SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No.)
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
BERKSHIRE ENERGY RESOURCES
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(Name of Registrant as Specified in Its Charter)
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(5) Total fee paid:
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[ ] 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:
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Berkshire Energy Resources
115 Cheshire Road
Pittsfield, MA 01201-1879
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held November 4, 1999
Pittsfield, Massachusetts
October 1, 1999
Notice is hereby given that the Annual Meeting of Shareholders of
Berkshire Energy Resources, a Massachusetts business trust, will be held at
the Crowne Plaza, Pittsfield,Massachusetts on Thursday, November 4, 1999 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) trustees.
Proposal No. 2. To consider and act upon a proposal to ratify the
selection by the Board of Trustees of Deloitte &
Touche LLP as auditors for the Company for the
fiscal year ending June 30, 2000.
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 24, 1999 (the
"Record Date") will be entitled to notice of and to vote at the meeting.
By Order of the Board of Trustees,
CHERYL M. CLARK
Secretary
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.
Berkshire Energy Resources
115 Cheshire Road
Pittsfield, MA 01201-1879
October 1, 1999
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 Berkshire Energy Resources (hereinafter called the
"Company") to be held at the Crowne Plaza, Pittsfield, Massachusetts on
November 4, 1999 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 TRUSTEES 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 Shares) 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 1, 1999.
The Company mails herewith to all shareholders entitled to vote a
copy of its Annual Report for the year ended June 30, 1999, 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 Secretary of the Company, 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 2000
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 Secretary, Berkshire Energy Resources, 115
Cheshire Road, Pittsfield, Massachusetts 01201-1879 not later than June 5,
2000. 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 2000 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 18, 2000. Even if proper
notice is received on or prior to August 18, 2000, 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 Shares of the Company at the
close of business on September 24, 1999 (the "Record Date") are the only
persons entitled to notice of and to vote at the meeting. As of the Record
Date, there were ________ 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 TRUSTEES
(PROPOSAL NO. 1)
The Declaration of Trust of the Company provides that the Board of
Trustees shall consist of not less than five nor more than nine members and
that the number of trustees to be elected each year shall be fixed by the
Board of Trustees prior to the Annual Meeting. The Board of Trustees has
set the number of trustees for the ensuing year at seven. The Declaration
of Trust of the Company provides that the Board of Trustees 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 Trustees is divided into three separate
classes, consisting of three Class A trustees, two Class B trustees and two
Class C trustees, whose terms expire as set forth in the table below.
Trustees 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 trustees of the class
whose three-year terms then expire. Any trusteeship which may become vacant
by reason of death, resignation or otherwise than by expiration of term,
may be filled solely by the Board of Trustees, as provided in the
Declaration of Trust.
The terms for the Class C trustees are scheduled to expire at the
1999 Annual Meeting and the Board has set at two the number of Class C
trustees to be elected at this meeting. The Board has nominated for
election the incumbent Class C trustees, James R. Keys and Robert B. Trask.
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 trustee 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 1999 Annual Meeting (which the Board of Trustees
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 trustees to be elected in order to eliminate the vacancy.
The following information is furnished with respect to each nominee
for election as a trustee, each trustee 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 trustees 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 Shares. Each of the individuals
in the following table has furnished the information appearing in the first
column opposite his name.
Common Shares Percentage of
Principal Occupation for Beneficially Common Shares
Preceding Five Years Owned as of Outstanding as
Name and Directorships June 30, 1999* of June 30, 1999+
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Nominees for election as Class C trustees whose terms expire at the 2002
Annual Meeting:
James R. Keys President, JR. Keys & Assoc., a 1,410 .06
Age: 58 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, 10,739(1) .43
Age: 53 Inc., formerly Country Curtains, Inc., a
Director since: 1994 mail order/retail firm dealing in household
Board Committees: Audit window treatments and accessories.
and Compensation
Class A trustees whose terms expire at the 2000 Annual Meeting:
Paul L. Gioia Of Counsel, LeBoeuf, Lamb, Greene 4,203(2) .17%
Age: 57 & MacRae, a law firm; Director,
Director since: 1991 New York State Electric & Gas
Board Committees: Audit Corporation; Director, Energy East Corp.
and Compensation
Franklin M. Hundley Chairman of the Board of Trustees 2,899 .12
Age: 64 of the Company. Of Counsel, Rich,
Director since: 1987 May, Bilodeau & Flaherty, P.C.,
Board Committees: a law firm. Trustee, NStar, a utility
Executive and Finance holding company.
