P R O S P E C T U S
MIDDLESEX WATER COMPANY
DIVIDEND REINVESTMENT AND COMMON STOCK PURCHASE PLAN
COMMON STOCK (WITHOUT PAR VALUE)
Dear Investor:
Middlesex Water Company (the "Company") is pleased to offer the Middlesex
Water Company Dividend Reinvestment and Common Stock Purchase Plan (the "Plan").
The Plan is a direct stock purchase plan designed to provide existing holders of
Company Common Stock with a convenient method to purchase additional shares and
to reinvest cash dividends paid on the Company's Common Stock in the purchase of
additional shares of Common Stock.
Key features of the Plan are summarized below:
o If you currently own at least one share of Common Stock, registered in
your name, you may participate by completing and returning an
enrollment form and following the instructions set forth in this
Prospectus.
o To open a new Plan account, you will be required to authorize the
reinvestment of dividends on at least ten (10) shares.
o Once you have enrolled, you may elect to have dividends on all or part
of your shares automatically reinvested in shares of Common Stock at
market prices.
o In addition, you may invest optional cash payments of $25 or more
(maximum $25,000 per calendar quarter) in the purchase of Common Stock
at market prices.
o Eligible employees of the Company (and its subsidiary companies and
affiliated companies) have the additional option of utilizing
automatic payroll deduction to purchase shares.
o As a participant, you may (but are not required to) deposit your
Company Common Stock certificates with the Plan Agent for safekeeping.
o The Company may, from time to time, make shares available to Plan
participants at a discount of up to five percent (5%) from market
prices.
This Company has reserved a total of 1,700,000 shares of Common Stock to be
used in connection with the Plan. As of the date of this Prospectus, 812,214
shares remain available for issuance under the Plan. Although the Plan
contemplates the continued payment of quarterly dividends, the Company can make
no assurances in that regard.
Sincerely,
/s/ J. Richard Tompkins
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J. Richard Tompkins
Chairman of the Board and President
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS JANUARY 25, 2000
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MIDDLESEX WATER COMPANY
Middlesex Water Company has served as a regulated water utility in central
New Jersey since 1897. Since 1992, the Company has operated water systems,
through subsidiary corporations, in other parts of New Jersey and in Delaware.
The Company's primary business is treating and distributing water on a
retail basis to residential, commercial, industrial and fire protection
customers in parts of New Jersey and Delaware. As of the date of this
Prospectus, we serve approximately 70,000 retail customers and provide water and
treatment services under contract to four municipalities and two municipal
utilities authorities. We also operate a wastewater system serving 2,200 retail
customers and, under contract, a municipal wastewater system in New Jersey.
Effective as of January 1, 1999, we operate and maintain both the 8,500 customer
water system and wastewater system of the City of Perth Amboy, New Jersey, under
a 20-year operating agreement. Our subcontractor is directly responsible for
carrying out the operation and maintenance of Perth Amboy's wastewater system.
We are regulated as to rates charged to customers for water and wastewater
services, as to the quality of water we provide and as to certain other matters.
Our revenues and income are significantly affected by the timing and amounts of
rate increases approved by regulatory authorities.
AVAILABLE INFORMATION; INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Middlesex Water Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended, and accordingly files reports,
proxy statements and other information with the Securities and Exchange
Commission. These materials may be inspected and copied at the public reference
facilities of the SEC, Judiciary Plaza, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, as well as the SEC regional offices at Citicorp Center,
500 W. Madison Street, Suite 1400, Chicago, Illinois 60661, and 7 World Trade
Center, New York, New York 10048. Copies may be obtained by mail at prescribed
rates. Requests should be directed to the SEC's Public Reference Section, Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. In
addition, the SEC maintains a Web site that contains all filings made
electronically by registrants like Middlesex Water Company, accessible at
http://www.sec.gov. The Common Stock of the Company is traded on the NASDAQ
market, where the Company's filings may also be inspected.
The Company has filed the following documents with the SEC. They are hereby
incorporated in the Prospectus by reference:
1. The Company's Annual Report on Form 10-K for the year ended December 31,
1998.
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1999.
