SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File
FOR QUARTER ENDED: SEPTEMBER 30, 1999 NO. 0-422
------------------ -----
MIDDLESEX WATER COMPANY
-----------------------
(Exact name of registrant as specified in its charter)
INCORPORATED IN NEW JERSEY 22-1114430
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1500 RONSON ROAD, ISELIN, NJ 08830
(Address of principal executive offices) (Zip Code)
(732) 634-1500
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that this registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 30 days.
YES X NO
------- -------
Indicate the number of shares outstanding of each of the Issuer's classes of
common stock, as of the latest practicable date.
CLASS OUTSTANDING AT SEPTEMBER 30, 1999
----- ---------------------------------
Common Stock, No Par Value 4,944,982
<PAGE>
INDEX
PART I. FINANCIAL INFORMATION PAGE
----
Item 1. Financial Statements:
Consolidated Statements of Income 1
Consolidated Balance Sheets 2
Consolidated Statements of Capitalization and Retained Earnings 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures of Market Risk 12
PART II. OTHER INFORMATION 13
SIGNATURE 14
<PAGE>
MIDDLESEX WATER COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Nine Months Twelve Months
Ended September 30, Ended September 30, Ended September 30,
1999 1998 1999 1998 1999 1998
----- ----- ----- ----- ----- ----
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues $15,392,145 $12,073,985 $40,884,826 $32,434,440 $51,508,352 $42,487,359
------------ ----------- ------------ ------------ ------------ ------------
Operating Expenses:
Operations 6,938,208 5,273,381 19,664,043 14,594,866 24,876,649 19,065,602
Maintenance 662,487 430,079 1,908,947 1,196,360 2,427,944 1,728,726
Depreciation 1,023,154 823,148 2,762,078 2,446,871 3,599,876 3,251,842
Other Taxes 1,952,789 1,666,111 5,245,111 4,580,355 6,766,475 5,984,220
Federal Income Taxes 1,200,064 903,758 2,762,344 2,422,447 3,339,185 3,167,443
------------ ----------- ------------ ------------ ------------ ------------
Total Operating Expenses 11,776,702 9,096,477 32,342,523 25,240,899 41,010,129 33,197,833
------------ ----------- ------------ ------------ ------------ ------------
Operating Income 3,615,443 2,977,508 8,542,303 7,193,541 10,498,223 9,289,526
Other Income:
Allowance for Funds Used During Construction 241,946 301,100 1,318,782 653,156 1,715,670 737,431
Other - Net 101,714 278,551 484,718 562,806 667,234 607,894
------------ ----------- ------------ ------------ ------------ ------------
Total Other Income 343,660 579,651 1,803,500 1,215,962 2,382,904 1,345,325
Income Before Interest Charges 3,959,103 3,557,159 10,345,803 8,409,503 12,881,127 10,634,851
------------ ----------- ------------ ------------ ------------ ------------
Interest Charges 1,178,544 1,209,587 3,500,014 3,224,672 4,698,943 4,075,902
------------ ----------- ------------ ------------ ------------ ------------
Net Income 2,780,559 2,347,572 6,845,789 5,184,831 8,182,184 6,558,949
Preferred Stock Dividend Requirements 77,697 79,697 237,090 239,090 316,786 319,256
------------ ----------- ------------ ------------ ------------ ------------
Earnings Applicable to Common Stock $2,702,862 $2,267,875 6,608,699 4,945,741 $7,865,398 $6,239,693
============ =========== ============ ============ ============ ============
Earnings per share of Common Stock:
Basic $ 0.55 $ 0.52 $ 1.34 $ 1.14 $ 1.64 $ 1.45
Diluted $ 0.54 $ 0.51 $ 1.32 $ 1.13 $ 1.62 $ 1.43
Average Number of
Common Shares Outstanding :
Basic 4,931,874 4,357,571 4,915,835 4,326,337 4,794,792 4,309,949
Diluted 5,156,139 4,583,997 5,141,533 4,552,763 5,020,673 4,536,401
Cash Dividends Paid per Common Share $0.29 1/2 $0.28 1/2 $0.88 1/2 $0.85 1/2 $1.18 $1.14
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
MIDDLESEX WATER COMPANY
CONSOLIDATED BALANCE SHEETS
ASSETS AND OTHER DEBITS
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------ ------------
(Unaudited)
<S> <C> <C>
UTILITY PLANT:
Water Production $ 62,163,208 $ 28,154,961
Transmission and Distribution 120,858,867 118,234,900
General 19,633,795 19,300,406
Construction Work in Progress 4,612,085 25,794,061
------------ ------------
TOTAL 207,267,955 191,484,328
Less Accumulated Depreciation 34,335,554 32,367,936
------------ ------------
UTILITY PLANT-NET 172,932,401 159,116,392
------------ ------------
NONUTILITY ASSETS-NET 4,042,541 3,710,437
------------ ------------
CURRENT ASSETS:
Cash and Cash Equivalents 4,475,657 9,388,822
Temporary Cash Investments-Restricted 2,692,751 9,776,072
Accounts Receivable (net of allowance
for doubtful accounts) 6,386,050 4,886,067
Unbilled Revenues 2,899,948 2,298,148
Materials and Supplies (at average cost) 1,137,672 906,866
Prepayments and Other Current Assets 606,999 528,348
------------ ------------
TOTAL CURRENT ASSETS 18,199,077 27,784,323
------------ ------------
DEFERRED CHARGES:
Unamortized Debt Expense 3,043,107 3,143,384
Preliminary Survey and Investigation Charges 389,700 276,202
Regulatory Assets
Income Taxes 5,863,752 5,788,752
Post Retirement Costs 1,149,436 1,214,092
Other 2,334,438 2,467,674
------------ ------------
TOTAL DEFERRED CHARGES 12,780,433 12,890,104
------------ ------------
TOTAL $207,954,452 $203,501,256
============ ============
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
MIDDLESEX WATER COMPANY
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND OTHER CREDITS
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------ ------------
(Unaudited)
<S> <C> <C>
CAPITALIZATION (see accompanying statements) $152,687,774 $149,756,614
------------ ------------
CURRENT LIABILITIES:
Current Portion of Long-term Debt 144,285 71,730
Notes Payable 1,000,000 1,000,000
Accounts Payable 1,937,869 3,373,595
Taxes Accrued 6,382,926 5,220,669
Interest Accrued 681,886 1,701,330
Other 1,881,835 1,832,737
------------ ------------
TOTAL CURRENT LIABILITIES 12,028,801 13,200,061
------------ ------------
DEFERRED CREDITS:
Customer Advances for Construction 11,993,118 11,275,660
Accumulated Deferred Investment Tax Credits 2,109,597 2,165,384
Accumulated Deferred Federal Income Taxes 12,013,103 12,070,474
Employee Benefit Plans 4,443,222 3,762,516
Other 879,144 791,460
------------ ------------
TOTAL DEFERRED CREDITS 31,438,184 30,065,494
------------ ------------
CONTRIBUTIONS IN AID OF CONSTRUCTION 11,799,693 10,479,087
------------ ------------
TOTAL $207,954,452 $203,501,256
============ ============
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
MIDDLESEX WATER COMPANY
CONSOLIDATED STATEMENTS OF CAPITALIZATION AND RETAINED EARNINGS
September 30, December 31,
1999 1998
-------------------- --------------------
(Unaudited)
<S> <C> <C>
CAPITALIZATION:
Common Stock, No Par Value
Shares Authorized - 10,000,000
Shares Outstanding - 1999 - 4,944,982; 1998 - 4,897,069 $46,476,503 $45,507,172
Retained Earnings 23,432,905 21,222,294
-------------------- --------------------
TOTAL COMMON EQUITY 69,909,408 66,729,466
-------------------- --------------------
Cumulative Preference Stock, No Par Value
Shares Authorized - 100,000; Shares Outstanding - None
Cumulative Preferred Stock, No Par Value, Shares Authorized - 148,980
Convertible:
Shares Outstanding, $7.00 Series - 14,881 1,562,505 1,562,505
Shares Outstanding, $8.00 Series - 19,000 2,214,858 2,331,430
Nonredeemable:
Shares Outstanding, $7.00 Series - 1,017 101,700 101,700
Shares Outstanding, $4.75 Series - 10,000 1,000,000 1,000,000
-------------------- --------------------
TOTAL CUMULATIVE PREFERRED STOCK 4,879,063 4,995,635
-------------------- --------------------
Long-term Debt:
8.02% Amortizing Secured Note, due December 20, 2021 3,383,602 3,418,243
First Mortgage Bonds:
7.25%, Series R, due July 1, 2021 6,000,000 6,000,000
5.20%, Series S, due October 1, 2022 12,000,000 12,000,000
5.25%, Series T, due October 1, 2023 6,500,000 6,500,000
6.40%, Series U, due February 1, 2009 15,000,000 15,000,000
5.25%, Series V, due February 1, 2029 10,000,000 10,000,000
5.35%, Series W, due February 1, 2038 23,000,000 23,000,000
0.00%, Series X, due August 1, 2018 1,024,986 1,050,000
4.53%, Series Y, due August 1, 2018 1,135,000 1,135,000
-------------------- --------------------
SUBTOTAL LONG-TERM DEBT 78,043,588 78,103,243
-------------------- --------------------
Less: Current Portion of Long-term Debt (144,285) (71,730)
-------------------- --------------------
TOTAL LONG-TERM DEBT 77,899,303 78,031,513
-------------------- --------------------
TOTAL CAPITALIZATION $152,687,774 $149,756,614
==================== ====================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Nine Months Ended Year Ended
September 30, December 31,
1999 1998
-------------------- --------------------
(Unaudited)
<S> <C> <C>
RETAINED EARNINGS:
BALANCE AT BEGINNING OF PERIOD $21,222,294 $20,087,065
Net Income 6,845,789 6,521,226
-------------------- --------------------
TOTAL 28,068,083 26,608,291
-------------------- --------------------
Cash Dividends:
Cumulative Preferred Stock 237,090 318,751
Common Stock 4,348,788 4,987,013
Common Stock Expenses 49,300 80,233
-------------------- --------------------
TOTAL DEDUCTIONS 4,635,178 5,385,997
-------------------- --------------------
BALANCE AT END OF PERIOD $23,432,905 $21,222,294
==================== ====================
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
MIDDLESEX WATER COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30, Twelve Months Ended September 30,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 6,845,789 $ 5,184,831 $ 8,182,184 $ 6,558,949
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation 2,762,078 2,446,871 3,599,876 3,251,842
Provision for Deferred Income Taxes (132,372) 200,567 (197,963) 408,778
Allowance for Funds Used During Construction (1,318,782) (653,156) (1,715,670) (737,431)
Changes in Current Assets and Liabilities:
Accounts Receivable (1,499,983) (1,370,417) (1,220,773) (756,456)
Accounts Payable (1,435,726) 532,093 (1,785,257) 2,030,888
Accrued Taxes 1,162,257 408,812 832,025 305,167
Accrued Interest (1,019,444) (488,681) (12,994) 234,610
Unbilled Revenues (601,800) (419,545) (304,469) (96,014)
Employee Benefit Plans 680,706 741,655 954,331 988,293
Other-Net 53,056 19,249 979,411 420,440
------------- ------------- ------------- --------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 5,495,779 6,602,279 9,310,701 12,609,066
------------- ------------- ------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Utility Plant Expenditures* (15,394,729) (18,764,047) (22,905,963) (21,740,080)
Note Receivable 47,512 (1,644,308) 72,755 (1,638,345)
Preliminary Survey and Investigation Charges (113,498) (36,694) (139,356) (2,018,189)
Other-Net (225,676) (426,292) (453,989) (1,219,286)
------------- ------------- ------------- --------------
NET CASH USED IN INVESTING ACTIVITIES (15,686,391) (20,871,341) (23,426,553) (26,615,900)
------------- ------------- ------------- --------------
</TABLE>
(continued)
<PAGE>
<TABLE>
<CAPTION>
Nine Months Ended September 30, Twelve Months Ended September 30,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Redemption of Long-term Debt (59,655) (31,671) (70,694) (44,496)
Proceeds from Issuance of Long-term Debt - 23,000,000 2,185,000 23,000,000
Short-term Bank Borrowings - 3,935,299 (3,500,000) 3,935,299
Deferred Debt Issuance Expenses (1,864) (474,096) (29,968) (474,096)
Temporary Cash Investments-Restricted 7,083,321 (11,277,788) 8,803,824 (11,277,917)
Proceeds from Issuance of Common Stock-Net 803,459 1,855,942 13,235,973 2,159,163
Payment of Common Dividends (4,348,788) (3,697,527) (5,638,274) (4,911,122)
Payment of Preferred Dividends (237,090) (239,054) (316,787) (318,787)
Construction Advances and Contributions-Net 2,038,064 360,068 2,247,030 599,630
------------- ------------- ------------- --------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 5,277,447 13,431,173 16,916,104 12,667,674
------------- ------------- ------------- --------------
NET CHANGE IN CASH AND CASH EQUIVALENTS (4,913,165) (837,889) 2,800,252 (1,339,160)
------------- ------------- ------------- --------------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 9,388,822 2,513,294 1,675,405 3,014,565
------------- ------------- ------------- --------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,475,657 $ 1,675,405 $ 4,475,657 $ 1,675,405
============= ============= ============= ==============
* Excludes Allowance for Funds Used During Construction
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash Paid During the Period for:
Interest (net of amounts capitalized) $ 3,094,507 $ 3,052,732 $ 2,852,353 $ 3,060,069
Income Taxes $ 2,322,350 $ 2,206,125 $ 3,279,200 $ 2,806,125
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Middlesex Water Company (Middlesex) is the parent company and
sole shareholder of Tidewater Utilities, Inc. (Tidewater), Pinelands Water
Company, Pinelands Wastewater Company, Utility Service Affiliates, Inc. (USA),
and Utility Service Affiliates (Perth Amboy) Inc. (USA-PA). Public Water Supply
Company, Inc. (Public) and White Marsh Environmental Systems, Inc., are wholly
owned subsidiaries of Tidewater. The financial statements for Middlesex and its
wholly owned subsidiaries (the Company) are reported on a consolidated basis.
All intercompany accounts and transactions have been eliminated.
The consolidated notes accompanying the 1998 Form 10-K are applicable to this
report and, in the opinion of the Company, the accompanying unaudited
consolidated financial statements contain all adjustments (consisting of only
normal recurring accruals) necessary to present fairly the financial position as
of September 30, 1999 and the results of operations and its cash flows for the
periods ended September 30, 1999 and 1998. Information included in the Balance
Sheet as of December 31, 1998, has been derived from the Company's audited
financial statements included in its annual report on Form 10-K for the year
ended December 31, 1998.
NOTE 2 - REGULATORY MATTERS
On September 20, 1999, Tidewater Utilities, Inc. and Public Water Supply
Company, Inc. jointly filed a petition with the Delaware Public Service
Commission (PSC) for a base rate increase of $1.7 million or 38.3%. The increase
is necessary to cover additional capital improvements and increased operating
and maintenance costs. As prescribed by PSC regulations, Tidewater has requested
an interim rate increase, subject to refund, of 14.8%, effective November 19,
1999. The PSC is expected to address this issue on November 16, 1999.
Concurrently with the rate increase request, an application was filed and
approved by the PSC for a corporate merger of Tidewater and Public. The last
increase in base rates for Tidewater and Public were in 1991 and 1992,
respectively. A rate decision by the PSC is expected in the second quarter of
2000.
<PAGE>
NOTE 3 - CAPITALIZATION
COMMON STOCK - During the three months ended September 30, 1999, 19,582 common
shares ($0.3 million) were issued under the Company's Restricted Stock Plan and
Dividend Reinvestment and Common Stock Purchase Plan.
PREFERRED STOCK - In September, the number of authorized Preferred Stock,
without par value, was reduced from 149,980 shares to 148,980 shares to account
for the election to exercise the conversion privilege of 1,000 shares of the
$8.00 Series into 6,857 shares of the Company's common shares.
LONG-TERM DEBT - On November 5, 1999, the Company closed on a BPU approved $4.5
million, 20 year loan from the State of New Jersey and the New Jersey
Environmental Infrastructure Trust (Trust) through the New Jersey State
Revolving Fund. The loan, which is secured by First Mortgage Bonds designated as
Series Z and AA, is comprised of a $2.15 million zero interest borrowing from
the New Jersey Department of Environmental Protection and a $2.35 million
borrowing from the Trust with the interest rate varying from 5.25% to 5.75 %,
depending on the maturity date. Final maturity for both series of Mortgage Bonds
is August 1, 2019. The interest paid to bond holders is exempt from federal and
New Jersey incomes taxes, but is subject to the Alternative Minimum Tax. The
proceeds will be used to fund the 2000 and 2001 capital projects to clean and
cement line previously unlined pipes and mains.
NOTE 4 - EARNINGS PER SHARE
Basic earnings per share (EPS) are computed on the basis of the weighted average
number of shares outstanding. Diluted EPS assumes the conversion of both the
Convertible Preferred Stock $7.00 Series and the Convertible Preferred Stock
$8.00 Series.
<PAGE>
<TABLE>
<CAPTION>
(In Thousands)
Three Months Ended Nine Months Ended Twelve Months Ended
September 30, September 30, September 30,
1999 1998 1999 1998 1999 1998
BASIC: Income Shares Income Shares Income Shares Income Shares Income Shares Income Shares
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Income $2,781 4,932 $2,348 4,358 $6,846 4,916 $5,185 4,326 $8,182 4,795 $6,559 4,310
PREFERRED DIVIDEND (78) (80) (237) (239) (317) (319)
---- ---- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Earnings
Applicable $2,703 4,932 $2,268 4,358 $6,609 4,916 $4,946 4,326 $7,865 4,795 $6,240 4,310
to Common Stock
BASIC EPS $ 0.55 $ 0.52 $ 1.34 $ 1.14 $ 1.64 $ 1.45
DILUTED:
- -------------------------------------------------------------------------------------------------------------------
Earnings
Applicable $2,703 4,932 $2,268 4,358 $ 6,609 4,916 $ 4,946 4,326 $7,865 4,795 $6,240 4,310
to Common Stock
$7.00 Series
Dividend 26 89 26 89 78 89 78 89 104 89 104 89
$8.00 Series
DIVIDEND 38 135 40 137 118 137 120 137 158 137 160 137
---- ---- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Adjusted Earnings
Applicable to
Common Stock $2,767 5,156 $2,334 4,584 $6,805 5,142 $ 5,144 4,552 $8,127 5,021 $6,504 4,536
DILUTED EPS $ 0.54 $ 0.51 $ 1.32 $ 1.13 $1.62 $ 1.43
</TABLE>
NOTE 5 - BUSINESS SEGMENT DATA
The Company has identified two reportable segments. One is the regulated
business of collecting, treating and distributing water on a retail and
wholesale basis to residential, commercial, industrial and fire protection
customers in parts of New Jersey and Delaware. It also operates a regulated
wastewater system in New Jersey. The Company is subject to regulations as to its
rates, services and other matters by the States of New Jersey and Delaware with
respect to utility service within these States. The other segment is the
non-regulated contract services for the operation and maintenance of municipal
water and wastewater systems. On January 1, 1999 the Company began operating the
water and wastewater systems of the City of Perth Amboy, New Jersey under a
service contract. The accounting policies of the segments are the same as those
described in the summary of significant accounting policies in Note 1 to the
Consolidated Financial Statements. Inter-segment transactions relating to
operational costs are treated as pass through expenses. Finance charges on
inter-segment loan activities are based on interest rates that are below what
would normally be charged by a third party lender.
<PAGE>
<TABLE>
<CAPTION>
(Thousands of Dollars)
Three Months Ended Nine Months Ended Twelve Months Ended
September 30, September 30, September 30,
Operations by Segments: 1999 1998 1999 1998 1999 1998
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Regulated $ 13,514 $ 11,966 $ 35,409 $ 32,104 $ 45,922 $ 42,054
Non - Regulated 1,887 116 5,505 348 5,621 457
Inter-segment Elimination (9) (8) (29) (18) (35) (24)
------------------------------------------------------------------------------------
Consolidated Revenues $ 15,392 $ 12,074 $ 40,885 $ 32,434 $ 51,508 $ 42,487
------------------------------------------------------------------------------------
Operating Income:
Regulated $ 3,367 $ 2,914 $ 7,954 $ 6,997 $ 9,898 $ 9,036
Non - Regulated 248 64 588 196 600 254
Inter-segment Elimination -- -- -- -- -- --
------------------------------------------------------------------------------------
Consolidated
Operating Income $ 3,615 $ 2,978 $ 8,542 $ 7,193 $ 10,498 $ 9,290
------------------------------------------------------------------------------------
Depreciation/Amortization:
Regulated $ 1,016 $ 823 $ 2,744 $ 2,447 $ 3,582 $ 3,252
Non - Regulated 7 -- 18 -- 18 --
Inter-segment Elimination -- -- -- -- -- --
------------------------------------------------------------------------------------
Consolidated
Depreciation/Amortization $ 1,023 $ 823 $ 2,762 $ 2,447 $ 3,600 $ 3,252
------------------------------------------------------------------------------------
Other Income:
Regulated $ 928 $ 894 $ 2,970 $ 1,929 $ 3,672 $ 2,289
Non - Regulated -- -- -- -- -- --
Inter-segment Elimination (584) (314) (1,166) (713) (1,289) (944)
------------------------------------------------------------------------------------
Consolidated Other Income $ 344 $ 580 $ 1,804 $ 1,216 $ 2,383 $ 1,345
------------------------------------------------------------------------------------
Interest Expense:
Regulated $ 1,303 $ 1,262 $ 3,782 $ 3,341 $ 5,052 $ 4,219
Non - Regulated 57 40 161 91 209 110
Inter-segment Elimination (181) (92) (443) (207) (562) (253)
------------------------------------------------------------------------------------
Consolidated Interest Expense $ 1,179 $ 1,210 $ 3,500 $ 3,225 $ 4,699 $ 4,076
------------------------------------------------------------------------------------
Net Income:
Regulated $ 2,993 $ 2,546 $ 7,142 $ 5,585 $ 8,517 $ 7,106
Non - Regulated 191 24 427 106 392 144
Inter-segment Elimination (403) (222) (723) (506) (727) (691)
------------------------------------------------------------------------------------
Consolidated Net Income $ 2,781 $ 2,348 $ 6,846 $ 5,185 $ 8,182 $ 6,559
------------------------------------------------------------------------------------
Capital Expenditures:
Regulated $ 5,012 $ 8,471 $ 15,245 $ 18,764 $ 22,756 $ 21,740
Non - Regulated 2 -- 150 -- 150 --
Inter-segment Elimination -- -- -- -- -- --
------------------------------------------------------------------------------------
Total Capital Expenditures $ 5,014 $ 8,471 $ 15,395 $ 18,764 $ 22,906 $ 21,740
------------------------------------------------------------------------------------
<CAPTION>
As of As of
September 30, December 31,
1999 1998
---- ----
<S> <C> <C>
Assets:
Regulated $ 225,202 $ 219,014
Non - Regulated 3,469 2,377
Inter-segment Elimination (20,717) (17,890)
--------- ---------
Consolidated Assets $ 207,954 $ 203,501
--------- ---------
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 1999
Operating revenues for the quarter ended September 30, 1999 rose 27.5% or $3.3
million over the same period in 1998. Better than half of the increase or $1.8
million is due to the contract service revenues from the operations of the City
of Perth Amboy's water and wastewater systems. Revenues from the May 1999 11.5%
increase in Middlesex rates accounted for $1.3 million with consumption and
customer growth in Delaware contributing $0.2 million. Record water usage during
July and early August in New Jersey was completely offset by the statewide
drought restrictions imposed by the Governor of New Jersey on August 6, 1999.
Generally, these restrictions were subsequently lifted on September 27, 1999. At
all times, Middlesex had adequate sources of water to supply its customers. This
fact, along with the Company's objection to such a broad water restriction was
communicated to State authorities.
Operating expenses increased for the quarter over last year's comparative period
by $2.7 million or 29.5%. Perth Amboy contract expenses were $1.6 million.
Together, purchased water and electric costs increased by $0.2 million.
Personnel costs rose $0.2 million. The improvements to Middlesex primary
treatment facility, the Carl J. Olsen Water Treatment Plant (CJO Plant), were
placed in service July 1999 causing most of the $0.2 million increase in
depreciation expense. Other Taxes rose $0.3 million as a result of higher
revenue related taxes. Federal income taxes also increased $0.3 million
consistent with higher earnings for the period.
Other income fell $0.2 million due to lower levels in the Allowance for Funds
Used During Construction (AFUDC) and investment income. AFUDC was ceased once
the CJO Plant was placed in service. Expenditures for the CJO Plant expenditures
from October 1998 through 1999 lowered the amount of funds available for
investment.
RESULTS OF OPERATIONS - NINE MONTHS ENDED SEPTEMBER 30, 1999
Operating revenues for the nine months ended September 30, 1999 rose $8.5
million or 26% compared to the first nine months of 1998. The increase was made
up of $5.2 million from Perth Amboy contract revenues, $2.2 million due to rate
increases in New Jersey, $0.6 million from higher consumption in New Jersey and
$0.5 million from customer growth in Delaware.
