PENNICHUCK CORPORATION
4 Water Street
Nashua, New Hampshire 03061
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Friday, April 18, 1997
To the Shareholders of Pennichuck Corporation:
Notice is hereby given that the Annual Meeting of Shareholders of
Pennichuck Corporation ("Company") will be held at 3:00 p.m. on Friday,
April 18, 1997, at the Nashua Marriott Hotel, 2200 Southwood Drive, Nashua,
New Hampshire for the following purposes:
(1) To elect three directors;
(2) To ratify the appointment by the Board of Directors of the firm
of Arthur Andersen LLP as independent accountants of the Company
for the fiscal year ending December 31, 1997; and
(3) To transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on March 14,
1997 as the record date for the determination of shareholders entitled to
notice of, and to vote at, the Annual Meeting. Only holders of common stock
of record at the close of business on that date will be entitled to notice
of, and to vote at, the Annual Meeting or any adjournment thereof. Your
attention is directed to the attached Proxy Statement.
By Order of the Board of Directors,
JAMES L. SULLIVAN, JR.
Secretary
Nashua, New Hampshire
March 19, 1997
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR
NOT YOU PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING, PLEASE SIGN,
DATE AND COMPLETE THE ACCOMPANYING PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. THE
GIVING OF THE PROXY WILL NOT AFFECT YOUR RIGHTS TO VOTE AT THE MEETING IF
THE PROXY IS REVOKED AS SET FORTH IN THE ACCOMPANYING PROXY STATEMENT.
---------------------------
PENNICHUCK CORPORATION
4 Water Street
Nashua, New Hampshire 03061
---------------------------
PROXY STATEMENT
for
ANNUAL MEETING OF SHAREHOLDERS
to be held on
April 18, 1997
GENERAL INFORMATION
This Proxy Statement and the accompanying proxy are being mailed to
shareholders beginning on or about March 19, 1997. They are furnished in
connection with the solicitation of proxies by the Board of Directors of
Pennichuck Corporation ("Company") for use at the Annual Meeting of
Shareholders to be held on Friday, April 18, 1997, and at any adjournment or
adjournments thereof. Holders of the Company's common stock are entitled to
one vote for each share held of record at the close of business on March 14,
1997. Shareholders are not entitled to cumulate their votes. On March 14,
1997, 747,665 shares of common stock of the Company were issued and
outstanding, all of which were entitled to vote, and 2,641 shares were held
as treasury stock.
A copy of the Annual Report to Shareholders for the year ended
December 31, 1996 accompanies this Proxy Statement.
VOTING PROCEDURES
If the accompanying proxy is properly executed and returned to the
Company in time to be voted at the Annual Meeting, the shares represented
thereby will be voted in accordance with any choice specified. Where no
choice is specified, executed proxies will be voted: (1) FOR the election of
the three nominees as directors of the Company; and (2) FOR the ratification
of the appointment of Arthur Andersen LLP as independent accountants of the
Company for the fiscal year ending December 31, 1997. If any matters not
specified in this Proxy Statement are properly brought before the Annual
Meeting, the shares represented by executed proxies will be voted at the
discretion of the proxy holders. As of the date hereof, management is not
aware of any other matters to be voted upon.
Any shareholder executing a proxy has the power to revoke it at any
time prior to the voting thereof on any matter (without, however, affecting
any vote taken prior to such revocation) by delivering a duly executed
written notice of revocation to the Secretary of the Company at the above
address, by executing and delivering to the Secretary another duly executed
proxy dated as of a later date, or by voting in person at the Annual
Meeting.
In addition to the solicitation of proxies by mail, the directors,
officers and regular employees of the Company may also solicit proxies
personally or by telephone or other means. None of such directors, officers
and employees will receive any compensation for such solicitation activities
beyond their usual compensation. All costs of soliciting proxies, including
reimbursement of certain brokers, fiduciaries and nominees for their
expenses in obtaining voting instructions from beneficial owners, will be
borne by the Company.
