The Berkshire Gas Company
115 Cheshire Road
Pittsfield, MA 01201-1879
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held November 6, 1998
Pittsfield, Massachusetts
October 2, 1998
Notice is hereby given that the Annual Meeting of Shareholders of The
Berkshire Gas Company, a Massachusetts corporation, will be held at the Crowne
Plaza Pittsfield Hotel (formerly the Berkshire Hilton Inn), Pittsfield,
Massachusetts on Friday, November 6, 1998 at 10:00 A.M. local time, for the
following purposes, as more fully set forth in the Proxy Statement which
accompanies this Notice:
Proposal No. 1. To elect two (2) directors.
Proposal No. 2. To consider and act upon a proposal to ratify the
selection by the Board of Directors of Deloitte &
Touche LLP as auditors for the Company for the fiscal
year ending June 30, 1999.
To transact such other business as may properly come before the meeting.
The stock transfer books will not be closed, but only Common shareholders
of record at the close of business on September 25, 1998 (the "Record Date")
will be entitled to notice of and to vote at the meeting.
By Order of the Board of Directors,
CHERYL M. CLARK
Clerk of the Corporation
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. WHETHER OR NOT YOU PLAN
TO ATTEND, PLEASE DATE, SIGN AND MAIL THE ENCLOSED PROXY IN THE ENCLOSED
SELF-ADDRESSED ENVELOPE. A SHAREHOLDER WHO EXECUTES AND RETURNS A PROXY IN THE
ACCOMPANYING FORM HAS THE POWER TO REVOKE SUCH PROXY AT ANY TIME PRIOR TO THE
EXERCISE THEREOF.
The Berkshire Gas Company
115 Cheshire Road
Pittsfield, MA 01201-1879
October 2, 1998
PROXY STATEMENT
This Proxy Statement sets forth certain information with respect to the
accompanying proxy proposed to be used at the Annual Meeting of Shareholders of
The Berkshire Gas Company (hereinafter called the "Company") to be held at the
Crowne Plaza Pittsfield Hotel (formerly the Berkshire Hilton Inn), Pittsfield,
Massachusetts on November 6, 1998 at 10:00 A.M. local time, or any adjournments
or postponements thereof, for the purposes set forth in the accompanying Notice
of Annual Meeting of Shareholders. THE BOARD OF DIRECTORS OF THE COMPANY
SOLICITS THIS PROXY AND URGES YOU TO INDICATE YOUR CHOICE ON THE PROXY, TO SIGN
AND DATE THE PROXY AND RETURN IT IMMEDIATELY. Your prompt cooperation is
requested in order to ensure a quorum (a majority of issued and outstanding
Common Stock) and to avoid additional expense and delay. Solicitation of
proxies will be primarily by mail and the cost of solicitation will be borne by
the Company. Proxies may also be solicited personally or by telephone by
regular employees of the Company at nominal cost.
The approximate date on which this Proxy Statement and the accompanying
proxy will first be mailed to shareholders is October 2, 1998.
The Company mails herewith to all shareholders entitled to vote a copy of
its Annual Report for the year ended June 30, 1998, which contains detailed
financial information concerning the Company. Upon the written request of any
shareholder, the Company will mail, without charge, a copy of the Company's
Annual Report on Form 10-K, as discussed further on page 14.
REVOCABILITY OF PROXY
The proxy is revocable on written instructions, signed in the same manner
as the proxy, received by the Clerk of the Corporation, at any time at or
before the balloting on the matter with respect to which such proxy is to be
used. If you attend the meeting you may, if you wish, revoke your proxy and
vote in person.
