SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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Check the appropriate box:
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[ ] Definitive Additional Materials
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[ ] Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2)
E'TOWN CORPORATION
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(Name of Registrant As Specified In Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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item 22(a)(2) of Schedule 14A.
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Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
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statement number, or the form or schedule and the date of its filing.
1) Amount previously paid:_________________________________________________
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4) Date filed:_____________________________________________________________
<PAGE>
E'TOWN CORPORATION
600 SOUTH AVENUE, WESTFIELD, N.J. 07090
-------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 16, 1996
-------------------
To the Stockholders of E'TOWN CORPORATION,
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of E'town
Corporation will be held at The Westwood, 438 North Avenue, Garwood, New Jersey,
on Thursday, May 16, 1996, at 10:00 A.M. for the following purposes:
1. To elect four members to the Board of Directors for terms to expire
at the 1999 Annual Meeting of Stockholders.
2. To ratify, confirm and approve the act of the Board of Directors,
on March 21, 1996, appointing Deloitte & Touche LLP, Parsippany, New
Jersey, as the auditors for the Corporation and its subsidiaries for the
year 1996.
3. To transact such other business as may properly be brought before
such meeting or any adjournment or adjournments thereof.
It is proposed to nominate as Directors: Thomas J. Cawley, Anthony S.
Cicatiello, John Kean and Chester A. Ring, 3rd for terms of three years.
The close of business on March 20, 1996, has been fixed as the time for the
determination of the stockholders entitled to vote at said meeting, or any
adjournments thereof, and only stockholders of record at such time will be
entitled to vote at such meeting, or at any adjournments thereof.
You are urged to sign, date and return the enclosed proxy promptly, using
the envelope enclosed for your convenience. You may revoke your proxy at any
time prior to the meeting and vote in person at the meeting.
By Order of the Board of Directors,
Walter M. Braswell
Secretary
Westfield, New Jersey
March 28, 1996
<PAGE>
E'TOWN CORPORATION
600 SOUTH AVENUE, WESTFIELD, N.J. 07090
March 28, 1996
PROXY STATEMENT
The following statement is furnished in connection with the solicitation by
the Board of Directors of E'town Corporation ("E'town" or the "Corporation") of
proxies to be used at the Annual Meeting of the holders of the Common Stock of
the Corporation, to be held May 16, 1996, at the hour and place set forth in the
Notice of Annual Meeting accompanying this Proxy Statement. This Proxy Statement
and the accompanying proxy were first sent to stockholders on March 28, 1996.
PERSONS MAKING THE SOLICITATION
This solicitation is made on behalf of the Board of Directors of the
Corporation. The cost of soliciting these proxies will be borne by the
Corporation. In addition to solicitation by mail, the Corporation may make
arrangements with brokerage houses and other custodians, nominees and
fiduciaries to send proxies and proxy material to their principals and may
reimburse them for their expenses in so doing. The solicitation will be
initially by mail, and it may later be decided to make further solicitations by
mail, telephone, telefax, or personal call by directors, officers and regular
employees of the Corporation. The Corporation has retained Georgeson & Company
("Georgeson") to assist in the solicitation pursuant to which Georgeson will be
paid a fee of $5,500 plus expenses.
VOTING SECURITIES AND OWNERSHIP THEREOF
BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of March 20, 1996, there were outstanding 7,562,323 shares of the
Corporation's Common Stock, the only capital stock entitled to vote at the
Annual Meeting. Each share of Common Stock is entitled to one vote. As stated in
the Notice of Annual Meeting, only holders of record of the Common Stock on such
date will be entitled to vote at the meeting or any adjournment thereof.
Under current rules of the Securities and Exchange Commission (the "SEC"),
a person who directly or indirectly has or shares voting power and/or investment
power with respect to a security is considered a beneficial owner of the
security. Voting power is the power to vote or direct the vote of shares, and
investment power is the power to dispose of or direct the disposition of shares.
To the knowledge of the Corporation, no persons owned beneficially more
than 5% of the outstanding Common Stock as of March 20, 1996.
<PAGE>
The following information pertains to the Common Stock of the Corporation
that, to the knowledge of the Corporation, is beneficially owned, directly or
indirectly, individually and as a group, by all Directors and Executive Officers
of the Corporation and its subsidiaries, Elizabethtown Water Company
("Elizabethtown") and E'town Properties, Inc. ("Properties"), as of March 20,
1996.
No. of Percent
Title of Class Name of Beneficial Owner Shares(1) of Class
- -------------- ------------------------ --------- --------
Common Stock.... Brendan T. Byrne.................... 1,541 .02
Edward F. Cash...................... 14,569 .19
Thomas J. Cawley.................... 9,287 .12
Anthony S. Cicatiello............... -- --
Andrew M. Chapman................... 29,060 .38
Anne Evans Estabrook................ 36,654 .49
John Kean........................... 290,004(2) 3.84
Robert W. Kean, Jr. ................ 188,627(3) 2.49
Robert W. Kean, III................. 4,725 .06
Barry T. Parker..................... 2,265(4) .03
Henry S. Patterson, II.............. 10,570 .14
Hugo M. Pfaltz, Jr. ................ 9,098(5) .12
Chester A. Ring, 3rd................ 16,797 .22
Norbert Wagner...................... 19,867 .26
Directors and Executive Officers
as a group........................ 633,064 8.36
- ----------------
(1) Includes shares held for Executive Officers under the Corporation's Tax
Reduction Act Stock Ownership Plan and Elizabethtown's Savings and
Investment Plan (the "401(k) Plan") and shares subject to options granted
but not yet exercised under the 1982 Incentive Stock Option Plan and 1987
Stock Option Plan.
