<PAGE> 1
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:
<TABLE>
<S> <C>
/ / 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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
PENNSYLVANIA ENTERPRISES, 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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 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.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
May 23, 1996
EDGAR
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, DC 20549
Gentlemen:
Re: Pennsylvania Enterprises, Inc. --
Definitive Annual Meeting Proxy Material
On behalf of Pennsylvania Enterprises, Inc. (the "Company")
and pursuant to Rule 14a-6(c) promulgated under the Securities Exchange Act
of 1934, as amended, in connection with the Company's 1996 Annual Meeting
of Shareholders scheduled to be held on June 26, 1996, please find for filing,
by electronic mail:
(i) A definitive copy of the Company's 1996 Annual Meeting Proxy
Statement (including the Notice of Meeting) and form of proxy,
which will be released on May 24 to the Company's
shareholders,
(ii) Definitive copies of our letter which will be sent on May 29
to certain participants in the Company's Employees' Savings
Plan (401(k)),
(iii) A definitive copy of a reminder notice which is to be sent to
all employees of the Company on June 7.
A filing fee of $125 required by Rule 14a-6(j) under the Act was wired
to the SEC's account at Mellon Bank on Friday, May 17, 1996.
Pursuant to Rule 14a-3(c) under the Act, seven information copies of
the Company's 1995 Annual Report to Shareholders (the "1995 Annual Report"),
which was previously distributed to the Company's shareholders are being sent to
the SEC Operations Center, 6432 General Green Way, Alexandria, Virginia. Also
being sent to this location are printed copies of the previously mentioned
materials (items i, ii, and iii).
<PAGE> 3
Securities and Exchange Commission -2- May 23, 1996
One set of the previously referenced materials is also being provided
to H. Roger Schwall, the SEC Branch Chief with responsibility for matters
pertaining to the Company.
Under separate cover, five definitive copies of the Company's 1996
Annual Meeting proxy materials and five copies of the 1995 Annual Report are
concurrently being filed with the New York Stock Exchange.
Sincerely yours,
/s/ Thomas J. Ward
------------------------
Thomas J. Ward
Vice President,
Administrative Services,
and Secretary
jmm
Enclosures
<PAGE> 4
<TABLE>
<S> <C>
[PEI LOGO] WILKES-BARRE CENTER, 39 PUBLIC SQUARE
WILKES-BARRE, PENNSYLVANIA 18711-0601
TELEPHONE: (717) 829-8843
</TABLE>
May 24, 1996
Dear Fellow Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
the Company.
The meeting will be held at the Community Arts Center, 220 West Fourth
Street, Williamsport, Pennsylvania, beginning at 10:00 a.m., on Wednesday, June
26, 1996. Directions to the meeting site and a map are included with this
letter. A report on the operations of the Company during 1995 and its plans for
1996 will be presented at the Annual Meeting. In this regard, we will discuss
the changes that are taking place at our principal subsidiary. Pennsylvania Gas
and Water Company has changed its name to PG Energy. This reflects the sale of
its water operations and its focus on becoming a leading edge provider of energy
and energy-related products and services. In addition, directors, officers, and
other key employees will be present to respond to your questions.
Your vote is important. Whether or not you expect to attend the Annual
Meeting, please sign and date the enclosed proxy and return it promptly by mail
in the enclosed envelope which requires no postage if mailed in the United
States.
Sincerely,
/s/ DEAN T. CASADAY /s/ KENNETH L. POLLOCK
- - ----------------------- -----------------------
Dean T. Casaday Kenneth L. Pollock
President and Chairman of the Board
Chief Executive Officer
<PAGE> 5
DIRECTIONS TO THE COMMUNITY ARTS CENTER, WILLIAMSPORT, PENNSYLVANIA
[MAP]
FROM INTERSTATE 80 OR SOUTH: Get off I-80 at Exit 30 and take Route 15 North to
Williamsport. After crossing the Susquehanna River Bridge into Williamsport, you
will be on Market Street. Take Market Street to the second traffic light and
turn left onto Fourth Street. Take Fourth Street to the third traffic light,
Turn right onto Hepburn Street and proceed approximately 1 1/2 blocks to the
Hepburn Plaza Parking lot on the left. Please park in spaces designated with
yellow circles. Bring your parking ticket for validation and proceed to the
Community Arts Center at 220 West Fourth Street.
FROM THE NORTH OR WEST: From Route 180 East, get off at the Hepburn Street Exit
(also listed as 15 South or Lewisburg Exit). Continue straight through the
second light at West Fourth Street and then go 1 1/2 blocks to the Hepburn Plaza
Parking lot which is on the left. Please park in spaces designated with yellow
circles. Bring your parking ticket for validation and proceed to the Community
Arts Center at 220 West Fourth Street.
FROM WILKES-BARRE: Take Route 308 North to Route 416 to Route 118 Hughesville.
At the traffic light in Hughesville, turn right and go a few blocks to Route 220
South. Turn left on Route 220 and drive approximately 4 miles to the Route 180
West entrance ramp on the right. Take Route 180 to the Route 15
South/Lewisburg/Basin Street Exit (approximately 10 miles). Turn right at the
stop sign onto Basin Street. At the stop light, proceed straight on Basin Street
to the stop sign. Turn left onto Fourth Street and go to the fifth traffic
light. Turn right onto Hepburn Street and proceed approximately 1 1/2 blocks to
the Hepburn Plaza Parking lot on the left. Please park in spaces designated with
yellow circles. Bring your parking ticket for validation and proceed to the
Community Arts Center at 220 West Fourth Street.
<PAGE> 6
<TABLE>
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LOGO WILKES-BARRE CENTER, 39 PUBLIC SQUARE
WILKES-BARRE, PENNSYLVANIA 18711-0601
TELEPHONE: (717) 829-8843
</TABLE>
- - --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Pennsylvania Enterprises, Inc. (the "Company") will be held at the Community
Arts Center, 220 West Fourth Street, Williamsport, Pennsylvania, on Wednesday,
June 26, 1996, at 10:00 a.m. for the following purposes:
(1) To elect eleven directors of the Company; and
(2) To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on May 17, 1996, as
the record date for the determination of holders of the Company's Common Stock
entitled to notice of and to vote at the meeting.
If you plan to attend the meeting and are a shareholder of record, please
mark your proxy card in the appropriate space. An admission ticket will be
mailed to you prior to the meeting date. However, if your shares are not
registered in your own name, please advise the shareholder of record (your bank,
broker, etc.) that you wish to attend. That firm will provide you with evidence
of your ownership which will enable you to gain admittance to the meeting.
Whether you plan to attend the meeting or not, please sign and date the
enclosed proxy and return it promptly by mail in the enclosed envelope. No
postage is required if mailed in the United States.
