Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant (x)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement
( ) Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
(x) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material pursuant to Section 240.14a-11(c) or Section
240.14a-12
Roanoke Gas Company
(Name of Registrant as Specified in its Charter)
Roger L. Baumgardner, Corporate Secretary
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
(x) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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>
ROANOKE GAS COMPANY
519 Kimball Avenue, N.E.
Roanoke, Virginia 24016
-----------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 26, 1998
-----------------------------------------------------------
NOTICE is hereby given that, pursuant to its Bylaws and call of its
directors, the Annual Meeting of the Shareholders of Roanoke Gas Company will
be held at the office of the Company, 519 Kimball Avenue, N.E., Roanoke,
Virginia 24016, on Monday, January 26, 1998, at 9 a.m., Eastern Standard Time,
for the election of directors and the transaction of such other business as
may properly come before the meeting. Your attention is directed to the Proxy
Statement accompanying this Notice for a more complete statement regarding
matters proposed to be acted upon at the meeting.
Only those shareholders of record as of the close of business on
November 21, 1997, shall be entitled to notice of and to vote at the meeting.
You are urged to sign and date the enclosed form of proxy and return it
promptly in the enclosed self-addressed, stamped envelope. Should you decide
to attend the meeting and vote in person, you may withdraw your proxy.
By Order of the Board of Directors.
ROGER L. BAUMGARDNER
Secretary
December 12, 1997
<PAGE>
------------------------------
PROXY STATEMENT
------------------------------
Mailed December 12, 1997
Annual Meeting of Shareholders to be Held January 26, 1998
This Proxy Statement is furnished on December 12, 1997, in connection
with the solicitation of proxies to be used at the Annual Meeting of
Shareholders of Roanoke Gas Company (the "Company"), to be held on Monday,
January 26, 1998, at 9 a.m., Eastern Standard Time, at the office of the
Company, 519 Kimball Avenue, N.E, Roanoke, Virginia 24016, and any
adjournments thereof.
Proxies in the form enclosed herewith are solicited by management at the
direction of the Board of Directors of the Company. If the enclosed proxy is
properly signed and returned to the Company, the shares represented thereby
will be voted at the Annual Meeting in accordance with its terms. Any proxy
given pursuant to this solicitation may be revoked at any time prior to the
vote of the shareholders, and an opportunity will be given to shareholders
attending the meeting to withdraw their proxies and to vote their shares in
person.
The Company's Annual Report to Shareholders for the year ended September
30, 1997 is being sent to all shareholders concurrently with this Proxy
Statement. Said Annual Report is not to be considered a part of the proxy
solicitation material.
Voting Securities
The close of business on November 21, 1997, has been fixed as the record
date for the determination of shareholders of the Company entitled to notice
of and to vote at the Annual Meeting of Shareholders. There were 1,535,361
shares of common stock outstanding as of the foregoing record date, and each
such share is entitled to one vote. To the Company's knowledge, no person is
the beneficial owner of more than five percent of the issued and outstanding
common stock of the Company.
A majority of votes entitled to be cast on matters to be considered at
the Annual Meeting constitutes a quorum. If a share is represented for any
purpose at the Annual Meeting, it is deemed to be present for purposes of
establishing a quorum. Abstentions and shares held of record by a broker or
its nominee ("Broker Shares") which are voted on any matter are included in
determining the number of votes present or represented at the Annual Meeting.
Conversely, Broker Shares that are not voted on any matter will not be
included in determining whether a quorum is present. If a quorum is
established, directors will be elected by a plurality of the votes cast by
shares entitled to vote at the Annual Meeting. Votes that are withheld and
Broker Shares that are not voted in the election of directors will not be
included in determining the number of votes cast.
