You are cordially invited to attend a special meeting of shareholders of Valley National Gases Incorporated, which will be held at the Pittsburgh Airport Marriot Hotel, 777 Aten Road, Coraopolis, Pennsylvania 15108, on          ,          , 2007, commencing at 9:00 a.m., local time.

On November 13, 2006, the Board of Directors of Valley National approved, and Valley National entered into, a merger agreement with VNG Acquisition LLC and its wholly owned subsidiary, VNG Acquisition Inc. VNG Acquisition LLC and VNG Acquisition Inc. are owned by investment vehicles affiliated with Caxton-Iseman Capital, Inc. If the merger is completed, Valley National will become a wholly owned subsidiary of VNG Acquisition LLC and all shareholders of record on          ,          , excluding Gary E. West, the majority shareholder of Valley National, and his affiliates, will be entitled to receive $27.00 in cash, without interest, for each share of Valley National common stock that they own. Mr. West and his affiliates will be entitled to receive $24.52 in cash, without interest, for each share of Valley National common stock that they own. A copy of the merger agreement is attached as Annex A to the accompanying proxy statement, and you are encouraged to read it in its entirety.

At the special meeting, you will be asked to approve and adopt the merger and the merger agreement. After careful consideration, our Board of Directors has unanimously approved the merger and the merger agreement and determined that the merger and the merger agreement are advisable and in the best interests of Valley National and its shareholders. Our Board of Directors unanimously recommends that you vote “FOR” the approval and adoption of the merger and the merger agreement. In reaching its determination, our Board of Directors considered a number of factors, including the opinion of an independent investment banking firm, which is attached as Annex B to the accompanying proxy statement, and which you are urged to read in its entirety.

The proxy statement attached to this letter provides you with information about the proposed merger and the special meeting. I encourage you to read the entire proxy statement carefully. You may also obtain additional information about Valley National from documents filed with the Securities and Exchange Commission. Our filings with the Securities and Exchange Commission are also available to the public from commercial document retrieval services and at the website maintained by the Securities and Exchange Commission at www.sec.gov.

The merger cannot be completed unless the merger and the merger agreement are approved and adopted by the affirmative vote of the holders of a majority of the votes cast by all shareholders entitled to vote at the special meeting. Mr. West and his affiliates have entered into a voting agreement with VNG Acquisition LLC, pursuant to which they have agreed to vote all shares beneficially owned by them in favor of the approval and adoption of the merger and the merger agreement. Accordingly, the merger and the merger agreement will be approved and adopted at the special meeting.

Whether or not you are able to attend the special meeting in person, please complete, sign and date the enclosed proxy card and return it in the envelope provided as soon as possible. This action will not limit your right to vote in person if you wish to attend the special meeting and vote in person.

Thank you for your cooperation and your continued support of Valley National Gases.

Neither the Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved the merger, passed upon the merits or fairness of the merger or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.

This proxy statement is dated December   , 2006 and is first being mailed to shareholders on or about December   , 2006.

A special meeting of the shareholders of Valley National Gases Incorporated, a Pennsylvania corporation, will be held at the Pittsburgh Airport Marriott Hotel, 777 Aten Road, Coraopolis, Pennsylvania 15108, on          ,          , 2007, commencing at 9:00 a.m., local time, for the following purposes:

The close of business on          ,           has been designated as the record date for the determination of shareholders entitled to notice of and to vote at the special meeting or any adjournments or postponements thereof. You are cordially invited to attend the meeting in person.

The approval and adoption of the merger and the merger agreement requires the affirmative vote of a majority of votes cast by all shareholders entitled to vote thereon at the special meeting. Even if you plan to attend the meeting in person, we request that you complete, sign, date and return the enclosed proxy card and thus ensure that your shares will be represented at the meeting if you are unable to attend. If you sign, date and mail your proxy card without indicating how you wish to vote, your vote will be counted as a vote in favor of the approval and adoption of the merger and the merger agreement, and in accordance with the recommendation of the Board of Directors on any other matters properly brought before the meeting for a vote. If you are a shareholder of record and do attend the meeting and wish to vote in person, you may withdraw your proxy and vote in person.

Holders of our common stock are entitled to dissenters’ rights under the Pennsylvania Business Corporation Law in connection with the merger. See “Dissenters’ Rights” on page   .

The following questions and answers are provided for your convenience, and briefly address some commonly asked questions about the proposed merger and the special meeting. You should still carefully read this entire proxy statement, including each of the annexes. In this proxy statement, the terms “Valley National,” “Valley National Gases,” “Company,” “we,” “our,” “ours,” and “us” refer to Valley National Gases Incorporated and its subsidiaries.

This summary highlights selected information from this proxy statement. It does not contain all of the information that is important to you. Accordingly, we urge you to read this entire proxy statement and the annexes to this proxy statement.

Valley National Gases Incorporated, a corporation organized under the laws of the Commonwealth of Pennsylvania, is one of the largest independent distributors in the estimated $9 billion U.S. market for industrial, medical and specialty gases delivered in “packaged” or cylinder form, and related welding equipment and supplies or hard goods. Valley National also has a growing presence in the approximately $12 billion U.S. market for non-pipeline residential, commercial and industrial propane. One of Valley National’s principal business strategies is to pursue growth through the acquisition of other packaged gas and propane distributors. Valley National serves a diversified base of more than 211,000 industrial, commercial and residential customers throughout its 14-state territory, primarily in the eastern United States. Our corporate operations are located in Wheeling, West Virginia, and our executive offices are located in Washington, Pennsylvania. We have 75 packaged gas and hard goods distribution locations in 14 states. Our common stock is listed on The American Stock Exchange under the symbol “VLG.”

VNG Acquisition LLC, a limited liability company organized under the laws of the State of Delaware, was formed on November 9, 2006 for the sole purpose of completing the merger with Valley National and arranging the related financing transactions. VNG Acquisition LLC is owned by investment vehicles affiliated with Caxton-Iseman Capital, Inc., which we refer to as Caxton-Iseman. VNG Acquisition LLC has not engaged in any business except in anticipation of the merger. VNG Acquisition LLC may assign its rights and obligations under the merger agreement to an affiliate with the consent of Valley National so long as it remains liable for its obligations under the merger agreement if such affiliate does not perform its obligations.

VNG Acquisition Inc., a corporation organized under the laws of the Commonwealth of Pennsylvania, is a wholly owned subsidiary of VNG Acquisition LLC. VNG Acquisition Inc. was formed exclusively for the purpose of effecting the merger. This is the only business of VNG Acquisition Inc.

The special meeting will be held on          , 2007, starting at 9:00 a.m., local time at the Pittsburgh Airport Marriot Hotel, located at 777 Aten Road, Coraopolis, Pennsylvania 15108.

At the special meeting, you will be asked to consider and vote upon a proposal to approve and adopt the merger and the merger agreement, and to act on other matters and transact other business, as may properly come before the meeting.

If you owned shares of our common stock at the close of business on          ,          , the record date for the special meeting, you are entitled to notice of and to vote at the special meeting. You have one vote for each share of our common stock that you own on the record date. As of the close of business on          ,          , there were           shares of our common stock outstanding and entitled to be voted at the special meeting.

Approval and adoption of the merger and the merger agreement requires the affirmative vote of a majority of the votes cast by all shareholders entitled to vote at the special meeting. Mr. West, our majority shareholder, and his affiliates have entered into a voting agreement with VNG Acquisition LLC, pursuant to which they are required to vote all shares beneficially owned by them in favor of the approval and adoption of the merger and the merger agreement. Accordingly, the merger and the merger agreement will be approved and adopted at the special meeting.

You may grant a proxy by completing and returning the enclosed proxy card. If you hold your shares through a broker or other nominee, you should follow the procedures provided by your broker or nominee.

You may revoke your proxy at any time before it is voted. If you have not submitted a proxy through your broker or nominee, you may revoke your proxy by:

Simply attending the special meeting will not constitute revocation of your proxy. If your shares are held in street name, you should follow the instructions of your broker or nominee regarding revocation of proxies. If your broker or nominee allows you to submit a proxy by telephone or through the Internet, you may be able to change your vote by submitting a proxy again by telephone or through the Internet.

Upon the terms and subject to the conditions of the merger agreement, VNG Acquisition Inc., a wholly owned subsidiary of VNG Acquisition LLC, will be merged with and into Valley National. As a result of the merger, Valley National will cease to be a publicly traded company and will become a wholly owned subsidiary of VNG Acquisition LLC. The merger agreement is attached as Annex A to this proxy statement. Please read it carefully.

Each holder of shares of our common stock (excluding Mr. West, our majority shareholder, and his affiliates) will be entitled to receive $27.00 in cash, without interest and less applicable withholding taxes, for each share of our common stock held immediately prior to the merger. Mr. West and his affiliates will be entitled to receive $24.52 in cash, without interest and less applicable withholding taxes, for each share of our common stock held

After careful consideration, our Board of Directors has determined that the merger and the merger agreement are advisable and in the best interests of Valley National and its shareholders. Accordingly, our Board of Directors has unanimously approved the merger and the merger agreement and unanimously recommends that you vote for “FOR” the approval and adoption of the merger and the merger agreement.

Bear, Stearns & Co. Inc., who we refer to as Bear Stearns, delivered its oral opinion to the Special Committee of our Board, which was subsequently confirmed in writing, that, as of November 13, 2006, and based upon and subject to the various qualifications, limitations, factors and assumptions set forth therein, the $27.00 in cash per share of our common stock to be received by our shareholders pursuant to the merger agreement is fair, from a financial point of view, to the shareholders of Valley National, excluding Mr. West and his affiliates.

The full text of the written opinion of Bear Stearns, dated November 13, 2006, which sets forth, among other things, assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex B to this proxy statement. The opinion was provided solely for the benefit and use of the Special Committee of our Board of Directors in connection with and for the purpose of its consideration of the transactions contemplated by the merger agreement. The Bear Stearns opinion does not constitute a recommendation to the Special Committee of our Board of Directors or any holders of Valley National common stock as to how to vote in connection with the transactions contemplated by the merger agreement or any other matter.

We and VNG Acquisition LLC estimate that the total amount of funds necessary to consummate the merger and related transactions will be approximately $320 million, which will be funded by new credit facilities and equity financing. Funding of the debt financing is subject to the satisfaction of the conditions set forth in the commitment letter pursuant to which the financing will be provided, see “The Merger — Financing” beginning on page   of this proxy statement. The following arrangements are in place to provide the necessary financing for the merger, including the payment of related transaction costs, charges, fees and expenses:

VNG Acquisition LLC has received a debt commitment letter from Credit Suisse Securities (USA) LLC, who we refer to as Credit Suisse, and Credit Suisse, Cayman Islands Branch, under which Credit Suisse, Cayman Islands Branch committed to provide first priority senior secured credit facilities in the amount of up to $215 million ($165 million of which will be funded simultaneously with the completion of the merger) and a second priority senior secured term loan facility in the amount of up to $75 million, subject to the satisfaction of certain terms and conditions in the debt commitment letter.

VNG Acquisition LLC and VNG Acquisition Inc. have represented to Valley National that Caxton-Iseman has committed to provide the equity financing required to complete the merger. The equity financing is required in order for VNG Acquisition LLC to secure the debt financing necessary to complete the merger.

We and VNG Acquisition LLC will not complete the merger unless a number of conditions are satisfied or waived. These conditions include:

The merger agreement may be terminated at any time prior to the effective time of the merger whether before or after the special meeting of our shareholders to consider the approval and adoption of the merger and the merger agreement:

The merger agreement generally provides that each party will bear its own fees and expenses. The merger agreement and a fee letter from Caxton-Iseman provide, however, that if Valley National or VNG Acquisition LLC fails to satisfy certain closing conditions or breaches its covenants under the merger agreement, the breaching party will be responsible for reimbursing up to $1,500,000 of the other party’s fees and expenses.

The merger agreement obligates us to pay a termination fee to VNG Acquisition LLC of $9 million, if our Board of Directors withdraws its recommendation that our shareholders vote in favor of the approval and adoption of the merger and the merger agreement and accepts a superior proposal.

Under the provisions of the HSR Act, we and VNG Acquisition LLC may not complete the merger until we have made certain filings with the Federal Trade Commission and the United States Department of Justice and the applicable waiting period has expired or been terminated. We and VNG Acquisition LLC filed pre-merger notifications with the U.S. antitrust authorities pursuant to the HSR Act on November 24, 2006. [The Federal Trade Commission and the Department of Justice granted early termination of the waiting period under the HSR Act on          , 2006.]

