<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant _X_
Filed by a party other than the registrant __
Check the appropriate box:
__ Preliminary proxy statement
_X_ Definitive proxy statement
__ Definitive additional materials
__ Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
CONNECTICUT WATER SERVICE, INC.
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(Name of Registrant as Specified in Its Charter)
CONNECTICUT WATER SERVICE, INC.
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
_X_ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14A-6(j)(2).
__ $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
__ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
Connecticut Water Service, Inc. Common Stock & Cumulative Preferred
Stock Series - A
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(2) Aggregate number of securities to which transactions applies:
2,795,824 Common Stock and 29,499 Series - A
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(3) Per unit price of other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: [1]
N/A
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(4) Proposed maximum aggregate value of transaction:
N/A
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__
__ Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registrations statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
Proxy - CTWS
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(3) Filing party:
Bowne, Inc.
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(4) Date filed:
3/15/94
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---------------
1 Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE> 2
[Logo]
March 15, 1994
Dear Stockholder:
You are cordially invited to the Annual Meeting of Stockholders of
Connecticut Water Service, Inc., scheduled to be held on April 22, 1994 at the
Company's offices, 93 West Main Street, Clinton, Connecticut, commencing at 2:00
P.M. Your Board of Directors and management look forward to greeting personally
those stockholders able to attend.
At the Meeting, you will be asked to elect five directors, to appoint
independent auditors for the fiscal year ending December 31, 1994, and to
transact such other business as may properly be brought before the Meeting.
In addition to the specific matters to be acted upon, there will be a
report on the progress of the Company and an opportunity for questions of
general interest to the stockholders. Important information is contained in the
accompanying proxy statement which you are urged to read carefully.
It is important that your shares are represented and voted at the Meeting,
regardless of the number you own and whether or not you plan to attend.
Accordingly, you are requested to sign, date, and return the enclosed proxy at
your earliest convenience.
Your interest and participation in the affairs of the Company are sincerely
appreciated.
Sincerely,
Marshall T. Chiaraluce
President and Chief Executive Officer
<PAGE> 3
CONNECTICUT WATER SERVICE, INC.
GENERAL OFFICES
CLINTON, CONNECTICUT 06413
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Notice is hereby given that the Annual Meeting of Stockholders of
Connecticut Water Service, Inc. (the "Company") will be held on April 22, 1994
at 2:00 P.M. at the Company's General Offices, 93 West Main Street, Clinton for
the following purposes:
1. To elect five directors for three-year terms;
2. To appoint Arthur Andersen & Company, independent public
accountants, as independent auditors for the Company for the fiscal
year ending December 31, 1994; and
3. To transact such other business as may properly come before said
meeting or any adjournment thereof.
Only holders of the Company's Common Stock and its Cumulative Preferred
Stock -- Series A of record at the close of business on March 1, 1994 are
entitled to notice of and to vote at this meeting or any adjournment thereof.
All stockholders who find it convenient to do so are urged to attend the
meeting in person.
By Order of the Board of Directors,
Vincent F. Susco, Jr.
Secretary
March 15, 1994
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE MARK, DATE, AND SIGN
THE ENCLOSED PROXY AND RETURN IT TO THE COMPANY IN THE ENVELOPE ACCOMPANYING
THIS NOTICE. IF YOU ARE PRESENT AT THE MEETING, YOU MAY VOTE IN PERSON EVEN
THOUGH YOU HAVE SENT IN YOUR PROXY.
<PAGE> 4
CONNECTICUT WATER SERVICE, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
APRIL 22, 1994
The accompanying proxy is solicited by the Board of Directors of the
Company for use at the Annual Meeting of Stockholders to be held at the
Company's General Offices, 93 West Main Street, Clinton, Connecticut 06413, on
April 22, 1994 at 2:00 P.M. and at any adjournment of the meeting.
Only holders of the Company's Common Stock and its Cumulative Preferred
Stock -- Series A of record at the close of business on March 1, 1994, are
entitled to notice of and to vote at the meeting. On that date, the Company had
outstanding 2,795,824 shares of Common Stock, 15,000 shares of Cumulative
Preferred Stock -- Series A, $20 par value, and 29,499 shares of $.90 Cumulative
Preferred Stock, $16 par value. Each share of Common Stock is entitled to three
votes and each share of Cumulative Preferred Stock-Series A is entitled to one
vote on all matters coming before the meeting. The holders of shares of $.90
Cumulative Preferred Stock, $16 par value, have no general voting rights.
The cost of solicitation of proxies will be borne by the Company. In
addition to this solicitation by mail being made initially on or about March 15,
1994, officers and regular employees of the Company may make solicitations by
telephone, telegraph, mail, or personal interviews, and arrangements may be made
with banks, brokerage firms, and others to forward proxy material to their
principals. The Company has retained Morrow & Company, Inc., to assist in the
solicitation of proxies at an estimated cost of $4,000 including expenses, which
will be paid by the Company.
