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:
[ X ] Preliminary Proxy Statement [ ] Confidential. For Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] 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)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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.
<PAGE>
April 25, 1997
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 1997 Annual Meeting of
Stockholders which will be held at the office of the Company, 1500 Ronson Road,
Iselin, New Jersey, on Wednesday, May 28, 1997, 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
Chairman of the Board and President
<PAGE>
------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 28, 1997
------------
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 28, 1997, at 11:00 a.m., for the
following purposes:
1. To elect four members of Class I of the Board of Directors to hold
office until the Annual Meeting of Stockholders in 2000, 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 1997.
3. To amend the Restated Certificate of Incorporation increasing the
authorized Preferred Stock, without par value, from 69,418 shares to
150,000 shares.
4. To allocate an additional 100,000 shares of Common Stock to the 1989
Restricted Stock Plan and amend the 1989 Restricted Stock Plan to
authorize the issuance of the additional 100,000 shares of Common
Stock and to make other modifications to the Plan.
5. 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, 1997, will be entitled to notice of and to vote at the meeting.
The Company's Annual Report for the year ended December 31, 1996, 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,
/s/ MARION F. REYNOLDS
MARION F. REYNOLDS
SECRETARY
April 25, 1997
- --------------------------------------------------------------------------------
IMPORTANT
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE
MAIL THE ENCLOSED PROXY PROMPTLY.
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
SOLICITATION AND REVOCATION OF PROXIES
SHARES ENTITLED TO VOTE
GENERAL INFORMATION
PROPOSAL 1 - ELECTION OF DIRECTORS
NOMINEES FOR ELECTION AS DIRECTOR WITH TERM EXPIRING IN 2000 - CLASS I DIRECTORS
WHOSE TERMS CONTINUE BEYOND THE 1997 ANNUAL MEETING SECURITY OWNERSHIP OF
DIRECTORS, MANAGEMENT AND CERTAIN BENEFICIAL OWNERS EXECUTIVE COMPENSATION
Summary Compensation Table
Compensation of Directors
Compensation Committee Interlocks and Insider Participation
Compensation Pursuant to Pension Plans
REPORT OF THE EXECUTIVE DEVELOPMENT AND COMPENSATION COMMITTEE
STOCK PERFORMANCE GRAPH
PROPOSAL 2 - APPOINTMENT OF INDEPENDENT AUDITORS
PROPOSAL 3 - AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION TO
INCREASE THE AUTHORIZED PREFERRED STOCK, WITHOUT PAR VALUE,
FROM 69,418 SHARES TO 150,000 SHARES
PROPOSAL 4 - ALLOCATION OF AN ADDITIONAL 100,000 SHARES OF COMMON STOCK TO THE
1989 RESTRICTED STOCK PLAN AND AMENDEMENT OF THE 1989 RESTRICTED
STOCK PLAN TO AUTHORIZE ISSUANCE OF THE ADDITIONAL 100,000 SHARES
OF COMMON STOCK AND TO MAKE CERTAIN OTHER MODIFICATIONS TO THE PLAN
DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
OTHER MATTERS
MINUTES OF LAST PREVIOUS MEETING OF STOCKHOLDERS
APPENDIX A - PROPOSED AMENDMENT OF THE FIRST SENTENCE OF ARTICLE 7A OF THE
RESTATED CERTIFICATE OF INCORPORATION
APPENDIX B - PROPOSED AMENDMENTS TO THE1989 RESTRICTED STOCK PLAN
<PAGE>
------------
PROXY STATEMENT
------------
Notice of the Annual Meeting of Stockholders of Middlesex Water Company to
be held on May 28, 1997, 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 25, 1997.
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 April 1,1997, there were outstanding 4,219,573 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, 1997, 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 ten meetings during the year 1996. Each incumbent Director
attended more than 88% 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 97% in 1996.
<PAGE>
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 1996.
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 1996.
The Board of Directors has a Pension Committee which reviews investment
policies and determines recommended investment objectives for the Company's
Pension Plan and meets periodically with the Company's Investments Managers. The
Committee held one meeting during the year 1996.
The Board of Directors appoints an ad hoc Nominating Committee from time
to time as needed. Such a Committee was appointed in 1996 to nominate two new
Directors. The Committee held two meetings in 1996. The Company does not
currently have a Nominating Committee. Qualified 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 26, 1997.
The Board of Directors appoints an ad hoc Pricing Committee from time to
time as needed. Such a Committee was not appointed in 1996. The Company does not
currently have a Pricing Committee.
PROPOSAL 1
ELECTION OF DIRECTORS
At the Annual Meeting of Stockholders four members of Class I of the Board
of Directors are to be elected to hold office until the Annual Meeting of
Stockholders in the year 2000, and in each case until their respective
successors are elected and qualify. The present terms of the four Directors
included in Class I of the Board of Directors expire at the 1997 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 1997 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.
<PAGE>
NOMINEES FOR ELECTION AS
DIRECTOR WITH TERM EXPIRING IN 2000 - CLASS I
<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>
John C. Cutting 60 2000 Senior Engineer, Science Applications
Director since November 1996 International Corporation, specialists
in information, energy and military
systems, Pittsburgh, Pennsylvania.
Member of Pension Committee
Ernest C. Gere 64 2000 Retired. Formerly Senior Vice President and
Director since 1988 Chief Financial Officer of the Company.
