As Filed with the Securities and Exchange Commission on May 17, 1995
Registration No. 33-______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
Form S-3
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
-----------------------
E'TOWN CORPORATION
(Exact name of registrant as specified in its charter)
New Jersey 22-2596330
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
600 SOUTH AVENUE
WESTFIELD, NEW JERSEY 07091-0788
908-654-1234
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
-----------------------
ANDREW M. CHAPMAN
Chief Financial Officer and Treasurer
E'town Corporation
600 South Avenue
Westfield, New Jersey 07091-0788
908-654-1234
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-----------------------
Copies to:
DAVID P. FALCK, ESQ. BART J. COLLI, ESQ.
Winthrop, Stimson, Putnam & Roberts McCarter & English
One Battery Park Plaza Four Gateway Center
New York, New York 10004-1490 100 Mulberry Street
Newark, New Jersey 07102-4096
Approximate date of commencement of proposed sale to the public: As
soon as practicable after the Registration Statement becomes effective.
-----------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. |_|
-----------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Proposed Proposed
Title of each maximum maximum
class of securities Amount to be offering price aggregate Amount of
to be registered registered<F1> per unit<F2> offering price<F2> registration fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, without
par value <F3>............ 660,000 $25.75 $16,995,000 $5,861
====================================================================================================================================
<FN>
<F1> Includes 85,000 shares issuable upon the exercise of the Underwriters'
option to purchase shares solely to cover over-allotments, if any.
<F2> Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933 based on the
average of the reported high and low sales of the Common Stock reported on
the New York Stock Exchange on May 12, 1995.
<F3> This Registration Statement also pertains to Rights to purchase 1/100th of
one share of Common Stock of the Registrant (the "Rights"). Until the
occurrence of certain prescribed events the Rights are not exercisable,
are evidenced by the certificates for E'town Corporation Common Stock and
will be transferred only with such securities.
</FN>
</TABLE>
-----------------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF ANY OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL
PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
JURISDICTION.
SUBJECT TO COMPLETION, DATED MAY 17, 1995
575,000 Shares
E'TOWN CORPORATION
Common Stock
(Without Par Value)
---------------
The common stock of the Company (the "Common Stock") is traded on the New
York Stock Exchange ("NYSE") under the symbol "ETW". On May 16, 1995, the last
sale price for the Company's Common Stock on the NYSE was $25.50 per share.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMIS-
SION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
=============================================================================================================================
Underwriting
Price to Discounts and Proceeds to
Public Commissions<F1> Company<F2>
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Per Share............................
- -----------------------------------------------------------------------------------------------------------------------------
Total<F3> ...........................
=============================================================================================================================
<FN>
<F1> The Company has agreed to indemnify the Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933. See "Underwriting".
<F2> Before deducting expenses payable by the Company estimated to be $122,625.
<F3> The Company has granted to the Underwriters a 30-day option to purchase up to 85,000
additional shares of Common Stock to cover over-allotments, if any. See "Underwriting". If
such option is exercised in full, the total Price to Public, Underwriting Discounts and
Commissions, and Proceeds to Company will be $ , $ and $ , respectively.
</FN>
</TABLE>
---------------------
The shares of Common Stock are offered by the Underwriters named below,
subject to receipt and acceptance by them and their right to reject any order in
whole or in part. It is expected that delivery of the shares will be made on or
about , 1995.
---------------------
A.G. Edwards & Sons, Inc. Legg Mason Wood Walker
Incorporated
The date of this Prospectus is , 1995.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON
STOCK OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
--------------
AVAILABLE INFORMATION
E'town Corporation ("E'town" or the "Company") is subject to the
informational requirements of the Securities Exchange Act of 1934 (the "Exchange
Act") and, in accordance therewith, files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information concerning the Company can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549; Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60604; and in the Public Reference Room, 14th Floor, Seven
World Trade Center, New York, New York 10048. Copies of such materials can be
obtained from the Public Reference Section of the Commission at its principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
In addition, material filed by the Company can be inspected at the offices of
the NYSE, 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a Registration Statement on
Form S-3 with respect to the offering made hereby. This Prospectus does not
contain all of the information set forth in the Registration Statement and the
exhibits thereto. Copies of the Registration Statement and the exhibits thereto
may be inspected without charge at offices of the Commission, and copies of all
or any portion thereof may be obtained from the Commission upon payment of the
prescribed fees.
--------------
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated by reference into this Prospectus and made a part hereof as of
their respective dates:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1994 (excluding the Board of Directors'
Compensation Committee Report on Executive Compensation and
the Performance Graph contained on pages 8-10 of the
definitive Proxy Statement of the Company dated March 29, 1995
incorporated in such Form 10-K by reference).
2. The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1995.
3. The description of the Company's common stock purchase rights
contained in the Company's Registration Statement on Form 8-A,
dated February 4, 1991.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of this offering shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the date of filing of such
documents. All of the documents described above are hereinafter referred to as
"Incorporated Documents." Any statement contained in an Incorporated Document
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
Incorporated Document modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
The information relating to the Company contained in this Prospectus
summarizes, is based upon, or refers to, information and financial statements
contained in one or more of the Incorporated Documents; accordingly, such
information contained herein is qualified in its entirety by reference to such
Incorporated Documents and should be read in conjunction therewith.
The Company undertakes to provide without charge to each person to whom
a copy of this Prospectus has been delivered, on the written or oral request of
any such person, a copy of any of the documents referred to above which have
been incorporated in this Prospectus by reference other than exhibits to such
document (unless such exhibits are specifically incorporated by reference into
such document). Requests for such copies should be directed to: Andrew M.
Chapman, Chief Financial Officer and Treasurer, E'town Corporation, 600 South
Avenue, Westfield, New Jersey 07091-0788; Telephone:
(908) 654-1234.
-2-
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to the
more detailed information and financial statements which appear elsewhere in
this Prospectus or in the Incorporated Documents. Unless the context otherwise
requires, the information contained in this Prospectus assumes that the
Underwriters' over-allotment option is not exercised.
The Company
E'town is a holding company whose principal subsidiary is Elizabethtown
Water Company ("Elizabethtown"), a regulated public utility providing water
service in central New Jersey. Elizabethtown serves a retail franchise area with
a population of approximately 570,000 and also provides, on a wholesale basis, a
portion of the water requirements of eight municipal systems and three
investor-owned water companies under long-term contracts. At December 31, 1993,
Elizabethtown, together with its subsidiary, The Mount Holly Water Company
("Mount Holly"), was the seventh largest investor-owned water utility in the
United States, based on gallons of water pumped annually. Real estate parcels
owned by E'town and another subsidiary, E'town Properties, Inc. ("Properties"),
totalling approximately 740 acres, are either held for sale or are in the
process of being zoned and permitted with the intent of offering these
properties for future sale. Through a majority-owned joint venture, Applied
Watershed Management, L.L.C. ("AWM"), E'town is pursuing non-regulated
opportunities related to water and wastewater management primarily in New
Jersey.
Elizabethtown and Mount Holly expect to invest approximately $171
million in their core utility businesses during the years 1995-1997. This amount
includes $66 million for construction of Elizabethtown's Canal Road Water
Treatment Plant (the "Plant"). The Plant, which is scheduled to be completed in
1996 at a total estimated cost of approximately $100 million, excluding AFUDC
(as defined herein), is necessary to replace groundwater supplies withdrawn from
service and to meet customer demand. In August 1993, the New Jersey Board of
Public Utilities (the "BPU") approved an agreement (the "1993 Plant
Stipulation") among the principal participants in Elizabethtown's rate cases,
affirming that the Plant is necessary and that Elizabethtown's initial estimates
(included in the 1993 Plant Stipulation) of the Plant's cost and construction
period were reasonable. The 1993 Plant Stipulation also allows Elizabethtown,
under certain circumstances, to levy a rate surcharge during the Plant's
construction period. See "Construction Program and Regulatory Issues".
Elizabethtown has executed a revolving credit agreement (the
"Agreement") with six banks to provide $60 million in short-term financing.
Management expects that financing available under the Agreement, together with
internal funds, proceeds of future issuances of debt and preferred stock, and
capital contributions from E'town, will be sufficient to finance Elizabethtown's
and Mount Holly's capital needs through 1997, including the Plant. In large part
due to Elizabethtown's ongoing capital program, Elizabethtown has applied for,
and received, base rate relief five times over the last six years, aggregating
$31.2 million, including a $5.3 million rate increase effective February 1,
1995. Primarily to recover the costs of the Plant, Elizabethtown expects to file
for an estimated 30% rate increase in late 1995. (Management estimates that the
bill for a typical residential customer of Elizabethtown is currently
approximately $20 per month.) Similarly, Mount Holly is planning a water supply,
treatment and transmission construction project at an estimated cost of $16.5
million which will require a significant increase in its rates. Elizabethtown
and Mount Holly expect that upon the completion, and successful reflection in
rates, of their respective new utility plant projects, their capital
requirements for utility plant should decrease, thereby reducing the need for
future rate increases and external financing.
<TABLE>
<CAPTION>
The Offering
<S> <C>
Issuer............................................E'town Corporation
Securities Offered................................575,000 shares of Common Stock, without par value<F1>
Shares to be Outstanding after the Offering
(as of May 16, 1995)............................7,251,489 shares<F1><F2>
NYSE Symbol.......................................ETW
Latest 12-Month Closing Price Range (through
May 16, 1995)...................................$23.75 per share to $28.25 per share
Indicated Annual Dividend per share of
Common Stock<F2>................................$2.04. See "Common Stock Price Range and Dividends".
Use of Proceeds...................................To make an equity contribution of approximately
$13.9 million to Elizabethtown (which will be used to
repay a portion of its borrowings under the Agreement
incurred to finance the construction program). See "Use
of Proceeds".
- ----------------
<FN>
<F1> Includes associated common stock purchase rights as described under
"Description of Common Stock".
<F2> On May 18, 1995, the Board of Directors declared a cash dividend of
$.51 per share payable on June 30, 1995 to holders of record on June 26, 1995.
Holders as of the record date of the shares of Common Stock offered hereby will
be entitled to receive this dividend.
