-----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, Vu/D0KwwlP4Tdydhw9kY27hQdMxI741sfyiQjGUhUVwI6sR9GbT5PNuLf2jSjcLL CuC8//zwYMR2Ok+29QeE/Q== 0000077231-96-000023.txt : 19960430 0000077231-96-000023.hdr.sgml : 19960430 ACCESSION NUMBER: 0000077231-96-000023 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960429 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PENNSYLVANIA ENTERPRISES INC CENTRAL INDEX KEY: 0000077231 STANDARD INDUSTRIAL CLASSIFICATION: GAS & OTHER SERVICES COMBINED [4932] IRS NUMBER: 231920170 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-11325 FILM NUMBER: 96552391 BUSINESS ADDRESS: STREET 1: 39 PUBLIC SQ STREET 2: WILKES BARRE CENTER CITY: WILKES BARRE STATE: PA ZIP: 18711-0601 BUSINESS PHONE: 7178298843 MAIL ADDRESS: STREET 1: 39 PUBLIC SQUARE CITY: WILKES BARRE STATE: PA ZIP: 18711-0601 10-K/A 1 TABLE OF CONTENTS PART III PAGE Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT . . . 1 Item 11. EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . 4 Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT . . . . . . . . . . . . . . . . 10 Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS . . . . . 12 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (a) IDENTIFICATION OF DIRECTORS Other Positions Director and Offices with Name Age Since the Company Kenneth L. Pollock (1) 75 1972 Chairman of the Board of Directors William D. Davis (1,2,3) 64 1981 Vice Chairman of the Board of Directors Dean T. Casaday 64 1991 President and Chief Executive Officer Paul R. Freeman (2,4) 48 1995 None Robert J. Keating (1,4) 77 1974 None John D. McCarthy (1,3,4) 60 1991 None John D. McCarthy, Jr. (2) 31 1995 None Kenneth M. Pollock (2,5) 38 1993 None Richard A. Rose, Jr. (3,5) 35 1995 None James A. Ross (4,5) 59 1978 None Ronald W. Simms (1,2,3,4,5) 56 1991 None (1) Member of the Executive Committee (2) Member of the Audit Committee (3) Member of the Compensation and Stock Option Committee (4) Member of the Investment Committee of the Employees' Retirement Plan of Pennsylvania Enterprises, Inc. (5) Member of the Planning Committee Each of the directors was elected as a director of the Company at the 1995 Annual Meeting of Shareholders, except for Messrs. Paul R. Freeman, John D. McCarthy, Jr., and Richard A. Rose, Jr., who were elected by the Board of Directors at a meeting held on November 10, 1995. The term of each director continues until the next annual meeting of shareholders and until his successor is elected and qualified. Kenneth L. Pollock is the father of Kenneth M. Pollock. Mr. Simms is the father-in-law of Mr. Rose. Mr. John D. McCarthy is the father of Mr. John D. McCarthy, Jr. Mr. Keating is the father-in-law of Mr. Thomas F. Karam, Executive Vice President of the Company. There are no other family relationships among any of the directors or executive officers of the Company. 1 (b) BUSINESS EXPERIENCE Name Business Experience Kenneth L. Pollock Chairman of the Board of Directors of the Company and PG Energy since June, 1987; President and Chief Executive Officer of the Company and PG Energy from March, 1991, to August, 1991; Director and sole stockholder, Susquehanna Coal Company and Ken L. Pollock, Inc., Nanticoke, PA, since prior to 1990. William D. Davis Vice Chairman of the Board of Directors of the Company and PG Energy since March, 1991; Chairman of the Board of the Commonwealth Bank Division of Meridian Bank, Williamsport, PA, from September, 1993 to December 31, 1995; Director, Meridian Bancorp, Inc., and Meridian Bank, Reading, PA, from September, 1993 to April, 1996; Chairman of the Board and Chief Executive Officer of Commonwealth Bancshares Corporation, Williamsport, PA, from April, 1987 to June, 1993; Director Corestates Bank, N.A., since April, 1996; Director of the National Association of Corporate Directors; Director, Lycoming Foundation; past Director and President of Industrial Properties Corporation; Director, Pennsylvania Economy League; Director and Treasurer, Pennsylvania College of Technology; past Director and Chairman, Williamsport/Lycoming Chamber of Commerce; and Director, Williamsport/Lycoming Foundation. Dean T. Casaday President and Chief Executive Officer of the Company and PG Energy since September 1, 1991; Vice President of Engineering and Operations of the Company and PG Energy in 1978, and Vice President of Corporate Development of PG