Chairman of 1996 Nominating Committee and
Member of Pension Committee
John P. Mulkerin 59 2000 President, Chief Executive Officer and
Director since November 1996 Director of First Savings Bank/SLA of
Perth Amboy, New Jersey, since 1996 and
prior to that date was Executive Vice
President, Chief Operating Officer and
Corporate Secretary since 1987 and General
Counsel since 1993. Director of FSB
Financial Corp., Raritan Bay Medical Center;
Director and President of Alliance
Distribution Center, Inc., and Trustee of
Daytop Village Foundation.
Member of Audit Committee
Philip H. Reardon 60 2000 President, Chief Executive Officer and
Director since 1991 Director, Essex County Gas Company,
Amesbury, Massachusetts, since 1992.
Director of New England Gas
Association, American Gas Association
and First & Ocean National Bank.
Chairman of Pension Committee and Member of
Audit Committee
</TABLE>
<PAGE>
DIRECTORS WHOSE TERMS CONTINUE BEYOND
THE 1997 ANNUAL MEETING AND ARE NOT
SUBJECT TO REELECTION THIS YEAR
<TABLE>
<CAPTION>
NAME, PERIOD SERVED EXPIRATION BUSINESS EXPERIENCE
AS DATE OF TERM DURING PAST FIVE YEARS
DIRECTOR OF COMPANY AGE AND CLASS AND OTHER AFFILIATIONS
------------------- --- ------------ ----------------------
<S> <C> <C> <C>
Stephen H. Mundy 63 1998 Retired. Formerly Vice President, A. Stanley
Director since 1977 Class II Mundy, Inc., Public Utility Contractor,
Virginia Beach, Virginia.
Chairman of Executive Development and
Compensation Committee. And Member of
1996 Nominating Committee
Richard A. Russo 51 1998 Executive Vice President of the Company since
Director since 1994 Class II May 1996 and prior to 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., Director and President of
PWSC Acquisition Corp.; subsidiaries of the
Company, and Director and President of White
Marsh Environmental Systems, Inc., a
subsidiary of TUI.
Carolina M. Schneider 78 1998 Retired. Formerly Secretary-Treasurer of the
Director since 1982 Class II Company.
Member of Executive Development and Compensation
Committee
William E. Scott 77 1999 Retired. Formerly Senior Executive Vice
Director since 1978 Class III President, Public Service Electric and
Gas Company, Newark, New Jersey.
Trustee of Delta Dental Plan of New
Jersey, Inc.
Chairman of Audit Committee and Member of
Pension Committee
Jeffries Shein 56 1999 Partner, Jacobson, Goldfarb & Tanzman,
Director since 1990 Class III Industrial and Commercial Brokerage
Firm, Woodbridge, New Jersey. Director
of First Savings Bank/SLA, Perth Amboy,
New Jersey, and Chairman of the Board of
Raritan Bay Medical Center.
Member of Executive Development and
Compensation Committee and 1996
Nominating Committee
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
J. Richard Tompkins 58 1999 Chairman of the Board and President of the
Director since 1981 Class III Company. Past President of National
Association of Water Companies, Director of
New Jersey Utilities Association and
Director of Raritan Bay Healthcare
Foundation. Director and Chairman of
Tidewater Utilities, Inc. (TUI); Pinelands
Water Company; Pinelands Wastewater Company;
Director and President of Utility Service
Affiliates, Inc.; Director and Chairman of
PWSC Acquisition Corp., subsidiaries of the
Company; and Director of White Marsh
Environmental Systems, Inc., a subsidiary of
TUI.
</TABLE>
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS, MANAGEMENT
AND CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of April 1, 1997, beneficial ownership
of Middlesex Water Company Common Stock by the Directors and Executive Officers
named in the table appearing under Executive Compensation and all Directors and
Executive Officers as a group. Jeffries Shein owned 1.58% of the shares
outstanding on April 1, 1997. All other individual Directors and Executive
Officers owned less than 1% of the shares outstanding on April 1, 1997.
AMOUNT AND NATURE
OF BENEFICIAL
NAME OWNERSHIP
---- ---------
Walter J. Brady 7,152
John C. Cutting 16,130
Ernest C. Gere 5,420
John P. Mulkerin 2,500
Stephen H. Mundy 31,449
Philip H. Reardon 5,077
Richard A. Russo 7,326
Carolina M. Schneider 8,569
William E. Scott 5,486
Jeffries Shein* 66,614
Dennis G. Sullivan 5,391
J. Richard Tompkins 19,954
Ronald F. Williams 656
All Directors and Executive
Officers as a group (15) 192,646**
- ----------
* Includes 7,429 shares over which Mr. Shein has shared voting powers. Mr.
Shein also disclaims beneficial ownership of 1,670 additional shares.
** 4.57% of the shares outstanding on April 1, 1997.
The following table sets forth information made known to the Company as of
December 31, 1996, of any person or group to be a beneficial owner of more than
five percent of the Company's Common Stock.
Number of Shares
Beneficially Owned
and Nature of Percent
Name and Address Beneficial Ownership(1) of Class
---------------- -------------------- --------
PNC Bank Corp. 301,312 7.17
One PNC Plaza
Pittsburgh, PA 15222
- ----------
(1) Beneficial owner has sole voting and shared dispositive power over 292,800
shares; shared voting power over 1,000 shares; and sole dispositive power
over 7,512 shares.