The Company's Bylaws require that the holders of a majority of all
shares of common stock outstanding and entitled to vote at a meeting be
present in person or by proxy at a meeting of shareholders in order to
constitute a quorum for the transaction of business. When a quorum is
present, the Bylaws of the Company also require the affirmative vote of a
majority of the shares of the Company's common stock present in person or by
proxy, and voting, at the meeting in order to elect directors and to ratify
the appointment of Arthur Andersen LLP. An abstention from voting on a
particular matter, or, where a broker indicates on the proxy that it does
not have discretionary authority as to certain shares to vote on a
particular matter, will have the same effect as a vote withheld on the
election of directors or as a vote against another matter submitted to the
shareholders for vote, as the case may be.
GENERAL DISCLOSURES
Security Ownership of Certain Beneficial Owners
To the best knowledge of the Company, and except as otherwise
indicated below (see "Security Ownership of Management"), the following are
the only person(s) or group of persons, as defined in Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended, ("Exchange Act") who
beneficially owned more than 5% of the Company's outstanding common stock as
of March 7, 1997. The following table, based on filings with the Securities
and Exchange Commission, sets forth information with respect to the shares
of the Company's common stock owned by such person or group of persons.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of % of Common Stock
Beneficial Owner Beneficial-Ownership Outstanding(2)
- ------------------- -------------------- -----------------
<S> <C> <C>
Katherine C. O'Neill(l) 39,809 5.1%
34 Raymond Street
Nashua, NH 03060
- --------------------
<F1> Katherine C. O'Neill claims sole voting and sole dispositive power over
all of such shares.
<F2> Calculation of percentages is based upon a total of 775,635 shares,
which total includes shares outstanding and entitled to vote of
747,665, plus 27,970 shares which have not been issued but which may
be issued within 60 days of March 7, 1997 if persons having rights to
exercise stock options within such period exercise such rights.
</TABLE>
Security Ownership of Management
To the best knowledge of the Company, the following table sets forth
information as of March 7, 1997 with respect to the shares of the Company's
common stock beneficially owned by each nominee and director, and by all
directors and officers as a group:
<TABLE>
<CAPTION>
Amount and % of Common
Nature of Stock Out-
Beneficial standing (if
Name of Beneficial Owner Ownership(l)(3) more than 1%)(2)
------------------------ --------------- ----------------
<S> <C> <C>
Maurice L. Arel(3)(7) 16,683 2.2%
Joseph A. Bellavance(3)(4) 6,608 -
Frank B. Clancy(5) 28,207 3.6
Charles E. Clough 1,464 -
Stephen J. Densberger(3)(7) 6,120 -
Robert P. Keller 779 -
Hannah M. McCarthy 100
Charles J. Staab(3)(7) 5,220 -
Davis P. Thurber(5)(6) 91,503 11.8
All directors and
officers as a group
(I2 persons) (3)(7)(8) 157,063 20.3%
- --------------------
<F1> Shares beneficially owned means shares over which a person exercises
sole or shared voting or investment power or shares of which a person
has the right to acquire beneficial ownership within 60 days of March
7, 1997. Unless otherwise noted, the individuals and group above have
sole voting and investment power with respect to shares beneficially
owned.
<F2> Calculation of percentages is based upon a total of 775,635 shares,
which total includes shares outstanding and entitled to vote of
747,665, plus 27,970 shares which have not been issued but which may
be issued within 60 days of March 7, 1997 if persons having rights to
exercise stock options within such period exercise such rights.
<F3> The individuals and group noted above have sole voting and investment
power with respect to shares beneficially owned, except as stated in
notes (4) through (7) below and except that voting and investment
power is shared as follows: Mr. Arel - 2,507 shares, Mr. Bellavance -
2,786 shares, Mr. Densberger - 1,270 shares, Mr. Staab - 1,420 shares,
and non-director officers as a group - 1, 137 shares.