Except as noted above with respect to the required filings under the HSR Act, and the filing of articles of merger in Pennsylvania at or before the effective date of the merger, we are unaware of any material federal, state or foreign regulatory requirements or approvals required for the execution of the merger agreement or completion of the merger.

Our Board has determined that Section 1906(c) of the PBCL applies to the merger and that, in accordance with Section 1906(c) and in lieu of the statutory class vote required by Section 1906(b) of the PBCL, holders of shares of our common stock will have dissenters’ rights in connection with the merger. Under Section 1906(c) of the PBCL and other relevant provisions of Pennsylvania law, if you do not vote in favor of the approval and adoption of the merger and the merger agreement, you may dissent and, instead of receiving the consideration payable in the

In order to obtain payment of the fair value of their shares, a shareholder must demand and perfect dissenters’ rights in accordance with Subchapter D, Sections 1571 through 1580, of the PBCL, which we refer to as Subchapter D. The full text of Subchapter D and Section 1906 of the PBCL is set forth in Annex C to this proxy statement. Your failure to follow the procedures set forth in Subchapter D will result in the loss of your dissenters’ rights.

The merger agreement provides that, at the effective time of the merger, subject to the applicable option holder entering into an option termination agreement with us, each option to purchase shares of our common stock will terminate in exchange for a payment, without interest and less applicable withholding taxes, equal to the number of shares of our common stock subject to such option multiplied by the amount, if any, by which $27.00 exceeds the exercise price of the option.

Our directors and executive officers have interests in the merger that may be in addition to, or different from, the interests of our shareholders. For example, if the merger is completed, certain indemnification arrangements for our directors and officers will be continued. Also, the merger agreement provides that each holder of shares of our common stock, including our directors and executive officers but excluding Mr. West, our Chairman and majority shareholder, and his affiliates, will be entitled to receive $27.00 in cash, without interest, for each share of our common stock held immediately prior to the merger. The merger agreement also provides that at the effective time of the merger, subject to the applicable option holder entering into an option termination agreement with us, each option to purchase shares of our common stock, including those options held by our directors and executive officers, will terminate in exchange for a payment equal to the number of shares of our common stock subject to such option multiplied by the amount, if any, by which $27.00 exceeds the exercise price of the option.

Mr. West, our Chairman and majority shareholder, and his affiliates, have agreed to accept $24.52 in cash, without interest, for each share of common stock held immediately prior to the merger, rather than the $27.00 per share to be received by all other shareholders, which is approximately 10.1% higher than the price per share that Mr. West and his affiliates have agreed to accept. In addition, Mr. West and his affiliates have agreed to indemnify VNG Acquisition LLC and Valley National for any breaches of the representations and warranties of Valley National contained in the merger agreement, and to deposit $12,500,000 of the aggregate merger consideration to be received by them into an escrow fund for a period of three years to provide a source of payment to satisfy claims for indemnification by VNG Acquisition LLC. No part of the merger consideration to be received by any shareholder excluding Mr. West and his affiliates is subject to an escrow or potential claims for indemnification by VNG Acquisition LLC. As a condition to their willingness to cause VNG Acquisition LLC and VNG Acquisition Inc. to enter into the merger agreement, Caxton-Iseman required that Mr. West and his affiliates enter into a voting agreement pursuant to which, among other things, they have agreed to vote all of their shares in favor of the approval and adoption of the merger and the merger agreement.

William A. Indelicato, our Chief Executive Officer and a member of our Board of Directors, is a party to an employment agreement with Valley National dated February 1, 2006 and modified October 2, 2006. The employment agreement will remain in place following the merger. Under the terms of this agreement, Mr. Indelicato has agreed to certain non-competition covenants and is entitled to receive additional compensation for such covenants if his employment is terminated under certain circumstances.

James P. Hart, our President, Chief Financial Officer and a member of our Board of Directors, is a party to an employment agreement with Valley National dated February 1, 2006. Under the terms of this agreement, Mr. Hart has agreed to certain non-competition covenants and is entitled to receive certain severance payments and, under certain circumstances, additional compensation for his non-competition covenants. The employment agreement will remain in place following the merger.

Gerald Zehala, our Vice President and Chief Operating Officer, is a party to an employment agreement with Valley National dated February 1, 2006. The employment agreement will remain in place following the merger. Under the terms of this agreement, Mr. Zehala has agreed to certain non-competition covenants and is entitled to receive certain severance payments and, under certain circumstances, additional compensation for his non-competition covenants.

VNG Acquisition LLC has not indicated that it expects to make changes to our team of executive officers following the consummation of the merger, although there is no assurance that, as the new parent holding company of our company, VNG Acquisition LLC will not make any changes. In making its initial proposal to acquire our company, Caxton-Iseman indicated that they hoped that senior management would remain employed by or involved with the surviving corporation, and that they anticipated that satisfactory arrangements would be made with our senior management. In the course of negotiations regarding the transaction, Caxton-Iseman agreed to proceed with the transaction without these arrangements being put into place in advance. The terms of any such arrangements are subject to negotiation and agreement between members of our senior management and VNG Acquisition LLC, and finalization of such arrangements is not a condition to the closing of the merger.

These interests are more fully described under “The Merger — Interests of Certain Persons in the Merger” beginning on page    of this proxy statement. Our Board was aware of these potential conflicts of interest and considered them, among other matters, in reaching its decision to approve the merger and the merger agreement and to recommend that our shareholders vote in favor of approving and adopting the merger and the merger agreement.

Simultaneously with the merger agreement, Valley National, Mr. West and his affiliates, and VNG Acquisition LLC entered into a voting agreement pursuant to which Mr. West and his affiliates have agreed to vote their shares in favor of the approval and adoption of the merger and the merger agreement at the special meeting. Mr. West and his affiliates hold approximately 72.4% of the outstanding shares of Valley National, which assures that the merger and the merger agreement will be approved and adopted at the special meeting. Under the voting agreement, Mr. West has also agreed to indemnify VNG Acquisition LLC against losses arising out, among other things, any breach of Valley National’s representations and warranties contained in the merger agreement. At the closing of the merger, $12,500,000 of the aggregate merger consideration to be received by Mr. West and his affiliates will be deposited into an escrow fund to provide the sole source of payment for any indemnity claims made by VNG Acquisition LLC following the merger. Pursuant to the voting agreement, Mr. West has also agreed that, at the time of the merger, certain real property and cylinder leases between affiliates of Mr. West and Valley National will be amended to provide a mechanism for determining the rent under any renewal terms.

We have agreed that we will not solicit, initiate or encourage any inquiry or any proposal or offer that is, or could reasonably be expected to lead to, an acquisition proposal, or to participate in discussions or furnish non-public information in connection with an acquisition proposal. However, prior to the approval and adoption of the merger agreement by our shareholders, if we determine that an unsolicited written acquisition proposal is reasonably likely to lead to a superior proposal, we may provide confidential information to, and engage in discussions with, the person making such proposal if required by our Board’s fiduciary duties. We have agreed to keep VNG Acquisition LLC informed of the status and the material terms and conditions of any such proposal.

Furthermore, our Board may not withdraw or modify its recommendation of the merger or recommend an acquisition proposal, which we refer to as a change in recommendation, unless prior to the shareholder vote in response to a superior proposal received by our Board:

Notwithstanding the foregoing, under the terms of the merger agreement we are required to hold the special meeting for the purpose of enabling our shareholders to vote on the merger and the merger agreement even if we receive a superior proposal.

This proxy statement, and the documents to which we refer you in this proxy statement, contain forward-looking statements about our plans, objectives, expectations and intentions. Forward-looking statements include information concerning possible or assumed future results of operations of our company, the expected completion and timing of the merger and other information relating to the merger. You can identify these statements by words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” “may,” “will” and “continue” or similar words. You should read statements that contain these words carefully. They discuss our future expectations or state other forward-looking information, and may involve known and unknown risks over which we have no control, including, without limitation,

We are furnishing this proxy statement to you, as a shareholder of Valley National, as part of the solicitation of proxies by our Board for use at the special meeting of shareholders.

The special meeting will be held at the Pittsburgh Airport Marriot Hotel, located at 777 Aten Road, Coraopolis, Pennsylvania 15108, on          , 2007, at 9:00 a.m., local time. The purpose of the special meeting is:

Our Board has, by unanimous vote, determined that the merger and the merger agreement are advisable and in the best interests of Valley National Gases and its shareholders, and has approved the merger and the merger agreement. Our Board unanimously recommends that our shareholders vote “FOR” approval and adoption of the merger and the merger agreement.

The holders of record of shares of our common stock as of the close of business on          ,          , which is the record date for the special meeting, are entitled to receive notice of and to vote at the special meeting.

On the record date, there were           shares of our common stock outstanding held by approximately           shareholders of record. Holders of a majority of the shares of our common stock issued and outstanding as of the record date and entitled to vote at the special meeting must be present in person or represented by proxy at the special meeting to constitute a quorum to transact business at the special meeting. Both abstentions and broker “non-votes” will be counted as present for purposes of determining the existence of a quorum. In the event that a quorum is not present at the special meeting, we expect that we will adjourn or postpone the meeting to solicit additional proxies.

Approval and adoption of the merger and the merger agreement require the affirmative vote of a majority of the votes cast by all shareholders entitled to vote thereon at the special meeting. Each holder of a share of our common stock is entitled to one vote per share.

Brokers or other nominees who hold shares of our common stock in “street name” for customers who are the beneficial owners of such shares may not give a proxy to vote those customers’ shares in the absence of specific instructions from those customers. These non-voted shares of our common stock will not be counted as votes cast or shares voting and will not affect the outcome of the vote regarding the approval and adoption of the merger and the merger agreement.

Mr. West, our majority shareholder, and his affiliates have entered into a voting agreement obligating them to vote all shares beneficially owned by them in favor of the approval and adoption of the merger and the merger agreement. Accordingly, the merger and the merger agreement will be approved and adopted at the special meeting.

Shareholders may vote their shares by attending the special meeting and voting their shares of our common stock in person, or by completing the enclosed proxy card, signing and dating it and mailing it in the enclosed postage-prepaid envelope. All shares of our common stock represented by properly executed proxies received in time for the special meeting will be voted at the special meeting in the manner specified by the holder. If a written proxy card is signed by a shareholder and returned without instructions, the shares of our common stock represented by the proxy will be voted “FOR” approval and adoption of the merger and the merger agreement.

Shareholders who have questions or requests for assistance in completing and submitting proxy cards should contact James P. Hart, President and Chief Financial Officer of Valley National, at (724) 228-3000.

Shareholders who hold their shares of Valley National common stock in “street name,” meaning in the name of a bank, broker or other person who is the record holder, must either direct the record holder of their shares of our common stock how to vote their shares or obtain a legal proxy from the record holder to vote their shares at the special meeting.

You can revoke your proxy at any time before it is voted at the special meeting by:

If your shares of our common stock are held in the name of a bank, broker, trustee or other holder of record, you must follow the instructions of your broker or other holder of record to revoke a previously given proxy. If your broker or nominee allows you to submit a proxy by telephone or through the Internet, you may be able to change your vote by submitting a proxy again by telephone or through the Internet.

In addition to solicitation by mail, our directors, officers and employees may solicit proxies by telephone, other electronic means or in person. These people will not receive any additional compensation for their services, but we will reimburse them for their out-of-pocket expenses. We will reimburse banks, brokers, nominees, custodians and fiduciaries for their reasonable expenses in forwarding copies of this proxy statement to the beneficial owners of shares of our common stock and in obtaining voting instructions from those owners. We will pay the costs of this proxy solicitation, including all expenses of filing, printing and mailing this proxy statement.

We are not currently aware of any business to be acted upon at the special meeting other than the matters discussed in this proxy statement. Under our bylaws, business transacted at the special meeting is limited to matters relating to the purposes stated in the notice of special meeting, which is provided at the beginning of this proxy statement. If other matters do properly come before the special meeting, we intend that shares of our common stock represented by properly submitted proxies will be voted by and at the discretion of the persons named as proxies on the proxy card.

In addition, the grant of a proxy will confer discretionary authority on the persons named as proxies on the proxy card to vote in accordance with their best judgment on procedural matters incident to the conduct of the special meeting. Any shareholder vote regarding any adjournment or postponement may be undertaken without notice by an announcement made at the special meeting by the chairman of the meeting. If the persons named as proxies on the proxy card are asked to vote for one or more adjournments or postponements of the meeting for matters incidental to the conduct of the meeting, such persons will have the authority to vote in their discretion on such matters. However, if the persons named as proxies on the proxy card are asked to vote for one or more adjournments or postponements of the meeting to permit further solicitation of proxies if there are not sufficient votes at the time of the meeting to approve and adopt the merger and the merger agreement, they will only have the authority to vote on such matter as instructed by you or your proxy or, if no instructions are provided, in favor of such adjournment or postponement. Any adjournment or postponement of the special meeting for the purpose of soliciting additional proxies will allow our shareholders who have already granted their proxies to revoke them at any time prior to their use.

