INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the registrant /x/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/x/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
E'TOWN CORPORATION
------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
E'TOWN CORPORATION
------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/x/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or Rule
14a-6(i)(2).
/ / $500 per each party per Exchange Act Rule 14a-6(i)(3), or Rule
14a-6(i)(2).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
<PAGE>
[CORPORATION LOGO]E'TOWN
600 SOUTH AVENUE, WESTFIELD, N.J. 07090
___________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 18, 1995
___________________
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 Westwood, 438 North Avenue, Garwood, New Jersey,
on Thursday, May 18, 1995, at 10:00 A.M. for the following purposes:
1. To elect four members to the Board of Directors for terms to expire
at the 1998 Annual Meeting of Stockholders.
2. To ratify, confirm and approve the act of the Board of Directors,
on February 16, 1995, appointing Deloitte & Touche LLP, Parsippany, New
Jersey, as the auditors for the Corporation and its subsidiaries for the
year 1995.
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: Andrew M. Chapman, Anne Evans
Estabrook, Robert W. Kean, III and Barry T. Parker for terms of three years.
The close of business on March 22, 1995, 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 29, 1995
<PAGE>
E'TOWN CORPORATION
600 SOUTH AVENUE, WESTFIELD, N.J. 07090
March 29, 1995
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 Common Stock of
the Corporation, to be held May 18, 1995, 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 29, 1995.
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, telefax, 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 22, 1995, there were outstanding 6,629,840 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, no persons owned beneficially more
than 5% of the outstanding Common Stock as of March 22, 1995.
<PAGE>
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 22,
1995.
No. of Percent
Title of Class Name of Beneficial Owner Shares(1) of Class
-------------- ------------------------ --------- --------
Common Stock .... Brendan T. Byrne ................... 1,250 .02
Edward F. Cash ..................... 10,176 .15
Thomas J. Cawley ................... 12,012 .18
Andrew M. Chapman .................. 16,750 .25
Frank Critelli ..................... 4,577(2) .07
Anne Evans Estabrook ............... 26,313 .40
John Kean .......................... 290,004(3) 4.37
Robert W. Kean, Jr. ................. 187,627(4) 2.83
Robert W. Kean, III ................ 570 .01
Arthur P. Morgan ................... 331 .01
Barry T. Parker .................... 2,080(5) .03
Henry S. Patterson, II ............. 10,570 .16
Hugo M. Pfaltz, Jr. ................ 9,001(6) .14
Chester A. Ring, 3rd ............... 16,515 .25
Norbert Wagner ..................... 12,218 .18
Directors and Executive
Officers as a group ............... 629,372 9.45
_______________
(1) Includes shares held for Executive Officers under the Corporation's Tax
Reduction Act Stock Ownership Plan and Elizabethtown's Savings and
Investment Plan (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) Retired 11/01/04.
(3) Includes 270,741 shares held under two trusts for which beneficial owner is
a co-trustee and beneficial owner indicated shares voting and investment
power with respect to these shares.
(4) Includes 171,567 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.
(5) 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.
(6) Includes 1,250 shares of Common Stock issuable upon conversion of
debentures held by a partnership of which Mr. Pfaltz is a general partner.
2
<PAGE>
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, three are in the class to be elected at
the 1995 Annual Meeting of Stockholders (and an additional Director nominee is
being proposed for such class), four are in the class to be elected at the 1996
Annual Meeting of Stockholders and four are in the class to be elected at the
1997 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 1995 Annual Meeting of Stockholders for
the election of nominees ANDREW M. CHAPMAN, ANNE EVANS ESTABROOK, ROBERT W.
KEAN, III, and BARRY T. PARKER, who have been designated by the Board of
Directors as the four nominees who, if elected, shall serve as Directors in the
class of directorships whose members' terms will expire in 1998.
The Board of Directors has no Nominating Committee. In February 1995,
pursuant to authority granted it in the Corporation's by-laws, the Board of
Directors expanded the number of Directors comprising the Board from eleven to
twelve members, effective as of the Annual Meeting, and nominated Andrew M.
Chapman to serve as such additional Director. All of the foregoing nominees
except Andrew M. Chapman 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 1995 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.