Energy from 1972 to 1978 and of the Company from 1974 to 1978; Vice President of National Fuel Gas Supply Corporation from 1989 to August, 1991; Chairman, President and Chief Executive Officer of Carnegie Natural Gas Company and Apollo Gas Company, both of which are subsidiaries of USX Corporation, from 1978 to 1989; Chairman of the Pennsylvania Gas Association; Director, Greater Wilkes-Barre Partnership; Corporate Advisory Board, Pennsylvania College of Technology. Paul R. Freeman Controller for HUD, Inc., trading as Emerald Anthracite II, since 1988. He previously held positions with Northeastern Bank, United Penn Bank, Barnett Banks, and Marine Midland Bank. 2 Robert J. Keating Chairman of the Board of Directors of the Company and PG Energy from June, 1986, to June, 1987; Chairman of the Board, Parodi Industries, Inc., Scranton, PA, from January, 1985, to February, 1994. John D. McCarthy President of McCarthy Tire Service Company, Wilkes-Barre, PA, since 1968; President of McCarthy Realty, Inc., since 1988; Director and Chairman, Wyoming Valley Health Care Systems, Inc.; Director of Pennsylvania-American Water Company. John D. McCarthy, Jr. Vice President of McCarthy Tire Service Company since 1989 and Vice President of McCarthy Realty, Inc. since 1988. President of McCarthy Tire Service Company of Allentown, Reading and Lancaster since 1992. Member and Chairman of the Board of Directors of the Wyoming Valley Catholic Youth Center; member of the Michelin Tire Corporation Dealer Council and Continental/General Tire Dealer Council. Kenneth M. Pollock Vice President of HUD, Inc., trading as Emerald Anthracite II, and Vice President of Susquehanna Coal Company and Susquehanna Mt. Carmel, Inc., since prior to 1987; Director of Commonwealth Bank East, a division of Corestates Bank, N.A.; Director of F. M. Kirby Center for the Performing Arts. Richard A. Rose, Jr. President of Petroleum Sales Company, Inc. since 1992 and Vice President of Petroleum Service Company, Inc. since 1987. Director of the Black Horse Foundation, Inc., Mountain Productions, Inc., Mountain Productions Services, Inc., and Rock USA, Inc. James A. Ross Independent financial consultant since prior to 1988; Chairman, Priestgate, Limited, since 1991; former President and Chief Executive Officer and Director, Sprague & Henwood, Inc., Scranton, PA; Director, Scranton Industrial Development Company; Director, Lackawanna Industrial Development Enterprise. Ronald W. Simms President and Chief Executive Officer of Petroleum Service Company, Inc., Wilkes-Barre, PA, since 1980; Chairman of the Board of Directors since 1994, and Chief Executive Officer since 1984, of Mountain Productions, Inc.; Chairman of the Board of Directors of First Heritage Bank, since March, 1994; Director of Pennsylvania-American Water Company; and past Chairman of the Wilkes-Barre Chamber of Commerce. 3 Certain Stock Transactions The Securities Exchange Act of 1934, as amended, requires that the Company's directors and officers file reports of ownership and changes in ownership of the Company's Common Stock with the Securities and Exchange Commission and the New York Stock Exchange. The Company believes that all directors and officers filed on a timely basis all such reports required of them with respect to stock ownership and changes in ownership during 1995. ITEM 11. EXECUTIVE COMPENSATION (a) SUMMARY COMPENSATION TABLE
Long-Term Compensation Annual Compensation Securities Other Annual Underlying All Other Name and Salary Bonus Compensation Options Compensation Principal Position Year ($) ($) ($)(1) (# of Shares) ($)(2) Dean T. Casaday, 1995 $202,243 -0- -0- -0- $3,987 President and Chief 1994 192,842 -0- -0- -0- 3,377 Executive Officer 1993 186,099 -0- -0- 9,000 3,305 Thomas F. Karam 1995 $150,000(3)-0- -0- -0- 77 Executive Vice President John F. Kell, Jr. 1995 $123,745 -0- -0- -0- 1,876 Vice President, 1994 121,527 -0- -0- -0- 1,518 Financial Services 1993 115,820 -0- -0- 3,500 1,489 __________
