INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the registrant /x/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/x/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
MIDDLESEX WATER COMPANY
- ------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MIDDLESEX WATER COMPANY
- ------------------------------------------------------------------------------
(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 Rule
14a-6(i)(2).
/ / $500 per each party per Exchange Act Rule 14a-6(i)(3), or Rule
14a-6(i)(2).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
<PAGE>
[logo] 1500 Ronson Road
P.O. Box 1500
Iselin, New Jersey 08830-0452
Tel. (908) 634-1500
Fax (908) 750-5981
NASDAQ Stock Market Symbol: MSEX
April 18, 1996
Dear Stockholder:
YOUR VOTE IS IMPORTANT TO US! Whether or not you plan to attend the
Stockholders' Meeting, I urge you to vote. Please specify your choice by marking
the appropriate boxes on the enclosed proxy card and sign, date and return your
proxy in the enclosed postpaid return envelope as promptly as possible. If you
date, sign and return your proxy card without indicating your choices, the
persons designated as proxies will vote your shares in accordance with the
recommendations of your Directors and management.
You are cordially invited to attend your Company's 1996 Annual Meeting of
Stockholders which will be held at the office of the Company, 1500 Ronson Road,
Iselin, New Jersey, on Wednesday, May 22, 1996, at 11:00 a.m.
Following the Annual Meeting you are also invited to tour our Company
headquarters facilities and to remain for luncheon.
I hope you will be able to attend.
Sincerely,
J. RICHARD TOMPKINS
-----------------------------------
J. Richard Tompkins
Chairman of the Board and President
<PAGE>
TABLE OF CONTENTS
PAGE
----
SOLICITATION AND REVOCATION OF PROXIES ..................................... 1
SHARES ENTITLED TO VOTE .................................................... 1
GENERAL INFORMATION ........................................................ 1
ELECTION OF DIRECTORS--PROPOSAL 1 .......................................... 2
NOMINEES FOR ELECTION AS DIRECTOR WITH TERM EXPIRING IN 1999--CLASS III .... 2
DIRECTORS WHOSE TERMS CONTINUE BEYOND THE 1996 ANNUAL MEETING .............. 3
SECURITY OWNERSHIP OF DIRECTORS, MANAGEMENT AND CERTAIN
BENEFICIAL OWNERS ........................................................ 4
EXECUTIVE COMPENSATION ..................................................... 5
Summary Compensation Table ............................................... 5
Compensation of Directors ................................................ 5
Compensation Committee Interlocks and Insider Participation .............. 5
Compensation Pursuant to Pension Plans ................................... 6
REPORT OF THE EXECUTIVE DEVELOPMENT AND COMPENSATION COMMITTEE ............. 7
PERFORMANCE GRAPH .......................................................... 8
APPOINTMENT OF INDEPENDENT AUDITORS--PROPOSAL 2 ............................ 9
DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS ............................... 9
OTHER MATTERS .............................................................. 9
MINUTES OF LAST PREVIOUS MEETING OF STOCKHOLDERS ........................... 9
<PAGE>
[logo] 1500 Ronson Road
P.O. Box 1500
Iselin, New Jersey 08830-0452
Tel. (908) 634-1500
Fax (908) 750-5981
NASDAQ Stock Market Symbol: MSEX
--------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 22, 1996
--------------------
To the Stockholders of MIDDLESEX WATER COMPANY
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of MIDDLESEX
WATER COMPANY will be held at the office of the Company, 1500 Ronson Road,
Iselin, New Jersey, on Wednesday, May 22, 1996, at 11:00 a.m., for the following
purposes:
1. To elect three members of Class III of the Board of Directors to hold
office until the Annual Meeting of Stockholders in 1999, and in each
case until their respective successors are elected and qualify.
2. To consider and act upon the approval of the appointment of Deloitte &
Touche LLP as independent auditors for the year 1996.
3. To transact such other business as may properly come before the
meeting and any adjournment thereof.
Only holders of record of common stock at the close of business on April
15, 1996, will be entitled to notice of and to vote at the meeting.
The Company's Annual Report for the year ended December 31, 1995, has
already been mailed to stockholders.