This discussion of the merger is qualified by reference to the merger agreement, which is attached to this proxy statement as Annex A. You should read the entire merger agreement carefully as it is the legal document that governs the merger.

Our Board of Directors and management have periodically reviewed and assessed strategic alternatives for our company, including a secondary public offering of our common stock and a potential sale of our company. At a meeting of our Board of Directors held on January 31, 2006, a nationally known investment banking firm made a presentation regarding their capabilities to act as financial advisor to Valley National. During the first calendar quarter of 2006, our Board and senior management determined that it would be in the best interests of Valley National and its shareholders to investigate the potential sale of Valley National, and to engage an investment banking firm to assist our Board and senior management in exploring a possible sale of all or part of Valley National, as well as other strategic alternatives to maximize shareholder value.

On May 1, 2006, Credit Suisse made a presentation regarding its capabilities to act as financial advisor to Valley National. Credit Suisse also preliminarily reviewed with our Board of Directors a summary of strategic alternatives and also explained the process for a bid auction. After discussing the strategic alternatives, our Board of Directors determined that it was in the best interests of our company and its shareholders to engage Credit Suisse and to explore further the possible sale of Valley National through a sale of the entire company.

At a meeting of our Board of Directors held on May 2, 2006, our Board of Directors established a committee of directors, comprised of Mssrs. Robert Hespe, William A. Indelicato and F. Walter Riebenack to investigate the possibility of a potential sale of Valley National. At that meeting, our Board of Directors also reviewed various strategic alternatives, including maintaining the status quo, selling all or part of the business, a recapitalization and other similar transactions.

On May 31, 2006, we formally engaged Credit Suisse as our exclusive financial advisor in considering and evaluating strategic alternatives.

During July 2006, we prepared, with the assistance of Credit Suisse, a Confidential Information Memorandum for use in soliciting third party bids to acquire Valley National. Beginning in July 2006, at the direction of our Board of Directors, Credit Suisse contacted approximately 54 potential buyers, all of which were financial buyers and primarily private equity firms. In the following weeks, we, in conjunction with Credit Suisse and our legal counsel, Robinson & Cole LLP, who we refer to as Robinson & Cole, negotiated and signed confidentiality agreements with 32 potential buyers. Each of these 32 potential buyers received a Confidential Information Memorandum from us, together with instructions to follow in order to submit a bid. At this time, at the direction of our Board of Directors, Credit Suisse also contacted three potential strategic buyers to determine their interest in signing confidentiality agreements and conducting due diligence regarding a potential acquisition of our company. The initial round of seeking bids concluded on August 10, 2006, with 10 potential financial buyers submitting preliminary indications of interest for the acquisition of all of the outstanding shares of Valley National and one additional potential financial buyer submitting a bid thereafter. None of the three potential strategic buyers contacted submitted a bid.

At a meeting of our Board of Directors held on August 15, 2006, our Board Directors established a Special Committee of independent directors, comprised of Messrs. Ben Exley, IV, Robert Hespe, August E. Maier and F. Walter Riebenack, as committee Chairman, and William A. Indelicato to participate as a non-voting committee member, to consider and evaluate possible transactions to maximize shareholder value and any third party proposals for any such transaction, as well as to consider the effect of any such transaction on the other constituencies of Valley National, including employees, communities, vendors, vendees and others. During the process of considering the proposals submitted by potential buyers, the Special Committee engaged Wilmer Cutler Pickering Hale and Dorr LLP, who we refer to as Wilmer Hale, as its special counsel. Wilmer Hale advised the Special Committee on matters relating to its fiduciary duties and certain other legal matters. During this process, we also engaged Morgan, Lewis & Bockius LLP to act as special Pennsylvania counsel to Valley National and to advise on Pennsylvania law issues.

At meetings of the Special Committee and our Board of Directors held on August 15, 2006, Credit Suisse reviewed with the Special Committee and our Board of Directors the preliminary indications of interest received from potential financial buyers. After this review, our Board invited nine potential financial buyers to attend management presentations and conduct further due diligence regarding Valley National. At this time, at the direction of our Board of Directors, Credit Suisse contacted two additional potential strategic buyers and invited each of them to participate in the second round bid process. Neither of these additional potential strategic buyers attended management presentations although both were invited to conduct due diligence. One of such potential strategic buyers entered into a confidentiality agreement and the other was already a party to a confidentiality agreement with Valley National. Both additional potential strategic buyers conducted a limited due diligence review.

In September 2006, our senior management, with the assistance of Credit Suisse, made presentations to all nine potential financial buyers regarding Valley National and its business. These nine potential financial buyers were also invited to conduct additional due diligence review of Valley National by visiting an on-line data room maintained by Valley National with the assistance of Credit Suisse and an outside vendor.

During early October 2006, our legal counsel, Robinson & Cole, prepared a draft merger agreement for the company and, at the direction of our Board of Directors, Credit Suisse distributed the draft merger agreement to six of the potential buyers, including two interested strategic buyers. In addition, Credit Suisse provided instructions for submitting final bids and, at the direction of our Board of Directors, established October 19, 2006 as the deadline for submitting final bids. Four of the six potential financial buyers who were provided with the draft merger agreement indicated that they would submit a final bid.

At the request of our Board, Credit Suisse, Cayman Islands Branch, an affiliate of Credit Suisse, offered to arrange financing to potential buyers in the transaction. For this and other reasons, our Board of Directors determined to engage a different investment banking firm to provide an opinion as to the fairness, from a financial point of view, of the consideration to be received by our shareholders, excluding Mr. West and his affiliates.

On October 19 and 20, 2006, we received proposals from Caxton-Iseman, and three other private equity firms, which we refer to as Bidders X, Y and Z, for the purchase of all of the outstanding shares of our company. Each of these proposals was accompanied by financing commitments. The Caxton-Iseman proposal and the proposal of Bidder X included detailed comments on the draft merger agreement. The proposals from Bidders Y and Z each included a memorandum summarizing issues under the draft merger agreement. No potential strategic buyers submitted a bid.

Caxton-Iseman’s proposal was to purchase all of our outstanding stock in a merger for a total cash consideration of $246 million, or approximately $25.00 per share, the closing of which would be subject to obtaining debt financing and other customary closing conditions. Caxton-Iseman’s proposal also required that Mr. West personally establish an escrow fund from his merger consideration to provide funds to satisfy indemnity claims for breaches of Valley National’s representations and warranties in the merger agreement. Caxton-Iseman’s proposal was accompanied by commitment letters from Credit Suisse, Cayman Islands Branch, and certain other financial institutions to provide the requisite debt financing. Caxton-Iseman’s proposal was also conditioned on Mr. West entering into a voting agreement with respect to all shares of Valley National controlled by Mr. West. Bidders X, Y and Z’s proposals were also to purchase all of our outstanding stock, were also accompanied by debt financing commitments and comments to the draft merger agreement, but were each lower than Caxton-Iseman’s proposed purchase price.

At a meeting of the Special Committee held on October 23, 2006, Credit Suisse reviewed with the Special Committee and our Board of Directors the four proposals. Representatives of Bear Stearns also attended this meeting. Our Board of Directors determined that the proposal of Bidder X did not merit further consideration due to the financial terms presented. Robinson & Cole reviewed with the Special Committee and the Board of Directors the principal terms of the draft merger agreement, the comments to the draft merger agreement and the financing commitment letters submitted by Caxton-Iseman and Bidders Y and Z. Our Board of Directors reviewed the proposals based upon price, deal terms and likelihood of proceeding to a successful closing. Our Board of Directors observed, based on discussions with Credit Suisse, management and Robinson & Cole, that Caxton-Iseman had conducted a more extensive due diligence review of our company compared to the other potential buyers still under

Following the October 23, 2006 Board meeting, Credit Suisse and Caxton-Iseman continued to negotiate the financial terms of the Caxton-Iseman proposal, and Robinson & Cole and Simpson Thacher continued to negotiate the terms of the merger agreement, and related voting agreement and escrow agreement. On October 31, 2006, Caxton-Iseman increased their bid by $2.5 million, or approximately $0.25 per share.

At a meeting of our Board of Directors held on November 1, 2006, Credit Suisse reviewed the status of the sale process and the key terms of the most recent proposal made by Caxton-Iseman. On November 3, 2006, at the direction of our Board of Directors, we entered into an exclusivity agreement with Caxton-Iseman in which we agreed to negotiate exclusively with them for a period of ten days. At the November 1 meeting, the Special Committee also discussed the engagement of Bear Stearns to render an opinion as to the fairness, from a financial point of view, of the consideration to be received by the shareholders, excluding Mr. West and his affiliates. On November 11, 2006, the Special Committee executed an engagement letter with Bear Stearns for such purpose.

The cash consideration of $248.5 million offered by Caxton-Iseman in its merger proposal would have resulted in a payment to all holders of our common stock in the amount of $25.25 per share if the merger was structured in a manner to pay all holders of our common stock the same consideration per share. At a meeting of the Special Committee held on November 12, 2006, the Special Committee recommended that the price per share to be received by each shareholder excluding Mr. West and his affiliates would be set in the final merger agreement at the higher of the average closing price for Valley National shares on The American Stock Exchange for the five trading days immediately prior to the date of signing the merger agreement, or the closing price on the date of signing the merger agreement. The price per share to be received by Mr. West would be determined by dividing the remaining consideration to be paid by Caxton-Iseman (after payment to all other shareholders and option holders) among the shares held by Mr. West and his affiliates. The Special Committee presented this approach to Mr. West and explained to him that it would result in him and his affiliates receiving less consideration per share than would have been the case had all shareholders received the same per share price. Mr. West agreed to the approach recommended by the Special Committee. As a result of Mr. West’s agreement with this approach, all holders of our common stock (excluding Mr. West and his affiliates) will receive consideration in the amount of $27.00 per share as part of the merger (a price approximately 10.1% higher than the price per share that Mr. West and his affiliates have agreed to accept), which price was the closing price per share on the date of signing the merger agreement and was higher than the five-day average closing price. Mr. West and his affiliates have agreed to receive consideration in the amount of $24.52 per share, which amount represents a price per share determined by dividing the remaining merger consideration (after payment to all other holders of our common stock and options) among the shares held by Mr. West and his affiliates. $12.5 million of the aggregate merger consideration to be received by Mr. West and his affiliates upon the merger completion will be held in an escrow account for a period of three years to provide the sole source of payment to satisfy claims of indemnification by VNG Acquisition LLC for breaches of the representations and warranties of Valley National and certain potential litigation claims.

On November 13, 2006, a meeting of the Special Committee of our Board was held to consider the Caxton-Iseman proposal and the terms of the merger agreement negotiated between Caxton-Iseman and its counsel, and our senior management and its legal counsel. At the meeting, Bear Stearns reviewed with the Special Committee its financial analysis and delivered to the Special Committee a fairness opinion to the effect that, as of that date, the merger consideration was fair from a financial point of view to our shareholders, excluding Mr. West and his affiliates. By unanimous vote, the Special Committee determined that the merger and the merger agreement were advisable, appropriate, fair to and in the best interests of Valley National and its shareholders, and recommended to our Board that it approve the merger and the merger agreement and recommend the approval and adoption of the merger and the merger agreement by our shareholders.

Immediately following the meeting of the Special Committee on November 13, 2006, a meeting of our Board of Directors was held to consider the Caxton-Iseman proposal and the terms of the merger agreement. At that meeting Credit Suisse reviewed the entire bid auction process and the financial terms of the Caxton-Iseman proposal to acquire Valley National. Robinson & Cole reviewed the final terms of the merger agreement, including the closing conditions and the provisions limiting our Board’s ability to respond to unsolicited acquisition proposals. Also at the meeting, Bear Stearns discussed with our Board of Directors its fairness opinion delivered to the Special Committee, to the effect that, as of that date, the merger consideration was fair, from a financial point of view, to our shareholders, excluding Mr. West and his affiliates. Following discussion and questions by our Board of Directors, and having received the recommendation of the Special Committee, our Board of Directors by the unanimous vote of all directors, approved and declared advisable the merger agreement and merger and resolved to recommend that our shareholders approve and adopt the merger and the merger agreement. After the meeting, Valley National, VNG Acquisition LLC and VNG Acquisition Inc. executed the merger agreement, and, prior to the opening of U.S. financial markets on Tuesday, November 14, 2006, we issued a press release announcing the signing of the merger agreement.