</FN>
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
Summary Consolidated Financial Information
(Dollars in thousands, except per share data)
Three Months
Year Ended December 31, Ended March 31,
--------------------------------------- -----------------------
1992 1993<F1> 1994<F1> 1994<F2> 1995<F2>
----- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Operating Revenues..........................$89,167 $99,996 $102,033 $24,657 $25,174
Operating Expenses.......................... 67,115 74,661 78,352 19,145 19,329
AFUDC and Capitalized Interest<F3>.......... 1,797 1,251 2,426 370 1,172
Net Income.................................. 10,231 13,830 12,088 2,537 3,015
Earnings per Share of Common Stock:
Primary................................. 2.21 2.59 1.95 .45 .45
Fully Diluted........................... 2.18 2.54 1.94 .45 .45
Dividends per Share of Common Stock......... $2.00 $2.01 $2.04 $.51 $.51
Average Primary Number of Shares of
Common Stock Outstanding (000)............ 4,628 5,338 6,210 5,683 6,636
Other Data (at end of period):
Common Equity as a Percentage of Total
Capitalization............................. 37.2% 43.5% 44.7% 43.8% 43.4%
Book Value per Share of Common Stock........ $21.14 $22.76 $23.17 $22.77 $23.12
Meters In Service...........................185,028 188,677 191,622 189,357 192,593
March 31, 1995
<CAPTION>
Actual As Adjusted<F4>
------------------------ -------------------------
Outstanding Ratio Outstanding Ratio
----------- ----- ----------- -----
<S> <C> <C> <C> <C>
Capitalization:
Short-term Debt<F5>.........................$ 35,042 9.9% $ 21,125 6.0%
Long-term Debt-net.......................... 153,901 43.3% 153,901 43.3%
Cumulative Preferred Stock.................. 12,000 3.4% 12,000 3.4%
Common Shareholders' Equity................. 153,967 43.4% 167,884 47.3%
------- ----- ------- ------
Total Capitalization..................$354,910 100.0% $354,910 100.0%
======== ====== ======== ======
- -----------------------------
<FN>
<F1> A return to more normal weather and water consumption patterns during 1994
compared to 1993, combined with a charge due to litigation of $.10 per
share in September 1994 and a gain on the sale of land of $.21 per share
in August 1993, all contributed to an overall decrease in earnings per
share in 1994 compared to 1993. Earnings per share were further affected
by a 16% increase in the average number of common shares outstanding in
1994.
<F2> Due to the seasonal and weather-related nature of Elizabethtown's
business, results of operations for the quarterly periods shown are not
necessarily indicative of full year results.
<F3> "AFUDC and Capitalized Interest" is comprised of (i) an Allowance for
Funds Used During Construction ("AFUDC"), which is capitalized by
Elizabethtown and Mount Holly as an appropriate cost of utility plant, and
represents the cost of financing major projects during construction
($2,045,234 for 1994 and $1,120,356 for the three months ended March 31,
1995), and (ii) capitalized interest for non-utility properties under
development ($380,565 for 1994 and $52,935 for the three months ended
March 31, 1995). AFUDC, a non-cash credit on the income statement, is
added to the construction cost of the project and included in rate base
for recovery in rates during the project's useful life.
<F4> As adjusted to reflect the sale of the Common Stock offered hereby for
estimated net proceeds of $13,917,000, as described under "Use of
Proceeds".
<F5> Includes current portion of long-term debt.
</FN>
</TABLE>
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<PAGE>
MAP
[See narrative description of Map contained in Appendix A.]
-5-
<PAGE>
THE COMPANY
The Company, a New Jersey corporation, is a holding company whose
principal subsidiary, Elizabethtown, is a regulated water utility, one of whose
corporate predecessors was first incorporated in 1854. The Company was formed in
1985 to become the holding company for Elizabethtown pursuant to a
reorganization approved by Elizabethtown's stockholders and the BPU. E'town and
its non-regulated subsidiary, Properties, currently own approximately 740 acres
of land in New Jersey which are either held for sale or are in the process of
being zoned and permitted with the intent of offering these properties for
future sale. The Company has no plans to acquire additional real estate. In
March 1995, the Company formed AWM, a three-year joint venture, in which it has
a 65% ownership interest. AWM intends to design, finance, engineer, construct,
own, operate and/or sell water and wastewater facilities primarily in New
Jersey.
Elizabethtown and Mount Holly are engaged in the treatment and
distribution of water for domestic, commercial, industrial and fire protection
purposes and for resale to municipal systems and other investor-owned water
companies. Throughout their central and southern New Jersey service areas,
Elizabethtown and Mount Holly serve a population of approximately 570,000 at
retail and provide, on a wholesale basis, a portion of the water requirements of
eight municipal entities and three investor-owned water utilities. All of the
Company's consolidated revenues are currently contributed by the Company's water
utility business. At December 31, 1993, Elizabethtown, together with Mount
Holly, was the seventh largest investor-owned water utility in the United
States, based on gallons of water pumped annually.
Elizabethtown and Mount Holly are subject to regulation by the BPU with
respect to rates and service, the issuance and sale of securities,
classification of accounts, mergers, and other matters. Elizabethtown and Mount
Holly periodically seek rate relief to cover the cost of increased operating
expenses, increases in financing expenses due to additional investments in
utility plant, and other costs of doing business.
The Company's executive offices are located at 600 South Avenue,
Westfield, New Jersey 07091-0788. Its telephone number is (908) 654-1234.
USE OF PROCEEDS
The net proceeds to the Company from the sale of the Common Stock offered
hereby, estimated to be $13,917,000, will be used to fund an equity contribution
in the same amount to Elizabethtown. Elizabethtown will repay a portion of its
short-term borrowings under the Agreement incurred to finance the construction
program, primarily the Plant. At May 16, 1995, Elizabethtown had short-term
borrowings outstanding of $42 million under the Agreement at interest rates from
6.2% to 7.1%, at a weighted average interest rate of 6.4%.
CONSTRUCTION PROGRAM AND REGULATORY ISSUES
Capital expenditures, primarily for water utility plant, were $70.1
million for 1994 and $136.4 million for the three-year period ended December 31,
1994. Capital expenditures for the three-year period ending December 31, 1997
are estimated to be $171.5 million, of which $170.4 million is for water utility
plant ($149.5 million for Elizabethtown and $20.9 million for Mount Holly) and
$1.1 million is for real estate-related expenditures and AWM.
-6-
<PAGE>
A major portion of the utilities' capital outlays will occur in the first
18 months of the three-year projection period through 1997 as Elizabethtown and
Mount Holly invest in new water treatment and water supply facilities, each as
described below. After these projects are completed, the capital outlays for the
utilities are expected to decrease.
Elizabethtown
Elizabethtown's capital program includes the construction of the Plant
near Elizabethtown's existing plant. The Plant, which will have an initial rated
production capacity of 40 million gallons per day and can be expanded to 200
million gallons per day, is necessary to meet existing and anticipated customer
demands and to replace groundwater supplies withdrawn from service as a result
of more restrictive water quality regulations and groundwater contamination.
Expansion of the Plant's production capacity beyond 40 million gallons per day
is not expected to occur in the foreseeable future. Elizabethtown's capital
program also includes the construction of additional mains and storage
facilities necessary to serve existing and future customers.
In April 1994, following a competitive bidding process, Elizabethtown
executed a lump-sum contract for the construction of the Plant. The current
estimated cost of the Plant is approximately $100 million, excluding AFUDC. As
of March 31, 1995, the Company has expended $43.8 million on the Plant
(excluding AFUDC of $2.9 million). The project is proceeding on schedule, the
construction contract remains on budget, and the project is expected to be
completed in mid-1996.
In August 1993, the BPU approved the 1993 Plant Stipulation signed by the
Department of Ratepayer Advocate, the BPU staff and several of Elizabethtown's
major wholesale customers, all of whom typically participate in Elizabethtown's
rate cases. The 1993 Plant Stipulation states the Plant is necessary and that
Elizabethtown's estimate regarding the Plant's cost ($87 million at that time)
and construction period are reasonable. In April 1994, Elizabethtown notified
all parties to the 1993 Plant Stipulation that the estimated cost of the Plant
had increased. The 1993 Plant Stipulation authorizes Elizabethtown to levy a
rate surcharge during the Plant's construction period if Elizabethtown's pre-tax
interest coverage ratio for any twelve-month historical period drops below 2.0
times. The surcharge would equal 20% of Elizabethtown's gross interest expense
for the prior twelve months, adjusted for revenue taxes. The surcharge would go
into effect at the same time as Elizabethtown's next base rate increase after
the coverage ratio falls below 2.0 times. Also, the surcharge would remain in
effect for twelve months and could be extended by the BPU for up to six
additional months. The 1993 Plant Stipulation also provides that the rate of
return on common stockholder's equity used to calculate the rate for the equity
component of the AFUDC for the Plant will be 1.5% less than the rate of return
on common stockholder's equity established in Elizabethtown's most recent base
rate case. The authorized rate of return on common stockholder's equity is
currently 11.5%. Elizabethtown's pre-tax interest coverage ratio, calculated in
accordance with the 1993 Plant Stipulation, for the twelve months ended March
31, 1995 was 2.8 times. Based upon current conditions, Elizabethtown expects its
pre-tax interest coverage will remain above the 2.0 times trigger level through
the completion of the Plant's construction and that the surcharge will not be
required.
On January 24, 1995, the BPU approved a stipulation ("1995 Stipulation")
for a rate increase for Elizabethtown of $5.3 million, effective February 1,
1995. The 1995 Stipulation provides for an authorized rate of return on common
equity of 11.5%. It also provides for recovery of the current service cost
portion of the obligation accrued under Statement of Financial Accounting
Standards 106, "Employer's Accounting for Postretirement Benefits Other Than
Pensions," provided this amount is funded by Elizabethtown. The rate increase
will recover the financing costs associated with $62.0 million of construction
projects that were not reflected in the rates last established in March 1993.
The increase
-7-
<PAGE>
will offset costs for power, labor and benefits, primarily medical. The 1995
Stipulation also provides for an increase in depreciation rates resulting in an
increase in depreciation expense of approximately $.5 million. The 1995
Stipulation requires Elizabethtown to maintain an average ratio of common equity
to total capitalization of at least 45.1% for the twelve months ended January
31, 1996. If a lesser ratio is realized, the revenue requirement associated with
such lesser ratio will offset the overall revenue requirement in the next base
rate case. The Company expects to sustain an average ratio of common equity to
total capitalization in excess of 45.1% for the twelve month period.
