<PAGE> 1
Registration No. ____________
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 15, 1998.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
E'TOWN CORPORATION
(Exact name of issuer as specified in its charter)
New Jersey 22-2596330
(State of Incorporation) (I.R.S. Employer Identification No.)
600 South Avenue
Westfield, New Jersey 07091-0788
(908) 654-1234
(Address and telephone number of principal executive offices)
E'TOWN CORPORATION
1998 STOCK OPTION PLAN
and
E'TOWN CORPORATION
1998 DIRECTORS STOCK PLAN
Walter M. Braswell
Secretary
E'town Corporation
600 South Avenue
Westfield, New Jersey 07091-0788
(908) 654-1234
(Name, address and telephone number of agent for service)
Copies to:
Winthrop, Stimson, Putnam & Roberts
One Battery Park Plaza
New York, New York 10004-1490
(212) 858-1000
Attention: David P. Falck, Esq.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===========================================================================================================
Proposed Maximum Proposed Maximum Amount of
Title of Securities to be Amount to be Offering Price Aggregate Offering Registration
Registered Registered Per Share(1) Price(1) Fee(1)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, without par value 540,000(2) $35.97 $19,423,800 $5,730.02
===========================================================================================================
</TABLE>
(1) Pursuant to Rule 457(h) and 457(c) under the Securities Act of 1933, as
amended, the proposed maximum offering price per share and the registration
fee are based on the average of the high and low prices of E'town
Corporation Common Stock reported on the New York Stock Exchange on June 8,
1998.
(2) Represents 40,000 shares of Common Stock for issuance under the E'town
Corporation 1998 Directors Stock Plan and 500,000 shares of Common Stock
for issuance under the E'town Corporation 1998 Stock Option Plan.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents which have been filed by E'town Corporation
(the "Company") with the Securities and Exchange Commission (the "Commission")
pursuant to the Securities Act of 1933, as amended (the "Securities Act") and
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
applicable, are incorporated by reference herein and shall be deemed to be a
part hereof:
1. The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1997.
2. The Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1998.
3. The description of the Company's capital stock contained in
the registration statement filed with the Commission under the 1934
Act, including any amendment or report filed for the purpose of
updating such description.
All documents, filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment to this registration statement which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold shall be deemed to be incorporated by reference in this
registration statement and made a part hereof from their respective dates of
filing (such documents, and the documents enumerated above, being hereinafter
referred to as "Incorporated Documents"); provided, however, that the documents
enumerated above or subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act in each year during which the
offering made by this registration statement is in effect prior to the filing
with the Commission of the Company's Annual Report on Form 10-K covering such
year shall not be Incorporated Documents or be incorporated by reference in this
registration statement or be a part hereof from and after the filing of such
Annual Report on Form 10-K.
Any statement contained in an Incorporated Document shall be deemed to
be modified or superseded for purposes of this registration statement 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 registration statement.
ITEM 4. DESCRIPTION OF SECURITIES.
See Item 3.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The legality of the Common Stock offered pursuant to this registration
statement has been passed upon for the Company by Mr. Walter M. Braswell,
Secretary and general counsel to the Company, 600 South Avenue, Westfield, New
Jersey 07091-0788. Mr. Braswell may be a participant in the E'town Corporation
1998 Stock Option Plan and beneficially owns 9,875 shares of Company Common
Stock.
<PAGE> 3
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 3, Section 6 of the Company's By-Laws permits the
indemnification of officers and directors under certain circumstances to the
full extent that such indemnification may be permitted by law.
Such rights of indemnification are in addition to, and not in
limitation of, any rights to indemnification to which any officer or director of
the Company is entitled under the New Jersey Business Corporation Act (Section
14A:3-5) (the "Act"), which provides for indemnification by a corporation of its
officers and directors under certain circumstances as stated in the Act and
subject to specified limitations set forth in the Act.
The Company also maintains directors' and officers' liability insurance
coverage which insures directors and officers of the Company against certain
losses arising from claims made, and for which the Company has not provided
reimbursement, by reason of their being directors and officers of the Company or
its subsidiaries.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
See Exhibit Index on page 6.
ITEM 9. UNDERTAKINGS.
(1) The Company hereby undertakes:
(a) to file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in
the registration statement;
Provided, however, that paragraphs (1)(a)(i) and (1)(a)(ii) do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the Company
pursuant to Section 13(a) or Section 15(d) of the 1934 Act that are incorporated
by reference in the registration statement.
(b) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment 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.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
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(2) The Company hereby undertakes that, for the purpose of determining
any liability under the Securities Act, each filing of the issuer's annual
report pursuant to Section 13(a) or 15(d) of the Exchange Act of (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 the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein and the offering of such securities
at the time shall be deemed to be the initial bona fide offering hereof.
