeBolt and
Samson, and $0 each for Messrs. Foley and McCoy); and
(2) the above-market portion of interest on deferred
compensation credited to the accounts of the Named Executive
Officers under the EDCP during 1995 ($704 for Mr. Ridgley,
$149 for Mr. DeBolt, $47 for Mr. Foley, $51 for Mr. Samson
and $45 for Mr. McCoy).
OPTIONS/SARs GRANTED IN 1995
No stock options were granted to the Named Executive
Officers during 1995.
OPTIONS/SAR EXERCISES AND YEAR-END VALUES
Shown below is information with respect to options to
purchase shares of the Company's Common Stock exercised in 1995
and unexercised options granted under the 1985 Stock Option Plan
to the Named Executive Officers and held by them at December 31,
1995.
AGGREGATED OPTION/SAR EXERCISES IN 1995 AND YEAR-END OPTION/SAR
VALUES
</TABLE>
<TABLE>
<CAPTION>
No. of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARs at Options/SARs at
No. of December 31, 1995 December 31, 1995
Shares ----------------------- ---------------------
Acquired on Value Unexer- Exer- Unexer-
Name Exercise Realized Exercisable cisable(1) cisable(2) cisable
- ----------------- ----------- -------- ----------- ---------- --------- ------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Ridgley 10,422 $128,970 16,279 0 $106,413 0
Bruce R. DeBolt 0 0 12,000 0 65,000 0
Dwayne L. Foley 6,134 50,126 8,498 0 26,390 0
Bruce B. Samson 0 0 10,000 0 65,000 0
Michael S. McCoy 6,421 60,792 5,549 0 6,492 0
- --------------
<FN>
(1) Unexercisable options are those options which have been
granted but cannot yet be exercised due to Internal Revenue
Code restrictions on the value of incentive options granted
and the restriction that options are not exercisable during
the first year following the date they are granted.
(2) Represents the difference between the exercise prices for
in-the-money options and the closing price of $33.00 for the
Company's Common Stock as quoted on the Nasdaq Stock Market
on December 29, 1995 times the number of in-the-money
options. Options granted in 1994 were not in-the-money at
year-end 1995.
<TABLE/>
REPORT OF THE ORGANIZATION AND EXECUTIVE COMPENSATION COMMITTEE ON
EXECUTIVE MANAGEMENT COMPENSATION
EXECUTIVE COMPENSATION PRINCIPLES
The Company's executive compensation program is administered
by the Organization and Executive Compensation Committee of the
Board of Directors (the Committee) which is comprised of
directors Hamachek, Keller, Kuni and Whiteley, each of whom is an
outside director. The program is designed to attract, motivate
and retain talented executives critical to the achievement of the
Company's long-term business strategy, its annual goals and
objectives, the enhancement of shareholder value, and the
implementation of corporate values. The program seeks to do this
by:
- - Tieing a portion of each executive's total compensation to
the achievement of previously-established annual performance
goals.
- - Aligning executives' long-term interests with those of the
Company's shareholders by encouraging ownership of the
Company's Common Stock.
- - Providing total compensation, including base salary and
incentive compensation, which is competitive with that of
other utilities and service and industrial companies of
comparable size and circumstances.
In establishing executive compensation levels, the Committee
also takes into consideration the Company's reductions in recent
years in the total number of executive officers and re-assignments
of the responsibilities of officers who have retired.
Through these actions, the number of officers has been reduced by
four, from a high of 14 in 1986 to the present ten executive
officers, producing a flatter, more efficient executive
structure.
EXECUTIVE COMPENSATION COMPONENTS
There are three primary components of the Company's
executive compensation program - annual base salary, annual
incentive cash bonuses and long-term stock options.
BASE SALARIES
Base salaries paid to executives are established by the
Board of Directors upon the recommendation of the Committee
based, in part, on market salary analyses prepared by the
Company's independent compensation consultant and used by the
Company in setting salary levels. This same methodology is used
for all non-bargaining unit employees. These analyses include
salary data for comparable executive positions of electric and
gas utilities as well as service and industrial companies of
approximately the same size in terms of total revenues located
throughout the United States. The gas utility portion of the
analysis includes data from the American Gas Association
executive compensation survey, which includes substantially the
same companies which comprise the American Gas Association Local
Distribution Company Index appearing on the performance graph
(page 19). The Committee uses this information as a guide to
establish base salaries that are competitive with those paid to
executives in similar positions in comparable companies.