PROPOSALS OF SHAREHOLDERS
If a shareholder intends to present a proposal at the Company's 1999
Annual Meeting of Shareholders and wants that proposal to be included in the
Company's Proxy Statement and form of proxy for that meeting, the proposal must
be received by the Office of the Clerk, The Berkshire Gas Company, 115 Cheshire
Road, Pittsfield, Massachusetts 01201-1879 not later than June 5, 1999. As to
any proposal that a shareholder intends to present to shareholders without
including it in the Company's proxy statement for the Company's 1999 Annual
Meeting of Shareholders, the proxies named in management's proxy for that
meeting will be entitled to exercise their discretionary authority on that
proposal unless the Company receives notice of the matter to be proposed not
later than August 20, 1999. Even if proper notice is received on or prior to
August 20, 1999, the proxies named in management's proxy for that meeting may
nevertheless exercise their discretionary authority with respect to such matter
by advising shareholders of such proposal and how they intend to exercise their
discretion to vote on such matter, unless the shareholder making the proposal
solicits proxies with respect to the proposal as set forth in Rule 14a-4(c)(2)
of the Securities Exchange Act of 1934.
VOTING SECURITIES
Holders of record of outstanding Common Stock, par value $2.50 per share,
of the Company at the close of business on September 25, 1998 (the "Record
Date") are the only persons entitled to notice of and to vote at the meeting.
As of the Record Date, there were 2,352,334 shares outstanding and entitled to
vote. Each outstanding share entitles the holder thereof to one vote.
Abstentions and broker non-votes are each included in calculating the
number of shares present and voting for purposes of determining quorum
requirements. However, each is tabulated separately. Abstentions are counted in
tabulating the votes cast on proposals presented to shareholders, whereas
broker non-votes are not counted for purposes of determining whether a proposal
has been approved.
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
The By-laws of the Company provide that the Board of Directors shall
consist of not less than five nor more than nine members and that the number of
directors to be elected each year shall be fixed by the Board of Directors
prior to the Annual Meeting. The Board of Directors has set the number of
directors for the ensuing year at seven. The Articles of Organization and the
By-laws of the Company provide that the Board of Directors be divided into
three classes, with staggered three-year terms, so that the term of office of
one class expires each year.
Currently, the Board of Directors is divided into three separate classes,
consisting of three Class A directors, two Class B directors and two Class C
directors, whose terms expire as set forth in the table below. Directors now
serving in each class have been elected in prior years by the shareholders to
serve for a period of three years and until election and qualification of their
respective successors in office. At each Annual Meeting of Shareholders, the
shareholders of the Company have the right to elect an appropriate number of
persons to serve as directors of the class whose three-year terms then expire.
Any directorship which may become vacant by reason of death, resignation or
otherwise than by expiration of term, may be filled solely by the Board of
Directors, as provided in the By-laws.
The terms for the Class B directors are scheduled to expire at the 1998
Annual Meeting and the Board has set at two the number of Class B directors to
be elected at this meeting. The Board has nominated for election the incumbent
Class B directors, George R. Baldwin and John W. Bond. It is the intention of
the persons named as proxies, in the absence of contrary specification, to vote
FOR the election of each of such persons to serve as director for a term of
three years and until the election and qualification of his successor. In the
event of a vacancy in the list of such nominees prior to the 1998 Annual
Meeting (which the Board of Directors does not anticipate), the persons named
as the proxies will vote for a person acceptable to the Board, unless the Board
should reduce the number of directors to be elected in order to eliminate the
vacancy.
The following information is furnished with respect to each nominee for
election as a director, each director whose term of office will continue after
the meeting, the Chief Executive Officer of the Company, each of the executive
officers identified in the summary compensation table on page 7 below, and all
directors and officers of the Company as a group. No person or group of persons
owns of record or is known by the Company to own more than 5% of the Company's
outstanding Common Stock. Each of the individuals in the following table has
furnished the information appearing in the first column opposite his name.
Shares of Percentage of
Common Stock Shares of
Principal Occupation for Beneficially Common Stock
Preceding Five Years Owned as of Outstanding as
Name and Directorships June 30, 1998* of June 30, 1998+
- ----------------------------- ------------------------------------------- -------------- -----------------
Nominees for election as Class B directors whose terms expire at the 2001
Annual Meeting:
George R. Baldwin Area Chairman, Arthur J. Gallagher & 2,223 .10%
Age: 55 Co., a national insurance brokerage
Director since: 1982 firm. Formerly, President and Chief
Board Committees: Executive Officer, Kaler Carney
Audit and Finance Liffler & Co., Inc., a general insurance
agency. Director, Century Bank & Trust.