All stockholders unable to attend the meeting in person are urged to send
in proxies to assure a good representation at the meeting. A proxy may be
revoked at any time before it is voted by a writing filed with the Secretary of
the Company, by a duly executed proxy bearing a later date or by voting in
person at the meeting.
PROPOSAL (1) -- ELECTION OF DIRECTORS
The Company's Certificate of Incorporation provides for a Board of not less
than nine nor more than fifteen directors, the exact number of directorships to
be determined from time to time by resolution adopted by the affirmative vote of
a majority of the Board. The directors are divided into three classes as nearly
equal in number as possible with members of each class to hold office until
successors are elected and qualified. Each class is to be elected for a
three-year term at successive annual meetings. As a result, only one class of
directors is to be elected at each Annual Meeting.
The Board of Directors has fixed the number of directors at 15, and has
selected the five nominees listed below for election to three-year terms
expiring in 1997. Of the Company's ten directors remaining in office, the terms
of five directors expire in 1995 and the terms of five directors expire in 1996.
Each nominee is presently a director of the Company except Rudolph E.
Luginbuhl.
Unless otherwise directed, it is intended that the enclosed proxy will be
voted for the election of Francis E. Baker, Harvey G. Moger, Warren C. Packard,
William F. Emswiler, and Rudolph E. Luginbuhl. In case any nominee is unable or
declines to serve, the persons named in the proxy may vote for some other person
or persons. Votes withheld and broker non-votes are counted for purposes of
determining whether a quorum is present at the meeting but are not considered as
voted in the election of directors. Thus, under Connecticut law such abstentions
and non-votes have the effect of a vote against the election of the Board's
nominees.
1
<PAGE> 5
<TABLE>
<CAPTION>
COMMON
STOCK OWNED
BENEFICIALLY
DIRECTOR AS OF
PRINCIPAL OCCUPATION SINCE MARCH 1, PERCENT OF
NAME AGE AND DIRECTORSHIPS (1) 1994 CLASS(2)
- --------------------- ---- --------------------------------------------- -------- ----------- ----------
<S> <C> <C> <C> <C> <C>
CLASS I:
NOMINEES FOR ELECTION AT THIS MEETING FOR TERMS EXPIRING IN 1997
Francis E. Baker 64 President and Director, Andersen Group, Inc. 1973 125(3) .01%
(electronic and medical manufacturing and
services); Director, Fresenius. USA.
William F. Emswiler 49 Vice President -- Finance and Chief Financial 1993 300 .01%
Officer, The Perkin-Elmer Corporation
(manufacturing); formerly Senior Vice
President and Chief Financial Officer,
Aquarion Company (water utility holding
company); Director, Silicon Valley Group,
Inc. (semi conductor equipment manufacturer);
Director, ETEC, Inc. (semi conductor
equipment manufacturer).
Rudolph E. Luginbuhl 65 Real Estate Agent with Gordon Realty Inc.; -- 100 .01%
Corporator of The Savings Bank of Rockville.
Harvey G. Moger 66 President, GBAJ Associates (diversified 1981 2,345 .08%
financial consulting services); Director,
Fleet Bank, N.A.; Director, Ensign Bickford
Realty Corporation.
Warren C. Packard 59 First Selectman, Town of Suffield; formerly 1991 150 .01%
President and Chief Executive Officer, The
Wiremold Company (manufacturing); Director,
The Wiremold Company.
CLASS II:
DIRECTORS WHOSE TERMS CONTINUE UNTIL 1995
Marshall T. 51 President and Chief Executive Officer of the 1992 2,912(4)(5) .10%
Chiaraluce Company.
William F. Guillaume 61 Vice President Engineering & Planning of the 1978 2,882(4) .10%
Company; Director, Connwood Foresters, Inc.
(forestry service and management).
Marcia L. Hincks 58 Retired; formerly Vice President and Senior 1983 245 .01%
Counsel, Aetna Life & Casualty.
William C. 66 Retired; formerly President and Chief 1989 400 .01%
Lichtenfels Operating Officer, Emhart Corporation
(manufacturing).
Robert F. Neal 59 Senior Vice President -- Network Services, 1990 200 .01%
Southern New England Telecommunications
Company.