By order of the Board of Directors,
Thomas J. Ward
Vice President of Administrative Services
Wilkes-Barre, Pennsylvania and Secretary
May 24, 1996
- - --------------------------------------------------------------------------------
IMPORTANT
PENNSYLVANIA LAW REQUIRES THAT THE HOLDERS OF A MAJORITY OF THE COMPANY'S
OUTSTANDING COMMON STOCK BE PRESENT IN PERSON OR BY PROXY AT THE ANNUAL MEETING
IN ORDER TO CONSTITUTE A QUORUM. SHAREHOLDERS CAN HELP AVOID THE NECESSITY AND
EXPENSE OF FOLLOW-UP LETTERS TO ASSURE THAT A QUORUM IS PRESENT AT THE ANNUAL
MEETING BY PROMPTLY RETURNING THE ENCLOSED PROXY. BROKER NON-VOTES, ABSTENTIONS,
AND WITHHOLD AUTHORITY VOTES ALL COUNT FOR THE PURPOSE OF DETERMINING A QUORUM.
IN THE ABSENCE OF A QUORUM, THE ANNUAL MEETING WILL BE ADJOURNED UNTIL A TIME
ANNOUNCED AT SUCH MEETING. AT THE ADJOURNED MEETING, THE SHAREHOLDERS IN
ATTENDANCE, ALTHOUGH LESS THAN A QUORUM, WILL NEVERTHELESS CONSTITUTE A QUORUM
TO ELECT DIRECTORS AND, IF THE ADJOURNMENT HAS BEEN AT LEAST FIFTEEN DAYS, TO
ACT ON ALL OTHER MATTERS INCLUDED IN THIS PROXY STATEMENT.
<PAGE> 7
MAILING DATE
MAY 24, 1996
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<S> <C>
[PEI LOGO] WILKES-BARRE CENTER, 39 PUBLIC SQUARE
WILKES-BARRE, PENNSYLVANIA 18711-0601
TELEPHONE: (717) 829-8843
</TABLE>
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JUNE 26, 1996
GENERAL
This Proxy Statement is furnished in connection with the solicitation by
and on behalf of the Board of Directors of Pennsylvania Enterprises, Inc., (the
"Company") of proxies to be used at the Annual Meeting of Shareholders of the
Company and any adjournment or adjournments thereof to be held at the Community
Arts Center, 220 West Fourth Street, Williamsport, Pennsylvania, on Wednesday,
June 26, 1996, at 10:00 a.m., for the purposes set forth in the accompanying
Notice of Annual Meeting of Shareholders. The Board of Directors has fixed the
close of business on May 17, 1996, as the record date for the determination of
shareholders entitled to notice of and to vote at the meeting.
Pennsylvania law provides that a proxy, unless coupled with an interest
(for example, a vote pooling or similar arrangement among shareholders; or
between the Company and shareholders; or an unrevoked proxy in favor of an
existing or potential creditor of a shareholder), is revocable at will by a
shareholder, notwithstanding any other agreement or any provision in the proxy
to the contrary. A shareholder may revoke a proxy by giving written notice of
revocation to the Secretary of the Company at any time before the proxy is
voted. Such revocation shall be effective upon receipt of the written notice by
the Secretary of the Company.
COMMON STOCK OUTSTANDING
Common Stock, of which there were 4,915,712 shares outstanding and entitled
to vote on May 17, 1996, constitutes the only class of securities of the Company
entitled to vote at the meeting. The Company does not know of any person who is
the beneficial owner of more than 5% of the outstanding Common Stock of the
Company, other than Mr. Kenneth L. Pollock, Chairman of the
1
<PAGE> 8
Company, who beneficially owns 5.6% of the Company's Common Stock as described
in the Security Ownership of Management section of this Proxy Statement.
ANNUAL REPORT
A copy of the annual report of the Company for the year 1995 was previously
mailed to shareholders.
MATTERS TO BE BROUGHT BEFORE THE MEETING
ELECTION OF DIRECTORS
At the meeting, eleven directors are to be elected to hold office for the
term of one year and until their successors have been elected and qualified.
Unless a contrary indication is specified, it is the intention of the persons
named as proxies to vote the shares represented by the proxy for the election of
the nominees listed herein as directors of the Company. Each of the nominees for
election as a director was elected as a director of the Company at the 1995
Annual Meeting of Shareholders, except for Messrs. Paul R. Freeman, John D.
McCarthy, Jr., and Richard A. Rose, Jr., who were elected by the Board of
Directors at a meeting held on November 10, 1995. In the event that any of the
nominees should become unavailable for any reason, which is not anticipated, the
Board of Directors, in its discretion, may, unless it shall have provided for a
lesser number of directors, designate a substitute nominee, in which event,
pursuant to the accompanying proxy, votes will be cast for such substitute
nominee.
NOMINEES FOR ELECTION AS DIRECTORS
The following information is furnished with respect to each person
nominated by the Board of Directors for election as a director: principal
occupations or employment, age, principal directorships, other affiliations,
Board Committee(s) on which each serves, the period of service as a director of
PG Energy Inc. ("PG Energy"), formerly Pennsylvania Gas and Water Company, and
the Company and the number of shares of Common Stock of the Company which each
nominee has advised the Company was beneficially owned directly or indirectly by
him as of May 17, 1996.
2
<PAGE> 9
NOMINEES FOR ELECTION AS DIRECTORS
<TABLE>
<CAPTION>
NAME
FIRST BECAME DIRECTOR
COMMON SHARES
BENEFICIALLY OWNED* PRINCIPAL OCCUPATION AND OTHER INFORMATION
- - --------------------- ----------------------------------------------------------------------
<S> <C>
Chairman of the Board of Directors of the Company and PG Energy since
[PHOTO] June, 1987; President and Chief Executive Officer of the Company and
KENNETH L. POLLOCK PG Energy from March, 1991, to August, 1991; Director and sole
July 1972 stockholder, Susquehanna Coal Company and Ken L. Pollock, Inc.,
275,989 Shares Nanticoke, PA, since prior to 1990. General Partner and Board Member,
Pittsburgh Pirates Baseball, Inc., since February 1996; Pennsylvania
State University National Development Council and Campaign for the
Library Committee; former board member of United Penn Bank, King's
College, Mercy Hospital, and the Mill Memorial Library. Age 75.
Chairman of the Executive Committee.
President and Chief Executive Officer of the Company and PG Energy
[PHOTO] since September 1, 1991; Vice President of Engineering and Operations
DEAN T. CASADAY of the Company and PG Energy in 1978, and Vice President of Corporate
September 1991 Development of PG Energy from 1972 to 1978 and of the Company from
19,287 Shares 1974 to 1978; Vice President of National Fuel Gas Supply Corporation
from 1989 to August, 1991; Chairman, President and Chief Executive
Officer of Carnegie Natural Gas Company and Apollo Gas Company, both
of which are subsidiaries of USX Corporation, from 1978 to 1989;
Chairman of the Pennsylvania Gas Association; Director, Greater
Wilkes-Barre Partnership; Corporate Advisory Board, Pennsylvania
College of Technology. Age 64.
</TABLE>
- - ---------------
*See page 9, Security Ownership of Management, for complete listing and
explanatory notes relating to the security ownership of directors and officers
of the Company.