(1) Does not include the value of perquisites and other personal benefits because the aggregate amount of such compensation does not exceed established reporting thresholds. (2) The amounts shown under All Other Compensation are for group term life insurance provided for officers and matching contributions made by the Company for the named executives to their Employees' Savings Plan (401(k)) account in the amount of $1,165 and $751 for 1995, $709 and $456 for 1994, and $735 and $463 for 1993 for Messrs. Casaday and Kell, respectively. (3) Mr. Karam commenced employment with the Company effective October 1, 1995. The above salary amount represents his compensation on an annualized basis. The amount for All Other Compensation is the actual amount for the portion of 1995 that he was employed by the Company. 4 (b) AGGREGATED STOCK OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END STOCK OPTION VALUES
Number of Shares Securities Underlying Value of Unexercised Acquired on Value Unexercised Options In-the-Money Options Exercise Realized at Fiscal Year-End (#) at Fiscal Year-End ($) Name (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable Dean T. Casaday.... -0- -0- 9,000 / -0- $70,875 / -0- John F. Kell, Jr... -0- -0- 3,500 / -0- $27,563 / -0- (c) COMPENSATION PURSUANT TO PLANS
Employees' Savings Plan Effective January 1, 1992, the Company established an Employees' Savings Plan to encourage retirement savings by its employees. Full-time employees age 21 or older who have completed one year of service are eligible to participate in the Employees' Savings Plan. Participating employees may elect to contribute up to 15% of their qualifying annual compensation (but no more than a statutory dollar limit - $9,240 for 1995) on a pre-tax basis, pursuant to Section 401(k) of the Internal Revenue Code of 1986, as amended. These employee 401(k) contributions are invested as directed by each participant in one or more designated funds available under the Employees' Savings Plan, including a fund that invests in the Company's Common Stock. The Company also contributes up to 15% of the first 4% contributed by the employees, which contribution is automatically invested in the Company's Common Stock. Participants are 100% vested in their 401(k) contributions and become 100% vested in any matching contribution over a five-year period commencing with the employee's date of hire. Employees' Retirement Plan The following table illustrates the estimated annual retirement benefits payable at age 65 under the Company's Employees' Retirement Plan as a straight life annuity to an employee retiring with the specified combination of final average earnings and years of service with the Company with the modifications discussed below, applicable to Mr. Casaday, for average annual earnings greater than $150,000. The benefits shown are not subject to deduction for social security. [CAPTION] 5-Year Years of Credited Service Average Earnings 15 20 25 30 35 [S] [C] [C] [C] [C] [C] $100,000............ $ 20,555 $ 27,407 $ 34,259 $ 41,111 $ 41,111 $125,000............ $ 26,180 $ 34,907 $ 43,634 $ 52,361 $ 52,361 $150,000............ $ 31,805 $ 42,407 $ 53,009 $ 63,611 $ 63,611 $175,000............ $ 37,430* $ 49,907* $ 62,384* $ 74,861* $ 74,861* $200,000............ $ 43,055* $ 57,407* $ 71,759* $ 86,111* $ 86,111* $250,000............ $ 54,305* $ 72,407* $ 90,509* $108,611* $108,611* __________ 5 * The Internal Revenue Code limits the amount of compensation which may be taken into account under a tax-qualified retirement plan. The benefits shown above, for average earnings above $150,000, include benefits payable pursuant to Mr. Casaday's supplemental retirement agreement which guarantees to Mr. Casaday the difference between the benefits he would be entitled to under the Company's Employees' Retirement Plan, if such benefits were calculated without regard to restrictions imposed under the Internal Revenue Code, and the amount of pension benefit actually payable under the Company's Employees' Retirement Plan. Additionally, pursuant to the terms of Mr. Casaday's supplemental retirement agreement, the Company has agreed to pay the difference, if any, between his pension benefits payable under the Retirement Plan, based on the total of his approximately 15 years of prior service and his current service with the Company, and a pension benefit based on 20 years of credited service. As of December 31, 1995, Mr. Casaday had completed 19 years of credited service and Mr. Kell, 17 years. Covered compensation under the Retirement Plan is the same as the amount reported in the Salary column of the Summary Compensation Table. Change in Control and Other Agreements The Company has agreements with certain of its officers, including Messrs. Casaday, Karam, and