3
<PAGE>
The following information relates to the nominees named herein and the
other persons whose terms as Directors will continue after the 1995 Annual
Meeting of Stockholders.
<TABLE>
<CAPTION>
NOMINEES:
Name, Age and Other Positions, Period Served as Director Term
if any, with Registrant Business Experience During Past 5 Years Expires
------------------------------ --------------------------------------- -------
<S> <C> <C>
Andrew M. Chapman, 39, Chief
Financial Officer and Treasurer,
E'town Corporation, Executive Vice
President and Chief Financial Officer,
Elizabethtown Water Company and
Treasurer, E'town Properties, Inc. .......... Served as Chief Financial Officer of the Corporation 1998
since August 1989 and Treasurer of the Corporation
since November 1990 and since May 1994, Executive
Vice President and Chief Financial Officer of
Elizabethtown. He served as Senior Vice President of
Elizabethtown from April 1993 to May 1994, Chief
Financial Officer of Elizabethtown from November 1990
to May 1994 and Treasurer of Elizabethtown from
August 1989 to May 1994. Prior to 1989, he was
Director of the Office of Financial Management of the
State of New Jersey, Department of Treasury and,
earlier, a Vice President at Shearson Lehman Brothers.
He is not currently a Director of the Corporation.
Anne Evans Estabrook, 50, Vice
President, E'town Corporation,
Member of Corporate Planning
and Elizabethtown's Executive
Compensation Committees .................... Served as Director of Elizabethtown since December 1998
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 has
served as a Director of UJB Financial Corp. since April
1994 and United Jersey Bank since July 1994. She
served as Director of the Constellation Bancorp and
Constellation Bank until March 1994.
Robert W. Kean, III, 47,
Executive Vice President,
E'town Properties, Inc. .................... Served as Director of the Corporation since May 1989 1998
and Director and Executive Vice President of Properties
since July 1987.
Barry T. Parker, 62, Member of
Audit Committee ............................ Served as Director of Elizabethtown since January 1983 1998
and the Corporation since 1991. He has been partner in
the law firm of Parker, McCay & Criscuolo since 1967.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THESE NOMINEES.
4
<PAGE>
<TABLE>
<CAPTION>
OTHER DIRECTORS:
Name, Age and Other Positions, Period Served as Director Term
if any, with Registrant Business Experience During Past 5 Years Expires
------------------------------ --------------------------------------- -------
<S> <C> <C>
Brendan T. Byrne, 70, Member of
Audit, Corporate Planning, Executive
Compensation, Stock Options and
Elizabethtown's Executive
Compensation Committees ..................... Served as Director of Elizabethtown since July 1982 and 1997
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 Ingersoll-Rand, The Chelsea GCA Group
Realty Partnership, LP and Cali Realty and was a
Director of Prudential Insurance Company of America
until his retirement in March 1994, of Jamesway
Corporation until January 1995 and of Bell Atlantic of
New Jersey until his retirement in January 1995.
Thomas J. Cawley, 64, President,
Elizabethtown Water Company ................. Served as Director of Elizabethtown and the Corporation 1996
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. He joined
Elizabethtown in 1969 and served in a variety of
operating positions until elected Executive Vice President
in 1987.
John Kean, 65, Member of
Elizabethtown's Pension Investment
Committee ................................... Served as Director of Elizabethtown since 1957 and the 1996
Corporation since March 1985. He is Chairman, Chief
Executive Officer and Director of NUI Corporation and
was, until October 1994, Chairman of the Board and
Director of Elizabethtown Gas Company, previously a
subsidiary of NUI Corporation. He also is an Honorary
President of the International Gas Union.
Robert W. Kean, Jr., 72, Chairman and
Chief Executive Officer, E'town
Corporation and Elizabethtown Water
Company ..................................... Served as Director of Elizabethtown since 1949 and the 1997
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 was, until October 1994, a Director of
Elizabethtown Gas Company, previously a subsidiary of
NUI Corporation. He was Chairman of the Board and
Director of Constellation Bancorp and a Director of
Constellation Bank until March 1994. He is a Director
of New Jersey Manufacturers Insurance Company
and New Jersey Business and Industry Association.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Name, Age and Other Positions, Period Served as Director Term
if any, with Registrant Business Experience During Past 5 Years Expires
------------------------------ --------------------------------------- -------
<S> <C> <C>
Arthur P. Morgan, 71, Member of
Audit and Elizabethtown's Pension
Investment Cimmittees ...................... Served as Director of Elizabethtown since 1973 and the 1996
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 served as Director of Chemical Bank,
New Jersey, until January 1, 1994.
