SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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E'TOWN CORPORATION
..........................................................................
(Name of Registrant as Specified In Its Charter)
GAIL P. BRADY
..........................................................................
(Name of Person(s) Filing Proxy Statement)
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[E'TOWN CORPORATION LOGO]
600 SOUTH AVENUE, WESTFIELD, N.J. 07090
___________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 2, 1994
___________________
To the Stockholders of E'TOWN CORPORATION,
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
E'town Corporation will be held at The Mansion Hotel, 295 South Avenue,
Fanwood, New Jersey, on Monday, May 2, 1994, at 11:00 A.M. for the following
purposes:
1. To elect four members to the Board of Directors for terms to
expire at the 1997 Annual Meeting of Stockholders.
2. To ratify, confirm and approve the act of the Board of
Directors, on February 17, 1994, appointing Deloitte & Touche, Parsippany, New
Jersey, as the auditors for the Corporation and its subsidiaries for the year
1994.
3. To transact such other business as may properly be brought
before such meeting or any adjournment or adjournments thereof.
It is proposed to nominate as Directors: Brendan T. Byrne, Robert W.
Kean, Jr., Henry S. Patterson, II, and Hugo M. Pfaltz, Jr. for terms of three
years.
The close of business on March 17, 1994, has been fixed as the time
for the determination of the stockholders entitled to vote at said meeting, or
any adjournments thereof, and only stockholders of record at such time will be
entitled to vote at such meeting, or at any adjournments thereof.
You are urged to sign, date and return the enclosed proxy promptly,
using the envelope enclosed for your convenience. You may revoke your proxy at
any time prior to the meeting and vote in person at the meeting.
By Order of the Board of Directors,
Walter M. Braswell
Secretary
Westfield, New Jersey
March 30, 1994
E'TOWN CORPORATION
600 SOUTH AVENUE, WESTFIELD, N.J. 07090
March 30, 1994
PROXY STATEMENT
The following statement is furnished in connection with the
solicitation by the Board of Directors of E'town Corporation ("E'town" or the
"Corporation") of proxies to be used at the Annual Meeting of the holders of
the stock of the Corporation, to be held May 2, 1994, at the hour and place set
forth in the Notice of Annual Meeting accompanying this Proxy Statement. This
Proxy Statement and the accompanying proxy were first sent to shareholders on
March 30, 1994.
PERSONS MAKING THE SOLICITATION
This solicitation is made on behalf of the Board of Directors of the
Corporation. The cost of soliciting these proxies will be borne by the
Corporation. In addition to solicitation by mail, the Corporation may make
arrangements with brokerage houses and other custodians, nominees and
fiduciaries to send proxies and proxy material to their principals and may
reimburse them for their expenses in so doing. The solicitation will be
initially by mail, and it may later be decided to make further solicitations by
mail, telephone, telegraph, or personal call by directors, officers and regular
employees of the Corporation. The Corporation has retained Georgeson & Company
("Georgeson") to assist in the solicitation pursuant to which Georgeson will be
paid a fee of $5,500 plus expenses.
VOTING SECURITIES AND OWNERSHIP THEREOF
BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of March 17, 1994, there were outstanding 5,639,472 shares of the
Corporation's Common Stock, the only capital stock entitled to vote at the
Annual Meeting. Each share of Common Stock is entitled to one vote. As stated
in the Notice of Meeting, only holders of record of the Common Stock on such
date will be entitled to vote at the meeting or any adjournment thereof.
Under current rules of the Securities and Exchange Commission (the
"SEC"), a person who directly or indirectly has or shares voting power and/or
investment power with respect to a security is considered a beneficial owner of
the security. Voting power is the power to vote or direct the vote of shares,
and investment power is the power to dispose of or direct the disposition of
shares.
To the knowledge of the Corporation, the following persons owned
beneficially more than 5% of the outstanding Common Stock as of March 17, 1994.
Beneficial holdings of Robert W. Kean, Jr., are also indicated.
Name and Address of No. of Shares of Percentage
Beneficial Owner Common Stock of Class
- - - ------------------- ---------------- ----------
Robert W. Kean, Jr., 600 South Ave.,
Westfield, N.J. 07090 . . . . . . . . . . . . . 15,125(1) .27
Robert W. Kean, Jr., as Co-Trustee,
with Hamilton F. Kean, and Thomas H. Kean,
600 South Ave., Westfield, N.J. 07090 . . . . . 171,567(2) 3.02
John Kean, 550 Route 202-206, Bedminster,
N.J. 07921 . . . . . . . . . . . . . . . . . . 19,263(1) .34
John Kean, as Co-Trustee, with Stewart B.