In the course of reaching its decision to approve the merger and the merger agreement, our Board of Directors consulted with senior management, our financial and legal advisors and the Special Committee, and reviewed a significant amount of information and considered a number of factors, including the following:

In the course of its deliberations, our Board also considered a variety of risks and other countervailing factors, including:

The foregoing discussion of the factors considered by our Board is not intended to be exhaustive, but does set forth the principal factors considered by our Board. Our Board collectively reached the unanimous conclusion to approve the merger and the merger agreement are in light of the various factors described above and other factors that each member of our Board felt were appropriate. In view of the wide variety of factors considered by our Board in connection with its evaluation of the merger and the complexity of these matters, our Board did not consider it practical, and did not attempt, to quantify, rank or otherwise assign relative weights to the specific factors it considered in reaching its decision and did not undertake to make any specific determination as to whether any particular factor, or any aspect of any particular factor, was favorable or unfavorable to the ultimate determination of the Board. Rather, our Board made its recommendation based on the totality of information presented to and the investigation conducted by it. In considering the factors discussed above, individual directors may have given different weights to different factors.

After evaluating these factors and consulting with its legal counsel and its financial advisors, our Board determined that the merger and the merger agreement were advisable and in the best interests of our shareholders. Accordingly, our Board has unanimously approved the merger and the merger agreement. Our Board of Directors unanimously recommends that you vote “FOR” the approval and adoption of the merger and the merger agreement.

Pursuant to an engagement letter dated November 11, 2006, the Special Committee of our Board of Directors retained Bear Stearns to render its opinion with respect to a possible transaction with Caxton-Iseman. In selecting Bear Stearns, the Special Committee of our Board of Directors considered, among other things, the fact that Bear Stearns is an internationally recognized investment banking firm with substantial experience advising companies in the chemicals industry as well as substantial experience providing strategic advisory services. Bear Stearns, as part of its investment banking business, is continuously engaged in the evaluation of businesses and their debt and equity securities in connection with mergers and acquisitions; underwritings, private placements and other securities offerings; senior credit financings; valuations; and general corporate advisory services.

At the November 13, 2006 meeting of the Special Committee of our Board of Directors, Bear Stearns delivered its oral opinion, which was subsequently confirmed in writing, that, as of November 13, 2006, and based upon and subject to the assumptions, qualifications and limitations set forth in the written opinion, the consideration to be received is fair, from a financial point of view, to our shareholders, excluding Mr. West and his affiliates.

The full text of Bear Stearns’ written opinion is attached as Annex B to this proxy statement and you should read the opinion carefully and in its entirety. The opinion sets forth the assumptions made, some of the matters considered and qualifications to and limitations of the review undertaken by Bear Stearns. The Bear Stearns opinion is subject to the assumptions and conditions contained therein and is necessarily based on economic, market and other conditions and the information made available to Bear Stearns as of the date of the Bear Stearns opinion.

In reading the discussion of the fairness opinion set forth below, you should be aware that Bear Stearns’ opinion:

We did not provide specific instructions to, or place any limitations on, Bear Stearns with respect to the procedures to be followed or factors to be considered by it in performing its analyses or providing its opinion.

In connection with rendering its opinion, Bear Stearns:

Bear Stearns relied upon and assumed, without independent verification, the accuracy and completeness of the financial and other information provided to or discussed with Bear Stearns by our senior management or obtained by Bear Stearns from public sources, including, without limitation, the projections referred to above. With respect to the projections, Bear Stearns relied on representations that they have been reasonably prepared on bases reflecting the best currently available estimates and judgments of our senior management as to our expected future performance. Bear Stearns did not assume any responsibility for the independent verification of any such information, including, without limitation, the projections, and Bear Stearns further relied upon the assurances of our senior management that they are unaware of any facts that would make the information and projections incomplete or misleading.

In arriving at its opinion, Bear Stearns did not perform or obtain any independent appraisal of our assets or liabilities (contingent or otherwise), nor was Bear Stearns furnished with any such appraisals. In addition, for purposes of its opinion Bear Stearns disregarded certain variable interest entities, including West Rentals, Inc., G.E.W. Real Estate LLC, RealEquip-Lease LLC, Acetylene Products Corporation and Plymouth Holding LLC, which Bear Stearns understood will no longer be consolidated in the Valley National financial statements after the merger becomes effective and in respect of which Bear Stearns understood no consideration is being paid in connection with the merger. Bear Stearns assumed that the merger will be consummated in a timely manner and in accordance with the terms of the merger agreement without any limitations, restrictions, conditions, amendments or modifications, regulatory or otherwise, that collectively would have a material effect on Valley National.

Bear Stearns did not express any opinion as to the price or range of prices at which the shares of our common stock may trade subsequent to the announcement of the merger.

The following is a brief summary of the material financial analyses performed by Bear Stearns and presented to the Special Committee of our Board of Directors in connection with rendering its fairness opinion.

Some of the financial analyses summarized below include summary data and information presented in tabular format. In order to understand fully the financial analyses, the summary data and tables must be read together with the full text of the analyses. Considering the summary data and tables alone could create a misleading or incomplete view of Bear Stearns’ financial analyses.

Bear Stearns compared the consideration to be received by our shareholders, excluding Mr. West and his affiliates, of $27.00 per share to our stock price on November 13, 2006, our 52-week high and our stock price one month, three months, six months, one year, two years and three years preceding November 13, 2006.

The table below summarizes the analysis.

Bear Stearns calculated the enterprise value for Valley National for purposes of analyzing the consideration to be received by our shareholders, excluding Mr. West and his affiliates. “Enterprise Value” is calculated as the sum of the equity value of Valley National’s common stock implied by the consideration to be received by our shareholders, excluding Mr. West and his affiliates, of $27.00 per share (including calculating the value of in-the-money options with a deduction for the exercise prices) and our total debt outstanding as of September 30, 2006 and subtracting our cash balance as of such date.

Bear Stearns calculated multiples of Valley National’s Enterprise Value to (i) our earnings before interest, taxes, depreciation and amortization, referred to in this summary as “EBITDA”, for the latest twelve months ending September 30, 2006, referred to in this summary as “LTM EBITDA”, and estimated EBITDA for the calendar years ending 2006 and 2007 and (ii) our earnings before interest and taxes, referred to in this summary as “EBIT”, for the latest twelve months ending September 30, 2006, referred to in this summary as “LTM EBIT”, and estimated EBIT for the calendar years ending 2006 and 2007.

Discounted Cash Flow Analysis-Base Case.  Bear Stearns calculated the estimated present value of our stand-alone, unlevered after-tax free cash flows for the six years ending June 30, 2012 based on the base case projections, referred to in this summary as “Base Case”, provided to Bear Stearns by our senior management. The Base Case assumes, among other things, that Valley National will continue to operate in the ordinary course, but will not engage in the acquisition of similar businesses. Bear Stearns then calculated an implied range of terminal values for Valley National under two methodologies: (i) by applying a range of perpetual growth rates of unlevered net income of 3% to 4% and (ii) by applying a range of multiples of 2012 EBITDA of 6.5x to 8.0x. The present value of the free cash flows and terminal values were discounted using a range of illustrative discount rates of 10.5% to 12.5%.

This analysis resulted in a range of implied equity values per share for our common stock of $20.51 to $29.06 per share.

Discounted Cash Flow Analysis-Acquisition Case.  Bear Stearns calculated the estimated present value of our stand-alone, unlevered after-tax free cash flows for the six years ending June 2012 based on the acquisition case projections, referred to in this summary as “Acquisition Case”, provided to Bear Stearns by our senior management. The Acquisition Case assumes, among other things, that Valley National will continue to operate in the ordinary course and will continue to acquire businesses consistent with historical practices. Bear Stearns then calculated an implied range of terminal values for Valley National under two methodologies: (i) by applying a range of perpetual growth rates of unlevered net income of 4% to 5% and (ii) by applying a range of multiples of 2012 EBITDA of 6.5x

This analysis resulted in a range of implied equity values per share for our common stock of $23.02 to $35.10 per share.

Bear Stearns analyzed selected historical and projected operating information provided by our senior management, stock price performance data and valuation multiples for Valley National and compared this data to that of seven publicly traded companies deemed by Bear Stearns to be generally comparable to Valley National. Bear Stearns utilized the earnings forecasts for these companies from publicly available data, First Call and selected Wall Street equity research reports. In conducting its analysis, Bear Stearns analyzed the multiples in the following subsets of comparable companies.

The companies included in the Bear Stearns analysis were:

Bear Stearns reviewed, among other things, the comparable companies’ (i) Enterprise Value as a multiple of LTM EBITDA, estimated EBITDA for the calendar year ending 2006, referred to in this summary as “CY 2006E EBITDA”, and estimated EBITDA for the calendar year ending 2007, referred to in this summary as “CY 2007E EBITDA” and (ii) Enterprise Value as a multiple of LTM EBIT, estimated EBIT for the calendar year ending 2006, referred to in this summary as “CY 2006E EBIT”, and estimated EBIT for the calendar year ending 2007, referred to in this summary as “CY 2007E EBIT”. The multiples were based on closing stock prices for the comparable companies on November 10, 2006.

The table below summarizes the analysis.

Bear Stearns compared the multiples implied in the merger of 8.3x LTM EBITDA, 7.9x 2006 estimated EBITDA, 7.8x 2007 estimated EBITDA, 10.5x LTM EBIT, 10.0x 2006 estimated EBIT, and 9.7x 2007 estimated EBIT with the range and mean of the Packaged Gas and Distribution multiples.

Bear Stearns analyzed 16 merger and acquisition transactions involving companies in the packaged gas and propane industries which Bear Stearns deemed generally comparable to Valley National and the merger. Transaction values range from $1.8 million to $475 million and include completed transactions announced from December 1, 1999 to September 1, 2006. Bear Stearns reviewed, among other things, the ratio of the target companies’ enterprise value implied in the respective transactions to target companies’ LTM Revenue and LTM EBITDA for the year in which the transaction was announced.

The precedent transactions in the Bear Stearns analysis were:

The table below summarizes the analysis.

Bear Stearns compared the multiple implied in the transaction of 1.50x LTM Revenue and 8.3x LTM EBITDA with the range and mean of the precedent transactions.

The preparation of a fairness opinion is a complex process and involves various judgments and determinations as to the most appropriate and relevant assumptions and financial analyses and the application of those methods to

The Bear Stearns opinion was just one of the many factors taken into consideration by the Special Committee of our Board of Directors. Consequently, Bear Stearns’ analysis should not be viewed as determinative of the decision of the Special Committee of our Board of Directors with respect to the fairness of the aggregate consideration to be received, from a financial point of view, by our shareholders, excluding Mr. West and his affiliates.

Pursuant to the terms of Bear Stearns’ engagement letter, we have agreed to pay Bear Stearns a customary transaction fee, all of which was payable upon rendering of the opinion. In addition, we have agreed to reimburse Bear Stearns for reasonable out-of-pocket expenses incurred by Bear Stearns in connection with its engagement and the transactions contemplated by the merger agreement, including reasonable fees and disbursements of its legal counsel. We will receive a credit for this fee and expenses against the fee we have agreed to pay Credit Suisse. We have agreed to indemnify Bear Stearns against certain liabilities arising out of or in connection with Bear Stearns’ engagement.

Various individuals and entities affiliated with Bear Stearns may have passive minority investments in private equity funds managed by Caxton-Iseman. In addition, Bear Stearns in the past has been engaged by Caxton-Iseman or its affiliates to provide certain investment banking and other services in matters unrelated to the merger, for which it has received, or expects to receive, customary fees.

In the ordinary course of business, Bear Stearns and its affiliates may actively trade the equity and debt securities and/or bank debt of Valley National and/or Caxton-Iseman and their respective affiliates for its own account and for the account of its customers and, accordingly, may at any time hold a long or short position in such securities or bank debt.

In connection with the merger, VNG Acquisition LLC will cause approximately $248.5 million to be paid out to our shareholders and holders of our options. This amount is expected to come from a combination of equity contributions by Caxton-Iseman and/or their co-investors, borrowings by VNG Acquisition Inc. or us, and our cash, cash equivalents and marketable securities on hand. As of          , 2006, we had approximately $      million in cash, cash equivalents and marketable securities.