If you are unable to be present at the meeting but desire to have your
shares voted, please execute the enclosed proxy and return it in the
accompanying envelope, to which no postage need be affixed if mailed in the
United States.
By Order of the Board of Directors,
MARION F. REYNOLDS
Secretary
April 18, 1996
- --------------------------------------------------------------------------------
IMPORTANT
TO ASSURE YOUR REPRESENTATION AT THE MEETING,
PLEASE MAIL THE ENCLOSED PROXY PROMPTLY.
- --------------------------------------------------------------------------------
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
[logo] 1500 Ronson Road
P.O. Box 1500
Iselin, New Jersey 08830-0452
Tel. (908) 634-1500
Fax (908) 750-5981
NASDAQ Stock Market Symbol: MSEX
-------------
PROXY STATEMENT
-------------
Notice of the Annual Meeting of Stockholders of Middlesex Water Company to
be held on May 22, 1996, is attached. You are cordially invited to attend the
meeting. If you are unable to attend, you are requested to sign and complete the
enclosed proxy and return it in the accompanying envelope.
SOLICITATION AND REVOCATION OF PROXIES
The enclosed proxy is solicited by and on behalf of the Board of Directors
of the Company. The cost of soliciting proxies will be borne by the Company. In
addition to solicitation by mail, the Company may make arrangements with
brokerage houses and other custodians, nominees, and fiduciaries to send proxies
and proxy material to their principals and will reimburse them for their
expenses in so doing. The solicitations will be initially by mail, and it may
later be decided to make further solicitations by mail, telephone, telegraph, or
personal calls by Directors, Officers, and employees of the Company. This proxy
statement and the accompanying proxy are first being sent to stockholders on or
about April 18, 1996.
The giving of a proxy does not preclude the right to vote in person should
the Stockholder giving the proxy so desire, and a proxy may be revoked by giving
notice to the Secretary of the Company in writing at any time prior to the
commencement of the meeting or in open meeting prior to the taking of the vote
to which such revocation relates.
SHARES ENTITLED TO VOTE
As of March 18, 1996, there were outstanding 4,150,898 shares of Common
Stock which is the only class of capital stock entitled to vote at the Annual
Meeting. Each holder of Common Stock is entitled to one vote for each share
held. As stated in the Notice of Meeting, holders of record of Common Stock at
the close of business on April 15, 1996, will be entitled to vote at the meeting
or any adjournment thereof.
GENERAL INFORMATION
Management of the Company is under the general direction of a Board of
Directors elected by the stockholders. The Board of Directors holds regular
monthly meetings and meets on other occasions when required in special
circumstances. The Board of Directors held eleven meetings and the Board
Committees held seven meetings during the year 1995. Each incumbent Director
attended more than 92% of the total number of meetings of the Board and
Committees on which each served. Attendance at Board and Committee meetings by
Directors as a group averaged 98% in 1995.
The Board of Directors has an Audit Committee which reviews the scope of
the audit and receives and reviews the auditors' annual report. The Committee
held four meetings during the year 1995.
The Board of Directors has an Executive Development and Compensation
Committee which reviews and makes recommendations to the Board of Directors as
to the salaries and benefits of the Executive Officers of the Company and
administers the 1989 Restricted Stock Plan. The Committee held three meetings
during the year 1995.
The Board of Directors appoints an ad hoc Nominating Committee from time to
time as needed. Such a Committee was not appointed in 1995. The Company does not
currently have a Nominating Committee. Qualified
1
<PAGE>
nominations for Directors recommended by stockholders will be considered by a
Nominating Committee when appointed. Recommendations should be sent to Middlesex
Water Company, Office of the Secretary, 1500 Ronson Road, P.O. Box 1500, Iselin,
New Jersey 08830-0452. Any nominations for Director should be received by the
Secretary on or before December 19, 1996.
PROPOSAL 1
ELECTION OF DIRECTORS
At the Annual Meeting of Stockholders three members of Class III of the
Board of Directors are to be elected to hold office until the Annual Meeting of
Stockholders in 1999, and in each case until their respective successors are
elected and qualify. The present terms of the three Directors included in Class
III of the Board of Directors expire at the 1996 Annual Meeting.