(3) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the above-mentioned provisions, or otherwise, the
Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company 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 Company 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 Securities Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 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 the State of New Jersey, on May 21,
1998.
E'TOWN CORPORATION
By: /s/ Gail P. Brady
-----------------
Gail P. Brady
Treasurer
POWER OF ATTORNEY
Each person whose signature appears below hereby severally constitutes
and appoints Gail P. Brady, Walter M. Braswell and Andrew M. Chapman, and each
of them acting singly, as his or her true and lawful attorney-in-fact and agent,
with full and several power of substitution and resubstitution, to sign for him
or her and in his or her name, place and stead in any and all capacities
indicated below, the registration statement on Form S-8 filed herewith and any
and all pre-effective and post-effective amendments and supplements to the said
registration statement, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent, full power and authority to do
and perform each and every act and thing requisite and necessary fully to all
intents and purposes as he or she might or could do in person hereby ratifying
and confirming all that said attorney-in-fact and agent, or his or her
substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment thereto has been signed below by the
following persons in the capacities and on the date indicated below.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Gail Brady Treasurer May 21, 1998
- ------------------------- (Principal Financial Officer)
Gail P. Brady
/s/ Walter M . Braswell Secretary May 21, 1998
- -------------------------
Walter M . Braswell
/s/ Thomas J. Cawley Director May 21, 1998
- -------------------------
Thomas J. Cawley
/s/ Andrew M. Chapman President and Director May 21, 1998
- ------------------------- (Principal Executive Officer)
Andrew M. Chapman
/s/ Anthony S. Cicatiello Director May 21, 1998
- -------------------------
Anthony S. Cicatiello
/s/ Dennis Doll Controller (Principal Accounting May 21, 1998
- ------------------------- Officer)
Dennis Doll
/s/ Anne Evans Estabrook Director, Chairman of the Board May 21, 1998
- -------------------------
Anne Evans Estabrook
</TABLE>
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<TABLE>
<S> <C> <C>
/s/ James W. Hughes Director May 21, 1998
- -------------------------
James W. Hughes
/s/ John Kean Director May 21, 1998
- -------------------------
John Kean
/s/ Robert W. Kean, III Director May 21, 1998
- -------------------------
Robert W. Kean, III
/s/ Barry T. Parker Director May 21, 1998
- -------------------------
Barry T. Parker
/s/ Hugh M. Pfaltz Director May 21, 1998
- -------------------------
Hugh M. Pfaltz
/s/ Chester A. Ring Director May 21, 1998
- -------------------------
Chester A. Ring
/s/ Joan Verplanck Director May 21, 1998
- -------------------------
Joan Verplanck
</TABLE>
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EXHIBIT INDEX
Exhibit No. Description
4(a) Amended Certificate of Incorporation of the Company
(incorporated by reference filed as Exhibit 4(a) in Registration
Statement No. 33-42509).
4(b) By-laws of the Company, as amended (incorporated by reference to
the Company's Annual Report on Form 10-K for the year ended
December 31, 1992).
5 Opinion of Walter M. Braswell, Esq. as to the legality of the
Company's Common Stock.
23(a) Consent of Walter M. Braswell, Esq. (included in the Opinion
filed as Exhibit 5 hereto).
23(b) Consent of Deloitte & Touche LLP, independent auditors.
24 Power of Attorney (set forth on the signature page hereof).
99(a) E'town Corporation 1998 Stock Option Plan.
99(b) E'town Corporation 1998 Directors Stock Plan.
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Exhibits 5 and 23(a)
E'TOWN CORPORATION
600 South Avenue
Westfield, New Jersey 07090
June 12, 1998
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 from time to time of up to 540,000
additional shares of Common Stock, without par value (the "Additional Common
Stock"), of the Company pursuant to the provisions of the E'town Corporation
1998 Stock Option Plan and the E'town Corporation 1998 Directors Stock Plan (the
"Plans"). I have examined, among other things, the registration statement on
Form S-8 (the "Registration Statement") to be filed with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended, (the "Act") with respect to the Additional Common Stock. 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 Additional 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 and (ii) the Additional
Common Stock shall have been issued and delivered against payment therefor as
contemplated in the Registration Statement, the Additional Common Stock will be
legally 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 use of this opinion as Exhibit 5 to the
Registration Statement. In giving such opinion, I do not thereby admit that I am
acting within the category of persons whose consent is required under Section 7
of the Act or the rules or regulations of the Commission.