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
COMMON
STOCK OWNED
BENEFICIALLY
DIRECTOR AS OF
PRINCIPAL OCCUPATION SINCE MARCH 1, PERCENT OF
NAME AGE AND DIRECTORSHIPS (1) 1994 CLASS(2)
- --------------------- ---- --------------------------------------------- -------- ----------- ----------
<S> <C> <C> <C> <C> <C>
CLASS III:
DIRECTORS WHOSE TERMS CONTINUE UNTIL 1996
Harold E. Bigler, Jr. 62 Chairman, Bigler Investment Management 1983 1,000 .04%
Company, Inc.
Astrid T. Hanzalek 66 Consultant -- water resources and various 1985 598 .02%
public policy issues (self-employed);
formerly Connecticut State Representative.
Frederick E. Hennick 67 Retired; formerly President and Publisher, 1983 225 .01%
Naugatuck Daily News; Director, Naugatuck
Valley Savings and Loan, Inc.
Bertram L. Lenz 54 Vice President -- Finance and Accounting and 1983 1,749(4) .06%
Treasurer of the Company.
Donald B. Wilbur 51 Plant Manager, Chesebrough-Pond's USA (health 1993 200 .01%
and beauty aids manufacturing); Director,
Middlesex Hospital.
</TABLE>
- ---------------
(1) The Connecticut Water Company is a subsidiary of the Company. The
affiliation of the Company (then Suburban Water Service, Inc.) and The
Connecticut Water Company was effected on April 10, 1975. Prior to the
affiliation, Mr. Baker was a director of The Connecticut Water Company. The
Company's Board of Directors and the Board of Directors of The Connecticut
Water Company are now identical.
(2) The percentages have been rounded to the nearest one hundredth of one
percent. As of March 1, 1994, executive officers and directors of the
Company as a group owned 12,263 shares (4.4%) of the Common Stock of the
Company. No directors or officers own any shares of the Company's Cumulative
Preferred Stock.
(3) All 125 shares are owned by Mr. Baker's wife.
(4) Includes shares actually earned by the officer under the Company's 1993
Performance Stock Program and awarded under the 1994 Performance Stock
Program.
(5) Includes 115 shares owned by Mr. Chiaraluce's daughter.
With the exception of Mr. Hennick who retired from the Naugatuck Daily News
in 1988, Mr. Lichtenfels who retired from Emhart Corporation in 1989, Mr.
Packard who retired from the Wiremold Company in 1991, Mr. Emswiler who was Vice
President and Chief Financial Officer of Aquarion Company from 1989 until
assuming his present position in May, 1992, Mr. Chiaraluce who was Chief
Operating Officer of South Central Connecticut Regional Water Authority from
1981 until his election as President of the Company, effective January 1, 1992,
and Mrs. Hincks who retired from Aetna Life & Casualty in 1993, each of the
nominees listed above has had the same employment for more than the past five
years either in the position or positions indicated or in other similar or
executive capacities with the same company or a predecessor thereof.
3
<PAGE> 7
The Company's Board of Directors met five times during 1993. In addition,
the Company has a number of standing committees, including an Audit Committee, a
Compensation Committee, and a Committee on Directors, which meet periodically
during the year. The Audit Committee, composed of Mmes. Hincks and Hanzalek and
Messrs. Moger, Wallace and Packard, reviews the activities, procedures and
recommendations of the independent auditors of the Company and The Connecticut
Water Company and recommends annually the appointment of independent auditors
for the coming year. The Committee met three times during 1993. The Compensation
Committee, composed of Ms. Hincks and Messrs. Lichtenfels, Neal, Wallace and
Wilbur, establishes compensation levels for officers of The Connecticut Water
Company and makes recommendations to the full Board regarding officer
succession. The Committee met once during 1993. The Committee on Directors,
consisting of Messrs. Baker, Hennick, Lichtenfels and Wallace, recommends
candidates for nomination as directors to the Board. The Committee met twice in
1993. All of the Company's directors attended at least 75% of the aggregate
number of meetings in 1993 of the Board and committees on which they serve
except Mr. Francis E. Baker.
Pursuant to the Company's Bylaws, nominations for directors may be made by
any stockholder entitled to vote for the election of directors at the meeting
who complies with the following procedures. A nomination by a stockholder shall
be made only if such stockholder has given proper and timely notice in writing
of such stockholder's intent to make such nomination to the Secretary of the
Company. To be timely a stockholder's notice must be delivered to or mailed and
received by the Secretary of the Company at the General Offices of the Company
not later than (i) with respect to an election to be held at an annual meeting
of stockholders, the close of business on a day which is not less than 120 days
prior to the anniversary date of the immediately preceding annual meeting, and
(ii) with respect to an election to be held at a special meeting of stockholders
called for the election of directors, the close of business on the tenth day
following the date on which notice of such meeting is first mailed to
stockholders. Each such notice must set forth: (a) the name and address of the
person or persons to be nominated; (b) the name and address, as they appear on
the Company's books, of the stockholder making such nomination; (c) the class
and number of shares of the Company which are beneficially owned by the
stockholder; (d) a representation that the stockholder is a holder of record of
stock of the Company entitled to vote at such meeting and intends to appear in
person or by proxy at the meeting to nominate the person or persons specified in
the notice; (e) a description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons (naming such person
or persons) pursuant to which the nomination or nominations are to be made by
the stockholder; (f) such other information regarding each nominee proposed by
the stockholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission; and (g)
the consent of each nominee to serve as a director of the Company if so elected.