Kell, which entitle the officers to receive a severance payment equal to two times their annual salary if, following a change in control (as defined in such agreements) of the Company, their employment is terminated or their compensation, position or benefits are reduced. Mr. Casaday has an employment agreement with the Company providing for a one year employment term, ending September 1, 1996, and certain supplemental retirement benefits. The retirement benefits are set forth in a supplemental retirement agreement, the major provisions of which are described in the previous section. (d) COMPENSATION OF DIRECTORS During 1995, directors of the Company and PG Energy who were not full- time employees of the Company and PG Energy were paid a fee of $500 per month, and on days they attended a Company and/or PG Energy Board meeting(s) they were paid $500, plus expenses. Since the Company and PG Energy Boards consist of the same members, meetings are usually scheduled on the same day, with the PG Energy meeting immediately following the Company meeting. Additionally, each director received $250 for Board Committee meetings attended on the same day as meeting(s) of the full Board(s), and $500 for each Board Committee meeting attended on a day when the full Board(s) did not meet. Further, directors who were members of the Investment Committee of the Employees' Retirement Plan were paid $250 for each meeting attended on the same day as a meeting of the full Board(s) and $500 for each meeting attended on a day when the full Board(s) did not meet. During 1995, Mr. Ross and Mr. John D. McCarthy also served as directors of Pennsylvania Energy Resources, Inc. (PERI) and Theta Land Corporation, both wholly-owned subsidiaries of PEI. They were each paid $1,000 for attending two board meetings of PERI during 1995. 6 The Company's 1995 Directors' Stock Compensation Plan (the "Directors' Plan") provides for the annual automatic award of 200 shares of Company Common Stock (subject to anti-dilution adjustment in the event of certain corporate changes) to each continuing director, who has completed at least one year of service and who is not a full-time employee of the Company or any of its affiliates, immediately following each annual meeting of shareholders. The Directors' Plan will terminate in 2005. Directors who are full-time employees of the Company are not eligible to participate in the Directors' Plan. Except for anti-dilution adjustments, without shareholder approval, the number of shares to be awarded to each director each year under the Directors' Plan may not be increased and the eligibility for awards may not be changed. All shares awarded under the Directors' Plan are non-transferrable for a period of 3 years following the award, except in the event of death, disability, or retirement on or after age 65, but in no event less than six months following the date of the award. (e) COMPENSATION COMMITTEE INTERLOCKS Messrs. John D. McCarthy, Ross, and Simms served as members of the Company's Compensation Committee during 1995. Beginning January 1, 1996, the Compensation Committee consisted of Messrs. John D. McCarthy, Davis, Rose, and Simms. None of these persons was or is an officer or employee of the Company or any of its subsidiaries. None of the Company's executive officers served on the compensation committee or board of an entity of which (i) a member of the Company's Compensation Committee or other director of the Company was an executive officer or (ii) an executive officer of the entity was one of the Company's directors. (f) COMPENSATION COMMITTEE REPORT The Company's executive compensation program is administered by the Compensation Committee of the Board of Directors, which is composed of four non-employee directors. The following is a report of the Compensation Committee to the Company's shareholders: Compensation Policies In determining compensation, including the award of both annual and long-term compensation, the Committee follows a policy of considering, among other factors, the operating and financial performance of the Company and the individual contribution of each officer. Salary is the principal component of the annual portion of the compensation of senior executives. Stock options, which were authorized for the first time in 1992 and granted in 1993, comprise both the long-term component and a portion of the annual component of compensation. The value of stock options is directly dependent on the performance of the Company's stock. 