Henry S. Patterson, II, 72, President,
E'town Corporation and E'town
Properties, Inc ........................... Served as Director of Elizabethtown since 1959, the 1997
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
and UJB Investor Services Co.
Hugo M. Pfaltz, Jr., 63, Member of
Corporate Planning, Executive
Compensation, Stock Options, and
Elizabethtown's Executive
Compensation and Pension Investment
Committees ................................ Served as Director of Elizabethtown since October 1980, 1997
the Corporation since June 1987 and Properties since
July 1987. Since 1976, he has been a principal of the
law firm of Pfaltz & Woller, P.A. since 1976.
Chester A. Ring, 3rd, 67, Member of
Elizabethtown's Pension Investment
Committee ................................. Served as Director of Elizabethtown since December 1996
1982 and the Corporation since June 1987. Effective
August 1, 1992, he retired as President of Elizabethtown
Water Company.
</TABLE>
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 $602,680 for the year ended December 31,
1994. Elizabethtown also purchases printing and related services from
Elizabethtown Gas Company amounting to $32,217 for 1994.
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. Management periodically reviews 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.
6
<PAGE>
In July 1994, Elizabethtown entered into a $60,000,000 revolving credit
agreement with six banks. United Jersey Bank, of which Anne Evans Estabrook and
Henry S. Patterson II are directors, is committed to lend $5,000,000 under the
agreement. There were no loans from United Jersey Bank under the agreement
during 1994.
Change in Control Agreement. E'town has entered into an agreement with
Andrew M. Chapman that provides him certain extended benefits in the event that
his employment is terminated by the Corporation (other than for cause) within
three years following a change in control of the Corporation. In the event of
such a termination, Mr. Chapman would be entitled under the agreement to receive
salary and incentive compensation, as well as medical and other benefits, at the
rates in effect prior to such termination for a period of thirty months
thereafter. In addition, any incentive compensation awards due to Mr. Chapman
prior to the change in control but not yet paid would be paid on the date of
termination and any restricted stock not vested at the time of the change in
control would thereupon become vested. The amounts payable pursuant to the
agreement will be reduced, if necessary, to avoid excise tax under the Federal
tax laws. The agreement expires on December 31, 1995, subject to automatic
annual renewal unless prior notice is given by the Corporation.
Meetings and Committees. The Board of Directors of the Corporation held
eleven meetings in 1994, with an attendance record by Directors of 97%. 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 four times in 1994, reviews the scope of the
annual audit by the Corporation's independent auditors, receives and reviews the
auditors' annual report, annually recommends to the Board of Directors the
appointment of independent auditors, subject to approval by the stockholders,
and oversees the activities of Elizabethtown's internal auditor. The Audit
Committee was composed of Barry T. Parker, Chairman, Brendan T. Byrne and Arthur
P. Morgan.
The Corporate Planning Committee, which met three times during 1994,
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 Estabrook.
The Executive Compensation Committee of Elizabethtown (the "Elizabethtown
Committee"), which met twice during 1994, reviews and recommends to the
Elizabethtown Board of Directors salaries and bonuses as well as awards under
incentive programs for officers of Elizabethtown. During 1994, it was composed
of Anne Evans Estabrook, Chairperson, Brendan T. Byrne and Hugo M. Pfaltz, Jr.
The Executive Compensation Committee of E'town (the "E'town Committee"), which
has similar duties with respect to E'town and was composed of Brendan T. Byrne
and Hugo M. Pfaltz, Jr., did not meet during 1994.
The Pension Investment Committee of Elizabethtown meets with the Investment
Managers for Elizabethtown's Employees' Retirement Plan Fund to review
investment policies and determine recommended investment objectives for the
Fund. The Committee met four times in 1994 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 1994,
administers the 1982 Incentive Stock Option Plan and the 1987 Stock Option Plan
and consists of Hugo M. Pfaltz, Jr., Chairman, and Brendan T. Byrne.