Any such notice of nominations for consideration at the 1995 Annual Meeting must
be received by the Company's Secretary by the close of business on December 16,
1994.
REPORTS UNDER SECTION 16
Under Section 16 of the Securities Exchange Act of 1934, directors,
officers, and certain beneficial owners of the Company's equity securities are
required to file reports of their transactions in the Company's equity
securities with the Securities and Exchange Commission on specified due dates.
To the Company's knowledge, based solely on its review of copies of such reports
filed with the Company and written representations to the Company that no other
reports were required, all said Section 16 filing requirements were complied
with on a timely basis during 1993.
4
<PAGE> 8
MANAGEMENT COMPENSATION
SUMMARY COMPENSATION TABLE
The following tabulation sets forth the total compensation paid by the
Company and The Connecticut Water Company during 1993, 1992, and 1991 to the
most highly compensated executive officers, including the Chief Executive
Officer of the Company, receiving more than $100,000 aggregate compensation in
1993. The Company has no employees. All officers are employees of The
Connecticut Water Company and all compensation is paid by The Connecticut Water
Company.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
----------------------
AWARDS
----------------------
ANNUAL COMPENSATION RESTRICTED
---------------------- STOCK
NAME AND PRINCIPAL POSITION YEAR SALARY($) AWARDS($)(1)
- ------------------------------------------ ---- --------- ----------------------
<S> <C> <C> <C>
Marshall T. Chiaraluce,
President and Chief Executive Officer 1993 170,250 30,044
1992 164,200 12,920
1991 --(2) --
William F. Guillaume,
V.P. Engineering and Planning 1993 121,600 16,408
1992 117,500 7,060
1991 113,000 --
Bertram L. Lenz,
V.P. Finance and Accounting and Treasurer 1993 117,500 16,408
1992 117,500 7,060
1991 113,000 --
William C. Stewart,
Chairman of the Board 1993 102,990(3)(4) --
1992 205,980(4) --
1991 201,060(4) --
</TABLE>
- ---------------
(1) The values shown are the aggregate values at the time of the award for the
following shares allocated to the above officers under the Company's
Performance Stock Program: 1,073, 586 and 586 shares, allocated to Messrs.
Chiaraluce, Guillaume and Lenz, respectively. As of December 31, 1993, these
shares had a value of $30,044, $16,408 and $16,408, respectively. Dividends
are paid on the above stock at the rate paid to all stockholders. The number
of such shares of restricted stock actually received by Messrs. Chiaraluce,
Guillaume and Lenz, based upon actual attainment of 1993 performance
criteria, were 483, 337, and 313, respectively.
(2) Mr. Chiaraluce was Chief Operating Officer of South Central Connecticut
Regional Water Authority from 1981 until his election as President of the
Company effective January 1, 1992.
(3) Mr. Stewart was Chief Executive Officer of the Company until his retirement
effective July 1, 1993.
(4) Includes monies received in lieu of contribution under the Company's pension
plan.
5
<PAGE> 9
RETIREMENT BENEFITS
Officers and employees of the Company and The Connecticut Water Company are
entitled to receive retirement benefits under a pension plan, and executive
officers are entitled to receive benefits under supplemental executive
retirement agreements, which provide for defined benefits in the event of
retirement at a specified age and after a specified number of years of service
based on final average compensation. Examples of annual full straight life
annuity allowances payable under the pension plan and supplemental agreements to
employees and executive officers are set forth in the following table. As of
December 31, 1993, the estimated credited years of service for Messrs.
Chiaraluce, Guillaume, and Lenz are 2, 29, and 15, respectively. The table
assumes retirement occurs at age 65 which for Messrs. Chiaraluce, Guillaume and
Lenz would occur with 16, 33 and 26 years, respectively, of credited service.
Final average compensation is the highest average regular basic compensation
received by an individual from the Company and The Connecticut Water Company
during any 60 consecutive months.