1995 Compensation of the Chief Executive Officer Mr. Casaday's annual salary was increased by 6.0% to $212,880 effective June 4, 1995, from $200,830, his base salary since his last salary adjustment in June 1994. In determining his salary adjustment for 1995, the Committee took into account a number of factors related to the goals and objectives for Mr. Casaday as set forth in his employment agreement for the period. These relate to management development, financial objectives, long-term planning, Board relations and communications, marketing plans, external relations, and leadership. Effective September 1, 1995, upon 7 recommendation of the Committee, the Company extended the term of Mr. Casaday's employment agreement for one year until September 1, 1996. The Committee operates on the principle that the compensation of the Company's executive officers should be competitive with compensation of senior executives at comparable companies. In this regard, the Committee reviewed and considered the compensation of executives in comparable positions at other utility companies, and non-utility companies located in the same region as the Company, with which the Company competes for executive talent. Consequently, these are not exactly the same companies that are included in the indices used in the Performance Graphs in this proxy statement. The Committee targets executive compensation to be in the general range, but not the high end, of compensation for comparable positions at these companies. The Committee (which also serves as the Stock Option Committee) considers previously established annual operating and financial performance goals to help it determine if and the extent to which stock options will be granted. The Committee did not award any stock options during 1995. Other Officers The compensation of Mr. Kell was determined in accordance with policies discussed earlier in this report. Mr. Karam commenced employment with the Company effective October 1, 1995. All members of the Committee concur and join in this report to the Company's shareholders. John D. McCarthy, Chairman Ronald W. Simms William D. Davis Richard A. Rose, Jr. (g) PERFORMANCE GRAPHS Five-Year Cumulative Return The graph below compares the cumulative total return on the Company's stock during the past five years with the average cumulative total return during the same period of the S & P 500 Stock Index, a gas/water utility performance index developed from the Edward D. Jones Indices for Natural Gas Distribution Companies and the Water Utility Industry, excluding the Company, and a self-constructed index of a group of comparable mid-sized natural gas distribution companies, excluding the Company. The gas/water utility index is an average of the two Edward D. Jones Indices where the two indices are weighted by the Company's average identifiable assets for its gas business and its water business during the period covered by the graph. Since the Company sold its water utility operations on February 16, 1996, and is now primarily a gas distribution utility, a gas index is now included in the graph. Next year the gas/water utility index will not be shown. The companies included in the self-constructed natural gas distribution index are: Atmos Energy Corporation, Cascade Natural Gas Corporation, Colonial Gas Company, Connecticut Energy Corp., Connecticut Natural Gas Co., North Carolina Natural Gas Corp., Providence Energy Corp., Public Service Company of North Carolina, Southeastern Michigan Gas Enterprises, United Cities Gas Co.,and Yankee Energy Systems Inc. These companies, selected from the Edward D. Jones Index for Natural Gas Distribution Companies, have revenues, net plant, and market capitalization in the same general range as that of the Company. 