<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 1996,
1995 and 1994 of the Chief Executive Officer and the other four most highly
compensated officers.
SUMMARY COMPENSATION TABLE
Name and Restricted Stock All Other Annual
Principal Position Year Salary Award Compensation
------------------ ---- ------ ----- ------------
(1)
J. Richard Tompkins 1996 $229,350 $40,844 $ 8,285(2)
Chairman of the Board 1995 $217,261 $42,188 $10,074
and President 1994 $208,350 $22,855 $ 9,683
Richard A. Russo 1996 $143,350 $21,239 $ 5,989(2)
Executive Vice President 1995 $132,885 $16,875 $ 5,483
1994 $121,504 $13,060 $ 4,717
Walter J. Brady 1996 $115,350 $11,436 $ 5,170(2)
Vice President- 1995 $111,350 $10,125 $ 4,569
Administration 1994 $107,350 $ 9,795 $ 4,394
Dennis G. Sullivan 1996 $111,350 $13,070 $ 4,974(2)
Vice President & 1995 $106,816 $13,500 $ 4,350
General Counsel 1994 $ 99,754 $11,428 $ 4,060
Assistant Secretary &
Assistant Treasurer
Ronald F. Williams 1996 $104,350 $8,169 $ 4,023(2)
Vice President-Operations 1995 $ 76,408(3) - $ 1,202
1994 - (3) - -
- ----------
(1) The number and value of Restricted Stock held in escrow as of December 31,
1996, were as follows: Mr. Tompkins - 9,400/$157,336; Mr. Russo -
4,600/$77,176; Mr. Brady - 2,800/$47,659; Mr. Sullivan - 3,600/$60,590;
and Mr. Williams - 500/$8,169. Generally, the restrictions lapse on these
awards five years from the date of grant. 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.
(2) Includes employer contribution to the Company's defined contribution plan
and life insurance premiums for 1996: Mr. Tompkins ($5,542 and $2,743),
Mr. Russo ($5,005 and $984), Mr. Brady ($4,025 and $1,145), Mr. Sullivan
($3,885 and $1,089) and Mr. Williams ($3,640 and $383).
(3) Mr. Williams began his employment with the Company in March 1995.
COMPENSATION OF DIRECTORS
A Director who is not an officer of the Company or its subsidiary is paid
an annual retainer of $6,000 and a fee of $500 for attendance at Board of
Directors (Board) meetings; a fee of $250 for attendance at special meetings of
the Board and a fee of $150 for attendance at special Board committee meetings
by means of communications facilities; and a fee of $350 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.
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1996 the members of the Executive Development and Compensation
Committee were Stephen H. Mundy, Jeffries Shein and William E. Scott. During
1996 no member of the Executive Development and Compensation Committee was an
officer or employee of the Company or a subsidiary.
COMPENSATION PURSUANT TO PENSION PLANS
Annual Benefit based on Compensation and Years of Service
Final
Year's
Compensation Years of Service
------------ ----------------------------------------------------------
15 20 25 30 35 45
-- -- -- -- -- --
$100,000 $ 60,013 $ 60,013 $ 60,013 $ 60,013 $ 60,013 $ 73,102
$125,000 $ 78,763 $ 78,763 $ 78,763 $ 78,763 $ 78,763 $ 92,852
$150,000 $ 97,513 $ 97,513 $ 97,513 $ 97,513 $ 97,513 $112,602
$175,000 $116,263 $116,263 $116,263 $116,263 $116,263 $116,263
$200,000 $135,013 $135,013 $135,013 $135,013 $135,013 $135,013
$225,000 $153,763 $153,763 $153,763 $153,763 $153,763 $153,763
$250,000 $172,513 $172,513 $172,513 $172,513 $172,513 $172,513
$300,000 $210,013 $210,013 $210,013 $210,013 $210,013 $210,013
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. Covered compensation under the Pension
Plan includes base wages only and not Directors' fees. The benefit integration
level is based on the 1996 Summary Compensation Table. The benefit amounts are
not subject to any deduction for Social Security benefits or other offset
amounts.
The estimated credited years of service based on normal retirement at age
65 includes 22 years, 20 years, 44 years, 22 years and 19 years for Messrs.
Tompkins, Russo, Brady, Sullivan and Williams, 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 direction 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 starts 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 Plan also provides for a
preretirement net death benefit of 1-1/2 times base salary at date of death.
<PAGE>
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 of 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 1996 the
Company paid life insurance premiums totaling $98,420, for Messrs. Tompkins,
Russo, Brady, Sullivan, and Williams.
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.
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 1996 Committee was composed of three independent
Directors: Stephen H. Mundy, Jeffries Shein and William E. Scott. 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.
<PAGE>
The Company maintains a restricted stock plan for the purpose of
attracting and retaining key executives and other employees having managerial or
supervisory responsibility who have contributed, or are likely to contribute,
significantly to the long-term performance and growth of the Company and its
subsidiaries. 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.
1997 Executive Development and Compensation Committee
Stephen H. Mundy, Chairman
Jeffries Shein
Carolina M. Schneider
<PAGE>
STOCK PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly change in the
cumulative total return (which includes reinvestment of dividends) of 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, 1991. 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, Southwest Water Company, United
Water Resources and the Company.