Offsetting some of the higher revenues were increased operating expenses of $7.1
million. The primary components of this 28.1% increase are Perth Amboy contract
expenses of $4.8 million, $0.4 million for purchased water and power and
personnel costs of $0.6 million. Almost two thirds of the depreciation expense
increase of $0.3 million is due to the CJO Plant additions. Other Taxes rose
$0.7 million mostly due to higher revenue related taxes. Federal income taxes
also increased $0.3 million consistent with higher earnings for the period.
A higher level of AFUDC calculated on CJO Plant capital expenditures for the
first nine months of 1999 over 1998 added $0.7 million to other income. This
more than offset lower investment related earnings for the period.
Debt service related to the Series W and Y First Mortgage Bonds, issued in March
and November 1998, respectively, accounted for the year to date increase in
interest expense.
<PAGE>
Basic earnings per share increased $0.20 and diluted earnings per share rose
$0.19. The per share dilution for the nine months ended September 30, 1999 is
attributable to the two series of convertible preferred stock currently
outstanding.
RESULTS OF OPERATIONS - TWELVE MONTHS ENDED SEPTEMBER 30, 1999
Operating revenues for the twelve months ended September 30, 1999 increased $9.0
million or 21.2%. Contributing to this increase were Perth Amboy contract
revenues of $5.2 million, rate increase related revenues of $2.7 million from
New Jersey customers, increased consumption of $0.5 million and growth in our
Delaware service area amounted to $0.6 million.
Total operating expenses increased $7.8 million or 23.5%. Expenses incurred to
operate the Perth Amboy water and wastewater systems amounted to $4.9 million.
Other factors that pushed expenses up were salaries and wages of $0.9 million,
purchased water of $0.3 million and purchased power costs of $0.2 million.
Depreciation expense rose $0.3 million. Other taxes increased $0.8 million
mostly due to higher revenue related taxes.
A higher level of AFUDC calculated on CJO Plant capital expenditures added
almost $1.0 million to other income and investment earnings increased to push
other income up to just over $1.0 million.
Basic and diluted earnings per share grew at a lower percentage versus net
income due to the effect of the December 1998 common stock offering of 515,000
shares.
CAPITAL RESOURCES
The Company's capital program for 1999 is estimated to be $24.1 million and
includes $15.0 million for the remaining expenditures for the upgrade of the CJO
Plant, $2.0 million for the RENEW Program, which is our program to clean and
cement line approximately nine miles of unlined mains in the Middlesex System.
There is a total of approximately 170 miles of unlined mains in the 670 mile
Middlesex System. The capital program also includes $3.3 million for water
system additions and improvements for our Delaware systems and $3.8 million for
scheduled upgrades to our existing systems in New Jersey. The scheduled upgrades
consists of $1.6 million for mains, $0.7 million for service lines, $0.4 million
for meters, $0.3 million for hydrants and $0.8 million for various other items.
LIQUIDITY
Proceeds from the $23.0 million Series W First Mortgage Bonds and the December
1998. $12.7 million common stock offering have been used to finance the CJO
Plant expenditures in 1999. Middlesex issued $2.2 million of First Mortgage
Bonds in November 1998 through the New Jersey State Revolving Fund (SRF) to
cover the cost of the 1999 RENEW Program. The capital program in Delaware will
be financed through a combination of a capital contribution from Middlesex and
long-term debt financing from either a financial institution or the Company.
Other capital expenditures will be financed through internally generated funds
and sale of common stock through the Dividend Reinvestment and Common Stock
Purchase Plan (DRP). Capital expenditures of $15.4 million have been incurred in
the nine months ended September 30, 1999. The Company may also utilize
short-term borrowings through $28.0 million of available lines of credit it has
with three commercial banks for working capital purposes. At September 30, 1999,
there were $1.0 million of loans outstanding against the lines of credit.
<PAGE>
ACCOUNTING STANDARDS
In June 1998, The Financial Accounting Standards Board (FASB) issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities." This
Statement establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts. The Company is currently evaluating the requirements of the
accounting standard, which is required to be adopted in the first quarter of
2001.
YEAR 2000 READINESS
The Company, through its year 2000 (Y2K) Committee, continues to advance in its
efforts to ensure that our ability to provide service will not be interrupted by
Y2K related problems.
Responses to our critical vendor questionnaire have reached 100%. Critical
vendors include electric utilities, chemical companies, bulk water suppliers and
telecommunications providers. Each vendor has indicated their level of
readiness. Middlesex contingency plans have been formalized and were submitted
to the BPU in August 1999. Contingency plans for our Delaware water utilities
have been submitted to the Delaware Public Service Commission. The costs to
implement these plans are currently projected to be less than $0.1 million.
The Y2K Committee has completed its inventory of equipment that may contain
embedded chips. Y2K compliance statements have been received for all of the
manufactured equipment in question. In each instance the manufacturer has
indicated that the equipment or components in use are not Y2K sensitive. Based
on the information received, Y2K testing for the respective equipment is not
being considered. The ability of our financial system to recognize post 1999
dates was tested and determined to be compliant.
Our customer billing and information system has been tested and classified as
Y2k compliant. All customers have received notification of our plans to ensure
service as usual on January 1, 2000.
FORWARD LOOKING INFORMATION
Certain matters discussed in this report on Form 10-Q are "forward-looking
statements" intended to qualify for safe harbors from liability established by
the Private Securities Litigation Reform Act of 1995. Such statements may
address future plans, objective, expectations and events concerning various
matters such as capital expenditures, earnings, litigation, growth potential,
rate and other regulatory matters, liquidity and capital resources and
accounting matters. Actual results in each case could differ materially from
those currently anticipated in such statements. The Company undertakes no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES OF MARKET RISK
The Company is subject to the risk of fluctuating interest rates in the normal
course of business. Our policy is to manage interest rates through the use of
fixed rate long-term debt and, to a lesser extent, short-term debt. The
Company's interest rate risk related to existing fixed rate, long-term debt is
not material due to the term of the majority of our First Mortgage Bonds, which
have final maturity dates ranging from 2009 to 2038. Over the next twelve months
approximately $0.1 million of the current portion of three existing long-term
debt instruments will mature. Applying a hypothetical change in the rate of
interest charged by 10% on those borrowings would not have a material effect on
earnings.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits No. 10.13, Copy of Supplemental Executive Retirement Plan,
As amended
No. 10.15(a), Employment Agreement Between Middlesex Water
Company and J. Richard Tompkins
No. 10.15(b), Employment Agreement Between Middlesex Water
Company and Walter J. Brady
No. 10.15(c), Employment Agreement Between Middlesex Water
Company and A. Bruce O'Connor
No. 10.15(d), Employment Agreement Between Middlesex Water
Company and Marion F. Reynolds
No. 10.15(e), Employment Agreement Between Middlesex Water
Company and Richard A. Russo
No. 10.15(f), Employment Agreement Between Middlesex Water
Company and Dennis G. Sullivan
No. 10.15(g), Employment Agreement Between Middlesex Water
Company and Ronald F. Williams
No.11, Statement Regarding Computation of Per Share
Earnings
No. 27, Financial Data Schedule.
(b) Reports on Form 8-K: None
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
MIDDLESEX WATER COMPANY
(Registrant)
/s/ A. BRUCE O'CONNOR
---------------------------------
Date: November 12, 1999 A. Bruce O'Connor
Vice President and Controller
MIDDLESEX WATER COMPANY
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
AMENDED AS OF FEBRUARY 25, 1999
<PAGE>
SECTION 1
- ---------
NAME
- ----
The Deferred Compensation Plan set forth herein shall be known as the
Middlesex Water Company Supplemental Executive Retirement Plan.
SECTION 2
- ---------
PURPOSE
- -------
The purposes of the Plan are to assist the Company in attracting and
retaining the vital and valuable services of certain key employees until their
retirement; to induce the key employees to utilize their best efforts to
maintain and enhance the business of the Employer and to provide certain
supplemental benefits to the key employees. The Plan is intended to constitute
an unfunded non-qualified deferred retirement plan.
The Company established the Plan to provide designated senior executives
additional retirement income to supplement the ERISA qualified retirement plan
and Social Security. The Plan, by design, is intended to provide enough
additional income for the executive retiring at Normal Retirement Age to bring
total retirement income up to seventy-five (75%) percent of the participant's
compensation during his last year of employment, exclusive of bonuses and
director's fees.
SECTION 3
- ---------
DEFINITIONS
- -----------
For purposes of the Plan, the following words and phrases shall have the
following meanings unless a different meaning is plainly required by the
context. Wherever used, the masculine pronoun shall include the feminine pronoun
and the feminine pronoun shall include the masculine pronoun and the singular
shall include the plural and the plural shall include the singular.
3.1 "Actuarial Equivalent" shall mean a benefit of equivalent value when
computed on the basis of actuarial tables approved by the Committee.
3.2 "Beneficiary" shall mean the person or persons designated to receive
any benefits under the Plan in the event of a Participant's death.
3.3 "Board of Directors" shall mean the Board of Directors of Middlesex
Water Company.
3.4 "Change in Control" shall be deemed to have occurred 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 of Directors elected in a 12-month period or less are so elected
without the approval of a majority of the Board of Directors as constituted at
the beginning of such period; or liquidation or dissolution of the Company.
3.5 "Committee" shall mean the Executive Development and Compensation
Committee of the Board of Directors or others appointed by that Committee or the
Board of Directorsto administer the Plan.
3.6 (a) "Compensation" shall mean the greater of a Participant's Earnings
for (i) the final full calendar year of employment or (ii) such Participant's
highest consecutive five (5) year average of Earnings during the ten (10) year
period prior to the year of such Participant's termination.
(b) "Earnings" shall mean the aggregate salary paid by the Company to
a Participant during a calendar year, exclusive of bonuses; awards under the
Company's 1989 Restricted Stock Plan; employee benefits; automobile allowance;
and any fees paid to such Participant as remuneration for serving as a Director
of the Company.
3.7 "Company or Employer" shall mean Middlesex Water Company, its
successors and assigns.
3.8 "Company Pension Plan Annual Benefit"--(a) "Actual Company Pension Plan
Annual Benefit" shall mean the actual annual benefit payable to a Participant at
the Participant's Normal Retirement Date under the Middlesex Water Company
Pension Plan, as amended from time to time, without regard to vesting and
assuming the normal form of benefit, namely, a life only annuity, (b) "Projected
Company Pension Plan Annual Benefit" shall mean the projected annual benefit
that would be payable to a Participant under the Middlesex Water Company Pension
Plan, as amended from time to time, without regard to vesting and assuming the
normal form of benefit, namely, a life only annuity, such benefit calculated as
if such Participant continued employment until Participant's Normal Retirement
Date at the same rate of earnings as in Participant's last full calendar year of
employment.
3.9 "Early Retirement Date" shall mean the first day of any month
coincident with or following the later of the date on which a Participant
attains age sixty-two (62) or has completed ten (10) years of service (that is,
Early Retirement under this Plan requires a minimum age of sixty-two (62) and at
least ten (10) years of service).
3.10 "Normal Retirement Date" shall mean the later of the date on which a
Participant attains age sixty-five (65) or has completed ten (10) years of
service (that is, Normal Retirement under this Plan requires a minimum age of
sixty five (65) and at least ten (10) years of service).
3.11 "Other Employer Retirement Benefits" shall mean any benefits to which
a Participant is entitled under any plans, qualified and non-qualified, funded
by any previous employer of Participant.
3.12 "Participant" shall mean any person who has been designated by the
Board of Directors to participate in the Plan in accordance with the provisions
herein set forth.
3.13 "Plan" shall mean the "Middlesex Water Company Supplemental Executive
Retirement Plan."
3.14 "Plan Year" shall mean the twelve (12) month period beginning each
January 1, and ending on each December 31.
3.15 "Primary Social Security Benefit" shall mean the annual primary
insurance amount to which a Participant is entitled under the Federal Old-Age
and Survivors Insurance System (Social Security) at Participant's Normal
Retirement Date; provided, however, that if, after the commencement of benefits,
the Primary Social Security Benefit to which the Participant is entitled is
reduced from the amount used to calculate Participant's benefits, that is,
either (a) the amount in effect at Participant's Normal Retirement Date, or (b)
the amount calculated to be in effect at Participant's Normal Retirement Date,
as the case may be, then in that case, the Primary Social Security Benefit shall
be the reduced amount and the amount of Participant's benefit under the Plan
shall be recalculated from the time of the reduction forward using the reduced
Primary Social Security Benefit. If a Participant terminates employment prior to
Participant's Normal Retirement Date, such Participant's Earnings for the last
Plan year in which he was employed shall be used for determining the Primary
Social Security Benefit to which the Participant would be entitled for the
purposes of this Plan. (Such determination shall be made immediately prior to
the commencement of SUCH PARTICIPANT'S BENEFITS.)
3.16 SERVICE
(a) "Month of Service" shall mean a calendar month during any part of
which a person was employed or was deemed employed by the Company.
(b) "Year of Service" shall mean twelve (12) Months of Service.
SECTION 4
- ---------
ADMINISTRATION OF THE PLAN
- --------------------------
4.1 ASSIGNMENT OF ADMINISTRATIVE AUTHORITY
The Board of Directors shall appoint a Committee to administer the Plan.
The Committee may consist of directors, officers, employees, or any other
individuals, who, upon acceptance of such appointment, shall serve at the
pleasure of the Board of Directors. Any member may resign by delivering his
written resignation to the Board of Directors and to the Committee. Vacancies in
the Committee arising from resignation, death, or removal shall be filled by the
Board of Directors.
4.2 ORGANIZATION AND OPERATION OF THE COMMITTEE
(a) The Committee shall have full power and authority to interpret and
construe the Plan and determine all questions of the status and rights of the
Participants hereunder, and its interpretation, construction or determination,
as the case may be, shall be final and conclusive on both the Company and the
Participants and their respective successors, assigns, personal representatives
and Beneficiaries.
(b) The Committee shall act by a majority of its members unless
unanimous consent is required by the Plan or by unanimous approval of its
members if there are two or fewer members in office at the time. In the event of
a Committee deadlock, the Committee shall determine the method for resolving
such deadlock. If there are two or more Committee members, no member shall act
upon any question pertaining solely to himself, and the other member or members
shall make any determination required by the Plan in respect thereof.
(c) The Committee may authorize any one or more of its members or an
officer of the Company to execute documents on behalf of the Committee.
(d) The Committee may, by unanimous consent, delegate specific
authority and responsibilities to one or more of its members. The member or
members so designated shall be solely liable, jointly and severally, for their
acts or omissions with respect to such delegated authority and responsibilities.
Members not so designated shall be relieved from liability for any act or
omission resulting from such delegation.
4.3 AUTHORITY AND RESPONSIBILITY
The Committee shall have full authority and responsibility for
administration of the Plan. Such authority and responsibility shall include, but
shall not be limited to the following:
(a) Appointment of qualified accountants, consultants, administrators,
counsel or investment manager, or other persons it deems necessary or advisable,
who, except for investment managers, shall serve the Committee as advisors only
and shall not exercise any discretionary authority, responsibility or control
with respect to the management or administration of the Plan.
Any action of the Committee on the basis of advice, opinion, reports,
etc. furnished by such qualified accountants consultants, administrators, and
counsel shall be the sole responsibility of the Committee.
Members of the Committee shall not be precluded from serving the
Committee in any other capacity, provided any compensation paid for such
services is reasonable.
(b) Determination of all benefits, and resolution of all questions
arising from the administration, interpretation and application of the Plan,
which authority shall be broadly construed.
(c) With the approval of the Board of Directors, waiver in whole or in
part of any reduction in benefits including reduction due to early retirement,
deferred retirement or termination.
(d) Adoption of forms and regulations for the administration of the
Plan.
(e) Remedy of all inequity resulting from incorrect information
received or communicated, or of administrative error.
(f) Settlement or compromise of any claims or debt arising from the
operation of the Plan and the commencement of any legal actions or
administrative proceedings.
4.4 RECORDS AND REPORTS
The Committee shall keep a record of its proceedings and acts and shall
keep books of account, records and other data necessary for the proper
administration of the Plan.
4.5 REQUIRED INFORMATION
The Company, Participants or Beneficiaries entitled to benefits
shall furnish forms and any information or evidence as requested by the
Committee for the proper administration of the Plan. Failure on the part of any
Participant or Beneficiary to comply with such request within a reasonable
period of time shall be sufficient grounds for delay in the payment of benefits
until the information or evidence requested is received.
4.6 PAYMENT OF EXPENSES OF PLAN
The expenses of the Committee in connection with the
administration of the Plan shall be the responsibility of the Company.
4.7 INDEMNIFICATION
The Company shall indemnify and hold the members of the Committee, and any
officer of the Company acting under the Plan, harmless against liability
incurred in the administration of the Plan, except for the gross negligence or
willful misconduct of any member.
SECTION 5
- ---------
ELIGIBILITY FOR PARTICIPATION
- -----------------------------
The following persons, and such other persons as may be designated from
time to time by the Board of Directors upon such terms and conditions as the
Board of Directors shall agree upon, shall be eligible to participate in the
Plan:
Ernest C. Gere
J. Richard Tompkins
Walter J. Brady
Carolina M. Schneider
Marion F. Reynolds
Dennis G. Sullivan
Richard A. Russo
A. Bruce O'Connor
Ronald F. Williams
SECTION 6
- ---------
RETIREMENT BENEFITS
- -------------------
6.1 NORMAL RETIREMENT
A Participant who retires on his Normal Retirement Date, shall be entitled
to an annual retirement benefit equal to seventy-five (75%) percent of his
Compensation, reduced by his Primary Social Security Benefit and further reduced
by his Actual Company Pension Plan Annual Benefit and any Other Employer
Retirement Benefits
6.2 EARLY RETIREMENT
A Participant who retires on or after his Early Retirement Date but prior
to his Normal Retirement Date shall be entitled to receive an annual retirement
benefit equal to seventy-five (75%) percent of his Compensation, multiplied by a
fraction, the numerator of which shall be the Months of Service completed by the
Participant at his Early Retirement Date and the denominator of which shall be
the Months of Service the Participant would have completed had he retired at
hhis Normal Retirement Date, reduced by his Primary Social Security Benefit and
his Projected Company Pension Plan Annual Benefit, and any Other Employer
Retirement Benefits and, unless waived by the Committee with the approval of the
Board, further reduced by one-half of one (0.5%) percent for each calendar month
between the commencement of benefits hereunder and the Participant's Normal
Retirement Date.
6.3 DEFERRED RETIREMENT
A Participant may remain in the employ of the Employer after his Normal
Retirement Date for such period or periods as shall be approved by the Employer.
Upon actual retirement, such Participant shall be entitled to an annual
retirement benefit equal to seventy-five (75%) percent of his Compensation
determined as of his Normal Retirement Date, unless a later date is otherwise
provided by the Committee with the approval of the Board, reduced by his Primary
Social Security Benefit, and further reduced by his Projected Company Pension
Plan Annual Benefit and any Other Employer Retirement Benefits.
6.4 TERMINATION
If a Participant (a) shall have attained age of at least fifty-five (55)
years; (b) shall have completed at least ten (10) years of service; and (c)
shall terminate his employment with the Employer prior to his Normal Retirement
Date, Early Retirement Date, or death, then such Participant shall be entitled
to an annual retirement benefit, to commence on his Normal Retirement Date. This
Annual Retirement Benefit shall be equal to seventy-five (75%) percent of his
Compensation, multiplied by a fraction, the numerator of which shall be the
Months of Service completed by the Participant at termination and the
denominator of which shall be the Months of Service the Participant would have
completed had he retired at his Normal Retirement Date, reduced by his Primary
Social Security Benefit and his Projected Company Pension Plan Annual Benefit,
and any Other Employer Retirement Benefits.
6.5 UPON OTHER TERMINATION OF EMPLOYMENT
(a) The provisions of Subsection 6.5(b) below shall apply if a
Participant leaves the Company's employ in the event of a Change in Control,
under any of the following circumstances, wherein, as a direct or indirect
result of a Change in Control, and within five (5) years thereof: (a)
Participant's employment with Company is terminated by Company; (b) the nature
and scope of Participant's duties or activities with the Company or its
successor are reduced to a level significantly below that which Participant had
enjoyed immediately prior to the Change in Control; or (c) Participant's base
salary is reduced; or (d) if the Change in Control is preceded by the Company
terminating Participant's employment with the Company without cause during the
six-month period prior to the occurrence of the Change in Control.
(b) If a Participant leaves the Company's employ as described in
Section 6.5(a) above, the Participant shall be entitled to receive an annual
retirement benefit equal to seventy-five (75%) percent of his Compensation,
reduced by his Primary Social Security Benefit and his Projected Company Pension
Plan Benefit, and any Other Employer Retirement Benefits, except that for the
purposes of this Subsection 6.5(b) the calculation of "Compensation" shall mean
the greatest of the Participant's Earnings for (i) the Participant's final full
calendar year of employment, or (ii) such Participant's highest consecutive five
(5) year average of Earnings during the ten (10) year period prior to the year
of such Participant's termination, or (iii) a calculation of Participant's
Earnings for the year prior to the year Participant reaches the age of
sixty-five (65) assuming that Participant's salary increased each year after
Participant's termination by the Consumer Price Index plus one (1) percentage
point.
c) Notwithstanding the provisions of Subsection 7.1 (pursuant to
which, in the event of termination as described in Subsection 6.5(a), the
Participant's benefit would be paid at a later date), and instead of receiving a
benefit in the amount described in Subsection 6.5(b) immediately above, if a
Participant leaves the Company's employ as described in Subsection 6.5(a), the
Participant, at Participant's sole option, may elect to receive a benefit in an
amount equal to seventy-five percent (75%) of his Compensation, multiplied by a
fraction, the numerator of which shall be the Months of Service completed by the
Participant at his termination date and the denominator of which shall be the
Months of Service the Participant would have completed had he retired at his
Normal Retirement Date; reduced by his Primary Social Security Benefit and his
Projected Company Pension Plan Annual Benefit and any Other Employer Retirement
Benefits. Such benefit shall commence within sixty (60) days after the
Participant terminates his employ with the Employer.
6.6 OTHER EMPLOYER RETIREMENT BENEFITS
As indicated in Subsections 6.1, 6.2, 6.3, 6.4 and 6.5, the benefits
set forth in this Section 6 are reduced by any Other Employer Retirement
Benefits. These include agreements, if any, entered into in connection with the
Participant's hire. Any such agreement shall be attached to this Plan document
as an Exhibit.
6.7 NORMAL FORM OF PAYMENT
Unless a Participant elects and the Committee approves an alternative
form of payment as provided under Subsection 7.4, he shall receive his annual
retirement benefit each year for fifteen (15) years payable in monthly
installments. In the event a Participant dies after commencement of his
retirement benefit payments in the normal form of payment, then the balance of
payments shall be paid to his designated Beneficiary.
6.8 For purposes of this Section 6, if a termination of a Participant is
the result of such Participant's fraud embezzlement or proven dishonesty of the
type or level punishable by termination, then such Participant shall not be
entitled to any benefits hereunder. If after commencement of benefits to a
Participant the Company determines that such Participant had committed an act or
acts of the type or level punishable by termination including fraud
embezzlement, or proven dishonesty, while in the employ of the Company, then
such Participant's benefits shall be terminated.
SECTION 7
- ---------
DISTRIBUTION OF BENEFITS
- ------------------------
7.1 NORMAL RETIREMENT; DEFERRED RETIREMENT; TERMINATION
Except as provided in Subsection 7.2, and, except as provided in Subsection
6.5(c) concerning a Change in Control termination, a Participant's annual
retirement benefit shall commence within sixty (60) days after the later of (a)
the Participant's Normal Retirement Date or (b) the Participant's retirement or
termination of employment with the Employer.
7.2 EARLY RETIREMENT
When a Participant Retires at or after his Early Retirement Date and before
his Normal Retirement Date, his annual retirement benefits shall commence within
sixty (60) days after the Participant terminates his employ with the Employer.
7.3 METHOD OF PAYMENT
Unless a Participant elects an alternative form of payment under Subsection
7.4, he shall receive his annual retirement benefit in the normal form of
payment, as provided under Subsection 6.7.
7.4 Alternative Form of Payment
With the approval of the Committee, a Participant may elect to receive his
retirement benefit, as determined under Section 6, in any one of the following
alternative forms of payment;
(a) Single life annuity in equal monthly installments of the Actuarial
Equivalent of the Participant's retirement benefit payable to the Participant
until his death.
(b) A joint and fifty (50%) percent survivor annuity which shall be the
Actuarial Equivalent of the Participant's retirement benefit. Under the joint
and fifty (50%) percent survivor annuity, a reduced retirement benefit shall be
paid to the Participant for his lifetime, and the Participant's spouse, if
surviving at the Participant's death, shall be entitled to receive thereafter a
lifetime survivorship benefit in a monthly amount equal to fifty (50%) percent
of the monthly amount which had been paid to the Participant.
(c) A joint and one-hundred (100%) percent survivor annuity which shall be
the Actuarial Equivalent of the Participant's retirement benefit. Under the
joint and one-hundred (100%) percent survivor annuity, a reduced retirement
benefit shall be paid to the Participant for his lifetime, and the Participant's
spouse, if surviving at the Participant's death, shall be entitled to receive
thereafter a lifetime survivorship benefit in a monthly amount equal to
one-hundred (100%) percent of the monthly amount which had been paid to the
Participant.