3
<PAGE> 10
<TABLE>
<CAPTION>
NAME
FIRST BECAME DIRECTOR
COMMON SHARES
BENEFICIALLY OWNED* PRINCIPAL OCCUPATION AND OTHER INFORMATION
- - --------------------- ----------------------------------------------------------------------
<S> <C>
Vice Chairman of the Board of Directors of the Company and PG Energy
[PHOTO] since March, 1991; Chairman of the Board of the Commonwealth Bank
WILLIAM D. DAVIS Division of Meridian Bank, Williamsport, PA, from September, 1993 to
June 1981 December 31, 1995; Director, Meridian Bancorp, Inc., and Meridian
4,271 Shares Bank, Reading, PA, from September, 1993, to April, 1996; Chairman of
the Board and Chief Executive Officer of Commonwealth Bancshares
Corporation, Williamsport, PA, from April, 1987 to June, 1993;
Director Corestates Bank, N.A., since April, 1996; Director of the
National Association of Corporate Directors; Director, Lycoming
Foundation; past Director and President of Industrial Properties
Corporation; Director, Pennsylvania Economy League; Director and
Treasurer, Pennsylvania College of Technology; past Director and
Chairman, Williamsport/Lycoming Chamber of Commerce; and Director,
Williamsport/Lycoming Foundation. Age 65. Member of Executive
Committee, Chairman of Audit Committee and member of the Compensation
and Stock Option Committees.
Controller of HUD, Inc., trading as Emerald Anthracite II, Nanticoke,
[PHOTO] PA, since 1988. Previously held positions with Northeastern Bank,
PAUL R. FREEMAN United Penn Bank, Barnett Banks, and Marine Midland Bank. Age 48.
November 1995 Member of the Audit Committee and the Investment Committee of the
1,000 Shares Employees' Retirement Plan.
</TABLE>
- - ---------------
*See page 9, Security Ownership of Management, for complete listing and
explanatory notes relating to the security ownership of directors and officers
of the Company.
4
<PAGE> 11
<TABLE>
<CAPTION>
NAME
FIRST BECAME DIRECTOR
COMMON SHARES
BENEFICIALLY OWNED* PRINCIPAL OCCUPATION AND OTHER INFORMATION
- - --------------------- ----------------------------------------------------------------------
<S> <C>
Chairman of the Board of Directors of the Company and PG Energy from
[PHOTO] June, 1986, to June, 1987; Chairman of the Board, Parodi Industries,
ROBERT J. KEATING Inc., Scranton, PA, from January, 1985, to February, 1994. Age 77.
June 1974 Member of Executive Committee and Investment Committee of the
6,720 Shares Employees' Retirement Plan.
President of McCarthy Tire Service Company, Wilkes-Barre, PA, since
[PHOTO] 1968; President of McCarthy Realty, Inc., since 1988; Director and
JOHN D. MCCARTHY Chairman, Wyoming Valley Health Care Systems, Inc.; Director of
March 1991 Pennsylvania- American Water Company. Age 60. Chairman of Compensation
2,550 Shares and Stock Option Committees, Chairman of the Investment Committee of
the Employees' Retirement Plan, and member of Executive Committee.
</TABLE>
- - ---------------
*See page 9, Security Ownership of Management, for complete listing and
explanatory notes relating to the security ownership of directors and officers
of the Company.
5
<PAGE> 12
<TABLE>
<CAPTION>
NAME
FIRST BECAME DIRECTOR
COMMON SHARES
BENEFICIALLY OWNED* PRINCIPAL OCCUPATION AND OTHER INFORMATION
- - --------------------- ----------------------------------------------------------------------
<S> <C>
Vice President of McCarthy Tire Service Company, Wilkes-Barre, PA,
[PHOTO] since 1989 and Vice President of McCarthy Realty, Inc. since 1988.
JOHN D. MCCARTHY, JR. President of McCarthy Tire Service Company of Allentown, Reading and
November 1995 Lancaster since 1992. Member and Chairman of the Board of Directors of
1,600 Shares the Wyoming Valley Catholic Youth Center; member of the Michelin Tire
Corporation Dealer Council and Continental/General Tire Dealer
Council. Age 31. Member of the Audit Committee.
Vice President of HUD, Inc., trading as Emerald Anthracite II, and
[PHOTO] Vice President of Susquehanna Coal Company and Susquehanna Mt. Carmel,
KENNETH M. POLLOCK Inc., Nanticoke, PA, since prior to 1987; Director of Commonwealth
October 1993 Bank East, a division of Corestates Bank, N.A.; Director of F. M.
117,487 Shares Kirby Center for the Performing Arts. Age 38. Member of Audit and
Planning Committees.
</TABLE>
- - ---------------
*See page 9, Security Ownership of Management, for complete listing and
explanatory notes relating to the security ownership of directors and officers
of the Company.
6
<PAGE> 13
<TABLE>
<CAPTION>
NAME
FIRST BECAME DIRECTOR
COMMON SHARES
BENEFICIALLY OWNED* PRINCIPAL OCCUPATION AND OTHER INFORMATION
- - --------------------- ----------------------------------------------------------------------
<S> <C>
President of Petroleum Sales Company, Inc., Wilkes-Barre, PA, since
[PHOTO] 1992 and Vice President of Petroleum Service Company, Inc. since 1987.
RICHARD A. ROSE, JR. Director of the Black Horse Foundation, Inc., Mountain Productions,
November 1995 Inc., Mountain Productions Services, Inc., and Rock USA, Inc. Age 35.
9,627 Shares Member of the Planning Committee and the Compensation and Stock Option
Committees.
Independent financial consultant since prior to 1988; Chairman,
[PHOTO] Priestgate, Limited, since 1991; former President and Chief Executive
JAMES A. ROSS Officer and Director, Sprague & Henwood, Inc., Scranton, PA; Director,
May 1978 Scranton Industrial Development Company; Director, Lackawanna
3,050 Shares Industrial Development Enterprise. Age 59. Chairman of the Planning
Committee and member of the Investment Committee of the Employees'
Retirement Plan.
</TABLE>
- - ---------------
*See page 9, Security Ownership of Management, for complete listing and
explanatory notes relating to the security ownership of directors and officers
of the Company.
7
<PAGE> 14
<TABLE>
<CAPTION>
NAME
FIRST BECAME DIRECTOR
COMMON SHARES
BENEFICIALLY OWNED* PRINCIPAL OCCUPATION AND OTHER INFORMATION
- - --------------------- ----------------------------------------------------------------------
<S> <C>
President and Chief Executive Officer of Petroleum Service Company,
[PHOTO] Inc., Wilkes-Barre, PA, since 1980; Chairman of the Board of Directors
RONALD W. SIMMS since 1994, and Chief Executive Officer since 1984, of Mountain
March 1991 Productions, Inc.; Chairman of the Board of Directors of First
120,000 Shares Heritage Bank, since March, 1994; Director of Pennsylvania-American
Water Company; past Chairman of the Wilkes-Barre Chamber of Commerce.
