<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS AND SIMILAR PLANS
PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from ____ to ____
Commission file number 0-18595
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
ELIZABETHTOWN WATER COMPANY SAVINGS
AND INVESTMENT PLAN - 401-K
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
E'TOWN CORPORATION
600 South Avenue
Westfield, New Jersey 07090
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ELIZABETHTOWN WATER COMPANY
SAVINGS AND INVESTMENT PLAN - 401(K)
FINANCIAL STATEMENTS FOR THE YEARS
ENDED DECEMBER 31, 1996 AND 1995 AND
SUPPLEMENTAL SCHEDULES FOR THE
YEAR ENDED DECEMBER 31, 1996 AND
INDEPENDENT AUDITORS' REPORT
PREPARED FOR FILING AS PART OF THE ANNUAL
RETURN/REPORT OF EMPLOYEE BENEFIT PLAN
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ELIZABETHTOWN WATER COMPANY
SAVINGS AND INVESTMENT PLAN - 401(K)
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TABLE OF CONTENTS
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DESCRIPTION PAGE
Independent Auditors' Report 1
Statements of Net Assets Available for Benefits
as of December 31, 1996 and 1995 2
Statements of Changes in Net Assets Available
for Benefits for the Years Ended December 31, 1996
and 1995 3
Notes to Financial Statements for the Years Ended
December 31, 1996 and 1995 4
Supplemental Schedule of Assets Held for Investment
Purposes as of December 31, 1996 (Item 27a) 7
Supplemental Schedule of Reportable Transactions
for the Year Ended December 31, 1996 (Item 27d) 8
Supplemental schedules not filed herewith are omitted
because of the absence of conditions under which
they are required.
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INDEPENDENT AUDITORS' REPORT
Elizabethtown Water Company
Savings and Investment Plan - 401(k)
We have audited, by fund and in total, the accompanying statements of net assets
available for benefits of Elizabethtown Water Company Savings and Investment
Plan - 401(k) as of December 31, 1996 and 1995, and the related statements of
changes in net assets available for benefits for the years then ended. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, by fund and in total,
in all material respects, the net assets available for benefits of the Plan at
December 31, 1996 and 1995, and the changes in net assets available for benefits
for the years then ended in conformity with generally accepted accounting
principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
table of contents are presented for the purpose of additional analysis and are
not a required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These schedules are the responsibility of the Plan's management. Such
schedules have been subjected to the auditing procedures applied in our audit of
the basic 1996 financial statements and, in our opinion, are fairly stated in
all material respects when considered in relation to the basic financial
statements taken as a whole.
Deloitte & Touche LLP
Parsippany, NJ
June 24, 1997
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ELIZABETHTOWN WATER COMPANY
SAVINGS AND INVESTMENT PLAN - 401(K)
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996
Growth Government
Savings & Income Securities Stock Loan
Fund Fund Fund Fund Fund Total
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Contributions receivable $ 11,965 $ 36,923 $ 10,394 $ 43,528 -- $ 102,810
Cash -- 78 7 64,191 -- 64,276
Accrued income 8 38 4,222 -- -- 4,268
Accrued Repayment of Loans 642 1,249 355 1,164 -- 3,410
Investments 878,388 2,872,910 891,855 4,008,785 $137,450 8,789,388
-------- ---------- -------- ---------- -------- ----------
Total Assets 891,003 2,911,198 906,833 4,117,668 137,450 8,964,152
-------- ---------- -------- ---------- -------- ----------
LIABILITIES:
Forfeitures due the Company -- -- -- 5,618 -- 5,618
-------- ---------- -------- ---------- -------- ----------
Total Liabilities -- -- -- 5,618 -- 5,618
-------- ---------- -------- ---------- -------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $891,003 $2,911,198 $906,833 $4,112,050 $137,450 $8,958,534
======== ========== ======== ========== ======== ==========
</TABLE>
<TABLE>
<CAPTION>
1995
Savings Cap. Apprec. Gov. Sec. Stock Loan
Fund Fund Fund Fund Fund Total
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Contributions receivable $ 12,306 $ 28,032 $ 11,181 $ 33,667 -- $ 85,186
Cash -- -- -- 51,343 -- 51,343
Accrued income 2 -- -- 94 -- 96
Accrued Repayment of Loans 727 1,236 204 1,065 -- 3,232
Investments 708,982 1,899,374 719,821 3,068,321 $164,046 6,560,544
-------- ---------- -------- ---------- -------- ----------
Total Assets 722,017 1,928,642 731,206 3,154,490 164,046 6,700,401
-------- ---------- -------- ---------- -------- ----------
LIABILITIES:
Forfeitures due the Company -- -- -- 706 -- 706
-------- ---------- -------- ---------- -------- ----------
Total Liabilities -- -- -- 706 -- 706
-------- ---------- -------- ---------- -------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $722,017 $1,928,642 $731,206 $3,153,784 $164,046 $6,699,695
======== ========== ======== ========== ======== ==========
</TABLE>
See notes to financial statements.