Security Ownership of Management
The following table sets forth, as of November 21, 1997, certain
information regarding the beneficial ownership of the common stock of the
Company by each director, nominee and named executive officer and by all
directors and executive officers as a group. Unless otherwise noted in the
footnotes to the table, the named persons have sole voting and investment
power with respect to all outstanding shares of common stock shown as
beneficially owned by them.<PAGE>
<TABLE>
<CAPTION>
Shares of Common
Name of Stock Beneficially Owned
Beneficial Owner As of 11/21/97(1) Percent of Class
- ---------------- ----------------- ----------------
<S> <C> <C>
Lynn D. Avis 8,760 *
Abney S. Boxley, III 3,707 *
Frank T. Ellett 5,869 *
Frank A. Farmer, Jr. 41,897 (2) 2.71
Wilbur L. Hazlegrove 35,606 (3) 2.32
J. Allen Layman 4,347 *
John H. Parrott 14,146 (4) *
Thomas L. Robertson 5,544 *
S. Frank Smith 5,871 *
John B. Williamson, III 1,692 *
All Directors and Executive
Officers as a Group (14 persons) 147,271 (5) 9.41
- -----------------
</TABLE>
* Less than 1%
(1) Includes restricted shares purchased by directors pursuant to Restricted
Stock Plan for Outside Directors.
(2) Includes 9,282 shares owned by spouse and includes 818 shares owned by
Mr. Farmer's mother for which Mr. Farmer holds power of attorney. Also
includes 13,000 shares which Mr. Farmer has the right to acquire through
the exercise of stock options.
(3) Includes 11,144 shares owned by spouse.
(4) Includes 2,216 shares owned by spouse.
(5) Includes an aggregate of 30,000 shares which executive officers have the
right to acquire through the exercise of stock options.
ELECTION OF DIRECTORS
Increasingly in recent years, officers of the Company have been
approached by others to open discussions for acquisition of the Company. The
Board of Directors does not believe that it is obligated to shareholders to
sell, hold out for sale or engage in discussions for sale of the Company and
has formally acted to direct officers and individual directors to advise those
who may propose acquisition or discussions for acquisition that the Company is
not now for sale under any arrangement requiring Board approval.
The Company's Board of Directors is divided into three classes (A, B and
C) with staggered three-year terms. The current term of office of the Class A
directors expires at the 1997 Annual Meeting. The terms of the Class B and
Class C directors will expire in 1998 and 1999, respectively.
There are three management nominees for Class A directors, Abney S.
Boxley, III, S. Frank Smith and John B. Williamson, III. Messrs. Boxley and
Smith currently serve on the Board and are standing for reelection. Mr.
Williamson has been nominated to fill the vacancy that will be created by the
retirement from the Board of John H. Parrott.
<PAGE>
Unless authorization is withheld, the persons named as proxies will vote
for the election of the nominees named below. Each nominee has agreed to serve
if elected. In the event any nominee shall unexpectedly be unable to serve,
the proxies will be voted for such other persons as the Board may designate.
The present principal occupation or employment and employment during the past
five years and the office, if any, held with the Company are set forth
opposite the name of each nominee and director. Proxies cannot be voted for a
greater number of persons than the following number of nominees:
<PAGE>
The Board of Directors recommends a vote FOR each of the nominees for
Class A Director.
<TABLE>
<CAPTION>
Year In
Which
First Elected
Name and Age As Director Principal Occupation
- ------------ ----------- --------------------
NOMINEES FOR DIRECTOR
- ---------------------
CLASS A DIRECTORS (Serving until 2001 Annual Meeting)
<S> <C> <C>
Abney S. Boxley, III 1994 President, W. W. Boxley Co. (Crushed stone
Age 39 supplier); Director, Valley Financial
Corporation
S. Frank Smith 1990 Executive Vice President, Coastal Coal
Age 49 Sales, Inc. (Marketers and sellers of coal)
John B. Williamson, III 1998 Vice President-Rates & Finance of the
Age 42 Company since January 1993; Director of
Rates and Finance April 1992 to January
1993; prior thereto, Chief Administrator,
Botetourt County, Virginia
DIRECTORS CONTINUING IN OFFICE
- ------------------------------
CLASS B DIRECTORS (Serving until 1999 Annual Meeting)
Lynn D. Avis 1986 President, Avis Construction Co., Inc.