Kean and May Kean Raynolds, 550 Route 202-
206, Bedminster, N.J. 07921 . . . . . . . . . . 241,941(2) 4.27
John Kean, as Co-Trustee, with Stewart B. Kean,
550 Route 202-206, Bedminster, N.J. 07921. . . . 28,800(2) .51
________________
(1) Beneficial owner indicated has sole voting and investment power with
respect to these shares.
(2) Beneficial owners indicated share voting and investment power with
respect to these shares.
The following information pertains to the Common Stock of the
Corporation that, to the knowledge of the Corporation, is beneficially owned,
directly or indirectly, individually and as a group, by all Directors and
Executive Officers of the Corporation and its subsidiaries, Elizabethtown Water
Company ("Elizabethtown") and E'town Properties, Inc. ("Properties"), as of
March 17, 1994.
No. of Percent
Title of Class Name of Beneficial Owner Shares(1) of Class
Common Stock. . . . . Brendan T. Byrne. . . . . . . . . 1,190 .02
Thomas J. Cawley. . . . . . . . . 11,566 .20
Andrew M. Chapman . . . . . . . . 16,488 .29
Frank Critelli. . . . . . . . . . 11,901 .21
Anne Evans Gibbons. . . . . . . . 25,846 .46
John Kean . . . . . . . . . . . . (2) (2)
Robert W. Kean, Jr. . . . . . . . (2) (2)
Robert W. Kean, III . . . . . . . 426 .01
Arthur P. Morgan. . . . . . . . . 331 .01
Barry T. Parker . . . . . . . . . 1,968(3) .04
Henry S. Patterson, II . . . . . 10,570 .19
Hugo M. Pfaltz, Jr. . . . . . . . 8,911(4) .16
Chester A. Ring, 3rd. . . . . . . 16,254 .29
Directors and Executive Officers
as a group . . . . . . . . . . . 632,181 11.15
_______________
(1) Includes shares held for Executive Officers under the Corporation's Tax
Reduction Act Stock Ownership Plan and the 401(k) Plan and shares subject to
options granted but not yet exercised under the 1982 Incentive Stock Option
Plan and 1987 Stock Option Plan.
(2) Reference is made to the information set forth in the preceding table.
(3) Includes 600 shares held under a trust for which beneficial owner is a
co-trustee and beneficial owner indicated shares voting and investment power
with respect to these shares.
(4) Includes 1,250 shares of Common Stock issuable upon conversion of
debentures held by a partnership of which Mr. Pfaltz is a general partner.
I. ELECTION OF DIRECTORS
The Board of Directors
The Board of Directors is divided into three classes of
directorships, with directors in each class serving staggered three-year terms.
At each Annual Meeting of Stockholders, the terms of directors in one of the
three classes expire. At that Annual Meeting of Stockholders, directors are
elected in a class to succeed the directors whose terms expire. The terms of
the directors so elected will expire at the third Annual Meeting of
Stockholders thereafter. Accordingly, of the current Directors, four are in the
class to be elected at the 1994 Annual Meeting of Stockholders, three are in
the class to be elected at the 1995 Annual Meeting of Stockholders and four are
in the class to be elected at the 1996 Annual Meeting of Stockholders.
Every shareholder entitled to vote shall have the right to vote
the number of shares owned by him or her for as many candidates for election as
there are directors to be elected. Directors shall be elected by a plurality
of the votes cast at the election. With respect to election of directors, the
approval of auditors and any other matter submitted to a vote of shareholders,
votes shall be counted by designated agents and tabulated by inspectors, with
abstentions and non-votes, including broker non-votes, treated as votes not
cast.
It is intended that the shares of Common Stock represented by the
accompanying proxy will be voted at the 1994 Annual Meeting of Stockholders for
the election of nominees BRENDAN T. BYRNE, ROBERT W. KEAN, JR., HENRY S.
PATTERSON, II, and HUGO M. PFALTZ, JR., who have been designated by the Board
of Directors as the four Directors in the class of directorships whose members'
terms will expire in 1997.
The Board of Directors has no Nominating Committee. All of the
foregoing persons are now Directors of the Corporation. While it is not
anticipated that any of the nominees will be unable to serve, if any such
nominee is not a candidate for election as a Director at the 1994 Annual
Meeting of Stockholders, the proxy will be voted in favor of such other person
or persons in lieu thereof as the present Board of Directors shall determine
unless the proxy withholds authority to vote for all nominees.
The following information relates to the nominees named herein and
the other persons whose terms as Directors will continue after the 1994 Annual
Meeting of Stockholders.