(2) Includes 270,741 shares held under two trusts for which beneficial owner is
a co-trustee and beneficial owner shares voting and investment power with
respect to these shares.
(3) Includes 171,567 shares held under a trust for which beneficial owner is a
co-trustee and beneficial owner shares voting and investment power with
respect to these shares.
(4) Includes 600 shares held under a trust for which beneficial owner is a
co-trustee and beneficial owner shares voting and investment power with
respect to these shares.
(5) Includes 1,250 shares of Common Stock issuable upon conversion of debentures
held by a partnership of which Mr. Pfaltz is a general partner.
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<PAGE>
I. ELECTION OF DIRECTORS
THE BOARD OF DIRECTORS
The Board of Directors is divided into three classes of directorships, with
directors in each class serving staggered three-year terms. At each Annual
Meeting of Stockholders, the terms of directors in one of the three classes
expire. At that Annual Meeting of Stockholders, directors are elected in a class
to succeed the directors whose terms expire. The terms of the directors so
elected will expire at the third Annual Meeting of Stockholders thereafter.
Accordingly, of the current Directors, three are in the class whose term expires
at the 1996 Annual Meeting of Stockholders, four are in the class whose term
expires at the 1997 Annual Meeting of Stockholders and four are in the class
whose term expires at the 1998 Annual Meeting of Stockholders.
Arthur P. Morgan, having reached the Board's mandatory retirement age of 72
during his most recent term, is retiring from the Board and not standing for
re-election at the Annual Meeting.
Every stockholder entitled to vote shall have the right to vote the number
of shares owned by him or her for as many candidates for election as there are
directors to be elected. Directors shall be elected by a plurality of the votes
cast at the election. With respect to election of directors, the approval of
auditors and any other matter submitted to a vote of stockholders, votes shall
be counted by designated agents and tabulated by inspectors, with abstentions
and non-votes, including broker non-votes, treated as votes not cast.
It is intended that the shares of Common Stock represented by the
accompanying proxy will be voted at the 1996 Annual Meeting of Stockholders for
the election of nominees THOMAS J. CAWLEY, ANTHONY S. CICATIELLO, JOHN KEAN, and
CHESTER A. RING, 3RD, who have been designated by the Board of Directors as the
four nominees who, if elected, shall serve as Directors in the class of
directorships whose members' terms will expire in 1999.
The Board of Directors has no nominating committee. All of the foregoing
nominees are currently Directors of the Corporation except Anthony S.
Cicatiello. While it is not anticipated that any of the nominees will be unable
to serve, if any such nominee is not a candidate for election as a Director at
the 1996 Annual Meeting of Stockholders, the proxy will be voted in favor of
such other person or persons in lieu thereof as the present Board of Directors
shall determine unless the proxy withholds authority to vote for all nominees.
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<PAGE>
The following information relates to the nominees named herein and the
other persons whose terms as Directors will continue after the 1996 Annual
Meeting of Stockholders.
<TABLE>
<CAPTION>
NOMINEES:
Name, Age and Other Positions, Period Serviced as Director Term
if any, with Registrant Business Experience During Past 5 Years Expires
- ---------------------------------------- --------------------------------------- -------
<S> <C> <C>
Thomas J. Cawley, 65, Vice
Chairman, Elizabethtown Water
Company................................. Served as Director of Elizabethtown and the Corporation since 1999
August 1992, and Properties since July 1987. In January 1996
he was appointed Vice Chairman of Elizabethtown Water
Company. From August 1992 to January 1996 he served as
President of Elizabethtown Water Company. He remains
President of The Mount Holly Water Company. He served as
Executive Vice President of Elizabethtown from 1987 to 1992.
He joined Elizabethtown in 1969 and served in a variety of
operating positions until elected Executive Vice President in
1987.
Anthony S. Cicatiello, 48............... He is the Chairman of CN Communications International, Inc., 1999
a public relations and advertising firm. He currently serves on
the Rutgers University Board of Governors.
John Kean, 66, Member of
Elizabethtown's Pension
Investment Committee.................... Served as Director of Elizabethtown since 1957 and the 1999
Corporation since March 1985. He is Chairman of the Board
and a Director of NUI Corporation. He was President and
Chief Executive Officer of NUI Corporation until his retirement
in April 1995, and until October 1994, Chairman of the Board
and Director of Elizabethtown Gas Company, which was
previously a subsidiary of NUI Corporation. He is also an
Honorary President of the International Gas Union.