(d) A single life annuity with a ten (10) year certain period which shall
be the Actuarial Equivalent of the Participant's retirement benefit.
(e) A single life annuity with a fifteen (15) year certain period which
shall be the Actuarial Equivalent of the Participant's retirement benefit.
7.5 EACH PARTICIPANT SHALL HAVE THE RIGHT OF ELECT, REVOKE OR CHANGE ANY
ELECTION UNDER SUBSECTION 7.4 AT ANY TIME UP TO AND INCLUDING THE SIXTIETH
(60TH) day prior to the commencement of his benefits.
SECTION 8
- ---------
DEATH BENEFITS AND BENEFICIARY DESIGNATION
- ------------------------------------------
8.1 Upon the death of a Participant prior to the commencement of any
retirement benefit payments to him and prior to his termination of employment,
Participant's Designated Beneficiary shall be entitled to receive the following:
(a) A lump sum payment equal to three times such Participant's
annualized Earnings at date of death, reduced by the proceeds from any life
insurance contracts on the life of the Participant the premiums on which are
paid by the Employer pursuant to a Company group life insurance plan. (For
example, if the beneficiary of a Participant is entitled to receive a payment
equal to one and one-half times the Participant's Earnings from the proceeds of
a life insurance policy, the premiums of which are paid by the Company, the
beneficiary would also receive a payment equal to one and one-half times the
Participant's Earnings under this Plan.); and
(b) A lump sum payment equal to the present value of the retirement
benefit to which the Participant would have been entitled under Subsection 6.4,
determined as if he had terminated his employment on the date of his death
assuming Participant had also satisfied the conditions of having attained the
age of fifty-five (55) and having completed at least ten (10) years of service.
For purposes of this Subsection 8.1(b) only, if the Participant is married at
the time of his death, the Primary Social Security Benefit shall be defined as
the annual benefit payable to the widow or widower of the Participant from
Social Security. For purposes of this Subsection 8.1(b) only, the Projected
Company Pension Plan Annual Benefit shall be defined as the annual
pre-retirement death benefit payable to a surviving spouse at the earliest
pension commencement date permissible under the Middlesex Water Company Pension
Plan.
For purposes of this Subsection 8.1(b) only, if the Participant is
unmarried at the time of his death, the Primary Social Security Benefit and
Actual Company Pension Plan Annual Benefit shall be determined as if the
Participant were married to a spouse of the same age as the Participant.
In determining the present value of this portion of a Participant's
death benefit the following interest rate shall be used:
The prime lending rate, as of the January 1 preceding the date of the
Participant's death, of the Company's primary lending institution. The
present value of this portion of the Participant's death benefit shall
be determined assuming that the annual retirement benefit payable
under this Subsection 8.1(b) would be payable immediately upon the
Participant's death.
8.2 Upon the death of a Participant subsequent to the commencement of any
retirement benefit payments to him, the only payments to which a Participant or
Beneficiary shall be entitled shall be those benefit payments (if any) being
made in accordance with the method of payment then in effect under Section 7.
8.3 Upon the death of a Participant subsequent to retirement or
termination, including retirement or termination pursuant to Subsections 6.2,
6.3, 6.4 and 6.5, and prior to the commencement of any retirement benefit
payments to him payable under the applicable Subsection, the Participant's
Designated Beneficiary shall be entitled to a lump sum payment equal to the
present value of the retirement benefit to which the Participant would have been
entitled under the applicable Subsection. For purposes of this Section 8.3 only,
if the Participant is married at the time of his death, the Primary Social
Security Benefit shall be defined as the annual benefit payable to the widow or
widower of the Participant from Social Security and the Projected Company
Pension Plan Annual Benefit shall be defined as the annual pre-retirement death
benefit payable to a surviving spouse at the earliest pension commencement date
permissible under the Middlesex Water Company Pension Plan.
For purposes of this Section 8.3 only, if the Participant is unmarried
at the time of his death, the Primary Social Security Benefit and Actual Company
Pension Plan Annual Benefit shall be determined as if the Participant were
married to a spouse of the same age as the Participant.
In determining the present value of this portion of a Participant's
death benefit the following interest rate shall be used:
The prime lending rate, as of the January 1 preceding the date of the
Participant's death, of the Company's primary lending institution. The
present value of this portion of the Participant's death benefit shall
be determined assuming that the annual retirement benefit payable
under this Section 8.3 would be payable immediately upon the
Participant's death. By way of clarification, a Participant who
terminates employment pursuant to Section 6.4 shall not be entitled to
the death benefits described in Section 8.1(a), generally describing a
lump sum payment equal to three times annualized earnings, reduced by
certain life insurance proceeds.
8.4 Each Participant may designate a Beneficiary and/or successor
Beneficiary to receive the benefits payable in the event of his death. Such
designations may be changed from time to time by the Participant. All such
designations and changes shall be made on an appropriate form and shall be filed
with the Committee. In the event the Participant fails to exercise his right to
designate a Beneficiary or if no designated Beneficiary shall survive the
Participant, then such benefits shall be paid to Participant's estate.
SECTION 9
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FUNDING OBLIGATION OF COMPANY
- -----------------------------
9.1 COMPANY CONTRIBUTIONS
(a) Although it is the intention of the Company to maintain adequate
reserves for the satisfaction of its obligations under the Plan, nothing
contained herein shall create an obligation on the part of the Company to set
aside or earmark any monies or other assets specifically for this purpose. It is
intended that these benefits be in the form of an unfunded obligation of the
Company.
(b) Should the Company elect to set aside or earmark any monies or
other assets specifically for the purpose of satisfying its obligation under the
Plan, all such assets shall remain the assets of the Company, shall remain
subject to the claims of the general creditors of the Company, and shall not be
segregated from the general assets of the Company. Should the Company elect to
purchase life insurance or annuity contracts as a means of satisfying its
obligations under this Plan, in whole or in part, it reserves the absolute right
in its sole discretion to terminate any such contracts, as well as any other
funding program, at any time, in whole or in part. At no time shall a
Participant, any designated Beneficiary or the Participant's estate have any
right, title or interest in or to any specific fund or assets of the Company
including but not limited to any life insurance or annuity contracts which the
Company may, at any time, have purchased. As to any claim for benefits under
this Plan, the Participant, any designated Beneficiary and/or the Participant's
estate, shall be a creditor of the Company in the same manner as any other
creditor having a general claim for unpaid compensation.
(c) Nothing herein shall prevent the Company from establishing a trust
or other structure to fund the obligation that may arise under the Plan.
(d) Upon the occurrence of a Change in Control as defined in Section
3.4, the Company will fund a trust substantially in the form attached hereto as
Exhibit D to fully provide for the Company's obligations to participants under
this Plan.
SECTION 10
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AMENDMENT AND TERMINATION
- -------------------------
10.1 AMENDMENT
Subject to Subsection 10.3, the Company may amend or modify the Plan in
whole or in part, either retroactively or prospectively, at any time.
10.2 TERMINATION
Subject to Subsection 10.3, the Company may terminate the Plan at any time.
10.3 (a) In the event of any amendment, modification or termination of the
Plan there shall be no reduction in the amount of benefits then being paid to
any Participant.
(b) In the event of any amendment, modification or termination of the
Plan, each Participant still employed shall be entitled to those benefits to
which he would have been entitled under Section 6 had he then terminated his
employment.
SECTION 11
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GENERAL PROVISIONS
- ------------------
11.1 LIMITATION OF RIGHTS
Neither the establishment of the Plan, nor any modification thereof, nor
the creation of any fund, trust or account, nor the purchase of any policy, nor
the payment of any benefits shall be construed as giving any Participant,
Beneficiary, or any other person whatsoever, any legal or equitable right
against the Company or the Committee unless such right shall be specifically
provided for in the Plan or conferred by affirmative action of the Committee or
the Company in accordance with the terms and provisions of the Plan; or as
giving any Participant or any other employee of the Company the right to be
retained in the service of the Company, and all Participants and other employees
shall remain subject to discharge to the same extent as if the Plan had never
been adopted.
11.2 CONSTRUCTION OF AGREEMENT
The Plan shall be construed according to the laws of the State of New
Jersey, and all provisions hereof shall be administered according to, and its
validity shall be determined under, the laws of such State except where
pre-empted by Federal Law.
11.3 TITLE TO ASSETS
No Participant, Beneficiary or any other person shall have any legal or
equitable right or interest in the funds set aside by the Company, or otherwise
received or held under the Plan, except as expressly provided in the Plan, and
no Participant, Beneficiary or any other person shall be deemed to possess a
right to any assets except as herein provided.
11.4 SEVERABILITY
Should any provision of the Plan or any regulations adopted thereunder be
deemed or held to be unlawful or invalid for any reason, such fact shall not
adversely affect the other provisions or regulations unless such invalidity
shall render impossible or impractical the functioning of the Plan and, in such
case, the appropriate parties shall immediately adopt a new provision or
regulation to take the place of the one held illegal or invalid.
11.5 TITLES AND HEADINGS
The titles and headings of the Sections in this instrument are for
convenience of reference only and, in the event of any conflict, the text rather
than such titles or headings shall control.
11.6 NON-ALIENATION OF BENEFITS
No benefit under the Plan shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any
such action shall be void for all purposes of the Plan. No benefit shall in any
manner be subject to the debts, contracts, liabilities, engagements, or torts of
any person, nor shall it be subject to attachments or other legal process for or
against any person, except to such extent as may be required by law.
SECTION 12
EFFECTIVE DATE
This plan became effective on January 1, 1984.
EXHIBIT A
---------
TO THE
------
MIDDLESEX WATER COMPANY
-----------------------
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
--------------------------------------
Additional Reduction - Marion Reynolds
(a) Subject to the conditions contained in Section 6 of this Plan, Marion
Reynolds shall be entitled under Subsections 6.1, 6.3, 6.4 and 6.5 of the Plan
to an annual benefit as calculated under the respective Subsection. The
reduction for her Other Employer Retirement Benefits shall be for her deferred
vested lifetime benefit under the Pension Plan of Public Service Electric and
Gas Company deemed to be $1,559.03 per month beginning at age 65.
(b) Subject to the conditions contained in Section 6 of the Plan, Marion
Reynolds shall be entitled under Subsection 6.2 of the Plan to an annual benefit
as calculated under the said Subsection 6.2. The reduction for her Other
Employer Retirement Benefits shall be for her deferred vested lifetime benefit
under the Pension Plan of Public Service Electric and Gas Company deemed to be
$1,559.03 per month beginning at age 65. This reduction shall be applied before
multiplying the annual benefit by the fraction contained in Subsection 6.2 of
the Plan.
EXHIBIT B
---------
TO THE
------
MIDDLESEX WATER COMPANY
-----------------------
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
--------------------------------------
Additional Reduction - Richard A. Russo
(a) Subject to the conditions contained in Section 6 of this Plan, Richard
A. Russo shall be entitled under Subsections 6.1, 6.3, 6.4 and 6.5 of the Plan
to an annual benefit as calculated under the respective Subsection. The
reduction for his Other Employer Retirement Benefits shall be 50% of his
deferred vested lifetime benefit under the pension plan of the City of Trenton,
his former employer, to be paid as a single life annuity in equal monthly
installments.
(b) Subject to the conditions contained in Section 6 of the Plan, Richard
A. Russo shall be entitled under Subsection 6.2 of the Plan to an annual benefit
as calculated under the said Subsection 6.2. The reduction for his Other
Employer Retirement Benefits shall be 50% of his deferred vested lifetime
benefit under the pension plan of the City of Trenton, his former employer, to
be paid as a single life annuity in equal monthly installments. This reduction
shall be applied before multiplying the annual benefit by the fraction contained
in Subsection 6.2 of the Plan.
EXHIBIT C
---------
TO THE
------
MIDDLESEX WATER COMPANY
-----------------------
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
--------------------------------------
Additional Reduction - Ronald F. Williams
(a) Subject to the conditions contained in Section 6 of this Plan, Ronald
F. Williams shall be entitled under Subsections 6.1, 6.3, 6.4 and 6.5 of the
Plan to an annual benefit as calculated under the respective Subsection. The
reduction for his Other Employer Retirement Benefits shall be 50% of his
deferred vested lifetime benefit under the pension plan of Consumers New Jersey
Water Company, his former employer, deemed to be paid as a single life annuity
in equal monthly installments.
(b) Subject to the conditions contained in Section 6 of the Plan, Ronald F.
Williams shall be entitled under Subsection 6.2 of the Plan to an annual benefit
as calculated under the said Subsection 6.2. The reduction for his Other
Employer Retirement Benefits shall be 50% of his deferred vested lifetime
benefit under the pension plan of the Consumers New Jersey Water Company, his
former employer, deemed to be paid as a single life annuity in equal monthly
installments. This reduction shall be applied before multiplying the annual
benefit by the fraction contained in Subsection 6.2 of the Plan.
CHANGE IN CONTROL TERMINATION AGREEMENT
This Change in Control Termination Agreement (the "Agreement") is entered
into on April 7, 1999, between Middlesex Water Company, a New Jersey
corporation, with its principal place of business located at 1500 Ronson Road,
P.O. Box 1500, Iselin, New Jersey 08830-0452, (the "Company"), and J. Richard
Tompkins, residing at 23 Hidden Pine Drive, Colts Neck, New Jersey 07722.
RECITALS
A. The Company considers it essential to the best interests of its
stockholders to foster the continuous employment of key management personnel. In
this connection, the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held Companies, the possibility of a
Change In Control may exist. This possibility, and the uncertainty and questions
that it may raise among management, may result in the departure or distraction
of management personnel to the detriment of the Company and its stockholders.
B. The Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of the
Company's management, including yourself, to the assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change In Control of the Company.
C. To induce you to remain in the employ of the Company, and in
consideration of your agreement set forth below, the Company agrees that you
shall receive the severance benefits set forth in this Agreement in the event
your employment with the Company is terminated or "constructively terminated" as
defined herein in connection with a "Change In Control of the Company" (as
defined in Section 2 below) under the circumstances described below. This
Agreement is meant to supersede any other specific written agreements that may
have been entered into between yourself and the Company concerning termination
of employment.
Therefore, in consideration of your continued employment and the
parties' agreement to be bound by the terms contained in this Agreement, the
parties agree as follows:
1. TERM OF AGREEMENT. This Agreement shall commence as of April 8, 1999 and
shall continue in effect through December 31, 2001. However, commencing on
December 31, 2001, and each December 31 afterwards, the term of this Agreement
shall automatically be extended for 1 additional year unless, no later than the
preceding November 1, the Company shall have given notice that it does not wish
to extend this Agreement. Notwithstanding the foregoing, if a Change In Control
of the Company shall be proposed to occur or have occurred during the original
or any extended term of this Agreement, this Agreement shall continue in effect
for a period of three years beyond the month in which the Change In Control
occurs. Notwithstanding the foregoing, and provided no Change of Control shall
have occurred, this Agreement shall automatically terminate on the earlier to
occur of (i) your termination of employment with the Company, or (ii) the
Company's furnishing you with notice of termination, irrespective of the
effective date of the termination.
2. CHANGE IN CONTROL. No benefits shall be payable under this Agreement
unless there shall have been a Change In Control of the Company, as set forth
below. For purposes of this Agreement, a "Change In Control" of the Company
shall be deemed to occur 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; or a liquidation or dissolution of
Company.
3. TERMINATION FOLLOWING CHANGE IN CONTROL. If any of the events described
in Section 2 above constituting a Change In Control of the Company shall have
occurred, you shall be entitled to the benefits provided in subsection 4.3 below
on the subsequent termination or "Constructive Termination" of your employment
during the term of this Agreement, unless the termination is (A) because of your
death, Disability or Retirement, (B) by the Company for Cause, or (C) by you
other than for Good Reason.
3.1 DISABILITY; RETIREMENT. If, as a result of your incapacity due to
physical or mental illness, you shall have been absent from the full-time
performance of your duties with the Company for 6 consecutive months, and within
30 days after written notice of termination is given you shall not have returned
to the full-time performance of your duties, your employment may be terminated
for "Disability." Termination by the Company or you of your employment based on
"Retirement" shall mean termination in accordance with the Company's retirement
policy, including early retirement, generally applicable to its salaried
employees or in accordance with any retirement arrangement established with your
consent with respect to you.
3.2 CAUSE. Termination by the Company of your employment for "Cause"
shall mean termination on:
3.2.1 the willful and continued failure by you to
substantially perform your duties with the Company
as such employment was performed by you prior to
the Change of Control (other than any such failure
resulting from your incapacity due to physical or
mental illness or any such actual or anticipated
failure after the issuance by you of a Notice of
Termination for Good Reason as defined in
Subsections 3.4 and 3.3, respectively) after a
written demand for substantial performance is
delivered to you by the Board, which demand
specifically identifies the manner in which the
Board believes that you have not substantially
performed your duties; or
3.2.2 the willful act by you in conduct that is
demonstrably and materially injurious to the
Company, and which the Board deems to cause or
will cause substantial economic damage to the
Company or injury to the business reputation of
the Company, monetarily or otherwise. For purposes
of this Subsection, no act, or failure to act, on
your part shall be deemed "willful" unless done,
or omitted to be done, by you not in good faith
and without a reasonable belief that your action
or omission was in the best interest of the
Company. Notwithstanding the foregoing, you shall
not be deemed to have been terminated for Cause
unless and until there shall have been delivered
to you a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters
of the entire membership of the Board at a meeting
of the Board called and held for such purpose
(after reasonable notice to you and an opportunity
for you, together with your counsel, to be heard
before the Board), finding that in the good faith
opinion of the Board you were guilty of conduct
set forth above in clauses 3.2.1 or 3.2.2 of the
first sentence of this Subsection and specifying
the particulars in detail.
3.3 GOOD REASON. You shall be entitled to terminate your employment
for Good Reason. For purposes of this Agreement, "Good Reason" shall mean,
without your express written ----------- consent, the occurrence in connection
with a Change In Control of the Company of any of the following circumstances
unless, in the case of paragraphs 3.3.1, 3.3.5, 3.3.6, 3.3.7, or 3.3.8, the
circumstances are fully corrected prior to the Date of Termination specified in
the Notice of Termination, as defined in Subsections 3.5 and 3.4, respectively,
given in respect of them. If you have Good Reason for your termination you shall
be considered to have been "Constructively Terminated" by the Company:
3.3.1 the assignment to you of any duties inconsistent
with your status and position (i) prior to the
Change In Control where such change is a direct
result of any pending Change in Control; or (ii)
as such status exists immediately prior to the
Change In Control of the Company, or (iii) a
substantial adverse alteration in the nature or
status of your responsibilities from those in
effect immediately prior to the Change In Control
of the Company whichever is applicable;
3.3.2 a reduction by the Company in your annual base
salary as in effect on this date or as the same
may be increased from time to time irrespective of
future Company policies including any
across-the-board salary reductions similarly
affecting all key employees of the Company;
3.3.3 your relocation, without your consent, to a
location not within twenty five (25) miles of your
present office or job location, except for
required travel on the Company's business to an
extent substantially consistent with your present
business travel obligations;
3.3.4 the failure by the Company, without your consent,
to pay to you any part of your current
compensation, or to pay to you any part of an
installment of deferred compensation under any
deferred compensation program of the Company,
within fourteen (14) days of the date the
compensation is due;
3.3.5 the failure by the Company to continue in effect
any bonus to which you were entitled, or any
compensation plan in which you participate (i)
prior to the Change in Control where such change
is a direct result of any pending Change In
Control; or (ii) immediately prior to the Change
In Control of the Company that is material to your
total compensation, including but not limited to
the Company's Restricted Stock Plan, 401(k) Plan,
and Benefit Plans, or any substitute plans adopted
prior to the Change In Control of the Company,
unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been
made with respect to the plan, or the failure by
the Company to continue your participation in it
(or in such substitute or alternative plan) on a
basis not materially less favorable, both in terms
of the amount of benefits provided and the level
of your participation relative to other
participants, as existed at the time of the Change
In Control;
3.3.6 the failure by the Company to continue to provide
you with (i) benefits substantially similar to
those enjoyed by you under any of the Company's
life insurance, medical, health and accident, or
disability plans in which you were participating
at the time of the Change In Control of the
Company was in effect for the employees of the
Company generally at the time of the Change In
Control, (ii) the failure to continue to provide
you with a Company automobile or allowance in lieu
of it at the time of the Change In Control of the
Company, (iii) the taking of any action by the
Company that would directly or indirectly
materially reduce any of such benefits or deprive
you of any material fringe benefit enjoyed by you
at the time of the Change In Control of the
Company, or (iv) the failure by the Company to
provide you with the number of paid vacation days
to which you are entitled on the basis of years of
service with the Company in accordance with the
Company's normal vacation policy in effect at the
time of the Change In Control of the Company;
3.3.7 the failure of the Company to obtain a
satisfactory agreement from any successor to
assume and agree to perform this Agreement, as
contemplated in Section 5 of this Agreement; or
3.3.8 any purported termination of your employment that
is not effected pursuant to a Notice of
Termination satisfying the requirements of
Subsection 3.4 below (and, if applicable, the
requirements of Subsection 3.2 above); for
purposes of this Agreement, no such purported
termination shall be effective.
Your rights to terminate your employment pursuant to this
Subsection shall not be affected by your incapacity due to physical or mental
illness. Your continued employment shall not constitute consent to, or a waiver
of rights with respect to, any circumstance constituting Good Reason under this
Agreement. In the event you deliver Notice of Termination based on circumstances
set forth in Paragraphs 3.3.1, 3.3.5, 3.3.6, 3.3.7, or 3.3.8 above, which are
fully corrected prior to the Date of Termination set forth in your Notice of
Termination, the Notice of Termination shall be deemed withdrawn and of no
further force or effect.
3.4 NOTICE OF TERMINATION. Any purported termination of your
employment by the Company or by you shall be communicated by written Notice of
Termination to the other party to --------------------- this Agreement in
accordance with Section 6 of this Agreement. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice that shall indicate the specific
termination provision in this Agreement relied on, and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of your employment under the provision so indicated.
3.5 DATE OF TERMINATION, ETC. "Date of Termination" shall mean (A) if
your employment is terminated for Disability, 30 days after Notice of
Termination is given (provided that you shall not have returned to the full-time
performance of your duties during such 30-day period), and (B) if your
employment is terminated pursuant to Subsection 3.2 or 3.3 above or for any
other reason (other than Disability), the date specified in the Notice of
Termination (which, in the case of a termination pursuant to Subsection 3.2
above shall not be less than 30 days, and in the case of a termination pursuant
to Subsection 3.3 above shall not be less than 15 nor more than 60 days,
respectively, from the date the Notice of Termination is given). However, if
within 15 days after any Notice of Termination is given, or, if later, prior to
the Date of Termination (as determined without regard to this provision), the
party receiving the Notice of Termination notifies the other party that a
dispute exists concerning the termination, then the Date of Termination shall be
the date on which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding arbitration award, or by a final
judgment, order, or decree of a court of competent jurisdiction (which is not
appealable or with respect to which the time for appeal has expired and no
appeal has been perfected). The Date of Termination shall be extended by a
notice of dispute only if the notice is given in good faith and the party giving
the notice pursues the resolution of the dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Company will continue to
pay you your full compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, base salary) and continue you
as a participant in all compensation, benefit, and insurance plans in which you
were participating when the notice giving rise to the dispute was given, until
the dispute is finally resolved in accordance with this Subsection. Amounts paid
under this Subsection are in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other amounts due under
this Agreement except to the extent otherwise provided in subsection 4.4.
4. COMPENSATION ON TERMINATION OR DURING DISABILITY. Following a
Change In Control of the Company, as defined by Section 2, on termination of
your employment or during a period of disability you shall be entitled to the
following benefits:
4.1 During any period that you fail to perform your full-time duties
with the Company as a result of incapacity due to physical or mental illness,
you shall continue to receive your base salary at the rate in effect at the
commencement of any such period, together with all amounts payable to you under
any compensation plan of the Company during the period, until this Agreement is
terminated pursuant to section 3.1 above. Thereafter, or in the event your
employment shall be terminated by the Company or by you for Retirement, or by
reason of your death, your benefits shall be determined under the Company's
retirement, insurance, and other compensation programs then in effect in
accordance with the terms of those programs.
4.2 If your employment shall be terminated by the Company for Cause or
by you other than for Good Reason, Disability, death, or Retirement, the Company
shall pay you your full base salary through the Date of Termination at the rate
in effect at the time Notice of Termination is given, plus all other amounts and
benefits to which you are entitled under any compensation plan of the Company at
the time the payments are due. The Company shall have no obligations to you
under this Agreement.
4.3 If your employment by the Company shall be terminated (a) by the
Company other than for Cause, Retirement or Disability, or (b) by you for Good
Reason, then you shall be entitled to the benefits provided below:
4.3.1 The Company shall pay you your full salary through
the Date of Termination at the rate in effect at
the time notice of Termination is given, plus all
other amounts and benefits to which you are
entitled under any compensation plan of the
Company, at the time the payments are due, except
as otherwise provided below.