Age 63 (Construction company)
J. Allen Layman 1991 President and Chief Executive Officer, R&B
Age 45 Communications, Inc.(Telecommunications)
Thomas L. Robertson 1986 President, Carilion Health System and
Age 54 Carilion Medical Center; Director, Roanoke
Electric Steel Corporation
CLASS C DIRECTORS (Serving until 2000 Annual Meeting)
Frank T. Ellett 1983 President, Virginia Truck Center, Inc.
Age 59 (Sale, lease and service of heavy trucks)
F. A. Farmer, Jr. 1979 President and Chief Executive Officer of
Age 65 the Company since January 1991; Chairman of
the Board of Directors of the Company since
January 1996
W. L. Hazlegrove 1979 Member, law firm of Woods, Rogers &
Age 68 Hazlegrove, P.L.C.; Vice President and
General Counsel of the Company, 1984-1994
</TABLE>
<PAGE>
Executive Compensation
The following table contains information with respect to the individual
compensation of the Chief Executive Officer for services in all capacities to
the Company and its subsidiaries for fiscal years ended September 30, 1997,
1996 and 1995. None of the Company's executive officers other than the Chief
Executive Officer received total annual compensation in excess of $100,000 for
services rendered to the Company during any of these years.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation
Name and ------------------------ Awards All Other
Principal Position Year Salary($) Bonus($)(1) Options/SARs (#) Compensation($)(2)
- ------------------ ---- --------- ----------- ---------------- ------------------
<S> <C> <C> <C> <C> <C>
Frank A. Farmer, Jr. 1997 169,875 20,000 8,000 7,965
President & Chief 1996 158,858 11,000 5,000 5,089
Executive Officer 1995 151,976 6,000 0 4,733
- ----------------
</TABLE>
(1) Bonus paid in current year for previous year's performance.
(2) Consists entirely of the Company's contribution under the Employees'
401(k) Plan.
<TABLE>
<CAPTION>
Options Grants in Last Fiscal Year
Individual Grants
-----------------------------------------------------------------------
% of Total Potential Realized
Number of Options Market Value (1) at Assumed
Securities Granted to Exercise Price on Annual Rates of
Underlying Employees or Base Date of Stock Price
Options in Fiscal Price Grant Expiration Appreciation for
Granted (#) Year ($/Share) (2) ($/Share) Date Option Term
----------- --------- ------------- --------- ----------- -------------------
5%($) 10%($)
----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Frank A. Farmer, Jr. 8,000 37 $16.875 $16.875 10/25/06 219,901 350,155
- ----------------
</TABLE>
(1) The dollar amounts under these columns are the result of calculations at
the 5% and 10% rates set by the Securities and Exchange Commission and
therefore are not intended to forecast possible future appreciation, if
any, of the Company's stock price. Additionally, these values do not
take into consideration the provisions of the options providing for
nontransferability or termination of the options following termination of
employment. The Company did not use an alternative formula for a grant
date valuation, as it is not aware of any formula which will determine
with reasonable accuracy a present value based on future unknown or
volatile factors.
(2) The exercise price of the options granted is equal to the closing sales
price of the Company's common stock on the Nasdaq National Market on the
date of grant. Options generally expire ten years from the date of
grant.
<PAGE>
Retirement Plan
The Company has in effect a noncontributory Retirement Plan. The costs
of benefits under the Plan, which are borne by the Company, are computed
actuarially and defrayed by earnings from the Plan's investments and/or annual
contributions of the Company. The Plan generally provides for the monthly
payment, at normal retirement age 65, of the greater of (a) the participant's
accrued benefit as of December 31, 1988 under the formula then in effect or
(b) one-twelfth of (i) plus (ii) minus (iii): (i) 1.2% of the participant's
average compensation for his highest consecutive sixty months of service
multiplied by years of credited service up to thirty years, (ii) .65% of the
participant's average compensation for his highest consecutive sixty months of
service in excess of covered compensation (generally defined as the average of
Social Security wage bases over a participant's assumed working lifetime)
multiplied by years of credited service up to thirty years, and (iii) the
participant's balance, if any, from the Company's former profit sharing plan.