Generally, it is the Committee's policy to target executives'
base salaries at a level equivalent to the 50th percentile for
base salaries for comparable positions included in the
consultant's analyses. Each executive's targeted salary level may
be adjusted, at the discretion of the Committee, on the basis of
such executive's performance and potential, as well as changes in
duties and responsibilities. Executives' salaries are reviewed
by the Committee annually.
EXECUTIVE ANNUAL INCENTIVE PLAN
The Company's Executive Annual Incentive Plan is intended to
advance the interests of the Company and its shareholders by
means of an incentive cash bonus program which will motivate key
executives to achieve previously-established annual performance
goals. The amounts to be paid if these goals should be achieved,
when added to base salaries, are intended to place the Company's
executives' compensation at between the 50th and 75th percentiles
of total cash compensation for comparable positions included in
the consultant's analyses.
Participation in the Plan currently is limited to ten
executive officers designated by the Board. The payment of
awards under this Plan is contingent upon meeting predetermined
individual and Company performance goals.
At the beginning of each year, weighted performance goals
are established. At year-end, performance is measured against
these goals on an arithmetic scale. The results are considered
by the Committee in determining the amounts, if any, to be
awarded.
The amounts of these awards are based on a formula which
reflects an allocation between Company and individual performance
criteria. The allocation depends upon each executive's ability
to influence corporate performance. Depending upon position,
performance and the other factors considered by the Committee, an
executive can earn from 20% to 40% of base salary if the
prescribed Company and individual performance goals are met, and
up to 30% to 60% of base salary if these goals are exceeded.
As in prior years, 1995 performance goals focused on
strengthening the Company's financial position. These included
the achievement of: (1) net income in an amount which the
Committee determined would demonstrate above average performance;
(2) a weighted average ranking for return on equity over a two-
year period which would exceed a base level among a peer group of
other gas utilities; and (3) several operating goals related to
marketing, controlling the cost of connecting new customers,
customer satisfaction and productivity. In combination, these
goals measured the Company's performance in terms of its overall
profitability, its financial performance, the reduction of costs
and the achievement of greater efficiency. In determining the
awards, the Committee utilized a performance matrix which
accorded 50% to net income and 25% to each of the other two
goals. The grant of any award for 1995 was conditioned upon the
Company's 1995 net income exceeding a percentage of the target
designated in advance by the Board and being sufficient to cover
the payment of all dividends.
1985 STOCK OPTION PLAN
The long-term component of the Company's executive
compensation program consists of the 1985 Stock Option Plan.
Stock options enable executives to benefit from increases in the
price of the Company's Common Stock, thereby aligning their
interests with those of the common shareholders.
The Company has not made grants under the Plan on an annual
basis and no options were granted to the Named Executive Officers
in 1995. When grants are made, the number of options granted is
not based upon a predetermined formula, but rather upon the
Committee's judgment as to how many options will provide
meaningful incentives to executives. The number of options to be
granted is based on a consideration of factors that include the
number of shares available for grant under the Plan, the number
of options previously granted, state regulatory restrictions on
options granted to executives, and the number of shares then
owned by each Named Executive Officer in relation to an informal
targeted objective for stock ownership by executives.
CEO COMPENSATION
Compensation paid to Robert L. Ridgley, as president and
chief executive officer, for the year 1995 consisted, in part, of
an increase in base salary and, in part, of an incentive bonus.
Mr. Ridgley's compensation reflects a 4.9% increase in base
salary, effective March 1, 1995, which was deemed by the
Committee and the Board to be appropriate to maintain the
competitiveness of Mr. Ridgley's base salary. His compensation
also reflects a cash bonus of $160,000 under the Executive Annual
Incentive Plan. The award of the bonus for 1995, which is equal
to 42.2% of Mr. Ridgley's 1995 base salary, was based on the
Committee's evaluation of Mr. Ridgley's performance in relation
to the achievement of the 1995 financial goals and the partial
achievement of the operating goals described above. For 1995,
the Company reported earnings of $2.42 per share, and record net
income applicable to common stock of $35.3 million despite
weather in the Company's service territory that was the second
warmest in 45 years. These 1995 results exceeded the financial
performance goals established for the year. For 1995, the
Company's return on equity of 11.8% ranked seventh among 30
comparable companies. Combined with the return on equity in
1994, the Company's weighted two-year ranking for return on
equity was eighth within this group. The Committee determined
that the achievements made with respect to these performance
goals, together with the partial achievement of the operating
goals discussed above, warranted the bonus awarded to Mr. Ridgley
for 1995.
DEDUCTIBILITY OF COMPENSATION
Section 162(m) of the Internal Revenue Code of 1986 limits
to $1 million per person the amount that the Company may deduct
for compensation paid in any year to any of its five highest-paid
executive officers. The Company does not expect the base salary
and annual cash incentive bonus paid to any executive officer to
exceed $1 million in any year.