VNG Acquisition LLC has received a debt commitment letter, dated November 13, 2006, from Credit Suisse, Cayman Islands Branch, to provide the following debt financing to VNG Acquisition Inc. or us, initially, and the surviving corporation, upon consummation of the merger, which we refer to as the borrower, subject to the conditions set forth therein:

Loans under the first-lien term facility and the second-lien term facility are expected to bear interest, at the borrower’s option, at (1) a rate equal to LIBOR (London Interbank Offered Rate) plus an applicable margin or (2) a rate equal to the higher of (a) the prime rate of Credit Suisse, Cayman Islands Branch and (b) the federal funds effective rate plus 0.50%, plus (in either case) an applicable margin. The applicable margins will be subject to change pursuant to a corporate rating-based pricing grid.

The commitment of Credit Suisse, Cayman Islands Branch to provide the debt financing expires on April 30, 2007. The documentation governing the first and second priority senior secured facilities has not been finalized and, accordingly, the actual terms may differ from those described in this proxy statement. In addition, VNG Acquisition LLC may obtain financing from different sources in amounts and on terms that may vary from those described herein.

The availability of the first-lien term facility and second-lien term facility will be subject to, in addition to customary corporate and documentation conditions and the payment of fees and expenses, the satisfaction or waiver of certain other conditions precedent, including the following:

VNG Acquisition LLC and VNG Acquisition Inc. have represented to Valley National that Caxton-Iseman has the funds available and will provide the equity financing required to complete the merger. The equity financing is required in order for VNG Acquisition LLC to secure the debt financing necessary to complete the merger.

If the merger and the merger agreement are approved and adopted by our shareholders and the other conditions to the closing of the merger are either satisfied or waived, VNG Acquisition Inc. will be merged with and into us, and we will be the surviving corporation. When the merger is completed, we will cease to be a publicly traded company and will instead become a wholly owned subsidiary of VNG Acquisition LLC.

Upon completion of the merger, each share of our common stock issued and outstanding immediately prior to the effective time of the merger (excluding shares held in our treasury, shares owned by Mr. West and his affiliates, shares owned by VNG Acquisition LLC or VNG Acquisition Inc. or any wholly owned subsidiary of VNG Acquisition LLC or Valley National Gases, and shares held by shareholders who properly exercise dissenters’ rights in compliance with all of the required procedures under Pennsylvania law) will be converted into the right to receive $27.00 in cash, without interest and less applicable taxes. Each share of our common stock owned by Mr. West and his affiliates immediately prior to the effective time of the merger will be converted into the right to receive $24.52 in cash, without interest and less applicable taxes. The merger agreement provides that at the effective time of the merger, each option to purchase shares of our common stock, including those options held by our directors and executive officers, will, subject to the option holder entering into an option termination agreement with us, terminate in exchange for a payment equal to the number of shares of our common stock subject to such option multiplied by the amount, if any, by which $27.00 exceeds the exercise price of the option, less any applicable taxes.

The aggregate consideration offered by Caxton-Iseman in its merger proposal would have resulted in a per share price of $25.25 to all holders of our common stock. Mr. West and his affiliates, however, have agreed to accept the suggestion of the Special Committee of our Board that allows all holders of our common stock, excluding Mr. West and his affiliates, to receive a price per share equal to the higher of the average closing price for Valley National shares on The American Stock Exchange for the five trading days immediately prior to the day of signing the merger agreement, or the closing price on the date of signing the merger agreement. As a result of Mr. West’s acceptance of the suggestion of the Special Committee of our Board, all holders of our common stock (excluding Mr. West and his affiliates) will receive consideration in the amount of $27.00 per share in connection with the merger, which amount was the closing price per share on the date of signing the merger agreement and was higher than the five-day average closing price. Mr. West and his affiliates have agreed to receive consideration per share in the amount of $24.52, which amount represents a price per share determined by dividing the remaining merger consideration (after payment to all other holders of our common stock and options) among the shares held by Mr. West and his affiliates.

At the effective time of the merger, our current shareholders will cease to have ownership interests in our company or rights as our shareholders. Therefore, our current shareholders will not participate in any of our future earnings or growth and will not benefit from any appreciation in our value.

Our common stock is currently registered under the Securities Exchange Act of 1934, which we refer to as the Exchange Act, and is listed on The American Stock Exchange under the symbol “VLG.” As a result of the merger, we will no longer be a publicly traded company, and there will be no public market for our common stock. After the merger, our common stock will cease to be listed on The American Stock Exchange, and price quotations with

In the event that the merger is not completed for any reason, shareholders will not receive any payment for their shares in connection with the merger. Instead, we will remain an independent public company and our common stock will continue to be listed on The American Stock Exchange. In addition, if the merger is not completed, we expect that management will operate the business in a manner similar to that in which it is being operated today and that our shareholders will continue to be subject to the same risks and opportunities as they currently are, including, among other things, the nature of the industrial, medical and specialty gas industry on which our business largely depends, and general industry, economic and market conditions. Accordingly, if the merger is not consummated, there can be no assurance as to the effect of these risks and opportunities on the future value of your shares of our common stock. From time to time, our Board will evaluate and review our business operations, properties, dividend policy and capitalization, among other things, make such changes as are deemed appropriate and continue to seek to identify strategic alternatives to maximize shareholder value. If the merger is not consummated for any reason, there can be no assurance that any other transaction acceptable to us will be offered or that our business, prospects or results of operations will not be adversely impacted or that we will retain our current senior management on a long-term basis especially given the age of our current Chief Executive Officer.

Mr. West, our majority shareholder, and his affiliates have entered into a voting agreement obligating them to vote all shares beneficially owned by them in favor of the approval and adoption of the merger and the merger agreement. Accordingly, the merger and the merger agreement will be approved and adopted at the special meeting.

If the merger agreement is terminated under certain circumstances, we will be obligated to pay a termination fee of $9 million to VNG Acquisition LLC. The merger agreement and a fee letter from Caxton-Iseman provide that if Valley National or VNG Acquisition LLC fails to satisfy certain closing conditions or breaches its covenants under the merger agreement, the breaching party will be responsible for reimbursing up to $1,500,000 of the other party’s fees and expenses.

If the merger is completed, our common stock will be delisted from The American Stock Exchange and deregistered under the Exchange Act, and we will no longer file periodic reports with the Securities and Exchange Commission.

In considering the recommendation of our Board with respect to the merger and the merger agreement, holders of shares of our common stock should be aware that our executive officers and directors have interests in the merger that may be different from, or in addition to, those of our shareholders generally. These interests may create potential conflicts of interest. Our Board was aware of these potential conflicts of interest and considered them, among other matters, in reaching its decision to approve the merger and the merger agreement and to recommend that our shareholders vote in favor of approving and adopting the merger and the merger agreement.

The merger agreement provides that each holder of shares of our common stock, including our directors and executive officers, excluding Mr. West and his affiliates, will be entitled to receive $27.00 in cash, without interest, for each share of our common stock held immediately prior to the merger. The merger agreement also provides that at the effective time of the merger, each option to purchase shares of our common stock, including those options held by our directors and executive officers, will, subject to the applicable option holder entering into an option termination agreement with us, terminate in exchange for a payment equal to the number of shares of our common

The table below sets forth, as of December 6, 2006, for each of our executive officers and directors:

On June 1, 2003, the Company and Mr. Hart entered into an employment agreement for an initial employment term of one year, continuing thereafter at the Company’s election for unspecified additional terms. The employment agreement sets Mr. Hart’s annual salary as President at $180,000 and also provides that Mr. Hart will receive certain benefits, as well as certain additional non-cash compensation, including a stock option, which vested in June 2006, to purchase 50,000 shares of the Company’s Common Stock with an exercise price of $8.00 per share, which exercise price was greater than the trading price for Valley National stock at such time. The employment agreement contains customary termination, inventions, nondisclosure and noncompetition provisions. In February 2006, this agreement was modified to extend Mr. Hart’s employment for three additional years through February 2009.

On June 1, 2004, the Company and Mr. Zehala entered into a revised employment agreement for an initial employment term of one year, continuing thereafter at the Company’s election for unspecified additional terms. The employment agreement sets his annual salary as Chief Operating Officer at $150,000 and also provides that Mr. Zehala will receive certain benefits including living expenses in connection with his relocation to the Company’s executive offices in Washington, Pennsylvania, as well as certain additional non-cash compensation, including a stock option, which vested in June 2006, to purchase 30,000 shares of the Company’s common stock with an exercise price of $8.00 per share, which exercise price was greater than the trading price for Valley National stock at such time. The employment agreement contains customary termination, inventions, nondisclosure and

On February 1, 2006, the Company and Mr. Indelicato entered into an employment agreement for a three year term through January 2009. The employment agreement was modified on October 2, 2006. The employment agreement sets his annual salary at $99,600 and also provides that the employee will be eligible for benefits as provided to other Company employees. The employment agreement contains customary termination, inventions and nondisclosure provisions. In addition, the agreement provides that for a four year period after termination of Mr. Indelicato’s employment, he is prohibited from engaging in any business that competes with the Company. Mr. Indelicato will be paid $960,000 in 48 consecutive monthly installments, paid in the amount of $25,000 each during the first 24 months of this non-compete period and $15,000 each during the second 24 months of this non-compete period.

VNG Acquisition LLC has not indicated that it expects to make changes to our team of executive officers following the consummation of the merger, although there is no assurance that, as the new parent holding company of our company, VNG Acquisition LLC will not make any changes. In making its initial proposal to acquire our company, Caxton-Iseman indicated that they hoped that senior management would remain employed by the surviving corporation, and that they anticipated that satisfactory arrangements would be made with our senior management. In the course of negotiations regarding the transaction, Caxton-Iseman agreed to proceed with the transaction without these arrangements being put into place in advance. The terms of any such arrangements are subject to negotiation and agreement between members of our senior management and VNG Acquisition LLC, and finalization of such arrangements is not a condition to the closing of the merger.

VNG Acquisition LLC has agreed that, for a period of six years following the effective time of the merger, it will cause the surviving corporation to indemnify and hold harmless our current and former directors and officers, and the current and former directors and officers of any of our subsidiaries, to the fullest extent permitted under the Pennsylvania Business Corporation Law or our current articles of incorporation and bylaws or agreements with such persons, against all claims, losses, liabilities, damages, judgments, fines and reasonable fees, costs and expenses, including attorneys’ fees and disbursements incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of or pertaining to the fact that those persons were directors or officers of our company or any of our subsidiaries, whether asserted or claimed prior to, at or after the effective time of the merger, and any claim, action, suit, proceeding or investigation arising out of, interrelated with, or based on facts or allegations that are the same or interrelated with any that form the basis of any claim, action, suit or proceeding asserted or claimed prior to such six-year anniversary. Each indemnified party will be entitled, subject to applicable law, to advancement of expenses incurred in the defense of any such claim, action, suit, proceeding or investigation from VNG Acquisition LLC and the surviving corporation within ten business days of receipt of a request for an advancement.

VNG Acquisition LLC has agreed that the provisions of the articles of incorporation and bylaws of the surviving corporation will contain provisions no less favorable with respect to indemnification, advancement of expenses and exculpation of our and our subsidiaries’ current and former directors and officers than the current provisions of our articles of incorporation and bylaws.

VNG Acquisition LLC and we have agreed that, prior to the completion of the merger, we will purchase:

The average cost of the DIC policy and the “tail” or “run off” policy must not exceed $350,000.

VNG Acquisition LLC has also agreed to cause the surviving corporation to maintain, at no expense to the beneficiaries, in effect for six years from the effective time of the merger the current policies of the directors’ and officers’ liability insurance maintained by us (including the DIC policy and such “tail” or “run off” policy) with respect to matters existing or occurring at or prior to the effective time of the merger (including the transactions contemplated by the merger agreement).

VNG Acquisition LLC has agreed to pay all expenses, including reasonable attorneys’ fees, that may be incurred by any of our current or former directors or officers in connection with their enforcement of their rights described above.

The indemnification obligations and the obligation to maintain the DIC policy, the “tail” or “run off” policy and the current policies of directors’ and officers’ liability insurance and to pay such expenses of our officers and directors are intended to be in addition to the rights otherwise available to the current officers and directors of Valley National by law, charter, statute, bylaw or agreement and shall operate to the benefit of their heirs and representatives. Additionally, in the event the surviving corporation to the merger subsequently assigns, consolidates with or merges into another entity and is not the surviving entity in such transaction, VNG Acquisition LLC has agreed that provision will be made so that the surviving entity in such transaction succeeds to the foregoing indemnification and insurance maintenance obligations.