Early retirement with reduced monthly benefits is available at age 55 after
ten years' service. Provisions also are made for vesting of benefits after
five years of service and for disability and death benefits. All employees
who have completed one year of service to the Company and are credited with at
least 1,000 hours of service in a Plan year are eligible to participate in the
Plan.
At age 65, for Plan purposes, Mr. Farmer will have 33 credited years of
service.
The compensation covered by the Plan includes the total of all amounts
paid to a participant by the Company for personal services reported on the
participant's federal income tax withholding statement (Form W-2), up to
certain statutory limits. For each of 1997 and 1998, these earnings are
limited to $160,000. This limit is indexed for cost of living after 1994.
<TABLE>
<CAPTION>
Estimated Annual Pension For
Representative Years of Credited Service(1)
------------------------------------------------------------
Highest Sixty Months
Average Compensation 15 20 25 30 35
- -------------------- -- -- -- -- --
<S> <C> <C> <C> <C> <C>
$125,000 $31,800 $42,400 $52,900 $63,500 $63,500
150,000 38,700 51,600 64,500 77,400 77,400
175,000 39,300 52,300 65,400 78,500 78,500
200,000 39,300 52,300 65,400 78,500 78,500
- -----------------
</TABLE>
(1) The benefit amounts assume the employee is retiring at normal retirement
age (age 65). The benefit amounts listed in the table are computed as a
straight life annuity. No offset to pension benefits due to the Profit-
Sharing Plan (which has been converted into the 401(k) Plan) is
reflected. Benefits are not reduced by Social Security.
<PAGE>
Report of the Compensation Committee of the Board of Directors
The Compensation Committee (the "Committee"), which is made up of five
members of the Board of Directors who are not officers or employees of the
Company, is responsible for setting and administering the policies that govern
the annual compensation paid to the executive officers of the Company,
including the Chief Executive Officer.
In fiscal 1997, annual salary continued to be the primary component of
compensation for executive officers of the Company. This is based in large
part on concern that external factors beyond the control of Company
executives, such as weather and regulatory decisions, may have a significant
impact on corporate performance.
The Committee recommends, for approval by the Board of Directors, the
annual salaries of executive officers. Salaries are based on the respective
positions held by the executive officers, including their accomplishments,
level of responsibility and experience and the relationship of such salaries
to the salaries of other Company managers and employees. In this regard, the
Committee reviews the Chief Executive Officer's recommendations on
compensation of the other executive officers and information concerning
executive compensation at other companies in the American Gas Association.
Such other companies are included in (but do not solely comprise) both of the
peer indices reflected in the Performance Graph below. The Committee also
considers overall corporate performance, customer service and satisfaction,
relationships with regulatory agencies and the ability to manage and maintain
a competent work force in preparing its compensation recommendations.
Pursuant to the Company's Stock Bonus Plan, the Committee approved the
payment in fiscal 1997 of bonuses to the CEO and other executive officers of
the Company for outstanding performance during the fiscal year 1996. The
Stock Bonus Plan is intended to allow the Board of Directors to award
individual or collective superior performance that has resulted in enhanced
shareholder value or returns and to encourage increased ownership of Company
common stock by officers and management. The Stock Bonus Plan is administered
by the Committee, which considers recommendations from the Company's
President. The Company's bonus award proposals are subject to approval of the
Board of Directors. Under the Stock Bonus Plan, executive officers of the
Company are encouraged to own a position in the Company's common stock of at
least 50% of the value of their annual salary. To promote this policy, the
Plan provides that all officers with stock ownership positions below 50% of
the value of their annual salaries must, unless approved by the Committee,
receive no less than 50% of any performance bonus in the form of Company
common stock. Bonus amounts, if any, for a fiscal year will generally be
determined in the January following that fiscal year end. Bonus award
determinations under the Stock Bonus Plan for performance in the 1996 fiscal
year were based on the performance of the Company, which was a record year,
combined with an analysis of the individual contributions of officers
receiving the bonuses to the overall performance of the Company.