Scott S. Robinson President and Chief Executive Officer 8,234(3) .33
Age: 59 of the Company.
Director since: 1983
Board Committees:
Executive and Finance
Class B trustees whose terms expire at the 2001 Annual Meeting:
George R. Baldwin President, Baldwin & Co., an investment 2,371 09%
Age: 56 firm. Area Chairman, Arthur J. Gallagher
Director since: 1982 & Co., a national insurance brokerage
Board Committees: Audit firm. Director, Century Bank & Trust.
and Finance
John W. Bond President, Kimbell Financial, Inc., a 4,074(4) .16
Age: 69 financial services company.
Director since: 1965
Board Committees:
Executive, Audit,
and Finance
Other individuals identified in the summary compensation table on Page 7:
Michael J. Marrone Vice President, Treasurer and 1,867 .07%
Chief Financial Officer of the
Company
Robert M. Allessio Vice President of the Company 649 .02
All trustees and officers of 36,446(5) 1.45
the Company, 9 persons
as a group
<FN>
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<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 Shares 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, 1999, there were 2,513,901 shares of the Company's
Common Shares outstanding.
<F1> 7,839 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.
<F2> All of Mr. Gioia's shares are held jointly with his spouse, with
shared voting and investment power over such shares.
<F3> Comprised of 7,492 shares held in trust, for which Mr. Robinson and
his spouse are joint trustees, with shared voting and investment
power, and 742 shares owned directly by Mr. Robinson.
<F4> Includes 273 shares held by his spouse, who has sole voting and
investment power over such shares.
<F5> Aggregate record or imputed beneficial ownership, with sole or shared
voting and investment power.
</FN>
The Board of Trustees 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 Trustees 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
trustees and executives of the Company, as well as industry trends in this
area, reports its findings to the Board of Trustees and makes
recommendations as to appropriate compensation for the trustees and
executives of the Company. The Compensation Committee held five meetings
during the past year.
The Board of Trustees does not have a standing nominating committee.
During the 1999 fiscal year, there were six meetings of the Board of
Trustees. No member of the Board of Trustees attended fewer than 75% of the
aggregate number of meetings of the Board and the committees on which he
served in fiscal year 1999, except Mr. Baldwin, who attended 73%.
During the year ended June 30, 1999, fees of $590,293 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.
EXECUTIVE COMPENSATION
Compensation of Executive Officers. The following table contains the
compensation paid or accrued by the Company during the years ended June 30,
1999, 1998 and 1997 to the Company's Chief Executive Officer and to each
executive officer whose total annual salary and bonus exceeded $100,000.
Subsequent to the establishment of a holding company corporate structure as
of December 31, 1998 where The Berkshire Gas Company became a wholly-owned
subsidiary of the Company, certain of the costs of compensation for
Executive Officers are allocated to other subsidiaries of the Company
pursuant to a Management Services Agreement that was approved by the
Massachusetts Department of Telecommunications and Energy. Although only
principal positions are listed, the compensation figures include all
compensation received in any capacity, including directorships or
trusteeships, for services rendered to the Company or any of its
subsidiaries during the fiscal years indicated.
SUMMARY COMPENSATION TABLE
Annual Compensation(1)
Name and Other Annual
Principal Position Year Salary Bonus Compensation
- ---------------------------- ---- ------- ------- ------------
Scott S. Robinson, 1999 $193,150 $25,001 $18,700(2)
President and Chief 1998 178,500 34,362 17,350
Executive Officer 1997 173,900 0 13,850
Michael J. Marrone 1999 119,800 13,104 0
Vice President, Treasurer 1998 114,800 18,942 0
and Chief Financial Officer 1997 110,989 0 0
Robert M. Allessio(3) 1999 110,500 12,915 0
Vice President 1998 98,000 16,170 0
<FN>
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<F1> Neither the Company nor The Berkshire Gas Company ("Berkshire Gas")
paid any long-term compensation to its Chief Executive Officer or to
its executive officers during the fiscal years ended June 30, 1999,
1998 and 1997.