[GRAPHIC OMITTED]
====================================================================
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
--------------------------------------------------------------------
Middlesex $100 $131 $173 $140 $168 $167
--------------------------------------------------------------------
NASDAQ 100 116 134 131 185 227
--------------------------------------------------------------------
Peer Group 100 113 129 120 137 178
====================================================================
<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 1997, 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.
PROPOSAL 3
AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE
AUTHORIZED PREFERRED STOCK FROM 69,418 TO 150,000 SHARES
The Board of Directors unanimously recommends that the stockholders
approve an amendment to the Company's Restated Certificate of Incorporation (the
"Certificate") increasing the authorized Preferred Stock, without par value,
from 69,418 shares to 150,000 shares. The text of the proposed amendment is
attached hereto as Appendix A. As of April 1, 1997, 25,918 shares of the 69,418
shares of Preferred Stock presently authorized were outstanding out of 100,000
shares originally authorized, reduced by the number of shares which have been
redeemed and retired.
Under the existing Certificate, the Board of Directors may issue, without
the prior approval of the shareholders, one or more series of Preferred Stock
with preferences, limitations and relative rights as provided for in the
Certificate. In so doing, the Board may also provide for variations among the
series as to dividend rates, redemption provisions, dissolution and distribution
rights, sinking fund provisions, conversion rights and other aspects permitted
by law. The existing Certificate does not permit the issuance of Preferred Stock
with voting rights except in limited circumstances for when there is an
arrearage in dividends due the holders of the Preferred Stock.
The terms of each series of Preferred Stock would continue to be
determined and fixed by the Board of Directors without shareholder approval
prior to the issuance of the shares of each series.
The Board believes that the proposed amendment will provide the Company
with greater flexibility of action for possible future acquisitions, financing
transactions and other corporate purposes. The Company is not presently
considering the issuance of the additional Preferred Stock; however,
opportunities may arise that require prompt action such as properties or
businesses becoming available for acquisition or favorable market conditions
existing for the sale of the additional Preferred Stock. The delay and expense
of seeking shareholder approval to increase the number of authorized shares of
Preferred Stock at the time of the issuance of such stock could deprive the
Company and its shareholders of the ability to effectively benefit from such an
opportunity.
Although the Board of Directors has no present intention of doing so, the
Board will have authority to issue Preferred Stock that could make it more
difficult, or discourage an attempt, to obtain control of the Company by means
of a merger, tender offer, proxy contest, or other method. For example, the
Company could issue Preferred Stock with special voting power or distribution or
conversion rights. Such an occurrence, in the event of a hostile takeover, may
be beneficial to management and may have an adverse impact on shareholders who
may wish to participate in such offer. The Board of Directors is not aware of
any present effort by any person to accumulate the Company's securities or to
obtain control of the Company.
<PAGE>
The Board of Directors believes that this amendment is in the Company's
interests and unanimously recommends its approval by the shareholders. A copy of
the proposed amendment is attached hereto as Appendix A. The information
contained in this Proxy statement is qualified in its entirety by reference to
the complete text of the amendment.
Two-thirds of the votes cast in person or by proxy is required for
approval of the proposed amendment to the Restated Certificate of Incorporation.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 3.
PROPOSAL 4
AMENDMENTS TO THE 1989 RESTRICTED STOCK PLAN
The Board of Directors unanimously recommends that the shareholders
approve certain modifications to the Company's 1989 Restricted Stock Plan (the
"Plan"). The Executive Officers of the Company may be participants in the Plan
and, therefore, by virtue of their participation, have an interest in any
modification or amendment to the Plan.
The number of shares which remain available for the Plan is insufficient
to meet future requirements of the Plan if the Board of Directors and the
Executive Development and Compensation Committee (the "Committee") desire to
make awards under the Plan at the same levels as they have in the recent past.
In order to address this requirement, therefore, additional shares should be
approved for the Plan. To this end, the Board recommends that shareholders
allocate 100,000 additional shares of Common Stock to the Plan. In 1989, the
shareholders had allocated 30,000 shares (60,000 shares when adjusted for the
1992 stock split) to the Plan of which 4,700 shares remain unissued.
The proposed amendments would also expand the group of officers and
employees who would be eligible for awards under the Plan. Under the Plan, as
amended, participation would be available "to officers and a select group of
employees with managerial or supervisory responsibilities as determined by the
Committee." Thus, as of this date, approximately 30 employee positions, in
addition to officers, would be eligible for awards under the Plan.
To facilitate future amendments to the Plan, it is proposed that in the
future amendments to the Plan be made by the Board of Directors as long as the
amendments are not "inconsistent with the rules of the Securities and Exchange
Commission (SEC) or the principal securities market on which the shares are
traded." Recent changes to the rules of the Securities and Exchange Commission
permit plans such as the Plan to be adopted and amended by the Board of
Directors and certain amendments are permitted by the rules of NASDAQ, the
principal securities market on which the Company's shares are traded. With the
proposed changes, therefore, not only could amendments be made by the Board of
Directors to the extent permitted under present regulations and rules but they
also could be made in the event of future changes in SEC regulations or NASDAQ
rules.
The amendments also provide that indemnification under the Plan will be
available not only to Directors acting under the Plan but also to any officers
so acting. An amendment also removes the automatic waiver of the Company's
exercise of its re-acquisition right and requires certain action by a
participant prior to the Company's waiver of its right. Finally, to be
consistent with recent SEC rule changes, the language concerning Committee
membership is proposed for modification.