The nominees listed were selected by the Board of Directors of the Company.
Proxies in the accompanying form will be voted for these nominees, unless
authority to vote for one or more of them shall have been withheld by so marking
the enclosed proxy. Directors shall be elected by a plurality of the votes cast
at the election.
If at the time of the meeting any of the nominees listed should be unable
to serve, which is not anticipated, it is the intention of the persons
designated as proxies to vote, in their discretion, for other nominees, unless
the number of Directors constituting a full Board is reduced.
There is shown as to each nominee, and as to each Director whose term of
office will continue after the 1996 Annual Meeting, age as of the date of the
Annual Meeting, the period of service as a Director of the Company, and business
experience during the last five years.
NOMINEES FOR ELECTION AS
DIRECTOR WITH TERM EXPIRING IN 1999--CLASS III
<TABLE>
<CAPTION>
EXPIRATION BUSINESS EXPERIENCE
NAME, PERIOD SERVED AS DATE OF DURING PAST FIVE YEARS
DIRECTOR OF COMPANY AGE NEW TERM AND OTHER AFFILIATIONS
------------------- --- -------- ----------------------
<S> <C> <C> <C>
William E. Scott.................. 76 1999 Retired. Formerly Senior Executive Vice President, Public Service
Director since 1978 Electric and Gas Company, Newark, New Jersey. Trustee of Delta
Dental Plan of New Jersey, Inc.
Member of Executive Development and Compensation Committee.
Jeffries Shein.................... 55 1999 Partner, Jacobson, Goldfarb & Tanzman, Industrial and Commercial
Director since 1990 Brokerage Firm, Woodbridge, New Jersey. Director of First Savings
Bank/SLA Perth Amboy, New Jersey.
Chairman of Executive Development and Compensation Committee.
J. Richard Tompkins............... 57 1999 Chairman of the Board and President of the Company. Past President of
Director since 1981 National Association of Water Companies and Director of New Jersey
Utilities Association. Director and Chairman of Tidewater
Utilities, Inc., (TUI); Pinelands Water Company; Pinelands
Wastewater Company; Director and President of Utility Service
Affiliates, Inc., subsidiaries of the Company, and Director of
White Marsh Environmental Systems, Inc., a subsidiary of TUI, and
Director of Raritan Bay Healthcare Foundation.
</TABLE>
2
<PAGE>
DIRECTORS WHOSE TERMS CONTINUE BEYOND
THE 1996 ANNUAL MEETING AND ARE NOT
SUBJECT TO REELECTION THIS YEAR
<TABLE>
<CAPTION>
EXPIRATION BUSINESS EXPERIENCE
NAME, PERIOD SERVED AS DATE OF DURING PAST FIVE YEARS
DIRECTOR OF COMPANY AGE NEW TERM AND OTHER AFFILIATIONS
------------------- --- -------- ----------------------
<S> <C> <C> <C>
Ernest C. Gere.................... 63 1997 Retired. Formerly Senior Vice President and Chief Financial Officer
Director since 1988 Class I of the Company since 1992 and prior to that date was Senior Vice
President and Controller since 1986.
Stephen H. Mundy.................. 62 1998 Retired. Formerly Vice President, A. Stanley Mundy, Inc.,
Director since 1977 Class II Public Utility Contractor, Virginia Beach, Virginia.
Member of Executive Development and Compensation Committee.
Philip H. Reardon................. 59 1997 President and Chief Executive Officer, Essex County Gas Company,
Director since 1991 Class I Amesbury, Massachusetts, since 1992 and prior to that date was
President and Chief Executive Officer of New Jersey Natural Gas
Company, Wall, New Jersey, since 1987. Director of Essex County Gas
Company, New England Gas Association and First Ocean National Bank.
Chairman of Audit Committee.