A rate increase of approximately 30% in excess of current rates will be
requested by Elizabethtown in late 1995 to be effective in mid-1996, a major
portion of which will be needed to recover the expected costs of the Plant. In
light of the approval by the BPU of the 1993 Plant Stipulation and
Elizabethtown's experience in obtaining base rate relief, Elizabethtown expects
the BPU to grant timely and adequate rate relief for the Plant, but cannot
predict the ultimate outcome of any rate proceeding.
Mount Holly
To ensure an adequate supply of quality water from an aquifer serving
parts of southern New Jersey, State legislation is requiring Mount Holly, as
well as other suppliers obtaining water from designated portions of this
aquifer, to reduce pumpage from its wells. Mount Holly has received preliminary
approvals from the New Jersey Department of Environmental Protection for its
conceptual plan to develop a new water supply, treatment and transmission system
necessary to obtain water outside the designated portion of the aquifer and to
treat and pump the water into the Mount Holly system. The project is currently
estimated to cost $16.5 million and is expected to be completed by the end of
1996. The land for the supply and treatment facilities has been purchased and
test wells have been drilled and evaluated. In the second quarter of 1995, Mount
Holly expects to petition the BPU for an increase in rates, to take place in two
phases, of more than 100% in excess of current rates. The first phase is
necessary to recover costs that were not reflected in rates last increased in
October 1986. The second phase would recover the costs of the new water supply,
treatment and transmission system discussed above. A decision by the BPU on
Mount Holly's petition is expected by the end of 1995. Mount Holly's rates are
now among the lowest in the State. Even though Mount Holly's forthcoming rate
increase, if granted at or near the level proposed, will be substantial relative
to current rates, management expects that the resulting rates will be lower than
those charged by the other major investor-owned water system in the region.
While management believes that the water supply, treatment and transmission
project planned for Mount Holly is a cost-effective response to the State
legislation affecting the area and that the costs incurred by Mount Holly since
rates were last increased are appropriate, management cannot predict the
ultimate outcome of any rate proceeding at this time.
FUTURE FINANCING REQUIREMENTS
For the three-year period ending December 31, 1997, Elizabethtown,
including Mount Holly, estimates 30% of its capital expenditures will be
financed with internally generated funds (after payment of common stock
dividends). Management believes Elizabethtown will be able to finance the
balance with a combination of capital contributions from the proceeds of E'town
common stock sales, proceeds from the sale by Elizabethtown of preferred stock
and long-term debentures and from tax-exempt New Jersey Economic Development
Authority ("NJEDA") bonds, and short-term borrowings by Elizabethtown under its
revolving credit agreement discussed below. Under Elizabethtown's most
restrictive debenture indenture, at March 31, 1995, Elizabethtown had the
ability to issue $57 million of long-term debentures at an assumed interest rate
of 8.25%.
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<PAGE>
Elizabethtown has executed the Agreement with an agent bank and five
additional banks to replace its uncommitted lines of credit. The Agreement
allows Elizabethtown to borrow, repay and reborrow up to $60 million during the
first three years, after which time Elizabethtown may convert any outstanding
balances to a five-year fully amortizing term loan. The Agreement further
provides that, among other covenants, Elizabethtown must maintain a ratio of
common and preferred equity to total capitalization of not less than 35% and a
pre-tax interest coverage ratio of at least 1.5 to 1. As of March 31, 1995, the
ratio of Elizabethtown's common and preferred equity to total capitalization was
48%. For the twelve months ended March 31, 1995 Elizabethtown's pre-tax interest
coverage ratio, calculated in accordance with the Agreement, was 3.0 to 1.
COMMON STOCK PRICE RANGE AND DIVIDENDS
The Company's Common Stock is listed on the NYSE under the symbol "ETW".
The following table sets forth the high and low closing prices per share of the
Company's Common Stock for the periods indicated, as reported by the NYSE. The
table also shows dividends paid per share on the Company's Common Stock for the
periods indicated.
<TABLE>
<CAPTION>
Closing Prices
--------------
Dividends
High Low Paid
----- ----- ---------
<S> <C> <C> <C>
1993: First Quarter............$30.88 $27.63 $.50
Second Quarter........... 31.13 29.50 .50
Third Quarter............ 35.75 29.88 .50
Fourth Quarter........... 34.75 30.25 .51
1994: First Quarter............ 32.00 29.75 .51
Second Quarter........... 29.75 26.50 .51
Third Quarter............ 27.75 26.25 .51
Fourth Quarter........... 27.00 23.75 .51
1995: First Quarter ........... 26.38 24.88 .51
Second Quarter (through
May 16, 1995).......... 27.13 25.38 <F*>
- ---------------------------
<FN>
<F*> On May 18, 1995, the Board of Directors declared a cash dividend of
$.51 per share payable on June 30, 1995 to holders of record on June 26, 1995.
Holders as of the record date of the shares of Common Stock offered hereby will
be entitled to receive this dividend.
</FN>
</TABLE>
On May 16, 1995, the last sale price for the Company's Common Stock, as
reported by the NYSE, was $25.50 per share. On December 31, 1994, there were
6,218 holders of record of the Company's Common Stock. Of the approximately 6.6
million shares outstanding as of that date, about 4.7 million shares were
registered in the name of only one holder, Cede & Co., which is a nominee of The
Depository Trust Company, a securities depositary for various banks and
brokerage firms.
-9-
<PAGE>
The Company and its predecessors have paid cash dividends since 1880. The
indicated annual dividend rate is currently $2.04 per share. The amount of
future dividends will depend upon the Company's earnings, financial condition,
capital requirements and other factors, including the timeliness and adequacy of
rate relief granted to Elizabethtown and Mount Holly.
The Company has a Dividend Reinvestment and Stock Purchase Plan (the "DRP
Plan") under which participating shareholders may have cash dividends on all or
a portion of their shares of Common Stock automatically reinvested in additional
shares of Common Stock at 95% of market value as outlined in the DRP Plan, and
may invest up to an additional $2,000 per month on the same basis. No commission
or service charge is paid by participants in connection with their purchases
under the DRP Plan. In 1994, the Company received $7.1 million in proceeds from
sales of Common Stock under the DRP Plan. The Company reserves the right to
amend or modify the DRP Plan at any time.
DESCRIPTION OF COMMON STOCK
Certain provisions of the Company's Certificate of Incorporation and
By-Laws and Elizabethtown's Restated Certificate of Incorporation and
Elizabethtown's indentures are summarized or referred to below. The summaries
are merely an outline, do not purport to be complete, do not relate to or give
effect to the provisions of statutory or common law, and are qualified in their
entirety by express reference to such Certificates of Incorporation, By-Laws and
indentures.
The Company is authorized by its Certificate of Incorporation to issue
15,000,000 shares of Common Stock, without par value, of which 6,676,489 shares
were issued and outstanding as of May 16, 1995. As of March 31, 1995, the
Company has agreed to keep reserved for issuance 299,825 shares of Common Stock
to satisfy the privileges of the Company's subordinated debentures which are
convertible into Common Stock at a conversion price of $40.00 per share, subject
to adjustment.
The holders of Common Stock of the Company are entitled to receive dividends as
and when declared by the Board of Directors of the Company out of funds legally
available for dividends. Payment of common stock dividends by Elizabethtown
(which currently constitutes the predominant source of cash from earnings
available to the Company) is restricted by certain provisions of the seven
indentures under which debentures of Elizabethtown are outstanding. At March 31,
1995, $7,800,513 of Elizabethtown's retained earnings were restricted under the
most restrictive of these indenture provisions. Therefore, $34,272,497 of
E'town's consolidated retained earnings were unrestricted. In the event of
liquidation, dissolution or winding up of the Company, the holders of Common
Stock are entitled to share ratably in all assets remaining after payment of
liabilities. The holders of record of Common Stock are entitled to one vote for
each share of such stock held by them. The holders of Common Stock have no
cumulative voting, preemptive or conversion rights and are not subject to
further calls or assessments by the Company. There are no redemption or sinking
fund provisions applicable to the Common Stock. The Common Stock currently
outstanding is, and the Common Stock offered pursuant to this Prospectus will
be, fully paid and non-assessable.
At the Annual Meeting of Shareholders on May 6, 1991, holders of the Company's
Common Stock adopted an amendment to the Company's Certificate of Incorporation
which provided for, among other things, a classified Board of Directors. Such
amendment may only be amended or repealed by the affirmative vote of the holders
of at least 80% of the Company's Common Stock. Also in May 1991, the Board of
Directors approved revisions to the Company's By-Laws which provided for, among
other things, certain notice requirements for business to be properly brought by
shareholders before an annual or special meeting of shareholders, certain
procedures for the nomination of directors by shareholders,
-10-
<PAGE>
the fixing of record dates with respect to action to be taken by shareholder
vote or by written consent, and the calling of special meetings of shareholders
pursuant to a vote of the Board of Directors, action by the Chairman or a
request of shareholders holding at least 40% of the capital stock of the
Company.
The outstanding Common Stock of the Company is traded on the NYSE. The Bank of
New York is the Registrar and Transfer Agent for the Common Stock of the
Company.
On January 24, 1991, pursuant to a shareholders' rights plan adopted by the
Company, the Board of Directors of the Company declared a dividend of one share
purchase right (a "Right") for each outstanding share of Common Stock (the
"Shares") of the Company. The dividend was paid on February 4, 1991 (the "Record
Date") to the shareholders of record on that date. Generally, each share of
Common Stock issued after the Record Date, including the shares of Common Stock
offered hereby, carries one Right. Each Right entitles the registered holder to
purchase from the Company 1/100th of one Share at a price of $.80 per 1/100th of
one Share, subject to adjustment. Until the occurrence of certain specified
events, including the acquisition by certain third parties of a large amount of
Common Stock or attempts to acquire the Company, the Rights are not exercisable,
have no dilutive effect, are evidenced by the certificates for the shares of the
Company's Common Stock and will be transferred only with such securities. A more
complete description of the Rights is set forth in the Company's Registration
Statement on Form 8-A, as amended, and the exhibits thereto, which description
has been incorporated by reference herein. See "Incorporation of Certain
Information by Reference."
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, a copy of
which is filed as an exhibit to the Registration Statement of which this
Prospectus is a part, the Company has agreed to sell to A.G. Edwards & Sons,
Inc. and Legg Mason Wood Walker, Incorporated (the "Underwriters"), and the
Underwriters have severally agreed to purchase from the Company, shares
and shares of the Common Stock offered hereby, respectively.
