<PAGE> 1
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:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
CONNECTICUT WATER SERVICE, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
CONNECTICUT WATER SERVICE, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
[Logo]
March 19, 1996
Dear Stockholder:
You are cordially invited to the Annual Meeting of Stockholders of
Connecticut Water Service, Inc., scheduled to be held on April 26, 1996 at the
Holiday Inn at 16 Ella T. Grasso Turnpike, Route 75, Windsor Locks, Connecticut,
commencing at 2:00 P.M. Please note the change in location for the meeting. Your
Board of Directors and management look forward to personally greeting those
stockholders able to attend.
At the Meeting, you will be asked to elect four directors, to appoint
independent auditors for the calendar year ending December 31, 1996, 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.
To give you a view of one the Company's largest customer's operations and
facilities, after the Meeting, we will conduct a tour of the H. P. Hood facility
located on Route 159 in Suffield, Connecticut. A bus will provide transportation
from the Holiday Inn to the facility. If you plan to attend, please call
860-669-8630 ext. 305 so we can accommodate you on the bus tour. Please allow
about an hour for the tour.
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.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
HOLIDAY INN
16 ELLA T. GRASSO TURNPIKE (ROUTE 75)
WINDSOR LOCKS, CONNECTICUT
Notice is hereby given that the Annual Meeting of Stockholders of
Connecticut Water Service, Inc. (the "Company") will be held on April 26, 1996
at 2:00 P.M. at the Holiday Inn, Route 75, Windsor Locks, Connecticut, for the
following purposes:
1. To elect four directors for three-year terms;
2. To appoint Arthur Andersen LLP, independent public accountants,
as independent auditors for the Company for the calendar year
ending December 31, 1996; 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, 1996 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 19, 1996
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 26, 1996
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 Holiday
Inn, 16 Ella T. Grasso Turnpike, Windsor Locks, Connecticut, on April 26, 1996
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, 1996, are
entitled to notice of and to vote at the meeting. On that date, the Company had
outstanding 2,973,119 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 19,
1996, 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 13, and has
selected the four nominees listed below for election to three-year terms
expiring in 1999. Of the Company's nine directors remaining in office, the terms
of four directors expire in 1997 and the terms of five directors expire in 1998.
Each nominee is presently a director of the Company. Mr. Bertram L. Lenz,
director, will retire on March 31, 1996, and therefore is not being considered
for relection.
1
<PAGE> 5
Unless otherwise directed, it is intended that the enclosed proxy will be
voted for the election of Harold E. Bigler, Jr., Astrid T. Hanzalek, Frederick
E. Hennick, and Donald B. Wilbur. 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 sufficient votes withheld
and non-votes may result in the failure to obtain a majority vote.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY
COMMITTEES OWNED AS OF
PRESENTLY PRINCIPAL OCCUPATION DIRECTOR MARCH 1, PERCENT OF
NAME SERVING(1) AGE AND DIRECTORSHIPS SINCE 1996 CLASS(2)
- --------------------- ----------- ---- ------------------------------------ -------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
CLASS I:
NOMINEES FOR ELECTION AT THIS MEETING FOR TERMS EXPIRING IN 1999
Harold E. Bigler, Jr. 2,3,7 64 Chairman, Bigler Investment 1983 2,000 .07
Management Company, Inc.
Astrid T. Hanzalek 1,2,5,6,7 68 Consultant -- water resources and 1985 687 .02
various public policy issues (self-
employed); formerly Connecticut
State Representative.
Frederick E. Hennick 5,6,7 69 Retired, formerly President and 1983 225 <.01
Publisher, Naugatuck Daily News;
Director, Naugatuck Valley Savings
and Loan, Inc.
Donald B. Wilbur 4,7 53 Plant Manager, Chesebrough-Pond's 1993 213 <.01
USA (personal products
manufacturing); Director, Middlesex
Hospital; Director, Liberty Bank.
CLASS II:
DIRECTORS WHOSE TERMS CONTINUE UNTIL 1997
Francis E. Baker 2,4,6 66 President and Director, Andersen 1973(3) 125 <.01
Group, Inc. (electronic and medical
manufacturing and services);
Director, Fresenius, USA.
Rudolph E. Luginbuhl 1,5 67 Real Estate Agent, D. W. Fish, 1994 300 .01
Better Homes; Corporator, The
Savings Bank of Rockville.