3. The Company's latest Proxy Statement for an Annual Meeting of
Shareholders, dated April 19, 1999.
4. The description of the Company's Common Stock contained in Registration
Statement on Form S-3, dated November 30, 1998.
All documents filed by the Company pursuant to Section 13, 14 or 15(d) of
the Securities Exchange Act of 1934 Act after the date of this Prospectus and
prior to the termination of this offering of Common Stock shall be deemed to be
incorporated by reference in this Prospectus and to be part hereof from the date
of filing of such documents.
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DESCRIPTION OF THE PLAN
PURPOSE OF THE PLAN
1. What is the purpose of the Plan?
The purpose of the Plan is to promote long-term stock ownership among
existing investors in the Company by providing a convenient and economical
method to purchase shares of Common Stock and reinvest cash dividends in shares
of Common Stock.
ADVANTAGES OF THE PLAN
2. What are the advantages of the Plan?
o Cash dividends on the shares held in your Plan account can be
automatically reinvested in shares of Common Stock.
o You pay no commission or service charge on purchases made under the Plan.
o You may purchase shares of Common Stock with optional cash payments of at
least $25, subject to a maximum of $25,000 per calendar quarter.
o Full investment of the funds you choose to invest is possible because
fractional shares, as well as whole shares, will by credited to your Plan
account.
o Safekeeping of the shares held in your account is assured since those
share certificates are not issued to you directly.
o For simplified recordkeeping, you will receive regular statements of your
Plan account.
o If you are employed by the Company (or its subsidiaries and other
affiliates), and are otherwise eligible to participate, you may make
purchases through a program of regular payroll deductions.
ADMINISTRATION OF THE PLAN
3. Who administers the Plan?
The Plan is administered by Registrar and Transfer Company of Cranford, New
Jersey (the "Plan Agent"). As Plan Agent, Registrar and Transfer Company keeps
records, sends statements of account to Plan participants and performs other
duties relating to the Plan. The Common Stock purchased in your Plan account
will be registered in the name of the Plan Agent, or its nominee, as your agent.
You may, at any time, withdraw all or any part of the shares held in your Plan
account. (See Questions 31 and 35.) Special arrangements may be made with the
Plan Agent if you are an institution that is required by law to maintain
physical possession of share certificates.
4. How do I contact the Plan Agent or the Company?
<TABLE>
<CAPTION>
PLAN AGENT COMPANY
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<S> <C> <C>
Written Inquiries: Middlesex Water Company Middlesex Water Company
c/o Registrar and Transfer Company 1500 Ronson Road
Dividend Reinvestment Department Iselin, New Jersey 08830
10 Commerce Drive Attn: Investor Relations
Cranford, New Jersey 07016 (732) 634-1500
Phone Inquiries: (800) 368-5948
</TABLE>
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5. What kind of reports will be sent to participants in the Plan?
As a participant, you will receive a statement of your account as soon as
practicable after each transaction (i.e., dividend reinvestment, optional cash
payments, share withdrawals, transfers, etc.) is posted to your Plan account.
You should retain these statements in order to establish the cost basis of
shares purchased under the Plan for income tax and other purposes. In addition,
you will receive all communications sent to all other shareholders, such as
annual and quarterly reports, proxy statements and income tax information for
reporting dividends paid.
PLAN ELIGIBILITY AND ENROLLMENT
6. How does a Company shareholder become eligible to participate in the Plan?
If you are already a registered shareholder of Common Stock (that is, your
share certificates are registered directly in your name), you may enroll in the
Plan by completing and returning the Authorization Form to the Plan Agent and
following the instructions set forth in the following paragraph. If the stock
you own is registered in more than one name (i.e., joint tenants, trustees,
etc.), all registered holders must sign the Authorization Form. In addition, if
the stock you own is registered in different names (i.e., "John Smith" and "J.
Smith"), you must submit an Authorization Form for each registration in order to
participate fully in the Plan.
To open a new Plan account, you will be required to authorize the
reinvestment of dividends on at least ten (10) shares of Company stock. If you
currently own fewer than ten (10) registered shares, you may meet this
enrollment requirement by authorizing the reinvestment of dividends on the
registered shares you currently own and including an optional cash payment with
your Authorization Form sufficient to purchase the remainder of the ten (10)
shares required to enroll. (Company employees should also refer to Question 11.)