4.3.2 In lieu of any further salary payments to you for
periods subsequent to the Date of Termination, the
Company shall pay to you, as severance pay the
following: (i) a lump sum severance payment equal
to three (3) times the average of your
Compensation for the five (5) years prior to the
occurrence of the circumstance giving rise to the
notice of Termination, plus (ii) the amounts in
the forms set forth in paragraphs 4.3.3, 4.3.4 and
4.3.5 (the "Severance Payments"). In addition to
the Severance Payments, the Company shall pay to
you an additional amount equal to the amount of
the Excise Tax, if any, that is due or determined
to be due under Section 4999 of the Internal
Revenue Code of 1986, as amended, resulting from
the Severance Payments or any other payments under
this Agreement or any other agreement between you
and the Company and an amount sufficient to pay
the taxes on any such Excise Taxes (the
"Gross-up"). For purposes of this Agreement,
"Compensation" shall mean the aggregate
remuneration paid by the Company to you during a
calendar year, including bonuses, awards under the
Company's Restricted Stock Plan, benefits under
employee benefit plans, automobile allowances or
any fees paid to you as remuneration for serving
as a Director of the Company.
4.3.3 The Company shall continue coverage for you and
your dependents under any health or welfare
benefit plan under which you and YOUR DEPENDENTS
WERE PARTICIPATING PRIOR TO THE CHANGE IN CONTROL
FOR A PERIOD ENDING ON THE EARLIER to occur of (i)
the date you become covered by a new employer's
health and welfare benefit plan, (ii) the date you
become covered by Medicare, or (iii) the date
which is thirty-six (36) months from the date of
Termination. The coverage for your dependents
shall end earlier than (i), (ii) or (iii) if
required by the health or welfare benefit plan due
to age eligibility.
4.3.4 The Company shall pay to you any deferred
compensation, including, but not limited to
deferred bonuses, allocated or credited to you or
your account as of the Date of Termination.
4.3.5 Outstanding stock options or Restricted Stock
grants, if any, granted to you under the Company's
Stock Plans which are not vested on Termination
shall immediately vest.
4.3.6 Where you shall prevail in any such action, the
Company shall also pay to you all legal and
accounting fees and expenses incurred by you as a
result of the termination (including all such fees
and expenses incurred by you as a result of the
termination (including all such fees and expenses,
if any, incurred in contesting or disputing any
termination or in seeking to obtain or enforce any
right or benefit provided by this Agreement or in
connection with any tax audit or proceeding to the
extent attributable to the application of Code
Section 4999 to any payment or benefit provided
under this Agreement) or any other agreement with
the Company.
4.3.7 The amount of Severance Payments and any Gross-up
due to you under this or any other relevant
agreement with the Company shall be determined by
a third party agreed to by you and the Company. If
you cannot agree on a third party, then both third
parties shall determine the amounts due under this
Agreement. If the third parties do not agree on
the amount to be paid to you, then either party
may submit the calculation of the amounts which
are in dispute to Arbitration in accordance with
this Agreement. The payments provided for in
Paragraphs 4.3.2, 4.3.4 and 4.3.5 above, shall be
made no later than the THIRTIETH (30TH) day
following the Date of Termination. However, if the
amounts of the payments cannot be finally
determined on or before that day, the Company
shall pay to you on that day an estimate, as
determined in good faith by the Company, of the
minimum amount of such payments and shall pay the
remainder of those payments (together with
interest at the rate provided in Section
1274(b)(2)(B) of the Code) as soon as the amount
can be determined but in no event later than the
30th day after the Date of Termination. In the
event that the amount of the estimate payments
exceeds the amount subsequently determined to have
been due, the excess shall constitute a loan by
the Company to you payable on the 30th day after
demand by the Company (together with interest at
the rate provided in Section 1274(b)(2)(B) of the
Code).
4.4 You shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or otherwise, nor
shall the amount of any payment or benefit provided for in this Section 4 be
reduced by any compensation earned by you as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by you to the Company, or otherwise except as specifically provided in this
Section 4.
4.5 In addition to all other amounts payable to you under this Section 4,
you shall be entitled to receive all qualified benefits payable to you under the
Company's 401(k) Plan, Defined Benefit Plan and any other plan or agreement
relating to retirement benefits.
5. SUCCESSORS; BINDING AGREEMENT.
5.1 The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain the assumption and agreement
prior to the effectiveness of any succession shall be a breach of this agreement
and shall entitle you to compensation from the Company in the same amount and on
the same terms as you would have been entitled to under this Agreement if you
had terminated your employment for Good Reason following a Change In Control of
the Company, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Date of
Termination.
5.2 This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators, heirs,
distributees, and legatees. If you should die while any amount would still be
payable to you if you had continued to live, all such amounts, unless otherwise
provided in this Agreement, shall be paid in accordance with the terms of this
Agreement to your legatee or other designee or, if there is no such designee, to
your estate.
6. NOTICE. For the purpose of this Agreement, all notices and other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth on the first page of this
Agreement, provided that all notices to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the Company, or to such
other address as either party may have furnished to the other in writing in
accordance this Agreement, except that notice of a change of address shall be
effective only on receipt.
7. MISCELLANEOUS.
7.1 No provision of this Agreement may be modified, waived, or
discharged unless the waiver, modification, or discharge is agreed to in writing
and signed by you and such officer as may be specifically designated by the
Board.
7.2 No waiver by either party to this Agreement at any time of any
breach by the other party of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
7.3 No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter of this Agreement have been made by
either party that are not expressly set forth in this Agreement.
7.4 Nothing in this Agreement is intended to reduce any benefits
payable to you under any other agreement you may have with the Company or in any
Company plan in which you may participate.
7.5 The validity, interpretation, construction, and performance of
this Agreement shall be governed by the law of New Jersey without reference to
its conflict of laws principals.
7.6 All references to sections of the Exchange Act or the Code shall
be deemed also to refer to any successor provisions to such sections. Any
payments provided for shall be paid net of any applicable withholding or
deduction required under federal, state or local law.
7.7 The obligations of the Company under Section 4 shall survive the
expiration of the term of this Agreement.
8. VALIDITY. The validity or enforceability of any provision of this
Agreement shall not affect the validity or unenforceability of any other
provision of this Agreement, which shall remain in full force and effect.
9. COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
10. ARBITRATION. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in New Jersey in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction. However, you shall be entitled to seek specific performance of
your right to be paid until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection this Agreement.
11. ENTIRE AGREEMENT. This Agreement sets forth the entire understanding of
the parties with respect to its subject matter and supersedes all prior written
or oral agreements or understandings with respect to the subject matter.
In witness whereof, the parties have executed this agreement as of the day
and year first above written.
<PAGE>
MIDDLESEX WATER COMPANY
By:/s/ Dennis G. Sullivan
-------------------------------------
Dennis G. Sullivan
Vice President and General Counsel
ATTEST:
/s/ Marion F. Reynolds
- ----------------------
Marion F. Reynolds
Vice President
Secretary and Treasurer
/s/ J. Richard Tompkins
-------------------------------
J. Richard Tompkins
<PAGE>
Exhibit 10.15(b)
CHANGE IN CONTROL TERMINATION AGREEMENT
This Change in Control Termination Agreement (the "Agreement") is entered
into on April 7, 1999, between Middlesex Water Company, a New Jersey
corporation, with its principal place of business located at 1500 Ronson Road,
P.O. Box 1500, Iselin, New Jersey 08830-0452, (the "Company"), and Walter J.
Brady, residing at 49 Howell Drive, Verona, New Jersey 07044.
RECITALS
A. The Company considers it essential to the best interests of its
stockholders to foster the continuous employment of key management personnel. In
this connection, the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held Companies, the possibility of a
Change In Control may exist. This possibility, and the uncertainty and questions
that it may raise among management, may result in the departure or distraction
of management personnel to the detriment of the Company and its stockholders.
B. The Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of the
Company's management, including yourself, to the assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change In Control of the Company.
C. To induce you to remain in the employ of the Company, and in
consideration of your agreement set forth below, the Company agrees that you
shall receive the severance benefits set forth in this Agreement in the event
your employment with the Company is terminated or "constructively terminated" as
defined herein in connection with a "Change In Control of the Company" (as
defined in Section 2 below) under the circumstances described below. This
Agreement is meant to supersede any other specific written agreements that may
have been entered into between yourself and the Company concerning termination
of employment.
Therefore, in consideration of your continued employment and the parties'
agreement to be bound by the terms contained in this Agreement, the parties
agree as follows:
1. TERM OF AGREEMENT. This Agreement shall commence as of April 8, 1999 and
shall continue in effect through December 31, 2001. However, commencing on
December 31, 2001, and each December 31 afterwards, the term of this Agreement
shall automatically be extended for 1 additional year unless, no later than the
preceding November 1, the Company shall have given notice that it does not wish
to extend this Agreement. Notwithstanding the foregoing, if a Change In Control
of the Company shall be proposed to occur or have occurred during the original
or any extended term of this Agreement, this Agreement shall continue in effect
for a period of three years beyond the month in which the Change In Control
occurs. Notwithstanding the foregoing, and provided no Change of Control shall
have occurred, this Agreement shall automatically terminate on the earlier to
occur of (i) your termination of employment with the Company, or (ii) the
Company's furnishing you with notice of termination, irrespective of the
effective date of the termination.
2. CHANGE IN CONTROL. No benefits shall be payable under this Agreement
unless there shall have been a Change In Control of the Company, as set forth
below. For purposes of this Agreement, a "Change In Control" of the Company
shall be deemed to occur 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; or a liquidation or dissolution of
Company.
3. TERMINATION FOLLOWING CHANGE IN CONTROL. If any of the events described
in Section 2 above constituting a Change In Control of the Company shall have
occurred, you shall be entitled to the benefits provided in subsection 4.3 below
on the subsequent termination or "Constructive Termination" of your employment
during the term of this Agreement, unless the termination is (A) because of your
death, Disability or Retirement, (B) by the Company for Cause, or (C) by you
other than for Good Reason.
3.1 DISABILITY; RETIREMENT. If, as a result of your incapacity due to
physical or mental illness, you shall have been absent from the full-time
performance of your duties with the Company for 6 consecutive months, and within
30 days after written notice of termination is given you shall not have returned
to the full-time performance of your duties, your employment may be terminated
for "Disability." Termination by the Company or you of your employment based on
"Retirement" shall mean termination in accordance with the Company's retirement
policy, including early retirement, generally applicable to its salaried
employees or in accordance with any retirement arrangement established with your
consent with respect to you.
3.2 CAUSE. Termination by the Company of your employment for "Cause"
shall mean termination on:
3.2.1 the willful and continued failure by you to
substantially perform your duties with the Company
as such employment was performed by you prior to
the Change of Control (other than any such failure
resulting from your incapacity due to physical or
mental illness or any such actual or anticipated
failure after the issuance by you of a Notice of
Termination for Good Reason as defined in
Subsections 3.4 and 3.3, respectively) after a
written demand for substantial performance is
delivered to you by the Board, which demand
specifically identifies the manner in which the
Board believes that you have not substantially
performed your duties; or
3.2.2 the willful act by you in conduct that is
demonstrably and materially injurious to the
Company, and which the Board deems to cause or
will cause substantial economic damage to the
Company or injury to the business reputation of
the Company, monetarily or otherwise. For purposes
of this Subsection, no act, or failure to act, on
your part shall be deemed "willful" unless done,
or omitted to be done, by you not in good faith
and without a reasonable belief that your action
or omission was in the best interest of the
Company. Notwithstanding the foregoing, you shall
not be deemed to have been terminated for Cause
unless and until there shall have been delivered
to you a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters
of the entire membership of the Board at a meeting
of the Board called and held for such purpose
(after reasonable notice to you and an opportunity
for you, together with your counsel, to be heard
before the Board), finding that in the good faith
opinion of the Board you were guilty of conduct
set forth above in clauses 3.2.1 or 3.2.2 of the
first sentence of this Subsection and specifying
the particulars in detail.
3.3 GOOD REASON. You shall be entitled to terminate your employment
for Good Reason. For purposes of this Agreement, "Good Reason" shall mean,
without your express written consent, the occurrence in connection with a Change
In Control of the Company of any of the following circumstances unless, in the
case of paragraphs 3.3.1, 3.3.5, 3.3.6, 3.3.7, or 3.3.8, the circumstances are
fully corrected prior to the Date of Termination specified in the Notice of
Termination, as defined in Subsections 3.5 and 3.4, respectively, given in
respect of them. If you have Good Reason for your termination you shall be
considered to have been "Constructively Terminated" by the Company:
3.3.1 the assignment to you of any duties inconsistent
with your status and position (i) prior to the
Change In Control where such change is a direct
result of any pending Change in Control; or (ii)
as such status exists immediately prior to the
Change In Control of the Company, or (iii) a
substantial adverse alteration in the nature or
status of your responsibilities from those in
effect immediately prior to the Change In Control
of the Company whichever is applicable;
3.3.2 a reduction by the Company in your annual base
salary as in effect on this date or as the same
may be increased from time to time irrespective of
future Company policies including any
across-the-board salary reductions similarly
affecting all key employees of the Company;
3.3.3 your relocation, without your consent, to a
location not within twenty five (25) miles of your
present office or job location, except for
required travel on the Company's business to an
extent substantially consistent with your present
business travel obligations;
3.3.4 the failure by the Company, without your consent,
to pay to you any part of your current
compensation, or to pay to you any part of an
installment of deferred compensation under any
deferred compensation program of the Company,
within fourteen (14) days of the date the
compensation is due;
3.3.5 the failure by the Company to continue in effect
any bonus to which you were entitled, or any
compensation plan in which you participate (i)
prior to the Change in Control where such change
is a direct result of any pending Change In
Control; or (ii) immediately prior to the Change
In Control of the Company that is material to your
total compensation, including but not limited to
the Company's Restricted Stock Plan, 401(k) Plan,
and Benefit Plans, or any substitute plans adopted
prior to the Change In Control of the Company,
unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been
made with respect to the plan, or the failure by
the Company to continue your participation in it
(or in such substitute or alternative plan) on a
basis not materially less favorable, both in terms
of the amount of benefits provided and the level
of your participation relative to other
participants, as existed at the time of the Change
In Control;
3.3.6 the failure by the Company to continue to provide
you with (i) benefits substantially similar to
those enjoyed by you under any of the Company's
life insurance, medical, health and accident, or
disability plans in which you were participating
at the time of the Change In Control of the
Company was in effect for the employees of the
Company generally at the time of the Change In
Control, (ii) the failure to continue to provide
you with a Company automobile or allowance in lieu
of it at the time of the Change In Control of the
Company, (iii) the taking of any action by the
Company that would directly or indirectly
materially reduce any of such benefits or deprive
you of any material fringe benefit enjoyed by you
at the time of the Change In Control of the
Company, or (iv) the failure by the Company to
provide you with the number of paid vacation days
to which you are entitled on the basis of years of
service with the Company in accordance with the
Company's normal vacation policy in effect at the
time of the Change In Control of the Company;
3.3.7 the failure of the Company to obtain a
satisfactory agreement from any successor to
assume and agree to perform this Agreement, as
contemplated in Section 5 of this Agreement; or
3.3.8 any purported termination of your employment that
is not effected pursuant to a Notice of
Termination satisfying the requirements of
Subsection 3.4 below (and, if applicable, the
requirements of Subsection 3.2 above); for
purposes of this Agreement, no such purported
termination shall be effective. Your rights to
terminate your employment pursuant to this
Subsection shall not be affected by your
incapacity due to physical or mental illness. Your
continued employment shall not constitute consent
to, or a waiver of rights with respect to, any
circumstance constituting Good Reason under this
Agreement. In the event you deliver Notice of
Termination based on circumstances set forth in
Paragraphs 3.3.1, 3.3.5, 3.3.6, 3.3.7, or 3.3.8
above, which are fully corrected prior to the Date
of Termination set forth in your Notice of
Termination, the Notice of Termination shall be
deemed withdrawn and of no further force or
effect.
3.4 NOTICE OF TERMINATION. Any purported termination of your
employment by the Company or by you shall be communicated by written Notice of
Termination to the other party to this Agreement in accordance with Section 6 of
this Agreement. For purposes of this Agreement, a "Notice of Termination" shall
mean a notice that shall indicate the specific termination provision in this
Agreement relied on, and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of your employment
under the provision so indicated.
3.5 DATE OF TERMINATION, ETC. "Date of Termination" shall mean (A) if
your employment is terminated for Disability, 30 days after Notice of
Termination is given (provided that you shall not have returned to the full-time
performance of your duties during such 30-day period), and (B) if your
employment is terminated pursuant to Subsection 3.2 or 3.3 above or for any
other reason (other than Disability), the date specified in the Notice of
Termination (which, in the case of a termination pursuant to Subsection 3.2
above shall not be less than 30 days, and in the case of a termination pursuant
to Subsection 3.3 above shall not be less than 15 nor more than 60 days,
respectively, from the date the Notice of Termination is given). However, if
within 15 days after any Notice of Termination is given, or, if later, prior to
the Date of Termination (as determined without regard to this provision), the
party receiving the Notice of Termination notifies the other party that a
dispute exists concerning the termination, then the Date of Termination shall be
the date on which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding arbitration award, or by a final
judgment, order, or decree of a court of competent jurisdiction (which is not
appealable or with respect to which the time for appeal has expired and no
appeal has been perfected). The Date of Termination shall be extended by a
notice of dispute only if the notice is given in good faith and the party giving
the notice pursues the resolution of the dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Company will continue to
pay you your full compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, base salary) and continue you
as a participant in all compensation, benefit, and insurance plans in which you
were participating when the notice giving rise to the dispute was given, until
the dispute is finally resolved in accordance with this Subsection. Amounts paid
under this Subsection are in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other amounts due under
this Agreement except to the extent otherwise provided in subsection 4.4.
4. COMPENSATION ON TERMINATION OR DURING DISABILITY. Following a Change In
Control of the Company, as defined by Section 2, on termination of your
employment or during a period of disability you shall be entitled to the
following benefits:
4.1 During any period that you fail to perform your full-time duties
with the Company as a result of incapacity due to physical or mental illness,
you shall continue to receive your base salary at the rate in effect at the
commencement of any such period, together with all amounts payable to you under
any compensation plan of the Company during the period, until this Agreement is
terminated pursuant to section 3.1 above. Thereafter, or in the event your
employment shall be terminated by the Company or by you for Retirement, or by
reason of your death, your benefits shall be determined under the Company's
retirement, insurance, and other compensation programs then in effect in
accordance with the terms of those programs.
4.2 If your employment shall be terminated by the Company for Cause or
by you other than for Good Reason, Disability, death, or Retirement, the Company
shall pay you your full base salary through the Date of Termination at the rate
in effect at the time Notice of Termination is given, plus all other amounts and
benefits to which you are entitled under any compensation plan of the Company at
the time the payments are due. The Company shall have no obligations to you
under this Agreement.
4.3 If your employment by the Company shall be terminated (a) by the
Company other than for Cause, Retirement or Disability, or (b) by you for Good
Reason, then you shall be entitled to the benefits provided below:
4.3.1 The Company shall pay you your full salary through
the Date of Termination at the rate in effect at
the time notice of Termination is given, plus all
other amounts and benefits to which you are
entitled under any compensation plan of the
Company, at the time the payments are due, except
as otherwise provided below.
4.3.2 In lieu of any further salary payments to you for
periods subsequent to the Date of Termination, the
Company shall pay to you, as severance pay the
following: (i) a lump sum severance payment equal
to three (3) times the average of your
Compensation for the five (5) years prior to the
occurrence of the circumstance giving rise to the
notice of Termination, plus (ii) the amounts in
the forms set forth in paragraphs 4.3.3, 4.3.4 and
4.3.5 (the "Severance Payments"). In addition to
the Severance Payments, the Company shall pay to
you an additional amount equal to the amount of
the Excise Tax, if any, that is due or determined
to be due under Section 4999 of the Internal
Revenue Code of 1986, as amended, resulting from
the Severance Payments or any other payments under
this Agreement or any other agreement between you
and the Company and an amount sufficient to pay
the taxes on any such Excise Taxes (the
"Gross-up"). For purposes of this Agreement,
"Compensation" shall mean the aggregate
remuneration paid by the Company to you during a
calendar year, including bonuses, awards under the
Company's Restricted Stock Plan, benefits under
employee benefit plans, automobile allowances or
any fees paid to you as remuneration for serving
as a Director of the Company.
4.3.3 The Company shall continue coverage for you and
your dependents under any health or welfare
benefit plan under which you and your dependents
were participating prior to THE CHANGE IN CONTROL
FOR A PERIOD ENDING ON THE EARLIER to occur of (i)
the date you become covered by a new employer's
health and welfare benefit plan, (ii) the date you
become covered by Medicare, or (iii) the date
which is thirty-six (36) months from the date of
Termination. The coverage for your dependents
shall end earlier than (i), (ii) or (iii) if
required by the health or welfare benefit plan due
to age eligibility.
4.3.4 The Company shall pay to you any deferred
compensation, including, but not limited to
deferred bonuses, allocated or credited to you or
your account as of the Date of Termination.
4.3.5 Outstanding stock options or Restricted Stock
grants, if any, granted to you under the Company's
Stock Plans which are not vested on Termination
shall immediately vest.
4.3.6 Where you shall prevail in any such action, the
Company shall also pay to you all legal and
accounting fees and expenses incurred by you as a
result of the termination (including all such fees
and expenses incurred by you as a result of the
termination (including all such fees and expenses,
if any, incurred in contesting or disputing any
termination or in seeking to obtain or enforce any
right or benefit provided by this Agreement or in
connection with any tax audit or proceeding to the
extent attributable to the application of Code
Section 4999 to any payment or benefit provided
under this Agreement) or any other agreement with
the Company.
4.3.7 The amount of Severance Payments and any Gross-up
due to you under this or any other relevant
agreement with the Company shall be determined by
a third party agreed to by you and the Company. If
you cannot agree on a third party, then both third
parties shall determine the amounts due under this
Agreement. If the third parties do not agree on
the amount to be paid to you, then either party
may submit the calculation of the amounts which
are in dispute to Arbitration in accordance with
this Agreement. The payments provided for in
Paragraphs 4.3.2, 4.3.4 AND 4.3.5 ABOVE, SHALL BE
MADE NO LATER THAN THE THIRTIETH (30TH) day
following the Date of Termination. However, if the
amounts of the payments cannot be finally
determined on or before that day, the Company
shall pay to you on that day an estimate, as
determined in good faith by the Company, of the
minimum amount of such payments and shall pay the
remainder of those payments (together with
interest at the rate provided in Section
1274(b)(2)(B) of the Code) as soon as the amount
can be determined but in no event later than the
30th day after the Date of Termination. In the
event that the amount of the estimate payments
exceeds the amount subsequently determined to have
been due, the excess shall constitute a loan by
the Company to you payable on the 30th day after
demand by the Company (together with interest at
the rate provided in Section 1274(b)(2)(B) of the
Code).
4.4 You shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or otherwise, nor
shall the amount of any payment or benefit provided for in this Section 4 be
reduced by any compensation earned by you as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by you to the Company, or otherwise except as specifically provided in this
Section 4.
4.5 In addition to all other amounts payable to you under this Section
4, you shall be entitled to receive all qualified benefits payable to
you under the Company's 401(k) Plan, Defined Benefit Plan and any other plan or
agreement relating to retirement benefits.
5. SUCCESSORS; BINDING AGREEMENT.
5.1 The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain the assumption and agreement
prior to the effectiveness of any succession shall be a breach of this agreement
and shall entitle you to compensation from the Company in the same amount and on
the same terms as you would have been entitled to under this Agreement if you
had terminated your employment for Good Reason following a Change In Control of
the Company, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Date of
Termination.
5.2 This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators, heirs,
distributees, and legatees. If you should die while any amount would still be
payable to you if you had continued to live, all such amounts, unless otherwise
provided in this Agreement, shall be paid in accordance with the terms of this
Agreement to your legatee or other designee or, if there is no such designee, to
your estate.
6. NOTICE. For the purpose of this Agreement, all notices and other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth on the first page of this
Agreement, provided that all notices to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the Company, or to such
other address as either party may have furnished to the other in writing in
accordance this Agreement, except that notice of a change of address shall be
effective only on receipt.
7. MISCELLANEOUS.
7.1 No provision of this Agreement may be modified, waived, or
discharged unless the waiver, modification, or discharge is agreed to in writing
and signed by you and such officer as may be specifically designated by the
Board.
7.2 No waiver by either party to this Agreement at any time of any
breach by the other party of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
7.3 No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter of this Agreement have been made by
either party that are not expressly set forth in this Agreement.
7.4 Nothing in this Agreement is intended to reduce any benefits
payable to you under any other agreement you may have with the Company or in any
Company plan in which you may participate.
7.5 The validity, interpretation, construction, and performance of
this Agreement shall be governed by the law of New Jersey without reference to
its conflict of laws principals.
7.6 All references to sections of the Exchange Act or the Code shall
be deemed also to refer to any successor provisions to such sections. Any
payments provided for shall be paid net of any applicable withholding or
deduction required under federal, state or local law.
7.7 The obligations of the Company under Section 4 shall survive the
expiration of the term of this Agreement.
8. VALIDITY. The validity or enforceability of any provision of this
Agreement shall not affect the validity or unenforceability of any other
provision of this Agreement, which shall remain in full force and effect.
9. COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
10. ARBITRATION. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in New Jersey in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction. However, you shall be entitled to seek specific performance of
your right to be paid until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection this Agreement.
11. ENTIRE AGREEMENT. This Agreement sets forth the entire understanding of
the parties with respect to its subject matter and supersedes all prior written
or oral agreements or understandings with respect to the subject matter.
In witness whereof, the parties have executed this agreement as of the day
and year first above written.
<PAGE>
MIDDLESEX WATER COMPANY
By: /s/ J. Richard Tompkins
-----------------------------------
J. Richard Tompkins
Chairman of the Board and President
ATTEST:
/s/ Marion F. Reynolds
- ----------------------
Marion F. Reynolds
Vice President
Secretary and Treasurer
/s/ Walter J. Brady
---------------------------
Walter J. Brady
<PAGE>
Exhibit 10.15(c)
CHANGE IN CONTROL TERMINATION AGREEMENT
This Change in Control Termination Agreement (the "Agreement") is entered
into on April 7, 1999, between Middlesex Water Company, a New Jersey
corporation, with its principal place of business located at 1500 Ronson Road,
P.O. Box 1500, Iselin, New Jersey 08830-0452, (the "Company"), and A. Bruce
O'Connor, residing at 32 Buckingham Way, Freehold, New Jersey 07728.
RECITALS
A. The Company considers it essential to the best interests of its
stockholders to foster the continuous employment of key management personnel. In
this connection, the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held Companies, the possibility of a
Change In Control may exist. This possibility, and the uncertainty and questions
that it may raise among management, may result in the departure or distraction
of management personnel to the detriment of the Company and its stockholders.
B. The Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of the
Company's management, including yourself, to the assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change In Control of the Company.
C. To induce you to remain in the employ of the Company, and in
consideration of your agreement set forth below, the Company agrees that you
shall receive the severance benefits set forth in this Agreement in the event
your employment with the Company is terminated or "constructively terminated" as
defined herein in connection with a "Change In Control of the Company" (as
defined in Section 2 below) under the circumstances described below. This
Agreement is meant to supersede any other specific written agreements that may
have been entered into between yourself and the Company concerning termination
of employment.
Therefore, in consideration of your continued employment and the parties'
agreement to be bound by the terms contained in this Agreement, the parties
agree as follows:
1. TERM OF AGREEMENT. This Agreement shall commence as of April 8, 1999 and
shall continue in effect through December 31, 2001. However, commencing on
December 31, 2001, and each December 31 afterwards, the term of this Agreement
shall automatically be extended for 1 additional year unless, no later than the
preceding November 1, the Company shall have given notice that it does not wish
to extend this Agreement. Notwithstanding the foregoing, if a Change In Control
of the Company shall be proposed to occur or have occurred during the original
or any extended term of this Agreement, this Agreement shall continue in effect
for a period of three years beyond the month in which the Change In Control
occurs. Notwithstanding the foregoing, and provided no Change of Control shall
have occurred, this Agreement shall automatically terminate on the earlier to
occur of (i) your termination of employment with the Company, or (ii) the
Company's furnishing you with notice of termination, irrespective of the
effective date of the termination.
2. CHANGE IN CONTROL. No benefits shall be payable under this Agreement
unless there shall have been a Change In Control of the Company, as set forth
below. For purposes of this Agreement, a "Change In Control" of the Company
shall be deemed to occur 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; or a liquidation or dissolution of
Company.
3. TERMINATION FOLLOWING CHANGE IN CONTROL. If any of the events described
in Section 2 above constituting a Change In Control of the Company shall have
occurred, you shall be entitled to the benefits provided in subsection 4.3 below
on the subsequent termination or "Constructive Termination" of your employment
during the term of this Agreement, unless the termination is (A) because of your
death, Disability or Retirement, (B) by the Company for Cause, or (C) by you
other than for Good Reason.
3.1 DISABILITY; RETIREMENT. If, as a result of your incapacity due to
physical or mental illness, you shall have been absent from the full-time
performance of your duties with the Company for 6 consecutive months, and within
30 days after written notice of termination is given you shall not have returned
to the full-time performance of your duties, your employment may be terminated
for "Disability." Termination by the Company or you of your employment based on
"Retirement" shall mean termination in accordance with the Company's retirement
policy, including early retirement, generally applicable to its salaried
employees or in accordance with any retirement arrangement established with your
consent with respect to you.
3.2 CAUSE. Termination by the Company of your employment for "Cause"
shall mean termination on:
3.2.1 the willful and continued failure by you to
substantially perform your duties with the Company
as such employment was performed by you prior to
the Change of Control (other than any such failure
resulting from your incapacity due to physical or
mental illness or any such actual or anticipated
failure after the issuance by you of a Notice of
Termination for Good Reason as defined in
Subsections 3.4 and 3.3, respectively) after a
written demand for substantial performance is
delivered to you by the Board, which demand
specifically identifies the manner in which the
Board believes that you have not substantially
performed your duties; or
3.2.2 the willful act by you in conduct that is
demonstrably and materially injurious to the
Company, and which the Board deems to cause or
will cause substantial economic damage to the
Company or injury to the business reputation of
the Company, monetarily or otherwise. For purposes
of this Subsection, no act, or failure to act, on
your part shall be deemed "willful" unless done,
or omitted to be done, by you not in good faith
and without a reasonable belief that your action
or omission was in the best interest of the
Company. Notwithstanding the foregoing, you shall
not be deemed to have been terminated for Cause
unless and until there shall have been delivered
to you a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters
of the entire membership of the Board at a meeting
of the Board called and held for such purpose
(after reasonable notice to you and an opportunity
for you, together with your counsel, to be heard
before the Board), finding that in the good faith
opinion of the Board you were guilty of conduct
set forth above in clauses 3.2.1 or 3.2.2 of the
first sentence of this Subsection and specifying
the particulars in detail.
3.3 GOOD REASON. You shall be entitled to terminate your employment
for Good Reason. For purposes of this Agreement, "Good Reason" shall mean,
without your express written consent, the occurrence in connection with a Change
In Control of the Company of any of the following circumstances unless, in the
case of paragraphs 3.3.1, 3.3.5, 3.3.6, 3.3.7, or 3.3.8, the circumstances are
fully corrected prior to the Date of Termination specified in the Notice of
Termination, as defined in Subsections 3.5 and 3.4, respectively, given in
respect of them. If you have Good Reason for your termination you shall be
considered to have been "Constructively Terminated" by the Company:
3.3.1 the assignment to you of any duties inconsistent
with your status and position (i) prior to the
Change In Control where such change is a direct
result of any pending Change in Control; or (ii)
as such status exists immediately prior to the
Change In Control of the Company, or (iii) a
substantial adverse alteration in the nature or
status of your responsibilities from those in
effect immediately prior to the Change In Control
of the Company whichever is applicable;
3.3.2 a reduction by the Company in your annual base
salary as in effect on this date or as the same
may be increased from time to time irrespective of
future Company policies including any
across-the-board salary reductions similarly
affecting all key employees of the Company;
3.3.3 your relocation, without your consent, to a
location not within twenty five (25) miles of your
present office or job location, except for
required travel on the Company's business to an
extent substantially consistent with your present
business travel obligations;
3.3.4 the failure by the Company, without your consent,
to pay to you any part of your current
compensation, or to pay to you any part of an
installment of deferred compensation under any
deferred compensation program of the Company,
within fourteen (14) days of the date the
compensation is due;
3.3.5 the failure by the Company to continue in effect
any bonus to which you were entitled, or any
compensation plan in which you participate (i)
prior to the Change in Control where such change
is a direct result of any pending Change In
Control; or (ii) immediately prior to the Change
In Control of the Company that is material to your
total compensation, including but not limited to
the Company's Restricted Stock Plan, 401(k) Plan,
and Benefit Plans, or any substitute plans adopted
prior to the Change In Control of the Company,
unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been
made with respect to the plan, or the failure by
the Company to continue your participation in it
(or in such substitute or alternative plan) on a
basis not materially less favorable, both in terms
of the amount of benefits provided and the level
of your participation relative to other
participants, as existed at the time of the Change
In Control;
3.3.6 the failure by the Company to continue to provide
you with (i) benefits substantially similar to
those enjoyed by you under any of the Company's
life insurance, medical, health and accident, or
disability plans in which you were participating
at the time of the Change In Control of the
Company was in effect for the employees of the
Company generally at the time of the Change In
Control, (ii) the failure to continue to provide
you with a Company automobile or allowance in lieu
of it at the time of the Change In Control of the
Company, (iii) the taking of any action by the
Company that would directly or indirectly
materially reduce any of such benefits or deprive
you of any material fringe benefit enjoyed by you
at the time of the Change In Control of the
Company, or (iv) the failure by the Company to
provide you with the number of paid vacation days
to which you are entitled on the basis of years of
service with the Company in accordance with the
Company's normal vacation policy in effect at the
time of the Change In Control of the Company;
3.3.7 the failure of the Company to obtain a
satisfactory agreement from any successor to
assume and agree to perform this Agreement, as
contemplated in Section 5 of this Agreement; or
3.3.8 any purported termination of your employment that
is not effected pursuant to a Notice of
Termination satisfying the requirements of
Subsection 3.4 below (and, if applicable, the
requirements of Subsection 3.2 above); for
purposes of this Agreement, no such purported
termination shall be effective.
Your rights to terminate your employment pursuant to this
Subsection shall not be affected by your incapacity due to physical or mental
illness. Your continued employment shall not constitute consent to, or a waiver
of rights with respect to, any circumstance constituting Good Reason under this
Agreement. In the event you deliver Notice of Termination based on circumstances
set forth in Paragraphs 3.3.1, 3.3.5, 3.3.6, 3.3.7, or 3.3.8 above, which are
fully corrected prior to the Date of Termination set forth in your Notice of
Termination, the Notice of Termination shall be deemed withdrawn and of no
further force or effect.
3.4 NOTICE OF TERMINATION. Any purported termination of your
employment by the Company or by you shall be communicated by written Notice of
Termination to the other party to this Agreement in accordance with Section 6 of
this Agreement. For purposes of this Agreement, a "Notice of Termination" shall
mean a notice that shall indicate the specific termination provision in this
Agreement relied on, and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of your employment
under the provision so indicated.
3.5 DATE OF TERMINATION, ETC. "Date of Termination" shall mean (A) if
your employment is terminated for Disability, 30 days after Notice of
Termination is given (provided that you shall not have returned to the full-time
performance of your duties during such 30-day period), and (B) if your
employment is terminated pursuant to Subsection 3.2 or 3.3 above or for any
other reason (other than Disability), the date specified in the Notice of
Termination (which, in the case of a termination pursuant to Subsection 3.2
above shall not be less than 30 days, and in the case of a termination pursuant
to Subsection 3.3 above shall not be less than 15 nor more than 60 days,
respectively, from the date the Notice of Termination is given). However, if
within 15 days after any Notice of Termination is given, or, if later, prior to
the Date of Termination (as determined without regard to this provision), the
party receiving the Notice of Termination notifies the other party that a
dispute exists concerning the termination, then the Date of Termination shall be
the date on which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding arbitration award, or by a final
judgment, order, or decree of a court of competent jurisdiction (which is not
appealable or with respect to which the time for appeal has expired and no
appeal has been perfected). The Date of Termination shall be extended by a
notice of dispute only if the notice is given in good faith and the party giving
the notice pursues the resolution of the dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Company will continue to
pay you your full compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, base salary) and continue you
as a participant in all compensation, benefit, and insurance plans in which you
were participating when the notice giving rise to the dispute was given, until
the dispute is finally resolved in accordance with this Subsection. Amounts paid
under this Subsection are in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other amounts due under
this Agreement except to the extent otherwise provided in subsection 4.4.
4. COMPENSATION ON TERMINATION OR DURING DISABILITY. Following a Change In
Control of the Company, as defined by Section 2, on termination of your
employment or during a period of disability you shall be entitled to the
following benefits:
4.1 During any period that you fail to perform your full-time duties
with the Company as a result of incapacity due to physical or mental illness,
you shall continue to receive your base salary at the rate in effect at the
commencement of any such period, together with all amounts payable to you under
any compensation plan of the Company during the period, until this Agreement is
terminated pursuant to section 3.1 above. Thereafter, or in the event your
employment shall be terminated by the Company or by you for Retirement, or by
reason of your death, your benefits shall be determined under the Company's
retirement, insurance, and other compensation programs then in effect in
accordance with the terms of those programs.
4.2 If your employment shall be terminated by the Company for Cause or
by you other than for Good Reason, Disability, death, or Retirement, the Company
shall pay you your full base salary through the Date of Termination at the rate
in effect at the time Notice of Termination is given, plus all other amounts and
benefits to which you are entitled under any compensation plan of the Company at
the time the payments are due. The Company shall have no obligations to you
under this Agreement.
4.3 If your employment by the Company shall be terminated (a) by the
Company other than for Cause, Retirement or Disability, or (b) by you for Good
Reason, then you shall be entitled to the benefits provided below:
4.3.1 The Company shall pay you your full salary through
the Date of Termination at the rate in effect at
the time notice of Termination is given, plus all
other amounts and benefits to which you are
entitled under any compensation plan of the
Company, at the time the payments are due, except
as otherwise provided below.
4.3.2 In lieu of any further salary payments to you for
periods subsequent to the Date of Termination, the
Company shall pay to you, as severance pay the
following: (i) a lump sum severance payment equal
to three (3) times the average of your
Compensation for the five (5) years prior to the
occurrence of the circumstance giving rise to the
notice of Termination, plus (ii) the amounts in
the forms set forth in paragraphs 4.3.3, 4.3.4 and
4.3.5 (the "Severance Payments"). In addition to
the Severance Payments, the Company shall pay to
you an additional amount equal to the amount of
the Excise Tax, if any, that is due or determined
to be due under Section 4999 of the Internal
Revenue Code of 1986, as amended, resulting from
the Severance Payments or any other payments under
this Agreement or any other agreement between you
and the Company and an amount sufficient to pay
the taxes on any such Excise Taxes (the
"Gross-up"). For purposes of this Agreement,
"Compensation" shall mean the aggregate
remuneration paid by the Company to you during a
calendar year, including bonuses, awards under the
Company's Restricted Stock Plan, benefits under
employee benefit plans, automobile allowances or
any fees paid to you as remuneration for serving
as a Director of the Company.
4.3.3 The Company shall continue coverage for you and
your dependents under any health or welfare
benefit plan under which you and your dependents
were participating prior to THE CHANGE IN CONTROL
FOR A PERIOD ENDING ON THE EARLIER to occur of (i)
the date you become covered by a new employer's
health and welfare benefit plan, (ii) the date you
become covered by Medicare, or (iii) the date
which is thirty-six (36) months from the date of
Termination. The coverage for your dependents
shall end earlier than (i), (ii) or (iii) if
required by the health or welfare benefit plan due
to age eligibility.
4.3.4 The Company shall pay to you any deferred
compensation, including, but not limited to
deferred bonuses, allocated or credited to you or
your account as of the Date of Termination.
4.3.5 Outstanding stock options or Restricted Stock
grants, if any, granted to you under the Company's
Stock Plans which are not vested on Termination
shall immediately vest.
4.3.6 Where you shall prevail in any such action, the
Company shall also pay to you all legal and
accounting fees and expenses incurred by you as a
result of the termination (including all such fees
and expenses incurred by you as a result of the
termination (including all such fees and expenses,
if any, incurred in contesting or disputing any
termination or in seeking to obtain or enforce any
right or benefit provided by this Agreement or in
connection with any tax audit or proceeding to the
extent attributable to the application of Code
Section 4999 to any payment or benefit provided
under this Agreement) or any other agreement with
the Company.
4.3.7 The amount of Severance Payments and any Gross-up
due to you under this or any other relevant
agreement with the Company shall be determined by
a third party agreed to by you and the Company. If
you cannot agree on a third party, then both third
parties shall determine the amounts due under this
Agreement. If the third parties do not agree on
the amount to be paid to you, then either party
may submit the calculation of the amounts which
are in dispute to Arbitration in accordance with
this Agreement. The payments provided for in
Paragraphs 4.3.2, 4.3.4 AND 4.3.5 ABOVE, SHALL BE
MADE NO LATER THAN THE THIRTIETH (30TH) day
following the Date of Termination. However, if the
amounts of the payments cannot be finally
determined on or before that day, the Company
shall pay to you on that day an estimate, as
determined in good faith by the Company, of the
minimum amount of such payments and shall pay the
remainder of those payments (together with
interest at the rate provided in Section
1274(b)(2)(B) of the Code) as soon as the amount
can be determined but in no event later than the
30th day after the Date of Termination. In the
event that the amount of the estimate payments
exceeds the amount subsequently determined to have
been due, the excess shall constitute a loan by
the Company to you payable on the 30th day after
demand by the Company (together with interest at
the rate provided in Section 1274(b)(2)(B) of the
Code).
4.4 You shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or otherwise, nor
shall the amount of any payment or benefit provided for in this Section 4 be
reduced by any compensation earned by you as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by you to the Company, or otherwise except as specifically provided in this
Section 4.
4.5 In addition to all other amounts payable to you under this Section
4, you shall be entitled to receive all qualified benefits payable to you under
the Company's 401(k) Plan, Defined Benefit Plan and any other plan or agreement
relating to retirement benefits.
5. SUCCESSORS; BINDING AGREEMENT.
5.1 The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain the assumption and agreement
prior to the effectiveness of any succession shall be a breach of this agreement
and shall entitle you to compensation from the Company in the same amount and on
the same terms as you would have been entitled to under this Agreement if you
had terminated your employment for Good Reason following a Change In Control of
the Company, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Date of
Termination.
5.2 This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators, heirs,
distributees, and legatees. If you should die while any amount would still be
payable to you if you had continued to live, all such amounts, unless otherwise
provided in this Agreement, shall be paid in accordance with the terms of this
Agreement to your legatee or other designee or, if there is no such designee, to
your estate.
6. NOTICE. For the purpose of this Agreement, all notices and other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth on the first page of this
Agreement, provided that all notices to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the Company, or to such
other address as either party may have furnished to the other in writing in
accordance this Agreement, except that notice of a change of address shall be
effective only on receipt.
7. MISCELLANEOUS.
7.1 No provision of this Agreement may be modified, waived, or
discharged unless the waiver, modification, or discharge is agreed to in writing
and signed by you and such officer as may be specifically designated by the
Board.
7.2 No waiver by either party to this Agreement at any time of any
breach by the other party of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
7.3 No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter of this Agreement have been made by
either party that are not expressly set forth in this Agreement.
7.4 Nothing in this Agreement is intended to reduce any benefits
payable to you under any other agreement you may have with the Company or in any
Company plan in which you may participate.
7.5 The validity, interpretation, construction, and performance of
this Agreement shall be governed by the law of New Jersey without reference to
its conflict of laws principals.
7.6 All references to sections of the Exchange Act or the Code shall
be deemed also to refer to any successor provisions to such sections. Any
payments provided for shall be paid net of any applicable withholding or
deduction required under federal, state or local law.
7.7 The obligations of the Company under Section 4 shall survive the
expiration of the term of this Agreement.
8. VALIDITY. The validity or enforceability of any provision of this
Agreement shall not affect the validity or unenforceability of any other
provision of this Agreement, which shall remain in full force and effect.
9. COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
10. ARBITRATION. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in New Jersey in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction. However, you shall be entitled to seek specific performance of
your right to be paid until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection this Agreement.
11. ENTIRE AGREEMENT. This Agreement sets forth the entire understanding of
the parties with respect to its subject matter and supersedes all prior written
or oral agreements or understandings with respect to the subject matter.
In witness whereof, the parties have executed this agreement as of the day
and year first above written.
<PAGE>
MIDDLESEX WATER COMPANY
By: /s/ J. Richard Tompkins
-----------------------------------
Chairman of the Board and President
ATTEST:
/s/ Marion F. Reynolds
- ----------------------
Marion F. Reynolds
Vice President
Secretary and Treasurer
/s/ A. Bruce O'Connor
---------------------------
A. Bruce O'Connor
<PAGE>
EXHIBIT 10.15(d)
CHANGE IN CONTROL TERMINATION AGREEMENT
This Change in Control Termination Agreement (the "Agreement") is entered
into on April 7 1999, between Middlesex Water Company, a New Jersey corporation,
with its principal place of business located at 1500 Ronson Road, P.O. Box 1500,
Iselin, New Jersey 08830-0452, (the "Company"), and A. Marion F. Reynolds,
residing at 10 Quicksilver Court, Lakewood, New Jersey 08701.
RECITALS
A. The Company considers it essential to the best interests of its
stockholders to foster the continuous employment of key management personnel. In
this connection, the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held Companies, the possibility of a
Change In Control may exist. This possibility, and the uncertainty and questions
that it may raise among management, may result in the departure or distraction
of management personnel to the detriment of the Company and its stockholders.
B. The Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of the
Company's management, including yourself, to the assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change In Control of the Company.
C. To induce you to remain in the employ of the Company, and in
consideration of your agreement set forth below, the Company agrees that you
shall receive the severance benefits set forth in this Agreement in the event
your employment with the Company is terminated or "constructively terminated" as
defined herein in connection with a "Change In Control of the Company" (as
defined in Section 2 below) under the circumstances described below. This
Agreement is meant to supersede any other specific written agreements that may
have been entered into between yourself and the Company concerning termination
of employment.
Therefore, in consideration of your continued employment and the parties'
agreement to be bound by the terms contained in this Agreement, the parties
agree as follows:
1. TERM OF AGREEMENT. This Agreement shall commence as of April 8, 1999 and
shall continue in effect through December 31, 2001. However, commencing on
December 31, 2001, and each December 31 afterwards, the term of this Agreement
shall automatically be extended for 1 additional year unless, no later than the
preceding November 1, the Company shall have given notice that it does not wish
to extend this Agreement. Notwithstanding the foregoing, if a Change In Control
of the Company shall be proposed to occur or have occurred during the original
or any extended term of this Agreement, this Agreement shall continue in effect
for a period of three years beyond the month in which the Change In Control
occurs. Notwithstanding the foregoing, and provided no Change of Control shall
have occurred, this Agreement shall automatically terminate on the earlier to
occur of (i) your termination of employment with the Company, or (ii) the
Company's furnishing you with notice of termination, irrespective of the
effective date of the termination.
2. CHANGE IN CONTROL. No benefits shall be payable under this Agreement
unless there shall have been a Change In Control of the Company, as set forth
below. For purposes of this Agreement, a "Change In Control" of the Company
shall be deemed to occur 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; or a liquidation or dissolution of
Company.
3. TERMINATION FOLLOWING CHANGE IN CONTROL. If any of the events described
in Section 2 above constituting a Change In Control of the Company shall have
occurred, you shall be entitled to the benefits provided in subsection 4.3 below
on the subsequent termination or "Constructive Termination" of your employment
during the term of this Agreement, unless the termination is (A) because of your
death, Disability or Retirement, (B) by the Company for Cause, or (C) by you
other than for Good Reason.
3.1 DISABILITY; RETIREMENT. If, as a result of your incapacity due to
physical or mental illness, you shall have been absent from the full-time
performance of your duties with the Company for 6 consecutive months, and within
30 days after written notice of termination is given you shall not have returned
to the full-time performance of your duties, your employment may be terminated
for "Disability." Termination by the Company or you of your employment based on
"Retirement" shall mean termination in accordance with the Company's retirement
policy, including early retirement, generally applicable to its salaried
employees or in accordance with any retirement arrangement established with your
consent with respect to you.
3.2 CAUSE. Termination by the Company of your employment for "Cause"
shall mean termination on:
3.2.1 the willful and continued failure by you to
substantially perform your duties with the Company
as such employment was performed by you prior to
the Change of Control (other than any such failure
resulting from your incapacity due to physical or
mental illness or any such actual or anticipated
failure after the issuance by you of a Notice of
Termination for Good Reason as defined in
Subsections 3.4 and 3.3, respectively) after a
written demand for substantial performance is
delivered to you by the Board, which demand
specifically identifies the manner in which the
Board believes that you have not substantially
performed your duties; or
3.2.2 the willful act by you in conduct that is
demonstrably and materially injurious to the
Company, and which the Board deems to cause or
will cause substantial economic damage to the
Company or injury to the business reputation of
the Company, monetarily or otherwise. For purposes
of this Subsection, no act, or failure to act, on
your part shall be deemed "willful" unless done,
or omitted to be done, by you not in good faith
and without a reasonable belief that your action
or omission was in the best interest of the
Company. Notwithstanding the foregoing, you shall
not be deemed to have been terminated for Cause
unless and until there shall have been delivered
to you a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters
of the entire membership of the Board at a meeting
of the Board called and held for such purpose
(after reasonable notice to you and an opportunity
for you, together with your counsel, to be heard
before the Board), finding that in the good faith
opinion of the Board you were guilty of conduct
set forth above in clauses 3.2.1 or 3.2.2 of the
first sentence of this Subsection and specifying
the particulars in detail.