Harvey G. Moger 1,2,3,7 68 President, GBAJ Associates 1981 2,345 .08
(commercial rea1 estate financial
consultant); Director, Ensign
Bickford Realty Corporation.
Warren C. Packard 1,3 61 Former First Selectman, Town of 1991 150 <.01
Suffield; former President and Chief
Executive Officer, The Wiremold
Company (manufacturing); Director,
The Wiremold Company.
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY
COMMITTEES OWNED AS OF
PRESENTLY PRINCIPAL OCCUPATION DIRECTOR MARCH 1, PERCENT OF
NAME SERVING(1) AGE AND DIRECTORSHIPS SINCE 1996 CLASS(2)
- --------------------- ----------- ---- ------------------------------------ -------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
CLASS III:
DIRECTORS WHOSE TERMS CONTINUE UNTIL 1998
Marshall T. 53 President and Chief Executive 1992 7,038(4) .24
Chiaraluce Officer of the Company.
William F. Guillaume 63 Vice President Engineering & 1978 4,242(4) .14
Planning of the Company; Director,
Connwood Foresters, Inc. (forestry
service and management).
Marcia L. Hincks 1,4,5 60 Retired; formerly Vice President and 1983 281 <.01
Senior Counsel, Aetna Life &
Casualty.
William C. 4,6,7 68 Retired, formerly President and 1989 418 .01
Lichtenfels Chief Operating Officer, Emhart
Corporation (manufacturing).
Robert F. Neal 3,4,5 61 Retired; formerly Senior Vice 1990 350 .01
President -- Network Services;
Southern New England
Telecommunications Corporation.
</TABLE>
- ---------------
(1) 1. Audit Committee
2. Finance Committee
3. Pension Trust Committee
4. Compensation Committee
5. Public Information Committee
6. Committee on Directors
7. Strategic Planning Committee
(2) The percentages have been rounded to the nearest one hundredth of one
percent. As of March 1, 1996, executive officers and directors of the
Company as a group owned 27,823 shares (.94 %) of the Common Stock of the
Company. No directors or officers own any shares of the Company's Cumulative
Preferred Stock.
(3) 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.
(4) Includes shares actually earned by the officer under the Company's pre-1996
Performance Stock Programs and awarded under the 1996 Performance Stock
Program.
With the exception of Mr. Packard who retired from the Wiremold Company in
1991 and whose term as First Selectman of the Town of Suffield expired on
November 21, 1995, 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, Mrs. Hincks who retired
from Aetna Life and Casualty in 1993, and Mr. Neal who retired from Southern New
England Telecommunications Company in 1994, 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 1995. In addition,
the Company has a number of committees, including an Audit Committee, a
Compensation Committee, a Committee on Directors, a Strategic Planning Committee
and a Public Information Committee which meet periodically during the year. The
Audit Committee, composed of Mmes. Hanzalek and Hincks and Messrs. Luginbuhl,
Moger 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 twice during 1995. The Compensation Committee, composed of Ms.
Hincks and Messrs. Baker, Lichtenfels, Neal 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
1995. The Committee on Directors, consisting of Ms. Hanzalek, Messrs. Baker,
Hennick and Lichtenfels, recommends candidates for nomination as directors to
the Board. The Committee did not meet in 1995. The Strategic Planning Committee,
consisting of Ms. Hanzalek and Messrs. Bigler, Hennick, Lichtenfels, Moger, and
Wilbur, oversees the preparation and implementation of the Company's Strategic
Plan. The Committee met once in 1995. The Public Information Committee,
consisting of Mmes. Hanzalek and Hincks and Messrs. Hennick, Neal and Luginbuhl,
advises management on policies for communicating Company information to the
general public, government officials, investors and other interested parties.
The Committee met twice in 1995. All of the Company's directors attended at
least 75% of the aggregate number of meetings in 1995 of the Board and
committees on which they serve, except Mr. Packard.
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 1997 Annual Meeting must
be received by the Company's Secretary by the close of business on December 15,
1996.
4
<PAGE> 8
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.
In fiscal 1995, only Mr. Luginbuhl failed to a file a timely report relating to
a single transaction of Common Stock beneficially owned by him. In making this
statement, the Company has relied on the written representations of its
directors and officers and its ten percent holders and copies of the reports
that they have filed with the Securities and Exchange Commission.