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ELIZABETHTOWN WATER COMPANY
SAVINGS AND INVESTMENT PLAN - 401(K)
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
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<TABLE>
<CAPTION>
1996
Growth Government
Savings & Income Securities Stock Loan
Fund Fund Fund Fund Fund Total
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Contributions:
Employer -- -- -- $ 327,118 -- $ 327,118
Employees $159,814 $ 456,482 $ 150,423 223,479 -- 990,198
Dividend Income -- 63,459 47,437 235,146 -- 346,042
Interest Income 98 303 143 841 $ 16,025 17,410
Rollovers 17,654 -- 17,654 -- -- 35,308
Net Appreciation
(Depreciation) in fair value of investments 48,578 419,423 (17,317) 222,851 -- 673,535
Transfers between Funds -- 57,259 4 12,715 -- 69,978
Participant Loans -- -- -- -- 42,756 42,756
Repayment of Loan 7,277 17,445 3,831 16,769 -- 45,322
-------- ---------- --------- ---------- --------- ----------
Total Additions 233,421 1,014,371 202,175 1,038,919 58,781 2,547,667
-------- ---------- --------- ---------- --------- ----------
DEDUCTIONS:
Distributions to Participants 11,231 10,115 4,151 59,602 -- 85,099
Forfeitures -- -- -- 5,618 -- 5,618
Employee Loans 19,600 21,700 -- 1,456 42,756
Repayment of Loans -- -- -- -- 85,377 85,377
Transfer between Funds 33,604 -- 22,397 13,977 -- 69,978
-------- ---------- --------- ---------- --------- ----------
Total Deductions 64,435 31,815 26,548 80,653 85,377 288,828
-------- ---------- --------- ---------- --------- ----------
NET INCREASE (DECREASE) 168,986 982,556 175,627 958,266 (26,596) 2,258,839
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR 722,017 1,928,642 731,206 3,153,784 164,046 6,699,695
-------- ---------- --------- ---------- --------- ----------
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR $891,003 $2,911,198 $ 906,833 $4,112,050 $ 137,450 $8,958,534
======== ========== ========= ========== ========= ==========
</TABLE>
<TABLE>
<CAPTION>
1995
Savings Cap. Apprec. Gov. Sec. Stock Loan
Fund Fund Fund Fund Fund Total
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Contributions:
Employer -- -- $ 232,055 -- $ 232,055
Employees $160,786 $ 361,521 $141,754 204,563 -- 868,624
Dividend Income -- 6,705 33,888 189,354 -- 229,947
Interest Income 137 75 7 659 $ 13,416 14,294
Rollovers -- 4,259 -- 1,825 -- 6,084
Net Appreciation
(Depreciation) in fair value of investments 39,973 438,474 37,686 368,515 -- 884,648
Transfers between Funds 38,138 21,575 9832 28,493 -- 98,038
Participant Loans -- -- -- -- 56,700 56,700
Repayment of Loan 8,076 16,143 2,095 15,501 -- 41,815
-------- ---------- -------- ---------- -------- ----------
Total Additions 247,110 848,752 225,262 1,040,965 70,116 2,432,205
-------- ---------- -------- ---------- -------- ----------
DEDUCTIONS:
Distributions to Participants 2,646 8,437 778 64,761 -- 76,622
Forfeitures -- -- -- 772 -- 772
Employee Loans 32,080 13,240 6,380 5,000 -- 56,700
Repayment of Loans -- -- -- -- 41,815 41,815
Transfer between Funds 36,674 54,542 2,128 4,694 -- 98,038
-------- ---------- -------- ---------- -------- ----------
Total Deductions 71,400 76,219 9,286 75,227 41,815 273,947
-------- ---------- -------- ---------- -------- ----------
NET INCREASE (DECREASE) 175,710 772,533 215,976 965,738 28,301 2,158,258
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR 546,307 1,156,109 515,230 2,188,046 135,745 4,541,437
-------- ---------- -------- ---------- -------- ----------
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR $722,017 $1,928,642 $731,206 $3,153,784 $164,046 $6,699,695
======== ========== ======== ========== ======== ==========
</TABLE>
See notes to financial statements.
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ELIZABETHTOWN WATER COMPANY
SAVINGS AND INVESTMENT PLAN - 401(k)
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NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
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1. DESCRIPTION OF THE PLAN
General
The Savings and Investment Plan - 401(k) (Plan) was adopted by the
Elizabethtown Water Company (Company) as of January 1, 1988. The Plan is
administered by the Administrative Committee of the Company, appointed
from time to time by the Board of Directors. Expenses incurred in the
administration of the Plan are paid by the Company.