Finally, the Board proposes to extend the life of the Plan from 1999 until
2007.
Summary Description of the Plan. During 1989 the Company adopted a
Restricted Stock Plan. Upon selection by the Executive Development and
Compensation Committee of the Board of Directors, the
<PAGE>
Executive Officers and other managerial and supervisory level employees of the
Company and its subsidiaries are eligible to participate. The employees to whom
awards are made, and the amount of the awards, are subject to the discretion of
that Committee.
Awards under this Plan are in the form of Common Stock, subject to
restrictions for five years, or other period as determined by the Committee.
During this period the participant has all the rights of ownership of the
shares, including the right to vote and receive dividends; however, the transfer
and other use of the stock is restricted and the shares held are in escrow. If a
participant terminates employment, except by retirement, disability or death,
prior to the expiration of the restricted period, the participant forfeits all
rights to the shares previously awarded. The forfeiture provision is modified,
and may be waived, in the event of early retirement approved by the Committee.
In the event of a "change of control" (as defined in the Plan) restrictions on
the shares, including rights the Company may have under the Plan to reacquire
shares from the participant, lapse.
The Board of Directors believes that this proposal is in the Company's
interests and unanimously recommends its approval by the shareholders. A copy of
the Plan marked to show the proposed changes is attached hereto as Appendix B.
The information contained in this proxy statement is qualified in its entirety
by reference to the complete text of the Plan with its proposed amendments.
A majority of votes cast in person or by proxy is required for approval of
the proposed amendments to the Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 4.
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 26, 1997, 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 25, 1997
<PAGE>
APPENDIX A
PROPOSED AMENDMENT OF THE FIRST SENTENCE OF ARTICLE 7A
OF THE RESTATED CERTIFICATE OF INCORPORATION
ARTICLE 7A. The total authorized capital stock of the Company is 6,250,000
shares, divided into 6,000,000 shares of common stock without nominal or par
value, 150,000 shares of preferred stock without nominal or par value and
100,000 shares of preference stock without nominal or par value.
APPENDIX B
PROPOSED AMENDMENTS TO THE
1989 RESTRICTED STOCK PLAN
Set forth below is the Company's 1989 Restricted Stock Plan. For ease of
reference, the proposed amendments are marked, with the text to be deleted
stricken through and the material to be added underlined. Such markings are not
to be part of the 1989 Restricted Stock Plan.
MIDDLESEX WATER COMPANY
1989 RESTRICTED STOCK PLAN
(As Amended January 23, 1997)
1. PURPOSE
The purpose of the 1989 Restricted Stock Plan (the "Plan") is to advance
the interests of Middlesex Water Company (the "Company") and its stockholders by
providing long-term incentives, in addition to current compensation, to attract
and retain for the Company and its subsidiaries key executives and other
employees having managerial or supervisory responsibility who have contributed,
or are likely to contribute, significantly to the long-term performance and
growth of the Company and such subsidiaries.
2. ADMINISTRATION
A. The Plan shall be administered by the Executive Development and
Compensation Committee (the "Committee") of the Board of Directors (the "Board")
of the Company, as such Committee is from time to time constituted, provided,
however, that such Committee shall at all times be composed solely of
Non-Employee Directors (as that term is defined in applicable regulations of the
Securities and Exchange Commission) and shall at all times have at least two
members. If at any time the Committee is unable to meet those requirements, the
Board of Directors shall administer the Plan.
B. No member of the Committee shall be an employee of the Company or a
subsidiary of the Company or shall have been eligible within one year prior to
his appointment to receive Awards under the Plan or to receive awards under any
other plan of the Company or its subsidiaries under which participants are
entitled to acquire stock, stock options or stock appreciation rights of the
Company or any of its subsidiaries.
C. The Committee shall have all the powers vested in it by the terms of
the Plan, such powers to include exclusive authority (within the limitations
described herein) to select the employees to be granted Awards under the Plan,
to determine the type, size, and terms of the Awards to be made to each employee
selected, to determine the time when Awards will be granted, and to prescribe
the form of the instruments embodying Awards made under the Plan. The Committee
shall be authorized to interpret the Plan and the Awards granted under the Plan,
to establish, amend and rescind any rules and
<PAGE>
regulations relating to the Plan, and to make any other determinations which it
believes necessary or advisable for the administration of the Plan. The
Committee may correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any Award in the manner and to the extent the
Committee deems desirable to carry it into effect. Any decision of the Committee
in the administration of the Plan, as described herein, shall be final and
conclusive. The Committee shall hold meetings at such times and places as it may
determine. A majority of the members of the Committee shall constitute a quorum
for the transaction of business, and a vote of a majority of those members
present at any meeting, or acts approved in writing (including writing
transmitted electronically) by a majority of the committee, shall decide any
question before the Committee. The Committee may authorize any one or more of
their number or any officer of the Company to execute and deliver documents on
behalf of the Committee.
D. No member of the Committee or the Board of Directors shall be liable
for any action or determination made in good faith under the Plan or in
connection with any Award, except those resulting from such member's own gross
negligence or willful misconduct.