NOMINEES:
Name, Age and Other Positions, Period Served as Director Term
if any, with Registrant Business Experience During Past 5 Years Expires
- - - ------------------------------ --------------------------------------- -------
Brendan T. Byrne, 69, Member of
Audit, Corporate Planning,
Executive Compensation,
Stock Options, and
Elizabethtown's Executive
Compensation Committees . . . . .Served as Director of Elizabethtown 1997
since July 1982 and the Corporation
since March 1985. He has been a partner
in the law firm of Carella, Byrne, Bain,
Gilfillan, Cecchi & Stewart since 1982.
From 1974 until 1982 he was Governor of
the State of New Jersey. He is also a
Director of Bell Atlantic of New Jersey,
Jamesway Corporation, Ingersoll-Rand, The
Chelsea Group and Prudential Insurance
Company of America.
Name, Age and Other Positions, Period Served as Director Term
if any, with Registrant Business Experience During Past 5 Years Expires
- - - ------------------------------ --------------------------------------- -------
Robert W. Kean, Jr., 71,
Chairman and Chief Executive
Officer, E'town Corporation and
Elizabethtown Water Company . . .Served as Director of Elizabethtown 1997
since 1949 and the Corporation since
March 1985. He is Chairman of the
Board and Chief Executive Officer
of both the Corporation and
Elizabethtown. He is a Director of
NUI Corporation and its subsidiary,
Elizabethtown Gas Company. He is
Chairman of the Board and Director
of Constellation Bancorp, and is a
Director of Constellation Bank. He is
a Director of New Jersey Business and
Industry Association and a member of
the New Jersey Board of Higher Education.
Henry S. Patterson, II, 71,
President, E'town Corporation and
E'town Properties, Inc. . . . . Served as Director of Elizabethtown 1997
since 1959, the Corporation since
March 1985 and Properties since
July 1987 and President of the
Corporation since March 1985 and
Properties since July 1987. He is
a Director of UJB Financial Corp.
and its subsidiaries, United Jersey
Bank Central, N.A., United Jersey
Bank and United Jersey Bank Investor
Services.
Hugo M. Pfaltz, Jr., 62,
Member of Corporate Planning,
Executive Compensation, Stock
Options, Elizabethtown's Executive
Compensation and Pension
Investment Committees . . . . . .Served as Director of Elizabethtown 1997
since October 1980, the Corporation
since June 1987 and Properties since
July 1987. He has been an attorney
with the law firm of Pfaltz &
Woller, P.A. since 1976.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THESE NOMINEES.
OTHER DIRECTORS:
Name, Age and Other Positions, Period Served as Director Term
if any, with Registrant Business Experience During Past 5 Years Expires
Thomas J. Cawley, 63, President,
Elizabethtown Water Company. . . Served as Director of Elizabethtown 1996
and the Corporation since August 1992,
and Properties since July 1987. He
has been President of Elizabethtown
Water Company and its subsidiary, The
Mount Holly Water Company since
August 1992. He served as Executive
Vice-President of Elizabethtown from
1987 to 1992.
Anne Evans Gibbons, 49,
Vice President, E'town Corporation,
Member of Corporate Planning
and Elizabethtown's Executive
Compensation Committees . . . . .Served as Director of Elizabethtown 1995
since December 1982, the
Corporation since March 1985
and Properties since July 1987
and as a Vice President of the
Corporation since September 1987.
She has been the owner of Elberon
Development Co. (a real estate
holding company) since 1984 and is
President of David O. Evans, Inc.
(a construction company). She is a
Director of the Constellation Bancorp
and Constellation Bank.
John Kean, 64, Member of
Pension Investment Committee. . .Served as Director of Elizabethtown 1996
since 1957 and the Corporation since
March 1985. He is President, Chief
Executive Officer and Director of NUI
Corporation and Chairman of the Board
and Director of its subsidiary,
Elizabethtown Gas Company. He also is an
Honorary President of the International
Gas Union.
Robert W. Kean, III, 46,
Executive Vice President,
E'town Properties, Inc. . . . . .Served as Director of the Corporation 1995
since May 1989 and Director and
Executive Vice President of Properties
since July 1987.
Arthur P. Morgan, 70, Member of
Audit and Elizabethtown's Pension
Investment Committees. . . . . .Served as Director of Elizabethtown 1996
since 1973 and the Corporation since
1991. He retired in 1985 as Executive
Vice President and Director of Princeton
Bank & Trust and he retired in 1991 from
the Tucker Capital Corporation where he
served as a Financial Consultant for
6 years. He was a Director of Chemical
Bank, New Jersey, until January 1, 1994.