Age 56. Member of the Executive, Audit, Planning, Compensation and
Stock Option Committees, and the Investment Committee of the
Employees' Retirement Plan.
</TABLE>
- - ---------------
*See page 9, Security Ownership of Management, for complete listing and
explanatory notes relating to the security ownership of directors and officers
of the Company.
8
<PAGE> 15
SECURITY OWNERSHIP OF MANAGEMENT
The following table shows the number of shares of the Company's Common
Stock, beneficially owned, directly or indirectly, as of May 17, 1996, by
individual directors, each of the officers named in the Summary Compensation
Table, and all directors and officers as a group, who held such positions as of
May 17, 1996. None of such persons beneficially owned more than 1% of the
Company's Common Stock, except for Mr. Kenneth L. Pollock, who beneficially
owned 5.6% of the Company's Common Stock, Mr. Kenneth M. Pollock, who
beneficially owned 2.4% of the Company's Common Stock, or 5.6% in the aggregate
for both of them on an unduplicated basis, and Mr. Ronald W. Simms who
beneficially owned 2.4% of the Company's Common Stock. See notes (4), (5), and
(6) to the table below. All directors and officers as a group beneficially owned
10.1% of the Company's Common Stock. Unless otherwise specified, shares are
beneficially owned by the director or officer or jointly with a spouse. None of
such persons owned any of PG Energy's preferred stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
-----------------------------------------------
SHARES OPTIONS
OTHER THAN EXERCISABLE TOTAL
OPTION WITHIN BENEFICIAL
TITLE OF CLASS NAME OF BENEFICIAL OWNER SHARES 60 DAYS(1) OWNERSHIP
- - ----------------------- ------------------------ ----------- ----------- ---------
<S> <C> <C> <C> <C>
Common Dean T. Casaday 10,287 9,000 19,287
William D. Davis 4,271 -- 4,271
Paul R. Freeman 1,000 -- 1,000
Robert J. Keating 6,720(2) -- 6,720
John D. McCarthy 2,550(3) -- 2,550
John D. McCarthy, Jr. 1,600(3) -- 1,600
Kenneth L. Pollock 275,989(4)(5) --(1) 275,989
Kenneth M. Pollock 117,487(5)(6) -- 117,487
Richard A. Rose, Jr. 9,627(7) -- 9,627
James A. Ross 3,050(8) -- 3,050
Ronald W. Simms 120,000(9) -- 120,000
Thomas F. Karam 24,191(10) --(1) 24,191
John F. Kell, Jr. 4,293 3,500 7,793
All directors and
officers as a group (20
persons) 471,355(11)(12) 25,300(1) 496,655
</TABLE>
- - ------------------
(1) Shares that could be purchased under the 1992 Stock Option Plan. Does not
include options to purchase shares of common stock granted on April 15,
1996, in the amount of 25,000 to Mr. Kenneth L. Pollock and 25,000 to Mr.
Thomas F. Karam which are not exercisable until April 15, 1997.
9
<PAGE> 16
(2) Includes 600 shares of Common Stock owned by Mr. Keating's wife. Includes
2,000 shares that Mr. Keating beneficially owns through Lakeside Drive
Assoc., Inc.
(3) Includes 1,000 shares held by McCarthy Realty, Inc. in which both John D.
McCarthy and John D. McCarthy, Jr. each have a beneficial interest. These
shares are reported in the total shares for each of them, but are reported
one time, on an unduplicated basis, in the total shares owned by all
directors and officers as a group.
(4) Includes 8,578 shares that Mr. Pollock owns jointly with his wife, 86,900
shares jointly with his son, Kenneth M. Pollock, 7,400 shares jointly with
his daughter, 24,144 shares jointly with his son and daughter, and 8,542 as
custodian for his grandchildren, 6,243 of which are for the children of
Kenneth M. Pollock. Includes 108,400 shares held by several corporations in
which Mr. Pollock holds a controlling interest.
(5) Shares held jointly by Mr. Kenneth L. Pollock and Mr. Kenneth M. Pollock,
and by Mr. Kenneth L. Pollock for Mr. Kenneth M. Pollock's children are
reported in the total shares for each of them but are reported one time, on
an unduplicated basis, in the total shares owned by all directors and
officers as a group. A total of 276,138 shares are beneficially owned by
Mr. Kenneth L. Pollock and Mr. Kenneth M. Pollock on an unduplicated basis.
(6) Includes 86,900 shares held jointly with his father, Mr. Kenneth L.
Pollock, 24,144 shares held jointly with his father and sister, and 6,243
shares held by his father as custodian for his children.
(7) Includes 1,000 shares owned by Mr. Rose's wife, 850 shares held as
custodian for his children, and 1,657 shares for which Mr. Rose has voting
power.
(8) Includes 300 shares owned by Mr. Ross's wife. Includes 1,300 shares owned
by charitable foundations of which Mr. Ross is a trustee. Mr. Ross shares
voting and investment power and disclaims beneficial ownership of the
shares held by these foundations.
(9) Includes 30,677 shares owned by Mr. Simms's wife and 38,200 shares for
which Mr. Simms has voting power.
(10) Includes 15,791 shares for which Mr. Karam has sole voting and investment
power, and 2,000 shares held in the name of Lakeside Drive Assoc., Inc., in
which Mr. Karam's wife has an interest. These 2,000 shares are also
reported for Mr. Keating who has an interest in Lakeside Drive Assoc., Inc.
These shares are reported one time, on an unduplicated basis, in the total
shares owned by all directors and officers as a group.
(11) The Company has an Employees' Savings Plan in which officers and employees
participate. Included in the number of shares of Common Stock shown above
are 9,918 shares which were allocated to the accounts under the Employees'
Savings Plan of all officers as a group at March 31, 1996 (including 1,502
shares in those shown for Mr. Casaday, 1,591 for Mr. Kell, and 808 for Mr.
Kenneth L. Pollock).
(12) Does not include 52,081 shares of the Company's Common Stock held by the
Employees' Retirement Plan, as to which investment power is exercised by
the Investment Committee under the Plan, consisting of Messrs. Freeman,
Keating, John D. McCarthy, Ross, and Simms. The Committee members disclaim
beneficial ownership of these shares.