8 The graph reflects the investment of $100 on December 31, 1990, in the Company's Common Stock, the S & P 500 Stock Index, and the utility indices. Dividends are assumed to be reinvested as paid in the Company's Common Stock and in the S & P 500 Stock Index and quarterly in the stocks of the utility indices. FIVE-YEAR CHART [CAPTION] S & P Gas/Water Gas Measurement Period Pennsylvania Stock Utility Utility (Fiscal Year Covered) Enterprises Index Index Index [S] [C] [C] [C] [C] 1990 100.00 100.00 100.00 100.00 1991 74.28 130.34 137.16 128.90 1992 112.10 140.26 160.67 164.39 1993 116.03 154.33 185.51 193.32 1994 111.99 156.43 170.45 174.24 1995 165.84 214.99 210.78 210.18 Four-Year Cumulative Return The market price of the Company's Common Stock was affected from 1989 into the fourth quarter of 1991 by events relating to the possible sale of the Company, including several bids made for the Company, certain of which were accepted, but none of which were consummated. The graph below compares the cumulative total return on the Company's stock for 1992 through 1995 with that of the S & P 500 Stock Index, the gas/water utility performance index, and the self-constructed index of comparable mid-sized natural gas distribution companies for the same period. The graph reflects the investment of $100 on December 31, 1991, in the Company's Common Stock, the S & P 500 Stock Index, and the utility indices. Dividends are assumed to be reinvested as paid in the Company's Common Stock and in the stocks in the S & P 500 Stock Index and quarterly in the stocks of the utility indices. FOUR-YEAR CHART [CAPTION] S & P Gas/Water Gas Measurement Period Pennsylvania Stock Utility Utility (Fiscal Year Covered) Enterprises Index Index Index [S] [C] [C] [C] [C] 1991 100.00 100.00 100.00 100.00 1992 152.92 107.61 117.39 127.53 1993 156.20 118.40 135.60 149.98 1994 150.77 120.01 124.53 135.17 1995 223.27 164.95 153.90 163.06 9 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT (a) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS The Company does not know of any person who is the beneficial owner of more than five percent of the outstanding Common Stock of the Company, other than Mr. Kenneth L. Pollock as described in the following section. (b) SECURITY OWNERSHIP OF MANAGEMENT The following table shows the number of shares of the Company's Common Stock, beneficially owned, directly or indirectly, as of April 26, 1996, by individual directors, each of the officers named in the Summary Compensation Table, and all directors and officers as a group, who held such positions as of April 26, 1996. None of such persons beneficially owned more than 1% of the Company's Common Stock, except for Mr. Kenneth L. Pollock, who beneficially owned 5.6% of the Company's Common Stock, Mr. Kenneth M. Pollock, who beneficially owned 2.4% of the Company's Common Stock, or 5.6% in the aggregate for both of them on an unduplicated basis, and Mr. Ronald W. Simms who beneficially owned 1.6% of the Company's Common Stock. See notes (4), (5), and (6) to the table below. All directors and officers as a group beneficially owned 9.2% of the Company's Common Stock. Unless otherwise specified, shares are beneficially owned by the director or officer or jointly with a spouse. None of such persons owned any of PG Energy's preferred stock.
Amount and Nature of Beneficial Ownership Shares Options Other than Exercisable Total Option Within Beneficial Title of Class Name of Beneficial Owner Shares 60 Days(1) Ownership Common Dean T. Casaday 10,183 9,000 19,183 William D. Davis 4,271 --- 4,271 Paul R. Freeman 1,000 --- 1,000 Robert J. Keating 6,720(2) --- 6,720 John D. McCarthy 2,550(3) --- 2,550 John D. McCarthy, Jr. 1,600(3) --- 1,600 Kenneth L. Pollock 275,938(4)(5) ---(1) 275,938 Kenneth M. Pollock 117,487(5)(6) --- 117,487 Richard A. Rose, Jr. 7,970(7) --- 7,970 James A. Ross 3,050(8) --- 3,050 Ronald W. Simms 79,300(9) --- 79,300 Thomas F. Karam 22,691(10) ---(1) 22,691 John F. Kell, Jr. 4,266 3,500 7,766 All directors and officers as a group (20 persons) 427,130(11)(12) 25,300(1) 452,430 __________
(1) Shares that could be purchased under the 1992 Stock Option Plan. Does not include options to purchase shares of common stock granted on April 15, 1996, in the amount of 25,000 to Mr. Kenneth L. Pollock and 25,000 to Mr. Thomas F. Karam which are not exercisable until April 15, 1997. 