Richard A. Russo.................. 50 1998 Executive Vice President of the Company since May 1995 and prior to
Director since 1994 Class II that date was Vice President-Operations since 1989. Director and
President of Tidewater Utilities, Inc., (TUI); Pinelands Water
Company; Pinelands Wastewater Company; Director and Executive Vice
President of Utility Service Affiliates, Inc., subsidiaries of the
Company, and Director and President of White Marsh Environmental
Systems, Inc., a subsidiary of TUI.
Carolina M. Schneider............. 77 1998 Retired. Formerly Secretary-Treasurer of the Company.
Director since 1982 Class II Member of Audit Committee.
Joseph S. Yewaisis................ 56 1997 Chairman of the Board and President, First Savings Bank/SLA, Perth
Director since 1989 Class I Amboy, New Jersey. Director of First Savings Bank/SLA, Financial
Institutions Retirement Fund, Raritan Bay Healthcare Foundation and
Chairman of the Board of Raritan Bay Medical Center.
Member of Audit Committee.
</TABLE>
3
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS, MANAGEMENT
AND CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of March 18, 1996, beneficial ownership
of Middlesex Water Company Common Stock by the Directors, Executive Officers
named in the table appearing under Executive Compensation and all Directors and
Executive Officers as a group. Jeffries Shein owned 1.30% of the shares
outstanding on March 18, 1996. All other individual Directors and Executive
Officers owned less than 1% of the shares outstanding on March 18, 1996.
AMOUNT AND NATURE
OF BENEFICIAL
NAME OWNERSHIP
---- ---------
Walter J. Brady ....................................... 7,069
Ernest C. Gere ........................................ 6,711
Stephen H. Mundy ...................................... 30,158
Philip H. Reardon ..................................... 4,540
Richard A. Russo ...................................... 6,773
Carolina M. Schneider ................................. 8,038
William E. Scott ...................................... 5,146
Jeffries Shein* ....................................... 54,333
Dennis G. Sullivan .................................... 5,797
J. Richard Tompkins ................................... 17,048
Joseph S. Yewaisis .................................... 1,899
All Directors and Executive Officers as a group (14) .. 156,870**
- --------------
* Disclaims beneficial ownership of 1,566 additional shares.
** 3.78% of the shares outstanding on March 18, 1996.
The following table sets forth information made known to the Company as of
December 31, 1995, of any person or group to be the beneficial owner of more
than five percent of the Company's Common Stock:
NUMBER OF SHARES
BENEFICIALLY OWNED
AND NATURE
OF BENEFICIAL PERCENT
NAME AND ADDRESS OWNERSHIP (1) OF CLASS
- ---------------- ------------- --------
PNC Bank Corp.......................... 299,602 7.24
One PNC Plaza
249 5th Avenue
Pittsburgh, Pennsylvania 15222-2707
- --------------
(1) Beneficial owner has sole power to vote and dispose of shares.
4
<PAGE>
EXECUTIVE COMPENSATION
There is shown below information concerning the annual and long-term
compensation for services in all capacities to the Company for the years 1995,
1994 and 1993 of those officers whose total annual salary amounted to $100,000
or more.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
RESTRICTED ALL
NAME AND OTHER ANNUAL STOCK OTHER ANNUAL
PRINCIPAL POSITION YEAR SALARY COMPENSATION AWARD COMPENSATION
------------------ ---- ------ ------------ ----- ------------
(1) (2) (3)
<S> <C> <C> <C> <C> <C>
J. Richard Tompkins ............................... 1995 $217,261 $ 7,652 $ 42,188 $ 7,560
Chairman of the Board 1994 $208,350 $ 7,491 $ 22,855 $ 7,280
and President 1993 $190,150 $ 6,771 $ 18,075 $ 6,720
Ernest C. Gere .................................... 1995 $132,100 $ 7,941 $ 13,500 $ 4,620
Senior Vice President & 1994 $128,323 $ 7,073 $ 13,060 $ 4,480
Chief Financial Officer 1993 $119,350 $ 6,042 $ 9,038 $ 4,235
Richard A. Russo .................................. 1995 $132,885 $ 5,941 $ 16,875 $ 4,616
Executive Vice President 1994 $121,504 $ 3,236 $ 13,060 $ 4,249
1993 $110,350 $ 2,676 $ 12,653 $ 3,850
Walter J. Brady ................................... 1995 $111,350 $ 3,000 $ 10,125 $ 3,885
Vice President--Administration 1994 $107,350 $ 2,881 $ 9,795 $ 3,745
1993 $101,350 $ 2,828 $ 9,038 $ 3,535
Dennis G. Sullivan ................................ 1995 $106,816 $ 3,136 $ 13,500 $ 3,710
Vice President & General 1994 $ 99,754 $ 2,962 $ 11,428 $ 3,479
Counsel and Assistant 1993 $ 89,950 $ 2,716 $ 9,038 $ 3,136
Secretary & Assistant
Treasurer
</TABLE>
- --------------
(1) Includes Auto Allowance and Group Life Insurance for all officers and
Directors' Fees for Messrs. Tompkins, Gere and Russo.