E. In addition to such other rights of indemnification as they may have as
members of the Board or the Committee, the members of the Committee and any
officer or employee acting on behalf of the Committee, shall be indemnified by
the Company against all costs and expenses reasonably incurred by them in
connection with any action, suit or proceeding to which they or any of them may
be party by reason of any action taken or failure to act under or in connection
with the Plan or any Award granted hereunder, and against all amounts paid by
them in settlement thereof (provided such settlement is approved by independent
legal counsel selected by the Company) or paid by them in satisfaction of a
judgment in any such action, suit or proceeding, except a judgment based upon a
finding of bad faith; provided that upon the institution of any such action,
suit or proceeding a Committee member or officer or employee, as the case may
be, shall, in writing, give the Company notice thereof and an opportunity, at
its own expense, to handle and defend the same before such Committee member,
officer or employee, undertakes to handle and defend it on her or his own
behalf.
3. PARTICIPATION
A. Employees. The Plan shall be a plan limited to officers and a select
group of employees with managerial or supervisory responsibilities as determined
by the Committee. Subject to the provisions of the Plan, the Committee shall
have exclusive power to select the officers and other employees of the Company
and its subsidiaries to be granted Awards under the Plan, but no Award shall be
made to any member of the Committee.
B. Subsidiary. For purposes of Awards under the Plan, an Officer or
employee of a subsidiary of the Company shall be considered an employee of the
Company. A subsidiary shall include any company wholly or partially-owned by the
Company.
4. AWARDS UNDER THE PLAN
A. Type of Awards. Awards under the Plan shall consist of "Restricted
Stock." Restricted Stock are common shares which are issued pursuant to
Paragraph 5.
B. Maximum Number of Shares That May Be Issued. There may be issued under
the Plan an aggregate of not more than 160,000 common shares (of which 104,700
shares are authorized but unissued shares remaining of the shares authorized
under the Plan), subject to adjustment as provided in Paragraph 7. If any shares
of Restricted Stock shall be reacquired pursuant to the right described in
Paragraph 5 below, or if any common shares awarded under the Plan shall be
reacquired pursuant to restrictions imposed at the time of award, such shares
may again be awarded under the Plan. Shares of stock which are to be awarded
under the Plan may be obtained by the Company from its treasury, by purchases on
the open market or from private sources, or by issuing authorized but unissued
stock. Any issuance of authorized but unissued stock shall be approved by the
Board or Committee.
<PAGE>
C. Rights With Respect to Shares. An employee to whom an Award of
Restricted Stock has been made shall have, after issuance of the Award and prior
to the expiration of the Restricted Period or the earlier reacquisition of such
common shares as herein provided, contingent ownership of such common shares,
including the right to vote the same and to receive dividends thereon, subject,
however, to the rights, restrictions and limitations imposed thereon pursuant to
the Plan.
5. Restricted Stock
Each Award of Restricted Stock under the Plan shall be evidenced by an
instrument in such form as the Committee shall prescribe from time to time in
accordance with the Plan and shall comply with the following terms and
conditions (and with such other terms and conditions as the Committee, in its
discretion, shall establish):
A. Number of Shares. The Committee shall determine the number of common
shares to be issued to a participant pursuant to the Award, as may be noted in
the Minutes of Committee meetings.
B. Purchase Price. An Award of Restricted Stock will be made either for no
consideration, or for an amount of consideration which shall be determined by
the Committee at the time of the Award, but will not be less than 50% of the
fair market value of the stock on the date it is granted. Each participant
eligible for an Award under the Plan shall, as a condition of, and in
consideration for such Award, pay to the Company, at such time and in such
manner as the Company may prescribe, a purchase price, if any, that may be
determined by the Committee. The Committee shall not be obligated to require
payment of any cash consideration, but in the event that such payment is
established by the Committee, then the Committee shall also have the discretion
to accept payment, in whole or part, by delivery of a promissory note of the
participant, containing terms and conditions acceptable to the Committee.
C. Nontransferability. Common shares issued to a participant in accordance
with the Award may not be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of, except by Will or the laws of descent and distribution,
for a period of five years, or such other greater or lesser period as the
Committee shall determine, from the date on which the Award is granted (the
"Restricted Period"), except as otherwise set forth in this Plan.
D. Reacquisition Right. If the participant's employment with the Company
or any of its subsidiaries terminates for any reason prior to the expiration of
the Restricted Period, then except as otherwise provided in subparagraph 5(F),
the Company will have the right to reacquire the shares subject to the Award.
Such right to reacquire shares shall be exercisable on such terms, in such
manner and during such period as shall be determined by the Committee when the
Award is made.
E. Enforcement. In order to enforce the restrictions imposed upon the
shares under this Plan, the Committee may require the participant to enter into
an Escrow Agreement at the time of the Award. The Escrow Agreement will provide
that the Certificates for common shares issued pursuant to Restricted Stock
Awards shall remain with the Company, as escrow holder, until all of the
restrictions imposed under the Plan have terminated. At its discretion, the
Committee may cause a legend to be placed on any such Certificate referencing
the restrictions imposed under this Plan.