<TABLE>
<CAPTION>
HIGHEST AVERAGE
ANNUAL COMPENSATION YEARS OF SERVICE*
DURING 60 -------------------------------------------------------------------------
CONSECUTIVE MONTHS 5 10 20 25 30 35
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$100,000 $ 60,000 $ 60,000 $ 60,000 $ 60,000 $ 60,000 $ 60,000
$125,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000
$150,000 $ 90,000 $ 90,000 $ 90,000 $ 90,000 $ 90,000 $ 90,000
$175,000 $105,000 $105,000 $105,000 $105,000 $105,000 $105,000
$200,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000
</TABLE>
- ---------------
* In the case of Mr. Chiaraluce, the amounts shown in the foregoing table are
reduced by benefits payable under the retirement plan of a prior employer.
Further, prior to his completion of five years of service with The Connecticut
Water Company, at which time he would become vested in The Connecticut Water
Company's retirement plan, Mr. Chiaraluce's supplemental executive retirement
agreement provides that he is entitled to an annual benefit based upon a
percentage of his average earnings and years of service, including years
served with a prior employer. As of December 31, 1993, Mr. Chiaraluce would be
entitled to an annual benefit of $5,577 under the foregoing formula were he to
have terminated employment as of that date.
The Connecticut Water Company has entered into a non-qualified supplemental
executive retirement agreement with Mr. Stewart. Mr. Stewart's benefit is
derived from a credit of $30,000 each July 1 beginning July 1, 1991 and
continuing through July 1, 1998 to a bookkeeping account established in his
name, and interest in the amount of 8% per annum is credited on the amount
credited to such account as of the preceding July 1st. The total amount credited
to the account as of July 1, 1998 will be converted to and paid in the form of
an equivalent annuity benefit on a joint and survivor basis if he is then
married or on a single life basis if he is then unmarried. If Mr. Stewart should
die prior to July 1, 1998, his estate receives the amount then credited to the
account.
The Connecticut Water Company has established a trust, which for federal
income tax purposes is taxed as a grantor trust, to which the Company may elect
to contribute amounts to meet its obligations to employees with whom it has
entered into supplemental executive retirement agreements described above. As of
the date of this Proxy Statement, the Company has contributed $90,000 to this
trust to provide for its obligations under Mr. Stewart's supplemental executive
retirement agreement.
6
<PAGE> 10
DIRECTOR COMPENSATION
Since the Boards of Directors of the Company and The Connecticut Water
Company are identical, regular meetings of each are generally held on the same
day. Directors of the Company receive $250 for each regular meeting of the Board
of Directors of the Company and $350 for each special Board meeting and each
committee meeting of the Company which they attend. In addition, Directors
receive an annual retainer of $3,200, $450 for each regular or special meeting
of the Board of Directors, and $350 for each committee meeting, of The
Connecticut Water Company which they attend. Directors who are salaried officers
receive compensation for serving as directors. These amounts have been included
in the Summary Compensation Table on Page 5. Directors who are not officers are
not entitled to retirement benefits from the Company or The Connecticut Water
Company.
Pursuant to a Directors Deferred Compensation Plan, the Directors of the
Company and The Connecticut Water Company may elect to defer receipt of all or a
specified portion of the compensation payable to them for services as Directors
until after retiring as Directors. Any amounts so deferred are credited to
accounts maintained for each participating Director, and interest at an annual
rate of 10.74% is currently credited monthly to all deferred amounts.
Distribution of amounts deferred and accumulated interest may be made, at the
election of each participating Director, in a lump sum or in annual installments
over a period of years specified by the Director, such distribution to commence
in the year following the year in which the individual ceases to be a Director.
In 1993, four Directors elected to participate in the Plan.
COMPENSATION COMMITTEE REPORT
The Committee is responsible for making recommendations to the Board on
executive compensation and administering the Company's Performance Stock Program
(the "Program").
EXECUTIVE COMPENSATION PRINCIPLES
The Company's executive compensation plan is designed to align executive
compensation with the Company's and/or The Connecticut Water Company's strategic
business planning which includes management initiatives and business financial
performance. Through this process the Committee has established a program to:
- Attract and retain key executives critical to the long-term success of
the Company.
- Reward executives for the accomplishment of strategic goals and the
enhancement of stockholder value.
- Integrate compensation programs with both The Connecticut Water Company's
annual performance review and the Company's and/or The Connecticut Water
Company's strategic planning and measuring processes.
- Support a performance-oriented environment that rewards performance with
respect to overall performance goals and performance on individual goals
for each participant in the plan.
7
<PAGE> 11
EXECUTIVE COMPENSATION PROGRAM
The total compensation program consists of both cash and equity based
compensation. The annual compensation consists of a base salary and any Common
Stock awarded through the Program. The Committee determines a salary range and a
level of salary for executive officers. The Committee determines the salary or
salary range based upon competitive norms from annual studies of a peer group of
other water companies. Actual salary changes are based upon such norms and upon
performance.