<F4> Mr. Bellavance disclaims beneficial ownership of 989 of these shares.
<F5> Includes 5,478 shares owned by the Charles H. Nutt Surgical Hospital
Trust, of which Mr. Clancy and Mr. Thurber are two of seven Trustees.
Mr. Clancy and Mr. Thurber share voting and investment power with the
other Trustees over these shares; Mr. Clancy and Mr. Thurber each
disclaim beneficial ownership of these shares. These shares are held
in trust by the Trust Department of Bank of New Hampshire (see note
8).
<F6> Includes 82,168 shares held in trust by the Trust Department of Bank of
New Hampshire (inclusive of shares owned by the Charles H. Nutt
Surgical Hospital Trust - see note 5). Mr. Thurber is one of nine
members of the Trust Investment Committee of Bank of New Hampshire and
as such, shares with the other members of the Committee power over
investment and voting of such shares. Mr. Thurber disclaims
beneficial ownership of these shares.
<F7> Includes shares subject to unexercised stock options previously granted
which officers have a right to acquire within 60 days of March 7,
1997. Mr. Arel holds options to acquire 7,000 shares, Mr. Densberger
holds options to acquire 4,600 shares, Mr. Staab holds options to
acquire 3,800 shares and the officers of the Company as a group hold
options to acquire a total of 20,120 shares within 60 days of March 7,
1997.
<F8> In computing the aggregate number of shares beneficially owned by
directors and officers as a group, the 5,478 shares owned by the
Charles H. Nutt Surgical Hospital Trust, of which Mr. Clancy and Mr.
Thurber are Trustees, all of which shares are held in trust by the
Trust Department of the Bank of New Hampshire, of which Mr. Thurber is
a member of the Trust Investment Committee thereof (see notes 5 and
6), are counted only once.
</TABLE>
ELECTION OF DIRECTORS
General
The Company's Board of Directors consists of nine members. The
Articles of Incorporation classify the directors into three classes, each
serving for three years, with one class being elected each year. The Board
has nominated Maurice L. Arel, Joseph A. Bellavance and Robert P. Keller,
three incumbent directors whose terms expire at this Annual Meeting, for re-
election to three-year terms expiring at the Annual Meeting of Shareholders
in 2000.
The Board of Directors recommends a vote FOR the election of the three
nominees as directors of the Company.
Information as to Nominees and Continuing Directors
Unless otherwise directed in the proxy, each proxy executed and
returned by a shareholder will be voted FOR the election of the three
nominees. If any person named as nominee should be unable or unwilling to
stand for election at the time of the Annual Meeting, the proxies will
nominate and vote for a replacement nominee or nominees recommended by the
Board of Directors. All nominees have indicated to the Company their
willingness to be nominated as directors and to serve as directors if
elected. At this time, the Board of Directors knows of no reason why any of
the nominees listed below would not be able to serve as a director if
elected.
The following table sets forth information concerning the three
persons nominated to serve on the Board of Directors and concerning the
other directors continuing in office beyond the Annual Meeting.
<TABLE>
<CAPTION>
Other
Director Year Present Position
of Company Term Will With
Nominees (1) Age Since Expire Company
- ------------ --- ---------- ------------ --------
<S> <C> <C> <C> <C>
Maurice L. Arel 59 1984 1997 President and
Chief Executive
Officer
Joseph A. Bellavance 57 1983 1997 ---
Robert P. Keller 59 1983 1997 ---
Continuing Directors (1)
- ------------------------
Charles E. Clough 66 1968 1998 ---
Frank B. Clancy 75 1975 1998 ---
Davis P. Thurber 71 1983 1998 ---
Hannah M. McCarthy 50 1994 1999 ---
Stephen J. Densberger 46 1986 1999 Executive
Vice President
Charles J. Staab 47 1986 1999 Vice President-
Treasurer
- --------------------
<F1> All nominees and continuing directors, except Messrs. Densberger and
Staab, are also directors of the Company's wholly-owned subsidiaries,
Pennichuck Water Works, Inc. and The Southwood Corporation. Mr.