F. Lapse of Restrictions. If a participant's employment is terminated
during the Restricted Period as a result of his death, disability (as defined in
Paragraph 6), or retirement after age 65, the right to reacquire (and any and
all other restrictions on transferability under this Paragraph 5) shall lapse
and cease to be effective as of the end of the month in which such termination
of employment occurred. Unless otherwise agreed by the participant, if the
participant retires before age 65 with the consent of the Committee, the right
to reacquire shares (and all other restrictions) shall lapse, as to a number of
shares (rounded up to a whole number of shares) equal to the number of shares in
an Award multiplied by a fraction, the numerator of which is the number of full
months of the Restricted Period of such Award which have elapsed since the date
of the Award to the end of the month in which his termination of employment and
the denominator of which is the total number of months in the Restricted
<PAGE>
Period of such Award. The right to reacquire shares shall remain exercisable as
to the balance of the shares. Notwithstanding the foregoing, the Committee, upon
recommendation of the Chief Executive Officer of the Company, may determine, in
the case of any participant, to cancel the right to reacquire (and any and all
other restrictions) on any or all of the common shares subject to such Award. If
the Committee does not notify the participant within (60) sixty days of his
termination of employment that the reacquisition right has been exercised, the
right to reacquire the shares shall be deemed to have been waived, provided that
at least ten (10) days prior to the end of that sixty (60) day period a
participant has inquired whether the Company intends to exercise its
reacquisition right.
6. DISABILITY
For the purposes of this Plan, a participant shall be deemed to have
terminated his employment by reason of disability if the Committee shall
determine that the physical or mental condition of the participant by reason of
which his employment terminated was such at that time as would entitle him to
payment of monthly disability benefits under the Company's Long-Term Disability
Benefit Plan, as may be in effect from time to time, or, if the participant is
not eligible for benefits under such plan, under any disability plan of the
Company or a subsidiary in which he is a participant. If the participant is not
eligible for benefits under any disability plan of the Company or a subsidiary,
he shall be deemed to have terminated his employment by reason of disability if
the Committee shall determine that his physical or mental condition would
entitle him to benefits under the Company's Long-term Disability Benefit Plan if
he were eligible therefor.
7. DILUTION AND OTHER ADJUSTMENTS
In the event of any change in the outstanding common shares of the Company
by reason of any stock split, stock dividend, recapitalization, merger,
consolidation, reorganization, combination or exchange of shares or other
similar event, if the Committee shall determine, in its sole discretion, that
such change equitably requires an adjustment in the number or kind of shares
that may be issued under the Plan, such adjustment shall be made by the
Committee and shall be conclusive and binding for all purposes of the Plan.
8. DESIGNATION OF BENEFICIARY BY PARTICIPANT
A participant may name a beneficiary to receive any share to which he may
be entitled under the Plan in the event of his death, on a form to be provided
by the Committee. A participant may change his beneficiary from time to time in
the same manner. If no designated beneficiary is living on the date on which any
shares becomes payable to a participant's beneficiary, such payment will be made
to the participant's executors or administrators, and the term "beneficiary" as
used in the Plan shall include such person or persons.
9. CHANGE IN CONTROL
If any party or group acquires beneficial ownership of 20 percent or more
of the voting shares of the Company, or if shareholder approval is required for
a transaction involving the acquisition of the Company through the purchase or
exchange of the stock or assets of the Company by merger or otherwise, or if
one-third or more of the Board elected in a 12 month period or less are so
elected without the approval of a majority of the Board as constituted at the
beginning of such period, then any rights the Company may have to reacquire
shares pursuant to Paragraph 5, together with any restrictions on shares issued
pursuant to this Plan under Paragraph 5, shall immediately lapse if there occurs
a "Change in Control Event," as defined in this Paragraph 9. The occurrence of
any one or more of the following events shall be deemed a "Change in Control
Event" for purposes of this Plan:
(a) a transaction is effected that requires (and receives)
approval by the shareholders of the Company and such
transaction is approved by the
<PAGE>
shareholders over the recommendation of the Board of Directors
of the Company;
(b) any "person" (including any individual, trust, estate,
partnership or corporation), other than a person who on the
effective date of this Plan is a director or officer of the
Company, becomes the owner, directly or indirectly, of
securities of the Company representing twenty (20%) percent or
more of the combined voting power of the Company's outstanding
securities; or
(c) if, at an annual meeting of the shareholders of the Company,
all of the persons recommended by the management of the
Company for election as Directors of the Company are rejected
by the shareholders.
10. MISCELLANEOUS PROVISIONS
A. No employee or other person shall have any claim or right to be granted
an Award under the Plan. The adoption of the Plan shall not constitute a
contract between the Company and the employee. Neither the Plan nor any action
taken hereunder shall be construed as giving any employee any right to be
retained in the employ of the Company or any subsidiary.
B. A participant's rights and interest under the Plan may not be assigned
or transferred in whole or in part either directly or by operation of law or
otherwise (except by Will or the laws of descent and distribution), including
but not limited to transfers by execution, levy, garnishment, attachment,
pledge, bankruptcy or in any other manner, and no such right or interest of any
participant in the Plan shall be subject to any obligation or liability of such
participant.
C. The Company may, but shall not be obligated to, register the Plan or
the shares received as Awards with the Securities and Exchange Commission and
any state securities law commission or agency. In the absence of such
registration, the shares:
(a) will be issued only pursuant to an exemption from
registration;
(b) cannot be sold, pledged, transferred or otherwise disposed of
in the absence of an effective registration statement or an
opinion of counsel satisfactory to the Company that such
registration is not required; and
(c) will bear an appropriate restrictive legend setting forth the
statement contained in subparagraph (b) above.