Very truly yours,
/s/ Walter M. Braswell
Walter M. Braswell
Secretary
<PAGE> 1
Exhibit 23(b)
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement of
E'town Corporation on Form S-8 of our report dated February 18, 1998, except for
the subsequent event discussed in Note 11, as to which the date is March 6,
1998, on the consolidated financial statements of E'town Corporation and our
report dated February 18, 1998 on the consolidated financial statements of
Elizabethtown Water Company, all appearing in and incorporated by reference in
the Annual Report on Form 10-K of E'town Corporation for the year ended December
31, 1997.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Parsippany, NJ
June 12, 1998
<PAGE> 1
Exhibit 99(a)
E'TOWN CORPORATION
1998 STOCK OPTION PLAN
ARTICLE 1
Establishment and Purpose
Section 1.1 Establishment. Effective as of May 21, 1998 (subject to
approval by the Corporation's shareholders), E'town Corporation, a New Jersey
corporation (the "Corporation"), hereby establishes a stock option plan for the
benefit of certain employees as described herein which shall be known as the
E'TOWN CORPORATION 1998 STOCK OPTION PLAN (the "Plan"). The Plan is intended to
provide for the grant of stock options qualifying as incentive stock options
satisfying the requirements of Section 422 of the Internal Revenue Code of 1986,
as amended, for the grant of stock options which do not qualify as incentive
stock options, and for the grant of related Stock Appreciation Rights.
Section 1.2 Purpose. The purpose of the Plan is to promote the
interests of the Corporation by ensuring continuity of management and increased
incentive on the part of officers and other key employees of the Corporation and
its Subsidiaries responsible for major contributions to effective management,
through facilitating their acquisition of equity interests in the Corporation on
reasonable terms.
ARTICLE 2
Definitions
For purposes of the Plan, the following terms shall have the meanings
provided herein:
Section 2.1 "Board" means the board of directors of the Corporation.
Section 2.2 "Code" means the Internal Revenue Code of 1986, as amended.
Section 2.3 "Committee" means the committee provided in Section 3.1.
Section 2.4 "Disability" means disability as defined in Section
22(e)(3) of the Code.
Section 2.5 "Incentive Option" means an option granted under the Plan
to purchase Shares and which is intended to qualify as an incentive stock option
under Section 422 of the Code.
Section 2.6 "Nonemployee Director" means a director of the Corporation
who is a "nonemployee director" within the meaning of Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended.
Section 2.7 "Nonqualified Option" means an option granted under the
Plan to purchase Shares and which is not intended to qualify as an Incentive
Option.
Section 2.8 "Option" means an Incentive Option or a Nonqualified
Option.
<PAGE> 2
Section 2.9 "Outside Director" means a director of the Corporation who
is an "outside director" within the meaning of Section 162(m) of the Code and
the regulations promulgated thereunder.
Section 2.10 "Shares" means shares of the Corporation's common stock,
no par value.
Section 2.11 "Stock Appreciation Rights" means the right to receive
cash or stock as set forth in Article 7.
Section 2.12 "Subsidiary" means any corporation which qualifies as a
"subsidiary corporation" of the Corporation under Section 424(f) of the Code or,
if applicable, as a "parent corporation" of the Corporation under Section 424(e)
of the Code.
ARTICLE 3
Administration
Section 3.1 Administration. The Plan shall be administered by the
Executive Compensation and Stock Options Committee appointed by and responsible
to the Board. The Committee shall consist of at least two Nonemployee Directors
and to the extent necessary for any Option or Stock Appreciation Right to
qualify as performance based compensation under Section 162(m) of the Code to so
qualify, each member of the Committee shall be an Outside Director.
Section 3.2 Powers of the Committee. The Committee shall have all the
powers vested in it by the terms of the Plan, such powers to include exclusive
authority (within the limitations described herein) to select the employees to
be granted Options and related Stock Appreciation Rights, if any, to determine
the number of Shares subject to, and the terms of, the Options and related Stock
Appreciation Rights to be granted to each employee selected, to determine the
time when Options and related Stock Appreciation Rights, if any, will be
granted, the period during which Options and related Stock Appreciation Rights
will be exercisable, and to prescribe the form of the instruments, if any,
embodying Options and related Stock Appreciation Rights. The Committee shall be
authorized to interpret the Plan and the Options and related Stock Appreciation
Rights granted under the Plan, to establish, amend and rescind any rules and
regulations relating to the Plan, and to make any other determinations which it
believes necessary or advisable for the administration of the Plan. The
Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or in any Option or Stock Appreciation Right in the
manner and to the extent the Committee deems necessary or desirable to carry it
into effect. Any decision of the Committee in the administration of the Plan, as
described herein, shall be final and conclusive. The Committee may act only by a
majority of its members in office, except that the members thereof may authorize
any one or more of their number or any officer of the Corporation to execute and
deliver documents on behalf of the Committee.