Name, Age and Other Positions, Period Served as Director Term
if any, with Registrant Business Experience During Past 5 Years Expires
- - - ------------------------------ --------------------------------------- -------
Barry T. Parker, 61, Member of
Audit Committee . . . . . . . . .Served as Director of Elizabethtown 1995
since January 1983 and the Corporation
since 1991. He has been partner in the
law firm of Parker, McCay & Criscuolo
since 1967.
Chester A. Ring, 3rd, 66, Member
of Elizabethtown's Pension
Investment Committee . . . . Served as Director of 1996
Elizabethtown since December 1982
and the Corporation since
June 1987. Effective, August 1, 1992,
he retired as President of
Elizabethtown Water Company.
Family Relationships. Robert W. Kean, Jr. is a first cousin of John
Kean and the father of Robert W. Kean, III.
Transactions. Utility Billing Services, a subsidiary of
Elizabethtown Gas Company, of which John Kean is Chairman of the Board and a
director and Robert W. Kean, Jr. is a director, provides data processing
services to Elizabethtown and its subsidiary pursuant to a contract expiring
December 31, 1997. The charges for such services totalled $593,158 for the
year ended December 31, 1993. Elizabethtown also purchases printing and
related services from Elizabethtown Gas Company amounting to $42,155 for 1993.
During the year ended December 31, 1993, Elizabethtown made short-
term borrowings in the normal course of business from Chemical Bank, New
Jersey, of which Arthur P. Morgan was a director. The rate of interest paid
on the loans was less than the prevailing prime rate and the maximum total
amount outstanding at any one time during the year was $2,000,000. There were
no loans outstanding as of December 31, 1993. The amount of interest paid to
Chemical Bank in 1993 amounted to $37,562.
It is the opinion of management that the amounts charged for these
services were generally as favorable as those that would be charged for such
services by comparable unaffiliated sources. It is management's policy to
periodically review the terms of these arrangements to ensure that the costs
for these services are comparable to those that would be charged in the general
market.
Meetings and Committees. The Board of Directors of the Corporation
held eleven meetings in 1993, with an attendance record by Directors of 96%.
There are six committees of the Board of Directors. Unless otherwise
indicated, these committees perform the indicated functions for both the
Corporation and Elizabethtown.
The Audit Committee, which met three times in 1993, reviews the
scope of the audit, receives and reviews the auditors' annual report and
annually recommends to the Board of Directors the appointment of independent
auditors, subject to approval by the stockholders. The Audit Committee was
composed of Barry T. Parker, Chairman, Brendan T. Byrne and Arthur P. Morgan.
The Corporate Planning Committee, which met once during 1993,
reviews and makes recommendations to the Board of Directors regarding the
Corporation's current and long-range strategic plans and objectives, and any
other matters that may be assigned by the Board of Directors to the Committee.
The Committee consisted of Brendan T. Byrne, Chairman, Hugo M. Pfaltz, Jr. and
Anne Evans Gibbons.
The Executive Compensation Committee of Elizabethtown, which met
twice during 1993, reviews and recommends to the Elizabethtown Board of
Directors salaries and bonuses as well as awards under incentive programs for
officers of Elizabethtown. During 1993, it was composed of Anne Evans Gibbons,
Chairperson, Brendan T. Byrne and Hugo M. Pfaltz, Jr. The Executive
Compensation Committee of E'town, composed of Brendan T. Byrne and Hugo M.
Pfaltz, Jr., did not meet during 1993.
The Pension Investment Committee of Elizabethtown meets with the
Investment Manager for Elizabethtown's Employees' Retirement Plan Fund to
review investment policies and determine recommended investment objectives
for the Fund. The Committee met three times in 1993 and was composed of Arthur
P. Morgan, Chairman, John Kean, Hugo M. Pfaltz, Jr. and Chester A. Ring, 3rd.
The Stock Options Committee of E'town, which did not meet in 1993,
administers the 1982 Incentive Stock Option Plan and the 1987 Stock Option
Plan and consists of Brendan T. Byrne, Chairman and Hugo M. Pfaltz, Jr.
________________________
Executive Management Committee. The Boards of Directors of the
Corporation and Elizabethtown have established an executive management
Committee, composed of both directors and officers, to review general policy
and planning matters and make recommendations to the Boards of Directors as to
policy decisions. This Committee, which usually meets bi-monthly, is composed
of Robert W. Kean, Jr., Anne Evans Gibbons, Thomas J. Cawley, Henry S.
Patterson, II and Andrew M. Chapman, Chief Financial Officer and Treasurer of
the Corporation.