(2) The number and value of Restricted Stock held in escrow as of December 31,
1995, were as follows: Mr. Tompkins--10,900/$166,893; Mr.
Gere--4,500/$68,063; Mr. Russo--5,300/$81,138; Mr. Brady--4,100/$61,423 and
Mr. Sullivan--4,800/$72,720. Generally, the restrictions lapse on these
awards five years from the date of grant. The restrictions on Mr. Gere's
awards will lapse on March 31, 1996, the date of his retirement. The
restrictions also lapse in the event of a change in control of the Company.
All dividends on these shares are paid to the awardees.
(3) Employer contribution to the Company's Defined Contribution Plan.
COMPENSATION OF DIRECTORS
A Director who is not an officer of the Company or its subsidiaries is paid
an annual retainer of $6,000, increased from $5,400; a fee of $500 for
attendance at Board of Directors (Board) meetings; a fee of $250 for attendance
at special meetings of the Board; a fee of $150 for attendance at special Board
Committee meetings by means of communications facilities and a fee of $350,
increased from $300, for each committee meeting attended. Committee chairmen
receive an additional $200 for each committee meeting chaired. Directors who are
officers of the Company are paid a fee of $250 for each meeting of the Board
attended. The increased fees became effective February 1, 1996.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1995, the members of the Executive Development and Compensation
Committee were Stephen H. Mundy, William E. Scott and Jeffries Shein. During
1995, no member of the Executive Development and Compensation was an officer or
employee of the Company or a subsidiary. Stephen H. Mundy has a financial
interest in a construction company that was awarded a contract by the Company in
the amount of $0.9 million in 1995.
5
<PAGE>
COMPENSATION PURSUANT TO PENSION PLANS
ANNUAL BENEFIT BASED ON COMPENSATION AND YEARS OF SERVICE
<TABLE>
<CAPTION>
FINAL YEARS OF SERVICE
YEAR'S ----------------------------------------------------------------------------------
COMPENSATION 15 20 25 30 35 45
------------ --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
$100,000.............. $ 60,611 $ 60,611 $ 60,611 $ 60,611 $ 60,611 $ 73,102
125,000.............. 79,361 79,361 79,361 79,361 79,361 92,852
150,000.............. 98,111 98,111 98,111 98,111 98,111 112,602
175,000.............. 116,861 116,861 116,861 116,861 116,861 116,861
200,000.............. 135,611 135,611 135,611 135,611 35,611 135,611
225,000.............. 154,361 154,361 154,361 154,361 154,361 154,361
250,000.............. 173,111 173,111 173,111 173,111 173,111 173,111
300,000.............. 210,611 210,611 210,611 210,611 210,611 210,611
</TABLE>
All employees who receive pay for 1,000 hours during the year are included
in the Plan. Under the noncontributory trusteed defined benefit plan current
service costs are funded annually. The Company's annual contribution is
determined on an actuarial basis. Benefits are measured from the member's entry
date and accrue to normal retirement date or date of early retirement. Benefits
are calculated, at normal retirement, at 1.25% of pay up to the Executive's
benefit integration level, plus 1.9% of such excess pay, multiplied by service
to normal retirement date, capped at 35 years of such excess pay, multiplied by
service to normal retirement date of age 65. Average pay is the highest annual
average of total pay during any 5 consecutive years within the 10 calendar-year
period prior to normal retirement date. The benefit integration level is based
on the 1995 Summary Compensation Table. The benefit amounts are not subject to
any deduction for Social Security benefits or other offset amounts.