VNG Acquisition LLC has agreed that it will give continuing employees full credit for prior service with us for purposes of eligibility and vesting under certain of the surviving corporation’s employee benefits plans, the determination of benefits levels under certain of the surviving corporation’s employee benefits plans or policies relating to vacation or severance and the determination of “retiree” status under certain of the surviving corporation’s employee benefit plans. In addition, VNG Acquisition LLC has agreed to use its commercially reasonable efforts to waive, or cause to be waived, any limitations on benefits relating to pre-existing conditions to the same extent such limitations are waived under any comparable plan of ours and recognize for purpose of annual deductible and out-of-pocket limits under its medical and dental plans, deductible and out-of-pocket expenses paid by our employees in the calendar year in which the merger occurs.

Mergers and acquisitions that may have an impact in the United States are subject to review by the Department of Justice and the Federal Trade Commission to determine whether they comply with applicable antitrust laws. Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder, which we refer to as the HSR Act, mergers and acquisitions that meet certain jurisdictional thresholds, such as the present transaction, may not be completed until the expiration of a waiting period that follows the filing of notification forms by both parties to the transaction with the Department of Justice and the Federal Trade Commission. The initial waiting period is 30 days, but this period may be shortened if the reviewing agency grants “early termination” of the waiting period, or it may be lengthened if the reviewing agency determines that an in-depth investigation is required and issues a formal request for additional information and documentary material. We and VNG Acquisition LLC filed pre-merger notifications with the U.S. antitrust authorities pursuant to the HSR Act on November 24, 2006. [The Federal Trade Commission and the Department of Justice granted early termination of the waiting period under the HSR Act on          .] Except for the filing of articles of merger in Pennsylvania at or before the effective date of the merger, we are unaware of any material federal, state or foreign regulatory requirements or approvals required for the execution of the merger agreement or completion of the merger.

It is possible that any of the government entities with which filings are made may seek various regulatory concessions as conditions for granting approval of the merger. There can be no assurance that we will obtain the regulatory approvals necessary to complete the merger or that the granting of these approvals will not involve the imposition of conditions on completion of the merger or require changes to the terms of the merger. These conditions or changes could result in conditions to the merger not being satisfied. See “Proposal 1 — The Merger Agreement — Conditions to the Merger” on page    of this proxy statement.

The following discussion summarizes the material U.S. federal income tax consequences of the merger to holders of our common stock. This discussion is based upon current provisions of the Internal Revenue Code of 1986, as amended, which we refer to as the Code, the regulations promulgated under the Code, Internal Revenue Service rulings and judicial and administrative rulings thereof, all of which are subject to change or varying interpretation, possibly with retroactive effect. Any such changes could affect the accuracy of the statements and conclusions set forth herein.

This discussion does not address all aspects of U.S. federal income taxation that may be relevant to a holder of common stock in light of the shareholder’s particular circumstances, nor does it discuss the special considerations applicable to those holders of common stock subject to special rules, such as U.S. holders whose functional currency is not the U.S. dollar, shareholders subject to the alternative minimum tax, shareholders who are financial institutions or broker-dealers, mutual funds, partnerships or other pass-through entities for U.S. federal income tax purposes, tax-exempt organizations, insurance companies, dealers in securities or foreign currencies, traders in securities who elect mark-to-market method of accounting, controlled foreign corporations, passive foreign investment companies, U.S. expatriates, shareholders who acquired their common stock through the exercise of options or similar derivative securities or shareholders who hold their common stock as part of a straddle, constructive sale or conversion transaction. This discussion also does not address the U.S. federal income tax consequences to holders of our common stock who acquired their shares through stock option or in other compensatory arrangements. This discussion assumes that holders of our common stock hold their shares as capital assets within the meaning of Section 1221 of the Code (generally property held for investment). No party to the merger will seek an opinion of counsel or a ruling from the Internal Revenue Service with respect to the U.S. federal income tax consequences discussed herein and accordingly there can be no assurance that the Internal Revenue Service will agree with the positions described in this proxy statement.

We intend this discussion to provide only a general summary of the material U.S. federal income tax consequences of the merger to holders of our common stock. We do not intend it to be a complete analysis or description of all potential U.S. federal income tax consequences of the merger. We also do not address foreign, state or local tax consequences of the merger. We urge you to consult your own tax advisor to determine the particular tax consequences to you (including the application and effect of any state, local or foreign income and other tax laws) of the receipt of cash in exchange for shares of our common stock pursuant to the merger or upon the exercise of dissenters’ rights, in light of your individual circumstances.

If a partnership holds our common stock, the tax treatment of a partner will generally depend on the status of the partners and activities of the partnership. If you are a partner of a partnership holding our common stock, you should consult your tax advisor.

For purposes of this discussion, we use the term “U.S. holder” to mean a beneficial owner of our common stock that for U.S. federal income tax purposes is:

A non-U.S. holder is a beneficial owner of our common stock (other than a partnership) that is not a U.S. holder.

The receipt of cash for shares of common stock pursuant to the merger or upon the exercise of dissenters’ rights in connection with the merger will be a taxable transaction to U.S. holders for U.S. federal income tax purposes. A

Gain recognized from the disposition of common stock held for more than one year will be long-term capital gain and will be subject (in the case of U.S. holders who are individuals) to tax at a maximum U.S. federal income tax rate of 15%. Gain recognized from the disposition of common stock held for one year or less will be short-term capital gain subject to tax at ordinary income tax rates. You must determine your holding period separately for each block of shares that are surrendered for cash pursuant to, or in connection with, the merger. In general, capital losses are deductible only against capital gains and are not available to offset ordinary income. However, individual taxpayers are permitted to offset a limited amount of net capital losses annually against ordinary income, and unused net capital losses may be carried forward to subsequent tax years.

Under the Code, a U.S. holder of our common stock may be subject, under certain circumstances, to information reporting on the cash received in the merger or upon the exercise of dissenters’ rights in connection with the merger. In addition, a U.S. holder of common stock may be subject to backup withholding on the cash received in the merger or upon the exercise of dissenters’ rights in connection with the merger unless such holder is an exempt recipient (such as a corporation) or provides to the paying agent such holder’s correct taxpayer identification number and certifies that such holder is exempt from or otherwise not subject to backup withholding. Backup withholding is not an additional tax. Generally, any amounts withheld under the backup withholding rules described above can be refunded or credited against a U.S. holder’s U.S. federal income tax liability, if any, provided that the required information is furnished to the Internal Revenue Service in a timely manner. You should consult your own tax advisor as to the qualifications for exemption from backup withholding and the procedures for obtaining such exemption.

Any gain realized on the receipt of cash in the merger or upon the exercise of dissenters’ rights in connection with the merger by a non-U.S. holder generally will not be subject to U.S. federal income tax, including by way of withholding, unless:

We do not believe that we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes.

Information reporting and, depending on the circumstances, backup withholding will apply to the cash received in the merger or upon the exercise of dissenters’ rights in connection with the merger, unless the beneficial owner certifies under penalties of perjury that it is a non-U.S. holder (and the payor does not have actual knowledge or reason to know that the beneficial owner is a U.S. person as defined under the Code) or such owner otherwise establishes an exemption. Backup withholding is not an additional tax and any amounts withheld under the backup withholding rules may be refunded or credited against a non-U.S. holder’s U.S. federal income tax liability, if any, provided that such non-U.S. holder furnishes the required information to the Internal Revenue Service in a timely manner.

The following is a summary of the material terms of the merger agreement. However, because the merger agreement is the primary legal document that governs the merger, you should carefully read the complete text of the merger agreement for its precise legal terms and other information that may be important to you. The merger agreement is included as Annex A to this proxy statement.

If all of the conditions to the merger are satisfied or waived in accordance with the merger agreement, VNG Acquisition Inc., a wholly owned subsidiary of VNG Acquisition LLC created solely for the purpose of engaging in the transactions contemplated by the merger agreement, will merge with and into us. The separate corporate existence of VNG Acquisition Inc. will cease, and we will continue as the surviving corporation and will become a wholly owned subsidiary of VNG Acquisition LLC.

The merger will become effective upon the filing of articles of merger with the Department of State of the Commonwealth of Pennsylvania or such later time as set forth in the articles of merger and established by VNG Acquisition LLC and us. The closing of the merger will occur on a date specified by us and VNG Acquisition LLC, which shall be no later than the second business day after the conditions to effect the merger set forth in the merger agreement have been satisfied or waived, or such other date as VNG Acquisition LLC and we may agree. Although we expect to complete the merger by the end of the first calendar quarter of 2007, we cannot specify when, or assure you that, we, VNG Acquisition LLC and VNG Acquisition Inc. will satisfy or waive all conditions to the merger.

At the effective time of the merger, our articles of incorporation and by-laws will continue in full force and effect without any changes as a result of the merger.

Our directors and officers immediately prior to the effective time of the merger will be the initial directors and officers of the surviving corporation, unless VNG Acquisition LLC requests that some or all of our directors resign prior to that time. We expect that VNG Acquisition LLC will request that some or all of our directors resign at the time the merger is completed, and that VNG Acquisition LLC will appoint one or more of its own representatives as the new directors of Valley National.

At the effective time of the merger, each share of our common stock issued and outstanding immediately prior to the effective time of the merger will automatically be canceled and converted into the right to receive $27.00 in cash, without interest and less applicable taxes, other than shares of common stock:

VNG Acquisition LLC and the surviving corporation shall be entitled to deduct and withhold from the consideration otherwise payable to any holder of shares of our common stock amounts that it is required to deduct and withhold with respect to making such payment under the Code, or any other applicable state, local or foreign tax law.

VNG Acquisition LLC and we (with respect to the merger consideration expected to be funded out of our cash, cash equivalents and marketable securities) will deposit sufficient cash with American Stock Transfer & Trust Company or another mutually acceptable bank or trust company, which we refer to as the exchange agent, at or prior to effective time of the merger (or, with respect to the merger consideration to be funded by us, as promptly as practicable thereafter) to make payment of the merger consideration. Promptly after the effective time of the merger, VNG Acquisition LLC shall cause the exchange agent to mail to each holder of record of a certificate which immediately prior to the effective time of the merger represented outstanding shares of our common stock, a letter of transmittal and instructions for effecting the surrender of his, her or its stock certificates in exchange for the merger consideration with respect to such certificates. Upon surrender of a certificate to the exchange agent, together with such letter of transmittal, the holder of such certificate shall be entitled to receive the merger consideration such holder has the right to receive pursuant to the merger agreement. VNG Acquisition LLC is entitled to cause the exchange agent to deliver to it any funds that have not been distributed for one year after the effective time of the merger. After that date, holders of certificates who have not previously complied with the instructions to exchange their certificates will be entitled to look only to VNG Acquisition LLC (subject to abandoned property, escheat and similar laws) for payment of its claim for merger consideration, without interest.

You should not send your Valley National stock certificates to the exchange agent until you have received transmittal materials from the exchange agent. Do not return your Valley National stock certificates with the enclosed proxy, and do not forward your stock certificates to the exchange agent without a letter of transmittal.

If any of your certificates which immediately prior to the effective time represented outstanding shares of our common stock have been lost, stolen or destroyed, you will be entitled to obtain the merger consideration after you make an affidavit of that fact.

Immediately prior to the effective time of the merger, all outstanding options not exercised prior to the merger, including those held by our directors and executive officers, will, subject to the applicable option holder entering into an option termination agreement with us, be cancelled as of the effective time of the merger and the holder of each such option will receive from VNG Acquisition LLC, immediately following the effective time of the merger, an amount in cash, without interest and less applicable taxes, equal to the product of:

The merger agreement contains representations and warranties that we made to VNG Acquisition LLC and VNG Acquisition Inc. regarding, among other things:

In addition, VNG Acquisition LLC and VNG Acquisition Inc. made representations and warranties to us regarding, among other things:

Many of our representations and warranties are qualified by a material adverse effect standard. A “material adverse effect” means, with respect to us, any material adverse change, event, circumstance or development with respect to, or, that would have material adverse effect on, the business, condition (financial or otherwise), operations, assets or results of operations of us and our subsidiaries, taken as a whole, except, that none of the following shall constitute, or shall be considered in determining whether there has occurred, a material adverse effect:

From November 13, 2006 through the effective time of the merger or the earlier termination of the merger agreement, we have agreed, and have agreed to cause our subsidiaries, to use commercially reasonable efforts to act and carry on our business in the ordinary course of business consistent with past practice, maintain and preserve our and our subsidiaries’ business organization, assets and properties and preserve our relationships with third parties.