Eligibility
Employees of Elizabethtown Water Company, The Mount Holly Water Company,
E'town Corporation and E'town Properties who were non-union employees as
of January 1, 1988 were eligible to join the Plan. As of January 1,
1995, employees who are union employees are eligible to join the Plan.
Employees may become members of the Plan after three months of service
and may enter the Plan at the next entry date. The entry dates are
January 1 and July 1. If an employee withdraws from the Plan, the
employee may not rejoin the Plan until the second entry date following
withdrawal.
Contributions
Non-union employees may reduce their salaries up to 10% or a dollar
limit of $9,500 and direct that the salary reductions be invested in the
Plan. This salary reduction, in accordance with the Internal Revenue
Code Section 401(k), shall not be subject to Federal or state income
taxes. The Company matched 50% in 1995 and effective April 1, 1996 the
Company matched 60% of participating non-union employees' salary
reductions up to 6%.
Union employees may reduce their salaries up to 6% and, effective
February 1, 1996, the Company will match 10% of participating union
employees' salary reductions up to that 6%.
Salary reductions are deducted each payroll period and deposited along
with the Company's matching contributions with the Trustee of each
investment fund at the end of the month.
The Plan provides that the salary reductions and matching contributions
are recorded in the accounts of the eligible participants.
Vesting and Distribution
All salary reductions are 100% vested and non-forfeitable. Employees are
vested in Company matching contributions based upon years of service.
Employees vest 25% each year after two years of service and are 100%
vested after five years of service. Distributions may be made from the
plan upon retirement, disability, death or separation from service.
Distributions may also be made for special financial hardship situations
in accordance with the Internal Revenue Code guidelines.
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<PAGE> 8
Loans
Participants who are non-union may be granted a loan for Plan designated
purposes for up to 50% of their vested plan balance. Loans are repaid
over a period of up to 5 years, or longer for a loan for the purchase of
a principal residence. The interest rate is 2 points above prime or the
prevailing mortgage rate for a residential loan. At December 31, 1996
interest rates on these loans range from 6.61% to 11% and maturity dates
range from March 1997 to October 2006. The loan and the interest
payments are credited to the participants' investment funds in relation
to the participants' investment decision.
Termination of the Plan
The Plan may be terminated at any time by the Company. In the event of
termination, the assets of the Plan will be distributed to the
participants by the Trustees, according to the participants' account
balances, less the administration costs of the Trustee.
Investments
In 1995, there were four investment options: First Fidelity - Capital
Appreciation Equity Fund, First Fidelity - Intermediate Government Fund,
First Fidelity - Guaranteed Investment Contract and E'town Corp. Common
Stock. The employee may elect to have their contribution invested in any
fund. The Company's matching contribution is invested in the stock fund.
Savings Fund - The Savings Fund is invested in a Guaranteed
Investment Contract Fund (GIC), managed by First Fidelity Bank
which invests in GIC's and short-term securities.
Capital Appreciation Fund - The Capital Appreciation Fund is
invested in a Capital Appreciation Equity Fund managed by First
Fidelity Bank which invests in diversified common stocks and
income securities convertible into common stock.
Intermediate-Term Government Securities Fund - The
Intermediate-Term Government Fund is invested in a
intermediate-term government securities fund managed by First
Fidelity Bank which invests primarily in U.S. Treasury
obligations and money market instruments.
Stock Fund - The Stock Fund is invested in E'town Corporation
common stock which is traded on the New York Stock Exchange. The
shares were held in trust for the Plan by First Fidelity Bank.
The Plan had 101,853 shares of E'town Corporation common stock
at December 31, 1995.
Effective January 19, 1996, First Fidelity Bank merged with First Union
National Bank. On that date, investments held in the previous First
Fidelity Bank funds were transferred to similar investments of First
Union National Bank. Employees' may elect to have their contributions
invested in any of the four following funds. The Company's matching
contribution is invested in the stock fund.
Savings Fund - The Savings Fund is invested in a Guaranteed
Investment Contract Fund (GIC), managed by First Union National
Bank which invests in GIC's and short-term securities.
Evergreen Growth and Income Fund - The Growth and Income Fund is
invested in a Capital Appreciation Equity Fund managed by First
Union National Bank which invests in diversified common stocks
and income securities convertible into common stock.
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<PAGE> 9
Evergreen Intermediate-Term Government Securities Fund - The
Intermediate-Term Government Fund is invested in an
intermediate-term government securities fund managed by First
Union National Bank which invests primarily in U.S. Treasury
obligations and money market instruments.