John W. Bond President, Kimbell Financial, Inc., a 4,136(3) .18
Age: 68 financial services company.
Director since: 1965
Board Committees:
Executive and Audit
Class A directors whose terms expire at the 2000 Annual Meeting:
Paul L. Gioia Of Counsel, LeBoeuf, Lamb, Greene 3,611(1) .16%
Age: 56 & MacRae, a law firm; formerly,
Director since: 1991 Senior Vice President, First Albany
Board Committees: Corporation, a securities brokerage
Audit and Compensation and investment banking firm; Director,
New York State Electric & Gas
Corporation; Director, Energy East Corp.
Franklin M. Hundley Chairman of the Board of Directors 2,661 .11
Age: 63 of the Company. Of Counsel, Rich,
Director since: 1987 May, Bilodeau & Flaherty, P.C.,
Board Committees: a law firm. Trustee, Commonwealth
Executive and Finance Energy System.
Scott S. Robinson President and Chief Executive Officer 6,720(2) .29
Age: 58 of the Company.
Director since: 1983
Board Committees:
Executive and Finance
Class C directors whose terms expire at the 1999 Annual Meeting:
James R. Keys President, J.R. Keys & Assoc., a 1,199 .05
Age: 57 marketing & government relations
Director since: 1996 consulting firm. Formerly Executive
Board Committees: Director of State Government
Compensation Relations, Tenneco, Inc.
Robert B. Trask President, The Fitzpatrick Companies, 9,376(4) .40
Age: 52 Inc., formerly Country Curtains, Inc., a
Director since: 1994 mail order/retail firm dealing in household
Board Committees: window treatments and accessories.
Audit and Compensation
Other individuals identified in the summary compensation table on Page 7:
Michael J. Marrone Vice President, Treasurer and 1,234 .05%
Chief Financial Officer of the
Company
Les H. Hotman Vice President of the Company 0 0
Robert M. Allessio Vice President of the Company 206 .008
All directors and officers 31,366(5) 1.35
of the Company, 10 persons
as a group
<FN>
- -------------------
<F*> As used in this Proxy Statement, "beneficial ownership" means direct or
indirect, sole or shared power to vote, or to direct the voting of,
and/or investment power to dispose of, or to direct the disposition of,
shares of the Common Stock of the Company. Except as indicated in the
footnotes below, the listed beneficial owners held direct and sole voting
and investment power with respect to the stated shares.
<F+> As of June 30, 1998, there were 2,315,913 shares of the Company's Common
Stock outstanding.
<F1> All of Mr. Gioia's shares are held jointly with his spouse, with shared
voting and investment power over such shares.
<F2> Comprised of 6,720 shares held in trust, for which Mr. Robinson and his
spouse are joint Trustees, with shared voting and investment power.
<F3> Includes 273 shares held by his spouse, who has sole voting and
investment power over such shares.
<F4> 6,476 of Mr. Trask's shares are held jointly with his spouse, with shared
voting and investment power over such shares. 2,900 of Mr. Trask's shares
are owned by a private, non-profit foundation of which Mr. Trask is a
trustee.
<F5> Aggregate record or imputed beneficial ownership, with sole or shared
voting and investment power.
</FN>
The Board of Directors of the Company has a standing Audit Committee, of
which Messrs. Baldwin, Bond, Gioia and Trask are members, which recommends the
selection of independent auditors, reviews the plan and results of the
independent audit, consults with the auditors on any matter which the Audit
Committee may deem relevant to the audit or which the auditors may desire to
bring to the attention of the Audit Committee, and approves each professional
service provided by the independent auditors. The Audit Committee held two
meetings during the past year.