Additional incentives are provided through the Program(1). The Committee
reviews and approves the participation of executive officers of The Connecticut
Water Company under the Program. The Committee also approves the award value
each year as a percentage of base salary and the basis for judging performance
over the following year. Awards are currently based on whether the Company
and/or The Connecticut Water Company has met certain goals based on objective
performance criteria and attainment by participants of individual goals. The
Committee determines what these criteria and goals are each year. The criteria
for the 1993 awards were based on the Company's return on equity, The
Connecticut Water Company's customer value rating and water quality measures,
other financial and service measures and specific individual performance goals.
The Committee has approved and implemented an award program for 1994 based upon
similar criteria and goals.
Executive officers may also participate in the Company's Savings and
Investment Plan (401K Plan) and other benefit plans generally available to all
levels of salaried employees. Also, executive officers may elect to defer
compensation under plans.
CHIEF EXECUTIVE OFFICER COMPENSATION
The Committee determined the compensation for 1993 of Mr. Chiaraluce, the
Chief Executive Officer ("CEO"), based upon a number of factors and criteria,
including a review of the salaries of Chief Executive Officers for similar
companies of comparable size and capitalization and a review by the Committee of
the CEO's performance. The Committee approved the CEO's participation in the
Program for 1993. Based upon Mr. Chiaraluce's meeting less than 100% of his
individual and corporate goals in 1993, Mr. Chiaraluce actually received 483 of
the 1,073 shares of the Company's Common Stock allocated to him in 1993 under
the Program.
- ---------------
(1) The Program provides for an aggregate maximum of up to 50,000 shares of
Common Stock of the Company to be issued as awards of restricted stock to
eligible employees. An award of a share of restricted stock is an award to a
participant of a share of the Common Stock of the Company generally
conditioned upon the attainment of performance goals established by the
Committee for the performance period to which the award relates and the
continued employment of the participant with the Company or any
majority-owned subsidiary of the Company through the end of the performance
period. During the performance period, the participant has all of the rights
of a stockholder of the Company, including the right to receive dividends,
except that the participant does not have custody of the shares of Common
Stock nor the right to transfer ownership of the shares during the
performance period.
8
<PAGE> 12
COMPENSATION COMMITTEE
William C. Lichtenfels, Chairman
Marcia L. Hincks
Robert F. Neal
Floyd Wallace
Donald B. Wilbur
PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total stockholder
return for each of the years 1988-1993 on the Company's Common Stock, based on
the market price of the Common Stock and assuming reinvestment of dividends,
with the cumulative total stockholder return of companies on the Standard &
Poor's 500 Stock Index and the Edward D. Jones & Company Water Utility Index.
<TABLE>
<CAPTION>
Connecticut E.D. Jones
Measurement Period Water Ser- Standard & Water Utili-
(Fiscal Year Covered) vice, Inc. Poor's 500 ties
<S> <C> <C> <C>
1988 100.00 100.00 100.00
1989 116.85 131.60 107.56
1990 119.30 127.52 99.39
1991 161.10 166.29 138.37
1992 188.11 178.92 151.40
1993 214.65 197.00 173.67
</TABLE>
9
<PAGE> 13
BENEFICIAL SHAREHOLDINGS OF CERTAIN PERSONS
The Company does not know of any beneficial owner of more than 5% of its
Common Stock or of its $.90 Cumulative Preferred Stock, $16 par value. The
Company does not know of any beneficial owner of more than 5% of its Cumulative
Preferred Stock -- Series A, $20 par value, except as follows:
<TABLE>
<CAPTION>
AMOUNT
NAME AND BENEFICIALLY PERCENT
ADDRESS OF OWNED AS OF OF
TITLE OF CLASS BENEFICIAL OWNER DECEMBER 31, 1993 CLASS
- ---------------------------- ------------------------- ----------------- -------
<S> <C> <C> <C>
Cumulative Preferred William Neal MacKenzie 1,850 12.3%
Stock -- 222 North Main Street
Series A, $20 par value Wallingford, CT 06492
Herbert I. Johnson 900 6.0%
and Annabelle C. Johnson
35 Carter Street
Bolton, CT 06040
Dorothy L. Bach 825 5.5%
55 Mountain Spring Road
Tolland, CT 06084
</TABLE>
CERTAIN TRANSACTIONS
During the year 1993, the law firm of Day, Berry & Howard, of which Michael
F. Halloran, Assistant Secretary of the Company and The Connecticut Water
Company, is a partner, performed certain legal services for the Company and The
Connecticut Water Company. The Company believes that the charges made by said
firm for legal services were not more than others would have charged for similar
services.