The Underwriting Agreement provides that the obligations of the Underwriters
thereunder are subject to approval of certain legal matters by counsel and to
various other conditions. The nature of the Underwriters' obligations is such
that they are committed to take and pay for all the shares of Common Stock
offered hereby if any are taken.
The Company has been advised by the Underwriters that they propose to offer the
shares of Common Stock offered hereby to the public at the offering price set
forth on the cover page of this Prospectus and may offer such shares to certain
dealers at such price less a concession not in excess of $ per share, and that
the Underwriters and such dealers may reallow a discount not in excess of $ per
share to other dealers. The public offering price and the concession and
discount to dealers may be changed by the Underwriters after the initial date of
the public offering.
The Company has granted the Underwriters an option exercisable for 30 days
after the date of this Prospectus to purchase up to an aggregate of 85,000
additional shares of Common Stock. The Underwriters may exercise such option
only to cover over-allotments in connection with the sale of the shares of
Common Stock offered hereby.
The Company has agreed that it will not, without the prior written consent of
the Underwriters, file with the Commission a registration statement under the
Securities Act of 1933 (the "Securities Act") relating to any issuance of its
Common Stock or any security convertible into or exchangeable for or any rights
to purchase or acquire Common Stock for a period of 180 days after the date of
this Prospectus,
-11-
<PAGE>
except for shares to be issued pursuant to the Company's DRP Plan or its
existing employee benefit plans.
The Company has agreed to indemnify the Underwriters and their controlling
persons against certain civil liabilities, including certain civil liabilities
under the Securities Act.
LEGAL MATTERS
Certain legal matters concerning the offering will be passed upon for the
Company by Walter M. Braswell, Esq., Secretary of the Company, and Winthrop,
Stimson, Putnam & Roberts, New York, New York, special counsel for the Company.
Certain legal matters will be passed upon for the Underwriters by McCarter &
English, Newark, New Jersey. As of May 16, 1995, Mr. Braswell owned 11,214
shares (including stock options) of the Company's Common Stock.
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this Prospectus by reference from the Company's Annual Report on
Form 10-K for the year ended December 31, 1994 have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their reports, which are
incorporated herein by reference, and have been so incorporated in reliance upon
the reports of such firm given upon their authority as experts in accounting and
auditing.
-12-
<PAGE>
No dealer, salesperson or any other person has
been authorized to give information or to make
any representations, other than those contained in
this Prospectus, in connection with the offer
contained in this Prospectus, and if given or made, 575,000 Shares
such information or representations must not be
relied upon as having been authorized by the
Company or by any of the Underwriters. This E'TOWN
Prospectus does not constitute an offer to sell, or a CORPORATION
solicitation of an offer to buy, securities other than
the securities offered hereby or an offer to sell, or
a solicitation of an offer to buy, any of the Common Stock
securities offered hereby in any jurisdiction to any (Without Par Value)
person to whom it is unlawful to make such offer in
such jurisdiction. Neither the delivery of this
Prospectus nor any sale made hereunder shall,
under any circumstances, create an implication
that there has been no change in the affairs of
the Company since the date hereof.
P R O S P E C T U S
TABLE OF CONTENTS
Page
A.G. Edwards & Sons, Inc.
Available Information.................
Incorporation of Certain Legg Mason Wood Walker
Information by Reference............ Incorporated
Prospectus Summary....................
Map................................... June , 1995
The Company...........................
Use of Proceeds.......................
Construction Program
and Regulatory Issues...............
Future Financing Requirements.........
Common Stock Price Range
and Dividends.......................
Description of Common Stock...........
Underwriting..........................
Legal Matters.........................
Experts...............................
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
<TABLE>
<CAPTION>
Item 14. Other Expenses of Issuance and Distribution.<F*>
<S> <C>
Securities and Exchange Commission filing fee........ $ 5,861
NASD filing fee...................................... 2,200
New York Stock Exchange listing fee.................. 2,000
Costs of printing and engraving...................... 16,000
Legal fees and expenses.............................. 45,000
Blue sky fees and expenses........................... 7,000
Accounting fees and expenses......................... 40,000
Miscellaneous expenses............................... 4,564
---------
Total........................................ $122,625
- -----------------------------
<FN>
<F*> All expenses except for the Securities and Exchange Commission and NASD
filing fees are estimated.
</FN>
</TABLE>
Item 15. Indemnification of Directors and Officers.
Article 3, Section 6 of the Company's By-Laws provides that the Company
shall indemnify each director or officer of the Company and any person who, at
the request of the Company, has served as a director, officer or trustee of
another corporation in which the Company has a financial interest against
reasonable costs, expenses and counsel fees paid or incurred (including any
judgments, fines or reasonable settlements exclusive of any amount paid to the
Company in settlement) in connection with the defense of any action, suit or
proceeding in which such person is named as a party by reason of having been
such director, officer or trustee or by reason of any action taken or not taken
in such capacity unless such director, officer or trustee is finally adjudged to
have been derelict in the performance of his duties as director, officer or
trustee. If any such action, suit or proceeding is settled or otherwise
terminated as against such director, officer or trustee without a final
determination on the merits and the Board of Directors of the Company shall
determine that such director, officer or trustee has not in any substantial way
been derelict in the performance of his duties as charged in such action, suit
or proceeding, the Company shall indemnify such director, officer or trustee as
aforesaid.
Such rights of indemnification are not exclusive of any rights to which
a director or officer of the Company may have pursuant to statute or otherwise.
Section 14A:3-5 of the New Jersey Business Corporation Act (the "Act")
gives a corporation the power, without a specific authorization in its
certificate of incorporation or by-laws, to indemnify a corporate agent against
expenses and liabilities incurred in connection with certain proceedings
involving the corporate agent by reason of his being or having been such a
corporate agent, provided that with regard to a proceeding other than one by or
in the right of the corporation, the corporate agent must have acted in good
faith and in a manner reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal proceeding, such
corporate agent had no reasonable cause to believe his conduct was unlawful. In
any such proceeding, termination of a proceeding by judgment, order, settlement,
conviction or upon plea of nolo contendere or its equivalent does not of itself
create a presumption that any such corporate agent failed to meet the above
applicable standards of conduct. The indemnification provided by the Act does
not exclude any rights to which a corporate agent may be entitled under a
certificate of incorporation, by-law, agreement, vote of shareholders or
otherwise. No indemnification, other than that required when a corporate agent
is successful on the merits or otherwise in any of the above proceedings shall
be allowed if such indemnification would be inconsistent with a provision of the
certificate of incorporation, a by-law or a resolution of the board of directors
or of the shareholders, an agreement
<PAGE>
or other proper corporate action in effect at the time of the accrual of the
alleged cause of action which prohibits, limits or otherwise conditions the
exercise of indemnification powers by the corporation or the rights of
indemnification to which a corporate agent may be entitled.
The Company also has insurance policies which, among other things,
provide officers and directors liability coverage, individually and in the
aggregate up to a limit of $20 million for each loss within a 12-month period.
Item 16. Exhibits.
Exhibit No. Description
1 - Form of Underwriting Agreement.
4(a) - Company's Certificate of Incorporation, as amended (filed as
Exhibit 4(a) in Registration Statement No. 33-42509).*
4(b) - By-Laws of the Company, as amended (filed as Exhibit 3(b) in
the Company's Form 10-K for the year ended December 31,
1994).*
4(c) - Rights Agreement dated as of February 4, 1991 between the
Company and the Rights Agent named therein (filed as
Exhibit 4(n) in Registration Statement No. 33-38566).*
4(d) - Form of Common Stock Certificate (filed as Exhibit 4(d) in
Registration Statement No. 33-53245).*
4(e) - Elizabethtown's Restated Certificate of Incorporation (filed
as Exhibit 3(a) in the Company's Form 10-K for the year ended
December 31, 1993).*
5 - Opinion of Walter M. Braswell, Esq., as to the securities
being registered.
23(a) - Consent of Walter M. Braswell, Esq. (contained in Exhibit 5).
23(b) - Consent of Deloitte & Touche LLP, Independent Auditors.
24 - Power of Attorney.
- -----------------
* Incorporated by reference.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) For purposes of determining any liability under the
Securities Act of 1933 ("Act"), each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 ("Exchange Act") (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-2
<PAGE>
(2) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as a part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part
of this registration statement as of the time it was declared effective.
(3) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described under Item 15 above or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Westfield and State of New Jersey, on the 17th
day of May, 1995.
E'TOWN CORPORATION
By /s/ WALTER M. BRASWELL
-------------------------
Walter M. Braswell
Secretary
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following persons in
the capacities and on the date indicated.
Signature Title Date
/s/ ROBERT W. KEAN, JR. *
- ---------------------------
Robert W. Kean, Jr. Chairman, Chief Executive
Officer and Director (Principal
Executive Officer) May 17, 1995
/s/ HENRY S. PATTERSON, II*
- ---------------------------
Henry S. Patterson, II President and Director May 17, 1995
/s/ ANNE EVANS ESTABROOK*
- ---------------------------
Anne Evans Estabrook Vice President and Director May 17, 1995
/s/ WALTER M. BRASWELL
- ---------------------------
Walter M. Braswell Secretary May 17, 1995
/s/ ANDREW M. CHAPMAN
- ---------------------------
Andrew M. Chapman Chief Financial Officer and
Treasurer (Principal Financial
Officer and Principal Accounting
Officer) May 17, 1995
/s/ BRENDAN T. BYRNE*
- ---------------------------
Brendan T. Byrne Director May 17, 1995
II-4
<PAGE>
/s/ THOMAS J. CAWLEY*
- ---------------------------
Thomas J. Cawley Director May 17, 1995
- ---------------------------
John Kean Director
/s/ ROBERT W. KEAN, III*
- ---------------------------
Robert W. Kean, III Director May 17, 1995
/s/ ARTHUR P. MORGAN*
- ---------------------------
Arthur P. Morgan Director May 17, 1995
/s/ BARRY T. PARKER*
- ---------------------------
Barry T. Parker Director May 17, 1995
/s/ HUGO M. PFALTZ, JR.*
- ---------------------------
Hugo M. Pfaltz, Jr. Director May 17, 1995
/s/ CHESTER A. RING, 3RD*
- ---------------------------
Chester A. Ring, 3rd Director May 17, 1995
*By /s/ WALTER M. BRASWELL
- --------------------------
Walter M. Braswell
Attorney-in-fact
II-5
<PAGE>
APPENDIX A
1. Narrative description of Map appearing on page 5 of the paper format
version of the Prospectus, included herein pursuant to Item 304 of
Regulation S-T:
The relevant graphic material, in the form of a map, generally
shows the state of New Jersey and, by use of symbols and different shading, the
service areas of Elizabethtown Water Company ("Elizabethtown") and Mount Holly
Water Company ("Mount Holly") and the location of land owned by E'town
Corporation ("E'town") or E'town Properties Inc. ("Properties") within central
New Jersey. Specifically, the map indicates the following:
A. By using "criss-cross" shading, the franchised area of
Elizabethtown (north of Trenton, New Jersey) is shown;
B. By using horizontal shading, the franchised area of Mount
Holly (south of Trenton, New Jersey) is shown;
C. By using dark shading, the area of other systems served by
Elizabethtown (north of Trenton, New Jersey) is shown;
D. By using dark circular symbols, the location of land owned by
E'town or Properties in central New Jersey is indicated;
E. By using dark square symbols, the respective locations of
Elizabethtown's Raritan-Millstone Treatment Plant and the
proposed Canal Road Treatment Plant are indicated; and
F. By using star symbols, the cities of Philadelphia, Trenton
and New York are indicated.