The Board of Directors also has a standing Compensation Committee, of
which Messrs. Gioia, Keys and Trask are members. The Compensation Committee
periodically reviews the compensation, pensions and benefits of the directors
and executives of the Company, as well as industry trends in this area, reports
its findings to the Board of Directors and makes recommendations as to
appropriate compensation for the directors and executives of the Company. The
Compensation Committee held four meetings during the past year.
The Board of Directors does not have a standing nominating committee.
During the 1998 fiscal year, there were six meetings of the Board of
Directors. No member of the Board of Directors attended fewer than 75% of the
aggregate number of meetings of the Board and the committees on which he served
in fiscal year 1998.
During the year ended June 30, 1998, fees of $473,398 were incurred for
legal services rendered by the law firm of Rich, May, Bilodeau & Flaherty,
P.C., which the Company has retained as counsel in the past and intends to
retain in the current fiscal year. Mr. Hundley is Of Counsel to such firm. In
addition, the Mansfield Consortium, a purchasing group of which the Company is
a member, during the last fiscal year was represented by and made payments (and
in the current fiscal year intends to continue to be represented by and to make
payments) to LeBoeuf, Lamb, Greene & MacRae, a law firm of which Mr. Gioia is
Of Counsel.
EXECUTIVE COMPENSATION
Compensation of Executive Officers. The following table contains the
compensation paid or accrued by the Company during the years ended June 30,
1998, 1997 and 1996 to the Company's Chief Executive Officer and to each
executive officer whose total annual salary and bonus exceeded $100,000.
Although only principal positions are listed, the compensation figures include
all compensation received in any capacity, including directorships, for
services rendered during the fiscal years indicated.
SUMMARY COMPENSATION TABLE
Annual Compensation(1)
Name and Other Annual
Principal Position Year Salary Bonus Compensation
- ------------------------------ ---- -------- ------- ------------
Scott S. Robinson, 1998 $178,500 $34,362 $17,350(2)
President and Chief 1997 173,900 0 13,850
Executive Officer 1996 165,000 28,050 12,858
Michael J. Marrone 1998 114,800 18,942 0
Vice President, Treasurer 1997 110,989 0 0
and Chief Financial Officer 1996 106,100 12,732 0
Les H. Hotman(3) 1998 109,400 0 0
Vice President 1997 105,575 0 0
1996 99,200 11,904 0
Robert M. Allessio(4) 1998 98,000 16,170 0
Vice President
<FN>
- -------------------
<F1> The Company did not pay any long-term compensation to its Chief Executive
Officer or to its executive officers during the fiscal years ended June
30, 1998, 1997 and 1996.
<F2> The Other Annual Compensation listed for Mr. Robinson represents director
fees.
<F3> Mr. Hotman resigned from the Company effective July 13, 1998.
<F4> Prior to fiscal year 1998, Mr. Allessio's total annual salary and bonus
from the Company was less than $100,000.
</FN>
Compensation Pursuant to Plans. The Company maintains two defined benefit
pension plans, one for union employees and one for non-union employees,
including executive officers. The following table shows the annual benefits
payable under the pension plan for non-union employees (the "Pension Plan")
upon retirement at age 65 to eligible employees in various base salary groups
and with various periods of service. The annual retirement benefits formula is
based on the number of years of service and the employee's average base salary
for the five years yielding the highest such average.
PENSION PLAN TABLE
Years of Credited Service
----------------------------------------
25 Years
Remuneration 15 Years 20 Years and Thereafter
------------ -------- -------- --------------
$ 65,000 $16,038 $21,384 $26,730
80,000 20,245 26,994 33,742
95,000 24,453 32,604 40,755
110,000 28,660 38,214 47,767
125,000 32,868 43,824 54,780
140,000 37,075 49,434 61,792
155,000 41,283 55,044 68,805
170,000 45,490 60,654 75,817
185,000 49,698 66,264 82,830
200,000 53,905 71,874 89,842
Messrs. Robinson, Marrone, Hotman and Allessio, the individuals named in
the preceding Summary Compensation Table, have 28, 15, 11 and 13 years,
respectively, of credited service under the Pension Plan. The compensation
covered by the Pension Plan is that shown in the Summary Compensation Table,
excepting any bonus amounts.