In July 1993, Mr. Luginbuhl acted as real estate agent in a land sale
transaction with the Company. The land, which was owned by Mr. Luginbuhl's
nephew, was sold to the Company. In connection with this transaction, a sales
commission was paid to Gordon Realty, Inc. and Mr. Luginbuhl received one-half
of this commission. The Company believes that the purchase price paid for the
land and the commission paid by the Company, were not more than would have been
paid to others in a similar transaction.
PROPOSAL (2) -- ELECTION OF AUDITORS
Arthur Andersen & Company served as independent auditors for the Company
and its subsidiary, The Connecticut Water Company, for the fiscal year ending
December 31, 1993. One or more representatives of Arthur Andersen & Company will
attend the annual meeting, with the opportunity to make a statement if they
desire to do so and to respond to appropriate questions.
It is intended that unless otherwise specified, proxies will be voted in
favor of the appointment of Arthur Andersen & Company, independent public
accountants, of Hartford, Connecticut, as independent auditors for the Company
for the fiscal year ending December 31, 1994. The Company's Audit Committee has
recommended that Arthur Andersen & Company be so appointed. Arthur Andersen and
Company has no direct or indirect financial interest in the Company. The
favorable vote of a majority of the shares of Common Stock and Cumulative
Preferred Stock -- Series A, $20 par value, represented at the meeting is
required for such approval.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" PROPOSAL (2).
10
<PAGE> 14
OTHER MATTERS (3)
The Board of Directors knows of no other matters which may be presented for
consideration at the meeting. However, if any other matters properly come before
such meeting, the persons named in the enclosed proxy will vote in their
discretion on such matters.
STOCKHOLDER PROPOSALS
For business to be properly brought before an annual meeting by a
stockholder, the business must be an appropriate matter to be acted upon by the
stockholders at an annual meeting and the stockholder must have given proper and
timely notice thereof in writing to the Secretary of the Company. To be timely,
a stockholder's notice must be delivered to or mailed and received by the
Secretary of the Company at the General Offices of the Company not later than
the close of business of a day which is not less than 120 days prior to the
anniversary date of the immediately preceding annual meeting. A stockholder's
notice to the Secretary must set forth as to each matter the stockholder
proposes to bring before the annual meeting (a) a brief description of the
business desired to be brought before the annual meeting and the reasons for
conducting such business at the annual meeting, (b) the name and address, as
they appear on the Company's books, of the stockholder proposing such business,
(c) the class and number of shares of the Company which are beneficially owned
by the stockholder and (d) any material interest of the stockholder in such
business.
Stockholder proposals intended to be presented at the Annual Meeting of
Stockholders in 1995 must be received by the Company not later than December 16,
1994 in order to be considered for inclusion in the Company's proxy statement
and form of proxy relating to the 1995 Annual Meeting of Stockholders.
Vincent F. Susco, Jr.
Secretary
March 15, 1994
THE COMPANY IS SUBJECT TO THE INFORMATIONAL REQUIREMENTS OF THE SECURITIES
EXCHANGE ACT OF 1934 AND IN ACCORDANCE THEREWITH FILES AN ANNUAL REPORT ON FORM
10-K WITH THE SECURITIES AND EXCHANGE COMMISSION. THE COMPANY WILL FURNISH A
COPY OF THE 1993 ANNUAL REPORT ON FORM 10-K FILED BY THE COMPANY, INCLUDING THE
FINANCIAL STATEMENTS AND SCHEDULES THERETO, BUT WITHOUT EXHIBITS, WITHOUT CHARGE
TO ANY STOCKHOLDER MAKING A WRITTEN REQUEST THEREFOR ADDRESSED TO: SECRETARY,
CONNECTICUT WATER SERVICE, INC., 93 WEST MAIN STREET, CLINTON, CONNECTICUT,
06413.
11
<PAGE> 15
/X/ PLEASE MARK VOTES AS IN
THIS EXAMPLE
With- For All
For hold Except
1.) For election of all Directors, / / / / / /
mark "For".
F. BAKER, H. MOGER, W. PACKARD,
W. EMSWILER, R. LUGINBUHL
If you do not wish your shares voted "FOR" a particular
nominee, mark the "For All Except" box and strike a line through
the nominee(s) name. Your shares will be voted for the
remaining nominee(s).
RECORD DATE SHARES:
REGISTRATION
Please be sure to sign and date this Proxy. Date
---------------------
---------------------------- -------------------------------------
Shareholder sign here Co-owner sign here
2.) Appointment of Arthur Anderson & Co. For Against Abstain
as independent Auditors. / / / / / /
3.) In their discretion the proxies are For Against Abstain
authorized to vote upon such other / / / / / /
business as may properly come before
the meeting.
Mark box at right if comments or address change / /
have been noted on the reverse side of this card.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
DETACH CARD
CONNECTICUT WATER SERVICE, INC.