<PAGE>
Exhibit Index
Exhibit No. Description
1 - Form of Underwriting Agreement.
4(a) - Company's Certificate of Incorporation, as amended (filed as
Exhibit 4(a) in Registration Statement No. 33-42509).*
4(b) - By-Laws of the Company, as amended (filed as Exhibit 3(b) in
the Company's Form 10-K for the year ended December 31,
1994).*
4(c) - Rights Agreement dated as of February 4, 1991 between the
Company and the Rights Agent named therein (filed as Exhibit
4(n) in Registration Statement No.
33-38566).*
4(d) - Form of Common Stock Certificate (filed as Exhibit 4(d) in
Registration Statement No. 33-53245).*
4(e) - Elizabethtown's Restated Certificate of Incorporation (filed
as Exhibit 3(a) in the Company's Form 10-K for the year ended
December 31, 1993).*
5 - Opinion of Walter M. Braswell, Esq., as to the securities
being registered.
23(a) - Consent of Walter M. Braswell, Esq. (contained in Exhibit 5).
23(b) - Consent of Deloitte & Touche, Independent Auditors.
24 - Power of Attorney.
- -----------------
* Incorporated by reference.
<PAGE>
Exhibit 1
575,000 Shares
E'TOWN CORPORATION
Common Stock
(Without Par Value)
UNDERWRITING AGREEMENT
June __, 1995
A.G. EDWARDS & SONS, INC.
One North Jefferson
St. Louis, MO 63103
LEGG MASON WOOD WALKER, INC.
111 South Calvert Street
Baltimore, MD 21202
Gentlemen:
E'town Corporation, a New Jersey corporation ("Company"),
confirms its agreement with you, as underwriters (hereinafter, "you" or
"Underwriters"), as follows:
1. Description of the Shares. The Company proposes
to issue and sell 575,000 shares of its Common Stock, without par
value ("Common Stock"), to the Underwriters. Such shares of
Common Stock are hereinafter referred to as the "Shares".
2. Representations and Warranties of the Company.
The Company represents and warrants to, and agrees with, the
Underwriters that:
(a) A registration statement (File No. 33-_____) with respect
to the Shares, including a preliminary form of prospectus, has been
prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended ("Act"), and the rules and
regulations ("Rules and Regulations") of the Securities and Exchange
Commission ("Commission") thereunder and filed with the Commission and
has become effective. The Company has reasonable grounds to believe
that it meets the requirements for the use of Form S-3 under the Act.
No stop order suspending the effectiveness of the registration
statement has been issued, and no proceeding for that purpose has been
instituted or threatened by the Commission. A final form of prospectus
has been or will be so prepared and will be filed pursuant to Rule
424(b) of the Rules and Regulations on or before the second business
day after the date hereof (or such earlier
<PAGE>
time as may be required by the Rules and Regulations). The Company will
not file a post-effective amendment after the time of execution of this
Agreement and prior to the filing of such final form of prospectus
without giving you an opportunity to review and comment thereon. Copies
of such registration statement, any such amendments, each related
preliminary prospectus ("Preliminary Prospectus") and all documents
incorporated by reference therein that were filed with the Commission
on or prior to the date of this Agreement (including one fully executed
copy of the registration statement and of each amendment thereto for
you and for counsel for the Underwriters) have been delivered to you.
Such registration statement, as it may have heretofore been amended and
including any information deemed by virtue of Rule 430A(a)(3) of the
Rules and Regulations to be part of such registration statement at the
time it was declared effective, is referred to herein as the
"Registration Statement", and such final form of prospectus, in the
form in which it is first filed or transmitted for filing pursuant to
Rule 424(b) of the Rules and Regulations, is referred to herein as the
"Prospectus". Any reference herein to the Registration Statement, the
Prospectus, any amendment or supplement thereto or any Preliminary
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein, and any reference to the terms
"amend," "amendment" or "supplement" with respect to the Registration
Statement or Prospectus shall be deemed to refer to and include the
filing after the execution hereof of any document with the Commission
deemed to be incorporated by reference therein.
(b) Each part of the Registration Statement, when such part
became or becomes effective, each Preliminary Prospectus, on the date
of filing thereof with the Commission, and the Prospectus and any
amendment or supplement thereto, on the date of filing thereof with the
Commission and at the Closing Date (as hereinafter defined), conformed
or will conform in all material respects with the requirements of the
Act and the Rules and Regulations or pursuant to such Rules and
Regulations are deemed to have complied therewith; each part of the
Registration Statement, when such part became or becomes effective, did
not or will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and each Preliminary
Prospectus, on the date of the filing thereof with the Commission, and
the Prospectus and any amendment or supplement thereto, on the date of
filing thereof with the Commission and at the Closing Date, did not or
will not include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the
light of the circumstances under
-2-
<PAGE>
which they were made, not misleading; except that the foregoing shall
not apply to statements in or omissions from any such document in
reliance upon, and in conformity with, written information furnished to
the Company by you specifically for use therein.
(c) The documents incorporated by reference in the
Registration Statement, the Prospectus, any amendment or supplement
thereto or any Preliminary Prospectus, when they became or become
effective under the Act or were or are filed with the Commission under
the Securities Exchange Act of 1934, as amended ("Exchange Act"), as
the case may be, conformed or will conform in all material respects
with the requirements of the Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder.
(d) The consolidated financial statements of the Company set
forth in the Registration Statement and the Prospectus fairly present
the financial condition of the Company and its subsidiaries as of the
dates indicated and the results of operations and changes in financial
position for the periods therein specified in conformity with generally
accepted accounting principles consistently applied throughout the
periods involved (except as otherwise stated therein).
(e) The Company and each of its subsidiaries has been duly
incorporated and is an existing corporation in good standing under the
laws of its jurisdiction of incorporation, has full power and authority
(corporate and other) to conduct its business as described in the
Registration Statement and Prospectus and is duly qualified to do
business in each jurisdiction in which it owns or leases real property
or in which the conduct of its business requires such qualification
except where the failure to be so qualified, considering all such cases
in the aggregate, does not involve a material risk to the business,
properties, financial position or results of operations of the Company
and its subsidiaries; and all of the outstanding shares of capital
stock of each such subsidiary have been duly authorized and validly
issued, are fully paid and non-assessable and (except as otherwise
stated in the Registration Statement) are owned beneficially by the
Company subject to no security interest, other encumbrance or adverse
claim.
(f) The outstanding shares of Common Stock of the Company and
the Shares to be issued and sold by the Company hereunder have been
duly authorized and are, or when issued as contemplated hereby will be,
validly issued, fully paid and non-assessable and conform in all
material respects, or when so issued will conform in all material
respects, to the
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description thereof in the Prospectus. The shareholders of the Company have no
preemptive rights with respect to the Shares.
(g) Except as set forth or contemplated in the Prospectus,
subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, neither the Company nor
any of its subsidiaries has incurred any liabilities or obligations,
direct or contingent, or entered into any transactions, in each case
not in the ordinary course of business, that are material to the
Company and its subsidiaries taken as a whole, and there has not been
any material change, on a consolidated basis, in the capital stock,
short-term debt or long-term debt of the Company, or any material
adverse change, or any event that will result in a material adverse
change, in the business, properties or financial condition of the
Company and its subsidiaries taken as a whole.
(h) Except as set forth in the Prospectus, there is not
pending or, to the knowledge of the Company, threatened any action,
suit or proceeding to which the Company or any of its subsidiaries is a
party, before or by any court or governmental agency or body, that is
likely to result in any material adverse change in the business,
properties or financial condition of the Company and its subsidiaries
taken as a whole.
(i) There are no contracts or documents of the Company or any
of its subsidiaries that are required to be filed as exhibits to the
Registration Statement or to any of the documents incorporated by
reference therein by the Act or the Exchange Act or by the rules and
regulations of the Commission thereunder that have not been so filed.
(j) The performance of this Agreement and the consummation of
the transactions herein contemplated will not result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, any agreement or instrument to which the Company is a
party or by which it is bound or to which any of the property of the
Company is subject, the Company's charter or by-laws, or to the best of
the Company's knowledge any statute, order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its properties; no consent, approval, authorization
or order of, or filing with, any court or governmental agency or body
is required for the consummation of the transactions contemplated by
this Agreement in connection with the issuance or sale of the Shares to
be sold by the Company, except such as may be required under the Act or
state securities laws; and the Company has full power and
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<PAGE>
authority to authorize, issue and sell the Shares to be sold by it as
contemplated by this Agreement, free of any preemptive rights.
(k) The Company is not and, after giving effect to the sale of
the Shares, will not be an "investment company" or a company
"controlled" by an "investment company" as such terms are defined by
the Investment Company Act of 1940, as amended.
3. Purchase, Sale and Delivery of Shares. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Company, at a purchase price of $0 per Share, the Shares.