The Company also maintains a supplemental pension plan (the "Supplemental
Plan") for Messrs. Robinson, Marrone, and Allessio. Under the Supplemental
Plan, upon retirement at age 62, covered executives are assured that they will
receive annually 75% of their final year's base salary in the form of
retirement income. The 75% of final base salary benefit will be comprised of
amounts received pursuant to the Pension Plan, Social Security, vested benefits
from any previous employers, and payments under the Supplemental Plan as may be
necessary to bring the covered officer's benefit to 75% of such officer's final
year's base salary. The Supplemental Plan allows for earlier retirement at age
60, with a corresponding reduction in benefits. The Supplemental Plan also will
pay disability benefits to covered officers in addition to those benefits paid
by the Company's Long Term Disability Insurance Plan. In addition, the
Supplemental Plan will provide a survivorship benefit to the selected
beneficiary of the covered officer in the event of such officer's death. Moneys
received under Supplemental Plans are in addition to amounts shown in the
Summary Compensation Table and the Pension Plan Table. As of June 30, 1998, it
is not possible to compute the estimated annual benefits payable under Messrs.
Robinson's, Marrone's or Allessio's Supplemental Plan upon their retirement at
the normal retirement age.
The Company also maintains a Non-Qualified Retirement Savings Plan (the
"Savings Plan") for Messrs. Robinson, Marrone, and Allessio. Under the Savings
Plan, the Executive is permitted to defer a portion per year of salary up to an
equivalent of 15-1/2% of gross wages, less the maximum contribution allowable
under the Company's Qualified 401(k) Plan. The Executive may select the assets
in which the funds are to be invested. The Savings Plan allows for the benefits
to be paid at retirement and if the Executive is at least 62 years of age. In
addition, the Savings Plan provides a survivorship benefit to the selected
beneficiary of the Executive, equal to the balance in the account, in the event
of the Executive's death. The amounts deferred by Messrs. Robinson, Marrone and
Allessio are included in the salary column in the Summary Compensation Table
above.
Employment Contracts, Termination of Employment and Change-in-Control
Arrangements. The Company has entered into an employment agreement with its
President and Chief Executive Officer, Scott S. Robinson. Under the terms of
this employment agreement, Mr. Robinson is compensated for his duties as an
officer and director with a salary in an amount determined from time to time by
the Board of Directors. The term of Mr. Robinson's employment contract is five
years, unless earlier terminated by either the Company or Mr. Robinson and,
unless so terminated, is renewed automatically at the expiration of each year
to provide for a continuous five-year term. In no event, however, may Mr.
Robinson's employment under his employment agreement be extended beyond the
year 2005. Mr. Robinson's employment contract also provides that in the event
Mr. Robinson is unable to perform his duties as the result of any disability,
the Company may terminate Mr. Robinson's employment, and shall pay him (or his
beneficiary) for a period of 60 months at a rate equal to 60% of Mr. Robinson's
"basic monthly earnings" as set forth in the Company's Long Term Disability
Insurance Plan.
