-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PDMSppR7Hp7jN9uQZcT1wxMDxt4KFrZDTiepeElJR7Ij5sFRx03B5SQ1iP6ivhnr l5bijd8P3QJdtXTLyzXRhA== 0000950135-95-002694.txt : 19960104 0000950135-95-002694.hdr.sgml : 19960104 ACCESSION NUMBER: 0000950135-95-002694 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960208 FILED AS OF DATE: 19951221 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: FALL RIVER GAS CO CENTRAL INDEX KEY: 0000034371 STANDARD INDUSTRIAL CLASSIFICATION: 4924 IRS NUMBER: 041298780 STATE OF INCORPORATION: MA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-00449 FILM NUMBER: 95603201 BUSINESS ADDRESS: STREET 1: 155 N MAIN ST STREET 2: P O BOX 911 CITY: FALL RIVER STATE: MA ZIP: 02722-0911 BUSINESS PHONE: 5086757811 MAIL ADDRESS: STREET 2: 155 NO MAIN ST CITY: FALL RIVER STATE: MA ZIP: 02720 DEF 14A 1 FALL RIVER GAS COMPANY 1 SCHEDULE 14A INFORMATION 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 /X/ Definitive Proxy Statement / / Definitive Additional Materials / / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 / / Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) FALL RIVER GAS COMPANY (Name of Registrant as Specified In Its Charter) N/A (Name of Person(s) Filing Proxy Statement, if other than the Registrant) PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX): /X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A. / / $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). / / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: N/A. (2) Aggregate number of securities to which transaction applies: N/A. (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): N/A. (4) Proposed maximum aggregate value of transaction: N/A. (5) Total fee paid: $125. / / 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.: Schedule 14A (definitive proxy statement). (3) Filing Party: Eric J. Krathwohl, Esq. of Rich, May, Bilodeau & Flaherty, P.C. on behalf of Registrant. (4) Date Filed: December 21, 1995. - - -------------------------------------------------------------------------------- 2 FALL RIVER GAS COMPANY 155 NORTH MAIN STREET POST OFFICE BOX 911 FALL RIVER, MASSACHUSETTS 02722-0911 NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON THURSDAY, FEBRUARY 8, 1996 Fall River, Massachusetts December 21, 1995 To the Common Stockholders of FALL RIVER GAS COMPANY: Notice is hereby given that the Annual Meeting of Stockholders of Fall River Gas Company will be held at the office of the Company, 155 North Main Street, Fall River, Massachusetts, on Thursday, February 8, 1996, at 10:30 A.M., local time, for the following purposes: (1) To consider and act upon a proposal to fix the number of Directors at nine (9) and to elect three (3) Class B Directors. (2) To designate auditors for the 1996 fiscal year. (3) To transact such other business as may properly come before the meeting. The stock transfer books will not be closed, but only holders of record at the close of business on December 15, 1995 (the "Record Date") will be entitled to notice of and to vote at the meeting. By Order of the Board of Directors, ROBERT J. POLLOCK, Clerk YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING AND VOTE YOUR SHARES. IN THE EVENT THAT YOU CANNOT ATTEND, PLEASE DATE, SIGN AND MAIL THE ENCLOSED PROXY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE. A STOCKHOLDER 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. 3 FALL RIVER GAS COMPANY PROXY STATEMENT December 21, 1995 BY WHOM PROXY SOLICITED AND SOLICITATION EXPENSES. The accompanying proxy is solicited by the Board of Directors of Fall River Gas Company (the "Company") for use at the Annual Meeting of Stockholders to be held at the office of the Company, 155 North Main Street, Fall River, Massachusetts, on Thursday, February 8, 1996. Proxies in the accompanying form, properly executed and received prior to the meeting and not revoked, will be voted. The expense of soliciting proxies will be borne by the Company. The approximate date upon which this proxy statement and the accompanying proxy will first be mailed to stockholders is December 21, 1995. In addition to solicitation by mail, some solicitation may be made by employees or agents of the Company by telephone or personal interview. The Company mails herewith to all stockholders entitled to vote a copy of its Annual Report for the fiscal year ended September 30, 1995, which contains detailed financial information concerning the Company. Upon the written request of any stockholder, the Company will mail, without charge, a copy of the Company's Annual Report on Form 10-K, as discussed further on page 10. RIGHT TO REVOKE PROXY. Any stockholder giving the proxy enclosed with this statement has the power to revoke the proxy at any time prior to the exercise thereof. Such revocation may be by writing (which may include a later dated proxy) received by the Office of the Clerk, Fall River Gas Company, 155 North Main Street, Post Office Box 911, Fall River, Massachusetts 02722-0911, received no later than February 7, 1996, if by mail, or prior to the exercise of the proxy if delivered by hand. Revocation may also be effected orally at the meeting prior to the exercise of the proxy. PROPOSALS OF STOCKHOLDERS. Stockholders' proposals intended to be presented at the 1997 Annual Meeting of Stockholders must be received by the Office of the Clerk, Fall River Gas Company, 155 North Main Street, Post Office Box 911, Fall River, Massachusetts 02722-0911 by August 23, 1996. VOTING SECURITIES OUTSTANDING. There were 1,780,542 shares of common stock outstanding and entitled to vote on December 15, 1995 (the "Record Date"). Each share of common stock is entitled to one vote. Only stockholders of record on the Record Date are entitled to notice of and to vote at the Annual Meeting of Stockholders or any adjournment thereof. 