Chester A. Ring, 3rd, 68, Member
of Elizabethtown's Pension
Investment Committee.................... Served as Director of Elizabethtown since December 1982 and 1999
the Corporation since June 1987. Effective August 1, 1992, he
retired as President of Elizabethtown Water Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THESE NOMINEES
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<PAGE>
<CAPTION>
OTHER DIRECTORS:
Name, Age and Other Positions, Period Serviced as Director Term
if any, with Registrant Business Experience During Past 5 Years Expires
- ---------------------------------------- --------------------------------------- -------
<S> <C> <C>
Brendan T. Byrne, 71, Member of
Audit, Corporate Planning,
Executive Compensation, Stock
Options and Elizabethtown's
Executive Compensation
Committees.............................. Served as Director of Elizabethtown since July 1982 and the 1997
Corporation since March 1985. He has been a partner in the
law firm of Carella, Byrne, Bain, Gilfillan, Cecchi, Stewart &
Olstein since 1982. From 1974 until 1982 he was Governor of
the State of New Jersey. He is also a Director of Ingersoll-
Rand, The Chelsea GCA Group Realty Partnership, LP and
Cali Realty and was a Director of Bell Atlantic of New Jersey
until his retirement in January 1995.
Andrew M. Chapman, 40, Chief
Financial Officer and Treasurer,
E'town Corporation, President,
Elizabethtown Water Company,
Treasurer, E'town Properties,
Inc. ................................... Served as Director of the Corporation and Elizabethtown since 1998
May 1995. Served as Chief Financial Officer of the
Corporation since August 1989 and Treasurer of the
Corporation since November 1990. He was elected President
of Elizabethtown in January 1996. He served as Executive
Vice President of Elizabethtown from May 1994 to December
1995, Senior Vice President of Elizabethtown from April 1993
to May 1994, Chief Financial Officer of Elizabethtown from
November 1990 to December 1995, and Treasurer of
Elizabethtown from August 1989 to May 1994. Prior to 1989,
he was Director of the Office of Financial Management of the
State of New Jersey, Department of Treasury.
Anne Evans Estabrook, 51,
Vice President, E'town
Corporation, Member of
Corporate Planning and
Elizabethtown's Executive
Compensation Committees................. Served as Director of Elizabethtown since December 1982, the 1998
Corporation since March 1985 and Properties since July 1987
and as a Vice President of the Corporation since September
1987. She has been the owner of Elberon Development Co. (a
real estate holding company) since 1984 and is President of
David O. Evans, Inc. (a construction company). She is a
Director of Summit Bancorp and its subsidiary, United Jersey
Bank. She is a Public Member of the Governing Board, New
Jersey Economic Development Authority.
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<PAGE>
<CAPTION>
Name, Age and Other Positions, Period Serviced as Director Term
if any, with Registrant Business Experience During Past 5 Years Expires
- ---------------------------------------- --------------------------------------- -------
<S> <C> <C>
Robert W. Kean, Jr., 73,
Chairman and Chief Executive
officer, E'town Corporation and
Elizabethtown Water Company............. Served as Director of Elizabethtown since 1949 and the 1997
Corporation since March 1985. He is Chairman of the Board
and Chief Executive Officer of both the Corporation and
Elizabethtown. He was a Director of NUI Corporation until his
retirement in March 1996. He is a Director of New Jersey
Manufacturers Insurance Company and New Jersey Business
and Industry Association.
Robert W. Kean, III, 48,
Executive Vice President,
E'town Properties, Inc. ................ Served as Director of the Corporation since May 1989 and 1998
Director and Executive Vice President of Properties since July
1987.
Barry T. Parker, 63, Member of
Audit Committee......................... Served as Director of Elizabethtown since January 1983 and the 1998
Corporation since 1991. He has been a partner in the law firm
of Parker, McCay & Criscuolo, P. C. since 1967.
Henry S. Patterson, II, 73,
President, E'town Corporation and
E'town Properties, Inc. ................ Served as Director of Elizabethtown since 1959, the 1997
Corporation since March 1985 and Properties since July 1987.
Served as President of the Corporation since March 1985 and
Properties since July 1987. He is a Director of Summit
Bancorp and its subsidiaries, United Jersey Bank and UJB
Discount Brokerage.
Hugo M. Pfaltz, Jr., 64,
Member of Corporate Planning,
Executive Compensation, Stock
Options, and Elizabethtown's
Executive Compensation and
Pension Investment Committees........... Served as Director of Elizabethtown since October 1980, the 1997
Corporation since June 1987 and Properties since July 1987.
He has been a principal of the law firm of Pfaltz & Woller,
P.A. since 1976.
</TABLE>
Family Relationships. Robert W. Kean, Jr. is a first cousin of John Kean
and the father of Robert W. Kean, III.
Transactions. Utility Billing Services, Inc., a subsidiary of NUI
Corporation, of which John Kean is Chairman of the Board and a Director,
provides data processing services to Elizabethtown and its subsidiary pursuant
to a contract expiring December 31, 1997. The charges for such services totalled
$626,276 for the year ended December 31, 1995.
In July 1994, Elizabethtown entered into a $60,000,000 revolving credit
agreement with six banks. United Jersey Bank, of which Anne Evans Estabrook and
Henry S. Patterson II are directors, is committed to lend
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<PAGE>
$5,000,000 under the agreement. At February 29, 1996, there were no loans
outstanding. Interest charges paid to United Jersey Bank totaled $105,912 during
1995.