The Company shall not be required to sell or issue any shares under Plan
if the issuance of such shares would, in the judgment of the Committee,
constitute or result in a violation by the participant or the Company of any
provision of law or regulation of any governmental agency. The Committee, at its
discretion, may require participants to sign, following an Award, an investment
letter satisfactory to the Committee.
D. The Company and its subsidiaries shall have the right to require a
participant to prepay any and all federal, state or local income or other taxes
required by law to be deducted or withheld with respect to any payment under the
Plan. If the amount requested is not paid, the Company may refuse to issue or
transfer shares to a participant upon expiration of the Restricted Period. The
Committee may also require, in its discretion, that a participant provide the
Company with an executed copy of any written election that the participant may
elect to file with the Internal Revenue Service pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended, within thirty days after such
election is filed.
E. With respect to unissued shares or Awards under the Plan, the Company
shall not be required
<PAGE>
to establish any special or separate fund or to make any other segregation of
assets to assure the payment or grant of any Award under the Plan and all assets
of the Company shall remain subordinate to the claims of the Company's general
creditors.
F. By accepting any Award or other benefit under the Plan, each
participant and each person claiming under or through him shall be conclusively
deemed to have indicated his acceptance and ratification of, and consent to, any
action taken under the Plan by the Company, the Board or the Committee.
G. The masculine pronoun also means the feminine and the singular also
means the plural wherever appropriate.
H. The appropriate officers of the Company shall cause to be filed any
reports, returns, or other information regarding Awards hereunder or any common
shares issued pursuant hereto as may be required by Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, or any other applicable statute,
rule, or regulation.
I. The expenses of the Plan shall be borne by the Company.
11. AMENDMENT OR DISCONTINUANCE
The Plan may be amended, terminated or suspended at any time and from time
to time and retroactively by the Board, but no amendment of the Plan shall be
made that would, be inconsistent with the rules of the Securities and Exchange
Commission or the principal securities market on which the shares are traded.
12. EFFECTIVE DATE AND APPROVALS
The Plan shall become effective and shall be deemed to have been adopted
on April 1, 1989, subject, however, to (1) approval and ratification of the Plan
by the shareholders, and (2) receipt of all regulatory approvals, if any,
required or sought by the Company in connection with the Plan. The Plan shall be
submitted to the shareholders of the Company for their approval and adoption on
or before the expiration of twelve months after the effective date of the Plan
on April 1, 1989. The shareholders shall be deemed to have approved and adopted
the Plan only if it is approved and adopted at a meeting of the shareholders
duly held on or before that date by vote taken in the manner required by the
laws of the State of New Jersey.
No Award may be granted under this Plan until such shareholder and
regulatory approvals, if any, are obtained. If such approvals are not obtained,
then this Plan shall terminate and all actions taken prior thereto shall be null
and void.
Further, no Awards may be made after March 31, 2007; provided, however,
that the Plan and all Awards outstanding on such date shall remain in effect
until all restrictions on such outstanding Awards have either expired or been
canceled.
<PAGE>
NOTES
<PAGE>
MIDDLESEX WATER COMPANY
1500 RONSON ROAD, P.O. BOX 1500
ISELIN, NEW JERSEY 08830-0452
908-634-1500
================================================================================
SET MAP HERE
================================================================================
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>
|X| PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE MIDDLESEX WATER COMPANY
ANNUAL MEETING OF SHAREHOLDERS
MAY 28, 1997
The undersigned stockholder(s) hereby appoint(s) Stephen H. Mundy and
Richard A. Russo, 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, 1997, at the annual meeting of shareholders to be held
on May 28, 1997, at 11:00 a.m., local time or any adjournment thereof.
Please be sure to sign and date Date ___________
this Proxy in the box below.
- ----------------------------------------------------
____________________________________________________
Shareholder sign above Co-holder (if any) sign above
1. Election of Directors, Nominees for Class 1 term expiring in 2000:
For Withhold For All Except
|_| |_| |_|
John C. Cutting, Ernest C. Gere, John P. Mulkerin and Philip H. Reardon
INSTRUCTION: To withhold authority to vote for any individual nominees, mark
"For All Except" and write that nominee's name in the space provided below.
________________________________________________________________________________
2. Approve the appointment of Deloitte & Touche LLP as auditors for the
Company for the year 1997.
For Against Abstain
|_| |_| |_|
3. Amend the Restated Certificate of Incorporation by increasing the
Authorized Preferred Stock without par value, from 89,418 shares to
150,000 shares.
For Against Abstain
|_| |_| |_|
4. Allocate an additional 100,000 shares of Common Stock to the 1989
Restricted Stock Plan and amend the 1989 Restricted Stock Plan to
authorize issuance of the additional 100,000 shares of Common Stock and to
make certain other modifications to the Plan.
For Against Abstain
|_| |_| |_|
5. In their discretion, the Proxies are authorized to vote upon such other
business that 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 proposals number 2, 3 and 4.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
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Detach above card, sign, date and mail in postage paid envelope provided.
MIDDLESEX WATER COMPANY
[LOGO] c/o Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016-3572
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PLEASE DATE AND SIGN EXACTLY AS YOUR NAME OR NAMES APPEAR ON THIS PROXY.
When signing as attorney, executor, administrator, trustee or guardian,
please give full 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 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
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