7. I already own shares, but they are held by my bank or broker and registered
in "street name." How can I participate?
If you currently own shares of Common Stock that are held on your behalf by
a bank or broker (that is, in "street name"), you will need to arrange with your
bank or broker to have at least one share registered directly in your name in
order to be eligible to participate. Once the share(s) is registered in your
name, you may then enroll in the Plan as described in Question 6. (Company
employees should also refer to Question 11.)
8. I am not currently a shareholder. Can I participate in the Plan?
You will first need to become a shareholder of record by purchasing at
least one share of Common Stock, and having a stock certificate issued in your
name. You then may enroll in the Plan as described in Question 6. (Company
employees should also refer to Question 11.)
9. Are there fees associated with enrollment?
No. The Company pays all fees, administrative and other expenses related to
your Plan enrollment. However, you may incur certain charges for certain other
transactions, requests or withdrawals under the Plan. (See Questions 25, 33 and
35.)
10. Are there any restrictions on participation in the Plan by shareholders
residing outside the United States?
Regulations in certain countries may limit or prohibit participation in
services provided under this type of program. Therefore, persons residing
outside the United States should first determine whether they are subject to any
governmental regulations prohibiting or limiting their participation before
requesting any of the services provided through the Plan.
11. Are there special eligibility or enrollment rules applicable to Company
employees?
Yes, if you are a Company employee or are an employee of one of the
Company's subsidiaries (which for purposes of the Plan, includes a subsidiary of
one of the Company's subsidiaries), you have the additional option of purchasing
shares through automatic payroll deductions. (See Question 22 for details.)
Employees who participate through the automatic payroll deduction option may
open a Plan account simply by completing an Authorization Form and returning it
to the Company (the ten (10) share minimum reinvestment requirement discussed in
Question 6 is not applicable to employees participating through automatic
payroll deduction).
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Employees of municipalities and municipal utility authorities under contract
with the Company are not eligible to participate through automatic payroll
deductions.
DIVIDEND REINVESTMENT
12. What dividend reinvestment options are available in the Plan?
(a) "Full Dividend Reinvestment"--Under this option, you direct the Company
to reinvest the dividends on all of the shares of Common Stock registered in
your name, as well as shares credited to your account under the Plan. In
addition, you may make additional investments by making optional cash payments;
(b) "Partial Dividend Reinvestment"--Under this option, you direct the
Company to reinvest the dividends on a portion of the shares of Common Stock
registered in your name. Dividends on shares credited to your account under the
Plan will be reinvested fully. In addition, you may make additional investments
by making optional cash payments; or
(c) "Optional Cash Payments Only"--Under this option, you may participate
in the Plan by making optional cash payments only. The Plan Agent will continue
to pay cash dividends on the shares you hold outside the Plan. Dividends on
shares credited to your account under the Plan (i.e., through the optional cash
investments) will be reinvested fully.
The Plan Agent will return your Authorization Form to you, if you fail to
select one of these options or fail to sign the Authorization Form.
13. Must my dividends be reinvested automatically to the extent I have chosen
either Full Dividend Reinvestment or Partial Dividend Reinvestment?
Yes. To the extent you have elected to participate in the Plan, cash
dividends on those shares which are subject to reinvestment will be reinvested
automatically in additional shares of Common Stock.
14. When will my dividends be reinvested and at what price?
If you are enrolled in the Plan as of an applicable "record date" for
dividends, either all or part of the dividends on your shares (depending on
which option you have chosen) will be used to purchase shares of Common Stock as
of the applicable dividend payment dates. Cash dividends on the Company's Common
Stock, when and as declared, are generally payable on the first business day of
March, June, September and December.
The price of the Common Stock to be purchased under the Plan is addressed
in Questions 24 and 25.
15. Will I be charged fees for participating in the dividend reinvestment
program?
No. You will not be charged any fees in connection with the reinvestment of
your dividends under the Plan. However, you may incur certain charges for
certain other transactions, requests or withdrawals under the Plan. (See
Questions 25, 33 and 35.)