The Company adopted a Key Employee Stock Option Plan, which became
effective January 1996. The Plan is intended to provide the Company's
executive officers with long-term (ten-year) incentives and rewards tied to
the price of the Company's common stock. The Committee believes that stock
options will assist the Company in attracting, maintaining and motivating
officers and other key employees of the Company, upon whose judgment,
initiative and efforts the Company depends, by providing such persons with the
opportunity to acquire an equity interest in the Company. Stock options are
used to provide executive officers additional incentive to use their best
efforts and superior performances to promote the best interest of the Company
and the shareholders.<PAGE>
In making its recommendation regarding the 1997 compensation of the
Chief Executive Officer, the Committee considered all of the criteria above.
Specific consideration also was given to the Chief Executive Officer's efforts
toward cost containment, the Company's improved earnings and shareholder and
customer growth in the preceding fiscal year. During 1997, Mr. Farmer
received a bonus of $20,000, which he elected to take in Company common stock,
for his performance during the fiscal year 1996. The amount of the bonus was
determined based upon Mr. Farmer's success during 1996 in monitoring
operational and capital budgets for maximum cost efficiency. The control of
costs, operational and financing, resulted in improved earnings for the
Company. Mr. Farmer also received during fiscal 1997 an option under the Key
Employee Stock Option Plan to purchase 8,000 shares of Company common stock.
The number of shares subject to the option was established based on the
Compensation Committee's determination that 8,000 option shares provided a
reasonable additional incentive for the Chief Executive Officer to place added
emphasis on enhancing share value through management practices while being
generally moderate in the total grant.
Submitted by the Compensation Committee of the
Board of Directors of the Company:
Lynn D. Avis, Abney S. Boxley, III, Frank T. Ellett, J. Allen Layman,
S. Frank Smith
<PAGE>
Performance Graph
The following graph compares the yearly percentage change and the
cumulative total of shareholder return on the Company's common stock with the
cumulative return on the Standard & Poor's 500 Composite Index (the "S&P
500"), the Standard & Poor's Utilities Index (the "S&P Utilities Index") and
the Edward Jones Natural Gas Distribution Index for the five-year period
commencing on September 30, 1992 and ending on September 30, 1997. These
comparisons assume the investment of $100 in the Company's common stock and
each of the indices on September 30, 1992 and the reinvestment of dividends.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Roanoke Gas Company $100 106 122 113 137 150
S&P 500 Stock Composite $100 113 117 152 183 256
S&P Utilities $100 124 108 138 148 169
Edward Jones Natural
Gas Distribution Index $100 125 110 125 152 179
</TABLE>
The Company has added the S&P Utilities Index to the performance graph this
year and will be substituting it for the S&P 500 in future years because the
Company believes that the S&P Utilities Index is more representative of the
Company's industry.
<PAGE>
Transactions with Management
The law firm of Woods, Rogers & Hazlegrove, P.L.C., of which W. L.
Hazlegrove, a director of the Company, is a member, rendered legal services to
the Company during 1997, and it is anticipated that similar legal services
will be provided by that firm to the Company in 1998.
Remuneration of Directors
Directors are compensated $6,000 per year in addition to receiving fees
for meetings of the Company's Board of Directors and of Committees of the
Board which they attend. Mr. Farmer is not compensated for attendance at
Board and Committee meetings and does not receive $6,000 per year for service
as a Board member. The schedule of fees paid to directors for each such
meeting attended is as follows:
<TABLE>
<CAPTION>
<S> <C>
Board of Directors . . . . . . . . . . . . . . . .$ 400
Executive Committee. . . . . . . . . . . . . . . .$ 400
Audit Committee. . . . . . . . . . . . . . . . . .$ 400
Compensation Committee . . . . . . . . . . . . . .$ 400
</TABLE>
However, the fee for any Committee meetings held the same day as a Board
meeting is $250
Restricted Stock Plan for Outside Directors
The Board of Directors of the Company implemented the Roanoke Gas
Company Restricted Stock Plan for Outside Directors effective January 27,
1997. The Plan is applicable to not more than 50,000 shares of Company common
stock.