The law firm of Parker, McCay & Criscuolo, P.C., of which Barry T. Parker
is a partner, provided legal services to the Corporation which resulted in
$123,624 in legal fees being paid to the firm in 1995.
The law firm of Lindabury, McCormick & Estabrook, of which the husband of
Anne Evans Estabrook is of counsel, provided legal services to the Corporation
which resulted in $70,204 in legal fees being paid to the firm in 1995.
It is the opinion of management that the amounts charged for these services
were generally as favorable as those that would be charged for such services by
comparable unaffiliated sources. Management periodically reviews the terms of
these arrangements to ensure that the costs for these services are comparable to
those that would be charged in the general market.
Meetings and Committees. The Board of Directors of the Corporation held
eleven meetings in 1995, with an attendance record by Directors of 98%. There
are six committees of the Board of Directors. Unless otherwise indicated, these
committees perform the indicated functions for both the Corporation and
Elizabethtown.
The Audit Committee, which met three times in 1995, reviews the scope of
the annual audit by the Corporation's independent auditors, receives and reviews
the auditors' annual report, annually recommends to the Board of Directors the
appointment of independent auditors, subject to approval by the stockholders,
and oversees the activities of Elizabethtown's internal auditor. The Audit
Committee was composed of Barry T. Parker, Chairman, Brendan T. Byrne and Arthur
P. Morgan.
The Corporate Planning Committee, which met once during 1995, reviews and
makes recommendations to the Board of Directors regarding the Corporation's
current and long-range strategic plans and objectives, and any other matters
that may be assigned by the Board of Directors to the Committee. The Committee
consisted of Brendan T. Byrne, Chairman, Hugo M. Pfaltz, Jr. and Anne Evans
Estabrook.
The Executive Compensation Committee of Elizabethtown (the "Elizabethtown
Committee"), which met five times during 1995, reviews and recommends to the
Elizabethtown Board of Directors salaries and bonuses as well as awards under
incentive programs for officers of Elizabethtown. During 1995, it was composed
of Anne Evans Estabrook, Chairperson, Brendan T. Byrne and Hugo M. Pfaltz, Jr.
The Executive Compensation Committee of E'town (the "E'town Committee"), which
has similar duties with respect to E'town and was composed of Brendan T. Byrne
and Hugo M. Pfaltz, Jr., did not meet during 1995.
The Pension Investment Committee of Elizabethtown meets with the Investment
Managers for Elizabethtown's Employees' Retirement Plan Fund to review
investment policies and determine recommended investment objectives for the
Fund. The Committee also reviews the investment performance of participants'
investment options for Elizabethtown's Savings and Investment Plan-401(k) and
the investment performance for the trust funds for postretirement benefits. The
Committee met five times in 1995 and was composed of Arthur P. Morgan, Chairman,
John Kean, Hugo M. Pfaltz, Jr. and Chester A. Ring, 3rd.
The Stock Options Committee of E'town, which met two times in 1995, and
which administers the 1982 Incentive Stock Option Plan and the 1987 Stock Option
Plan, consists of Hugo M. Pfaltz, Jr., Chairman, and Brendan T. Byrne.
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<PAGE>
-------------------
Executive Management Committee. The Boards of Directors of the Corporation
and Elizabethtown have established an Executive Management Committee to review
general policy and planning matters and make recommendations to the Boards of
Directors as to policy decisions. This Committee, which usually meets semi-
monthly, is composed of Robert W. Kean, Jr., Anne Evans Estabrook, Thomas J.
Cawley, Henry S. Patterson, II and Andrew M. Chapman.
-------------------
Directors' Fees. Directors of the Corporation who are also not officers of
Elizabethtown or employees of Properties receive an attendance fee of $550 for
Board meetings held on days not coincident with Board meetings of Elizabethtown.
Directors of Elizabethtown who are not also officers of Elizabethtown or
employees of Properties as of 1995 are paid an annual retainer of $13,000 and a
fee of $550 for each meeting of the Board of Directors attended. Prior to April
13, 1995, the annual retainer was $10,000. Directors who are officers of
Elizabethtown or employees of Properties are paid a $300 fee for each Board
meeting they attend. Prior to April 13, 1995, they were paid a $100 fee for each
meeting.
Members of committees who are not officers of Elizabethtown or employees of
Properties are paid $350 for participation at Committee meetings on the same day
as regular Board meetings and $550 for meetings held on days other than Board
meetings. No fees are paid to members of the Executive Management Committee for
attendance at meetings. A Director cannot stand for re-election after his or her
72nd birthday. A retired Director with 10 or more years' service on the Board of
Directors becomes eligible at age 72 to receive a pension for life equal to the
annual retainer in effect at the date the Director becomes eligible for the
pension. A retiring Director with 5 to 9 years of service will receive a pension
equal to the annual retainer in effect at the date of retirement. This pension
will be paid for the same number of years that the Director served on the Board.
In addition, Henry S. Patterson, II, who retired as Vice Chairman of
Elizabethtown on July 1, 1987, serves as President of the Corporation, for which
he receives no salary. In addition to Directors' fees as noted above and
retirement benefits accrued under the retirement plans discussed below in
respect of his service as an employee prior to his retirement in 1987, Henry S.
Patterson, II receives an annual fee of $75,000.