________________________
Executive Management Committee. The Boards of Directors of the Corporation
and Elizabethtown have established an Executive Management Committee, currently
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 Estabrook, Thomas J. Cawley, Henry S. Patterson, II and
Andrew M. Chapman.
7
<PAGE>
Board of Director's Compensation Committee Report on Executive Compensation
E'town's Executive Compensation Committee (the "E'town Committee") consists
of two E'town directors: Brendan T. Byrne and Hugo M. Pfaltz, Jr. The Executive
Compensation Committee of Elizabethtown (the "Elizabethtown Committee"), the
principal subsidiary of E'town, is composed of three Elizabethtown directors:
Anne Evans Estabrook, Chairperson, Brendan T. Byrne and Hugo M. Pfaltz, Jr.
Each executive officer named in the Summary Compensation Table is an
executive officer of, and is compensated by, Elizabethtown. The Elizabethtown
Committee reviews and recommends to Elizabethtown's Board of Directors the
salaries and benefits for the executive officers of Elizabethtown. The
Elizabethtown 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 Elizabethtown 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
entitled "Comparison of Five-year Cumulative Total Return v. S&P 500 and Peer
Group of Water Utilities."
The Elizabethtown Committee and the E'town 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
Elizabethtown 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.
The E'town 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 or 1994. The 1992 awards to the
five most highly compensated Executive Officers other than the Chief Executive
Officer are shown in the Summary Compensation Table.
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. At his request Mr.
Kean's salary has been maintained at its 1988 level. He has also disqualified
himself from participation in the incentive plans. The E'town Committee and the
Elizabethtown Committee are aware that Mr. Kean's present compensation is less
than his peers at the select group of water companies used for comparative
purposes.
The Executive Compensation The Executive Compensation Committee of
Committee of E'town Corporation: Elizabethtown Water Company:
Brendan T. Byrne Anne Evans Estabrook, Chairperson
Hugo M. Pfaltz, Jr. Brendan T. Byrne
Hugo M. Pfaltz, Jr.
8
<PAGE>
The following performance graph illustrates the cumulative total return to
shareholders from the beginning of 1990 to the end of 1994 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 E'town Committee
and the Elizabethtown 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)
(Thousands of Dollars)
--------------------------------------------------------------------------------
1989 1990 1991 1992 1993 1994
--------------------------------------------------------------------------------
E'town ............. 10.0 9.589 12.472 13.060 15.657 14.114
--------------------------------------------------------------------------------
Water Utilities .... 10.0 9.282 13.254 14.679 16.725 15.581
--------------------------------------------------------------------------------
S&P 500 ............ 10.0 10.311 13.439 14.462 15.913 16.129
--------------------------------------------------------------------------------
(1) Assumes $10,000 invested December 31, 1989 in E'town Corporation Common
Stock, S&P 500 and Water Utilities. All dividends are assumed to be
reinvested over the five year period. Total returns for each Water Utility
were determined in accordance with SEC regulations; i.e. weighted according
to each such issuer's stock market capitalization.
(2) Water Utilities: American Water Works, Aquarion, California Water Service,
Connecticut Water Service, Consumers Water, Dominguez Services, E'town, IWC
Resources, Middlesex Water, Philadelphia Suburban, San Jose Water, Southern
California Water, Southwest Water, United Water Resources.