Stock Fund - The Stock Fund is invested in E'town Corporation
common stock which is traded on the New York Stock Exchange. The
shares are held in trust for the Plan by First Union National
Bank. The Plan has 126,760 shares of E'town Corporation common
stock at December 31, 1996.
The Plan's investments are reported at fair market value based on
closing market quotations at December 31, 1996 and 1995. Purchases and
sales of securities are recorded on a trade date basis.
2. TAX STATUS
The Plan conforms with the requirements of Section 401(b) of the
Internal Revenue Code and is entitled to exemption from Federal income
taxation by the Internal Revenue Code.
The Plan obtained its latest determination letter on July 24, 1995, in
which the Internal Revenue Service stated that the Plan is in compliance
with the applicable requirements of the Internal Revenue Code.
3. OTHER
The Plan's accounts are maintained on an accrual basis.
There are no material lease commitments or parties in interest
transactions.
As of December 31, 1996 and 1995, benefits of $146,526 and $39,543
respectively, were due to participants who have withdrawn from
participation in the Plan.
4. SUBSEQUENT EVENTS
Effective January 1, 1997, the Company merged the Elizabethtown Water
Company Employee Stock Ownership Plan into the Plan. The merger of the
two plans does not have an impact on participants' benefits.
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<PAGE> 10
ELIZABETHTOWN WATER COMPANY Form 5500
SAVINGS AND INVESTMENT PLAN - 401(k) Item 27(a)
SUPPLEMENTAL SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES (Item 27(a))
AS OF DECEMBER 31, 1996
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<TABLE>
<CAPTION>
Original Cost Market Value
------------- ------------
<S> <C> <C>
GIC Fund
First Union GIC Commingled Fund $ 784,082 $ 878,388
Growth & Income Fund
127,401.75 Shares @ $22.55 per share 2,271,315 2,872,910
First Union Evergreen Money Market Fund 78 78
Intermediate-Term Government Bond Fund
88,477.72 Shares @ $10.08 per share 906,586 891,855
First Union Evergreen Money Market Fund 7 7
Stock Fund
126,760 Shares of E'town Corporation Stock @ $31.625
per share 3,531,498 4,008,785
First Union Evergreen Money Market Fund 64,191 64,191
Loan Fund
Market value at December 31, 1996 represents the total unpaid principal
balance at the end of the year. Interest rates on these loans
range from 6.61% to 11%. Maturity dates range from March 1997
through October 2006 137,450 137,450
---------- ----------
TOTAL $7,695,207 $8,853,664
========== ==========
</TABLE>
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<PAGE> 11
Form 5500
Item 27(d)
ELIZABETHTOWN WATER COMPANY
SAVINGS AND INVESTMENT PLAN-401(k)
SUPPLEMENTAL SCHEDULE OF REPORTABLE TRANSACTIONS (Item 27(d))
FOR THE YEAR ENDED DECEMBER 31, 1996*
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<TABLE>
<CAPTION>
NUMBER NUMBER
OF TOTAL OF TOTAL
PURCHASES PURCHASES SALES SALES
--------- --------- ------- -----
<S> <C> <C> <C> <C>
GIC FUND:
GIC Commingled Fund 3 $ 40,950 5 $ 27,032
First Union Evergreen Money
Market Fund 5 25,239 4 25,233
Stable Portfolio Group Trust 2 30,414 1 10,000
GIC BIC Fund 8 113,969 7 27,466
GROWTH & INCOME FUND:
First Fidelity Bank Lexicon Capital
Appreciation Equity Fund 86 1,742,201
First Union Evergreen Growth &
Income Fund 107 2,298,874 7 31,814
First Union Evergreen Money
Market Fund 3 49,985 2 49,978
GOVERNMENT BOND FUND:
First Fidelity Bank Lexicon Intermediate
Term Government Fund 78 729,047
First Union Evergreen Intermediate
Term Government Fund 102 933,632 6 26,619
STOCK FUND:
E'town Corporation
Common Stock 20 866,996 8 30,283
First Union Evergreen Money
Market Fund 7 137,220 4 83,596
</TABLE>
* Reportable transactions consist of any transaction or series of
transactions within the Plan year with the same person or entity which,
when aggregated, involves an amount that is in excess of 5% of the fair
value of Plan assets at the beginning of the Plan year.
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INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No. 33 -
19600 on Form S-8 of E'town Corporation of our report dated June 24, 1997
appearing in this Annual Report on Form 11-K of the Elizabethtown Water Company
Savings and Investment Plan - 401(K) for the year ended December 31, 1996.
Deloitte & Touche LLP
Parsippany, NJ
June 24, 1997
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
Date: June 30, 1997
ELIZABETHTOWN WATER COMPANY
SAVINGS AND INVESTMENT PLAN - 401(K)
By: /s/ Gail P. Brady
---------------------
Name: Gail P. Brady
Title: Trustee