Certificates for the Shares will be delivered by the Company
to you at the office of A.G. Edwards & Sons, Inc. against payment of the
purchase price therefor by certified or official bank check or checks in New
York Clearing House (next day) funds payable to the order of the Company at the
offices of Winthrop, Stimson, Putnam & Roberts, at 10:00 A.M., New York time, on
June __, 1995 (or if the New York or American Stock Exchanges or commercial
banks in The City of New York are not open on such day, the next day on which
such exchanges and banks are open), or at such other time not later than eight
full business days thereafter as you and the Company determine, such time being
herein referred to as the "Closing Date". The Shares, in definitive form and in
such denominations and registered in such names as you may request upon at least
two business days' prior notice to the Company, will be made available for
checking and packaging at the office of A.G. Edwards & Sons, Inc., at least one
business day prior to the Closing Date. If the Underwriters shall request that
any of the certificates evidencing the Shares be registered in a name or names
of a purchaser other than the Underwriters, the Company shall not be responsible
for any transfer taxes resulting from such request.
4. Covenants. The Company covenants and agrees with
the Underwriters that:
(a) The Company will cause the Prospectus to be filed as
required by Section 2(a) hereof (but only if you have not reasonably
objected thereto by notice to the Company after having been furnished a
copy a reasonable time prior to filing) and will notify you promptly of
such filing; it will notify you promptly of the time when any
subsequent amendment to the Registration Statement has become effective
or any supplement to the Prospectus has been filed and of any request
by the Commission for any amendment or
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<PAGE>
supplement to the Registration Statement or Prospectus or for
additional information; and it will file no amendment or supplement to
the Registration Statement or Prospectus to which you shall reasonably
object by notice to the Company after having been furnished a copy a
reasonable time prior to the filing.
(b) The Company will advise you, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement, of the suspension of the qualification of the
Shares for offering or sale in any jurisdiction, or of the initiation
or threat of any proceeding for any such purpose; and it will use
promptly its best efforts to prevent the issuance of any stop order or
to obtain its withdrawal if such a stop order should be issued.
(c) Within the time during which a prospectus relating to the
Shares is required to be delivered under the Act, the Company will
comply as far as it is able with all requirements imposed upon it by
the Act and by the Rules and Regulations, as from time to time in
force, so far as necessary to permit the continuance of sales of or
dealings in the Shares as contemplated by the provisions hereof and the
prospectus. If during such period any event occurs as a result of which
the prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances then
existing, not misleading, or if during such period it is necessary to
amend or supplement the Registration Statement or Prospectus to comply
with the Act, the Company will promptly notify you and will amend or
supplement the Registration Statement or Prospectus (at the expense of
the Company) so as to correct such statement or omission or effect such
compliance. Until the expiration of nine months following the date
hereof, the cost of preparing such amendment or supplement shall rest
with the Company (unless such amendment or supplement is necessitated
solely by activities of the Underwriters); thereafter, such expenses
shall be borne by the Underwriters.
(d) The Company will use its best efforts to qualify the
Shares for sale under the securities laws of such jurisdictions as you
reasonably designate and to continue such qualifications in effect so
long as required for the distribution of the Shares, except that the
Company shall not be required in connection therewith to qualify as a
foreign corporation or to execute a general consent to service of
process in any jurisdiction or to comply with any other requirements
that are not known to the Company on the
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<PAGE>
date of this Agreement and are deemed by the Company to be
unduly burdensome.
(e) The Company will furnish to you copies of the Registration
Statement, each Preliminary Prospectus, the Prospectus and all
amendments and supplements to such documents, in each case as soon as
available and in such quantities as you may from time to time
reasonably request; and upon the request of the Underwriters and as
contemplated by the Prospectus, the Company will provide any person
with any of the documents incorporated by reference therein.
(f) The Company will make generally available to its security
holders as soon as practicable, but in any event not later than 15
months after the end of the Company's current fiscal quarter, an
earnings statement (which need not be audited) covering a 12-month
period beginning after the date of this Agreement that shall comply
with the provisions of Section 11(a) of the Act and Rule 158
promulgated under the Act.
(g) The Company will apply the net proceeds from the
sale of the Shares to be sold by it hereunder for purposes
set forth in the Prospectus.
(h) The Company will not file with the Commission a
registration statement under the Securities Act relating to the
issuance of its Common Stock or securities convertible into or
exchangeable for, or any rights to purchase or acquire, Common Stock
prior to the expiration of 180 days from the date of this Agreement
without your prior written consent, except for shares to be issued
pursuant to the Company's dividend reinvestment plan and the other
existing employee benefit plans set forth on Schedule B hereto.
The Company covenants and agrees with you that, whether or not
the transactions contemplated hereunder are consummated or this Agreement is
terminated (i) the Company will pay the costs and charges of any transfer agent
or registrar, other than transfer taxes, and the cost of preparing stock
certificates; and (ii) the Company will pay all other expenses incident to the
performance of the obligations of the Company hereunder and the expenses of
printing all documents relating to the offering, and will reimburse you for any
expenses not in excess of $10,000 (including fees and disbursements of your
counsel) incurred by you in connection with the matters referred to in Section
4(d) hereof and the preparation of memoranda relating thereto.
If the sale of the Shares provided for herein is not
consummated by reason of any failure, refusal or inability on the part of the
Company to perform any agreement or because any other condition of your
obligations hereunder required to be fulfilled
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<PAGE>
by the Company is not fulfilled, the Company will reimburse you for all
reasonable and documented out-of-pocket expenses (including fees and
disbursements of your counsel) incurred by you in connection with your
investigation, preparing to market and marketing the Shares or in contemplation
of performing your obligations hereunder. The Company shall not in any event be
liable to you (i) for loss of anticipated profits from the transactions covered
by this Agreement or (ii) for any amounts in excess of 50% of out-of-pocket
expenses referred to above, if this Agreement is terminated by you pursuant to
Section 9(iii) hereof.
5. Conditions of Underwriters' Obligations. The obligations of
the Underwriters to purchase and pay for the Shares as provided herein shall be
subject to the accuracy, as of the date hereof and the Closing Date (as if made
at the Closing Date), of the representations and warranties of the Company
herein, to the performance by the Company of its obligations hereunder and to
the following additional conditions:
(a) The prospectus shall have been filed as required by
Section 2(a) hereof; and no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceeding for
that purpose shall have been instituted or, to the knowledge of the
Company or the Underwriters, threatened by the Commission and any
request of the Commission for additional information (to be included in
the Registration Statement or the Prospectus or otherwise) shall have
been complied with to your satisfaction.
(b) Except as contemplated in the Prospectus, subsequent to
the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall not have been
any change, on a consolidated basis, in the capital stock, short-term
debt or long-term debt of the Company and its subsidiaries, or any
material adverse change, or any event that will result in a material
adverse change, in the business, property or financial condition of the
Company and its subsidiaries taken as a whole, that, in your judgment,
materially impairs the investment quality of the Shares.
(c) You shall have received the opinion of Walter M.
Braswell, Esq., counsel for the Company, dated the Closing
Date; to the effect that:
(i) The Company and each of its subsidiaries has been
duly incorporated and is an existing corporation in good
standing under the laws of its jurisdiction of incorporation,
has full corporate power and authority to conduct its business
as described in the
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<PAGE>
Registration Statement and Prospectus and is duly qualified to
do business in each jurisdiction in which it owns or leases
real property or in which the conduct of its business requires
such qualification except where the failure to be so
qualified, considering all such cases in the aggregate, does
not involve a material risk to the business, properties,
financial position or results of operations of the Company and
its subsidiaries; and all of the outstanding shares of capital
stock of each of the Company's subsidiaries have been duly
authorized and validly issued, are fully paid and
non-assessable and (except as otherwise stated in the
Registration Statement) are owned beneficially by the Company
subject to no security interest, other encumbrance or adverse
claim;
(ii) The Registration Statement and the Prospectus
comply as to form (except as to the financial statements and
other financial and statistical data contained or incorporated
by reference therein, upon which such counsel does not pass)
in all material respects with the applicable requirements of
the Act and, with respect to the documents filed with the
Commission pursuant to the Exchange Act and incorporated by
reference in the Prospectus pursuant to Item 12 of Form S-3,
the Exchange Act, and the applicable published instructions,
rules and regulations of the Commission thereunder, or
pursuant to said instructions, rules and regulations are
deemed to comply therewith; the Registration Statement has
become and is effective under the Act; and to the best of such
counsel's knowledge, no proceedings for a stop order with
respect thereto are pending or threatened under Section 8(d)
of the Act.
(iii) The Common Stock (including the Shares)
conforms as to legal matters with statements concerning it
made in the Prospectus;
(iv) The Shares have been duly authorized and validly
issued, are fully paid and non-assessable, and the
shareholders of the Company have no preemptive rights with
respect to the Shares being issued and sold by the Company
hereunder;
(v) This Agreement has been duly authorized, executed
and delivered by the Company; the execution and performance of
this Agreement and the consummation of the transactions herein
contemplated, including the issuance of the Shares, will not
result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any material
agreement or
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<PAGE>
instrument known to such counsel to which the Company is a
party or by which it is bound or to which any of the property
of the Company is subject, the Company's charter or by-laws,
and no approval, authorization, consent or other order of any
New Jersey public board or body or court (other than in
connection or compliance with the provisions of the New Jersey
securities or "blue sky" laws, upon which such counsel does
not pass) is legally required for the issuance and sale by the
Company of the Shares;
(vi) Such counsel does not know of any statutes or
legal or governmental proceedings required to be described in
the Prospectus that are not described as required, or of any
contracts or documents of a character required to be described
in the Registration Statement or the Prospectus (or required
to be filed under the Exchange Act if upon such filing they
would be incorporated by reference therein) or to be filed as
exhibits to the Registration Statement that are not described
and filed as required.
(d) You shall have received the opinion of Winthrop, Stimson,
Putnam & Roberts, special counsel for the Company, dated the Closing
Date, to the effect that:
(i) The Registration Statement has become and is
effective under the Act; the Prospectus has been filed in
accordance with Rule 424(b)(1) under the Act; and to the best
knowledge of such counsel no stop order suspending the
effectiveness of the Registration Statement has been issued
and no proceeding for that purpose has been instituted or
threatened by the Commission;
(ii) The Registration Statement and the Prospectus on
the date of filing thereof with the Commission and at the
Closing Date, complied as to form in all material respects
with the requirements of the Act and the applicable Rules and
Regulations thereunder; such counsel has no reason to believe
that, when the Registration Statement became effective,it
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or
that the Prospectus on the date of filing thereof with the
Commission or at the Closing Date, included an untrue
statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
and the documents incorporated by reference
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<PAGE>
in the Registration Statement or Prospectus or any amendment
or supplement thereto, when they became effective under the
Act or were filed with the Commission under the Exchange Act,
as the case may be, complied as to form in all material
respects with the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission
thereunder; it being understood that such counsel need express
no opinion as to the financial statements or other financial
or statistical data included in any of the documents mentioned
in this clause;
(iii) To the best of such counsel's knowledge, no
approval, authorization, consent or other order of any public
board or body or court (other than in connection with the
provisions of the state securities or "blue sky" laws of any
jurisdiction, upon which such counsel does not pass) is
required for the authorization of the issuance and sale by the
Company of the Shares;
(iv) The Common Stock conforms as to legal
matters with the statements concerning it made in the
Prospectus;
(v) The Shares have been duly authorized,
validly issued and are fully paid and non-assessable; and
(vi) This Agreement has been duly authorized,
executed and delivered by the Company.