The Company maintains severance agreements with certain of its executive
officers and key personnel (each, a "Severance Agreement"). Pursuant to the
Severance Agreements, the Company has agreed to pay such covered executive
officers and key personnel certain benefits in the event of a change in control
of the Company leading to the termination of the covered employee's employment
with the Company. For the purposes of the Severance Agreements, a "change in
control" of the Company is defined as: (i) the acquisition by any person,
group, corporation or other entity of 25% or more of the outstanding Common
Stock of the Company, whether or not pursuant to a tender or exchange offer;
(ii) the approval by the shareholders of the Company of (a) any consolidation
or merger of the Company in which the Company will not be the continuing or
surviving corporation or pursuant to which shares of the Company's Common Stock
would be converted into cash, securities or other property, (b) any
acquisition, combination or merger of the Company by or with another
corporation in which less than a majority of the outstanding voting shares of
the surviving corporation will be owned by the owners of the Common Stock of
the Company outstanding immediately prior to such acquisition, combination or
merger; (iii) a complete liquidation or dissolution of the Company; or (iv) any
sale, lease, exchange or other transfer of all or substantially all the assets
of the Company. Under the Severance Agreements, during the 24 months following
a change in control of the Company, should a covered employee be discharged
without cause or resign in the face of any diminution of salary, substantial
change in responsibilities, geographical relocation or the like, the covered
employee is entitled to receive a severance benefit in the amount of his or her
salary for a period of up to 30 months, subject to partial set-off from any
compensation received from any new employment obtained by the covered employee
during the period during which any severance benefits are received. At present,
three executive officers or key employees of the Company, including two of the
above named executive officers (Mr. Marrone and Mr. Allessio) are covered by
Severance Agreements.
Compensation of Directors. The annual retainer for a director is $8,500,
of which $3,000 is applied to the purchase of Company stock. In addition,
directors are paid $600 for attendance at each regular meeting of the Board of
Directors and $600 for attendance at committee meetings, except for attendance
at Executive Committee meetings for which no fee is paid. Compensation for
serving on the Executive Committee is $3,800 annually. Further, the chairmen of
the Finance, Audit, and Compensation Committees each receive an annual fee of
$1,000 for such services. Mr. Hundley receives $24,000 annually as Chairman of
the Board of Directors.
The Company maintains a Non-Qualified Retirement Savings Plan (the
"Plan") for the Board of Directors. Under the Plan, the Directors are permitted
to defer up to 100% of their fees. The Director may select the assets in which
the funds are to be invested. The Plan allows for the benefits to be paid at
age 70-1/2. In addition, the Plan provides a survivorship benefit, equal to the
balance in the account, to the selected beneficiary of the Director in the
event of the Director's death.
The Company also maintains a Retirement Plan for Directors, pursuant to
which directors of the Company are entitled to certain limited benefits upon
their retirement as directors of the Company. Eligibility for participation in
the Retirement Plan is limited to directors having served as such for a period
of at least five years. Under the plan, directors are entitled to receive an
annual retirement benefit equal to one-half of the annual retainer fee for
directors plus an additional amount based on 10% of the annual retainer fee for
every year in excess of five, but not exceeding ten, years of service as
director. Benefits under the Retirement Plan are payable for a ten-year period,
and may, in certain circumstances, be paid to a participant's beneficiary.
Compensation Committee Interlocks and Insider Participation. Directors
Gioia, Keys and Trask served on the Company's Compensation Committee during the
Company's last fiscal year. Mr. Gioia served as chairman of the Committee. The
law firm of which Mr. Hundley is Of Counsel received fees of $473,398 from the
Company during the Company's most recent fiscal year; the Company intends to
retain such firm in the current fiscal year.
Report of the Compensation Committee. The Company's Compensation
Committee has submitted the following report concerning executive compensation.
The compensation of executive officers of the Company, including that of
the executive officers named in the Summary Compensation Table, is formally
reviewed and established annually by the Compensation Committee of the Board of
Directors, subject to approval by the Board.
During the fiscal year ended June 30, 1998, the compensation of the
executive officers of the Company, including that of the President and Chief
Executive Officer, the Vice President, Treasurer and Chief Financial Officer
and Vice President, Utility Operations, consisted of base salary, and
director's fees as to Mr. Robinson. In its annual review and in setting
compensation for the President and Chief Executive Officer and other
executives, the Compensation Committee considered and gave weight to financial
and operating results, earnings levels and return on common equity, development
and implementation of short term and long term planning objectives, achievement
of cost containment in the Company's operations, the state of relations between
the Company and its customers, regulatory authorities and the public generally
and the degree of achievement of individual and management goals established
from time to time. In this regard, as in previous years, the Compensation
Committee gave greater weight to the degree of achievement of earnings and
common equity return objectives than to other goals, with appropriate
consideration of the impact of variable weather conditions and the condition of
the local economy upon the Company's earnings and common equity return during
the last fiscal year.