3.3 GOOD REASON. You shall be entitled to terminate your employment
for Good Reason. For purposes of this Agreement, "Good Reason" shall mean,
without your express written consent, the occurrence in connection with a Change
In Control of the Company of any of the following circumstances unless, in the
case of paragraphs 3.3.1, 3.3.5, 3.3.6, 3.3.7, or 3.3.8, the circumstances are
fully corrected prior to the Date of Termination specified in the Notice of
Termination, as defined in Subsections 3.5 and 3.4, respectively, given in
respect of them. If you have Good Reason for your termination you shall be
considered to have been "Constructively Terminated" by the Company:
3.3.1 the assignment to you of any duties inconsistent
with your status and position (i) prior to the
Change In Control where such change is a direct
result of any pending Change in Control; or (ii)
as such status exists immediately prior to the
Change In Control of the Company, or (iii) a
substantial adverse alteration in the nature or
status of your responsibilities from those in
effect immediately prior to the Change In Control
of the Company whichever is applicable;
3.3.2 a reduction by the Company in your annual base
salary as in effect on this date or as the same
may be increased from time to time irrespective of
future Company policies including any
across-the-board salary reductions similarly
affecting all key employees of the Company;
3.3.3 your relocation, without your consent, to a
location not within twenty five (25) miles of your
present office or job location, except for
required travel on the Company's business to an
extent substantially consistent with your present
business travel obligations;
3.3.4 the failure by the Company, without your consent,
to pay to you any part of your current
compensation, or to pay to you any part of an
installment of deferred compensation under any
deferred compensation program of the Company,
within fourteen (14) days of the date the
compensation is due;
3.3.5 the failure by the Company to continue in effect
any bonus to which you were entitled, or any
compensation plan in which you participate (i)
prior to the Change in Control where such change
is a direct result of any pending Change In
Control; or (ii) immediately prior to the Change
In Control of the Company that is material to your
total compensation, including but not limited to
the Company's Restricted Stock Plan, 401(k) Plan,
and Benefit Plans, or any substitute plans adopted
prior to the Change In Control of the Company,
unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been
made with respect to the plan, or the failure by
the Company to continue your participation in it
(or in such substitute or alternative plan) on a
basis not materially less favorable, both in terms
of the amount of benefits provided and the level
of your participation relative to other
participants, as existed at the time of the Change
In Control;
3.3.6 the failure by the Company to continue to provide
you with (i) benefits substantially similar to
those enjoyed by you under any of the Company's
life insurance, medical, health and accident, or
disability plans in which you were participating
at the time of the Change In Control of the
Company was in effect for the employees of the
Company generally at the time of the Change In
Control, (ii) the failure to continue to provide
you with a Company automobile or allowance in lieu
of it at the time of the Change In Control of the
Company, (iii) the taking of any action by the
Company that would directly or indirectly
materially reduce any of such benefits or deprive
you of any material fringe benefit enjoyed by you
at the time of the Change In Control of the
Company, or (iv) the failure by the Company to
provide you with the number of paid vacation days
to which you are entitled on the basis of years of
service with the Company in accordance with the
Company's normal vacation policy in effect at the
time of the Change In Control of the Company;
3.3.7 the failure of the Company to obtain a
satisfactory agreement from any successor to
assume and agree to perform this Agreement, as
contemplated in Section 5 of this Agreement; or
3.3.8 any purported termination of your employment that
is not effected pursuant to a Notice of
Termination satisfying the requirements of
Subsection 3.4 below (and, if applicable, the
requirements of Subsection 3.2 above); for
purposes of this Agreement, no such purported
termination shall be effective.
Your rights to terminate your employment pursuant to this
Subsection shall not be affected by your incapacity due to physical or mental
illness. Your continued employment shall not constitute consent to, or a waiver
of rights with respect to, any circumstance constituting Good Reason under this
Agreement. In the event you deliver Notice of Termination based on circumstances
set forth in Paragraphs 3.3.1, 3.3.5, 3.3.6, 3.3.7, or 3.3.8 above, which are
fully corrected prior to the Date of Termination set forth in your Notice of
Termination, the Notice of Termination shall be deemed withdrawn and of no
further force or effect.
3.4 NOTICE OF TERMINATION. Any purported termination of your
employment by the Company or by you shall be communicated by written Notice of
Termination to the other party to this Agreement in accordance with Section 6 of
this Agreement. For purposes of this Agreement, a "Notice of Termination" shall
mean a notice that shall indicate the specific termination provision in this
Agreement relied on, and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of your employment
under the provision so indicated.
3.5 DATE OF TERMINATION, ETC. "Date of Termination" shall mean (A) if
your employment is terminated for Disability, 30 days after Notice of
Termination is given (provided that you shall not have returned to the full-time
performance of your duties during such 30-day period), and (B) if your
employment is terminated pursuant to Subsection 3.2 or 3.3 above or for any
other reason (other than Disability), the date specified in the Notice of
Termination (which, in the case of a termination pursuant to Subsection 3.2
above shall not be less than 30 days, and in the case of a termination pursuant
to Subsection 3.3 above shall not be less than 15 nor more than 60 days,
respectively, from the date the Notice of Termination is given). However, if
within 15 days after any Notice of Termination is given, or, if later, prior to
the Date of Termination (as determined without regard to this provision), the
party receiving the Notice of Termination notifies the other party that a
dispute exists concerning the termination, then the Date of Termination shall be
the date on which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding arbitration award, or by a final
judgment, order, or decree of a court of competent jurisdiction (which is not
appealable or with respect to which the time for appeal has expired and no
appeal has been perfected). The Date of Termination shall be extended by a
notice of dispute only if the notice is given in good faith and the party giving
the notice pursues the resolution of the dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Company will continue to
pay you your full compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, base salary) and continue you
as a participant in all compensation, benefit, and insurance plans in which you
were participating when the notice giving rise to the dispute was given, until
the dispute is finally resolved in accordance with this Subsection. Amounts paid
under this Subsection are in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other amounts due under
this Agreement except to the extent otherwise provided in subsection 4.4.
4. COMPENSATION ON TERMINATION OR DURING DISABILITY. Following a Change In
Control of the Company, as defined by Section 2, on termination of your
employment or during a period of disability you shall be entitled to the
following benefits:
4.1 During any period that you fail to perform your full-time duties
with the Company as a result of incapacity due to physical or mental illness,
you shall continue to receive your base salary at the rate in effect at the
commencement of any such period, together with all amounts payable to you under
any compensation plan of the Company during the period, until this Agreement is
terminated pursuant to section 3.1 above. Thereafter, or in the event your
employment shall be terminated by the Company or by you for Retirement, or by
reason of your death, your benefits shall be determined under the Company's
retirement, insurance, and other compensation programs then in effect in
accordance with the terms of those programs.
4.2 If your employment shall be terminated by the Company for Cause or
by you other than for Good Reason, Disability, death, or Retirement, the Company
shall pay you your full base salary through the Date of Termination at the rate
in effect at the time Notice of Termination is given, plus all other amounts and
benefits to which you are entitled under any compensation plan of the Company at
the time the payments are due. The Company shall have no obligations to you
under this Agreement.
4.3 If your employment by the Company shall be terminated (a) by the
Company other than for Cause, Retirement or Disability, or (b) by you for Good
Reason, then you shall be entitled to the benefits provided below:
4.3.1 The Company shall pay you your full salary through
the Date of Termination at the rate in effect at
the time notice of Termination is given, plus all
other amounts and benefits to which you are
entitled under any compensation plan of the
Company, at the time the payments are due, except
as otherwise provided below.
4.3.2 In lieu of any further salary payments to you for
periods subsequent to the Date of Termination, the
Company shall pay to you, as severance pay the
following: (i) a lump sum severance payment equal
to three (3) times the average of your
Compensation for the five (5) years prior to the
occurrence of the circumstance giving rise to the
notice of Termination, plus (ii) the amounts in
the forms set forth in paragraphs 4.3.3, 4.3.4 and
4.3.5 (the "Severance Payments"). In addition to
the Severance Payments, the Company shall pay to
you an additional amount equal to the amount of
the Excise Tax, if any, that is due or determined
to be due under Section 4999 of the Internal
Revenue Code of 1986, as amended, resulting from
the Severance Payments or any other payments under
this Agreement or any other agreement between you
and the Company and an amount sufficient to pay
the taxes on any such Excise Taxes (the
"Gross-up"). For purposes of this Agreement,
"Compensation" shall mean the aggregate
remuneration paid by the Company to you during a
calendar year, including bonuses, awards under the
Company's Restricted Stock Plan, benefits under
employee benefit plans, automobile allowances or
any fees paid to you as remuneration for serving
as a Director of the Company.
4.3.3 The Company shall continue coverage for you and
your dependents under any health or welfare
benefit plan under which you and your dependents
were participating prior to THE CHANGE IN CONTROL
FOR A PERIOD ENDING ON THE EARLIER to occur of (i)
the date you become covered by a new employer's
health and welfare benefit plan, (ii) the date you
become covered by Medicare, or (iii) the date
which is thirty-six (36) months from the date of
Termination. The coverage for your dependents
shall end earlier than (i), (ii) or (iii) if
required by the health or welfare benefit plan due
to age eligibility.
4.3.4 The Company shall pay to you any deferred
compensation, including, but not limited to
deferred bonuses, allocated or credited to you or
your account as of the Date of Termination.
4.3.5 Outstanding stock options or Restricted Stock
grants, if any, granted to you under the Company's
Stock Plans which are not vested on Termination
shall immediately vest.
4.3.6 Where you shall prevail in any such action, the
Company shall also pay to you all legal and
accounting fees and expenses incurred by you as a
result of the termination (including all such fees
and expenses incurred by you as a result of the
termination (including all such fees and expenses,
if any, incurred in contesting or disputing any
termination or in seeking to obtain or enforce any
right or benefit provided by this Agreement or in
connection with any tax audit or proceeding to the
extent attributable to the application of Code
Section 4999 to any payment or benefit provided
under this Agreement) or any other agreement with
the Company.
4.3.7 The amount of Severance Payments and any Gross-up
due to you under this or any other relevant
agreement with the Company shall be determined by
a third party agreed to by you and the Company. If
you cannot agree on a third party, then both third
parties shall determine the amounts due under this
Agreement. If the third parties do not agree on
the amount to be paid to you, then either party
may submit the calculation of the amounts which
are in dispute to Arbitration in accordance with
this Agreement. The payments provided for in
Paragraphs 4.3.2, 4.3.4 AND 4.3.5 ABOVE, SHALL BE
MADE NO LATER THAN THE THIRTIETH (30TH) day
following the Date of Termination. However, if the
amounts of the payments cannot be finally
determined on or before that day, the Company
shall pay to you on that day an estimate, as
determined in good faith by the Company, of the
minimum amount of such payments and shall pay the
remainder of those payments (together with
interest at the rate provided in Section
1274(b)(2)(B) of the Code) as soon as the amount
can be determined but in no event later than the
30th day after the Date of Termination. In the
event that the amount of the estimate payments
exceeds the amount subsequently determined to have
been due, the excess shall constitute a loan by
the Company to you payable on the 30th day after
demand by the Company (together with interest at
the rate provided in Section 1274(b)(2)(B) of the
Code).
4.4 You shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or otherwise, nor
shall the amount of any payment or benefit provided for in this Section 4 be
reduced by any compensation earned by you as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by you to the Company, or otherwise except as specifically provided in this
Section 4.
4.5 In addition to all other amounts payable to you under this Section
4, you shall be entitled to receive all qualified benefits payable to you under
the Company's 401(k) Plan, Defined Benefit Plan and any other plan or agreement
relating to retirement benefits.
5. SUCCESSORS; BINDING AGREEMENT.
5.1 The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain the assumption and agreement
prior to the effectiveness of any succession shall be a breach of this agreement
and shall entitle you to compensation from the Company in the same amount and on
the same terms as you would have been entitled to under this Agreement if you
had terminated your employment for Good Reason following a Change In Control of
the Company, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Date of
Termination.
5.2 This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators, heirs,
distributees, and legatees. If you should die while any amount would still be
payable to you if you had continued to live, all such amounts, unless otherwise
provided in this Agreement, shall be paid in accordance with the terms of this
Agreement to your legatee or other designee or, if there is no such designee, to
your estate.
6. NOTICE. For the purpose of this Agreement, all notices and other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth on the first page of this
Agreement, provided that all notices to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the Company, or to such
other address as either party may have furnished to the other in writing in
accordance this Agreement, except that notice of a change of address shall be
effective only on receipt.
7. MISCELLANEOUS.
7.1 No provision of this Agreement may be modified, waived, or
discharged unless the waiver, modification, or discharge is agreed to in writing
and signed by you and such officer as may be specifically designated by the
Board.
7.2 No waiver by either party to this Agreement at any time of any
breach by the other party of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
7.3 No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter of this Agreement have been made by
either party that are not expressly set forth in this Agreement.
7.4 Nothing in this Agreement is intended to reduce any benefits
payable to you under any other agreement you may have with the Company or in any
Company plan in which you may participate.
7.5 The validity, interpretation, construction, and performance of
this Agreement shall be governed by the law of New Jersey without reference to
its conflict of laws principals.
7.6 All references to sections of the Exchange Act or the Code shall
be deemed also to refer to any successor provisions to such sections. Any
payments provided for shall be paid net of any applicable withholding or
deduction required under federal, state or local law.
7.7 The obligations of the Company under Section 4 shall survive the
expiration of the term of this Agreement.
8. VALIDITY. The validity or enforceability of any provision of this
Agreement shall not affect the validity or unenforceability of any other
provision of this Agreement, which shall remain in full force and effect.
9. COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
10. ARBITRATION. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in New Jersey in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction. However, you shall be entitled to seek specific performance of
your right to be paid until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection this Agreement.
11. ENTIRE AGREEMENT. This Agreement sets forth the entire understanding of
the parties with respect to its subject matter and supersedes all prior written
or oral agreements or understandings with respect to the subject matter.
In witness whereof, the parties have executed this agreement as of the day
and year first above written.
<PAGE>
MIDDLESEX WATER COMPANY
By:/s/ J. Richard Tompkins
-----------------------------------
J. Richard Tompkins
Chairman of the Board and President
ATTEST:
/s/ Dennis G. Sullivan
- ----------------------
Dennis G. Sullivan
Vice President and General Counsel
/s/ Marion F. Reynolds
------------------------------
Marion F. Reynolds
<PAGE>
Exhibit 10.15(e)
CHANGE IN CONTROL TERMINATION AGREEMENT
This Change in Control Termination Agreement (the "Agreement") is entered
into on April 7 1999, between Middlesex Water Company, a New Jersey corporation,
with its principal place of business located at 1500 Ronson Road, P.O. Box 1500,
Iselin, New Jersey 08830-0452, (the "Company"), and Richard A. Russo, residing
at 7 Anne Marie Lane, Titusville, New Jersey 08560.
RECITALS
A. The Company considers it essential to the best interests of its
stockholders to foster the continuous employment of key management personnel. In
this connection, the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held Companies, the possibility of a
Change In Control may exist. This possibility, and the uncertainty and questions
that it may raise among management, may result in the departure or distraction
of management personnel to the detriment of the Company and its stockholders.
B. The Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of the
Company's management, including yourself, to the assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change In Control of the Company.
C. To induce you to remain in the employ of the Company, and in
consideration of your agreement set forth below, the Company agrees that you
shall receive the severance benefits set forth in this Agreement in the event
your employment with the Company is terminated or "constructively terminated" as
defined herein in connection with a "Change In Control of the Company" (as
defined in Section 2 below) under the circumstances described below. This
Agreement is meant to supersede any other specific written agreements that may
have been entered into between yourself and the Company concerning termination
of employment.
Therefore, in consideration of your continued employment and the
parties' agreement to be bound by the terms contained in this Agreement, the
parties agree as follows:
1. TERM OF AGREEMENT. This Agreement shall commence as of April 8, 1999 and
shall continue in effect through December 31, 2001. However, commencing on
December 31, 2001, and each December 31 afterwards, the term of this Agreement
shall automatically be extended for 1 additional year unless, no later than the
preceding November 1, the Company shall have given notice that it does not wish
to extend this Agreement. Notwithstanding the foregoing, if a Change In Control
of the Company shall be proposed to occur or have occurred during the original
or any extended term of this Agreement, this Agreement shall continue in effect
for a period of three years beyond the month in which the Change In Control
occurs. Notwithstanding the foregoing, and provided no Change of Control shall
have occurred, this Agreement shall automatically terminate on the earlier to
occur of (i) your termination of employment with the Company, or (ii) the
Company's furnishing you with notice of termination, irrespective of the
effective date of the termination.
2. CHANGE IN CONTROL. No benefits shall be payable under this Agreement
unless there shall have been a Change In Control of the Company, as set forth
below. For purposes of this Agreement, a "Change In Control" of the Company
shall be deemed to occur 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; or a liquidation or dissolution of
Company.
3. TERMINATION FOLLOWING CHANGE IN CONTROL. If any of the events described
in Section 2 above constituting a Change In Control of the Company shall have
occurred, you shall be entitled to the benefits provided in subsection 4.3 below
on the subsequent termination or "Constructive Termination" of your employment
during the term of this Agreement, unless the termination is (A) because of your
death, Disability or Retirement, (B) by the Company for Cause, or (C) by you
other than for Good Reason.
3.1 DISABILITY; RETIREMENT. If, as a result of your incapacity due to
physical or mental illness, you shall have been absent from the full-time
performance of your duties with the Company for 6 consecutive months, and within
30 days after written notice of termination is given you shall not have returned
to the full-time performance of your duties, your employment may be terminated
for "Disability." Termination by the Company or you of your employment based on
"Retirement" shall mean termination in accordance with the Company's retirement
policy, including early retirement, generally applicable to its salaried
employees or in accordance with any retirement arrangement established with your
consent with respect to you.
3.2 CAUSE. Termination by the Company of your employment for "Cause"
shall mean termination on:
3.2.1 the willful and continued failure by you to
substantially perform your duties with the Company
as such employment was performed by you prior to
the Change of Control (other than any such failure
resulting from your incapacity due to physical or
mental illness or any such actual or anticipated
failure after the issuance by you of a Notice of
Termination for Good Reason as defined in
Subsections 3.4 and 3.3, respectively) after a
written demand for substantial performance is
delivered to you by the Board, which demand
specifically identifies the manner in which the
Board believes that you have not substantially
performed your duties; or
3.2.2 the willful act by you in conduct that is
demonstrably and materially injurious to the
Company, and which the Board deems to cause or
will cause substantial economic damage to the
Company or injury to the business reputation of
the Company, monetarily or otherwise. For purposes
of this Subsection, no act, or failure to act, on
your part shall be deemed "willful" unless done,
or omitted to be done, by you not in good faith
and without a reasonable belief that your action
or omission was in the best interest of the
Company. Notwithstanding the foregoing, you shall
not be deemed to have been terminated for Cause
unless and until there shall have been delivered
to you a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters
of the entire membership of the Board at a meeting
of the Board called and held for such purpose
(after reasonable notice to you and an opportunity
for you, together with your counsel, to be heard
before the Board), finding that in the good faith
opinion of the Board you were guilty of conduct
set forth above in clauses 3.2.1 or 3.2.2 of the
first sentence of this Subsection and specifying
the particulars in detail.
3.3 GOOD REASON. You shall be entitled to terminate your employment
for Good Reason. For purposes of this Agreement, "Good Reason" shall mean,
without your express written consent, the occurrence in connection with a Change
In Control of the Company of any of the following circumstances unless, in the
case of paragraphs 3.3.1, 3.3.5, 3.3.6, 3.3.7, or 3.3.8, the circumstances are
fully corrected prior to the Date of Termination specified in the Notice of
Termination, as defined in Subsections 3.5 and 3.4, respectively, given in
respect of them. If you have Good Reason for your termination you shall be
considered to have been "Constructively Terminated" by the Company:
3.3.1 the assignment to you of any duties inconsistent
with your status and position (i) prior to the
Change In Control where such change is a direct
result of any pending Change in Control; or (ii)
as such status exists immediately prior to the
Change In Control of the Company, or (iii) a
substantial adverse alteration in the nature or
status of your responsibilities from those in
effect immediately prior to the Change In Control
of the Company whichever is applicable;
3.3.2 a reduction by the Company in your annual base
salary as in effect on this date or as the same
may be increased from time to time irrespective of
future Company policies including any
across-the-board salary reductions similarly
affecting all key employees of the Company;
3.3.3 your relocation, without your consent, to a
location not within twenty five (25) miles of your
present office or job location, except for
required travel on the Company's business to an
extent substantially consistent with your present
business travel obligations;
3.3.4 the failure by the Company, without your consent,
to pay to you any part of your current
compensation, or to pay to you any part of an
installment of deferred compensation under any
deferred compensation program of the Company,
within fourteen (14) days of the date the
compensation is due;
3.3.5 the failure by the Company to continue in effect
any bonus to which you were entitled, or any
compensation plan in which you participate (i)
prior to the Change in Control where such change
is a direct result of any pending Change In
Control; or (ii) immediately prior to the Change
In Control of the Company that is material to your
total compensation, including but not limited to
the Company's Restricted Stock Plan, 401(k) Plan,
and Benefit Plans, or any substitute plans adopted
prior to the Change In Control of the Company,
unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been
made with respect to the plan, or the failure by
the Company to continue your participation in it
(or in such substitute or alternative plan) on a
basis not materially less favorable, both in terms
of the amount of benefits provided and the level
of your participation relative to other
participants, as existed at the time of the Change
In Control;
3.3.6 the failure by the Company to continue to provide
you with (i) benefits substantially similar to
those enjoyed by you under any of the Company's
life insurance, medical, health and accident, or
disability plans in which you were participating
at the time of the Change In Control of the
Company was in effect for the employees of the
Company generally at the time of the Change In
Control, (ii) the failure to continue to provide
you with a Company automobile or allowance in lieu
of it at the time of the Change In Control of the
Company, (iii) the taking of any action by the
Company that would directly or indirectly
materially reduce any of such benefits or deprive
you of any material fringe benefit enjoyed by you
at the time of the Change In Control of the
Company, or (iv) the failure by the Company to
provide you with the number of paid vacation days
to which you are entitled on the basis of years of
service with the Company in accordance with the
Company's normal vacation policy in effect at the
time of the Change In Control of the Company;
3.3.7 the failure of the Company to obtain a
satisfactory agreement from any successor to
assume and agree to perform this Agreement, as
contemplated in Section 5 of this Agreement; or
3.3.8 any purported termination of your employment that
is not effected pursuant to a Notice of
Termination satisfying the requirements of
Subsection 3.4 below (and, if applicable, the
requirements of Subsection 3.2 above); for
purposes of this Agreement, no such purported
termination shall be effective.
Your rights to terminate your employment pursuant to this
Subsection shall not be affected by your incapacity due to physical or mental
illness. Your continued employment shall not constitute consent to, or a waiver
of rights with respect to, any circumstance constituting Good Reason under this
Agreement. In the event you deliver Notice of Termination based on circumstances
set forth in Paragraphs 3.3.1, 3.3.5, 3.3.6, 3.3.7, or 3.3.8 above, which are
fully corrected prior to the Date of Termination set forth in your Notice of
Termination, the Notice of Termination shall be deemed withdrawn and of no
further force or effect.
3.4 NOTICE OF TERMINATION. Any purported termination of your
employment by the Company or by you shall be communicated by written Notice of
Termination to the other party to this Agreement in accordance with Section 6 of
this Agreement. For purposes of this Agreement, a "Notice of Termination" shall
mean a notice that shall indicate the specific termination provision in this
Agreement relied on, and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of your employment
under the provision so indicated.
3.5 DATE OF TERMINATION, ETC. "Date of Termination" shall mean (A) if
your employment is terminated for Disability, 30 days after Notice of
Termination is given (provided that you shall not have returned to the full-time
performance of your duties during such 30-day period), and (B) if your
employment is terminated pursuant to Subsection 3.2 or 3.3 above or for any
other reason (other than Disability), the date specified in the Notice of
Termination (which, in the case of a termination pursuant to Subsection 3.2
above shall not be less than 30 days, and in the case of a termination pursuant
to Subsection 3.3 above shall not be less than 15 nor more than 60 days,
respectively, from the date the Notice of Termination is given). However, if
within 15 days after any Notice of Termination is given, or, if later, prior to
the Date of Termination (as determined without regard to this provision), the
party receiving the Notice of Termination notifies the other party that a
dispute exists concerning the termination, then the Date of Termination shall be
the date on which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding arbitration award, or by a final
judgment, order, or decree of a court of competent jurisdiction (which is not
appealable or with respect to which the time for appeal has expired and no
appeal has been perfected). The Date of Termination shall be extended by a
notice of dispute only if the notice is given in good faith and the party giving
the notice pursues the resolution of the dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Company will continue to
pay you your full compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, base salary) and continue you
as a participant in all compensation, benefit, and insurance plans in which you
were participating when the notice giving rise to the dispute was given, until
the dispute is finally resolved in accordance with this Subsection. Amounts paid
under this Subsection are in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other amounts due under
this Agreement except to the extent otherwise provided in subsection 4.4.
4. COMPENSATION ON TERMINATION OR DURING DISABILITY. Following a Change In
Control of the Company, as defined by Section 2, on termination of your
employment or during a period of disability you shall be entitled to the
following benefits:
4.1 During any period that you fail to perform your full-time duties
with the Company as a result of incapacity due to physical or mental illness,
you shall continue to receive your base salary at the rate in effect at the
commencement of any such period, together with all amounts payable to you under
any compensation plan of the Company during the period, until this Agreement is
terminated pursuant to section 3.1 above. Thereafter, or in the event your
employment shall be terminated by the Company or by you for Retirement, or by
reason of your death, your benefits shall be determined under the Company's
retirement, insurance, and other compensation programs then in effect in
accordance with the terms of those programs.