OPTIONAL CASH PAYMENTS
16. How does the cash payment option work? What are the minimum and maximum
amounts for optional cash payments?
As a Plan participant, you may make optional cash payments at any time in
amounts of at least $25, subject to a limitation of $25,000, per calendar
quarter.
17. How do I make an optional cash payment?
If you choose to make an optional cash payment at the time of your
enrollment in the Plan, you may do so by enclosing a check or money order made
payable to the Plan Agent (that is, "Registrar and Transfer Company") with your
Authorization Form. Thereafter, you may make optional cash payments by sending a
check or money order, together with the cash payment form attached to the
statement of account you receive from the Plan Agent, to the Plan Agent (that
is, "Registrar and Transfer Company").
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18. When will optional cash payments be invested?
If the Plan Agent receives your optional cash payment at least ten days
prior to the end of any month, it will invest your funds on the first business
day of the next month. If the Plan Agent receives your payment fewer than ten
days prior to the end of any month, it will hold your funds and invest them on
the first business day of the month following the next month. Only shares which
are purchased prior to the applicable record date for dividends will be entitled
to receive dividends. No interest will be paid on amounts held by the Plan Agent
pending investment.
19. Will I be charged fees for optional cash payments?
No. You will not be charged any fees in connection with your optional cash
payments. However, you may incur certain charges for certain other transactions,
requests or withdrawals under the Plan. (See Questions 25, 33 and 35.)
20. Under what circumstances may an optional cash payment be returned to me?
If the Plan Agent receives a written request from you to return your
optional cash payment at least two days prior to the day on which the Plan Agent
is scheduled to purchase shares for you, the Plan Agent will return your
payment.
NO INTEREST WILL BE PAID ON AMOUNTS HELD BY THE PLAN AGENT.
21. How are payments with "insufficient funds" handled?
If an optional cash payment is made by a check drawn on insufficient funds
or incorrect draft information, or the Plan Agent otherwise does not receive the
money, the requested purchase will be deemed void, and the Plan Agent will
immediately remove from your account any shares already purchased upon the prior
credit of such funds. The Plan Agent may, at its discretion, sell such shares to
satisfy any uncollected amounts or return such shares to the Company. If the net
proceeds from any sale of such shares are insufficient to satisfy the balance
due, the Plan Agent may sell additional shares from your account as necessary to
satisfy the uncollected balance.
22. I am an employee eligible to participate (See Question 11). How can I make
optional cash payments though automatic payroll deductions?
If you are an eligible employee (See Question 11) and you have completed
six months of consecutive employment and you have already enrolled in the Plan
(See Questions 6, 7, and 8), you can enroll to make optional cash payments
through automatic payroll deductions by completing an Employee Authorization
Form and submitting it to the Company (if you have not previously enrolled in
the Plan, you may do so at the same time you enroll to make optional payroll
deductions). The Company (and the Plan Agent) must receive your forms
sufficiently in advance of your next paycheck to allow for processing. If you
are paid weekly, you may authorize payroll deductions in a specified
whole-dollar amount from each regular paycheck, subject to a $5 minimum and $100
maximum per pay period. If you are paid biweekly, the minimum deduction is $10
and the maximum deduction is $200 per pay period. Payroll deductions will be
counted against the limitation on optional cash payments discussed in Question
16. Once authorized, payroll deductions will continue until changed or
terminated by you.
NO INTEREST WILL BE PAID ON PAYROLL DEDUCTIONS HELD BY THE
COMPANY OR THE PLAN AGENT PENDING INVESTMENT.
PURCHASE OF COMMON STOCK
23. What is the source of Company Common Stock purchased through the Plan?
Share purchases will be made directly from the Company.
24. How many shares of Common Stock will be purchased under the Plan and what
will be the price of shares?
Your Plan account will be credited with the number of shares (including
fractional shares, computed to four decimals) equal to the amount invested for
your Plan account divided by the applicable price per share. Shares purchased
under the Plan will be purchased and credited to your account at the average of
the daily averages of the high and low sales prices of Company Common Stock as
reported on the Over-the-Counter Market as quoted on NASDAQ for the five days on
which the Common Stock was traded immediately preceding and ending on the
applicable date of purchase.