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. 4 As of September 30, 1995, all directors and executive officers of the Company, 12 persons as a group, beneficially owned 279,841 shares or 15.7% of the outstanding common stock of the Company. No person or group owns of record or is known by the Company to own beneficially more than 5% of the Company's outstanding common stock, other than as set forth in the following table.*
BENEFICIAL PERCENT NAME AND ADDRESS OF OWNERSHIP AS OF OF BENEFICIAL OWNER SEPTEMBER 30, 1995 CLASS -------------------------------------------------------- ------------------ ------- Ronald J. Ferris 145,059 Shares(1) 8.1% 75 GAR Highway Swansea, Massachusetts Barbara N. Jarabek 304,714 Shares(2) 17.1% 103 South Washington Drive Sarasota, Florida
- - --------------- (1) Includes 5,852 shares owned jointly with Dale Ferris, 4,000 shares owned jointly with children of Mr. Ferris, 36,990 shares owned by Lee's River Realty, Inc., 3,926 shares held in trusts for the children of Mr. Ferris, and 53,594 shares owned by the Swansea Lounge, Inc. Pension Trust for which Mr. Ferris is a co-trustee. Mr. Ferris has shared voting and investment power with respect to all shares beneficially owned by him except for 40,697 shares owned directly and of record by him, with respect to which he has sole voting and investment power. Mr. Ferris disclaims beneficial ownership with respect to the 3,926 shares held in trust for his children and the 53,594 shares owned by the Swansea Lounge, Inc. Pension Trust. (2) Consists of shares held in two trusts for which Barbara N. Jarabek is trustee, and with respect to which Mrs. Jarabek possesses sole power to vote and sole investment power. ELECTION OF DIRECTORS (PROPOSAL NO. 1) The By-laws of the Company provide that the number of directors shall be fixed at the Annual Meeting of Stockholders each year at a number not less than three nor more than nine. The Board of Directors proposes that the number of directors for the ensuing year be set at nine. The Articles of Organization 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. The Board of Directors is divided into three separate classes, currently consisting of three Class A directors, three Class B directors and three Class C directors, the terms of which expire as set forth in the table below. Except as noted, directors serving in each class have been elected in prior years by the stockholders to serve until the election and qualification of their respective successors in office. At each annual meeting of stockholders, the stockholders of the Company have the right to elect the appropriate number of persons to serve for a three-year period as directors of the class whose terms then expire, the right to increase the number of directors (not to exceed nine) and the right to elect directors to fill the new directorships created by any such increase. Any directorship which may become vacant by reason of death, resignation or otherwise than by expiration of term may be filled by the Board of Directors, as provided in the By-laws. - - --------------- *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 to the tables appearing on this page and on pages 3 and 4, the listed beneficial owners held direct and sole voting and investment power with respect to the stated shares. 2 5 The term of the Class B directors is scheduled to expire at the 1996 Annual Meeting of Stockholders and the Board has set at three the number of Class B directors to be elected at this meeting. The Board has nominated for election the three incumbents in such class: Bradford J. Faxon, Raymond H. Faxon and Ronald J. Ferris. It is the intention of the persons named below as proxies, in the absence of contrary specification, to vote FOR the election of each of the foregoing persons to serve as director until the election and qualification of his successor. In the event of any vacancy in the foregoing list of nominees prior to the Annual Meeting of Stockholders (which the Board of Directors does not anticipate), the persons named as the proxies will vote for such person or persons acceptable to the Board of Directors. The following information is furnished with respect to each nominee for election as a director and for each director whose term of office will continue after the meeting. Each of the individuals in the following table has furnished the information opposite his or her name.