-------------------
BOARD OF DIRECTORS' COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
E'town's Executive Compensation Committee (the "E'town Committee") consists
of two E'town directors: Brendan T. Byrne and Hugo M. Pfaltz, Jr. The Executive
Compensation Committee of Elizabethtown (the "Elizabethtown Committee"), the
principal subsidiary of E'town, is composed of three Elizabethtown directors:
Anne Evans Estabrook, Chairperson, Brendan T. Byrne and Hugo M. Pfaltz, Jr.
Each executive officer named in the Summary Compensation Table is an
executive officer of, and is compensated by, Elizabethtown. The Elizabethtown
Committee reviews and recommends to Elizabethtown's Board of Directors the
salaries and benefits for the executive officers of Elizabethtown. The
Elizabethtown Committee designs its executive compensation program to enable
Elizabethtown to attract, motivate and retain the caliber of executives required
to effectively attain Elizabethtown's objectives.
The Elizabethtown Committee administers executive compensation to ensure
that the compensation remains competitive with levels paid to comparable
positions in comparably-sized companies in three groups: water
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<PAGE>
utilities, other utilities and general industry. The select group of water
utilities used for comparative purposes includes those set forth in Note 2 to
the performance graph entitled "Comparison of Five-Year Cumulative Total Return
v. S&P 500 and Peer Group of Water Utilities."
The Elizabethtown Committee and the E'town Committee believe that
competitive salaries provide the foundation of the executive officer
compensation program of E'town and Elizabethtown and are essential for E'town
and Elizabethtown to attract and retain qualified executive officers. The
Elizabethtown Committee positions executive pay levels at the median of the
comparative group, and annually evaluates the continued competitiveness of these
levels. The pay program consists primarily of annual merit increases and is
sufficiently variable that above average performance is adequately rewarded and
below average performance, if it occurs, is not rewarded.
The E'town Committee can also make restricted stock grants and recommend
the granting of stock options. Stock options and restricted stock grants are
used primarily to retain and motivate executive officers to improve the
long-term stock market performance of E'town. Stock options were granted in 1995
to key employees, excluding Robert W. Kean, Jr. No restricted stock awards have
been made since 1992.
Current SEC regulations also require a discussion of the relationship
between the compensation of the Chief Executive Officer (Robert W. Kean, Jr.)
and company performance for the last completed fiscal year. In 1995, the
Elizabethtown Committee increased Mr. Kean's salary by $25,000. Prior to 1995,
Mr. Kean's salary, at his request, had been maintained at its 1988 level. He has
also disqualified himself from participation in the Company's incentive plans.
The E'town Committee and the Elizabethtown Committee are of the opinion that the
value of Mr. Kean's services exceeds his compensation received and that he is
presently undercompensated when compared to his peers at the select group of
water companies used for comparative purposes.
The Executive Compensation The Executive Compensation Committee of
Committee of E'town Corporation: Elizabethtown Water Company:
Brendan T. Byrne Anne Evans Estabrook, Chairperson
Hugo M. Pfaltz, Jr. Brendan T. Byrne
Hugo M. Pfaltz, Jr.
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<PAGE>
The following performance graph illustrates the cumulative total return to
stockholders from the beginning of 1991 to the end of 1995 in comparison to the
Standard & Poor's ("S&P") 500 and a peer group of water utilities ("Water
Utilities") (Note 2). This peer group is included in the statistical survey used
by the E'town Committee and the Elizabethtown Committee for comparative
purposes.
E'TOWN CORPORATION
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN(1)
VS.
S&P 500 AND PEER GROUP OF WATER UTILITIES(2)
[Note: Graphic image has been replaced by the following table for electronic
filing purposes.]
- ------------------------------------------------------------------------------
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
- ------------------------------------------------------------------------------
E'town $10,000 $13,007 $13,620 $16,329 $14,719 $18,096
- ------------------------------------------------------------------------------
S&P 500 $10,000 $13,034 $14,026 $15,433 $15,643 $21,499
- ------------------------------------------------------------------------------
Water Utilities $10,000 $14,279 $15,814 $18,018 $16,786 $21,118
- ------------------------------------------------------------------------------
(1) Assumes $10,000 invested December 31, 1990 in E'town Corporation Common
Stock, S&P 500 and Water Utilities. All dividends are assumed to be
reinvested over the five-year period. Total returns for each Water
Utility were determined in accordance with SEC regulations; i.e.
weighted according to each such issuer's stock market capitalization.
(2) Water Utilities: American Water Works, Aquarion, California Water
Service, Connecticut Water Service, Consumers Water, Dominguez
Services, E'town, IWC Resources, Middlesex Water, Philadelphia
Suburban, San Jose Water, Southern California Water, Southwest Water,
United Water Resources.
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<PAGE>
E'TOWN CORPORATION
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term
Compensation
- ------------------------------------------------------------------------------------------------------------------------------------
Other Annual Restricted
Name & Principal Position Fiscal Salary Bonus Compensation Stock Awards All Other
Year (1)&(2) (3) (4) (4) Compensation
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert W. Kean, Jr.