4.2 If your employment shall be terminated by the Company for Cause or
by you other than for Good Reason, Disability, death, or Retirement, the Company
shall pay you your full base salary through the Date of Termination at the rate
in effect at the time Notice of Termination is given, plus all other amounts and
benefits to which you are entitled under any compensation plan of the Company at
the time the payments are due. The Company shall have no obligations to you
under this Agreement.
4.3 If your employment by the Company shall be terminated (a) by the
Company other than for Cause, Retirement or Disability, or (b) by you for Good
ReaIson, then you shall be entitled to the benefits provided below:
4.3.1 The Company shall pay you your full salary through
the Date of Termination at the rate in effect at
the time notice of Termination is given, plus all
other amounts and benefits to which you are
entitled under any compensation plan of the
Company, at the time the payments are due, except
as otherwise provided below.
4.3.2 In lieu of any further salary payments to you for
periods subsequent to the Date of Termination, the
Company shall pay to you, as severance pay the
following: (i) a lump sum severance payment equal
to three (3) times the average of your
Compensation for the five (5) years prior to the
occurrence of the circumstance giving rise to the
notice of Termination, plus (ii) the amounts in
the forms set forth in paragraphs 4.3.3, 4.3.4 and
4.3.5 (the "Severance Payments"). In addition to
the Severance Payments, the Company shall pay to
you an additional amount equal to the amount of
the Excise Tax, if any, that is due or determined
to be due under Section 4999 of the Internal
Revenue Code of 1986, as amended, resulting from
the Severance Payments or any other payments under
this Agreement or any other agreement between you
and the Company and an amount sufficient to pay
the taxes on any such Excise Taxes (the
"Gross-up"). For purposes of this Agreement,
"Compensation" shall mean the aggregate
remuneration paid by the Company to you during a
calendar year, including bonuses, awards under the
Company's Restricted Stock Plan, benefits under
employee benefit plans, automobile allowances or
any fees paid to you as remuneration for serving
as a Director of the Company.
4.3.3 The Company shall continue coverage for you and
your dependents under any health or welfare
benefit plan under which you and your dependents
were participating prior to THE CHANGE IN CONTROL
FOR A PERIOD ENDING ON THE EARLIER to occur of (i)
the date you become covered by a new employer's
health and welfare benefit plan, (ii) the date you
become covered by Medicare, or (iii) the date
which is thirty-six (36) months from the date of
Termination. The coverage for your dependents
shall end earlier than (i), (ii) or (iii) if
required by the health or welfare benefit plan due
to age eligibility.
4.3.4 The Company shall pay to you any deferred
compensation, including, but not limited to
deferred bonuses, allocated or credited to you or
your account as of the Date of Termination.
4.3.5 Outstanding stock options or Restricted Stock
grants, if any, granted to you under the Company's
Stock Plans which are not vested on Termination
shall immediately vest.
4.3.6 Where you shall prevail in any such action, the
Company shall also pay to you all legal and
accounting fees and expenses incurred by you as a
result of the termination (including all such fees
and expenses incurred by you as a result of the
termination (including all such fees and expenses,
if any, incurred in contesting or disputing any
termination or in seeking to obtain or enforce any
right or benefit provided by this Agreement or in
connection with any tax audit or proceeding to the
extent attributable to the application of Code
Section 4999 to any payment or benefit provided
under this Agreement) or any other agreement with
the Company.
4.3.7 The amount of Severance Payments and any Gross-up
due to you under this or any other relevant
agreement with the Company shall be determined by
a third party agreed to by you and the Company. If
you cannot agree on a third party, then both third
parties shall determine the amounts due under this
Agreement. If the third parties do not agree on
the amount to be paid to you, then either party
may submit the calculation of the amounts which
are in dispute to Arbitration in accordance with
this Agreement. The payments provided for in
Paragraphs 4.3.2, 4.3.4 AND 4.3.5 ABOVE, SHALL BE
MADE NO LATER THAN THE THIRTIETH (30TH) day
following the Date of Termination. However, if the
amounts of the payments cannot be finally
determined on or before that day, the Company
shall pay to you on that day an estimate, as
determined in good faith by the Company, of the
minimum amount of such payments and shall pay the
remainder of those payments (together with
interest at the rate provided in Section
1274(b)(2)(B) of the Code) as soon as the amount
can be determined but in no event later than the
30th day after the Date of Termination. In the
event that the amount of the estimate payments
exceeds the amount subsequently determined to have
been due, the excess shall constitute a loan by
the Company to you payable on the 30th day after
demand by the Company (together with interest at
the rate provided in Section 1274(b)(2)(B) of the
Code).
4.4 You shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or otherwise, nor
shall the amount of any payment or benefit provided for in this Section 4 be
reduced by any compensation earned by you as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by you to the Company, or otherwise except as specifically provided in this
Section 4.
4.5 In addition to all other amounts payable to you under this Section
4, you shall be entitled to receive all qualified benefits payable to you under
the Company's 401(k) Plan, Defined Benefit Plan and any other plan or agreement
relating to retirement benefits.
5. SUCCESSORS; BINDING AGREEMENT.
5.1 The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain the assumption and agreement
prior to the effectiveness of any succession shall be a breach of this agreement
and shall entitle you to compensation from the Company in the same amount and on
the same terms as you would have been entitled to under this Agreement if you
had terminated your employment for Good Reason following a Change In Control of
the Company, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Date of
Termination.
5.2 This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators, heirs,
distributees, and legatees. If you should die while any amount would still be
payable to you if you had continued to live, all such amounts, unless otherwise
provided in this Agreement, shall be paid in accordance with the terms of this
Agreement to your legatee or other designee or, if there is no such designee, to
your estate.
6. NOTICE. For the purpose of this Agreement, all notices and other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth on the first page of this
Agreement, provided that all notices to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the Company, or to such
other address as either party may have furnished to the other in writing in
accordance this Agreement, except that notice of a change of address shall be
effective only on receipt.
7. MISCELLANEOUS.
7.1 No provision of this Agreement may be modified, waived, or
discharged unless the waiver, modification, or discharge is agreed to in writing
and signed by you and such officer as may be specifically designated by the
Board.
7.2 No waiver by either party to this Agreement at any time of any
breach by the other party of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
7.3 No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter of this Agreement have been made by
either party that are not expressly set forth in this Agreement.
7.4 Nothing in this Agreement is intended to reduce any benefits
payable to you under any other agreement you may have with the Company or in any
Company plan in which you may participate.
7.5 The validity, interpretation, construction, and performance of
this Agreement shall be governed by the law of New Jersey without reference to
its conflict of laws principals.
7.6 All references to sections of the Exchange Act or the Code shall
be deemed also to refer to any successor provisions to such sections. Any
payments provided for shall be paid net of any applicable withholding or
deduction required under federal, state or local law.
7.7 The obligations of the Company under Section 4 shall survive the
expiration of the term of this Agreement.
8. VALIDITY. The validity or enforceability of any provision of this
Agreement shall not affect the validity or unenforceability of any other
provision of this Agreement, which shall remain in full force and effect.
9. COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
10. ARBITRATION. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in New Jersey in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction. However, you shall be entitled to seek specific performance of
your right to be paid until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection this Agreement.
11. ENTIRE AGREEMENT. This Agreement sets forth the entire understanding of
the parties with respect to its subject matter and supersedes all prior written
or oral agreements or understandings with respect to the subject matter.
In witness whereof, the parties have executed this agreement as of the day
and year first above written.
MIDDLESEX WATER COMPANY
By:/s/ J. Richard Tompkins
----------------------------------------
J. Richard Tompkins
Chairman of the Board and President
ATTEST:
/s/ Marion F. Reynolds
- ----------------------
Marion F. Reynolds
Vice President
Secretary and Treasurer
/s/ Richard A. Russo
---------------------------------
Richard A. Russo
<PAGE>
Exhibit 10.15(f)
CHANGE IN CONTROL TERMINATION AGREEMENT
This Change in Control Termination Agreement (the "Agreement") is
entered into on April 7 1999, between Middlesex Water Company, a New Jersey
corporation, with its principal place of business located at 1500 Ronson Road,
P.O. Box 1500, Iselin, New Jersey 08830-0452, (the "Company"), and Dennis G.
Sullivan, residing at 2 Winchester Drive, Freehold, New Jersey 07728.
RECITALS
A. The Company considers it essential to the best interests of its
stockholders to foster the continuous employment of key management personnel. In
this connection, the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held Companies, the possibility of a
Change In Control may exist. This possibility, and the uncertainty and questions
that it may raise among management, may result in the departure or distraction
of management personnel to the detriment of the Company and its stockholders.
B. The Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of the
Company's management, including yourself, to the assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change In Control of the Company.
C. To induce you to remain in the employ of the Company, and in
consideration of your agreement set forth below, the Company agrees that you
shall receive the severance benefits set forth in this Agreement in the event
your employment with the Company is terminated or "constructively terminated" as
defined herein in connection with a "Change In Control of the Company" (as
defined in Section 2 below) under the circumstances described below. This
Agreement is meant to supersede any other specific written agreements that may
have been entered into between yourself and the Company concerning termination
of employment.
Therefore, in consideration of your continued employment and
the parties' agreement to be bound by the terms contained in this Agreement, the
parties agree as follows:
1. TERM OF AGREEMENT. This Agreement shall commence as of April 8, 1999 and
shall continue in effect through December 31, 2001. However, commencing on
December 31, 2001, and each December 31 afterwards, the term of this Agreement
shall automatically be extended for 1 additional year unless, no later than the
preceding November 1, the Company shall have given notice that it does not wish
to extend this Agreement. Notwithstanding the foregoing, if a Change In Control
of the Company shall be proposed to occur or have occurred during the original
or any extended term of this Agreement, this Agreement shall continue in effect
for a period of three years beyond the month in which the Change In Control
occurs. Notwithstanding the foregoing, and provided no Change of Control shall
have occurred, this Agreement shall automatically terminate on the earlier to
occur of (i) your termination of employment with the Company, or (ii) the
Company's furnishing you with notice of termination, irrespective of the
effective date of the termination.
<PAGE>
2. CHANGE IN CONTROL. No benefits shall be payable under this Agreement
unless there shall have been a Change In Control of the Company, as set forth
below. For purposes of this Agreement, a "Change In Control" of the Company
shall be deemed to occur 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; or a liquidation or dissolution of
Company.
3. TERMINATION FOLLOWING CHANGE IN CONTROL. If any of the events described
in Section 2 above constituting a Change In Control of the Company shall have
occurred, you shall be entitled to the benefits provided in subsection 4.3 below
on the subsequent termination or "Constructive Termination" of your employment
during the term of this Agreement, unless the termination is (A) because of your
death, Disability or Retirement, (B) by the Company for Cause, or (C) by you
other than for Good Reason.
3.1 DISABILITY; RETIREMENT. If, as a result of your incapacity due to
physical or mental illness, you shall have been absent from the full-time
performance of your duties with the Company for 6 consecutive months, and within
30 days after written notice of termination is given you shall not have returned
to the full-time performance of your duties, your employment may be terminated
for "Disability." Termination by the Company or you of your employment based on
"Retirement" shall mean termination in accordance with the Company's retirement
policy, including early retirement, generally applicable to its salaried
employees or in accordance with any retirement arrangement established with your
consent with respect to you.
3.2 CAUSE. Termination by the Company of your employment for "Cause"
shall mean termination on:
3.2.1 the willful and continued failure by you to
substantially perform your duties with the Company
as such employment was performed by you prior to
the Change of Control (other than any such failure
resulting from your incapacity due to physical or
mental illness or any such actual or anticipated
failure after the issuance by you of a Notice of
Termination for Good Reason as defined in
Subsections 3.4 and 3.3, respectively) after a
written demand for substantial performance is
delivered to you by the Board, which demand
specifically identifies the manner in which the
Board believes that you have not substantially
performed your duties; or
3.2.2 the willful act by you in conduct that is
demonstrably and materially injurious to the
Company, and which the Board deems to cause or
will cause substantial economic damage to the
Company or injury to the business reputation of
the Company, monetarily or otherwise. For purposes
of this Subsection, no act, or failure to act, on
your part shall be deemed "willful" unless done,
or omitted to be done, by you not in good faith
and without a reasonable belief that your action
or omission was in the best interest of the
Company. Notwithstanding the foregoing, you shall
not be deemed to have been terminated for Cause
unless and until there shall have been delivered
to you a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters
of the entire membership of the Board at a meeting
of the Board called and held for such purpose
(after reasonable notice to you and an opportunity
for you, together with your counsel, to be heard
before the Board), finding that in the good faith
opinion of the Board you were guilty of conduct
set forth above in clauses 3.2.1 or 3.2.2 of the
first sentence of this Subsection and specifying
the particulars in detail.
3.3 GOOD REASON. You shall be entitled to terminate your employment
for Good Reason. For purposes of this Agreement, "Good Reason" shall mean,
without your express written consent, the occurrence in connection with a Change
In Control of the Company of any of the following circumstances unless, in the
case of paragraphs 3.3.1, 3.3.5, 3.3.6, 3.3.7, or 3.3.8, the circumstances are
fully corrected prior to the Date of Termination specified in the Notice of
Termination, as defined in Subsections 3.5 and 3.4, respectively, given in
respect of them. If you have Good Reason for your termination you shall be
considered to have been "Constructively Terminated" by the Company:
3.3.1 the assignment to you of any duties inconsistent
with your status and position (i) prior to the
Change In Control where such change is a direct
result of any pending Change in Control; or (ii)
as such status exists immediately prior to the
Change In Control of the Company, or (iii) a
substantial adverse alteration in the nature or
status of your responsibilities from those in
effect immediately prior to the Change In Control
of the Company whichever is applicable;
3.3.2 a reduction by the Company in your annual base
salary as in effect on this date or as the same
may be increased from time to time irrespective of
future Company policies including any
across-the-board salary reductions similarly
affecting all key employees of the Company;
3.3.3 your relocation, without your consent, to a
location not within twenty five (25) miles of your
present office or job location, except for
required travel on the Company's business to an
extent substantially consistent with your present
business travel obligations;
3.3.4 the failure by the Company, without your consent,
to pay to you any part of your current
compensation, or to pay to you any part of an
installment of deferred compensation under any
deferred compensation program of the Company,
within fourteen (14) days of the date the
compensation is due;
3.3.5 the failure by the Company to continue in effect
any bonus to which you were entitled, or any
compensation plan in which you participate (i)
prior to the Change in Control where such change
is a direct result of any pending Change In
Control; or (ii) immediately prior to the Change
In Control of the Company that is material to your
total compensation, including but not limited to
the Company's Restricted Stock Plan, 401(k) Plan,
and Benefit Plans, or any substitute plans adopted
prior to the Change In Control of the Company,
unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been
made with respect to the plan, or the failure by
the Company to continue your participation in it
(or in such substitute or alternative plan) on a
basis not materially less favorable, both in terms
of the amount of benefits provided and the level
of your participation relative to other
participants, as existed at the time of the Change
In Control;
3.3.6 the failure by the Company to continue to provide
you with (i) benefits substantially similar to
those enjoyed by you under any of the Company's
life insurance, medical, health and accident, or
disability plans in which you were participating
at the time of the Change In Control of the
Company was in effect for the employees of the
Company generally at the time of the Change In
Control, (ii) the failure to continue to provide
you with a Company automobile or allowance in lieu
of it at the time of the Change In Control of the
Company, (iii) the taking of any action by the
Company that would directly or indirectly
materially reduce any of such benefits or deprive
you of any material fringe benefit enjoyed by you
at the time of the Change In Control of the
Company, or (iv) the failure by the Company to
provide you with the number of paid vacation days
to which you are entitled on the basis of years of
service with the Company in accordance with the
Company's normal vacation policy in effect at the
time of the Change In Control of the Company;
3.3.7 the failure of the Company to obtain a
satisfactory agreement from any successor to
assume and agree to perform this Agreement, as
contemplated in Section 5 of this Agreement; or
3.3.8 any purported termination of your employment that
is not effected pursuant to a Notice of
Termination satisfying the requirements of
Subsection 3.4 below (and, if applicable, the
requirements of Subsection 3.2 above); for
purposes of this Agreement, no such purported
termination shall be effective.
Your rights to terminate your employment pursuant to this
Subsection shall not be affected by your incapacity due to physical or mental
illness. Your continued employment shall not constitute consent to, or a waiver
of rights with respect to, any circumstance constituting Good Reason under this
Agreement. In the event you deliver Notice of Termination based on circumstances
set forth in Paragraphs 3.3.1, 3.3.5, 3.3.6, 3.3.7, or 3.3.8 above, which are
fully corrected prior to the Date of Termination set forth in your Notice of
Termination, the Notice of Termination shall be deemed withdrawn and of no
further force or effect.
3.4 NOTICE OF TERMINATION. Any purported termination of your
employment by the Company or by you shall be communicated by written Notice of
Termination to the other party to this Agreement in accordance with Section 6 of
this Agreement. For purposes of this Agreement, a "Notice of Termination" shall
mean a notice that shall indicate the specific termination provision in this
Agreement relied on, and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of your employment
under the provision so indicated.
3.5 DATE OF TERMINATION, ETC. "Date of Termination" shall mean (A) if
your employment is terminated for Disability, 30 days after Notice of
Termination is given (provided that you shall not have returned to the full-time
performance of your duties during such 30-day period), and (B) if your
employment is terminated pursuant to Subsection 3.2 or 3.3 above or for any
other reason (other than Disability), the date specified in the Notice of
Termination (which, in the case of a termination pursuant to Subsection 3.2
above shall not be less than 30 days, and in the case of a termination pursuant
to Subsection 3.3 above shall not be less than 15 nor more than 60 days,
respectively, from the date the Notice of Termination is given). However, if
within 15 days after any Notice of Termination is given, or, if later, prior to
the Date of Termination (as determined without regard to this provision), the
party receiving the Notice of Termination notifies the other party that a
dispute exists concerning the termination, then the Date of Termination shall be
the date on which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding arbitration award, or by a final
judgment, order, or decree of a court of competent jurisdiction (which is not
appealable or with respect to which the time for appeal has expired and no
appeal has been perfected). The Date of Termination shall be extended by a
notice of dispute only if the notice is given in good faith and the party giving
the notice pursues the resolution of the dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Company will continue to
pay you your full compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, base salary) and continue you
as a participant in all compensation, benefit, and insurance plans in which you
were participating when the notice giving rise to the dispute was given, until
the dispute is finally resolved in accordance with this Subsection. Amounts paid
under this Subsection are in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other amounts due under
this Agreement except to the extent otherwise provided in subsection 4.4.
4. COMPENSATION ON TERMINATION OR DURING DISABILITY. Following a Change In
Control of the Company, as defined by Section 2, on termination of your
employment or during a period of disability you shall be entitled to the
following benefits:
4.1 During any period that you fail to perform your full-time duties
with the Company as a result of incapacity due to physical or mental illness,
you shall continue to receive your base salary at the rate in effect at the
commencement of any such period, together with all amounts payable to you under
any compensation plan of the Company during the period, until this Agreement is
terminated pursuant to section 3.1 above. Thereafter, or in the event your
employment shall be terminated by the Company or by you for Retirement, or by
reason of your death, your benefits shall be determined under the Company's
retirement, insurance, and other compensation programs then in effect in
accordance with the terms of those programs.
4.2 If your employment shall be terminated by the Company for Cause or
by you other than for Good Reason, Disability, death, or Retirement, the Company
shall pay you your full base salary through the Date of Termination at the rate
in effect at the time Notice of Termination is given, plus all other amounts and
benefits to which you are entitled under any compensation plan of the Company at
the time the payments are due. The Company shall have no obligations to you
under this Agreement.
4.3 If your employment by the Company shall be terminated (a) by the
Company other than for Cause, Retirement or Disability, or (b) by you for Good
Reason, then you shall be entitled to the benefits provided below:
4.3.1 The Company shall pay you your full salary through
the Date of Termination at the rate in effect at
the time notice of Termination is given, plus all
other amounts and benefits to which you are
entitled under any compensation plan of the
Company, at the time the payments are due, except
as otherwise provided below.
4.3.2 In lieu of any further salary payments to you for
periods subsequent to the Date of Termination, the
Company shall pay to you, as severance pay the
following: (i) a lump sum severance payment equal
to three (3) times the average of your
Compensation for the five (5) years prior to the
occurrence of the circumstance giving rise to the
notice of Termination, plus (ii) the amounts in
the forms set forth in paragraphs 4.3.3, 4.3.4 and
4.3.5 (the "Severance Payments"). In addition to
the Severance Payments, the Company shall pay to
you an additional amount equal to the amount of
the Excise Tax, if any, that is due or determined
to be due under Section 4999 of the Internal
Revenue Code of 1986, as amended, resulting from
the Severance Payments or any other payments under
this Agreement or any other agreement between you
and the Company and an amount sufficient to pay
the taxes on any such Excise Taxes (the
"Gross-up"). For purposes of this Agreement,
"Compensation" shall mean the aggregate
remuneration paid by the Company to you during a
calendar year, including bonuses, awards under the
Company's Restricted Stock Plan, benefits under
employee benefit plans, automobile allowances or
any fees paid to you as remuneration for serving
as a Director of the Company.
4.3.3 The Company shall continue coverage for you and
your dependents under any health or welfare
benefit plan under which you and your dependents
were participating prior to THE CHANGE IN CONTROL
FOR A PERIOD ENDING ON THE EARLIER to occur of (i)
the date you become covered by a new employer's
health and welfare benefit plan, (ii) the date you
become covered by Medicare, or (iii) the date
which is thirty-six (36) months from the date of
Termination. The coverage for your dependents
shall end earlier than (i), (ii) or (iii) if
required by the health or welfare benefit plan due
to age eligibility.
4.3.4 The Company shall pay to you any deferred
compensation, including, but not limited to
deferred bonuses, allocated or credited to you or
your account as of the Date of Termination.
4.3.5 Outstanding stock options or Restricted Stock
grants, if any, granted to you under the Company's
Stock Plans which are not vested on Termination
shall immediately vest.
4.3.6 Where you shall prevail in any such action, the
Company shall also pay to you all legal and
accounting fees and expenses incurred by you as a
result of the termination (including all such fees
and expenses incurred by you as a result of the
termination (including all such fees and expenses,
if any, incurred in contesting or disputing any
termination or in seeking to obtain or enforce any
right or benefit provided by this Agreement or in
connection with any tax audit or proceeding to the
extent attributable to the application of Code
Section 4999 to any payment or benefit provided
under this Agreement) or any other agreement with
the Company.
4.3.7 The amount of Severance Payments and any Gross-up
due to you under this or any other relevant
agreement with the Company shall be determined by
a third party agreed to by you and the Company. If
you cannot agree on a third party, then both third
parties shall determine the amounts due under this
Agreement. If the third parties do not agree on
the amount to be paid to you, then either party
may submit the calculation of the amounts which
are in dispute to Arbitration in accordance with
this Agreement. The payments provided for in
Paragraphs 4.3.2, 4.3.4 AND 4.3.5 ABOVE, SHALL BE
MADE NO LATER THAN THE THIRTIETH (30TH) day
following the Date of Termination. However, if the
amounts of the payments cannot be finally
determined on or before that day, the Company
shall pay to you on that day an estimate, as
determined in good faith by the Company, of the
minimum amount of such payments and shall pay the
remainder of those payments (together with
interest at the rate provided in Section
1274(b)(2)(B) of the Code) as soon as the amount
can be determined but in no event later than the
30th day after the Date of Termination. In the
event that the amount of the estimate payments
exceeds the amount subsequently determined to have
been due, the excess shall constitute a loan by
the Company to you payable on the 30th day after
demand by the Company (together with interest at
the rate provided in Section 1274(b)(2)(B) of the
Code).
4.4 You shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or otherwise, nor
shall the amount of any payment or benefit provided for in this Section 4 be
reduced by any compensation earned by you as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by you to the Company, or otherwise except as specifically provided in this
Section 4.
4.5 In addition to all other amounts payable to you under this Section
4, you shall be entitled to receive all qualified benefits payable to you under
the Company's 401(k) Plan, Defined Benefit Plan and any other plan or agreement
relating to retirement benefits.
5. SUCCESSORS; BINDING AGREEMENT.
5.1 The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain the assumption and agreement
prior to the effectiveness of any succession shall be a breach of this agreement
and shall entitle you to compensation from the Company in the same amount and on
the same terms as you would have been entitled to under this Agreement if you
had terminated your employment for Good Reason following a Change In Control of
the Company, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Date of
Termination.
5.2 This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators, heirs,
distributees, and legatees. If you should die while any amount would still be
payable to you if you had continued to live, all such amounts, unless otherwise
provided in this Agreement, shall be paid in accordance with the terms of this
Agreement to your legatee or other designee or, if there is no such designee, to
your estate.
6. NOTICE. For the purpose of this Agreement, all notices and other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth on the first page of this
Agreement, provided that all notices to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the Company, or to such
other address as either party may have furnished to the other in writing in
accordance this Agreement, except that notice of a change of address shall be
effective only on receipt.