ARTICLE 4
Eligibility and Participation
Options and Stock Appreciation Rights may be granted only to officers
and other key employees of the Corporation and its Subsidiaries. Any officer or
key employee of the Corporation or of a Subsidiary shall be eligible to receive
one or more Options and Stock Appreciation Rights; provided, however, that no
Incentive Option shall be granted to any person who at the time of grant owns
stock (including stock the ownership of which is attributed to such person
pursuant to Section 424(d) of the Code) possessing more than 10 percent of the
total voting power of all classes of stock of the Corporation or a Subsidiary;
and provided, further, that no officer or key employee of the Corporation or a
Subsidiary may be granted Options and Stock
2
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Appreciation Rights in respect of more than 50,000 shares during each calendar
year.
ARTICLE 5
Shares Subject to Plan
Section 5.1 Amount of Stock. There may be issued under the Plan an
aggregate of not more than 500,000 Shares, subject to adjustment as provided in
Section 5.2. Shares issued pursuant to the Plan may be unissued Shares or
reacquired Shares, as the Board may from time to time determine. In the event
that Options shall terminate or expire without being exercised in whole or in
part, new Options may be granted covering the Shares not purchased under such
lapsed Options.
Section 5.2 Dilution and Other Adjustments. In the event of any change
in the outstanding Shares by reason of any stock split, stock dividend,
recapitalization, merger, consolidation, reorganization, combination or exchange
of shares or other similar event, if the Committee shall determine, in its sole
discretion, that such change equitably requires an adjustment in the number or
kind of shares that may be issued under the Plan, in the number or kind of
shares which are subject to outstanding Options, or in the purchase price per
share relating thereto, such adjustment shall be made by the Committee and shall
be conclusive and binding for all purposes of the Plan.
ARTICLE 6
Terms and Conditions of Options
Section 6.1 Terms and Options. An Option granted under the Plan shall
be in such form as the Committee may from time to time approve. Each Option
shall be subject to the terms and conditions provided in this Article 6 and
shall contain such additional terms and conditions as the Committee may deem
desirable, but in no event shall such terms and conditions be inconsistent with
the Plan and, in the case of Incentive Options, with the provisions of the Code
(and regulations promulgated thereunder) applicable to "incentive stock options"
as described in Section 422 of the Code.
Section 6.2 Option Price. The purchase price per Share under an Option
will be determined by the Committee but may be not less than the fair market
value of a Share at the date the Option is granted.
Section 6.3 Option Period. The period during which an Option may be
exercised shall be fixed by the Committee. No Incentive Option shall be
exercisable after the expiration of ten years from the date such Incentive
Option is granted and no Nonqualified Option shall be exercisable after the
expiration of ten years and one day from the date such Nonqualified Option is
granted.
Section 6.4 Consideration. As consideration for the grant of an Option,
the optionee shall agree to remain continuously in the employ of the Corporation
or a Subsidiary for at least one year from the date the Option is granted, and
no Option and related Stock Appreciation Right shall be exercisable until after
the expiration of such one-year period.
Section 6.5 Exercise of Option. (a) Except as provided in Sections 6.7,
6.8 and 6.9, the holder of an Option must be in the employ of the Corporation or
a Subsidiary at the time the Option is exercised. An optionee shall be deemed to
be in the employ of the Corporation or a Subsidiary during any period of
military, sick leave or other leave of absence meeting the requirements of
Section 1.421-7(h)(2) of the Federal Income Tax Regulations, or similar or
successor section.
(b) An Option and related Stock Appreciation Right may be exercised in
whole or in part from time to time during the option period (or, if determined
by the Committee, in specified installments during the
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<PAGE> 4
option period) by giving written notice of exercise to the Secretary or
Treasurer of the Corporation specifying the number of Shares to be purchased.
Notice of exercise of an Option must be accompanied by payment in full of the
purchase price either by cash or check or in Shares owned by the optionee having
a fair market value at the date of exercise (as determined by the Committee)
equal to such purchase price, or in a combination of the foregoing. No Shares
shall be issued in connection with the exercise of an Option until full payment
therefor has been made. An optionee shall have the rights of a shareholder only
with respect to Shares for which certificates have been issued to such person.
Section 6.6 Nontransferability of Options. No Option granted under the
Plan shall be transferable by the optionee otherwise than by will or by the laws
of descent and distribution or (except with respect to Incentive Options)
pursuant to a qualified domestic relations order as defined by Section 414(p) of
the Code or Section 206(d) of the Employee Retirement Income Security Act of
1974, as amended, and such Option shall be exercisable, during such person's
lifetime, only by such person. Notwithstanding the foregoing, in the case of a
Nonqualified Option, the Committee may, in its sole discretion, provide in the
option agreement that all or any part of such Nonqualified Option may, subject
to the prior written consent of the Committee, be transferred to one or more
member of the following class of donees: a family member, a trust for the
benefit of a family member, a limited partnership whose partners are solely
family members or any other legal entity set up for the benefit of family
members.