9
<PAGE>
<TABLE>
<CAPTION>
E'TOWN CORPORATION
Summary Compensation Table
Long-Term
Annual Compensation Compensation
---------------------------------------------- ------------------------------
Fiscal Salary Bonus Other Annual Restricted All Other
Year ($) ($) Compensation Stock Awards Compensation
Name & Principal Position (1) (2)&(3) (4) ($)(5) ($)(5) ($)
------------------------- ----- ------- ----- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Robert W. Kean, Jr. .................... 1994 $201,250 $0 $0 $0 $5,903(6)
Chairman and Chief Executive 1993 $201,250 $0 $0 $0 $5,862
Officer, E'town Corporation and 1992 $208,943 $0 $0 $0 $6,464
Elizabethtown Water Company
Thomas J. Cawley ....................... 1994 $192,000 $0 $0 $0 $6,594(6)
President, Elizabethtown Water 1993 $178,877 $10,000 $0 $0 $6,597
Company 1992 $154,160 $0 $0 $18,014 $6,196
Andrew M. Chapman ...................... 1994 $150,869 $0 $0 $0 $6,223(6)
Chief Financial Officer and Treasurer 1993 $139,058 $7,500 $0 $0 $5,836
of E'town Corporation and Chief 1992 $136,306 $0 $0 $17,328 $5,723
Financial Officer, Senior Vice
President and Treasurer of
Elizabethtown Water Company
Frank Critelli ......................... 1994 $139,858 $0 $0 $0 $5,953(6)
Controller and Assistant Secretary 1993 $130,581 $4,000 $0 $0 $5,480
of E'town Corporation and Senior 1992 $129,246 $0 $0 $16,432 $5,294
Vice President--Accounting and Rates-
Assistant Secretary of Elizabethtown
Water Company (Retired 11/01/94)
Norbert Wagner ......................... 1994 $118,558 $0 $0 $0 $4,890(6)
Senior Vice President, 1993 $111,927 $7,500 $0 $0 $4,696
Elizabethtown Water Company 1992 $106,569 $0 $0 $8,757 $4,472
Edward F. Cash ......................... 1994 $115,323 $0 $0 $0 $4,756(6)
Vice President--Customer Services, 1993 $110,343 $5,000 $0 $0 $4,630
Elizabethtown Water Company 1992 $109,266 $0 $0 $9,258 $4,223
<FN>
-----------
(1) 1992 has 53 pay weeks.
(2) All salaries are paid by Elizabethtown, the Corporation's principal
subsidiary.
(3) Includes pretax contributions to the 401(k) Plan and Director's fees for
R.W. Kean, Jr. and T.J. Cawley.
(4) The bonus payments in 1993 for T.J. Cawley, A.M. Chapman, F. Critelli, N.
Wagner and E.F. Cash 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.
(5) Restricted stock awards of the E'town Corporation 1990 Performance Stock
Program will vest, unless a forfeiture event occurs, on the third
anniversary under the date of the award. Unless forfeited, restricted stock
awards include voting and dividend rights. The number and value of shares
of restricted stock held by the named executive officers at 12/31/94: T.J.
Cawley, 683 shares ($18,014); A.M. Chapman, 657 shares ($17,328); N.
Wagner, 332 shares ($8,757); and E.F. Cash, 351 shares ($9,258). Upon the
retirement of F. Critelli, effective 11/1/94, 623 shares of restricted
stock with a market value of $15,887 were distributed to him. R.W. Kean,
Jr. has disqualified himself from E'town's 1990 Performance Stock Program.
To date, no awards have been granted under Elizabethtown's Management
Incentive Plan.
(6) Includes 401(k) Plan matching contributions by Elizabethtown and life
insurance premiums for: R.W. Kean, Jr. $4,620 and $1,283; T.J. Cawley
$4,620 and $1,974; A.M. Chapman $4,521 and $1,702; F. Critelli $4,196 and
$1,757; N. Wagner $3,552 and $1,338; and E.F. Cash $3,455 and $1,301,
respectively.
</FN>
</TABLE>
10
<PAGE>
E'TOWN CORPORATION
Aggregated Options/SAR Exercises in Last Fiscal
Year and Fiscal Year-End Option/SAR Values
<TABLE>
<CAPTION>
Value of all
Number of Outstanding
Shares All outstanding In-the-Money
Acquired Aggregate Options/SARs at Options/SARs
on Value 12/31/94 at 12/31/94
Exercise Realized Exercisable Exercisable
Name (#) ($) (2),(3) (2),(3)
----- -------- -------- ------------- -----------
<S> <C> <C> <C> <C>
Robert W. Kean, Jr.(1) ... 0 $0 0 $0
Thomas J. Cawley ......... 0 $0 3,300 $690
Andrew M. Chapman ........ 0 $0 15,000 $12,788
Frank Critelli (4) ....... 0 $0 7,800 $3,862
Norbert Wagner ........... 0 $0 850 $178
Edward F. Cash ........... 0 $0 0 $0
----------
<FN>
(1) R.W. Kean, Jr. has disqualified himself from participation in the 1982 and
1987 Stock Option Plans.
(2) All outstanding options are exercisable.