During the same period, we have also agreed that, subject to certain exceptions, we will not, and will not permit or cause any of our subsidiaries to, do any of the following without the prior written consent of VNG Acquisition LLC:

The merger agreement provides that, until the effective time of the merger or the earlier termination of the merger agreement, neither we nor any of our subsidiaries will, and we will cause our directors, officers, employees, investment bankers, attorneys, accountants and other advisors and representatives not to, directly or indirectly:

Prior to the approval and adoption of the merger agreement by our shareholders, however, in response to a superior proposal or a bona fide, unsolicited written acquisition proposal received by us after November 13, 2006, other than as a result of a breach by us of the no solicitation provisions of the merger agreement, we may provide information to and participate in discussions or negotiations with the person making such acquisition proposal. We may take these actions only:

In response to such a proposal in these circumstances, we may also amend, or grant a waiver or release under, any standstill or similar agreement with respect to any shares of our common stock.

We have further agreed that, until the effective time of the merger or the earlier termination of the merger agreement, our Board will not:

Until such time as our shareholders approve and adopt the merger agreement, however, our Board may withdraw or modify its recommendation that our shareholders vote in favor of the merger and the approval and adoption of merger agreement, and, if such withdrawal or modification is in response to a superior proposal, approve or recommend such superior proposal, if our Board determines in good faith, after consultation with outside counsel, that failure to do so could reasonably constitute a breach of its fiduciary obligations under applicable law, but only if:

Notwithstanding the foregoing, under the terms of the merger agreement we are required to hold the special meeting for the purpose of enabling our shareholders to vote on the merger agreement even if we receive a superior proposal. Furthermore, Mr. West, our majority shareholder, and his affiliates have entered into a voting agreement obligating them to vote all shares beneficially owned by them in favor of the approval and adoption of the merger and the merger agreement. Accordingly, the merger and the merger agreement will be approved and adopted at the special meeting.

In addition, if our Board withdraws its recommendation that our shareholders vote in favor of the approval and adoption of the merger and the merger agreement, we must pay VNG Acquisition LLC a termination fee in the amount of $9 million. Moreover, during the five business day period prior to effecting a withdrawal or modification of its recommendation, our Board must consider and negotiate in good faith with VNG Acquisition LLC regarding any revisions to the terms of the transaction contemplated by the merger agreement that are proposed by VNG Acquisition LLC.

We have agreed to notify VNG Acquisition LLC within 48 hours of our receipt of any acquisition proposal or any request for nonpublic information in connection with any acquisition proposal, or of any inquiry with respect to any acquisition proposal, the material terms and conditions of any such acquisition proposal or inquiry and the identity of the person making any such acquisition proposal or inquiry. We are also required to keep VNG Acquisition LLC reasonably informed of the status, and any material changes in the terms, of any such acquisition proposal or inquiry. We also agreed to, and to direct our directors, officers, employees, investment bankers, attorneys, accountants and other advisors and representatives to, cease immediately all discussions and negotiations that commenced prior to November 13, 2006 regarding any proposal that constitutes or could reasonably be expected to lead to an acquisition proposal.

Nothing in the merger agreement prohibits us from taking and disclosing a position to our shareholders with respect to a tender offer contemplated by Rules 14d-9 and 14e-2 under the Exchange Act or from making any required disclosure to our shareholders, if our Board determines in good faith, after consultation with outside counsel, failure to do so would be inconsistent with its obligations under applicable law.

An acquisition proposal means any proposal or offer:

A superior proposal means any unsolicited, bona fide written proposal made by a third party to acquire over 90% of our equity securities or consolidated total assets, pursuant to a tender or exchange offer, a merger, a consolidation or a sale of our assets, that our Board determines in its good faith judgment to be:

The merger agreement requires us to promptly and duly call, give notice of, convene and hold a meeting of our shareholders to approve and adopt the merger agreement. Subject to the provisions described above under “— No Solicitation”, our Board is required to recommend approval and adoption of the merger agreement by our shareholders and may not withhold, withdraw or modify in a manner adverse to VNG Acquisition LLC its recommendation that our shareholders vote in favor of the approval and adoption of the merger and the merger agreement. Subject to the provisions described above under “— No Solicitation”, we are required to take all reasonable and lawful action to solicit from our shareholders proxies in favor of the approval and adoption of the merger and the merger agreement, and all other actions reasonable necessary or advisable to secure the vote or consent of our shareholders required by the Pennsylvania Business Corporation Law.

VNG Acquisition LLC has agreed that, for a period of six years following the effective time of the merger, it will cause the surviving corporation to indemnify our current and former directors and officers, and the current and former directors and officers of any of our subsidiaries, to the fullest extent permitted under the Pennsylvania Business Corporation Law or our articles of incorporation and bylaws or agreements with such persons, against all claims, losses, liabilities, damages, judgments, fines and reasonable fees, costs and expenses, including attorneys’ fees and disbursements incurred in connection with any claim, action, suit, proceeding or investigation, arising out of or pertaining to the fact that those persons were directors or officers of our company or any of our subsidiaries. Each indemnified party will be entitled, subject to applicable law, to advancement of expenses incurred in the defense of any such claim, action, suit, proceeding or investigation from VNG Acquisition LLC and the surviving corporation within ten business days of receipt of a request for an advancement.

VNG Acquisition LLC has agreed that the provisions of the articles of incorporation and bylaws of the surviving corporation will contain provisions no less favorable with respect to indemnification, advancement of expenses and exculpation of our and our subsidiaries’ current and former directors and officers than the current provisions of our articles of incorporation and bylaws.

VNG Acquisition LLC and we have agreed that, prior to the completion of the merger, we will purchase:

The average cost of the DIC policy and the “tail” or “run off” policy must not exceed $350,000.

VNG Acquisition LLC has also agreed to cause the surviving corporation to maintain, at no expense to the beneficiaries, in effect for six years from the effective time of the merger the current policies of the directors’ and officers’ liability insurance maintained by us (including the DIC policy and such “tail” or “run off” policy) with respect to matters existing or occurring at or prior to the effective time of the merger (including the transactions contemplated by the merger agreement).

VNG Acquisition LLC has agreed to pay all expenses, including reasonably attorneys’ fees, that may be incurred by any of our current or former directors or officers in connection with their enforcement of their rights described above.

The indemnification obligations and the obligation to maintain the DIC policy, the “tail” or “run off” policy and the current policies of directors’ and officers’ liability insurance and to pay such expenses of our officers and directors are intended to be in addition to rights otherwise available to our current officers and directors by law, charter, statute, bylaw or agreement and shall operate to the benefit of their heirs and representatives. Additionally, in the event the surviving corporation to the merger subsequently assigns, consolidates with or merges into another entity and is not the surviving entity in such transaction, VNG Acquisition LLC has agreed that provision will be made so that the surviving entity in such transaction succeeds to the foregoing indemnification and insurance maintenance obligations.

VNG Acquisition LLC has agreed that it will give continuing employees full credit for prior service with us for purposes of eligibility and vesting under certain of the surviving corporation’s employee benefits plans, the determination of benefits levels under certain of the surviving corporation’s employee benefits plans or policies relating to vacation or severance an the determination of “retiree” status under certain of the surviving corporation’s employee benefit plans. In addition, VNG Acquisition LLC has agreed to use its commercially reasonable efforts to waive, or cause to be waived, any limitations on benefits relating to pre-existing conditions to the same extent such limitations are waived under any comparable plan of ours and recognize for purpose of annual deductible and out-of-pocket limits under its medical and dental plans, deductible and out-of-pocket expenses paid by our employees in the calendar year in which the merger occurs.

Our Board has taken the steps required so that any dispositions of our common stock (including derivative securities with respect to common stock, such as options) by our insiders pursuant to the terms of the merger agreement will be exempt transactions for purposes of Section 16 of the Exchange Act. Our insiders means our officers and directors who are subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to us.

Subject to the terms and conditions of the merger agreement, each party has agreed to use its commercially reasonable efforts to take, or cause to be taken, all actions and do, or cause to be done, all things necessary, proper or advisable to consummate and make effective the transactions contemplated by the merger agreement as promptly as practicable. Among other things, each party has committed to use such efforts to obtain all necessary consents, approvals and authorizations from governmental authorities and third parties. Each party has also agreed to make appropriate filings under the Exchange Act, the HSR Act and any other applicable law.

We have agreed to, and to cause our subsidiaries and each of our directors, officers, agents or representatives to, provide VNG Acquisition LLC and VNG Acquisition Inc. with such cooperation in connection with the arrangement of the debt financing contemplated by the debt financing commitment letter as may be commercially reasonably requested. Such cooperation includes, but is not limited to,

In connection with providing such cooperation, however, neither we nor any of our subsidiaries will be required to pay any commitment or other similar fee, have any liability or obligation under any loan agreement or related documents, unless and until the merger is completed, or incur any other liability in connection with the debt financing contemplated by the debt financing commitment letter or be required to take any action that will conflict with or violate our organizational documents or any law or result in the contravention of, or that would reasonably be expected to result in a violation or breach of, or default under, any contract to which we or any of our subsidiaries is a party.

If requested by VNG Acquisition LLC, we have agreed to consider in good faith to cooperate and cause our subsidiaries to cooperate with VNG Acquisition LLC in restructuring the ownership and operations of our

VNG Acquisition LLC has agreed to indemnify, defend and hold harmless us, our subsidiaries and our respective officers, directors, employees, agents, shareholders and representatives from and against any liabilities, losses, damages, claims, costs, expenses, interest, awards, judgments and penalties suffered or incurred by us or them in connection with any such actions taken by us at the direction of VNG Acquisition LLC. Furthermore, we are not obligated to incur any out-of-pocket fees, costs or expenses in connection taking any such actions until the completion of the merger.

Our and VNG Acquisition LLC’s and VNG Acquisition Inc.’s obligations to effect the merger are subject to the satisfaction of the following conditions:

In addition, our obligation to effect the merger is subject to the satisfaction or waiver of the following conditions:

In addition, the obligations of VNG Acquisition LLC and VNG Acquisition Inc. to effect the merger are subject to the satisfaction or waiver of the following conditions:

The merger agreement may be terminated at any time prior to the effective time of the merger whether before or after the special meeting of our shareholders to consider the adoption of the merger agreement:

The merger agreement obligates us to pay a termination fee to VNG Acquisition LLC of $9 million, if our Board withdraws its recommendation that our shareholders vote in favor of the approval and adoption of the merger and the merger agreement and accepts a superior proposal. The merger agreement and a fee letter from Caxton-Iseman provide that if Valley National or VNG Acquisition LLC fails to satisfy certain closing conditions or breaches its covenants under the merger agreement, the breaching party will be responsible for reimbursing up to $1,500,000 of the other party’s fees and expenses.

The parties may amend the merger agreement at any time before or after approval of the matters presented in connection with the merger agreement by the shareholders of any party. After shareholder approval has been obtained, however, the parties may not amend the merger agreement which by law requires further approval by such shareholders without obtaining such further approval. The merger agreement also provides that, at any time prior to the effective time of the merger, the parties may extend the time for the performance of any obligations or other acts of the other parties, waive any inaccuracies in the representations and warranties in the merger agreement or any document delivered in connection therewith or waive compliance with any of the agreements or conditions contained in the merger agreement.

In accordance with Section 1906 of the PBCL, Subchapter D (the full text of which appears in Annex C to this proxy statement) entitles the holders of shares of our common stock to dissent from the merger and obtain, in place of the merger consideration, the “fair value” of their shares in cash as determined by an appraisal process in accordance with Subchapter D. The following description is intended as a brief summary of the material provisions of Subchapter D. This summary, however, is not a complete statement of all applicable requirements and is qualified in its entirety by reference to Subchapter D.

In the discussion of dissenters’ rights, the term “fair value” means the value of a share of Valley National common stock immediately before the effective date of the merger, taking into account all relevant factors, but excluding any appreciation or depreciation in anticipation of the merger.

In order to exercise the right to dissent, a holder must demand and perfect the rights in accordance with Subchapter D. If you fail to comply with the specific requirements of Subchapter D, you will be entitled to receive the cash payment for your shares as provided in the merger agreement, but you will have no dissenters’ rights with respect to your shares.

Section 1571 requires that, where a merger agreement is to be submitted for approval and adoption at a shareholders’ meeting, shareholders on the record date for the meeting be notified in the notice of the meeting that

If you wish to dissent and to demand payment of the fair value of your shares, you must:

Neither voting (in person or by proxy) against, abstaining from voting on, nor failing to vote on the proposal to approve and adopt the merger and the merger agreement will constitute a written demand for payment within the meaning of Section 1574 of the PBCL. The written demand for payment must be in addition to and separate from any proxy or vote against the proposal. If the written demand for payment is made in accordance with the requirements of Pennsylvania law, failure to vote against the merger (i.e., abstaining) will not operate as a waiver of the shareholder’s dissenters’ rights.