<F2> The Other Annual Compensation listed for Mr. Robinson represents
trustee fees.
<F3> Prior to fiscal year 1998, Mr. Allessio's total annual salary and
bonus from the Company or Berkshire Gas was less than $100,000.
</FN>
Compensation Pursuant to Plans. The Company's gas utility subsidiary,
Berkshire Gas, 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
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25 Years
Remuneration 15 Years 20 Years and Thereafter
------------ -------- -------- --------------
$ 65,000 $15,901 $21,202 $26,502
80,000 20,109 26,812 33,515
95,000 24,316 32,422 40,527
110,000 28,524 38,032 47,540
125,000 32,731 43,642 54,552
140,000 36,939 49,252 61,565
155,000 41,146 54,862 68,577
170,000 45,354 60,472 75,590
185,000 49,561 66,082 82,602
200,000 53,769 71,692 89,615
Messrs. Robinson, Marrone and Allessio, the individuals named in the
preceding Summary Compensation Table, have 29, 16 and 14 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.
Berkshire Gas 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 Berkshire Gas' 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, 1999, 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.
Berkshire Gas 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. Berkshire Gas 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 trustee 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 through the calendar year 2001. In the event of a
change of control affecting either Berkshire Gas or the Company he shall
receive a severance benefit equal to three times his total annual cash
compensation.
Berkshire Gas maintains severance agreements with certain of its
executive officers and key personnel (each, a "Severance Agreement").
Pursuant to the Severance Agreements, Berkshire Gas has agreed to pay such
covered executive officers and key personnel certain benefits in the event
of a change in control of the Company or Berkshire Gas leading to the
termination of the covered employee's employment with Berkshire Gas. 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 Shares
of the Company or Berkshire Gas, 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 or Berkshire Gas in which the
Company or Berkshire Gas will not be the continuing or surviving
corporation or pursuant to which shares of the Company's or Berkshire Gas'
Common Shares would be converted into cash, securities or other property,
(b) any acquisition, combination or merger of the Company or Berkshire Gas
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 Shares of the Company or Berkshire Gas outstanding
immediately prior to such acquisition, combination or merger; (iii) a
complete liquidation or dissolution of the Company or Berkshire Gas; or
(iv) any sale, lease, exchange or other transfer of all or substantially
all the assets of the Company or Berkshire Gas. Under the Severance
Agreements, during the 24 months following a change in control of the
Company or Berkshire Gas, 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
Berkshire Gas, including two of the above named executive officers (Mr.
Marrone and Mr. Allessio) are covered by Severance Agreements.
Compensation of Trustees. The annual retainer for a trustee is
$10,000. In addition, trustees are paid $600 for attendance at each regular
meeting of the Board of Trustees and $600 for attendance at committee
meetings. Further, the chairmen of the Finance, Audit, and Compensation
Committees each receive an annual fee of $2,000 for such services. Mr.
Hundley receives $36,000 annually as Chairman of the Board of Trustees.
During the fiscal year ended June 30, 1999, the Company adopted the
Trustee Share Plan that provides a form of long term incentive compensation
to the Company's Trustees in the form of phantom equity units. The
objectives of the Trustee Share Plan are to attract and retain Trustees of
the Company by allowing Trustees to share in the growth of the Company
through the appreciation in the value of the Company's Common Shares and to
enhance the linkage between Trustee and shareholder interests. Under the
Trustee Share Plan 100 phantom units equivalent to the Company's Common
Shares are awarded annually to Trustees. An individual that ceases to serve
as a Trustee shall be entitled to a cash payment from the Company
determined by multiplying the aggregate number of phantom units granted to
such individual by the then current price of the Company's Common Shares.
The Company maintains a Non-Qualified Retirement Savings Plan (the
"Plan") for the Board of Trustees. Under the Plan, the Trustees are
permitted to defer up to 100% of their fees. The Trustee may select the
assets in which the funds are to be invested. In addition, the Plan
provides a survivorship benefit, equal to the balance in the account, to
the selected beneficiary of the Trustee in the event of the Trustee's
death.