10
<PAGE> 17
CERTAIN STOCK TRANSACTIONS
The Securities Exchange Act of 1934, as amended, requires that the
Company's directors and officers file reports of ownership and changes in
ownership of the Company's Common Stock with the Securities and Exchange
Commission and the New York Stock Exchange. The Company believes that all
directors and officers filed on a timely basis all such reports required of
them with respect to stock ownership and changes in ownership during 1995.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
During 1995, Ken Pollock, Inc. and Pole Company hauled sludge residue from
PG Energy's water treatment plants which had been stored for up to 25 years to
land owned by Pole Company under a permit issued by the Pennsylvania Department
of Environmental Protection. The removal of this residue was required by the
Asset Purchase Agreement pursuant to which PG Energy sold its water operations
and related assets. Ken Pollock, Inc. and Pole Company were paid $1.01 million
for these services. PG Energy determined to use these two companies based on
amounts generally charged for these services and the fact that Pole Company had
a site available within a short distance from PG Energy's property. Early in
1996, PG Energy exchanged with Heavy Media, Inc. a parcel of property owned by
PG Energy but not contiguous with its other property for a parcel owned by Heavy
Media, Inc. that was contiguous to PG Energy's property. An independent
appraiser appraised the parcel PG Energy exchanged at $75,000 and the parcel it
received at $152,000. Kenneth L. Pollock and Kenneth M. Pollock are officers
and/or hold controlling interests in Ken Pollock, Inc., Pole Company, and Heavy
Media, Inc.
ADDITIONAL DIRECTOR INFORMATION
During 1995, the Board met 17 times, and each incumbent director attended
more than 75% of the total number of meetings of the Board and of the committees
of the Board on which he served.
The Company has an Executive Committee, currently consisting of Messrs.
Kenneth L. Pollock (Chairman), Davis, Keating, John D. McCarthy, and Simms.
During intervals between meetings of the Company's Board of Directors, the
Executive Committee may exercise, subject to law and any specific directions
given by the Board to the Executive Committee, all powers of the Board of
Directors in the management of the business and affairs of the Company. The
Executive Committee met two times during 1995.
In addition to an Executive Committee, the Company has an Audit Committee,
currently consisting of Messrs. Davis (Chairman), Freeman, Kenneth M. Pollock,
John D. McCarthy, Jr., and Simms. This Committee met four times during 1995 and
performs the following functions, among others: recommending the appointment and
monitoring the independence and compensation of the independent auditors;
approving professional services provided by the independent auditors; reviewing
the scope of the annual audit with the independent auditors; reviewing the
independent and internal auditors' reports to management; reviewing financial
statements; and reviewing various internal accounting controls.
11
<PAGE> 18
The Company has an Investment Committee of the Employees' Retirement Plan
currently consisting of Messrs. John D. McCarthy (Chairman), Freeman, Ross,
Simms, and Keating. The duties of this Committee include appointing, removing,
and monitoring the performance of investment managers, allocating Plan assets
among them, reviewing the investment philosophy of the Plan, and managing all or
portions of the assets of the Plan, subject to any limits or guidelines
established by the Board. This Committee met four times during 1995.
The Company has a Compensation Committee which provides direction and
guidance and makes recommendations to the Board and management on
compensation-related matters. The members of the Compensation Committee are also
designated as the Stock Option Committee for the purpose of administering the
1992 Stock Option Plan. The Compensation and Stock Option Committees currently
consist of Messrs. McCarthy (Chairman), Simms, Davis, and Rose. These committees
met four times during 1995.
The Company's Planning Committee, currently consisting of Messrs. Ross
(Chairman), Simms, Kenneth M. Pollock, and Rose, provides direction and guidance
and makes recommendations to the Board and management on corporate planning
issues. The Planning Committee did not meet during 1995.
The Company does not have a Nominating Committee. Nominations are
considered by the full Board.
During 1995, directors of the Company and PG Energy who were not full-time
employees of the Company and PG Energy were paid a fee of $500 per month, and on
days they attended a Company and/or PG Energy Board meeting(s) they were paid
$500, plus expenses. Since the Company and PG Energy Boards consist of the same
members, meetings are usually scheduled on the same day, with the PG Energy
meeting immediately following the Company meeting. Additionally, each director
received $250 for Board Committee meetings attended on the same day as
meeting(s) of the full Board(s), and $500 for each Board Committee meeting
attended on a day when the full Board(s) did not meet. Further, directors who
were members of the Investment Committee of the Employees' Retirement Plan were
paid $250 for each meeting attended on the same day as a meeting of the full
Board(s) and $500 for each meeting attended on a day when the full Board(s) did
not meet.
During 1995, Mr. Ross and Mr. John D. McCarthy also served as directors of
Pennsylvania Energy Resources, Inc. (PERI) and Theta Land Corporation, both
wholly-owned subsidiaries of PEI. They were each paid $1,000 for attending two
board meetings of PERI during 1995.
The Company's 1995 Directors' Stock Compensation Plan (the "Directors'
Plan") provides for the annual automatic award of 200 shares of Company Common
Stock (subject to anti-dilution adjustment in the event of certain corporate
changes) to each continuing director, who has completed at least one year of
service and who is not a full-time employee of the Company or any of its
affiliates, immediately following each annual meeting of shareholders. The
Directors' Plan will terminate in 2005. Directors who are full-time employees of
the Company are not eligible to participate in the Directors' Plan. Except for
anti-dilution adjustments, without shareholder approval, the number of shares to
be awarded to each director each year under the Directors' Plan may not be
12
<PAGE> 19
increased and the eligibility for awards may not be changed. All shares awarded
under the Directors' Plan are non-transferrable for a period of 3 years
following the award, except in the event of death, disability, or retirement on
or after age 65, but in no event less than six months following the date of the
award.
Kenneth L. Pollock is the father of Kenneth M. Pollock. Mr. Simms is the
father-in-law of Mr. Rose. Mr. John D. McCarthy is the father of Mr. John D.
McCarthy, Jr. Mr. Keating is the father-in-law of Mr. Thomas F. Karam, executive
vice president of the Company. There are no other family relationships among any
of the directors or executive officers of the Company.
COMPENSATION COMMITTEE INTERLOCKS
Messrs. John D. McCarthy, Ross, and Simms served as members of the
Company's Compensation Committee during 1995. Beginning January 1, 1996, the
Compensation Committee consisted of Messrs. John D. McCarthy, Davis, Rose, and
Simms. None of these persons was or is an officer or employee of the Company or
any of its subsidiaries. None of the Company's executive officers served on the
compensation committee or board of an entity of which (i) a member of the
Company's Compensation Committee or other director of the Company was an
executive officer or (ii) an executive officer of the entity was one of the
Company's directors.
13
<PAGE> 20
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT
The Company's executive compensation program is administered by the
Compensation Committee of the Board of Directors, which is composed of four
non-employee directors. The following is a report of the Compensation Committee
to the Company's shareholders:
COMPENSATION POLICIES
In determining compensation, including the award of both annual and
long-term compensation, the Committee follows a policy of considering, among
other factors, the operating and financial performance of the Company and the
individual contribution of each officer.
Salary is the principal component of the annual portion of the compensation
of senior executives. Stock options, which were authorized for the first time in
1992 and granted in 1993, comprise both the long-term component and a portion of
the annual component of compensation. The value of stock options is directly
dependent on the performance of the Company's stock.
1995 COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Mr. Casaday's annual salary was increased by 6.0% to $212,880 effective
June 4, 1995, from $200,830, his base salary since his last salary adjustment in
June 1994. In determining his salary adjustment for 1995, the Committee took
into account a number of factors related to the goals and objectives for Mr.