Board of Director's Compensation Committee Report on Executive Compensation
E'town's Executive Compensation Committee (the "Committee") consists
of two E'town directors: Brendan T. Byrne and Hugo M. Pfaltz, Jr. The
Executive Compensation Committee of Elizabethtown (the "Water Company
Committee"), the principal subsidiary of E'town, is composed of three
Elizabethtown directors: Anne Evans Gibbons, Chairperson, Brendan T. Byrne and
Hugo M. Pfaltz, Jr.
Each executive officer, other than Robert W. Kean, III, named in the
Summary Compensation Table is an executive officer of, and is compensated by,
Elizabethtown. The Water Company Committee reviews and recommends to
Elizabethown's Board of Directors the salaries and benefits for the executive
officers of Elizabethtown. The Water Company Committee designs its executive
compensation program to enable Elizabethtown to attract, motivate and retain
the caliber of executives required to effectively attain Elizabethtown's
objectives.
The Water Company Committee administers executive compensation to
ensure that the compensation remains competitive with levels paid to comparable
positions in comparably-sized companies in three groups: water utilities,
other utilities and general industry. The select group of water utilities used
for comparative purposes includes those set forth in Note 2 to the Performance
Graph below.
The Water Company Committee and the Committee believe that
competitive salaries provide the foundation of the executive officer
compensation program of E'town and Elizabethtown and are essential for E'town
and Elizabethtown to attract and retain qualified executive officers. The
Water Company Committee positions executive pay levels at the median of the
comparative group, annually evaluating the continued competitiveness of these
levels. The pay program consists primarily of annual merit increases and is
sufficiently variable that above average performance is adequately rewarded and
below average performance, if it occurs, is not rewarded. Mr. Cawley's salary
was increased upon his promotion to President of Elizabethtown.
The Committee can also make restricted stock grants and recommend
the granting of stock options. Stock options and restricted stock grants are
used primarily to retain and motivate Executive Officers to improve the long-
term stock market performance of E'town. No stock options have been granted
since 1990. In 1992, the first awards under the restricted stock plan were
made. No restricted stock awards were made in 1993. The 1992 awards to the
highest three compensated Executive Officers other than the Chief Executive
Officer are shown in the compensation table.
Bonuses were paid in 1993 to Messrs. Cawley ($10,000), Chapman
($7,500), Critelli ($4,000) and Robert W. Kean, III ($41,622). The bonus
payments for Messrs. Cawley, Chapman and Critelli were determined by the Water
Company Committee based on its evaluation of each Executive Officer's
contribution to Elizabethtown, taking into account each Executive Officer's
base salary. The bonus paid to Robert W. Kean, III is based on the gain
realized upon the sale of real estate held by E'town Properties, Inc. in
accordance with the E'town Properties, Inc. Incentive Bonus Plan established by
E'town on September 21, 1989 and as amended on August 19, 1993.
Current SEC regulations also require a discussion of the
relationship between the Chief Executive Officer's (Robert W. Kean, Jr.)
compensation and company performance for the last completed fiscal year.
Although the Corporation's performance was excellent, at his request Mr. Kean's
salary has been maintained at its 1988 level. He has also disqualified himself
from participation in the above-noted incentive plans. The Committee and the
Water Company Committee are of the opinion that the value of Mr. Kean's
services exceeds his compensation received and that he is presently
undercompensated when compared to his peers at the select group of water
companies used for comparative purposes as discussed above.
The Committee is aware of the limitations the recent tax legislation
has placed on the tax deductibility of compensation in excess of $1 million
which is earned in any year by an executive officer. Currently, none of the
executive officers has earned compensation subject to such limitations.
Proposed regulations were only released late last year and are not yet in final
form. The Committee will continue to monitor developments in this area.
The Executive Compensation The Executive Compensation Committee of
Committee of E'town Corporation: Elizabethtown Water Company:
Brendan T. Byrne Anne Evans Gibbons, Chairperson
Hugo M. Pfaltz, Jr. Brendan T. Byrne
Hugo M. Pfaltz, Jr.
The following graph illustrates the cumulative total return to shareholders
from the beginning of 1989 to the end of 1993 in comparison to the Standard &
Poor's ("S&P") 500 and a peer group of Water Utilities (Note 2). This peer
group is included in the statistical survey used by the Committee and the Water
Company Committee for comparative purposes.
E'TOWN CORPORATION
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN(1)
VS.
S&P 500 AND PEER GROUP OF WATER UTILITIES(2)
Measurement Period
(Fiscal Year Covered) E'town S&P 500 Water Utilities
Measurement Pt-12/31/88 $ 10,000 $ 10,000 $ 10,000
1989 10,909 13,160 10,756
1990 10,460 12,752 9,938
1991 13,606 16,628 13,837
1992 14,247 17,892 15,139
1993 17,080 19,699 17,366
(1) Assumes $10,000 invested December 31, 1988 in E'town Corporation common
stock, S&P 500 and Water Utilities. All dividends are assumed to be
reinvested over period. Total returns for each Water Utility were
determined in accordance with Securities and Exchange Commission
regulations; i.e. weighted according to each such issuer's stock market
capitalization.