Section 6.7 Retirement and Termination of Employment. (a) If an
optionee retires pursuant to a tax-qualified retirement plan of the Corporation
or a Subsidiary, the Incentive Options granted to such person shall be
exercisable by such person to the extent provided in the Option Agreement during
the three-month period immediately following such person's retirement and
Nonqualified Options granted to such person shall be exercisable by such person
to the extent provided in the Option Agreement during the twelve-month period
immediately following such person's retirement.
(b) If an optionee's employment with the Corporation or a Subsidiary
terminates for any reason other than death, Disability or retirement, the Option
granted to such person shall be exercisable by such person to the extent
provided in the Option Agreement during the one-month period immediately
following the date of termination of such person's employment.
Section 6.8 Death of an Optionee. In the event of the death of an
optionee while in the employ of the Corporation or a Subsidiary, the Option
granted to such person shall be exercisable by the executors, administrators,
legatees or distributees of such person's estate, as the case may be. In such
case, the Option shall be exercisable to the extent provided in the option
agreement, but in no event shall such agreement provide that the number of
Shares remaining subject to the Option be less than the number of Shares
purchasable by the employee on the date of such person's death nor more than the
total number of Shares remaining under the Option. The period during which such
Option may be exercised shall end on the earlier of the date one year from the
optionee's death or expiration of the option period provided in the Option
pursuant to Section 6.3. In the event an Option is exercised by the executors,
administrators, legatees or distributees of the estate of a deceased optionee,
the Corporation shall be under no obligation to issue Shares thereunder unless
and until the Corporation is satisfied that the person or persons exercising the
Option are the duly appointed legal representatives of the deceased optionee's
estate or the proper legatees or distributees thereof.
Section 6.9 Disability of an Optionee. In the event of the termination
of the employment of an optionee due to Disability, the Options granted to such
person shall be exercisable by such person to the extent provided in the Option
Agreement during the twelve-month period immediately following such termination
of such person's employment.
Section 6.10 Annual Limitation. The aggregate fair market value of the
Shares determined on the date of grant, with respect to which Incentive Options
granted under the Plan and any other plan of the Corporation or its Subsidiary
which are exercisable for the first time by any optionee during any calendar
year shall not exceed $100,000.
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ARTICLE 7
Stock Appreciation Rights
The Committee may also grant Stock Appreciation Rights to optionees
granted related Options under the Plan. A Stock Appreciation Right may be
exercised only at a time when the fair market value of a Share exceeds the
option price for a Share, the Option is otherwise exercisable, and at the time
of such exercise the optionee surrenders the privilege of exercising the related
Option to the extent that the optionee exercises the Stock Appreciation Right.
Upon exercise of a Stock Appreciation Right in accordance with Section 6.5(b)
and surrender of the related Option (or any portion of such Option), the
optionee shall be entitled to receive an amount equal to the excess of the fair
market value of one Share at the time of such surrender over the option price
per Share specified in such Option times the number of such Shares called for by
the Option, or portion thereof, which is so surrendered. Such payment shall be
made as determined by the Committee, in its sole discretion, either in (i) cash
or (ii) Shares valued at fair market value as of the date of exercise or (iii)
partly in cash and partly in Shares.
ARTICLE 8
Miscellaneous Provisions
Section 8.1 Withholding Obligations. As a condition to the delivery of
any Shares or cash pursuant to the exercise of an Option or Stock Appreciation
Right, the Committee may require that the optionee, at the time of such
exercise, pay to the Corporation an amount sufficient to satisfy any applicable
tax withholding obligations.
Section 8.2 No Implied Rights. No employee or other person shall have
any claim or right to be granted an Option or Stock Appreciation Right under the
Plan. Neither the Plan nor any action taken hereunder shall be construed as
giving any employee any right to be retained in the employ of the Corporation or
any Subsidiary or affect any right of the Corporation or any Subsidiary to
terminate any employee's employment.
Section 8.3 Securities Law Compliance. No Shares shall be issued
hereunder unless counsel for the Corporation shall be satisfied that such
issuance will be in compliance with applicable federal and state securities
laws.
Section 8.4 Ratification of Actions. By accepting any Option or Stock
Appreciation Right or other benefit under the Plan, each employee and each
person claiming under or through such person shall be conclusively deemed to
have indicated such person's acceptance and ratification of, and consent to, any
action taken under the Plan by the Corporation, the Board or the Committee.