In rendering their opinion, such counsel may rely upon
the opinion of Walter M. Braswell, Esq. referred to above as to
all matters governed by New Jersey law.
(e) You shall have received from McCarter & English, counsel
for the Underwriters, such opinion or opinions, dated the Closing Date,
with respect to the incorporation of the Company, the validity of the
Shares, the Registration Statement, the Prospectus, this Agreement and
other related matters as you reasonably may request, and such counsel
shall have received such papers and information as they request to
enable them to pass upon such matters.
(f) At the time of execution of this Agreement and at the
Closing Date, you shall have received a letter from Deloitte & Touche,
dated the date of delivery thereof, to the effect set forth in Exhibit
I hereto.
(g) You shall have received from the Company a certificate,
signed by (i) the Chairman of the Board, the President or a Vice
President and (ii) the principal
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<PAGE>
financial or accounting officer of the Company, dated the Closing Date,
to the effect that, to the best of their knowledge based upon
reasonable investigation:
(i) The representations and warranties of the Company
in this Agreement are true and correct, as if made at and as
of the Closing Date, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date;
(ii) No stop order suspending the effectiveness of
the Registration Statement has been issued, and no proceeding
for that purpose has been instituted or is threatened by the
Commission; and
(iii) Since the effective date of the Registration
Statement, there has occurred no event required to be set
forth in an amendment or supplement to the Registration
Statement or Prospectus that has not been so set forth, and
there has been no document required to be filed under the
Exchange Act and the rules and regulations of the Commission
thereunder that, upon such filing, would be deemed to be
incorporated by reference in the Prospectus that has not been
so filed.
(h) The Company shall have furnished to you such
further certificates and documents as you shall have
reasonably requested.
(i) Not fewer than all of the Shares shall have been tendered
for delivery in accordance with the terms and provisions of this
Agreement.
All such opinions, certificates, letters, forms and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you. The Company will furnish you with such conformed copies of
such opinions, certificates, letters, forms and other documents as you shall
reasonably request.
6. Indemnification and Contribution. (a) The Company
------------------------------------
agrees to indemnify and hold each Underwriter harmless against any and all
losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, or arise out
of or are based upon the
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<PAGE>
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse each Underwriter for any reasonable legal or other expenses
incurred by it in connection with investigating or defending against such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by any Underwriter specifically for use therein;
provided further that the indemnity contained in this clause (a) with respect to
the Prospectus shall not inure to the benefit of the Underwriters (or any person
controlling the Underwriters) on account of any losses, claims, damages,
liabilities or actions arising from the sale of Shares to any person if pursuant
to the second sentence of Section 4(c) hereof the Company amends the
Registration Statement or prepares an amended or supplemented Prospectus and the
Underwriter fails to make reasonable efforts to deliver a copy of such amended
or supplemented Prospectus with or prior to the written confirmation of such
sale or with or prior to the delivery of such Shares to any such person.
(b) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Company against any and all losses, claims,
damages or liabilities, joint or several, to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made therein in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter specifically for use therein; and will reimburse the Company for any
reasonable legal or other expenses reasonably incurred by the Company in
connection with investigating or defending against any such loss, claim, damage,
liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing
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<PAGE>
of the commencement thereof; but the omission so to notify the indemnifying
party shall not relieve it from any liability that it may have to any
indemnified party otherwise than under such subsection. In case any such action
shall be brought against any indemnified party, and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof (unless expressly agreed to in writing by the
indemnifying party) other than reasonable costs of investigation; the
indemnifying party will not be liable for any settlement of any such action
effected without its written consent, but if settled with the consent of the
indemnifying party, or if there be a final judgment for the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless the
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party in lieu of
indemnifying such indemnified party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above, (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other from the offering of the Shares
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriters on the other in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company on the one hand and the
Underwriters on the other shall be determined by reference to, among other
things, whether the
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<PAGE>
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or you and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission.
The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this subsection (d) were to be
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid to an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending against any action or claim that
is the subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by such Underwriter and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(e) The obligations of the Company under this Section 6 shall
be in addition to any liability that the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
each Underwriter within the meaning of the Act; and the obligations of each
Underwriter under this Section 6 shall be in addition to any liability that such
Underwriter may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company, to each officer of the Company who
has signed the Registration Statement and to each person, if any, who controls
the Company within the meaning of the Act.
7. Representations and Agreements to Survive Delivery. All
representations, warranties and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of you contained in
Section 6 hereof, shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of you or any controlling persons, or
the Company, or any of its officers, directors or any controlling persons, and
shall survive delivery of and payment for the Shares hereunder.
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<PAGE>
8. Substitution of Underwriters. (a) If either Underwriter
shall fail to take up and pay for the number of Shares agreed by such
Underwriter to be purchased hereunder, upon tender of such Shares in accordance
with the terms hereof, and the number of Shares not purchased does not aggregate
more than 10% of the total number of Shares that the Underwriters are obligated
to purchase hereunder at the Closing Date, the remaining Underwriter shall be
obligated to take up and pay for the Shares that the withdrawing or defaulting
Underwriter agreed but failed to purchase.
(b) If any Underwriter shall fail to take up and pay for the number of
Shares agreed by such Underwriter to be purchased hereunder, upon tender of such
Shares in accordance with the terms hereof, and the number of Shares not
purchased aggregates more than 10% of the total number of Shares that the
Underwriters are obligated to purchase hereunder at the Closing Date, and
arrangements satisfactory to you and the Company for the purchase of such Shares
by other persons are not made within 36 hours thereafter, this Agreement shall
terminate. In the event of any such termination the Company shall not be under
any liability to any Underwriter with respect to Shares not purchased by reason
of such termination (except to the extent provided in the penultimate paragraph
of Section 4 hereof and in Section 6 hereof) nor shall any Underwriter (other
than an Underwriter who shall have failed, otherwise than for some reason
permitted under this Agreement, to purchase the number of Shares agreed by such
Underwriter to be purchased hereunder) be under any liability to the Company
with respect to such Shares (except to the extent provided in Section 6 hereof.)
9. Termination. You shall have the right by giving notice as
hereinafter specified at any time at or prior to the Closing Date, to terminate
this Agreement if (i) the Company shall have failed, refused or been unable, at
or prior to the Closing Date, to perform any agreement on its part to be
performed hereunder, (ii) any other condition of your obligations hereunder are
not fulfilled, (iii) there shall have occurred any new outbreak of hostilities
or escalation of existing hostilities or other national or international
calamity or crisis, the effect of which on the financial markets in the United
States is such as to make it, in your reasonable judgment, impracticable to
market the Shares or to enforce contracts for the sale of the Shares on the
terms and in the manner contemplated by the Prospectus, or (iv) after the
execution of this Agreement there shall have occurred any of the following: (A)
a suspension or material limitation in trading in securities generally on the
New York Stock Exchange or the American Stock Exchange or the over-the-counter
market, or minimum or maximum prices for trading shall have been fixed, or
maximum ranges for prices for securities shall have been required on the New
York Stock Exchange or the American Stock Exchange or the over-the-counter
market, by the
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<PAGE>
New York Stock Exchange or the American Stock Exchange or the authorities
administering the over-the-counter market or by order of the Commission or any
other governmental authority having jurisdiction; (B) a general moratorium on
commercial banking activities shall have been declared by either Federal or New
York authorities; or (C) any rating of the Company's securities shall have been
recognized statistical rating organization. Any termination of this Agreement
pursuant to this Section 9 shall be without liability on the part of the Company
or you, except as otherwise provided in the last two paragraphs of Section 4
hereof and except as otherwise provided in Section 6 hereof.
Any notice referred to above may be given at the addresses
specified in Section 10 hereof in writing or by telegraph or telephone, and if
by telegraph or telephone, shall be immediately confirmed in writing.
10. Notices. All notices or communications hereunder, except
as herein otherwise specifically provided, shall be in writing and if sent to
you shall be mailed by first class mail, delivered, telexed or telecopied and
confirmed to you c/o A.G. Edwards & Sons, Inc., One North Jefferson, St. Louis,
MO 63103, telecopy (314) 289-6010, telephone (314) 289-3000, and c/o Legg Mason
Wood Walker, Inc., 111 South Calvert Street, Baltimore, MD 21202, telecopy (410)
539-4508, telephone (410) 539-0000 or if sent to the Company, shall be mailed,
delivered, telexed or telecopied and confirmed to the Company at 600 South
Avenue, Westfield, New Jersey 07091-0788, telecopy (908) 232-2719, telephone
(908) 654-1234. Any party to this Agreement may change such address for notices
by sending to the parties to this Agreement written notice of a new address for
such purpose.
11. Parties. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective successors and the controlling persons, officers and
directors referred to in Section 6, and no other person will have
any right or obligation hereunder.
12. Applicable Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of
New York.
13. Over-allotment Option. (a) In addition to the shares of
Common Stock being sold by the Company and described as the "Shares" in Section
1 hereof (which are referred to herein as the "Firm Shares"), you, at your
option, shall have the right to purchase from the Company up to an aggregate of
85,000 additional shares ("Optional Shares"). The first two paragraphs of
Section 3 hereof shall be deemed to apply only to the purchase, sale and
delivery of the Firm Shares. References in those two paragraphs to the "Shares"
shall be deemed to be references to the "Firm Shares"; except as otherwise
provided in this Section 13, other
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<PAGE>
references in this Agreement to the "Shares" shall be deemed to include the Firm
Shares and the Optional Shares.