The Company also maintains a Retirement Plan for Trustees, pursuant
to which trustees of the Company are entitled to certain limited benefits
upon their retirement as trustees of the Company. Eligibility for
participation in the Retirement Plan is limited to trustees having served
as such for a period of at least five years (including time served as a
director of The Berkshire Gas Company). Under the plan, trustees are
entitled to receive an annual retirement benefit equal to one-half of the
annual retainer fee for trustees 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 trustee. 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. Trustees
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
$590,293 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 Trustees, subject to approval by the Board.
During the fiscal year ended June 30, 1999, the compensation of the
executive officers of the Company or its operating subsidiaries, including
that of the President and Chief Executive Officer, the Vice President,
Treasurer and Chief Financial Officer and Vice President, Utility
Operations of Berkshire Gas, consisted of base salary, and director's and
trustee'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
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.
Berkshire Gas adopted some years ago, and the Company's Compensation
Committee continues to review 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.
Berkshire Gas 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
Berkshire Gas 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.
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, 1999,
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 during such fiscal
year. The awards made for the fiscal year ended June 30, 1999 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, 1994 in each of (i) the Company's Common
Shares, (ii) the Nasdaq Stock Market - U.S. Index, and (iii) a peer group
consisting of 34 companies within the Company's Standard Industrial
Classification Code (SIC), the "Peer Group".
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG BERKSHIRE ENERGY RESOURCES,
THE NASDAQ STOCK MARKET-(US) INDEX AND A PEER GROUP
Cumulative Total Return
--------------------------------------------
6/94 6/95 6/96 6/97 6/98 6/99
---- ---- ---- ---- ---- ----
Berkshire Energy Resources 100 96 105 118 180 184
Peer Group 100 108 134 157 177 185
Nasdaq Stock Market-US 100 133 171 208 274 393
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* $100 invested on 06/30/94 in stock or index-including reinvestment of
dividends. Fiscal Year Ending June 30.
+ Total return for the Company prior to December 31, 1998 reflects the
performance of Berkshire Gas.
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 Trustees in selecting the firm of Deloitte &
Touche LLP, Independent Certified Public Accountants, as auditors for the
Company for the fiscal year ending June 30, 2000. In the event of non-
ratification, the Board of Trustees would reconsider its selection.
Representatives of Deloitte & Touche LLP, which has served as
principal accountant for the Company and Berkshire Gas 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 Trustees 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, 1999, 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: SECRETARY, BERKSHIRE ENERGY
RESOURCES, 115 CHESHIRE ROAD, PITTSFIELD, MASSACHUSETTS 01201-1879.
By Order of the Board of Trustees,
CHERYL M. CLARK
Secretary
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
BERKSHIRE ENERGY RESOURCES
CONTROL NUMBER:
Proposal No. 1
To elect two (2) trustees
For all For All
Nominees Withhold Except
James R. Keys [ ] [ ] [ ]
Robert B. Trask
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 nominees.
Proposal No. 2
To ratify the selection by the Board of Trustees of Deloitte & Touche LLP
as auditors for the Company for the fiscal year ending June 30, 2000.
For Against Abstain
[ ] [ ] [ ]
To act upon such other matters as may properly come before the meeting.
Mark box at right if an address change of comment has been noted on the
reverse side of this card. [ ]
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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------|
Detach Card Detach Card
BERKSHIRE ENERGY RESOURCES
Common Share 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 recelved prior to the Annual Meeting of Shareholders,
November 4, 1999.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
BERKSHIRE ENERGY RESOURCES
Common Share Proxy
The undersigned, revoking any previous instructions, hereby acknowledges
receipt of the Notice and Proxy Statement dated October 1, 1999, 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
Common Shares of Berkshire Energy Resources held of record by the
undersigned on September 24, 1999, at the Annual Meeting of Shareholders to
be held on November 4, 1999, and any adjournments or postponements thereof.
This Proxy is solicited on behalf of the Board of Trustees. 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.
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PLEASE VOTE, DATE, AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY IN ENCLOSED
ENVELOPE.
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Please sign this Proxy exactly as your name(s) appears(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.
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HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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