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25. Will the Company offer discounts on the price per share?
Subject to certain limitations, the Company may, from time to time, offer
shares to Plan participants at a discount of up to five percent (5%) from the
purchase price described in Question 24. The following conditions will apply if
and when the Company offers shares at a discount: (i) the Company may limit the
number of shares offered at the discounted price; (ii) the Company may limit the
time period during which the discounted price is in effect (but in no event will
the time period be less than ninety (90) days); (iii) if you purchase shares at
the discounted price and subsequently withdraw shares from your Plan account
within six (6) months after the date of purchase, you will be charged a
withdrawal fee equal to the applicable per share reduction in purchase price on
all shares withdrawn (up to a maximum of the number of shares purchased at the
discounted price). The withdrawal fee will be charged against your Plan account
at the time of withdrawal, and will also apply to any purchases of shares made
at the discounted price through automatic dividend reinvestment and employee
payroll deductions (if applicable) during the six month period before the date
of withdrawal.
26. Will I be charged fees in connection with purchases under the Plan?
No. There are no brokerage fees or service charges applicable to purchases
made under the Plan. However, you may incur certain charges for certain other
transactions, requests or withdrawals under the Plan. (See Questions 25, 33 and
35.)
CUSTODIAL SERVICE
27. How does the custodial service (book-entry shares) work?
All shares of Company Common Stock that are purchased through the Plan will
be held by the Plan Agent and reflected in book-entry form in your account on
the records of the Plan Agent. If you hold Company Common Stock certificates you
may also, at any time, deposit those certificates for safekeeping with the Plan
Agent, and the shares represented by the deposited certificates will be included
in the book-entry form in your Plan account.
28. How do I deposit my Company Common Stock certificates with the Plan Agent?
To deposit certificates into the Plan, you should send your certificates,
by registered and insured mail, to the Plan Agent, with your written
instructions to deposit the shares represented by the certificates to your Plan
account.
THE CERTIFICATES SHOULD NOT BE ENDORSED AND THE ASSIGNMENT
SECTION SHOULD NOT BE COMPLETED.
29. Are there any charges associated with this custodial service?
No. There is no cost to you either for having the Plan Agent hold the
shares purchased for you through the Plan or for depositing with the Plan Agent
the stock certificates you hold for the purpose of adding the shares to your
book-entry share position. However, you may incur certain charges for certain
other transactions, requests or withdrawals under the Plan. (See Questions 25,
33 and 35.)
ISSUANCE OF STOCK CERTIFICATES
30. Will stock certificates be issued for shares acquired through the Plan?
No. Stock certificates will not be issued for shares in a Plan account
unless a specific request is made to the Plan Agent.
31. How do I request a stock certificate?
Certificates for full shares held in the Plan may be obtained, without
charge, by writing to the Plan Agent and requesting the issuance of shares in
certificate form.
CERTIFICATES FOR FRACTIONAL SHARES WILL NOT BE ISSUED
UNDER ANY CIRCUMSTANCES.
32. Can I pledge or assign the shares held in my Plan account?
No. Shares held in your Plan account may not be pledged or assigned. If you
wish to pledge or assign your shares, you first must write to the Plan Agent and
request the issuance of shares in certificate form.
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GIFTS AND TRANSFERS OF SHARES
33. Can I transfer shares that I hold in the Plan to someone else?
Yes. Subject to compliance with any applicable laws, you may transfer
ownership of some or all of your Plan shares by sending the Plan Agent written,
signed transfer instructions. You will be responsible for any applicable taxes
in connection with the transfer. Signatures of all registered holders must be
"Medallion Guaranteed" by a financial institution participating in the Medallion
Guarantee program. The Medallion Guarantee program ensures that the individual
signing is in fact the owner as indicated on the participant's account.
You may transfer shares to new or existing shareholders. If you are opening
a new Plan account for the transferee, you must include a completed
Authorization Form with the gift/transfer instructions; however, a new Plan
account will not be opened as a result of a transfer of fewer than ten (10)
shares, unless you (i) authorize the reinvestment of dividends on the shares to
be transferred and (ii) include an optional cash payment with your transfer
instructions sufficient to purchase the remainder of the ten (10) shares
required to enroll.