A holder of record of shares of our common stock who continuously holds such shares through the date of the merger is entitled to assert dissenters’ rights for the shares of common stock registered in that holder’s name. Accordingly, a notice of intention to demand payment should be executed by or on behalf of the holder of record, fully and correctly, as his, hers or its name appears on his, hers or its stock certificates, and state that such person intends to demand payment of fair value for his, hers or its shares of our common stock in connection with the merger. An authorized agent, including two or more joint owners, may execute a notice of intention to demand payment of fair value on behalf of a holder of record; however, the agent must identify the record owner or owners and expressly disclose the fact that, in executing the notice, the agent is agent for such owner or owners. A record holder, such as a broker who holds shares of our common stock as nominee for several beneficial owners, may exercise dissenters’ rights with respect to the shares of our common stock held for one or more beneficial owners while not exercising such rights with respect to the shares of our common stock held for other beneficial owners; in such case, however, the written notice should set forth the number of shares of our common stock as to which dissenters’ rights are sought as well as the name and address of the person or persons on whose behalf dissenters’ rights are sought, and where no number of shares of our common stock is expressly mentioned the notice will be presumed to cover all shares of our common stock which are held in the name of the record owner. A beneficial owner who does not hold the shares of record may assert dissenters’ rights provided the record holder submits consent prior to the deadline for filing the dissenters’ rights notice under Section 1574. If you are a beneficial holder, you may not dissent with respect to less than all of the shares of our common stock beneficially owned by you, whether or not such shares are registered in your name.

Shareholders who hold their shares of our common stock in brokerage accounts or other nominee forms and who wish to exercise dissenters’ rights are urged to consult with their brokers to determine the appropriate procedures for the making of a demand for payment of fair value by such a nominee.

All demands for dissenters’ rights should be made in writing and addressed to the Secretary of Valley National Gases at 200 West Beau Street, Suite 200, Washington, Pennsylvania 15301 before the shareholder vote on the merger is taken at the special meeting. The demand must reasonably inform us of the identity of the holder and the intention of the holder to demand payment of fair value for his, her or its shares of common stock. If your shares of our common stock are held through a broker, bank, nominee or other third party, and you wish to demand dissenters’ rights, you must act promptly to instruct the applicable broker, bank, nominee or other third party to follow the steps summarized in this section.

Upon approval and adoption of the merger and the merger agreement, we must give written notice of the result of the vote to each holder who has properly filed a written demand for dissenters’ rights and has not voted in favor of

Upon the effective date of the merger, or upon timely receipt of a demand for payment if the closing of the merger has already taken place, we will remit to dissenters who have timely filed a demand and if their shares are certificated, deposited their certificates, the amount we estimate to be the fair value of the shares, or give written notice that no remittance will be made. The remittance or notice must be accompanied by:

If we do not remit the amount of our estimate of the fair value of the shares, we will return all certificates that have been deposited and may make a notation on them that a demand for payment has been made.

A dissenter who believes that the amount stated or remitted is less than the fair value of the shares may send a demand for full or supplemental payment to us within 30 days of our mailing. A dissenter who fails to demand a full or supplemental payment is entitled to receive no more than the amount remitted or stated by us.

Within 60 days after the later of the effective date of the merger, filing of shareholder demand notices and certificates, or receipt of demands for full or supplemental payment in response to a remittance or a written notice that no remittance will be made, we may file a petition in court demanding a determination of the fair value of the shares of our common stock held by all holders entitled to dissenters’ rights. If a dissenter’s demands have not been settled, such dissenter will be made a party to the proceeding and will be entitled to recover the amount by which the fair value of such dissenter’s shares of our common stock is found to exceed the amount, if any, previously remitted by us, plus interest.

Upon expiration of the 60 day time period and upon our failure to file a petition in court, any dissenter who has not settled a claim with us may, within 30 days, file a petition in court in the name of the corporation for a determination of fair value.

Costs and expenses of the valuation proceeding will be assessed against Valley National except where the court deems it appropriate to apportion some or all of the costs and expenses among all or some of the dissenters who are parties and whose action in demanding supplemental payment the court finds to be dilatory, obdurate, arbitrary, vexatious or in bad faith. Reasonable attorneys’ fees and the fees of experts may be assessed as the court deems appropriate against either Valley National and in favor of any or all dissenters if Valley National failed to comply substantially with the requirements of Subchapter D and may be assessed against either Valley National or a dissenter, in favor of any other party, where the court finds that a party against whom the fees and expenses are assessed acted in bad faith. Finally, if the court finds that the services of counsel for any dissenter substantially benefited other dissenters similarly situated, the court may find that the fees for that service should not be assessed against Valley National but instead paid out of the amounts awarded to the dissenters who were benefited.

In view of the complexity of Subchapter D, holders of shares of our common stock who may wish to pursue dissenters’ rights should promptly consult their legal advisors.

Our common stock is listed on The American Stock Exchange under the symbol “VLG.” The table below shows, for the periods indicated, the high and low sales prices for shares of our common stock as reported by The American Stock Exchange.

The following table sets forth the closing sales prices per share of Valley National’s common stock, as reported on The American Stock Exchange on November 13, 2006, the last full trading day before the public announcement of the proposed merger, and          , the latest practicable date before the printing of this proxy statement:

If the merger is consummated, our common stock will be delisted from The American Stock Exchange, there will be no further public market for shares of our common stock and each share of our common stock, excluding shares held by Mr. West and his affiliates will be converted into the right to receive $27.00 in cash, without interest. Each share of our common stock held by Mr. West and his affiliates will be converted into the right to receive $24.52 in cash, without interest.

Our revolving credit facility permits us to pay cash dividends on our capital stock to the extent the dividends we pay, and any redemptions or repurchases we make, do not exceed $2.0 million annually. On November 23, 2005, we authorized a $0.10 dividend per share (approximately $1.0 million in total), which was paid on January 5, 2006 to shareholders of record as of December 21, 2005. This was the second dividend we have paid. Dividend payments in the future will depend upon several factors, including earnings, acquisition opportunities and debt level.

The following table sets forth information regarding the number of outstanding shares of our common stock as of December 6, 2006 beneficially owned by each of our directors, each of our executive officers and all of our directors and executive officers as a group:

The following table sets forth certain information with respect to each person known by us to be the beneficial owner of more than 5% of our outstanding common stock as of December 6, 2006:

Valley National Gases Incorporated, a corporation organized under the laws of the Commonwealth of Pennsylvania, is one of the largest independent distributors in the estimated $9 billion U.S. market for industrial, medical and specialty gases delivered in “packaged” or cylinder form, and related welding equipment and supplies or hard goods. Valley National also has a growing presence in the approximately $12 billion U.S. market for non-pipeline residential, commercial and industrial propane. One of Valley National’s principal business strategies is to pursue growth through the acquisition of other packaged gas and propane distributors. Valley National serves a diversified base of more than 211,000 industrial, commercial and residential customers throughout its 14-state territory, primarily in the eastern United States. Valley National focuses on providing excellent service to local accounts, an approach that we believe allows us to enjoy a strong position in the markets we serve. Our corporate operations are located in Wheeling, West Virginia, and our executive offices are located in Washington, Pennsylvania. We have 75 packaged gas and hard goods distribution locations in 14 states. Our common stock is listed on the American Stock Exchange under the symbol “VLG.”

VNG Acquisition LLC, a limited liability company organized under the laws of the State of Delaware, was formed on November 9, 2006, for the sole purpose of completing the merger with Valley National Gases and arranging the related financing transactions. VNG Acquisition LLC is owned by investment vehicles affiliated with Caxton-Iseman Capital, Inc. VNG Acquisition LLC has not engaged in any business except in anticipation of the merger. VNG Acquisition LLC may assign its rights and obligations under the merger agreement to an affiliate so long as it remains liable for its obligations under the merger agreement if such affiliate does not perform its obligations.

VNG Acquisition Inc., a corporation organized under the laws of the Commonwealth of Pennsylvania, is a wholly owned subsidiary of VNG Acquisition LLC. VNG Acquisition Inc. was formed exclusively for the purpose of effecting the merger. This is the only business of VNG Acquisition Inc.

Proposals of shareholders intended to be presented at the 2007 Annual Meeting must be received by us no later than June 1, 2007, for inclusion in our proxy statement and proxy relating to that meeting. Upon receipt of any such proposal, we will determine whether or not to include such proposal in the proxy statement and proxy in accordance with regulations governing the solicitation of proxies.

In order for a shareholder to nominate a candidate for director, under our bylaws, timely notice of the nomination must be given to us in advance of the meeting. Ordinarily, such notice must be given not less than 60 nor more than 90 days prior to the date of any meeting of the shareholders at which directors are to be elected. The shareholder filing the notice of nomination must describe various matters related to the nominee and the shareholder filing the notice, as specified in our bylaws.

In order for a shareholder to bring other business before a shareholder meeting, timely notice must be given to the Company. To be timely, such notice must be delivered to or mailed and received at the Company’s principal executive offices not less than 60 days before nor more than 90 days prior to the meeting. However, if the meeting is

In each case the notice must be given to the Secretary of the Company, whose address is 200 West Beau Street, Suite 200, Washington, Pennsylvania 15301. Any shareholder desiring a copy of the Company’s Articles of Incorporation, as amended, or Bylaws will be furnished a copy without charge upon written request to the Secretary.

We file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission under the Exchange Act. You may read and copy this information at, or obtain copies of this information by mail from, the Securities and Exchange Commission’s Public Reference Room, 100 F Street, N.E., Washington, D.C. 20549, at prescribed rates. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information about the public reference room.

Our filings with the Securities and Exchange Commission are also available to the public from commercial document retrieval services and at the web site maintained by the Securities and Exchange Commission at www.sec.gov.

We will furnish, without charge, a copy of our Annual Report on Form 10-K for the fiscal year ended June 30, 2006, including consolidated financial statements and schedules thereto but not including exhibits, to each of our shareholders of record on           and to each beneficial shareholder on that date upon written request made to Secretary, Valley National Gases Incorporated, 200 West Beau Street, Suite 200, Washington, Pennsylvania 15301. A reasonable fee will be charged for copies of requested exhibits.

The Securities and Exchange Commission allows us to incorporate by reference information into this proxy statement. This means that we can disclose important information to you by referring you to another document filed separately with the Securities and Exchange Commission. The information incorporated by reference into this proxy statement is considered a part of this proxy statement, and information that we file later with the Securities and Exchange Commission, prior to the closing of the merger, will automatically update and supersede the previously filed information and be incorporated by reference into this proxy statement.

We incorporate by reference into this proxy statement the documents listed below and any filings we make with the Securities and Exchange Commission under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this proxy statement and prior to the date of the special meeting:

No persons have been authorized to give any information or to make any representations other than those contained in this proxy statement and, if given or made, such information or representations must not be relied upon as having been authorized by us or any other person. This proxy statement is dated          , 2006. You should not assume that the information contained in this proxy statement is accurate as of any date other than that date, and the mailing of this proxy statement to shareholders shall not create any implication to the contrary.

This proxy statement contains a description of representations and warranties made in the merger agreement. Representations and warranties are also set forth in contracts and other documents, including the merger agreement, that are attached or filed as annexes to this proxy statement or are incorporated by reference into this document. These representations and warranties were made only for the purposes of such contracts or other documents and solely for the benefit of the parties to such contracts or other documents as of specific dates, may be subject to important limitations and qualifications agreed to by the contracting parties (including Valley National, VNG Acquisition LLC and VNG Acquisition Inc.), and may not be complete. Furthermore, these representations and warranties may have been made for the purposes of allocating contractual risk between the parties to such contract or other document instead of establishing these matters as facts, and may or may not have been accurate as of any specific date and do not purport to be accurate as of the date of this proxy statement. Accordingly, you should not rely upon the descriptions of representations and warranties contained in this proxy statement or the actual representations and warranties contained in such contracts and other documents, including the merger agreement, as statements of factual information.

Whether or not you plan to attend the special meeting, please sign and date the enclosed proxy card and return it promptly in the envelope provided. Giving your proxy now will not affect your right to vote in person if you attend the meeting.

If you have any questions about this proxy statement, the special meeting or the merger or need assistance with the voting procedures, you should contact James P. Hart, President and Chief Financial Officer of Valley National Gases, at (724) 228-3000.

Annex A — Agreement and Plan of Merger

Annex B — Opinion of Bear, Stearns & Co.  Inc.

Annex C — Subchapter D and Section 1906 of the Pennsylvania Business Corporation Law