Under the Plan, 40% of the monthly retainer fee paid to each nonemployee
director of the Company is paid in shares of Company common stock that is
subject to vesting and nontransferability restrictions (the "Restricted
Stock"). The number of shares of Restricted Stock is calculated each month
based on the closing sales price of the Company's common stock on the Nasdaq-
NMS on the first day of the month, if the first day of the month is a trading
day, or if not, the first trading day prior to the first day of the month.
Beginning in fiscal 1998, a participant can, subject to approval of the Board,
elect to receive up to 100% of his retainer fee for the fiscal year in
Restricted Stock. Such election cannot be revoked or amended during the
fiscal year.
The shares of Restricted Stock of the Company issued under the Plan will
vest only in the case of a participant's death, disability, retirement
(including not standing for reelection to the Board), or in the event of a
change in control of the Company. There is no option to take cash in lieu of
stock upon vesting of shares under the Plan. The Restricted Stock may not be
sold, transferred, assigned or pledged by the participant until the shares
have vested in accordance with the terms of the Plan. At the time the
Restricted Stock vests, a certificate for vested shares will be delivered to
the participant or the participant's beneficiary.
<PAGE>
The shares of Restricted Stock will be forfeited to the Company by a
participant's voluntary resignation during his term on the Board or removal
for cause as a director.
Subject to the terms of the Plan, a participant, as owner of the
Restricted Stock, has all rights of a shareholder, including, but not limited
to, voting rights, the right to receive cash or stock dividends, and the right
to participate in any capital adjustment of the Company. The Company requires
that all dividends or other distributions paid on shares of Restricted Stock
be automatically sequestered and reinvested on an immediate or deferred basis
in additional Restricted Stock.
All directors, except Mr. Farmer (who does not qualify as an outside
director), participated in the Plan in fiscal 1997. Each participating
director received in fiscal 1997, 147.594 shares of Restricted Stock, valued
at $2,656.69 (calculated using the closing price of $18.00 per share of
Company common stock on September 30, 1997).
Board of Directors and Committees
Audit Committee
The Audit Committee of the Board of Directors, composed of Messrs.
Boxley, Ellett, Layman, Robertson, and Smith, meets at least annually with the
Company's chief financial officer, the independent auditors of the Company,
and certain appropriate officers of the Company. The basic functions of this
Committee include reviewing significant financial information, reviewing
accounting procedures and internal controls and recommending the selection of
the Company's independent auditors. The Audit Committee met four times during
the 1997 fiscal year.
Executive Committee
The Executive Committee of the Board of Directors, which is composed of
Messrs. Avis, Hazlegrove, Ellett, and Parrott, is empowered to exercise all
authority of the Board of Directors, except with respect to matters reserved
for the Board by Virginia law. Thus, in the absence of nominations by the
Board of Directors, this Committee may nominate persons as management's
nominees for election to the Board of Directors by the shareholders at the
Company's annual meeting. This Committee, which did not meet during fiscal
year 1997, will not consider proposed nominees recommended by shareholders of
the Company. The Board of Directors does not have a standing nominating
committee as such.
Compensation Committee
The Compensation Committee of the Board of Directors is composed of
Messrs. Avis, Boxley, Ellett, Layman, and Smith. This Committee meets as
necessary to consider and make recommendations to the Board of Directors
concerning the salaries of certain executive officers and management employees
of the Company. This Committee met three times during the 1997 fiscal year.
Meetings of the Board and Committees
The Board of Directors met twelve times during the 1997 fiscal year.
With the exception of Mr. Hazlegrove, the incumbent members of the Board
attended in fiscal year 1997, at least 75 percent of the aggregate of the
total number of meetings of the Board and the total number of meetings held by
all Committees of the Board on which they served.
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and any persons who own more than
10% of the Company's common stock, to file reports of ownership and changes in
ownership of Company common stock with the Securities and Exchange Commission.
Based on its review of the copies of such forms furnished to it and written
representations from certain reporting persons that no other reports are
required, the Company believes that in fiscal 1997 no late reports were filed.