(b) Upon written notice from you given to the Company not more
than 30 days subsequent to the date of the initial public offering of the
Shares, you may purchase all or less than all of the Optional Shares at the
purchase price per share to be paid for the Firm Shares. Such Optional Shares
may be purchased by you only for the purpose of covering over-allotments made in
connection with the sale of the Firm Shares. No Optional Shares shall be sold or
delivered unless the Firm Shares previously have been, or simultaneously are,
sold and delivered. The right to purchase the Optional Shares or any portion
thereof may be surrendered and terminated at any time upon notice by you to the
Company. The "Closing Date", as defined in Section 3 hereof, shall be deemed to
be the "First Closing Date", and the time for the delivery of and payment for
the Optional Shares is herein referred to as the "Second Closing Date" (which
may be the First Closing Date). The Second Closing Date shall be determined by
you but shall be not later than 10 days after you give to the Company written
notice of election to purchase Optional Shares. The preparation, registration,
checking and delivery of, and payment for, the Optional Shares shall occur or be
made in the same manner as provided in Section 3 hereof for the Firm Shares,
except as you and the Company may otherwise agree.
(c) The conditions to your obligations set forth in Section 5
shall be deemed to be conditions to your obligations to purchase and pay for the
Shares to be purchased on each of the First Closing Date and the Second Closing
Date, as the case may be; references in that Section and in Sections 2 and 9
hereof to the "Closing Date" shall be deemed to be references to the First
Closing Date or the Second Closing Date, as the case may be, and references to
the "Shares" in Section 5 hereof shall be deemed to be references to the Shares
to be purchased at such Closing Date. A termination of this Agreement as to the
Optional Shares after the First Closing Date will not terminate this Agreement
as to the Firm Shares.
14. Action by Underwriters. The Underwriters agree to furnish
forthwith to the Company in writing such information as to the Underwriters and
the terms of offering as is reasonably required to amend the Registration
Statement and to enable the Company to comply with its undertakings contained in
the Registration Statement and herein and to file amendments to the Registration
Statement and supplements to the Prospectus.
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<PAGE>
If the foregoing provisions correctly set forth the
understanding among the Company and you, please so indicate in the space
provided below for the purpose, whereupon this letter shall constitute a binding
agreement between the Company and you, the Underwriters.
Very truly yours,
E'TOWN CORPORATION
By: _________________________
Title:
ACCEPTED as of the date first
above written
A.G. EDWARDS & SONS, INC.
By: ________________________
Title:
LEGG MASON WOOD WALKER INCORPORATED
By:
Title:
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<PAGE>
SCHEDULE A
Number of
Shares
to be
Purchased
Underwriter
A.G. Edwards & Sons, Inc...............................................___,___
Legg Mason Wood Walker, Incorporated...................................___,___
Total..................................................................575,000
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<PAGE>
SCHEDULE B
ALLOWED EMPLOYEE BENEFIT PLANS
PURSUANT TO SECTION 4(h)
1) Elizabethtown Water Company Savings and Investment Plan
2) Incentive Stock Option Plan
3) E'town's 1987 Stock Option Plan
4) E'town's 1990 Performance Stock Program
5) Elizabethtown Water Company Employee Stock Ownership Plan
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<PAGE>
Exhibit I
The letter of Deloitte & Touche referred to in Section 5(g) of
the Underwriting Agreement will be to the effect that:
(i) Deloitte & Touche are independent certified public
accountants with respect to the Company and its subsidiaries within the meaning
of the Act and the Rules and Regulations; (ii) in their opinion, the
consolidated financial statements audited by them and included and incorporated
by reference in the Registration Statement and the Prospectus comply as to form
in all material respects with the applicable accounting requirements of the Act
and the Exchange Act, as applicable, and the published rules and regulations of
the Commission thereunder; (iii) on the basis of procedures referred to in such
letter, including (1) a reading of the unaudited consolidated financial
statements of the Company incorporated by reference in the Registration
Statement and the Prospectus and included in the Company's Form 10-Q filed with
the Commission under Section 13 of the 1934 Act (the "Form 10-Q"), and a review
of the Form 10-Q as described in SAS No. 71, Interim Financial Information (2) a
reading of the latest available unaudited consolidated financial statements of
the Company, (3) a reading of the latest available minutes of meetings of the
Board of Directors of the Company and (4) inquiries of certain officers of the
Company who have responsibility for financial and accounting matters (it being
understood that the foregoing procedures do not constitute an audit made in
accordance with generally accepted auditing standards and would not necessarily
reveal matters of significance with respect to the comments made in such letter,
and accordingly, that Deloitte & Touche makes no representation as to the
sufficiency of such procedures for the purposes of the Underwriters), nothing
has caused them to believe that (A) any material modifications should be made to
the unaudited financial statements included in the Form 10-Q for them to be in
conformity with generally accepted accounting principles, (B) the unaudited
consolidated financial statements included in the Form 10-Q do not comply as to
form in all material respects with the applicable accounting requirements of the
1934 Act and the 1934 Act Regulations, (C) at the date of the latest available
financial statements and at a specified date not more than five days prior to
the date of such letter there was any change in the capital stock (except for
issuance of common stock in connection with the Company's Dividend Reinvestment
and Stock Purchase Plan) or long-term debt (except for redemptions pursuant to
the death benefit provision of the Company's 6-3/4% convertible subordinated
debentures) of the Company, as compared with amounts shown in the March 31, 1995
consolidated balance sheet incorporated by reference in the Registration
Statement and the Prospectus, except for changes or decreases which the
prospectus
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<PAGE>
discloses have occurred or may occur, (D) there was any decrease in consolidated
net assets at May 31, 1995 as compared with amounts shown in the March 31, 1995
consolidated balance sheet incorporated by reference in the Registration
Statement and the prospectus, except for changes or decreases which the
prospectus and information incorporated by reference therein discloses have
occurred or may occur, (E) for the five months ending May 31, 1995, there was
any decrease, as compared with the corresponding period of the previous year, in
consolidated revenues, net income or per share amounts of net income, except in
all cases for changes or decreases that the prospectus and information
incorporated by reference therein discloses have occurred or may occur or as may
be set forth in such letter; and (iv) they have carried out certain procedures
and made certain findings, as specified in such letter, with respect to such
other items included or incorporated by reference in the Registration Statement
and the Prospectus as the Underwriters may have reasonably requested. In the
event the Second Closing Date occurs and does not occur simultaneously with the
First Closing Date, the dates set forth in Subsections (iii) (D) and (E) will be
adjusted accordingly.
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Exhibit 5
E'TOWN CORPORATION
600 South Avenue
Westfield, New Jersey 07090
(908) 654-1234
May 17, 1995
E'town Corporation
600 South Avenue
Westfield, New Jersey 07090
Ladies and Gentlemen:
I have acted as counsel to E'town Corporation (the "Company") in connection with
the proposed issuance and sale of up to 660,000 shares of Common Stock, without
par value (the "Common Stock"), of the Company pursuant to an underwritten
offering. As Secretary of the Company, I have examined, among other things, the
registration statement on Form S-3, and the prospectus included therein, being
filed under the Securities Act of 1933 with respect to the Common Stock (the
"Registration Statement"). I have also examined and am familiar with the
originals and copies, certified or otherwise identified to my satisfaction, of
pertinent documents, corporate records and other instruments relating to the
issuance of the Common Stock and other actions and proceedings relating thereto.
Based upon the foregoing, I am of the opinion that when (i) the Registration
Statement shall have become effective, (ii) the Company's Board of Directors
shall have taken appropriate action in connection with the issuance and sale of
the Common Stock and (iii) the Common Stock shall have been issued and delivered
against payment therefor as contemplated in the Registration Statement, the
Common Stock will be validly issued, fully paid and non-assessable.
I am admitted to the bar of the State of New Jersey and do not hold myself out
as an expert on the laws of any other jurisdiction. I hereby consent to the
filing of this opinion as an exhibit to the Registration Statement and to the
use of my name under the heading "Legal Matters" in the prospectus included in
the Registration Statement.
Very truly yours,
/s/WALTER M. BRASWELL
Walter M. Braswell
Secretary
<PAGE>
Exhibit 23(b)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
E'town Corporation on Form S-3 of our reports dated February 17, 1995, except
for the subsequent events discussed in Notes 3 and 11 as to which the dates are
February 23, 1995 and March 9, 1995, respectively, appearing in and incorporated
by reference in the Annual Report on Form 10-K of E'town Corporation for the
year ended December 31, 1994 and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
Deloitte & Touche LLP
Parsippany, New Jersey
May 17, 1995
<PAGE>
Exhibit 24
E'TOWN CORPORATION
POWER OF ATTORNEY
E'town Corporation and each of the directors and/or officers
of E'town Corporation whose signatures appear below do hereby appoint WALTER M.
BRASWELL and DAVID P. FALCK, and each of them severally, as its, his or her true
and lawful attorneys-in-fact to execute on its, his or her behalf and in any and
all capacities a Registration Statement on Form S-3 to be filed pursuant to the
Securities Act of 1933 in connection with the registration of up to 690,000
shares of E'town Corporation Common Stock, without par value, and any and all
pre- and post-effective amendments thereto and other documents relating thereto,
and to file the same with the Securities and Exchange Commission. Each of said
attorneys-in-fact shall have power to act hereunder with or without the other.
IN WITNESS WHEREOF, the undersigned have duly executed this
instrument as of the 20th day of April 1995.
E'TOWN CORPORATION
By: ROBERT W. KEAN, JR.
Robert W. Kean, Jr.
Chairman of the Board
Chief, Executive Officer
and Director
HENRY S. PATTERSON, II
Henry S. Patterson, II,
President and Director
ANNE EVANS ESTABROOK
Anne Evans Estabrook,
Vice President and
Director
WALTER M. BRASWELL
Walter M. Braswell,
Secretary
ANDREW M. CHAPMAN
Andrew M. Chapman,
Chief Financial Officer
and Treasurer
<PAGE>
BRENDAN T. BYRNE
Brendan T. Byrne,
Director
THOMAS J. CAWLEY
Thomas J. Cawley,
Director
John Kean,
Director
ROBERT W. KEAN, III
Robert W. Kean, III,
Director
ARTHUR P. MORGAN
Arthur P. Morgan,
Director
BARRY T. PARKER
Barry T. Parker,
Director
HUGO M. PFALTZ, JR.
Hugo M. Pfaltz, Jr.,
Director
CHESTER A. RING, 3RD
Chester A. Ring, 3rd,
Director
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