Substantially all of the options granted under the 1985
Stock Option Plan have been Incentive Stock Options. The Company
receives no tax deduction from the exercise of an Incentive Stock
Option unless the optionee disposes of the acquired shares before
satisfying certain holding periods. In February 1996, the
Committee determined that option grants would henceforth
generally be Non-Statutory Stock Options for which the Company
will receive a tax deduction upon exercise. Under IRS
regulations, the $1 million cap on deductibility applies to
compensation recognized by an optionee upon an early disposition
of an Incentive Stock Option or exercise of a Non-Statutory Stock
Option unless the option meets certain requirements. It is the
Company's policy generally to grant options that meet the
requirements of the IRS regulations so that any such compensation
recognized by an optionee will be fully deductible.
Tod R. Hamachek, Chair
Richard B. Keller
Wayne D. Kuni
Benjamin R. Whiteley
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the annual
percentage change in the cumulative total shareholder return on
the Company's Common Stock against the cumulative total return of
the S&P Composite - 500 Stock Index and the American Gas
Association (AGA) Local Distribution Company (LDC) Index for the
period of five years commencing December 31, 1990 and ended
December 31, 1995.
</TABLE>
<TABLE>
<CAPTION>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN *
(Based on $100 invested on 12/31/90)
(Performance line graph depicting five-year cumulative total
return information for the Company, the S&P 500 and the American
Gas Association Local Distribution Company Index based on $100
invested on December 31, 1990. Data points for the Company, the
S&P 500 and the AGA LDC Index are shown below.)
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
N.W. Natural Gas $100.00 $118.21 $124.26 $156.96 $143.26 $168.85
S&P 500 $100.00 $130.47 $140.41 $154.57 $156.61 $215.46
AGA LDC Index $100.00 $121.18 $144.62 $168.02 $152.59 $199.73
- --------------
<FN>
* Total return assumes reinvestment of dividends daily for the S&P
500 and at year-end for the Company and the AGA LDC Index.
** The AGA LDC Index is comprised of the following companies:
Atlanta Gas Light Co., Atmos Energy Corporation, Bay
State Gas Company, The Berkshire Gas Company, Brooklyn
Union Gas Co., Colonial Gas Company, Connecticut Energy
Corp., Connecticut Natural Gas, Delta Natural Gas Co.,
Inc., EnergyNorth Inc., Energy West Inc., Essex County
Gas Company, Fall River Gas Company, Indiana Energy,
Inc., Laclede Gas Company, MCN Corporation, Mobile Gas
Service Corp., New Jersey Resources Corporation, NICOR
Inc., North Carolina Natural Gas, Northwest Natural Gas
Company, NUI Corporation, Pacific Enterprises, Peoples
Energy Corporation, Piedmont Natural Gas Co.,
Providence Energy Corp., Public Service Co. of North
Carolina, Southern Union Gas Company, United Cities Gas
Company, Washington Gas Light Co. and Yankee Energy
System, Inc.
</TABLE>
RETIREMENT PLANS
The following table shows the estimated annual retirement
benefit payable on a straight life annuity basis (net of Social
Security offset) for participants (consisting of all executive
officers) in the Company's Executive Supplemental Retirement
Income Plan (ESRIP) from all Company defined benefit plans: the
qualified Retirement Plan for Non-Bargaining Unit Employees, the
Executive Deferred Compensation Plan supplemental benefit and the
ESRIP. Optional forms of payment, including joint and survivor
forms, are available, subject to an actuarial adjustment in the
amount of payment.
<TABLE>
<CAPTION>
PENSION PLAN TABLE
Years of Service
Compensation 15 20 25 30 35
- ------------ -- -- -- -- --
<S> <C> <C> <C> <C> <C>
$150,000 $ 82,500 $ 82,500 $ 90,000 $ 90,000 $ 90,000
200,000 115,000 115,000 125,000 125,000 125,000
250,000 147,500 147,500 160,000 160,000 160,000
300,000 180,000 180,000 195,000 195,000 195,000
350,000 212,500 212,500 230,000 230,000 230,000
400,000 245,000 245,000 265,000 265,000 265,000
450,000 277,500 277,500 300,000 300,000 300,000
500,000 310,000 310,000 335,000 335,000 335,000
550,000 342,500 342,500 370,000 370,000 370,000
600,000 375,000 375,000 405,000 405,000 405,000
650,000 407,500 407,500 440,000 440,000 440,000
</TABLE>
For purposes of the ESRIP, "compensation" consists of the
annual salary of the plan participant last approved by the
Organization and Executive Compensation Committee of the Board of
Directors and being paid by the Company at the date of retirement
plus the average of the last three bonus awards (if any) paid
prior to retirement.