ARTICLE 9
Amendments or Discontinuance
The Plan may be amended at any time and from time to time by the Board
and without the approval of shareholders of the Corporation, except that no
amendment which increases the aggregate number of Shares which may be issued
pursuant to the Plan shall be effective unless and until the same is approved by
the shareholders of the Corporation. No amendment of the Plan shall adversely
affect any right of any optionee with respect to any Option or Stock
Appreciation Right theretofore granted without such optionee's written consent.
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ARTICLE 10
Termination
The Plan shall terminate upon the earlier of the following dates or
events to occur:
(a) upon the adoption of a resolution of the Board terminating the
Plan; or
(b) May 20, 2008.
No termination of the Plan shall alter or impair any of the rights or
obligations of any person, without such person's consent, under any Option or
Stock Appreciation Right theretofore granted under the Plan.
ARTICLE 11
Dissolution or Merger
Upon a dissolution or liquidation of the Corporation or a merger or
consolidation in which the Corporation is not to be the surviving corporation,
every Option and Stock Appreciation Right outstanding hereunder shall terminate,
except that in such event the Board may, in its absolute discretion, permit each
optionee to exercise such person's Options or Stock Appreciation Rights, in
whole or in part, prior to or simultaneously with such event except that no
Option and related Stock Appreciation Right shall be exercisable within six
months of the date of grant of such Option and related Stock Appreciation Right,
or in the case of such a merger or consolidation the surviving corporation may,
in its absolute discretion, substitute new options and stock appreciation rights
for the outstanding Options and Stock Appreciation Rights hereunder.
Notwithstanding anything to the contrary in the Plan, neither the Board nor the
Committee shall have any authority to take any action under the Plan where such
action would affect the Corporation's ability to account for any business
combination as a "pooling of interests."
ARTICLE 12
Shareholder Approval and Adoption
The Plan shall be submitted to the shareholders of the Corporation for
their approval and adoption and Options and Stock Appreciation Rights hereunder
may be granted prior to such approval and adoption contingent upon such approval
and adoption. The shareholders of the Corporation shall be deemed to have
approved and adopted the Plan only if it is approved and adopted at a meeting of
the shareholders duly held by vote taken in the manner required by the laws of
the State of New Jersey.
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Exhibit 99(b)
E'TOWN CORPORATION
1998
DIRECTORS' STOCK PLAN
<PAGE> 2
E'TOWN CORPORATION
1998 DIRECTORS' STOCK PLAN
ARTICLE I
Purpose
1.01 Plan is intended to motivate, reward and retain non-employee
Directors of the Company for contributing to the long-term success of the
Company and its subsidiaries by providing an opportunity for meaningful capital
accumulation linked to the future success of the Company and appreciation in
shareholder value. The Plan is intended to permit the award of shares of
Restricted Stock and Unrestricted Stock. It is intended that, commencing on the
effective date of the Plan, the annual retainer fee paid to non-employee members
of the Board of Directors shall be provided in the form of Restricted or
Unrestricted Stock, in accordance with each Director's election, as provided in
Articles IV and VII hereof.
ARTICLE II
Definitions
2.01 "Affiliate" means any "subsidiary" or "parent" corporation (within
the meaning of Section 424 of the Code) of the Company.
2.02 "Agreement" means a written agreement (including any amendment or
supplement thereto) between the Company and a Participant specifying the terms
and conditions upon which an award of Restricted Stock is granted to such
Participant.
2.03 "Board" means the Board of Directors of E'town Corporation and
Elizabethtown Water Company.
2.04 "Code" means the Internal Revenue Code of 1986, and any amendments
thereto.
2.05 "Committee" means the Executive Compensation and Stock Options
Committee of the Company.
2.06 "Common Stock" means the Common Stock of the Company.
2.07 "Company" means E'town Corporation, or any successor thereof.
2.08 "Director" means a member of the Board who is not an employee of
the Company, any Subsidiary or Affiliate.
2.09 "Election Period" means the period from April 1 through April 30
immediately preceding each Plan Year during which a Participant can make an
election pursuant to Section 7.02 of the Plan.
2.10 "Elizabethtown" means Elizabethtown Water Company, a wholly-owned
subsidiary of the Company, or any successor thereof.
2.11 "Participant" means a Director of the Company who received an
award of Restricted Stock or Unrestricted Stock under the Plan.
2.12 "Plan" means the E'town Corporation 1998 Directors' Stock Plan.
<PAGE> 3
2.13 "Plan Administrator" means the individual(s) appointed by the
Committee to administer the Plan in accordance with its terms.
2.14 "Plan Year" means the 12-month period beginning June 1 and ending
May 31. The initial Plan Year shall commence June 1, 1998.