SHARES OF COMMON STOCK BENEFICIALLY PERCENT OWNED AS OF OF NAME SEPTEMBER 30, 1995 CLASS ---- ------------------ ------- NOMINEES FOR ELECTION AS CLASS B DIRECTORS FOR A TERM OF THREE YEARS EXPIRING AT THE 1999 ANNUAL MEETING: Bradford J. Faxon, 57, President of the Company since 1986. Chair of the Board of Directors and of the Pension Committee; member of the Audit and Executive Committees. A Director since 1978. Formerly, Executive Vice-President and Vice-President of Commercial and Industrial Sales. Son of Raymond H. Faxon, a Director of the Company. Director also of Corning Natural Gas Corporation. 37,992(1) 2.1% Raymond H. Faxon, 88, Financial Consultant since before 1988. A Director since 1955. Vice Chair of the Board of Directors, Chair of the Executive Committee and member of the Pension Committee. Father of Bradford J. Faxon, President and a Director of the Company. 57,370(2) 3.2% Ronald J. Ferris, 53, President of Venus de Milo, Inc., Interstate Motel Corp. and Ferris Realty since before 1988. A Director since 1984. Member of the Pension and Compensation Committees. 145,059(3) 8.1% CLASS C DIRECTORS WHOSE TERMS EXPIRE AT THE 1997 ANNUAL MEETING: Cindy L. J. Audette, 33, Director and Vice President, Jack Realty, Inc.; formerly, Loan Officer, Bank of Boston, Real Estate Division, 1986-1990. A Director since 1992. Chair of the Compensation Committee and member of the Audit and Executive Committees. Sister-in-law of Gilbert C. Oliveira, Jr., a Director of the Company. 7,857(4) * Jack R. McCormick, 71, Financial Consultant to the Company. Previously served as President of the Company, 1973-1986. A Director since 1974. Chair of the Audit Committee and member of the Compensation Committee. Director also of Corning Natural Gas Corporation. 4,700(5) * Donald R. Patnode, 67, Retired. Formerly, Business Consultant; President of Industrial Filters & Equipment Corporation 1989-1994; President of North East Water Service, 1957-1989. A Director since 1984. Member of the Audit and Executive Committees. Director also of Corning Natural Gas Corporation. 1,750 *
3 6
SHARES OF COMMON STOCK BENEFICIALLY PERCENT OWNED AS OF OF NAME SEPTEMBER 30, 1995 CLASS - - ------------------------------------------------------------------ ------------------ ------- CLASS A DIRECTORS WHOSE TERMS EXPIRE AT THE 1998 ANNUAL MEETING: Thomas K. Barry, 50, President and Chief Executive Officer of Corning Natural Gas Corporation since 1984. A Director since 1992. Member of the Audit Committee. Director also of Corning Natural Gas Corporation. 1,200 * Thomas H. Bilodeau, 53, Vice President-Finance, Medical & Environmental Coolers, Inc. since 1990; formerly, Partner, R. A. Kingrey Co., 1988-1990. A Director since 1987. Member of the Pension Committee. Director also of Corning Natural Gas Corporation. 9,006(6) * Gilbert C. Oliveira, Jr., 39, Vice President, Gilbert C. Oliveira Insurance Agency, and President, G. Curt Oliveira Insurance Agency since 1988. A Director since 1992. Member of the Pension and Compensation Committees. Brother-in-law of Cindy L. J. Audette, a Director of the Company. 7,195(7) *
- - --------------- * Less than one percent. (1) Includes 4,952 shares held as custodian for Bradford J. Faxon's children. (2) Comprised of 57,370 shares held in trust, for which Raymond H. Faxon is a trustee. (3) Includes 5,852 shares owned jointly with Dale Ferris, 4,000 shares owned jointly with children of Mr. Ferris, 36,990 shares owned by Lee's River Realty, Inc., 3,926 shares held in trusts for the children of Mr. Ferris, and 53,594 shares owned by the Swansea Lounge, Inc. Pension Trust for which Mr. Ferris is a co-trustee. Mr. Ferris has shared voting and investment power with respect to all shares beneficially owned by him except for 40,697 shares owned directly and of record by him, with respect to which he has sole voting and investment power. Mr. Ferris disclaims beneficial ownership with respect to the 3,926 shares held in trust for his children and the 53,594 shares owned by the Swansea Lounge, Inc. Pension Trust. (4) Includes 660 shares held jointly with spouse (with shared voting and investment power). (5) Includes 1,100 shares held jointly with spouse (with shared voting and investment power). (6) Includes 7,746 shares held in trust for Thomas H. Bilodeau's children. (7) Comprised of 7,195 shares held by Mr. Oliveira's spouse as custodian for a minor child of Mr. Oliveira. The Board of Directors has a standing Audit Committee, consisting of Mr. J. McCormick, as Chair, and Ms. C. Audette and Messrs. T. Barry, B. Faxon and D. Patnode, which recommends the selection of independent auditors and reviews the plan and results of the independent audit. The Audit Committee held one meeting during the fiscal year ended September 30, 1995. The Board of Directors also has a standing Compensation Committee consisting of Ms. Audette, as Chair, and Messrs. R. Ferris, J. McCormick and G. Oliveira, to consider and recommend to the Board of Directors the amount and terms of compensation paid to the directors and executive officers of the Company. The Compensation Committee met one time during the fiscal year ended September 30, 1995. The Board of Directors does not have a standing nominating committee, nor a committee performing similar functions. The Board of Directors met five times during fiscal year 1995. Each director attended 100% of the aggregate number of meetings of the Board of Directors and committees on which he or she served during the fiscal year. 4 7 As required by the Securities and Exchange Commission (the "SEC") rules under Section 16 of the Securities Exchange Act of 1934, the Company notes that during the Company's last fiscal year, Ronald Ferris, a director of the Company, failed to file on a timely basis with the SEC one report on Form 4 Statement of Changes of Beneficial Ownership of Securities ("Form 4") with respect to one transaction in the Company's common stock. The Company any also notes that during the Company's 1993 fiscal year, Gilbert Oliveira, a director of the Company, failed to file on a timely basis with the SEC two Forms 4 with respect to two transactions in the Company's common stock. EXECUTIVE COMPENSATION Compensation of Executive Officers. The following table contains the compensation paid or accrued by the Company and its subsidiary during the three consecutive fiscal years ended September 30, 1995 to the Company's Chief Executive Officer and to each executive officer whose total annual salary and bonus exceeded $100,000. Although only principal capacities 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 ALL OTHER PRINCIPAL POSITION YEAR SALARY(2) BONUS COMPENSATION(3) - - -------------------------------------------------- ---- -------- ----- --------------- Bradford J. Faxon President 1995 $182,600 0 $21,592 1994 159,501 0 20,761 1993 147,963 0 20,572 Peter H. Thanas Senior Vice President and Treasurer 1995 $126,125 0 $ 9,045 1994 104,150 0 7,965 1993 96,528 0 7,625
- - --------------- (1) The Company did not pay any long-term compensation to its Chief Executive Officer or to its other executive officers during the fiscal years ended September 30, 1995, 1994 and 1993. (2) The amounts in this column represent the aggregate of cash compensation received and compensation deferred by the named executive officers. (3) Consists of director's fees paid to the named executive officers by the Company and its subsidiary, as well as matching contributions made by the Company on behalf of the named executive officers to the Company's 401(k) savings plan. Compensation Pursuant to Plans. The Company maintains a defined benefit pension plan 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 the age of 65 to eligible employees in various base salary groups and with various periods of service. The annual benefits formula is based on the number of years of service and the employee's average base salary for the four consecutive years yielding the highest such average, subject, however, to the $150,000 per year statutory maximum. Although service may be credited beyond the normal retirement age (i.e., 65), benefits received under the Pension Plan are computed on the basis of earnings received at age 65. 5 8 PENSION PLAN TABLE