Casaday as set forth in his employment agreement for the period. These relate to
management development, financial objectives, long-term planning, Board
relations and communications, marketing plans, external relations, and
leadership. Effective September 1, 1995, upon recommendation of the Committee,
the Company extended the term of Mr. Casaday's employment agreement for one year
until September 1, 1996.
The Committee operates on the principle that the compensation of the
Company's executive officers should be competitive with compensation of senior
executives at comparable companies. In this regard, the Committee reviewed and
considered the compensation of executives in comparable positions at other
utility companies, and non-utility companies located in the same region as the
Company, with which the Company competes for executive talent. Consequently,
these are not exactly the same companies that are included in the indices used
in the Performance Graphs in this proxy statement. The Committee targets
executive compensation to be in the general range, but not the high end, of
compensation for comparable positions at these companies.
The Committee (which also serves as the Stock Option Committee) considers
previously established annual operating and financial performance goals to help
it determine if and the extent to which stock options will be granted. The
Committee did not award any stock options during 1995.
14
<PAGE> 21
OTHER OFFICERS
The compensation of Mr. Kell was determined in accordance with policies
discussed earlier in this report. Mr. Karam commenced employment with the
Company effective October 1, 1995.
All members of the Committee concur and join in this report to the
Company's shareholders.
JOHN D. MCCARTHY, CHAIRMAN RONALD W. SIMMS WILLIAM D. DAVIS RICHARD A. ROSE,
JR.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION -------------
-------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND SALARY BONUS COMPENSATION OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($)(1) (# OF SHARES) ($)(2)
- - ----------------------- ----- --------- ------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Dean T. Casaday,....... 1995 $ 202,243 -0- -0- -0- $ 3,987
President and Chief 1994 192,842 -0- -0- -0- 3,377
Executive Officer 1993 186,099 -0- -0- 9,000 3,305
Thomas F. Karam, 1995 $ 150,000(3) -0- -0- -0- 77
Executive Vice
President
John F. Kell, Jr., 1995 $ 123,745 -0- -0- -0- 1,876
Vice President, 1994 121,527 -0- -0- -0- 1,518
Financial Services 1993 115,820 -0- -0- 3,500 1,489
</TABLE>
- - ---------------
(1) Does not include the value of perquisites and other personal benefits
because the aggregate amount of such compensation does not exceed
established reporting thresholds.
(2) The amounts shown under All Other Compensation are for group term life
insurance provided for officers and matching contributions made by the
Company for the named executives to their Employees' Savings Plan (401(k))
account in the amount of $1,165 and $751 for 1995, $709 and $456 for 1994,
and $735 and $463 for 1993 for Messrs. Casaday and Kell, respectively.
(3) Mr. Karam commenced employment with the Company effective October 1, 1995.
The above salary amount represents his compensation on an annualized basis.
The amount for All Other Compensation is the actual amount for the portion
of 1995 that he was employed by the Company.
AGGREGATED STOCK OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END STOCK OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SHARES SECURITIES UNDERLYING VALUE OF UNEXERCISED
ACQUIRED ON VALUE UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
EXERCISE REALIZED AT FISCAL YEAR-END (#) AT FISCAL YEAR-END ($)
NAME (#) ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- - --------------------- ----------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Dean T. Casaday...... -0- -0- 9,000 / -0- $70,875 / -0-
John F. Kell, Jr..... -0- -0- 3,500 / -0- $27,563 / -0-
</TABLE>
15
<PAGE> 22
EMPLOYEES' SAVINGS PLAN
Effective January 1, 1992, the Company established an Employees' Savings
Plan to encourage retirement savings by its employees. Full-time employees age
21 or older who have completed one year of service are eligible to participate
in the Employees' Savings Plan. Participating employees may elect to contribute
up to 15% of their qualifying annual compensation (but no more than a statutory
dollar limit -- $9,240 for 1995) on a pre-tax basis, pursuant to Section 401(k)
of the Internal Revenue Code of 1986, as amended. These employee 401(k)
contributions are invested as directed by each participant in one or more
designated funds available under the Employees' Savings Plan, including a fund
that invests in the Company's Common Stock. The Company also contributes up to
15% of the first 4% contributed by the employees, which contribution is
automatically invested in the Company's Common Stock. Participants are 100%
vested in their 401(k) contributions and become 100% vested in any matching
contribution over a five-year period commencing with the employee's date of
hire.
EMPLOYEES' RETIREMENT PLAN
The following table illustrates the estimated annual retirement benefits
payable at age 65 under the Company's Employees' Retirement Plan as a straight
life annuity to an employee retiring with the specified combination of final
average earnings and years of service with the Company with the modifications
discussed below, applicable to Mr. Casaday, for average annual earnings greater
than $150,000. The benefits shown are not subject to deduction for social
security.
<TABLE>
<CAPTION>
YEARS OF CREDITED SERVICE
5-YEAR ------------------------------------------------------------------
AVERAGE EARNINGS 15 20 25 30 35
- - ------------------------------- -------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C>
$100,000....................... $ 20,555 $ 27,407 $ 34,259 $ 41,111 $ 41,111
$125,000....................... $ 26,180 $ 34,907 $ 43,634 $ 52,361 $ 52,361
$150,000....................... $ 31,805 $ 42,407 $ 53,009 $ 63,611 $ 63,611
$175,000....................... $ 37,430* $ 49,907* $ 62,384* $ 74,861* $ 74,861*
$200,000....................... $ 43,055* $ 57,407* $ 71,759* $ 86,111* $ 86,111*
$250,000....................... $ 54,305* $ 72,407* $ 90,509* $ 108,611* $ 108,611*
</TABLE>
- - ---------------
* The Internal Revenue Code limits the amount of compensation which may be taken
into account under a tax-qualified retirement plan. The benefits shown above,
for average earnings above $150,000, include benefits payable pursuant to Mr.
Casaday's supplemental retirement agreement which guarantees to Mr. Casaday
the difference between the benefits he would be entitled to under the
Company's Employees' Retirement Plan, if such benefits were calculated without
regard to restrictions imposed under the Internal Revenue Code, and the amount
of pension benefit actually payable under the Company's Employees' Retirement
Plan.
Additionally, pursuant to the terms of Mr. Casaday's supplemental
retirement agreement, the Company has agreed to pay the difference, if any,
between his pension benefits payable under the Retirement Plan, based on the
total of his approximately 15 years of prior service and his current service
with the Company, and a pension benefit based on 20 years of credited service.
As of December 31, 1995, Mr. Casaday had completed 19 years of credited service
and Mr. Kell, 17 years.
16
<PAGE> 23
Covered compensation under the Retirement Plan is the same as the amount
reported in the Salary column of the Summary Compensation Table.
CHANGE IN CONTROL AND OTHER AGREEMENTS
The Company has agreements with certain of its officers, including Messrs.
Casaday, Karam, and Kell, which entitle the officers to receive a severance
payment equal to two times their annual salary if, following a change in control
(as defined in such agreements) of the Company, their employment is terminated
or their compensation, position or benefits are reduced.