2.15 "Restricted Stock" means Common Stock awarded to a Participant
under Article VII. Shares of Common Stock shall cease to be Restricted Stock
when, in accordance with the terms of the Plan and the applicable Agreement,
they become transferable and free of substantial risks of forfeiture.
2.16 "Unrestricted Stock" means Common Stock awarded to a Participant
in accordance with Article VII, which is not subject to restrictions regarding
ownership and transferability.
ARTICLE III
Administration
3.01 The Committee shall determine the terms of any award of Restricted
Stock as the Committee may consider appropriate, in a manner which is consistent
with the provisions of this Plan. No shares of Common Stock comprising an award
of Restricted Stock shall be transferable by the recipient thereof prior to the
time such recipient ceases to be a director, except upon conversion of such
Restricted Stock to Unrestricted Stock as provided in Article VI. The terms of
any award of Restricted Stock may include other conditions, in addition to those
contained in this Plan, on the transferability or forfeitability of Restricted
Stock. In addition, the Committee shall have complete authority to interpret all
provisions of this Plan; to prescribe the form of Agreements; to adopt, amend,
and rescind rules and regulations pertaining to the administration of the Plan;
and to make all other determinations necessary or advisable for the
administration of this Plan. The express grant in the Plan of any specific power
to the Committee shall not be construed as limiting any power or authority of
the Board. Any decision made, or action taken, by the Committee or the Board in
connection with the administration of this Plan shall be final and conclusive.
The Board shall not be liable for any action, failure to act, determination or
interpretation made in good faith with respect to this Plan, or any transaction
hereunder. All expense of administering this Plan shall be borne by the Company
and/or Elizabethtown, as the Board shall determine.
ARTICLE IV
Eligibility
4.01 General. Participation in the Plan will be limited to Directors
who are not employees of the Company.
4.02 Awards. Effective with the initial Plan Year beginning June 1,
1998, the entire amount of any annual retainer payable to a member of the Board
shall be paid exclusively as an award of Restricted Stock or Unrestricted Stock.
The Plan Administrator will administer the award of shares of Restricted Stock
or Unrestricted Stock to each Director in accordance with the annual election of
the Director, and will calculate the number of shares of Common Stock subject to
each award. The number of shares of Restricted Stock or Unrestricted Stock which
shall be awarded to a Director shall be based on the value of his or her
retainer divided by the average closing price of the Common Stock as traded on
the New York Stock Exchange during each of the five (5) trading days preceding
the beginning of the Plan Year (June 1 of each year) for which the retainer is
payable and the Director's election is effective. The price of the shares of
Common Stock, as calculated pursuant to this formula, shall be applied to
Restricted Stock and Unrestricted Stock in the same manner. In the event the
calculation results in fractional shares, the award of shares of Common Stock
shall round down to the next whole number of shares.
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All shares of Restricted Stock awarded under this Plan shall be
evidenced by Agreements which shall be subject to applicable provisions of this
Plan and to such other provisions as the Committee may determine.
ARTICLE V
Stock Subject to Plan
5.01 Upon the award of shares of Restricted and Unrestricted Stock, the
Company may issue shares of Common Stock from its authorized but unissued Common
Stock, from shares held as treasury stock, or from Common Stock purchased by or
on behalf of the Company or Elizabethtown in the open market, subject to all
applicable provisions of the Federal and state securities laws. The maximum
aggregate number of shares of Common Stock that may be awarded as Restricted and
Unrestricted Stock under this Plan is 400,000 shares. Such maximum aggregate
number of shares of Common Stock that may be issued under this Plan shall be
subject to adjustment as provided in Article VIII.
ARTICLE VI
Restricted Stock/Unrestricted Stock
6.01 Conversion of Restricted Stock. Restricted Stock held by a
Participant shall immediately be converted to Unrestricted Stock when the
Participant ceases to be a Director, or at such other time as may be determined
by the Committee.
6.02 Nonalienation or Assignment. No right or interest of a Participant
in Restricted Stock shall be subject to any lien, obligation or liability of
such Participant.
6.03 Shareholder Rights - Restricted Stock. A Participant will have the
rights of a shareholder with respect to Restricted Stock as of the date of
award, including the rights to receive dividends; provided, however, that (i) a
Participant may not sell, transfer, pledge, exchange, hypothecate, or otherwise
dispose of Restricted Stock, and (ii) the Company shall retain custody of the
certificates evidencing shares of Restricted Stock. The limitations set forth in
the preceding sentence shall not apply after the shares cease to be Restricted
Stock.
6.04 Shareholder Rights - Unrestricted Stock. Upon the award of
Unrestricted Stock, a Participant will have all the rights accorded to an owner
of Common Stock with respect to his or her ownership of such Unrestricted Stock.