During the year 1995, the Company made a contribution to the Pension Plan
in the amount of $372,000. The range of the permissible Plan contribution was
$351,000 to $385,000. Remuneration covered under the Pension Plan includes base
wages only and not Directors' fees.
The estimated credited years of service based on normal retirement at age
65 includes 22 years, 21 years, 20 years, 44 years and 22 years for Messrs.
Tompkins, Gere, Russo, Brady and Sullivan, respectively.
Supplemental Executive Retirement Plan--All executive officers are eligible
to participate in the Deferred Compensation Plan known as the Supplemental
Executive Retirement Plan at the discretion of the Board of Directors.
A participant who retires on his normal retirement date is entitled to an
annual retirement benefit equal to 75% of his compensation reduced by his
primary Social Security benefit and further reduced by any benefit payable from
the Qualified Pension Plan. In certain cases further reductions are made for
benefits from other employment.
Vesting provisions start at 50% for 5 years of service and increases 10%
for each year of service for a maximum of 100% vesting at 10 years of service.
Annual retirement benefits are payable for 15 years either to the participant or
his beneficiary.
Retirement benefits may be in the form of single life annuity, joint and
50% survivors annuity, joint and 100% survivors annuity, single life annuity
with a 10-year certain period and single life annuity with a 15-year certain
period paid on an actuarial equivalent basis.
The Company is not obligated to set aside or earmark any monies or other
assets specifically for the purpose of funding the Plan. The benefits are in the
form of an unfunded obligation of the Company. The Company has elected to
purchase Corporate-owned life insurance as a means of satisfying its obligation
under this Plan. The Company reserves the right to terminate any plan or life
insurance at any time; however, a participant is entitled to any benefits he
would have been entitled to under the Plan provisions. For the year 1995 the
Company paid life insurance premiums totaling $131,767, for Messrs. Tompkins,
Gere, Russo, Brady and Sullivan, which provides a preretirement net death
benefit of 1 1/2 times base salary at date of death.
Defined Contribution Plan--The Company matches 100% of that portion of the
contribution which does not exceed 1% of basic pay plus an additional 50% of
that portion from 2% to 6% of basic pay. Distributions under the Plan are made
upon normal retirement, total and permanent disability or death and are subject
to certain vesting provisions as to Company contributions. During 1995, this
Plan was converted from an after tax plan to a 401(k) pre tax plan.
6
<PAGE>
REPORT OF THE EXECUTIVE DEVELOPMENT AND COMPENSATION COMMITTEE
The compensation program for executive officers of the Company is
administered by the Executive Development and Compensation Committee of the
Board of Directors. The 1995 Committee was composed of three independent
Directors: Stephen H. Mundy, William E. Scott and Jeffries Shein. The Committee
is responsible for setting and administering the policies which govern annual
compensation and Restricted Stock awards. Policies and plans developed by the
Committee are approved by the full Board of Directors.
The Committee's compensation policies and plans applicable to the executive
officers seek to enhance the profitability of the Company and shareholder value,
as well as control costs and maintain reasonable rates for the customers. The
Committee's practices reflect policies that compensation should (1) attract and
retain well-qualified executives, (2) support short- and long-term goals and
objectives of the Company, (3) reward individuals for outstanding contributions
to the Company's success, (4) be meaningfully related to the value created for
shareholders, and (5) relate to maintenance of good customer relations and
reasonable rates.
The Committee meets with Mr. Tompkins to evaluate the performance of the
other executive officers and meets in the absence of Mr. Tompkins to evaluate
his performance. The Committee reports on all executive evaluations to the full
Board of Directors.
Base salary levels are reviewed annually using compensation data produced
by an outside compensation expert for similar positions and comparable
companies. Base salaries for satisfactory performance are targeted at the median
of the competitive market. Individual performance of the executive is determined
and taken into account when setting salaries against the competitive market
data. The Committee reviews, as well, the individual's efforts on cost control
and his or her contributions to the results of the year. The Committee also
reviews the Company's financial results compared with prior years and compared
with other companies. It compares salaries with both water and general industry
salaries.