Independent Public Accountants
At its meeting on July 28, 1997, the Board of Directors of the Company,
upon recommendation of the Audit Committee, appointed Deloitte & Touche LLP as
independent accountants to audit the financial statements of the Company and
its subsidiaries for the years ending September 30, 1998, 1999 and 2000. KPMG
Peat Marwick LLP ("KPMG") previously had served as the Company's certifying
accountants since 1990. The Board of Directors solicited competitive bids
from accountants interested in serving as the Company's auditor. From the
bids received, the Audit Committee recommended Deloitte & Touche LLP to the
Board of Directors. KPMG's current engagement terminated after completion of
the 1997 audit.
KPMG's auditors' reports on the Company's financial statements for the
past two fiscal years ended September 30, 1997, contained no adverse opinion
or a disclaimer of opinion, nor were they qualified or modified as to
uncertainty, audit scope, or accounting principles. During the Company's two
most recent fiscal years and the subsequent interim period preceding the
change in accountants, there were no disagreements with KPMG on any matter of
accounting principles or practices, financial statement disclosure, or
auditing scope or procedure which, if not resolved to the satisfaction of
KPMG, would have caused it to make a reference to the subject matter of the
disagreement in connection with its auditors' reports.
Other Matters
Management does not know of any matters to be presented at the Annual
Meeting of Shareholders other than the election of directors. However, if any
other matters properly come before the meeting, proxies received pursuant to
this solicitation will be voted thereon in the discretion of the proxyholder.
Shareholders Proposals
Proposals of shareholders intended to be presented at the Company's 1998
Annual Meeting must be received by the Corporate Secretary of Roanoke Gas
Company at its office, 519 Kimball Avenue, N.E., Roanoke, Virginia 24016, no
later than August 14, 1998, in order to be considered for inclusion in the
Company's Proxy Statement relating to that meeting.
<PAGE>
Expense of Solicitation
The entire expense of preparing, assembling, printing and mailing the
form of proxy and Proxy Statement will be paid by the Company. The Company
will request banks and brokers to solicit their customers who beneficially own
common stock of the Company listed in the names of nominees and will reimburse
said banks and brokers for the reasonable out-of-pocket expense of such
solicitation. In addition to the use of the mails, solicitation may be made
by employees of the Company by telephone, telegraph, cable and personal
interview. The Company does not expect to pay any compensation for the
solicitation of proxies.
By Order of the Board of Directors
F. A. FARMER, JR.
President
December 12, 1997
The Company's Annual Report on Form 10-K for the year ended September 30, 1997
is available without charge to any shareholder requesting the same. Written
requests should be addressed to the attention of Mr. Roger L. Baumgardner,
Secretary, Roanoke Gas Company, P.O. Box 13007, Roanoke, Virginia 24030.
<PAGE>
[PROXY CARD APPEARS HERE]
PROXY
ROANOKE GAS COMPANY
519 Kimball Avenue, N.E.
Roanoke, Virginia 24016
This Proxy is solicited on behalf of the Board of Directors
The undersigned hereby appoints Albert W. Buckley and Robert W. Woody,
or either of them, with full power of substitution, to vote all common stock
of Roanoke Gas Company held of record by the undersigned as of November 21,
1997, at the Annual Meeting of Shareholders of Roanoke Gas Company to be held
on January 26, 1998, and at any adjournments thereof, as follows:
1. ELECTION OF CLASS A DIRECTORS (Serving until 2001 Annual Meeting):
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote
(except as marked to the for all nominees listed
contrary below) below
Abney S. Boxley, III, S. Frank Smith, John B. Williamson, III
INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the line below:
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2. Upon such other business as may properly come before the meeting and any
adjournments thereof.
(Over)
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THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED, IF NO CHOICE
IS SPECIFIED, THE PROXY WILL BE VOTED FOR NO. 1 ABOVE.
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The undersigned hereby acknowledges receipt of the Proxy Statement dated
December 12, 1997.
Dated:
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Signature of Shareholder
Please sign your name(s) exactly as shown imprinted hereon. Executors,
administrators, trustees and other fiduciaries, and persons signing on behalf
of corporations or partnerships, should so indicate when signing.
(This proxy is revocable at any time prior to exercise hereof.)
<PAGE>