Chairman and Chief Executive 1995 $220,820 $0 $0 $0 $5,494(5)
Officer, E'town Corporation 1994 $201,250 $0 $0 $0 $5,903
and Elizabethtown Water 1993 $201,250 $0 $0 $0 $5,862
Company
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas J. Cawley 1995 $202,166 $0 $0 $18,441 $5,964(5)
Vice Chairman, Elizabethtown 1994 $192,000 $0 $0 $0 $6,594
Water Company 1993 $178,877 $10,000 $0 $0 $6,597
- ------------------------------------------------------------------------------------------------------------------------------------
Andrew M. Chapman
Chief Financial Officer and 1995 $166,864 $0 $0 $17,739 $5,964(5)
Treasurer of E'town 1994 $150,869 $0 $0 $0 $6,223
Corporation and President of 1993 $139,058 $7,500 $0 $0 $5,836
Elizabethtown Water Company
- ------------------------------------------------------------------------------------------------------------------------------------
Norbert Wagner 1995 $124,170 $0 $0 $8,964 $4,743(5)
Senior Vice President, 1994 $118,558 $0 $0 $0 $4,890
Elizabethtown Water Company 1993 $111,927 $7,500 $0 $0 $4,696
- ------------------------------------------------------------------------------------------------------------------------------------
Edward F. Cash
Vice President - Customer 1995 $120,231 $0 $0 $9,477 $4,095(5)
Services, Elizabethtown Water 1994 $115,323 $0 $0 $0 $4,756
Company 1993 $110,343 $5,000 $0 $0 $4,630
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) All salaries are paid by Elizabethtown, the Corporation's principal
subsidiary.
(2) Includes pretax contributions to the 401(k) Plan and Director's fees for
R.W. Kean, Jr., T.J. Cawley and A.M. Chapman.
(3) The bonus payments in 1993 for T.J. Cawley, A.M. Chapman, N. Wagner and E.F.
Cash were determined by the Executive Compensation Committee of
Elizabethtown based on its evaluation of each executive's contribution to
Elizabethtown, taking into account each executive's base salary.
(4) Restricted stock awards granted in 1992 under the E'town Corporation 1990
Performance Stock Program vested in 1995. The number of shares of restricted
stock vested in 1995 for executive officers was: T.J. Cawley, 683 shares;
A.M. Chapman, 657 shares; N. Wagner, 332 shares; and E.F. Cash, 351 shares.
The market value of these shares is shown in the table. R.W. Kean, Jr. has
disqualified himself from E'town's 1990 Performance Stock Program.
(5) Includes 401(k) Plan matching contributions by Elizabethtown and life
insurance premiums for: R.W. Kean, Jr. $4,620 and $874; T.J. Cawley $4,620
and $1,344; A.M. Chapman $4,620 and $1,344; N. Wagner $3,721 and $1,022; and
E.F. Cash $3,099 and $996, respectively.
-11-
<PAGE>
E'TOWN CORPORATION
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
====================================================================================================================================
Potential
Realizable Value at
Assumed Annual
Rates of Stock Price
Appreciation for
Individual Grants Option Term (3)
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Shares % of Total
Underlying Options/SARs Exercise
Options/ Granted to or Base
SARs Employees in Price Expiration
Name Granted(2) Fiscal Year ($/Sh) Date 5% 10%
=================================================================================================================================
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert W. Kean, Jr.(1) -- -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
Thomas J. Cawley -- -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
Andrew M. Chapman 12,000 15.58% $27.125 4/20/05 $204,780 $518,820
- ----------------------------------------------------------------------------------------------------------------------------
Norbert Wagner 8,000 10.39% $27.125 4/20/05 $136,520 $345,880
- ----------------------------------------------------------------------------------------------------------------------------
Edward F. Cash 4,000 5.19% $27.125 4/20/05 $ 68,260 $172,940
=================================================================================================================================
</TABLE>
(1) R.W. Kean, Jr. has disqualified himself from participation in the 1982 and
1987 Stock Option Plans.
(2) All options granted in 1995 are exercisable as of April 20, 1996. To date,
no Stock Appreciation Rights have been granted under the 1982 or 1987 Stock
Option Plans.
(3) These values are not predictions of what the Corporation believes the market
value of its Common Stock will be in the next 10 years. They are merely
assumed values required to be calculated in accordance with SEC rules.
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
==================================================================================================================================
Value of all
Number of Outstanding
Shares all Outstanding In-the-Money
Acquired Options/SARs at Options/SARs
on Aggregate 12/31/95 at 12/31/95
Exercise Value Unexercisable/Exercisable Unexercisable/Exercisable
Name (#) Realized (2) (2)
==================================================================================================================================
<S> <C> <C> <C> <C>
Robert W. Kean, Jr.(1) -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Thomas J. Cawley 3,300 $2,340 -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Andrew M. Chapman 0 $0 12,000/15,000 $36,000/$66,825
- ----------------------------------------------------------------------------------------------------------------------------------
Norbert Wagner 850 $603 8,000/0 $24,000/$0
- ----------------------------------------------------------------- ----------------------------------------------------------------
Edward F. Cash 0 $0 4,000/0 $12,000/$0
==================================================================================================================================
</TABLE>
(1) R.W. Kean, Jr. has disqualified himself from participation in the 1982 and
1987 Stock Option Plans.
(2) To date, no Stock Appreciation Rights have been granted under the 1982 or
1987 Stock Option Plans.
-12-
<PAGE>
Pensions. Elizabethtown's non-contributory defined benefit retirement plan
provides that a participant will receive an annual retirement benefit equal in
amount to 1.6% (increased from 1.525% as of February 1, 1996) of the
participant's final average compensation for the highest four (decreased from
five as of February 1, 1996) consecutive calendar years multiplied by the number
of years of credited service (up to a maximum of 40). Remuneration covered under
the retirement plan includes base wages only. Directors who are not also
officers or employees do not participate.