The factors and criteria upon which Mr. Tompkins' compensation was based
generally include those discussed with respect to all the executive officers.
Specifically, however, his salary is based on his overall performance and that
of the Company. His salary was set at a rate which was approximately the median
of the utility market and below that of the general industry. In addition, in
evaluating the performance of the CEO, the Committee has taken particular note
of management's success with respect to the growth of the Company.
The Company maintains a restricted stock plan for the purpose of attracting
and retaining certain key employees of the Company who have contributed, or are
likely to contribute, significantly to the long-term performance and growth of
the Company. This plan is designed to enhance financial performance, customer
service and corporate efficiency through a performance-based stock award. Annual
stock awards are based upon several factors including the participant's ability
to contribute to the overall success of the Company.
The level of awards and the value of the performance are reviewed annually
by the Committee. The Committee submits reports on all executive evaluations and
restricted stock awards to the full Board of Directors for approval.
1996 Executive Development and Compensation Committee
Jeffries Shein, Chairman
Stephen H. Mundy
William E. Scott
7
<PAGE>
PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly change in the
cumulative total return (which includes reinvestment of dividends) on a $100
investment for the Company's Common Stock, the NASDAQ and a peer group of
investor-owned water utilities for the period of five years commencing December
31, 1990. The peer group includes Aquarion Company, California Water Service
Company, Connecticut Water Service, Inc., Consumers Water Company, E'town
Corporation, IWC Resources Corporation, Philadelphia Suburban Corporation, SJW
Corporation, Southern California Water Company, United Water Resources and the
Company.
--GRAPHICAL REPRESENTATION OF DATA TABLE BELOW--
<TABLE>
<CAPTION>
12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
MSEX ................ $100 $130 $171 $226 $183 $219
NASDAQ .............. 100 161 187 215 210 296
Peer Group .......... 100 130 146 166 155 177
</TABLE>
8
<PAGE>
PROPOSAL 2
APPOINTMENT OF INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee, the Board of Directors has
appointed Deloitte & Touche LLP of Parsippany, New Jersey, as independent
auditors to make the annual audit of the books of account and supporting records
of the Company for 1996, subject to the approval of the stockholders entitled to
vote for the election of Directors, by a majority of the votes cast on the
question of such approval, provided a quorum is present, at the Annual Meeting
of Stockholders.
Representatives of Deloitte & Touche LLP will be present at the meeting,
and will be afforded an opportunity to make a statement if they so desire and to
respond to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 2.
STOCKHOLDER PROPOSALS
Stockholders are entitled to submit proposals on matters appropriate for
stockholder action consistent with regulations of the Securities and Exchange
Commission. Should a stockholder intend to present a proposal at next year's
annual meeting, it must be received by the Secretary of the Company at 1500
Ronson Road, P.O. Box 1500, Iselin, New Jersey 08830-0452, not later than
December 19, 1996, in order to be included in the Company's proxy statement and
form of proxy relating to that meeting.
OTHER MATTERS
The Management of the Company does not intend to bring any other matters
before the meeting and has no reason to believe any will be presented to the
meeting. If, however, other matters properly do come before the meeting, it is
the intention of the persons named in the accompanying proxy to vote in
accordance with their judgment in such matters.
MINUTES OF LAST PREVIOUS MEETING OF STOCKHOLDERS
The minutes of the last previous meeting of Stockholders will be submitted
at the meeting for the correction of any errors or omissions but not for the
approval of the matters referred to therein.
By Order of the Board of Directors,
MARION F. REYNOLDS
Secretary
Iselin, New Jersey
April 18, 1996
9
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
MIDDLESEX WATER COMPANY
1500 RONSON ROAD, P.O. BOX 1500
ISELIN, NEW JERSEY 08830-0452
908-634-1500
[MAP]
DIRECTIONS TO MIDDLESEX WATER COMPANY
FROM GARDEN STATE PARKWAY (NORTH OR SOUTH): Take Exit 131A to second traffic
light. Turn right onto Middlesex -- Essex Turnpike and proceed (about 1/2 mile)
to first traffic light (Gill Lane). Turn right and go (about 1 mile) under
railroad underpass and make right onto Ronson Road. Proceed past three large
mirror-sided office buildings on the right. Make right into Middlesex Water
Company at sign.