MANAGEMENT COMPENSATION
SUMMARY COMPENSATION TABLE
The following tabulation sets forth the total compensation paid by the
Company and The Connecticut Water Company during 1995, 1994, and 1993 to the
most highly compensated executive officers, including the Chief Executive
Officer of the Company, receiving more than $100,000 aggregate compensation in
1995. The Company has no employees. All officers are employees of The
Connecticut Water Company and all compensation is paid by The Connecticut Water
Company.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------- RESTRICTED STOCK
NAME AND PRINCIPAL POSITION YEAR SALARY($) AWARDS($)(1)
- --------------------------------------------------- ---- ------- ----------------------
<S> <C> <C> <C>
Marshall T. Chiaraluce,
President and Chief Executive Officer 1995 200,000 47,091
1994 186,500 31,643
1993 176,700 12,558
William F. Guillaume,
V.P. Engineering and Planning 1995 129,500 17,621
1994 125,000 12,206
1993 121,800 8,762
Bertram L. Lenz,
V.P. Finance and Accounting and Treasurer 1995 128,000 15,429
1994 123,500 12,206
1993 117,500 8,138
</TABLE>
- ---------------
(1) The value of the full number of shares of restricted stock initially
allocated to Messrs. Chiaraluce, Guillaume and Lenz under the Company's
Performance Stock Program was $30,044, $16,408, and $16,408 respectively in
1993; $48,423, $17,565 and $17,565 respectively in 1994; and $50,370,
$18,262, and $18,262 respectively in 1995. The aggregate number of shares of
restricted stock actually earned by Messrs. Chiaraluce, Guillaume and Lenz,
based upon the actual attainment of 1993, 1994 and 1995 performance criteria
were 483, 337 and 313 respectively in 1993; 1,361, 525 and 525 respectively
in 1994; and 1,697, 635 and 556 respectively in 1995. The values shown in
the table above are of the shares actually earned in said year, valued on
the date earned which was February 11, 1994 for the 1993 plan, February 10,
1995 for the 1994 plan, and February 14, 1996 for the 1995 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 highest average annual 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, 1995, the estimated credited years of service for
Messrs. Chiaraluce, Guillaume, and Lenz are 4, 31, and 17, 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. Highest average annual 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
DURING 60 5 OR MORE YEARS
CONSECUTIVE MONTHS OF SERVICE*
- ------------------- ---------------
<S> <C>
$ 100,000 $60,000
$ 125,000 $75,000
$ 150,000 $90,000
</TABLE>
- ---------------
* In the case of Mr. Chiaraluce, the amounts 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 pension
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, 1995 Mr. Chiaraluce would be entitled to an
annual benefit of $12,175 under the foregoing formula were he to have
terminated employment as of that date.
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 of
The Connecticut Water Company 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 which they attend. Directors who are salaried officers receive
the same retainer and meeting fees as other directors. These amounts have been
included in the Summary Compensation Table on Page 6. Directors who are not
officers are not entitled to retirement benefits from the Company or The
Connecticut Water Company.
6
<PAGE> 10
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 1995, five 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 which reflect
customer service and satisfaction as well as 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.
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 periodic studies of a peer group
of other water companies. Actual salary changes are based upon such norms and
upon performance.
7
<PAGE> 11
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 1995 awards were based on The Connecticut Water Company's customer value
rating and water quality measures, the Company's return on equity, other service
and financial measures, and specific individual performance goals. The Committee
has approved and implemented an award program for 1996 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 a nonqualified salary deferral plan.
CHIEF EXECUTIVE OFFICER COMPENSATION
The Committee determined the compensation for 1995 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 1995. Based upon Mr. Chiaraluce's achieving greater than 75% of his
individual and corporate goals in 1995, Mr. Chiaraluce actually received 1,697
of the 2,190 shares of the Company's Common Stock allocated to him in 1995 under
the Program.
COMPENSATION COMMITTEE
William C. Lichtenfels, Chairman
Francis E. Baker, Jr.