10 (2) Includes 600 shares of Common Stock owned by Mr. Keating's wife. Includes 2,000 shares that Mr. Keating beneficially owns through Lakeside Drive Assoc., Inc. (3) Includes 1,000 shares held by McCarthy Realty, Inc. in which both John D. McCarthy and John D. McCarthy, Jr. each have a beneficial interest. These shares are reported in the total shares for each of them, but are reported one time, on an unduplicated basis, in the total shares owned by all directors and officers as a group. (4) Includes 8,578 shares that Mr. Pollock owns jointly with his wife, 86,900 shares jointly with his son, Kenneth M. Pollock, 7,400 shares jointly with his daughter, 24,144 shares jointly with his son and daughter, and 8,542 as custodian for his grandchildren, 6,243 of which are for the children of Kenneth M. Pollock. Includes 108,400 shares held by several corporations in which Mr. Pollock holds a controlling interest. (5) Shares held jointly by Mr. Kenneth L. Pollock and Mr. Kenneth M. Pollock, and by Mr. Kenneth L. Pollock for Mr. Kenneth M. Pollock's children are reported in the total shares for each of them but are reported one time, on an unduplicated basis, in the total shares owned by all directors and officers as a group. A total of 276,138 shares are beneficially owned by Mr. Kenneth L. Pollock and Mr. Kenneth M. Pollock on an unduplicated basis. (6) Includes 86,900 shares held jointly with his father, Mr. Kenneth L. Pollock, 24,144 shares held jointly with his father and sister, and 6,243 shares held by his father as custodian for his children. (7) Includes 1,000 shares owned by Mr. Rose's wife and 850 shares held as custodian for his children. (8) Includes 300 shares owned by Mr. Ross's wife. Includes 1,300 shares owned by charitable foundations of which Mr. Ross is a trustee. Mr. Ross shares voting and investment power and disclaims beneficial ownership of the shares held by these foundations. (9) Includes 28,964 shares owned by Mr. Simms's wife. (10) Includes 15,791 shares for which Mr. Karam has sole voting and investment power, and 2,000 shares held in the name of Lakeside Drive Assoc., Inc., in which Mr. Karam's wife has an interest. These 2,000 shares are also reported for Mr. Keating who has an interest in Lakeside Drive Assoc., Inc. These shares are reported one time, on an unduplicated basis, in the total shares owned by all directors and officers as a group. (11) The Company has an Employees' Savings Plan in which officers and employees participate. Included in the number of shares of Common Stock shown above are 9,550 shares which were allocated to the accounts under the Employees' Savings Plan of all officers as a group at December 31, 1995 (including 1,397 shares in those shown for Mr. Casaday, 1,564 for Mr. Kell, and 758 for Mr. Kenneth L. Pollock). 11 (12) Does not include 52,081 shares of the Company's Common Stock held by the Employees' Retirement Plan, as to which investment power is exercised by the Investment Committee under the Plan, consisting of Messrs. Freeman, Keating, John D. McCarthy, Ross, and Simms. The Committee members disclaim beneficial ownership of these shares. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS During 1995, Ken Pollock, Inc. and Pole Company hauled sludge residue from PG Energy's water treatment plants to land owned by Pole Company under a permit issued by the Pennsylvania Department of Environmental Protection. The removal of this residue was required by the Asset Purchase Agreement pursuant to which PG Energy sold its water operations and related assets. Ken Pollock, Inc. and Pole Company were paid $1.01 million for these services. PG Energy determined to use these two companies based on amounts generally charged for these services and the fact that Pole Company had a site available within a short distance from PG Energy's property. Early in 1996, PG Energy exchanged with Heavy Media, Inc. a parcel of property owned by PG Energy but not contiguous with its other property for a parcel owned by Heavy Media, Inc. that was contiguous to PG Energy's property. An independent appraiser appraised the parcel PG Energy exchanged at $75,000 and the parcel it received at $152,000. Kenneth L. Pollock and Kenneth M. Pollock are officers and/or hold controlling interests in Ken Pollock, Inc., Pole Company, and Heavy Media, Inc. 12 PENNSYLVANIA ENTERPRISES, INC. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this amendment to the Registrant's 1995 Annual Report on Form 10-K to be signed on its behalf by the undersigned thereunto duly authorized. PENNSYLVANIA ENTERPRISES, INC. (Registrant) Date: April 29, 1996 By: /s/ Thomas J. Ward Thomas J. Ward Secretary Date: April 29, 1996 By: /s/ John F. Kell, Jr. John F. Kell, Jr. Vice President, Financial Services (Principal Financial Officer and Principal Accounting Officer) 13 -----END PRIVACY-ENHANCED MESSAGE-----