15 20 25 30 YEARS REMUNERATION YEARS YEARS YEARS AND THEREAFTER - - ------------ ------- ------- ------- -------------- $ 65,000 19,500 26,000 32,500 39,000 80,000 24,000 32,000 40,000 48,000 95,000 28,500 38,000 47,500 57,000 110,000 33,000 44,000 55,000 66,000 125,000 37,500 50,000 62,500 75,000 140,000 42,000 56,000 70,000 84,000 155,000 45,000 60,000 75,000 90,000 170,000 45,000 60,000 75,000 90,000 180,000 45,000 60,000 75,000 90,000
Messrs. B. Faxon and P. Thanas, the individuals named in the preceding Summary Compensation Table, have 32 years and 18 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. Additionally, the Company has entered into agreements with each of Messrs. B. Faxon and P. Thanas (collectively, the "Supplemental Benefits Agreements"), which provide that the officer covered thereby and retiring after the age of 60 is entitled to receive monthly payments equal to thirty-five percent (35%) of the officer's monthly salary at retirement for either life or 180 months, whichever is longer.* Retirement benefits otherwise available upon retirement at age 60 under the Supplemental Benefits Agreements are reduced cumulatively by four percent (4%) for each year prior to age 60 in which the covered officer retires; provided, however, that an officer covered under a Supplemental Benefits Agreement receives no retirement benefits thereunder in the event that such officer retires before age 55. The Supplemental Benefits Agreements further provide that in the event that an officer covered by such an agreement dies prior to retirement, such officer's designated beneficiary is entitled to receive monthly payments equal to fifty percent (50%) of the officer's monthly salary at death for 180 months. Benefits payable under the Supplemental Benefits Agreements increase by four percent (4%) annually. Eligibility to enter into a Supplemental Benefits Agreement, or equivalent thereof, is based upon employee performance, service and value to the Company; such eligibility is determined on an individual basis by the Board of Directors. Currently, Messrs. B. Faxon and P. Thanas are the only officers of the Company covered by Supplemental Benefits Agreements, and no payments have been made to date under such agreements. The Supplemental Benefits Agreements are in addition to the amounts shown in the Summary Compensation Table and are not subject to limitation. The Company maintains a deferred compensation plan which is available to all officers. Eligible officers may elect to defer receiving any portion of their salary until the termination of their employment with the Company. Interest accrues on amounts deferred at a rate fixed by the Board of Directors; currently, such rate is the (variable) prime rate of a Boston bank. Upon termination of employment, participants receive amounts accrued under the plan. The participants may elect to receive amounts over a period of not less than one year nor longer than their contribution period. The amounts deferred by Messrs. B. Faxon and P. Thanas in fiscal year 1995 are included in the compensation figures in the table on page 5. - - --------------- *The age at which employees normally become eligible to receive pension benefits is 65. However, employees of the Company are not required to retire in order to receive such benefits. 6 9 EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS. Effective September 30, 1991, the Company entered into employment contracts with its President and Chief Executive Officer, Mr. Bradford J. Faxon, and with its Senior Vice President, Treasurer and Chief Financial Officer, Mr. Peter H. Thanas. Under the terms of such employment contracts, Mr. Faxon is compensated for his duties as an officer and director and Mr. Thanas is compensated for his duties as an officer with respective salaries in amounts determined from time to time by the Board of Directors. The term of each employment contract was initially five years, unless earlier terminated by an act of either the Company or the respective officer. Beginning in September 1993 and annually thereafter, the remaining term of each employment contract is automatically extended for an additional one-year period. The employment contracts further provide that upon any change in control of the Company leading to the termination of the subject officer's employment with