Mr. Casaday has an employment agreement with the Company providing for a
one year employment term, ending September 1, 1996, and certain supplemental
retirement benefits. The retirement benefits are set forth in a supplemental
retirement agreement, the major provisions of which are described in the
previous section.
17
<PAGE> 24
PERFORMANCE GRAPHS
FIVE-YEAR CUMULATIVE RETURN
The graph on the following page compares the cumulative total return on the
Company's stock during the past five years with the average cumulative total
return during the same period of the S & P 500 Stock Index, a gas/water utility
performance index developed from the Edward D. Jones Indices for Natural Gas
Distribution Companies and the Water Utility Industry, excluding the Company,
and a self-constructed index of a group of comparable mid-sized natural gas
distribution companies, excluding the Company. The gas/water utility index is an
average of the two Edward D. Jones Indices where the two indices are weighted by
the Company's average identifiable assets for its gas business and its water
business during the period covered by the graph. Since the Company sold its
water utility operations on February 16, 1996, and is now primarily a gas
distribution utility, a gas index is now included in the graph. Next year the
gas/water utility index will not be shown. The companies included in the
self-constructed natural gas distribution index are: Atmos Energy Corporation,
Cascade Natural Gas Corporation, Colonial Gas Company, Connecticut Energy Corp.,
Connecticut Natural Gas Co., North Carolina Natural Gas Corp., Providence Energy
Corp., Public Service Company of North Carolina, Southeastern Michigan Gas
Enterprises, United Cities Gas Co.,and Yankee Energy Systems Inc. These
companies, selected from the Edward D. Jones Index for Natural Gas Distribution
Companies, have revenues, net plant, and market capitalization in the same
general range as that of the Company.
18
<PAGE> 25
The graph reflects the investment of $100 on December 31, 1990, in the
Company's Common Stock, the S & P 500 Stock Index, and the utility indices.
Dividends are assumed to be reinvested as paid in the Company's Common Stock and
in the S & P 500 Stock Index and quarterly in the stocks of the utility indices.
FIVE-YEAR CHART
<TABLE>
<CAPTION>
PENNSYLVANIA GAS/WATER
MEASUREMENT PERIOD ENTERPRISES, S & P 500 UTILITY INDE GAS UTILITY
(FISCAL YEAR COVERED) INC. STOCK INDEX X INDEX
<S> <C> <C> <C> <C>
1990 100.00 100.00 100.00 100.00
1991 74.28 130.34 137.16 128.90
1992 112.10 140.26 160.67 164.39
1993 116.03 154.33 185.51 193.32
1994 111.99 156.43 170.45 174.24
1995 165.84 214.99 210.78 210.18
</TABLE>
19
<PAGE> 26
FOUR-YEAR CUMULATIVE RETURN
The market price of the Company's Common Stock was affected from 1989 into
the fourth quarter of 1991 by events relating to the possible sale of the
Company, including several bids made for the Company, certain of which were
accepted, but none of which were consummated. The graph below compares the
cumulative total return on the Company's stock for 1992 through 1995 with that
of the S & P 500 Stock Index, the gas/water utility performance index, and the
self-constructed index of comparable mid-sized natural gas distribution
companies for the same period. The graph reflects the investment of $100 on
December 31, 1991, in the Company's Common Stock, the S & P 500 Stock Index, and
the utility indices. Dividends are assumed to be reinvested as paid in the
Company's Common Stock and in the stocks in the S & P 500 Stock Index and
quarterly in the stocks of the utility indices.
FOUR-YEAR CHART
<TABLE>
<CAPTION>
PENNSYLVANIA GAS/WATER
MEASUREMENT PERIOD ENTERPRISES, S & P 500 UTILITY INDE GAS UTLITY
(FISCAL YEAR COVERED) INC. STOCK INDEX X INDEX
<S> <C> <C> <C> <C>
1991 100.00 100.00 100.00 100.00
1992 152.92 107.61 117.39 127.53
1993 156.20 118.40 135.60 149.98
1994 150.77 120.01 124.53 135.17
1995 223.27 164.95 153.90 163.06
</TABLE>
SOLICITATION OF PROXIES
The Company will bear the costs of this solicitation of proxies. In
addition to solicitation by mail, arrangements may be made with brokerage houses
and other custodians, nominees and fiduciaries to send material to their
principals, and the Company may reimburse them for their expenses in so doing.
To the extent necessary in order to ensure a sufficient shareholder presence to
constitute a quorum, officers and other employees of the Company and its
principal subsidiary, PG Energy Inc. or designated agents may, without
additional renumeration, in person or by telephone or telegram,
20
<PAGE> 27
request the return of proxies. In addition, the Company has retained D. F. King
& Co., Inc. for assistance in the solicitation of proxies. For its services, D.
F. King will receive a fee estimated at $5,500 plus reimbursement for reasonable
and customary out-of-pocket expenses.
VOTE REQUIRED
Candidates for director receiving the highest number of affirmative votes,
up to the number of directors to be elected, shall be elected. Broker non-votes,
abstentions, and withhold authority votes, will be counted in determining the
presence of a quorum but will have no effect on the election of directors.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee recommended to the Board of Directors that Arthur
Andersen LLP be appointed as independent public accountants to audit the books
of the Company for the year ending December 31, 1996. The Board of Directors
approved the Audit Committee's recommendation on March 6, 1996. Arthur Andersen
LLP has examined the financial statements of PG Energy Inc. and its predecessor,
Pennsylvania Gas and Water Company, since 1943 and those of the Company since
its inception in 1974. Representatives of Arthur Andersen LLP are expected to be
present at the Annual Meeting, and will be available to respond to appropriate
questions by shareholders.
SHAREHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Proposals of shareholders intended to be presented at the 1997 Annual
Meeting of Shareholders must be received by the Secretary of the Company at the
Company's executive offices, Wilkes-Barre Center, 39 Public Square,
Wilkes-Barre, Pennsylvania 18711-0601, by November 28, 1996, for inclusion in
the Company's proxy statement and form of proxy relating to that meeting.
OTHER MATTERS
The Board of Directors knows of no other business to be transacted at the
Annual Meeting, but if any other matters properly come before the meeting, the
persons named as proxies will vote upon such matters in accordance with their
best judgment.
By Order of the Board of Directors,
Thomas J. Ward
Vice President of Administrative
Services and Secretary
Wilkes-Barre, Pennsylvania
May 24, 1996
21
<PAGE> 28
Upon written request the Company will provide without charge to each person
whose vote is solicited for the Annual Meeting a copy of the Company's Annual
Report on Form 10-K for the year ended December 31, 1995, as filed with the
Securities and Exchange Commission. Requests for such Annual Report should be
addressed to the Investor Relations Department, Pennsylvania Enterprises, Inc.,
Wilkes-Barre Center, 39 Public Square, Wilkes-Barre, Pennsylvania 18711-0601.