CHANGING METHOD OF PARTICIPATION AND WITHDRAWAL
34. How do I change my method of participation in the Plan?
You may change your method of participation at any time by completing a new
Authorization Form and returning it to the Plan Agent.
35. How do I close my Plan account?
You may terminate your participation in the Plan by giving written notice
to the Plan Agent. Upon termination, you must elect either (a) to receive a
certificate for the number of whole shares held in your Plan account and a check
for the value of any fractional share (which value will be based on the closing
market price of the Common Stock on the first day that the stock is traded after
the withdrawal request is received); or (b) to have all of the shares in your
Plan account sold for you. If you request that your shares be sold, the Plan
Agent will make the sale in the market, if practicable, within ten trading days
after receipt of the request. You will receive the proceeds of sale, less any
brokerage commission and transfer tax. Receipt by the Plan Agent of due notice
of a participant's death or incompetence shall be deemed a notice of withdrawal.
Any certificates issued upon termination will be issued in the name or
names in which the account is registered, unless otherwise instructed. If the
certificate is to be issued in a name other than the name or names on your Plan
account, your signature (and that of any co-owner) on the instructions or stock
power must be "Medallion Guaranteed" by a financial institution participating in
the Medallion Guarantee program. (See Question 33.) You will be responsible for
any applicable taxes in connection with the transfer. No certificates will be
issued for fractional shares.
The Plan Agent will process notices of withdrawal and send proceeds to you
as soon as practicable, without interest. If a notice of withdrawal is received
on or after an ex-dividend date but before the related dividend payment date,
the withdrawal will be processed as described above and a separate dividend
check will be mailed as soon as practicable following the payment date.
Thereafter, cash dividends will be paid out to the shareholder and not
reinvested in Company Common Stock.
If a notice of withdrawal is received by the Plan Agent at least two days
prior to an optional cash payment purchase date, any optional cash payment held
by the Plan Agent will be returned to you as soon as practicable.
Plan withdrawals made within six months after a purchase at a discounted
price described in the answer to Question 25 are subject to the withdrawal fee
explained in that answer.
Employees participating through payroll deduction also must contact the
Company. (See Question 36.)
36. I am an eligible employee investing though payroll deductions, do I need to
do anything else to withdraw?
Yes. In addition to sending a withdrawal request to the Plan Agent, you
must notify the Company in writing in order to discontinue the payroll
deductions. The Company must receive your request sufficiently in
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advance of your next paycheck to allow for processing. Any amounts held by the
Company or the Plan Agent which have not been invested, will be returned to you,
without interest.
37. May I terminate automatic payroll deductions and still remain in the Plan?
Yes. As an eligible employee, you may decide to terminate your payroll
deductions but choose to leave your shares in the Plan and otherwise continue to
participate. In such an instance, you may continue to make optional cash
payments directly to the Plan Agent.
38. After withdrawing from the Plan, may I later re-enroll?
Generally, yes. As an eligible employee, you may re-enroll by following the
procedures for enrollment described above; however, the Company reserves the
right to reject your enrollment form if it believes that your participation may
be contrary to the general intent of the Plan (promoting long-term ownership of
Company shares) or in violation of applicable law.
39. Can the Company unilaterally terminate my participation in the Plan?
The Company reserves the right to terminate you from the Plan if fewer than
ten (10) shares of Common Stock are held in your Plan account and you no longer
remain a record holder of Company Common Stock subject to automatic dividend
reinvestment under the Plan. In such a case, you will be issued a check for the
cash value of any fractional share in your Plan account. In addition, the
Company reserves the right to terminate you from the Plan if it believes that
your participation may be contrary to the general intent of the Plan (promoting
long-term ownership of Company shares) or in violation of applicable law.
ADDITIONAL INFORMATION
40. How would a stock split, stock dividend or rights offering affect my
account?