7. MISCELLANEOUS.
7.1 No provision of this Agreement may be modified, waived, or
discharged unless the waiver, modification, or discharge is agreed to in writing
and signed by you and such officer as may be specifically designated by the
Board.
7.2 No waiver by either party to this Agreement at any time of any
breach by the other party of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
7.3 No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter of this Agreement have been made by
either party that are not expressly set forth in this Agreement.
7.4 Nothing in this Agreement is intended to reduce any benefits
payable to you under any other agreement you may have with the Company or in any
Company plan in which you may participate.
7.5 The validity, interpretation, construction, and performance of
this Agreement shall be governed by the law of New Jersey without reference to
its conflict of laws principals.
7.6 All references to sections of the Exchange Act or the Code shall
be deemed also to refer to any successor provisions to such sections. Any
payments provided for shall be paid net of any applicable withholding or
deduction required under federal, state or local law.
7.7 The obligations of the Company under Section 4 shall survive the
expiration of the term of this Agreement.
8. VALIDITY. The validity or enforceability of any provision of this
Agreement shall not affect the validity or unenforceability of any other
provision of this Agreement, which shall remain in full force and effect.
9. COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
10. ARBITRATION. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in New Jersey in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction. However, you shall be entitled to seek specific performance of
your right to be paid until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection this Agreement.
11. ENTIRE AGREEMENT. This Agreement sets forth the entire understanding of
the parties with respect to its subject matter and supersedes all prior written
or oral agreements or understandings with respect to the subject matter.
In witness whereof, the parties have executed this agreement as of the day
and year first above written.
MIDDLESEX WATER COMPANY
By:/s/ J. Richard Tompkins
-----------------------------------
J. Richard Tompkins
Chairman of the Board and President
ATTEST:
/s/ Marion F. Reynolds
- ----------------------
Marion F. Reynolds
Vice President
Secretary and Treasurer
/s/ Dennis G. Sullivan
------------------------------
Dennis G. Sullivan
<PAGE>
Exhibit 10.15(g)
CHANGE IN CONTROL TERMINATION AGREEMENT
This Change in Control Termination Agreement (the "Agreement") is
entered into on April 7 1999, between Middlesex Water Company, a New Jersey
corporation, with its principal place of business located at 1500 Ronson Road,
P.O. Box 1500, Iselin, New Jersey 08830-0452, (the "Company"), and Ronald F.
Williams, residing at 11 Peacock Court, Trenton, New Jersey 08691.
RECITALS
A. The Company considers it essential to the best interests of its
stockholders to foster the continuous employment of key management personnel. In
this connection, the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held Companies, the possibility of a
Change In Control may exist. This possibility, and the uncertainty and questions
that it may raise among management, may result in the departure or distraction
of management personnel to the detriment of the Company and its stockholders.
B. The Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of the
Company's management, including yourself, to the assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change In Control of the Company.
C. To induce you to remain in the employ of the Company, and in
consideration of your agreement set forth below, the Company agrees that you
shall receive the severance benefits set forth in this Agreement in the event
your employment with the Company is terminated or "constructively terminated" as
defined herein in connection with a "Change In Control of the Company" (as
defined in Section 2 below) under the circumstances described below. This
Agreement is meant to supersede any other specific written agreements that may
have been entered into between yourself and the Company concerning termination
of employment.
Therefore, in consideration of your continued employment and the parties'
agreement to be bound by the terms contained in this Agreement, the parties
agree as follows:
1. TERM OF AGREEMENT. This Agreement shall commence as of April 8, 1999 and
shall continue in effect through December 31, 2001. However, commencing on
December 31, 2001, and each December 31 afterwards, the term of this Agreement
shall automatically be extended for 1 additional year unless, no later than the
preceding November 1, the Company shall have given notice that it does not wish
to extend this Agreement. Notwithstanding the foregoing, if a Change In Control
of the Company shall be proposed to occur or have occurred during the original
or any extended term of this Agreement, this Agreement shall continue in effect
for a period of three years beyond the month in which the Change In Control
occurs. Notwithstanding the foregoing, and provided no Change of Control shall
have occurred, this Agreement shall automatically terminate on the earlier to
occur of (i) your termination of employment with the Company, or (ii) the
Company's furnishing you with notice of termination, irrespective of the
effective date of the termination.
2. CHANGE IN CONTROL. No benefits shall be payable under this Agreement
unless there shall have been a Change In Control of the Company, as set forth
below. For purposes of this Agreement, a "Change In Control" of the Company
shall be deemed to occur 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; or a liquidation or dissolution of
Company.
3. TERMINATION FOLLOWING CHANGE IN CONTROL. If any of the events described
in Section 2 above constituting a Change In Control of the Company shall have
occurred, you shall be entitled to the benefits provided in subsection 4.3 below
on the subsequent termination or "Constructive Termination" of your employment
during the term of this Agreement, unless the termination is (A) because of your
death, Disability or Retirement, (B) by the Company for Cause, or (C) by you
other than for Good Reason.
3.1 DISABILITY; RETIREMENT. If, as a result of your incapacity due to
physical or mental illness, you shall have been absent from the full-time
performance of your duties with the Company for 6 consecutive months, and within
30 days after written notice of termination is given you shall not have returned
to the full-time performance of your duties, your employment may be terminated
for "Disability." Termination by the Company or you of your employment based on
"Retirement" shall mean termination in accordance with the Company's retirement
policy, including early retirement, generally applicable to its salaried
employees or in accordance with any retirement arrangement established with your
consent with respect to you.
3.2 CAUSE. Termination by the Company of your employment for "Cause" shall
mean termination on:
3.2.1 the willful and continued failure by you to
substantially perform your duties with the Company
as such employment was performed by you prior to
the Change of Control (other than any such failure
resulting from your incapacity due to physical or
mental illness or any such actual or anticipated
failure after the issuance by you of a Notice of
Termination for Good Reason as defined in
Subsections 3.4 and 3.3, respectively) after a
written demand for substantial performance is
delivered to you by the Board, which demand
specifically identifies the manner in which the
Board believes that you have not substantially
performed your duties; or
3.2.2 the willful act by you in conduct that is
demonstrably and materially injurious to the
Company, and which the Board deems to cause or
will cause substantial economic damage to the
Company or injury to the business reputation of
the Company, monetarily or otherwise. For purposes
of this Subsection, no act, or failure to act, on
your part shall be deemed "willful" unless done,
or omitted to be done, by you not in good faith
and without a reasonable belief that your action
or omission was in the best interest of the
Company. Notwithstanding the foregoing, you shall
not be deemed to have been terminated for Cause
unless and until there shall have been delivered
to you a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters
of the entire membership of the Board at a meeting
of the Board called and held for such purpose
(after reasonable notice to you and an opportunity
for you, together with your counsel, to be heard
before the Board), finding that in the good faith
opinion of the Board you were guilty of conduct
set forth above in clauses 3.2.1 or 3.2.2 of the
first sentence of this Subsection and specifying
the particulars in detail.
3.3 GOOD REASON. You shall be entitled to terminate your employment
for Good Reason. For purposes of this Agreement, "Good Reason" shall mean,
without your express written consent, the occurrence in connection with a Change
In Control of the Company of any of the following circumstances unless, in the
case of paragraphs 3.3.1, 3.3.5, 3.3.6, 3.3.7, or 3.3.8, the circumstances are
fully corrected prior to the Date of Termination specified in the Notice of
Termination, as defined in Subsections 3.5 and 3.4, respectively, given in
respect of them. If you have Good Reason for your termination you shall be
considered to have been "Constructively Terminated" by the Company:
3.3.1 the assignment to you of any duties inconsistent
with your status and position (i) prior to the
Change In Control where such change is a direct
result of any pending Change in Control; or (ii)
as such status exists immediately prior to the
Change In Control of the Company, or (iii) a
substantial adverse alteration in the nature or
status of your responsibilities from those in
effect immediately prior to the Change In Control
of the Company whichever is applicable;
3.3.2 a reduction by the Company in your annual base
salary as in effect on this date or as the same
may be increased from time to time irrespective of
future Company policies including any
across-the-board salary reductions similarly
affecting all key employees of the Company;
3.3.3 your relocation, without your consent, to a
location not within twenty five (25) miles of your
present office or job location, except for
required travel on the Company's business to an
extent substantially consistent with your present
business travel obligations;
3.3.4 the failure by the Company, without your consent,
to pay to you any part of your current
compensation, or to pay to you any part of an
installment of deferred compensation under any
deferred compensation program of the Company,
within fourteen (14) days of the date the
compensation is due;
3.3.5 the failure by the Company to continue in effect
any bonus to which you were entitled, or any
compensation plan in which you participate (i)
prior to the Change in Control where such change
is a direct result of any pending Change In
Control; or (ii) immediately prior to the Change
In Control of the Company that is material to your
total compensation, including but not limited to
the Company's Restricted Stock Plan, 401(k) Plan,
and Benefit Plans, or any substitute plans adopted
prior to the Change In Control of the Company,
unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been
made with respect to the plan, or the failure by
the Company to continue your participation in it
(or in such substitute or alternative plan) on a
basis not materially less favorable, both in terms
of the amount of benefits provided and the level
of your participation relative to other
participants, as existed at the time of the Change
In Control;
3.3.6 the failure by the Company to continue to provide
you with (i) benefits substantially similar to
those enjoyed by you under any of the Company's
life insurance, medical, health and accident, or
disability plans in which you were participating
at the time of the Change In Control of the
Company was in effect for the employees of the
Company generally at the time of the Change In
Control, (ii) the failure to continue to provide
you with a Company automobile or allowance in lieu
of it at the time of the Change In Control of the
Company, (iii) the taking of any action by the
Company that would directly or indirectly
materially reduce any of such benefits or deprive
you of any material fringe benefit enjoyed by you
at the time of the Change In Control of the
Company, or (iv) the failure by the Company to
provide you with the number of paid vacation days
to which you are entitled on the basis of years of
service with the Company in accordance with the
Company's normal vacation policy in effect at the
time of the Change In Control of the Company;
3.3.7 the failure of the Company to obtain a
satisfactory agreement from any successor to
assume and agree to perform this Agreement, as
contemplated in Section 5 of this Agreement; or
3.3.8 any purported termination of your employment that
is not effected pursuant to a Notice of
Termination satisfying the requirements of
Subsection 3.4 below (and, if applicable, the
requirements of Subsection 3.2 above); for
purposes of this Agreement, no such purported
termination shall be effective.
Your rights to terminate your employment pursuant to this
Subsection shall not be affected by your incapacity due to physical or mental
illness. Your continued employment shall not constitute consent to, or a waiver
of rights with respect to, any circumstance constituting Good Reason under this
Agreement. In the event you deliver Notice of Termination based on circumstances
set forth in Paragraphs 3.3.1, 3.3.5, 3.3.6, 3.3.7, or 3.3.8 above, which are
fully corrected prior to the Date of Termination set forth in your Notice of
Termination, the Notice of Termination shall be deemed withdrawn and of no
further force or effect.
3.4 NOTICE OF TERMINATION. Any purported termination of your
employment by the Company or by you shall be communicated by written Notice of
Termination to the other party to this Agreement in accordance with Section 6 of
this Agreement. For purposes of this Agreement, a "Notice of Termination" shall
mean a notice that shall indicate the specific termination provision in this
Agreement relied on, and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of your employment
under the provision so indicated.
3.5 DATE OF TERMINATION, ETC. "Date of Termination" shall mean (A) if
your employment is terminated for Disability, 30 days after Notice of
Termination is given (provided that you shall not have returned to the full-time
performance of your duties during such 30-day period), and (B) if your
employment is terminated pursuant to Subsection 3.2 or 3.3 above or for any
other reason (other than Disability), the date specified in the Notice of
Termination (which, in the case of a termination pursuant to Subsection 3.2
above shall not be less than 30 days, and in the case of a termination pursuant
to Subsection 3.3 above shall not be less than 15 nor more than 60 days,
respectively, from the date the Notice of Termination is given). However, if
within 15 days after any Notice of Termination is given, or, if later, prior to
the Date of Termination (as determined without regard to this provision), the
party receiving the Notice of Termination notifies the other party that a
dispute exists concerning the termination, then the Date of Termination shall be
the date on which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding arbitration award, or by a final
judgment, order, or decree of a court of competent jurisdiction (which is not
appealable or with respect to which the time for appeal has expired and no
appeal has been perfected). The Date of Termination shall be extended by a
notice of dispute only if the notice is given in good faith and the party giving
the notice pursues the resolution of the dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Company will continue to
pay you your full compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, base salary) and continue you
as a participant in all compensation, benefit, and insurance plans in which you
were participating when the notice giving rise to the dispute was given, until
the dispute is finally resolved in accordance with this Subsection. Amounts paid
under this Subsection are in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other amounts due under
this Agreement except to the extent otherwise provided in subsection 4.4.
4. COMPENSATION ON TERMINATION OR DURING DISABILITY. Following a Change In
Control of the Company, as defined by Section 2, on termination of your
employment or during a period of disability you shall be entitled to the
following benefits:
4.1 During any period that you fail to perform your full-time duties
with the Company as a result of incapacity due to physical or mental illness,
you shall continue to receive your base salary at the rate in effect at the
commencement of any such period, together with all amounts payable to you under
any compensation plan of the Company during the period, until this Agreement is
terminated pursuant to section 3.1 above. Thereafter, or in the event your
employment shall be terminated by the Company or by you for Retirement, or by
reason of your death, your benefits shall be determined under the Company's
retirement, insurance, and other compensation programs then in effect in
accordance with the terms of those programs.
4.2 If your employment shall be terminated by the Company for Cause or
by you other than for Good Reason, Disability, death, or Retirement, the Company
shall pay you your full base salary through the Date of Termination at the rate
in effect at the time Notice of Termination is given, plus all other amounts and
benefits to which you are entitled under any compensation plan of the Company at
the time the payments are due. The Company shall have no obligations to you
under this Agreement.
4.3 If your employment by the Company shall be terminated (a) by the
Company other than for Cause, Retirement or Disability, or (b) by you for Good
Reason, then you shall be entitled to the benefits provided below:
4.3.1 The Company shall pay you your full salary through
the Date of Termination at the rate in effect at
the time notice of Termination is given, plus all
other amounts and benefits to which you are
entitled under any compensation plan of the
Company, at the time the payments are due, except
as otherwise provided below.
4.3.2 In lieu of any further salary payments to you for
periods subsequent to the Date of Termination, the
Company shall pay to you, as severance pay the
following: (i) a lump sum severance payment equal
to three (3) times the average of your
Compensation for the five (5) years prior to the
occurrence of the circumstance giving rise to the
notice of Termination, plus (ii) the amounts in
the forms set forth in paragraphs 4.3.3, 4.3.4 and
4.3.5 (the "Severance Payments"). In addition to
the Severance Payments, the Company shall pay to
you an additional amount equal to the amount of
the Excise Tax, if any, that is due or determined
to be due under Section 4999 of the Internal
Revenue Code of 1986, as amended, resulting from
the Severance Payments or any other payments under
this Agreement or any other agreement between you
and the Company and an amount sufficient to pay
the taxes on any such Excise Taxes (the
"Gross-up"). For purposes of this Agreement,
"Compensation" shall mean the aggregate
remuneration paid by the Company to you during a
calendar year, including bonuses, awards under the
Company's Restricted Stock Plan, benefits under
employee benefit plans, automobile allowances or
any fees paid to you as remuneration for serving
as a Director of the Company.
4.3.3 The Company shall continue coverage for you and
your dependents under any health or welfare
benefit plan under which you and your dependents
were participating prior to THE CHANGE IN CONTROL
FOR A PERIOD ENDING ON THE EARLIER to occur of (i)
the date you become covered by a new employer's
health and welfare benefit plan, (ii) the date you
become covered by Medicare, or (iii) the date
which is thirty-six (36) months from the date of
Termination. The coverage for your dependents
shall end earlier than (i), (ii) or (iii) if
required by the health or welfare benefit plan due
to age eligibility.
4.3.4 The Company shall pay to you any deferred
compensation, including, but not limited to
deferred bonuses, allocated or credited to you or
your account as of the Date of Termination.
4.3.5 Outstanding stock options or Restricted Stock
grants, if any, granted to you under the Company's
Stock Plans which are not vested on Termination
shall immediately vest.
4.3.6 Where you shall prevail in any such action, the
Company shall also pay to you all legal and
accounting fees and expenses incurred by you as a
result of the termination (including all such fees
and expenses incurred by you as a result of the
termination (including all such fees and expenses,
if any, incurred in contesting or disputing any
termination or in seeking to obtain or enforce any
right or benefit provided by this Agreement or in
connection with any tax audit or proceeding to the
extent attributable to the application of Code
Section 4999 to any payment or benefit provided
under this Agreement) or any other agreement with
the Company.
4.3.7 The amount of Severance Payments and any Gross-up
due to you under this or any other relevant
agreement with the Company shall be determined by
a third party agreed to by you and the Company. If
you cannot agree on a third party, then both third
parties shall determine the amounts due under this
Agreement. If the third parties do not agree on
the amount to be paid to you, then either party
may submit the calculation of the amounts which
are in dispute to Arbitration in accordance with
this Agreement. The payments provided for in
Paragraphs 4.3.2, 4.3.4 AND 4.3.5 ABOVE, SHALL BE
MADE NO LATER THAN THE THIRTIETH (30TH) day
following the Date of Termination. However, if the
amounts of the payments cannot be finally
determined on or before that day, the Company
shall pay to you on that day an estimate, as
determined in good faith by the Company, of the
minimum amount of such payments and shall pay the
remainder of those payments (together with
interest at the rate provided in Section
1274(b)(2)(B) of the Code) as soon as the amount
can be determined but in no event later than the
30th day after the Date of Termination. In the
event that the amount of the estimate payments
exceeds the amount subsequently determined to have
been due, the excess shall constitute a loan by
the Company to you payable on the 30th day after
demand by the Company (together with interest at
the rate provided in Section 1274(b)(2)(B) of the
Code).
4.4 You shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or otherwise, nor
shall the amount of any payment or benefit provided for in this Section 4 be
reduced by any compensation earned by you as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by you to the Company, or otherwise except as specifically provided in this
Section 4.
4.5 In addition to all other amounts payable to you under this Section
4, you shall be entitled to receive all qualified benefits payable to you under
the Company's 401(k) Plan, Defined Benefit Plan and any other plan or agreement
relating to retirement benefits.
5. SUCCESSORS; BINDING AGREEMENT.
5.1 The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain the assumption and agreement
prior to the effectiveness of any succession shall be a breach of this agreement
and shall entitle you to compensation from the Company in the same amount and on
the same terms as you would have been entitled to under this Agreement if you
had terminated your employment for Good Reason following a Change In Control of
the Company, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Date of
Termination.
5.2 This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators, heirs,
distributees, and legatees. If you should die while any amount would still be
payable to you if you had continued to live, all such amounts, unless otherwise
provided in this Agreement, shall be paid in accordance with the terms of this
Agreement to your legatee or other designee or, if there is no such designee, to
your estate.
6. NOTICE. For the purpose of this Agreement, all notices and other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth on the first page of this
Agreement, provided that all notices to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the Company, or to such
other address as either party may have furnished to the other in writing in
accordance this Agreement, except that notice of a change of address shall be
effective only on receipt.
7. MISCELLANEOUS.
7.1 No provision of this Agreement may be modified, waived, or
discharged unless the waiver, modification, or discharge is agreed to in writing
and signed by you and such officer as may be specifically designated by the
Board.
7.2 No waiver by either party to this Agreement at any time of any
breach by the other party of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
7.3 No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter of this Agreement have been made by
either party that are not expressly set forth in this Agreement.
7.4 Nothing in this Agreement is intended to reduce any benefits
payable to you under any other agreement you may have with the Company or in any
Company plan in which you may participate.
7.5 The validity, interpretation, construction, and performance of
this Agreement shall be governed by the law of New Jersey without reference to
its conflict of laws principals.
7.6 All references to sections of the Exchange Act or the Code shall
be deemed also to refer to any successor provisions to such sections. Any
payments provided for shall be paid net of any applicable withholding or
deduction required under federal, state or local law.
7.7 The obligations of the Company under Section 4 shall survive the
expiration of the term of this Agreement.
8. VALIDITY. The validity or enforceability of any provision of this
Agreement shall not affect the validity or unenforceability of any other
provision of this Agreement, which shall remain in full force and effect.
9. COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
10. ARBITRATION. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in New Jersey in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction. However, you shall be entitled to seek specific performance of
your right to be paid until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection this Agreement.
11. ENTIRE AGREEMENT. This Agreement sets forth the entire understanding of
the parties with respect to its subject matter and supersedes all prior written
or oral agreements or understandings with respect to the subject matter.
In witness whereof, the parties have executed this agreement as of the
day and year first above written.
<PAGE>
MIDDLESEX WATER COMPANY
By:/s/ J. Richard Tompkins
-----------------------------------
J. Richard Tompkins
Chairman of the Board and President
ATTEST:
/s/ Marion F. Reynolds
- ----------------------
Marion F. Reynolds
Vice President
Secretary and Treasurer
/s/ Ronald F. Williams
------------------------------------
Ronald F. Williams
EXHIBIT 11
MIDDLESEX WATER COMPANY
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
(In Thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
BASIC: Income Shares Income Shares Income Shares Income Shares
-------- ------ -------- ------ -------- ------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Income Before Preferred Stock
Dividend Requirement $ 2,781 4,932 $ 2,348 4,358 $ 6,846 4,916 $ 5,185 4,326
Less Preferred Stock Dividend Requirement (78) (80) (237) (239)
------- ------ ------- ----- ------- ----- ------- -----
Earnings Applicable to Common Stock $ 2,703 4,932 $ 2,268 4,358 $ 6,609 4,916 $ 4,946 4,326
Basic Earnings Per Share of Common Stock $ 0.55 $ 0.52 $ 1.34 $ 1.14
------- ------- ------- -------
DILUTED:
Earnings Applicable to Common Stock $ 2,703 4,932 $ 2,268 4,358 $ 6,609 4,916 $ 4,946 4,326
Convertible Preferred Stock $7.00 Series Dividend 26 89 26 89 78 89 78 89
Convertible Preferred Stock $8.00 Series Dividend 38 135 40 137 118 137 120 137
------- ------ ------- ----- ------- ----- ------- -----
Adjusted Earnings Applicable to Common Stock $ 2,767 5,156 $ 2,334 4,584 $ 6,805 5,142 $ 5,144 4,552
Diluted Earnings Per Share of Common Stock $ 0.54 $ 0.51 $ 1.32 $ 1.13
------- ------- ------- -------
</TABLE>
(continued)
<TABLE>
<CAPTION>
Twelve Months Ended
September 30,
1999 1998
BASIC: Income Shares Income Shares
-------- ------ ------- -------
<S> <C> <C> <C> <C>
Income Before Preferred Stock
Dividend Requirement $ 8,182 4,795 $ 6,559 4,310
Less Preferred Stock Dividend Requirement (317) (319)
------- ----- ------- ------
Earnings Applicable to Common Stock $ 7,865 4,795 $ 6,240 4,310
Basic Earnings Per Share of Common Stock $ 1.64 $ 1.45
------- -------
DILUTED:
Earnings Applicable to Common Stock $ 7,865 4,795 $ 6,240 4,310
Convertible Preferred Stock $7.00 Series Dividend 104 89 104 89
Convertible Preferred Stock $8.00 Series Dividend 158 137 160 137
------- ----- ------- -----
Adjusted Earnings Applicable to Common Stock $ 8,127 5,021 $ 6,504 4,536
Diluted Earnings Per Share of Common Stock $ 1.62 $ 1.43
------- -------
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<CIK> 0000066004
<NAME> MIDDLESEX WATER COMPANY
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 172,932,401
<OTHER-PROPERTY-AND-INVEST> 4,042,541
<TOTAL-CURRENT-ASSETS> 18,199,077
<TOTAL-DEFERRED-CHARGES> 12,780,433
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 207,954,452
<COMMON> 46,476,503
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 23,432,905
<TOTAL-COMMON-STOCKHOLDERS-EQ> 69,909,408
0
4,879,063
<LONG-TERM-DEBT-NET> 77,899,303
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 144,285
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 55,122,393
<TOT-CAPITALIZATION-AND-LIAB> 207,954,452
<GROSS-OPERATING-REVENUE> 40,884,826
<INCOME-TAX-EXPENSE> 2,762,344
<OTHER-OPERATING-EXPENSES> 29,580,179
<TOTAL-OPERATING-EXPENSES> 32,342,523
<OPERATING-INCOME-LOSS> 8,542,303
<OTHER-INCOME-NET> 1,803,500
<INCOME-BEFORE-INTEREST-EXPEN> 10,345,803
<TOTAL-INTEREST-EXPENSE> 3,500,014
<NET-INCOME> 6,845,789
237,090
<EARNINGS-AVAILABLE-FOR-COMM> 6,608,699
<COMMON-STOCK-DIVIDENDS> 4,348,788
<TOTAL-INTEREST-ON-BONDS> 4,166,712
<CASH-FLOW-OPERATIONS> 5,495,779
<EPS-BASIC> 1.34
<EPS-DILUTED> 1.32
</TABLE>