(2) Water Utilities: American Water Works, Aquarion, California Water
Service, Connecticut Water Service, Consumers Water, E'town, General
Waterworks, IWC Resources, Middlesex Water, San Jose Water, Southwest
Water, Southern California Water, United Water Resources, Philadelphia
Suburban.
E'TOWN CORPORATION
Summary Compensation Table
Long-Term
----Annual Compensation--- Compensation
- - - -----------------------------------------------------------------------------
Other Restricted All
Name & Principal Fiscal Salary Bonus Annual Stock Other
Position Year ($) ($) Compensation Awards Compensation
(1) (2) & (3) (4) ($) ($) (5) ($)
- - - ---------------- ------ --------- ----- ------------ ---------------------
RobertW. Kean, Jr.
Chairman and Chief
Executive Officer,
E'town Corporation 1993 $201,250 $0 $0 $0 $5,862 (6)
and Elizabethtown 1992 $208,943 $0 $0 $0 $6,464
Water Company 1991 $201,150 $0 $0 $0 $6,338
Thomas J. Cawley
President, 1993 $178,877 $10,000 $0 $0 $6,597 (6)
Elizabethtown 1992 $154,160 $0 $0 $18,014 $6,196
Water Company 1991 $129,420 $0 $0 $0 $5,236
Andrew M. Chapman
Chief Financial
Officer and
Treasurer of E'town
Corporation and Chief
Financial Officer, Senior
Vice President and
Treasurer of 1993 $139,058 $7,500 $0 $0 $5,836 (6)
Elizabethtown Water 1992 $136,306 $0 $0 $17,328 $5,723
Company 1991 $122,844 $0 $0 $5,157
Frank Critelli
Controller and
Assistant Secretary
of E'town Corporation
and Senior Vice President
Accounting And Rates-
Assistant Secretary 1993 $130,581 $4,000 $0 $0 $5,480 (6)
of Elizabethtown 1992 $129,246 $0 $0 $16,432 $5,294
Water Company 1991 $117,765 $0 $0 $0 $4,942
Robert W. Kean, III
Executive Vice 1993 $97,004 $41,622 $0 $0 $4,979 (6)
President of E'town 1992 $98,766 $0 $0 $0 $3,224
Properties, Inc. 1991 $97,116 $0 $0 $0 $3,147
- - - -----------------------------------------------------------------------------
(1) 1992 has 53 pay weeks.
(2) All salaries, except for the salary of R.W. Kean, III, are paid by
Elizabethtown, the Company's principal subsidiary. The salary of R.W.
Kean, III is paid by E'town Properties, Inc.
(3) Includes pretax contributions to Elizabethtown's Savings & Investment
Plan (the "401(k) Plan") and Director's fees for R.W. Kean, Jr.,
T.J. Cawley and R.W. Kean, III.
(4) The bonus payments for T.J. Cawley, A.M. Chapman and F. Critelli were
determined by the Executive Compensation Committee of Elizabethtown
based on its evaluation of each executive's contribution to
Elizabethtown, taking into account each executive's base salary.
The bonus paid to R.W. Kean, III is based on the gain realized upon
the sale of real estate held by E'town Properties Inc. in accordance
with the E'town Properties, Inc. Incentive Bonus Plan.
(5) Restricted stock awards of Elizabethtown Water Company will vest,
unless a forfeiture event occurs, on the third anniversary of the
date of the award. Unless forfeited, restricted stock held by the
named executive officers at 12/31/93: T.J. Cawley, 683 shares
($21,515); A.M. Chapman, 657 shares ($20,696) and F. Critelli,
623 shares ($19,625); R.W. Kean, Jr. has disqualified himself from
E'town's Performance Stock Program. To date, no awards have been
granted under Elizabethtown's Cash Incentive Plan.
(6) Includes 401(k) Plan Company matching contributions and life
insurance premiums for: R.W. Kean, Jr. $4,497 and $1,365; T.J.
Cawley $4,497 and $2,100; A.M. Chapman $4,167 and $1,669; F. Critelli
$3,913 and $1,567; and R.W. Kean, III $2,879 and $2,000, respectively.