Dear Stockholder:
Please take note of the important information enclosed with this Proxy
Ballot. There are a number of issues related to the management and
operation of your Company that require your immediate attention and
approval. These are discussed in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to
vote your shares.
Please mark the boxes on the proxy card to indicate how your shares shall
be voted. Then sign the card, detach it and return your proxy vote in the
enclosed postage paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders,
April 22, 1994.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Connecticut Water Service, Inc.
<PAGE> 16
CONNECTICUT WATER SERVICE, INC
COMMON STOCK
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING APRIL 22, 1994
The undersigned stockholder of Connecticut Water Service, Inc. hereby appoints
William F. Guillaume, Bertram L. Lenz and Marshall T. Chiaraluce or any of them,
attorneys and proxies for the undersigned, with power of substitution, to act
for and to vote, as designated herein, with the same force and affect as the
undersigned, all shares of the Company's Common Stock standing in the name of
the undersigned at the Annual Meeting of Stockholders of Connecticut Water
Service, Inc. to be held at it's general offices at 93 West Main St., Clinton,
Connecticut, on April 22, 1994, at 2 p.m., and any adjustments thereof.
When properly executed, this proxy will be voted in the manner directed, herein
by the undersigned stockholder. If no direction is made, this proxy will grant
authority to vote for all nominees for Director and will be voted "FOR"
Proposal (2).
The undersigned hereby acknowledges receipt of notice of said meeting and the
related Proxy Statement.
PLEASE VOTE, DATE, AND SIGN ON OTHER SIDE AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE.
Please sign this proxy exactly as your name appears on the books of the
Company. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where more
than one name appears, a majority must sign. If a coroporation, this signature
should be that of an authorized officer who should state his or her title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ----------------------------------------- -----------------------------------
- ----------------------------------------- -----------------------------------
- ----------------------------------------- -----------------------------------
<PAGE> 17
/x/ PLEASE MARK VOTES AS IN
THIS EXAMPLE
With- For All
1.) For election of all Directors, For hold Except
mark "For". / / / / / /
F. BAKER, H. MOGER, W. PACKARD,
W. EMSWILER, R. LUGINBUHL
If you do not wish your shares voted "FOR" a particular nominee, mark the
"For All Except" box and strike a line through the nominee(s) name. Your
shares will be voted for the remaining nominee(s).
RECORD DATE SHARES:
REGISTRATION
Please be sure to sign and date this Proxy. Date
-----------------------
------------------------------------------- -----------------------------
Shareholder sign here Co-owner sign here
2.) Appointment of Arthur Anderson & Co. For Against Abstain
as independent Auditors. / / / / / /
3.) In their discretion the proxies are For Against Abstain
authorized to vote upon such other / / / / / /
business as may properly come before
the meeting.
Mark box at right if comments or address change / /
have been noted on the reverse side of this card.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
DETACH CARD
CONNECTICUT WATER SERVICE, INC.
Dear Stockholder:
Please take note of the important information enclosed with this Proxy
Ballot. There are a number of issues related to the management and operation
of your Company that require your immediate attention and approval. These are
discussed in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to
vote your shares.
Please mark the boxes on the proxy card to indicate how your shares shall be
voted. Then sign the card, detach it and return your proxy vote in the
enclosed postage paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders, April
22, 1994.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Connecticut Water Service, Inc.
<PAGE> 18
CONNECTICUT WATER SERVICE, INC
CUMULATIVE PREFERRED STOCK -- SERIES A
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING APRIL 22, 1994
The undersigned stockholder of Connecticut Water Service, Inc. hereby
appoints William F. Guillaume, Bertram L. Lenz and Marshall T. Chiaraluce or
any of them, attorneys and proxies for the undersigned, with power of
substitution, to act for and to vote, as designated herein, with the same force
and affect as the undersigned, all shares of the Company's Cumulative Preferred
Stock-Series A, $20 par value, standing in the name of the undersigned at the
Annual Meeting of Stockholders of Connecticut Water Service, Inc. to be held at
its general offices at 93 West Main Street, Clinton, Connecticut, on April 22,
1994, at 2 p.m., and any adjournments thereof.
When properly executed, this proxy will be voted in the manner directed, herein
by the undersigned stockholder. If no direction is made, this proxy will grant
authority for all Nominees for Director and will be voted "FOR" Proposal (2).
PLEASE VOTE, DATE, AND SIGN ON OTHER SIDE AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE.
Please sign this proxy exactly as your name appears on the books of the
Company. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where more
than one name appears, a majority must sign. If a corporation, this signature
should be that of an authorized officer who should state his or her title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- -------------------------------------------- --------------------------------
- -------------------------------------------- --------------------------------
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