the Company, the Company shall pay such officer three times the officer's then present annual salary, or such lesser amount in order to avoid certain adverse tax consequences under the Internal Revenue Code. COMPENSATION OF DIRECTORS. The current annual director's compensation is $5,500. In addition, directors are paid $400 for each Board of Directors' meeting attended, and $300 for each Audit, Compensation or Pension Committee meeting attended. Furthermore, those directors who are members of the Executive Committee are paid $2,000 annually for their services on the committee, and those directors who are members of the Audit, Compensation and Pension Committees are paid an additional $500 annually for their services on those committees. In addition to the aforementioned compensation, the chairs of the Audit, Executive, Compensation and Pension Committees receive annual payments of $1,000, $2,500, $500 and $500, respectively. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. Directors Audette, Ferris, McCormick and Oliveira served on the Company's Compensation Committee during the Company's last fiscal year. Ms. Audette is the daughter of Mrs. Barbara N. Jarabek, who beneficially owns 17.1% of the voting securities of the Company; Mr. Oliveira is the son-in-law of Mrs. Jarabek. Mr. Ferris beneficially owns 8.1% of the voting securities of the Company. Mr. McCormick is a former executive officer of the Company. Director B. Faxon, the President and an executive officer and director of the Company, is a member of the Compensation Committee of Corning Natural Gas Corporation's Board of Directors. Thomas Barry, the President of Corning Natural Gas Corporation, is a director of the Company. REPORT OF THE DIRECTOR AND EXECUTIVE COMPENSATION COMMITTEE. The Director and Executive Compensation Committee of the Company's Board of Directors has furnished the following report concerning executive compensation: The compensation of executive officers of the Company is formally reviewed and established annually by the Compensation Committee of the Board of Directors, subject to approval by the Board of Directors. The Company does not have in effect any separately existing incentive plan for executive compensation. In its annual review and in setting compensation for 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 personal and management goals established from time to time. 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 7 10 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 of the Company. In determining salary ranges for each executive officer, reference is made in part to information concerning salaries paid by other regional utility companies and to such executive officer's comparative responsibilities. 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 job performance and the factors set forth above. In setting executive compensation for the past year, the Compensation Committee gave greater weight to salaries of executive officers of comparable public utility companies and other gas distribution companies in Massachusetts and the New England region, as well as the degree of achievement by the executive officers of personal and management goals. THE DIRECTOR AND EXECUTIVE COMPENSATION COMMITTEE Cindy L. J. Audette, Chair Ronald J. Ferris Jack R. McCormick Gilbert C. Oliveira, Jr. 8 11 PERFORMANCE GRAPH. The following graph illustrates the return that would have been realized (assuming reinvestment of dividends) by an investor who invested on September 30, 1990 in each of (i) the Company's common stock, (ii) the NASDAQ Stock Market -- U.S. Index, and (iii) a peer group consisting of 15 companies within the Company's Standard Industrial Classification Code (SIC), the "Peer Group". COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* AMONG FALL RIVER GAS COMPANY, THE NASDAQ STOCK MARKET-US INDEX AND A PEER GROUP
MEASUREMENT PERIOD FALL RIVER GAS NASDAQ STOCK (FISCAL YEAR COVERED) COMPANY PEER GROUP MARKET-US 1990 100 100 100 1991 105 123 157 1992 109 160 176 1993 124 198 231 1994 174 174 233 1995 170 184 321 *100 INVESTED ON 09/30/90 IN STOCK OR INDEX - INCLUDING REINVESTMENT OF DIVIDENDS. FISCAL YEAR ENDED SEPTEMBER 30.