E'TOWN CORPORATION
Aggregate Options/SAR Excercises in Last Fiscal Year
Year and Fiscal Year-end Option/SAR Values
- - - -----------------------------------------------------------------------------
Value of all
Number of all Outstanding
Outstanding In-the-Money
Shares Aggregate Options/SARs at Options/SARs
Acquired on Value 12/31/93 at 12/31/93 ($)
Name Excercise Realized Excercisable Excercisable
(#) ($) (2), (3) (2), (3)
- - - -----------------------------------------------------------------------------
Robert W. Kean, Jr. (1) 0 $0 0 $0
Thomas J. Cawley 0 $0 3,300 $17,602
Andrew M. Chapman 0 $0 15,000 $87,450
Frank Critelli 0 $0 7,800 $43,837
Robert W. Kean, III 0 $0 0 $0
- - - -----------------------------------------------------------------------------
(1) R.W. Kean, Jr. has disqualified himself from participation in the 1982 and
1987 Stock Option Plans.
(2) All outstanding options are excercisable.
(3) To date, no Stock Appreciation Rights have been granted under the 1982
or 1987 Stock Option Plans.
- - - -----------------------------------------------------------------------------
Directors' Fees. Effective March 18, 1993, Directors of the
Corporation who are also not officers of Elizabethtown or employees of
Properties receive an attendance fee of $550 (previously $500) for Board
meetings held on days not coincident with Board meetings of Elizabethtown.
Directors of Elizabethtown who are not also officers of Elizabethtown or
employees of Properties are paid an annual retainer of $10,000 and a fee of
$550 (previously $500) for each meeting of the Board of Directors attended.
Directors who are officers of Elizabethtown or employees of Properties are paid
a $100 fee for each Board meeting they attend.
Effective March 18, 1993, members of committees who are not
officers of Elizabethtown or employees of Properties are paid $350 (previously
$300) for participation at Committee meetings on the same day as regular Board
meetings and $550 (previously $500) for meetings held on days other than Board
meetings. No fees are paid to members of the Executive Management Committee
for attendance at meetings. A Director cannot stand for re-election after his
or her 72nd birthday. A retiring Director with 10 or more years' service on
the Board of Directors becomes eligible to receive a pension for life equal to
the annual retainer in effect at the date of retirement. A retiring Director
with 5 to 9 years of service will receive a pension equal to the annual
retainer in effect at the date of retirement for the number of years served
as a Director.
In addition, Henry S. Patterson, II, who retired as President of
Elizabethtown on July 1, 1987, serves as President of the Corporation, for
which he receives no salary. In addition to Directors' fees as noted above and
retirement benefits accrued under the retirement plans discussed below in
respect of his service as an employee prior to his retirement in 1987, Henry S.
Patterson, II receives an annual consulting fee of $75,000.
Pensions. Elizabethtown's non-contributory defined benefit
retirement plan provides that a participant will receive an annual retirement
benefit equal in amount to 1.525% of the participant's final average
compensation (the average of the highest five consecutive calendar years' base
earnings) multiplied by the number of years of credited service (up to a
maximum of 40). Remuneration covered under the retirement plan includes base
wages only. Directors who are not also officers or employees do not
participate.
The following table shows annual pension benefits payable to
employees, including officers, upon retirement at age 65, in various
remuneration and years-of-service classifications. The compensation taken into
account under a tax-qualified plan is subject to a maximum annual limit under
the Internal Revenue Code of 1986, as amended, adjusted annually for cost of
living increases ($235,840 in 1993 and $150,000 in 1994.
Highest
Consecutive
Five Year Annual Benefits for Years of Service Indicated
Average
Compensation 10 years 15 year 20 years 25 years 30 years 35 years 40 years
$ 75,000 $11,437 $17,156 $22,875 $28,594 $34,312 $40,031 $45,750
100,000 15,250 22,875 30,500 38,125 45,750 53,375 61,000
125,000 19,062 28,594 38,125 47,656 57,187 66,719 76,250
150,000 22,875 34,313 45,750 57,188 68,625 80,063 91,500
175,000 26,687 40,031 53,375 66,719 80,062 93,406 106,750
200,000 30,500 45,750 61,000 76,250 91,500 106,750 122,000
225,000 34,313 51,469 68,625 85,781 102,938 120,094 137,250
250,000 38,125 57,188 76,250 95,313 114,375 133,438 152,500
The annual benefit amounts shown above are not subject to any
deduction for Social Security benefits or other offset amounts. The number of
years of service now credited under the retirement plan is as indicated for the
following officers: Robert W. Kean, Jr., 40 years; Thomas J. Cawley, 24 years;
Andrew M. Chapman, 4 years; Frank Critelli, 29 years and Robert W. Kean, III,
16 years.