The Compensation Committee, using information provided by independent
sources, publicly available information concerning other public utilities
similar in size to the Company and information from industry organizations,
reviewed earnings levels and return on common equity realized by the Company on
a comparative basis with other similar companies. The Compensation Committee
also reviewed information concerning executive compensation paid by other gas
distribution companies in Massachusetts and the New England area.
The Company adopted some years ago, and the Compensation Committee
reviews periodically, with the assistance of Company personnel and outside
consultants as necessary, salary ranges for each executive officer, including
the President and Chief Executive Officer, of the Company. In determining
salary ranges, reference is made in part to information concerning salaries
paid by other regional utility companies. The Compensation Committee
established what it believed to be an appropriate compensation level for each
executive within the salary range by reference to an assessment of each
executive's responsibilities and job performance and the factors set forth
above.
The Company adopted, in 1994, a corporate Incentive Compensation Plan
("ICP") as part of an ongoing review of executive compensation, in order to
provide a discretionary and variable component of overall compensation that
will acknowledge exceptional service and achievement, and at the same time will
encourage continuing improvement in the Company's performance, promote the
interests of the Company's shareholders and ratepayers by incorporating
criteria of financial performance and comparative measures of operating
performance, and reinforce a sense of commitment to the achievement of longer
term objectives by the achievement of short-term goals. It is intended that
awards through the ICP will encourage executives to increase their equity
ownership in the Company with 50% of the award purchasing Common Stock through
the Company's Dividend Reinvestment and Stock Purchase Plan.
The ICP is administered by the Committee, subject to Board approval, and
provides that awards shall be made only for a year in which the Company's
earnings exceed dividend payout (except for any awards made at the Board's
discretion, which awards are limited to 25% of the maximum ICP award). Annual
awards under the ICP, if any, are to be made as a percentage of base salary and
can range from a low of 2.5% to a maximum of 35%, depending upon the degree to
which performance measures established by the Committee are met or exceeded.
During the fiscal year ended June 30, 1998, the Company's earnings exceeded
dividend payout and the Board approved awards under the ICP based upon its
discretionary authority and upon the Company's performance with respect to
shareholder return and market-to-book value during such fiscal year. The awards
made for the fiscal year ended June 30, 1998 were included in the Company's
operating expenses for such fiscal year and are reflected in the Summary
Compensation Table at page 7 above in the "Bonus" column.
THE COMPENSATION COMMITTEE
Paul L. Gioia, Chairman
James R. Keys
Robert B. Trask
Performance Graph. The following graph illustrates the return that would
have been realized (assuming reinvestment of dividends) by an investor who
invested on June 30, 1993 in each of (i) the Company's Common Stock, (ii) the
Nasdaq Stock Market - U.S. Index, and (iii) a peer group consisting of 13
companies within the Company's Standard Industrial Classification Code (SIC),
the "Peer Group".
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
THE BERKSHIRE GAS COMPANY, THE NASDAQ STOCK MARKET-US INDEX
AND A PEER GROUP
Cumulative Total Return
--------------------------------------------------------
6/93 6/94 6/95 6/96 6/97 6/98
------ ------ ------ ------ ------ ------
Berkshire Gas Co. 100.00 103.37 99.25 109.02 121.68 186.58
Peer Group 100.00 93.83 101.18 113.86 125.92 144.25
Nasdaq Stock Market-US 100.00 100.96 134.77 173.03 210.38 277.69
<FN>
- --------------------
<F*> $100 INVESTED ON 06/30/93 IN STOCK OR INDEX-
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING JUNE 30.