(3) To date, no Stock Appreciation Rights have been granted under the 1982 or
1987 Stock Option Plans.
(4) Retired 11/01/94.
</FN>
</TABLE>
---------------
Directors' Fees. Directors of the Corporation who are also not officers of
Elizabethtown or employees of Properties receive an attendance fee of $550 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
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.
Members of committees who are not officers of Elizabethtown or employees of
Properties are paid $350 for participation at Committee meetings on the same day
as regular Board meetings and $550 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 retired Director with 10 or more years' service on the Board of
Directors becomes eligible at age 72 to receive a pension for life equal to the
annual retainer in effect at the date the Director becomes eligible for the
pension. 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.
11
<PAGE>
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 and 1995).
<TABLE>
<CAPTION>
Highest
Consecutive
Five Year Annual Benefits for Years of Service Indicated
Average -------------------------------------------------------------------------------------------------------------------
Compensation 10 years 15 years 20 years 25 years 30 years 35 years 40 years
------------ -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 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
</TABLE>
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, 25 years; Andrew M.
Chapman, 5 years; Norbert Wagner, 31 years and Edward F. Cash, 36 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
annual base salary for the thirty-six months prior to retirement and the regular
pension benefit shown in the table above.
CERTAIN SEC FILINGS
Section 16(a) of the Securities Exchange Act of 1934 and the rules
promulgated thereunder require that directors and certain executive officers of
the Corporation, Elizabethtown and Properties and certain beneficial owners of
the Corporation's equity securities file with the SEC various reports of
holdings of and transactions in the Corporation's equity securities. In
addition, directors and certain executive officers are required to file an
initial report under Section 16(a) upon becoming a director or executive officer
regardless of their holdings, if any, of equity securities of the Corporation.
Effective May 1, 1994, Mr. Dennis Doll became Controller of Elizabethtown and
was therefore required by these rules to file an initial report with the SEC
within ten days of such effective date. Through inadvertence the required report
was not filed until June 21, 1994.
12
<PAGE>
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. There is currently one vacancy on the Board of
Directors. 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. If Andrew M. Chapman is elected a
Director of the Corporation at the Annual Meeting, the Board of Directors of the
Corporation intends to elect him a Director of Elizabethtown.
II. APPROVAL OF APPOINTMENT OF AUDITORS
Deloitte & Touche LLP, 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, 1995.
The appointment of Deloitte & Touche LLP 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 LLP will be
present at the Annual Meeting, will have the opportunity to make a statement if
they so desire, 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 1995 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 SEC. 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 29, 1995 in order to be included in the
Corporation's proxy statement and form of proxy relating to that meeting. Under
the rules of the SEC, 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
13
<PAGE>
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 Thursday, May 18, 1995, at 10:00
A.M. or any adjournments thereof.
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).
Continued, and to be signed and dated, on reverse side.
E'TOWN CORPORATION
P.O. BOX 11997
NEW YORK, N.Y. 10203-0997
<PAGE>
1. ELECTION OF DIRECTORS: FOR all nominees listed below.
.
WITHHOLD AUTHORITY to vote for all nominees
listed below.
*EXCEPTIONS
Nominees: Andrew M. Chapman, Anne Evans Estabrook, Robert W. Kean, III
and Barry T. Parker.
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark
the "Exceptions" box and write that nominee's name in the
space provided below.)
*Exceptions___________________________________________________
2. APPROVAL OF APPOINTMENT OF Deloitte & Touche LLP as independent auditors.
FOR AGAINST ABSTAIN
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
Change of Address and/or Comments Mark Here
PLEASE DATE AND SIGN EXACTLY AS INDICATED AT LEFT, FOR JOINT
ACCOUNTS, EACH JOINT OWNER SHOULD SIGN.
Dated: ______________________________________________, 1995
______________________________________________
Signature
______________________________________________
Signature
Sign, Date and Return the Proxy card
Promptly Using the Enclosed Envelope.
Votes must be indicated
(x) in Black or Blue ink