Persons who were not shareholders of record on May 17, 1996, should include with
the request a representation that the person making the request is a beneficial
owner of Common Stock as of the date of the request.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN AND
DATE THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
22
<PAGE> 29
<TABLE>
<S> <C>
- - -------------------------------------- --------------------------------------
NOTICE OF
ANNUAL MEETING
OF SHAREHOLDERS
LOGO ON JUNE 26, 1996
AND
PROXY STATEMENT
- - -------------------------------------- --------------------------------------
</TABLE>
<PAGE> 30
PENNSYLVANIA ENTERPRISES, INC.
Solicited by the Board of Directors of the Company
Shareholder's Proxy
The undersigned hereby appoints John F. Kell, Jr., Joseph F. Perugino,
and Thomas J. Ward, or any one or more of them, each with full power of
substitution, the proxy or proxies of the undersigned to vote the shares of
Common Stock of Pennsylvania Enterprises, Inc. which the undersigned would be
entitled to vote if personally present at the Annual Meeting of Shareholders of
Pennsylvania Enterprises, Inc. to be held on June 26, 1996,at the Community Arts
Center, 220 West Fourth Street, Williamsport, Pennsylvania, at 10:00 a.m., and
at any and all adjournments or postponements thereof.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY
PENNSYLVANIA ENTERPRISES, INC.
Annual Meeting of Shareholders
Wednesday, June 26, 1996
10:00 A. M.
Community Arts Center
220 West Fourth Street
Williamsport, Pennsylvania
<PAGE> 31
The shares represented by this proxy, which revokes all prior proxies, will be
voted as directed by the shareholder. If no direction is given, such shares will
be voted "FOR" all nominees in Item 1.
Please mark
/x/ your vote
like this
The Board of Directors Recommends a Vote "FOR all nominees" in Item 1.
Item 1 - Election of the following nominees as Directors: Dean T.
Casaday, William D. Davis, Paul R. Freeman, Robert J. Keating, John D.
McCarthy, John D. McCarthy, Jr., Kenneth L. Pollock, Kenneth M. Pollock, Richard
A. Rose, Jr., James A. Ross, and Ronald W. Simms.
FOR all nominees listed
above (except as marked Withhold authority to
to the contrary on the vote for all nominees
line, provided below) listed above
/ / / /
To withhold authority to vote for any individual
nominee(s), write the nominee(s)' name(s) below
________________________________________________
Item 2 - In their discretion, the Proxies are authorized to vote upon such other
matters as may properly come before the meeting.
If you plan to attend the Annual Meeting,
please check this box in order to receive
an admission ticket / /
Signature ___________________ Signature___________________ Date ________
Please mark, date and sign your name exactly as it appears above and
return promptly in the enclosed envelop. For joint accounts, each joint
owner should sign. When signing as attorney, executor, administrator,
trustee, guardian, or other officer of a corporation, please give your full
title as such. If stock is owned by a partnership or corporation, please
indicate your capacity in signing the proxy.
<PAGE> 32
DIRECTIONS TO THE COMMUNITY ARTS CENTER, WILLIAMSPORT, PENNSYLVANIA
FROM INTERSTATE 80 OR SOUTH: Get off I-80 at Exit 30 and take Route 15 North to
Williamsport. After crossing the Susquehanna River Bridge into Williamsport, you
will be on Market Street. Take Market Street to the second traffic light and
turn left onto Fourth Street. Take Fourth Street to the third traffic light,
Turn right onto Hepburn Street and proceed approximately 1 1/2 blocks to the
Hepburn Plaza Parking lot on the left. Please park in spaces designated with
yellow circles. Bring your parking ticket for validation and proceed to the
Community Arts Center at 220 West Fourth Street.
FROM THE NORTH OR WEST: From Route 180 East, get off at the Hepburn Street Exit
(also listed as 15 South or Lewisburg Exit). Continue straight through the
second light at West Fourth Street and then go 1 1/2 blocks to the Hepburn Plaza
Parking lot which is on the left. Please park in spaces designated with yellow
circles. Bring your parking ticket for validation and proceed to the Community
Arts Center at 220 West Fourth Street.
FROM WILKES-BARRE: Take Route 308 North to Route 416 to Route 118 Hughesville.
At the traffic light in Hughesville, turn right and go a few blocks to Route 220
South. Turn left on Route 220 and drive approximately 4 miles to the Route 180
West entrance ramp on the right. Take Route 180 to the Route 15
South/Lewisburg/Basin Street Exit (approximately 10 miles). Turn right at the
stop sign onto Basin Street. At the stop light, proceed straight on Basin Street
to the stop sign. Turn left onto Fourth Street and go to the fifth traffic
light. Turn right onto Hepburn Street and proceed approximately 1 1/2 blocks to
the Hepburn Plaza Parking lot on the left. Please park in spaces designated with
yellow circles. Bring your parking ticket for validation and proceed to the
Community Arts Center at 220 West Fourth Street.
<PAGE> 33
May 29, 1996
Dear 401(k) Plan Participant:
As you know, shares of common stock of Pennsylvania Enterprises, Inc.
(PEI) are added to your individual Employees' Savings Plan (401(k)) account
through your contributions, matching contributions by the Company, and/or the
reinvestment of dividends on stock held in your account. The total investments
in your 401(k) account will be an important part of your retirement package.
Because you are the owner of the shares of common stock of PEI held in
your 401(k) account, you are entitled to vote those shares by proxy at the
Annual Meeting of Shareholders. Therefore, enclosed is a Notice of Annual
Meeting, Proxy Statement, and your shareholder's proxy card for the shares of
common stock held in your 401(k) account. The 1995 Annual Report to Shareholders
was previously distributed unless you are a new plan participant, in which case
it is enclosed. I WOULD APPRECIATE YOUR SIGNING, DATING, AND RETURNING YOUR
PROXY CARD AS SOON AS POSSIBLE BY MAILING IT IN THE ENCLOSED ENVELOPE, to
Retirement & Investment Services, PNC Bank, P. O. Box 937, Scranton, PA
18540-9951, Attention: Employee Benefit Department.
Thank you for your cooperation.
/s/ Dean T. Casaday
-------------------------------------
Dean T. Casaday
President and Chief Executive Officer
jmm
Enclosures
<PAGE> 34
June 7, 1996
On May 24, 1996, a Notice of Annual Meeting of Shareholders
of Pennsylvania Enterprises, Inc. (PEI) to be held on June 26, 1996, was sent to
every common shareholder of record on May 17, 1996.
A large number of active employees are registered shareholders of PEI,
and if you are one of them, we ask that if you have not already done so, that
you give this matter your prompt attention by sending your proxy card in the
postage-free envelope provided, addressed to Chemical Mellon Shareholder
Services, New York.
Also, if you received a proxy card for the Employees' Savings
Plan (401(k)) stock held in your name by the Trustee, we would also appreciate
your sending that card to the Trustee, PNC Bank.
THOMAS J. WARD
Vice President, Administrative
Services, and Secretary