</FN>
RATIFICATION OF THE SELECTION OF AUDITORS
(PROPOSAL NO. 2)
There will be submitted to the Annual Meeting a proposal to ratify the
action of the Board of Directors in selecting the firm of Deloitte & Touche
LLP, Independent Certified Public Accountants, as auditors for the Company for
the fiscal year ending June 30, 1999. In the event of non-ratification, the
Board of Directors would reconsider its selection.
Representatives of Deloitte & Touche LLP, which has served as principal
accountant for the Company during the past fiscal year, are expected to be
present at the Annual Meeting to respond to appropriate questions and to make a
statement if they so desire.
OTHER MATTERS
As of the date hereof, the Board of Directors has not been informed of
any matters to be presented for action at the Annual Meeting other than those
listed in the Notice of Annual Meeting and referred to herein. If any other
matters properly come before the Annual Meeting or any adjournment thereof, it
is intended that the proxies will be voted in respect thereof in accordance
with the judgment of the persons named therein.
PLEASE DATE, SIGN AND RETURN THE ENCLOSED PROXY.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED JUNE 30, 1998, WHICH HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, MAY BE OBTAINED WITHOUT CHARGE BY ANY SHAREHOLDER OF THE COMPANY
UPON WRITTEN REQUEST ADDRESSED TO: OFFICE OF THE CLERK, THE BERKSHIRE GAS
COMPANY, 115 CHESHIRE ROAD, PITTSFIELD, MASSACHUSETTS 01201-1879.
By Order of the Board of Directors,
CHERYL M. CLARK
Clerk of the Corporation
THE BERKSHIRE GAS COMPANY
Common Stock Proxy
The undersigned, revoking any previous instructions, hereby acknowledges
receipt of the Notice and Proxy Statement dated October 2, 1998, in
connection with the Annual meeting mentioned hereon and appoints Franklin
M. Hundley, Scott S. Robinson and John W. Bond as Proxies, each with the
power to act alone and to appoint his substitute and authorizes them to
represent and to vote, as indicated on the reverse side hereof, all of the
shares of Common Stock of The Berkshire Gas Company held of record by the
undersigned on September 25, 1998, at the Annual Meeting of Shareholders
to be held on November 6, 1998, and any adjournments or postponements
thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. When this
Proxy is properly executed, the shares represented hereby will be voted as
specified by the Shareholder on the reverse side hereof. If no
specification is made, such shares will be voted "FOR" the nominees named
herein and "FOR" each of the Proposals.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
Please sign this Proxy exactly as your name(s) appear(s) hereon. Joint
owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name
appears, a majority must sign. If a corporation, this signature should be
that of an authorized officer, who should state his or her title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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THE BERKSHIRE GAS COMPANY
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
RECORD DATE SHARES:
Proposal No. 1
To elect two (2) directors
For all For all
Nominees Withhold Except
John W. Bond [ ] [ ] [ ]
George R. Baldwin
If you do not wish your shares voted "For" any particular nominee, mark
the "For All Except" box and strike a line through that nominee's name.
Your shares will be voted for the remaining nominee(s).
FOR AGAINST ABSTAIN
Proposal No. 2
To ratify the selection by the Board of [ ] [ ] [ ]
Directors of Deloitte & Touche LLP as
auditors for the Company for the fiscal
year ending June 30, 1999.
To act upon such other matters as may properly come before the meeting.
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Please be sure to sign and date this Proxy. | Date |
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----------Shareholder sign here---------------Co-owner sign here--------
Mark box at right if an address change or comment has [ ]
been noted on the reverse side of this card.
DETACH CARD DETACH CARD
THE BERKSHIRE GAS COMPANY
Common Stock Proxy
Dear Shareholder,
Please take note of the important information enclosed with this Proxy
Card. The Proposals require your immediate attention and approval and are
discussed in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right
to vote your shares.
Please mark the boxes on this proxy card to indicate how your shares will
be voted. Then sign the card, detach it and return your proxy vote in the
enclosed postage paid envelope.
Your vote must be received prior to the Annual Meeting of Shareholders,
November 6, 1998.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
The Berkshire Gas Company