SELECTION OF AUDITORS (PROPOSAL NO. 2) It is recommended that Arthur Andersen LLP, Certified Public Accountants, of Boston, Massachusetts, be designated as auditors for the Company for the fiscal year ending September 30, 1996. Arthur Andersen LLP has no direct or indirect financial interest in the Company or any of its subsidiaries and has never had any connection with the Company or any of its subsidiaries in the capacity of promoter, underwriter, voting trustee, director, officer or employee. A representative of Arthur Andersen LLP, which has served as principal accountant for the Company for the past fiscal year, is expected to be present at the Annual Meeting of Stockholders, with the opportunity to make a statement if such representative desires to do so, and is expected to be available to respond to appropriate questions. 9 12 OTHER MATTERS Except for the matters set forth above, the Board of Directors knows of no other matters which may be presented to the Annual Meeting of Stockholders, but if any other matters properly come before such meeting, it is the intention of the persons named in the accompanying form of proxy to vote such proxies in accordance with their judgment. PLEASE DATE, SIGN AND RETURN THE ENCLOSED PROXY. By Order of the Board of Directors, ROBERT J. POLLOCK, Clerk All holders of common stock of the Company may obtain, without charge, a copy of the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1995, including the financial statements and schedules thereto, required to be filed with the Securities and Exchange Commission. The report will be furnished upon request made in writing to: Bradford J. Faxon, President Fall River Gas Company 155 North Main Street Post Office Box 911 Fall River, Massachusetts 02722-0911 10 13 PROXY FALL RIVER GAS COMPANY PROXY ANNUAL MEETING OF STOCKHOLDERS FEBRUARY 8, 1996 The undersigned, having received the Notice of the Annual Meeting of Stockholders and Proxy Statement of Fall River Gas Company (the "Company"), dated December 21, 1995, hereby appoints Cindy L. J. Audette, Bradford J. Faxon, Raymond H. Faxon and Donald R. Patnode, and any of them, as proxy or proxies of the undersigned, to vote the shares of the common stock of the Company owned by the undersigned, at the Annual Meeting of Stockholders of the Company to be held at the offices of the Company in Fall River, Massachusetts on Thursday, February 8, 1996, at 10:30 A.M. local time and at any postponements or adjournment(s) thereof, with all powers the undersigned would possess if personally present at said meeting with full power of substitution or revocation. The following purposes for which this proxy may be exercised are set forth in the Notice of the Annual Meeting of Stockholders and are more fully set forth in the Proxy Statement. 1. FOR / / AGAINST / / ABSTAIN / / The proposal to fix the number of Directors at nine and the election as Class B Directors the nominees of Bradford J. Faxon, Raymond H. Faxon and Ronald J. Ferris, except as written in the space below. -------------------------------------------------------------------------- WITHHOLD AUTHORITY TO VOTE ON / / The election of all nominees listed above, as a group. 2. FOR / / AGAINST / / ABSTAIN / / The designation of Arthur Andersen LLP, Certified Public Accountants, as auditors for the Company for the fiscal year ending September 30, 1996. 3. To act upon such other matters as may come before the meeting. The undersigned ratifies and confirms all that said proxy(ies) may do by virtue hereof. The proxies are authorized to vote in their discretion with respect to matters not known or determined at the date of the Proxy Statement. A majority of said proxies as shall be present and acting at the meeting shall have and may exercise all of the powers of proxies hereunder, or if only one be present and acting, then that one shall have and may exercise all of said powers. (OVER) THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE ABOVE IN REGARD TO THE PROPOSALS NUMBERED 1 AND 2. IN THE ABSENCE OF A SPECIFICATION, THIS PROXY WILL BE VOTED FOR THE NOMINEES NAMED HEREIN AND FOR THE PROPOSAL NUMBERED 2. DATED: , 199 ------------------------------ (L.S.) ------------------------------ (L.S.) STOCKHOLDERS SHOULD SIGN HERE EXACTLY AS THE NAME OR NAMES ARE PRINTED. WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL TITLE AS SUCH. JOINT OWNERS SHOULD EACH SIGN PERSONALLY. IMPORTANT PLEASE DATE, SIGN AND MAIL PROMPTLY IN THE ENCLOSED ENVELOPE. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY. -----END PRIVACY-ENHANCED MESSAGE-----