The credited years of service under the ESRIP for Messrs.
Ridgley, DeBolt, Foley, Samson, and McCoy are 35 years, 16 years,
28 years, 13 years and 26 years, respectively. For purposes of
the ESRIP, Messrs. Ridgley and Samson were granted an additional
23 years and 7 years, respectively, of past service credit which
are included in years of service shown.
ITEM (2) - ELECTION OF AUDITORS
The Audit Committee of the Board of Directors has
recommended that Deloitte & Touche LLP, independent certified
public accountants, be retained as independent auditors of the
Company for the year 1996, and that this firm be elected by the
shareholders at the Annual Meeting. Deloitte & Touche LLP has
been engaged in this capacity by the Company since 1932. A
representative of Deloitte & Touche LLP will be present at the
Annual Meeting of Shareholders and will be provided with the
opportunity to make a statement and to respond to appropriate
questions. In case Deloitte & Touche LLP is not elected, the
Board of Directors will select another independent certified
public accounting firm to serve as independent auditors of the
Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE
FOR THE ELECTION OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS
FOR THE YEAR 1996.
OTHER MATTERS
The management does not know of any other matters to be
presented at the Annual Meeting. If other matters should be
properly presented at the meeting, the persons named in the
accompanying proxy will vote the shares represented by such proxy
with respect to such matters in accordance with their best
judgment.
EXECUTIVE SEVERANCE AGREEMENTS
In February 1996, the Board of Directors approved the
Company's entry into severance agreements with eight designated
officers of the Company, including all of the Named Executive
Officers other than Mr. Ridgley. These agreements generally
provide for the payment, upon the termination of the employee's
employment by the Company without cause or by the employee for
"good reason" (as defined in the severance agreement) within two
years following a change of control of the Company, of an amount
equal to the maximum amount payable without causing any portion
to constitute a "parachute payment" subject to excise tax. This
amount will generally equal three times the employee's average
taxable compensation over the prior five years. Each employee is
obligated under the severance agreement to remain in the employ
of the Company for a period of 270 days following a "potential
change in control" (as defined in the severance agreements). All
of the eight designated officers have executed the severance
agreements.
EMPLOYMENT AGREEMENTS
On October 27, 1983, the Company entered into an employment
agreement with Mr. Ridgley which provides for the continuation of
his salary in the event his employment as an executive officer is
terminated by the Company for reasons other than malfeasance in
office. This agreement provides that Mr. Ridgley will receive
payment of one year's salary if employment is terminated, for
reasons other than a change in control of the Company, prior to
his reaching age 65. However, should Mr. Ridgley's employment be
terminated as the result of a change in control of the Company
prior to his reaching age 65, he will receive payment of three
years' salary. Under this agreement with Mr. Ridgley, the
Company also agreed to recognize 23 years of past service for
purposes of the Executive Supplemental Retirement Income Plan.
Accordingly, upon retirement, Mr. Ridgley will be eligible for
benefits under this Plan as if he had commenced employment with
the Company on January 1, 1961. Mr. Ridgley has indicated his
intent to retire as chief executive officer as of December 31,
1996.
On September 22, 1994, the Company entered into an agreement
with Mr. Ridgley which provides for him to perform certain
services for the Company following his planned retirement. This
agreement provides that Mr. Ridgley will serve as Chairman of the
Board and as a consultant for two years for which he will receive
$10,000 per month. This amount would continue to be paid to Mr.
Ridgley's wife in the event of his death or disability during the
two-year period. The agreement also provides for Mr. Ridgley's
continued use of a Company automobile during this two-year
period, and the reimbursement by the Company of certain business-
related club dues and assessments until he reaches age 72 or
retires from the Board, whichever occurs earlier.
Under an agreement with Mr. Samson dated November 27, 1989,
the Company agreed to recognize seven years of past service for
purposes of the Executive Supplemental Retirement Income Plan.
Mr. Samson will be eligible for benefits under this Plan as if
he had commenced employment with the Company on March 1, 1983.
1997 ANNUAL MEETING OF SHAREHOLDERS
The 1997 Annual Meeting of Shareholders is scheduled to be
held in Portland on Thursday, May 22, 1997. Specific proposals
of common shareholders intended to be presented at this meeting
must comply with the requirements of the Securities Exchange Act
of 1934 and be received by the Secretary of the Company for
inclusion in its 1997 proxy materials by December 13, 1996.