FROM NEW JERSEY TURNPIKE (NORTH OR SOUTH): Take Exit 11 onto Garden State
Parkway North and follow above directions.
FROM US ROUTE NO. 1 (NORTH OR SOUTH): Proceed to the Woodbridge Center area and
follow signs to Gill Lane. When on Gill Lane, make left turn onto Ronson Road.
Proceed past three large mirror-sided office buildings on the right. Make right
into Middlesex Water Company at sign.
<PAGE>
APPENDIX
(Pursuant to Rule 304 of Regulation S-T)
1. Page 8 contains a description in tabular form of a graph entitled
"Performance Graph" which represents the comparison of the cumulative total
stockholder return on the Company's Common Stock against the cumulative total
return of the NASDAQ Index and the Peer Group Index for the period of five years
commencing December 31, 1990 and ending December 31, 1995, which graph is
contained in the paper format of this Proxy Statement being sent to
Stockholders.
<PAGE>
REVOCABLE PROXY
MIDDLESEX WATER COMPANY
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
ANNUAL MEETING OF STOCKHOLDERS
MAY 22, 1996
The undersigned stockholder(s) hereby appoint(s) ERNEST C. GERE and PHILIP
H. REARDON, and each of them, proxies, with the power to appoint his substitute,
and hereby authorizes them to represent and to vote as designated, all the
shares of common stock of Middlesex Water Company held on record by the
undersigned on April 15, 1996, at the annual meeting of shareholders to be held
on May 22, 1996, at 11:00 a.m., local time or any adjournment thereof.
1. Election of Directors, Nominees for Class III term expiring in 1999:
William E. Scott, Jeffries Shein and J. Richard Tompkins
For All
For Withhold Except
[ ] [ ] [ ]
INSTRUCTION: To withhold vote for any individual nominee, mark "For All Except"
and write the nominee's name in the space provided below
- -------------------------------------------------------------------------------
2. Approve the appointment of Deloitte & Touche LLP as auditors for the Company
for the year 1996.
For Against Abstain
[ ] [ ] [ ]
3. In their discretion, the Proxies are authorized to vote such other business
as may properly come before the meeting.
PLEASE CHECK BOX IF YOU PLAN TO ATTEND THE MEETING. [ ]
If this Proxy is properly executed and returned, the shares represented
hereby will be voted. If not otherwise specified, this Proxy will be voted FOR
the persons nominated as directors, and FOR proposal number 2.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
PLEASE DATE AND SIGN EXACTLY AS YOUR NAME OR NAMES APPEAR ON THIS PROXY.
WHEN SIGNING AS AN ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN,
PLEASE GIVE TITLE AS SUCH. IF SIGNER IS A CORPORATION, PLEASE SIGN FULL
CORPORATE NAME BY AUTHORIZED OFFICER AND ATTACH A CORPORATE SEAL. FOR JOINT
ACCOUNT, EACH JOINT OWNER SHOULD SIGN.
Please be sure to sign and date this Proxy in the box below.
------------------
Date
- ------------------------------------------------------------------------------
Stockholder sign above Co-holder (if any) sign above
- --------------------------------------------------------------------------------
Detach above card, sign, date and mail in postage paid envelope provided.
MIDDLESEX WATER COMPANY
c/o REGISTRAR AND TRANSFER COMPANY
10 COMMERCE DRIVE
CRANFORD, NEW JERSEY 07016
PLEASE ACT PROMPTLY
BE SURE TO COMPLETE, SIGN AND RETURN THIS
PROXY, WHETHER OR NOT YOU ELECT TO BE
PRESENT IN PERSON. ALL SIGNATURES MUST
APPEAR EXACTLY AS YOUR NAME APPEARS
ON THIS PROXY.
THANK YOU