The following table shows annual pension benefits payable to employees,
including officers, upon retirement at age 65, in various remuneration and
years-of-service classifications. The compensation taken into account under a
tax-qualified plan is subject to a maximum annual limit under the Internal
Revenue Code of 1986, as amended, adjusted annually for cost of living increases
($235,840 in 1993, $150,000 in 1994 and 1995, and $155,000 in 1996).
<TABLE>
<CAPTION>
Highest
Consecutive Annual Benefits for Years of Service Indicated
Four-Year -------------------------------------------------------------------------------------------------------
Average
Compensation 10 years 15 years 20 years 25 years 30 years 35 years 40 years
------------ -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 75,000 $12,000 $18,000 $24,000 $ 30,000 $ 36,000 $ 42,000 $ 48,000
100,000 16,000 24,000 32,000 40,000 48,000 56,000 64,000
125,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000
150,000 24,000 36,000 48,000 60,000 72,000 84,000 96,000
175,000 28,000 42,000 56,000 70,000 84,000 98,000 112,000
200,000 32,000 48,000 64,000 80,000 96,000 112,000 128,000
225,000 36,000 54,000 72,000 90,000 108,000 126,000 144,000
250,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000
</TABLE>
The annual benefit amounts shown above are not subject to any deduction for
Social Security benefits or other offset amounts. The number of years of service
now credited under the retirement plan is as indicated for the following
officers: Robert W. Kean, Jr., 40 years; Thomas J. Cawley, 26 years; Andrew M.
Chapman, 6 years; Norbert Wagner, 32 years and Edward F. Cash, 37 years.
Executive officers of Elizabethtown are entitled to either a Supplemental
Executive Retirement Plan benefit or a 1995 Supplemental Executive Retirement
Plan benefit upon the attainment of the normal retirement age of 65 with a
minimum of 20 years service. The benefit payable under each of these plans is an
amount equal to the difference between 60% of the average annual base salary for
the thirty-six months prior to retirement and the regular pension benefit shown
in the table above. The 1995 Plan also provides life insurance equal to two
times compensation if death occurs before age 55. The following table shows the
annual benefit under each plan payable to executive officers upon retirement at
age 65.
Average Annual
Base Salary for 36 Annual Supplemental
Months Prior to Executive Retirement
Retirement Benefit(1)
------------------ --------------------
$ 75,000 $ 45,000
100,000 60,000
125,000 75,000
150,000 90,000
175,000 105,000
200,000 120,000
225,000 135,000
250,000 150,000
(1) To be reduced by regular pension benefit shown in prior table.
-13-
<PAGE>
Change in Control Agreement. E'town has entered into an agreement with
Andrew M. Chapman that provides him certain extended benefits in the event that
his employment is terminated by the Corporation (other than for cause) within
three years following a change in control of the Corporation. In the event of
such a termination, Mr. Chapman would be entitled under the agreement to receive
salary and incentive compensation, as well as medical and other benefits, at the
rates in effect prior to such termination for a period of thirty months
thereafter. In addition, any incentive compensation awards due to Mr. Chapman
prior to the change in control but not yet paid would be paid on the date of
termination and any restricted stock not vested at the time of the change in
control would thereupon become vested. The amounts payable pursuant to the
agreement will be reduced, if necessary, to avoid excise tax under the Federal
tax laws. The agreement expires on December 31, 1996, subject to automatic
annual renewal unless prior notice is given by the Corporation.
ELIZABETHTOWN WATER COMPANY
Elizabethtown is a wholly-owned subsidiary of the Corporation. The Board of
Directors of Elizabethtown currently numbers twelve individuals, consisting of
the Directors of the Corporation. Eleven of the directors of Elizabethtown will
stand for election and it is the intention of the Board of Directors of the
Corporation to elect all of such persons as directors of Elizabethtown. If
Anthony S. Cicatiello is elected a Director of the Corporation at the Annual
Meeting, the Board of Directors of the Corporation intends to elect him a
Director of Elizabethtown.
II. APPROVAL OF APPOINTMENT OF AUDITORS
Deloitte & Touche LLP, Two Hilton Court, Parsippany, New Jersey 07054,
independent certified public accountants, have been selected by the Board of
Directors, upon recommendation of the Audit Committee, to serve as independent
auditors of the Corporation for the year ending December 31, 1996.
The appointment of Deloitte & Touche LLP continues a relationship that
began in 1950. Stockholder approval of this appointment is requested. In the
event a majority of the votes cast is against approval, the Board of Directors
will reconsider the appointment.
It is expected that representatives of Deloitte & Touche LLP will be
present at the Annual Meeting, will have the opportunity to make a statement if
they so desire, and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THIS PROPOSAL.