GENERAL
Proxies may be solicited on behalf of the Board of Directors
by regular employees in person or by mail, telephone or facsimile
transmission. The Company will reimburse brokers or other
persons holding stock in their names or in the names of their
nominees for their reasonable expenses incurred in forwarding
proxies and proxy materials to the beneficial owners of such
shares. All solicitation costs will be borne by the Company. The
Company has retained Beacon Hill Partners Inc. to assist in the
solicitation of proxies from banks, brokers and nominees at a fee
of $2,000 plus reasonable out-of-pocket expenses.
If you are unable to be present at the Annual Meeting in
person, please mark, date, sign and mail the enclosed proxy so
that the business of the meeting can be transacted.
By Order of the Board of Directors,
Portland, Oregon C. J. Rue
April 12, 1996 Secretary
April 12, 1996
Dear Shareholder:
You are cordially invited to attend the 1996 Annual Meeting of
Shareholders of Northwest Natural Gas Company (the Company), which
will be held in the State Ballroom of the Hilton Hotel, 921 S.W. Sixth
Avenue, Portland, Oregon, on Thursday, May 23, 1996, commencing at
2:00 p.m. Pacific Daylight Time. We look forward to greeting as many
of our shareholders as are able to be with us.
At the meeting you will asked to consider and vote upon (1) the
election of four directors and (2) the election of independent
auditors. Your Board of Directors unanimously recommends that you
vote FOR proposals 1 and 2.
WHETHER OR NOT YOU EXPECT TO ATTEND, TO ASSURE YOUR REPRESENTATION AT
THE MEETING AND THE PRESENCE OF A QUORUM, PLEASE COMPLETE, DATE, SIGN
AND MAIL PROMPTLY THE ENCLOSED PROXY, for which a return envelope is
provided.
Sincerely,
/s/ Robert L. Ridgley
Robert L. Ridgley
Chairman and Chief Executive Officer
- ----------------------------------------------------------------------
PROXY FORM Northwest Natural Gas PROXY FORM
- ----------------------------------------------------------------------
This proxy when properly executed will be voted in the manner directed
herein by the shareholder whose signature appears below. If no
direction is made, the proxy will be voted FOR Items 1 and 2.
When signing as attorney-in-fact, executor, administrator, trustee,
guardian or officer of a corporation please give full title as such.
On joint accounts, each owner should sign.
- ----------------------------------------------------------------------
ITEM 1. Election of Directors:
Class III Nominees: Mary Arnstad, Thomas E. Dewey, Jr.
Richard G. Reiten, Benjamin R. Whiteley
INSTRUCTIONS: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided below.)
_______________________________________________________________
/ / VOTE FOR all nominees listed above (except as marked to the
contrary to the right)
/ / VOTE WITHHELD from all nominees
FOR AGAINST ABSTAIN
--- ------- -------
ITEM 2. Election of Deloitte & Touche LLP / / / / / /
as Auditors for 1996.
Please mark this box if you have any comments or changes to
names or addresses. / /
Please mark this box if you plan to attend the Annual Meeting. / /
- ----------------------------------------------------------------------
PLEASE MARK ALL
CHOICES LIKE THIS / X /
Signature _____________________ Date _____________________
Signature _____________________ Date _____________________
- ----------------------------------------------------------------------
PROXY FORM Northwest Natural Gas PROXY FORM
- ----------------------------------------------------------------------
Please date and sign this proxy on the reverse side and mail
without delay in the enclosed envelope to the
Company, 220 N.W. Second Avenue, Portland, Oregon 97209.
NORTHWEST NATURAL GAS COMPANY
PROXY FOR 1996 ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints Wayne D. Kuni, Robert L. Ridgley
and Carlton Woodard and each or any of them, the proxy or
proxies, with power of substitution and with authorization to
vote all of the common shares of the undersigned at the annual
meeting of shareholders of Northwest Natural Gas Company to be
held on Thursday, May 23, 1996, and at all adjournments thereof,
(i) as designated on the reverse of this card and, (ii) at their
discretion, upon any and all matters which properly may be
brought before such meeting or any adjournment thereof.
THE ADMINISTRATOR, OR ITS AGENT, UNDER THE COMPANY'S DIVIDEND
REINVESTMENT AND STOCK PURCHASE PLAN HEREBY IS INSTRUCTED TO
EXECUTE A PROXY WITH IDENTICAL INSTRUCTIONS TO VOTE THOSE SHARES
OF THE UNDERSIGNED, IF ANY, HELD UNDER THE PLAN.
The Company will provide reasonable accommodation for a
disability. If you need an accommodation, please contact the
Company at (503) 226-4211 at least 72 hours before the meeting.