Executive officers of Elizabethtown either have or will be eligible
for a Supplemental Executive Retirement Plan benefit upon the attainment of the
normal retirement age of 65 with a minimum of 20 years service. The benefit
payable under this plan is an amount equal to the difference between 60% of the
average ual base salary for the thirty-six months prior to retirement and the
regular pension benefit shown in the table above.
ELIZABETHTOWN WATER COMPANY
Elizabethtown is a wholly-owned subsidiary of the Corporation. The
Board of Directors of Elizabethtown currently numbers eleven individuals,
consisting of the Directors of the Corporation. The eleven directors of
Elizabethtown will stand for re-election and it is the intention of the Board
of Directors of the Corporation to re-elect all of such persons as directors of
Elizabethtown.
II. APPROVAL OF APPOINTMENT OF AUDITORS
Deloitte & Touche, Two Hilton Court, Parsippany, New Jersey 07054,
independent certified public accountants, have been selected by the Board of
Directors, upon recommendation of the Audit Committee, to serve as independent
auditors of the Corporation for the year ending December 31, 1994.
The appointment of Deloitte & Touche continues a relationship that
began in 1950. Stockholder approval of this appointment is requested. In the
event a majority of the votes cast is against approval, the Board of Directors
will reconsider the appointment.
It is expected that representatives of Deloitte & Touche will be
present at the Annual Meeting and will be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THIS PROPOSAL.
III. OTHER BUSINESS
Management does not intend to present and does not have any reason
to believe that others will present at the 1994 Annual Meeting of Stockholders
any item of business other than the proposals set forth herein. However, if
other matters are properly presented for a vote, the proxies will be voted upon
such matters in accordance with the judgment of the person acting under the
proxies. Dissenting stockholders have no rights of appraisal with respect to
the proposals set forth herein.
STOCKHOLDER PROPOSALS
Stockholders are entitled to submit proposals on matters appropriate
for stockholder action consistent with regulations of the Securities and
Exchange Commission. Should a stockholder intend to present a proposal at next
year's annual meeting, it must be received by the Secretary of the Corporation
(at 600 South Avenue, Westfield, New Jersey 07090) by not later than
November 30, 1994 in order to be included in the Corporation's proxy statement
and form of proxy relating to that meeting. Under the rules of the Securities
and Exchange Commission, a stockholder submitting a proposal is required to be
a record or beneficial owner of at least 1% or $1,000 in market value of Common
Stock for at least one year prior to the date of submission of the proposal,
and he or she must continue to own such securities through the date on which
the meeting is held.
On Behalf of the Board of Directors,
Walter M. Braswell
Secretary
Westfield, New Jersey
__________
/ /
/ /
This proxy when properly executed will be voted in the manner directed herein
by the undersigned stockholders. If no direction is made, this proxy will be
voted FOR Proposals (1) and (2).
1. ELECTION OF DIRECTORS: Brendan T. Byrne, Robert W. Kean, Jr., Henry S.
Patterson, II and Hugo M. Pfaltz, Jr.
FOR ALL WITHHOLD AUTHORITY *EXCEPTIONS
NOMINEES TO VOTE FOR NOMINEES (AS MARKED TO THE
LISTED ABOVE/ X / LISTED ABOVE / X / CONTRARY BELOW) / X /
(INSTRUCTION: To withhold authority to vote for any individual nominee,
mark the "EXCEPTIONS" box and write that nominee's name in the space
following)
*EXCEPTIONS _______________________________________________________________
FOR AGAINST ABSTAIN
2. APPROVAL OF APPOINTMENT
of Deloitte & Touche Address Change
as independent auditors. / X / / X / / X / and/or Comments
Mark Here / X /
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
I plan to attend the meeting
/ X /
PROXY DEPARTMENT
NEW YORK, N.Y. 10203-0997
Dated: ____________________________________, 1994
Number of shares owned _____________________
X___________________________________________
X___________________________________________
PLEASE DATE AND SIGN EXACTLY AS INDICATED AT LEFT.
FOR JOINT ACCOUNTS, EACH JOINT OWNER SHOULD SIGN.
Sign, Date and Return the
Proxy Card Promptly Using
the Enclosed Envelope. Votes must be indicated (X) in Black or Blue Ink./X/
E'TOWN CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS OF THE CORPORATION
The undersigned hereby appoints ROBERT W. KEAN, JR., and HENRY S.
PATTERSON, II, or any one of them with full power of substitution, attorneys,
agents and proxies to vote on behalf of the undersigned at the annual meeting
of Stockholders of E'town Corporation to be held Monday, May 2, 1994, at
11:00 A.M. or at any adjournments thereof:
(Continued and to be signed and dated on the reverse side.)
<PAGE>