III. OTHER BUSINESS
Management does not intend to present and does not have any reason to
believe that others will present at the 1996 Annual Meeting of Stockholders any
item of business other than the proposals set forth herein. However, if other
matters are properly presented for a vote, the proxies will be voted upon such
matters in accordance with the judgment of the person acting under the proxies.
Dissenting stockholders have no rights of appraisal with respect to the
proposals set forth herein.
-14-
<PAGE>
STOCKHOLDER PROPOSALS
Stockholders are entitled to submit proposals on matters appropriate for
stockholder action consistent with regulations of the SEC. Should a stockholder
intend to present a proposal at next year's annual meeting, it must be received
by the Secretary of the corporation (at 600 South Avenue, Westfield, New Jersey
07090) by not later than November 28, 1996 in order to be included in the
Corporation's proxy statement and form of proxy relating to that meeting. Under
the rules of the SEC, a stockholder submitting a proposal is required to be a
record or beneficial owner of at least $1,000 in market value of Common Stock
for at least one year prior to the date of submission of the proposal, and he or
she must continue to own such securities through the date on which the meeting
is held.
On Behalf of the Board of Directors,
Walter M. Braswell
Secretary
Westfield, New Jersey
-15-
<PAGE>
E'TOWN CORPORATION
Map and Directions to the Annual Meeting at The Westwood
<PAGE>
APPENDIX
(Pursuant to Rule 304 of Regulation S-T)
1. Page 10 contains a description in tabular form of a graph entitled
"Perfrmance Graph" which represents the comparison of the cumulative total
stockholder return on the Company's Common Stock against the cumulative total
return of the Standard and Poor's 500 Stock Index and the Water Utilities Peer
Group for the period of each of the years commencing December 31, 1990 and
ending December 31, 1995, which graph is contained in the paper format of this
Proxy Statement being sent to Stockholders.
<PAGE>
E'TOWN CORPORATION
600 SOUTH AVENUE
WESTFIELD, NEW JERSEY 07090
Dear Stockholder:
The Annual Meeting of Stockholders of E'town Corporation will be held at 10:00
a.m. on Thursday, May 16, 1996 at The Westwood, 438 North Avenue, Garwood, New
Jersey, for the following purposes:
1. To elect four directors to the Board of Directors.
2. Approval of appointment of Deloitte & Touche LLP as independent
auditors.
3. To transact such other business as may properly be brought before the
meeting or any adjournment or adjournments thereof.
To be sure that your vote is counted, we urge you to complete and sign the
proxy/voting instruction card below, detach it from this letter and return it in
the postage paid envelope enclosed in this package. The giving of such proxy
does not affect your right to vote in person if you attend the meeting. The
prompt return of your signed proxy will aid the Company in reducing the expense
of additional proxy solicitation.
Sincerely,
WALTER M. BRASWELL
Secretary
March 28, 1996
Detach Proxy Card Here
- -------------------------------------------------------------------------------
- ------
| |
- ------
1. ELECTION OF DIRECTORS: FOR all nominees [ ] WITHHOLD AUTHORITY to vote [ ]
listed below. for all nominees listed below.
*EXCEPTIONS [ ]
Nominees: Thomas J. Cawley, Anthony S. Cicatiello, John Kean and Chester A.
Ring, 3rd.
(INSTRUCTIONS: To withhold authority to vote for any individual
nominee, mark the "Exceptions" box and write that nominee's name in the
space provided below.)
*Exceptions ___________________________________________________________
2. To ratify and approve the selection by the Board of Directors of Deloitte &
Touche LLP as independent public auditors.
3. In their discretion, the Proxies are authorized to vote upon such other
matters as may properly come before the meeting or any adjournment or
adjournments thereof.
FOR [ ] AGAINST [ ] ABSTAIN [ ] I plan to attend the meeting [ ]
Change of Address and
or Comments Mark Here [ ]
The signature on this Proxy should correspond exactly with
stockholder's name as printed to the left. In the case of
joint tenancies, co-executors or co-trustees, both should
sign. Persons signing as Attorney, Executor, Administrator,
Trustee or Guardian should give their full title.
Dated: _____________________________________________, 1996
__________________________________________________________
Signature
__________________________________________________________
Signature
Votes must be indicated
(x) in Black or Blue ink. [X]
Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope.
<PAGE>
E'TOWN CORPORATION
This Proxy is Solicited by the Board of Directors
PROXY for Annual Meeting of Stockholders, May 16, 1996
The undersigned hereby appoints ROBERT W. KEAN, JR. and HENRY S. PATTERSON,
II, or any one of them with full power of substitution, attorneys, agents and
proxies to vote on behalf of the undersigned all shares of Common Stock of
E'TOWN CORPORATION which the undersigned would be entitled to vote if personally
present at the Annual Meeting of Stockholders to be held at The Westwood, 438
North Avenue, Garwood, New Jersey, on Thursday, May 16, 1996, at 10:00 A.M., or
any adjournments thereof.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholders. If no direction is made, this proxy will
be voted FOR Proposals (1) and (2).
Continued, and to be signed and dated, on reverse side.
E'TOWN CORPORATION
P.O. BOX 11225
NEW YORK, N.Y. 10203-0225