Any shares resulting from a stock split or stock dividend paid on shares
held in custody for you by the Plan Agent will be credited to your book-entry
position. Of course you may request a certificate at any time for any or all of
your shares. (See Question 31.) Stock dividends or split shares distributed on
any certificated shares registered in your name will be mailed directly to you
in the same manner as to stockholders who are not participating in the Plan.
Warrants representing rights on any shares registered in your name and on
shares credited to your Plan account, will be mailed directly to you in the same
manner as to stockholders not participating in the Plan.
41. How do I vote my Plan shares at shareholders' meetings?
As a Plan participant, you will be sent a proxy statement in connection
with each meeting of the Company's shareholders, together with a proxy card
representing the shares registered directly in your name and the whole shares
held by the Plan Agent in your Plan account. This proxy card, when signed and
returned, will be voted as you indicate. If the proxy card is not returned or if
it is returned unsigned, the shares will not be voted unless you or a duly
appointed representative votes in person at the meeting. As is the case with
stockholders not participating in the Plan, if no instructions are indicated on
a properly signed and returned proxy card, all of the shares represented by the
proxy card will be voted in accordance with the recommendations of the Company's
management.
42. Can the Plan be changed or discontinued?
While the Company intends at the present time to continue the Plan
indefinitely, the Company reserves the right to amend, suspend, modify or
terminate the Plan at any time. Notice of any such amendment, suspension,
modification or termination will be sent to all Plan participants. The Plan
Agent reserves the right to resign at any time upon reasonable notice to the
Company in writing. The Company reserves the right to elect and appoint at any
time a new agent including itself or its nominee to administer the Plan.
Upon termination of the Plan by the Company, the Company or the Plan Agent,
as the case may be, will return any uninvested optional cash payments and
payroll deductions, issue a certificate for whole shares credited to each
account under the Plan, and make a cash payment for any fractional share
credited to each account.
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43. Who interprets and regulates the Plan?
The Company reserves the right to interpret the Plan as may be necessary or
desirable in connection with the operation of the Plan.
LIMITATION OF LIABILITY
IF YOU CHOOSE TO PARTICIPATE IN THE PLAN, YOU SHOULD RECOGNIZE THAT NEITHER
THE COMPANY NOR THE PLAN AGENT CAN ASSURE YOU OF A PROFIT OR PROTECT YOU AGAINST
A LOSS ON THE SHARES THAT YOU PURCHASE UNDER THE PLAN.
Neither the Company nor the Plan Agent, in administering the Plan, will be
liable for any act done in good faith or for any good faith omission to act,
including without limitation any claim of liability arising out of failure to
terminate a participant's account upon such participant's death or incompetence,
the price at which shares are purchased or sold for the participant's account,
the times when purchases or sales are made, or fluctuations in the market value
of Company Common Stock. This limitation of liability will not constitute a
waiver by any participant of his or her rights under the federal securities
laws.
Although the Plan provides for the reinvestment of dividends, the
declaration and payment of dividends will continue to be determined by the Board
of Directors of the Company in its discretion, depending upon future earnings,
the financial condition of the Company and other factors. The amount and timing
of dividends may be changed, or the payment of dividends terminated, at any time
without notice.
U.S. FEDERAL INCOME TAXATION
Cash dividends reinvested under the Plan will be taxable for U.S. Federal
income tax purposes as having been received by a participant even though the
participant has not actually received them in cash. Each participant will
receive an annual statement from the Plan Agent indicating the amount of
reinvested dividends reported to the U.S. Internal Revenue Service as dividend
income.
A participant will not realize gain or loss for U.S. Federal income tax
purposes upon a transfer of shares to the Plan or the withdrawal of whole shares
from the Plan. Participants will, however, generally realize gain or loss upon
the receipt of cash for fractional shares held in the Plan. Gain or loss will
also be realized by the participant when whole shares are sold by the
participant after withdrawal from the Plan. The amount of gain or loss will be
the difference between the amount that the participant receives for the shares
or fraction of a share sold and the participant's tax basis therefor. In order
to determine the tax basis for shares or any fraction of a share credited to a
participant's account, each participant should retain all account statements and
transaction advices.