ARTICLE VII
Election by a Director
7.01 Award. The Committee will determine whether a Director shall be
awarded Restricted Stock or Unrestricted Stock in accordance with the Director's
annual election. The Plan Administrator will calculate the number of shares of
Common Stock provided by the award in accordance with Article IV.
7.02 Annual Election. Each Director shall direct the Company to cause
to be paid his or her entire annual retainer for a given Plan Year, as either an
award of Restricted Stock or Unrestricted Stock, by filing an Election Form with
the Plan Administrator during each applicable Election Period. A Director's
meeting and committee fees shall continue to be paid to the Director in cash.
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7.03 Rules Governing Annual Elections. The annual election made by a
Participant shall be irrevocable for the Plan Year for which the election is
made. The certificates representing the Restricted Stock or Unrestricted Stock
awarded to a Participant in accordance with the annual election will be issued
to the Participant (and, if the award is of Restricted Stock, retained by the
Company) as soon as practicable following the date on which annual retainer fees
are payable.
A Participant may request payment of his or her annual retainer for a
Plan Year entirely in Restricted Stock or Unrestricted Stock, but not to a
combination of Restricted Stock and Unrestricted Stock.
7.04 Taxes on Awards of Common Stock. The Participant agrees to satisfy
any tax obligations under federal, state or local law as a result of the award
of Common Stock.
ARTICLE VIII
Adjustment Upon Change in Common Stock
8.01 The maximum aggregate number of shares that may be awarded as
Restricted Stock and Unrestricted Stock under this Plan (and the number of
shares of any particular award) shall be proportionately adjusted, and the terms
of any outstanding Restricted Stock awards may be adjusted, as the Committee
shall determine to be equitably required in the event that (a) the Company
effects one or more stock dividends, stock split-ups, subdivisions or
consolidations of shares or (b) there occurs any other event that, in the
judgment of the Committee, necessitates such action. Any determination made
under this Article VIII by the Committee shall be final and conclusive.
The Issuance by the Company of shares of any class, or securities
convertible into shares of stock of any class, for cash or property, or for
labor or services, whether upon direct sale or upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or obligations of
the Company convertible into such shares or other securities, shall not affect,
and no adjustment by reason thereof shall be made with respect to, outstanding
awards of Restricted Stock or Unrestricted Stock.
ARTICLE IX
Compliance with Law and Approval of Regulatory Bodies
9.01 No Common Stock shall be awarded and no certificates for shares of
Common Stock shall be delivered under this Plan except in compliance with all
applicable federal and state laws and regulations (including, without
limitation, withholding tax and securities laws requirements). The Company shall
have the right to rely on an opinion of its counsel as to such compliance. Any
share certificate issued to evidence Common Stock for which shares of Restricted
Stock or Unrestricted Stock are awarded may bear such legends and statements as
the Committee may deem advisable to assure compliance with federal and state
laws and regulations. No Restricted Stock or Unrestricted Stock shall be
awarded, no Common Stock shall be issued, and no certificates for shares shall
be delivered under this Plan until the Company has obtained such consent or
approval as the Board of Directors may deem advisable from regulatory bodies
having jurisdiction over such matters.
ARTICLE X
General Provisions
10.01 Effect on Directorship. Neither the adoption of this Plan, its
operation, any agreement hereunder, nor any documents describing appointment to
the Board or referring to this Plan (or any part thereof) shall confer upon any
individual any right to continue as a Director of the Company, nor shall it
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affect the rights of the shareholders of the Company to remove a Director from
the Board, upon a proper vote thereon.
10.02 Rules of Construction. Headings are given to the articles and
sections of this Plan solely as a convenience to facilitate reference. The
reference to any statute, regulation, or other provision of law shall be
construed to refer to any amendment to or successor of such provision of law.
10.03 Obligation to Effect Registration. The Company agrees to take
such steps as shall be required by law to assure the free transferability of
Unrestricted Stock by Participants including, if necessary, using its best
efforts to register the Common Stock subject to this Plan under the Securities
Act of 1933, as amended.
ARTICLE XI
Amendment
11.01 The Board may amend or terminate this Plan at any time or from
time to time; provided, however, that no amendment may become effective until
shareholder approval is obtained if (i) the amendment increases the aggregate
number of shares of Common Stock that may be awarded under the Plan, or (ii) the
amendment changes the class of individuals eligible to become Participants. No
amendments shall, without a Participant's consent, adversely affect any rights
of such Participant under any Restricted Stock or Unrestricted Stock award
outstanding at the time such amendment is made, in violation of the terms of
this Plan.
ARTICLE XII
Effective Date of Plan
12.01 Restricted Stock and Unrestricted Stock may only be awarded under
this Plan upon approval of the Plan by the shareholders of the Company.
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