Marcia L. Hincks
Robert F. Neal
Donald B. Wilbur
- ---------------
(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
PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total stockholder
return for each of the years 1990-1995 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>
1990 100.00 100.00 100.00
1991 135.03 130.34 142.79
1992 157.67 140.26 158.14
1993 179.92 154.33 180.18
1994 156.01 156.43 167.86
1995 201.29 215.00 211.18
</TABLE>
9
<PAGE> 13
BENEFICIAL SHAREHOLDINGS OF CERTAIN PERSONS
The Company does not know of any beneficial owner of more than 5% of its
$.90 Cumulative Preferred Stock, $16 par value. The Company does not know of any
beneficial owner of more than 5% of its Common Stock and 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, 1995 CLASS
- --------------------------------- --------------------------------- ----------------- -------
<S> <C> <C> <C>
Cumulative Preferred Stock -- William Neal MacKenzie 1,850 12.3%
Series A, $20 par value 222 North Main Street
Wallingford, CT 06492
Herbert I. Johnson and 900 6.0%
Annabelle C. Johnson
35 Carter Street, Bolton, CT
06040
Shearson Lehman American Express 900 6.0%
One Western Union Int L Plaza
New York, NY 1004-1008
Dorothy L. Bach 825 5.5%
55 Mountain Spring Road
Tolland, CT 06084
</TABLE>
CERTAIN TRANSACTIONS
During the year 1995, 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.
PROPOSAL (2) -- ELECTION OF AUDITORS
Arthur Andersen LLP served as independent auditors for the Company and its
subsidiary, The Connecticut Water Company, for the calendar year ending December
31, 1995. One or more representatives of Arthur Andersen LLP 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 LLP, independent public accountants,
of Hartford, Connecticut, as independent auditors for the Company for the
calendar year ending December 31, 1996. The Company's Audit Committee has
recommended that Arthur Andersen LLP be so appointed. Arthur Andersen LLP 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 on 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 1997 must be received by the Company not later than December 15,
1996 in order to be considered for inclusion in the Company's proxy statement
and form of proxy relating to the 1997 Annual Meeting of Stockholders.
Vincent F. Susco,
Jr.
Secretary
March 19, 1996
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 1995 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: VICE
PRESIDENT -- FINANCE, CONNECTICUT WATER SERVICE, INC., 93 WEST MAIN STREET,
CLINTON, CONNECTICUT, 06413.
11
<PAGE> 15
CONNECTICUT WATER SERVICE, INC.
COMMON STOCK
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING APRIL 26, 1996
The undersigned stockholder of Connecticut Water Service, Inc. hereby appoints
William F. Guillaume and Marshall T. Chiaraluce or either 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 effect 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 the Holiday Inn, 16 Ella T. Grasso Turnpike, Route 75, Windsor Locks,
Connecticut, on April 26, 1996, 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 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 THE 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?
- ---------------------------------------- -------------------------------------
- ---------------------------------------- -------------------------------------
- ---------------------------------------- -------------------------------------
<PAGE> 16
/X/ PLEASE MARK VOTES AS IN
THIS EXAMPLE
With- For All
For hold Except
1.) For election of all Directors, / / / / / /
H. BIGLER, JR., A. HANZALEK, F. HENNICK, D. WILBUR
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:
Please be sure to sign and date this Proxy. Date _________________________
___________________________________ ____________________________________
Shareholder sign here Co-owner sign here
2.) Appointment of Arthur Andersen LLP
as independent Auditors. For Against Abstain
/ / / / / /
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 material.
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 26, 1996.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Connecticut Water Service, Inc.
<PAGE> 17
CONNECTICUT WATER SERVICE, INC.
CUMULATIVE PREFERRED STOCK -- SERIES A
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING APRIL 26, 1996
The undersigned stockholder of Connecticut Water Service, Inc. hereby appoints
William F. Guillaume and Marshall T. Chiaraluce or either 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 effect as the undersigned, all
shares of the Company's Cumulative Preferred Stock-Series A standing in the
name of the undersigned at the Annual Meeting of Stockholders of Connecticut
Water Service, Inc. to be held at the Holiday Inn, 16 Ella T. Grasso Turnpike,
Route 75, Windsor Locks, Connecticut, on April 26, 1996, 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 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 THE 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?
- -------------------------------------- -------------------------------------
- -------------------------------------- -------------------------------------
- -------------------------------------- -------------------------------------
<PAGE> 18
/X/ PLEASE MARK VOTES AS IN
THIS EXAMPLE
With- For All
For hold Except
1.) For election of all Directors, / / / / / /
H. BIGLER, JR., A. HANZALEK, F. HENNICK, D. WILBUR
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:
Please be sure to sign and date this Proxy. Date _________________________
____________________________________ ______________________________________
Shareholder sign here Co-owner sign here
2.) Appointment of Arthur Andersen LLP
as independent Auditors. For Against Abstain
/ / / / / /
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 material.
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 26, 1996.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Connecticut Water Service, Inc.