Plan participants who are non-resident aliens or non-U.S. corporations,
partnerships or other entities generally are subject to a withholding tax on
dividends paid on shares held in the Plan. The Plan Agent is required to
withhold from dividends paid the appropriate amount determined in accordance
with Internal Revenue Service regulations. Where applicable, this withholding
tax is determined by treaty between the United States and the country in which
the participant resides. In addition, dividends paid on shares in Plan accounts
are subject to the "backup withholding" provisions of the Internal Revenue Code.
Accordingly, the amount of any dividends, net of the applicable withholding tax,
will be credited to participant Plan accounts for investment in additional
shares of Company Common Stock.
The foregoing does not purport to be a comprehensive summary of all of the
tax considerations that may be relevant to a participant in the Plan and does
not constitute tax advice. The summary does not reflect every possible outcome
that could result from participation in the Plan, and does not consider any
possible tax consequences under various state, local, foreign or other tax laws.
Each participant is urged to consult his or her own tax advisor regarding the
tax consequences applicable to his or her particular situation before
participating in the Plan or disposing of shares purchased under the Plan.
10
<PAGE>
USE OF PROCEEDS
Shares purchased for Plan participants with reinvested cash dividends and
optional cash investments will, at the Company's option, be shares newly issued
by the Company or shares held in the Company's treasury. The Company and the
Plan Agent are unable to estimate the number of shares, if any, that will be
purchased directly from the Company under the Plan or the amount of proceeds
from any such shares. The net proceeds will be used by the Company for general
corporate purposes.
LEGAL MATTERS
The legality of the Common Stock covered hereby will be passed upon for the
Company by Norris, McLaughlin & Marcus, P.A., 721 Route 202-206, P.O. Box 1018,
Somerville, New Jersey 08876-1018.
EXPERTS
The consolidated financial statements incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended December 31, 1998, have
been so incorporated in reliance upon the report of Deloitte & Touche LLP ,
independent accountants, given on the authority of such firm as experts in
accounting and auditing.
INDEMNIFICATION
The Company's By-Laws provide for indemnification of officers, directors
and employees of the Company in certain circumstances for certain liabilities
and expenses. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the Company has
been informed that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act, and is therefore
unenforceable.
THIS PROSPECTUS SHOULD BE RETAINED BY PARTICIPANTS IN THE PLAN FOR FULL
REFERENCE.
11
<PAGE>
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS. IF ANY OTHER
INFORMATION OR REPRESENTATIONS ARE GIVEN OR MADE, YOU MUST NOT RELY ON THEM AS
HAVING BEEN AUTHORIZED.
This Prospectus does not constitute an offer to sell or a solicitation of
an offer to buy shares of Company Common Stock in any state or other
jurisdiction to any person to whom it is unlawful to make such an offer or
solicitation.
Neither the delivery of this Prospectus nor any sale made hereunder should
be deemed to imply that there has been no change in the affairs of the Company
since the date of this Prospectus or that the information herein is correct as
of any time subsequent to its date. This Prospectus relates only to the Common
Stock offered hereby and is not to be relied upon in connection with the
purchase or sale of any other securities in the Company.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Middlesex Water Company....................... 2
Available Information; Incorporation of
Certain Documents by Reference.............. 2
Description of the Plan....................... 3
Purpose of the Plan....................... 3
Advantages of the Plan.................... 3
Administration of the Plan................ 3
Plan Eligibility and Enrollment........... 4
Dividend Reinvestment..................... 5
Optional Cash Payments.................... 5
Purchase of Common Stock.................. 6
Custodial Service......................... 7
Issuance of Stock Certificates............ 7
Gifts and Transfers of Shares............. 8
Changing Method of Participation and
Withdrawal.............................. 8
Additional Information.................... 9
Limitation of Liability....................... 10
U.S. Federal Income Taxation.................. 10
Use of Proceeds............................... 11
Legal Matters................................. 11
Experts....................................... 11
Indemnification............................... 11
</TABLE>
MIDDLESEX
WATER
COMPANY
DIVIDEND REINVESTMENT
AND COMMON STOCK
PURCHASE PLAN
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P R O S P E C T U S
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ADDRESS:
1500 Ronson Road
P.O. Box 1500
Iselin, New Jersey 08830-0452
Dated: January 25, 1999
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