Densberger is a director of Pennichuck Water Works, Inc. Messrs.
Arel, Densberger and Staab are also directors and officers of the
Company's third wholly-owned subsidiary, Pennichuck Water Service
Corporation.
</TABLE>
The business experience of each of the above nominees, continuing
directors and of the executive officers of the Company during the last five
years, and certain other pertinent information, is as follows:
Maurice L. Arel - Mr. Arel has served as President, Chief Executive
Officer and a Director of the Company since October 1984. Mr. Arel also
serves as President, Chief Executive Officer and a Director of the Company's
subsidiaries Pennichuck Water Works, Inc., The Southwood Corporation and
Pennichuck Water Service Corporation. He is the former Mayor of the City of
Nashua, having served from 1977 to 1984. He received his Bachelor of Arts
degree in Chemistry from St. Anselm College and his Master of Science degree
in Physical Chemistry from St. John's University. He is a Commissioner of
the Nashua Police Department, a Director of Fleet Bank - NH and Blue
Cross/Blue Shield of New Hampshire, a director of Freedom Energy Company,
LLC, a Trustee of St. Anselm College of Manchester, New Hampshire and a
member of the Board of Trustees of the Public Library of Nashua. He serves
as a member of the Safe Drinking Water Advisory Council to the Administrator
of the USEPA. He is a member of the National Association of Water
Companies, the American Chemical Society, the American Water Works
Association and the New England Water Works Association.
Joseph A. Bellavance - Mr. Bellavance is President and General Manager
of Bellavance Beverage Company, Inc. and President of Bellavance Realty
Corporation, both of Nashua. He received his Bachelor of Science degree in
Business Administration from the University of New Hampshire. He is a
Director of the New Hampshire Wholesale Beverage Association, "New Hampshire
The Beautiful," and a member of the American Legion and the Nashua Rotary
Club.
Frank B. Clancy - Mr. Clancy was a practicing attorney in Nashua, New
Hampshire and is now retired. He is former President and a former Director
of the firm of Clancy and O'Neill, Professional Association of Nashua. He
received an A.B. from Harvard College and holds an L.L.B. from Harvard Law
School. Mr. Clancy serves as President of the Board of Trustees of the Mary
A. Sweeney Home, as a Trustee and Clerk of the Board of Trustees of the
Charles H. Nutt Surgical Hospital and Chairman of the Board of Trustees of
the Public Library of Nashua. He is a past-president of the Nashua Rotary
Club, the Nashua Chamber of Commerce and the Nashua Bar Association.
Charles E. Clough - Mr. Clough is currently President of Freedom
Energy Company, LLC. He holds a Master of Business Administration degree
from the Amos Tuck School of Business and was affiliated with Nashua
Corporation from 1957 until 1995. Mr. Clough also serves as a Director of
Hitchiner Manufacturing Company, Inc. of Milford, New Hampshire.
Stephen J. Densberger - Mr. Densberger is Executive Vice President of
the Company and has been affiliated with the Company since 1974. Mr.
Densberger was the Treasurer of the Company from 1978 to 1983. He holds a
Master of Business Administration degree from the Whittemore School of
Business and Economics of the University of New Hampshire. He is past
President of the New Hampshire Water Works Association, past President of
the New England Water Works Association, and is a member of the City of
Nashua Board of Assessors. Mr. Densberger also serves as Executive Vice
President of Pennichuck Water Works, Inc. and as Vice President of The
Southwood Corporation and Pennichuck Water Service Corporation.
Robert P. Keller - Mr. Keller is a Certified Public Accountant. From
April 27, 1990 until October 10, 1991 he served as President and Chief
Executive officer of Dartmouth Bank of Manchester, New Hampshire and from
October 10, 1991 until June 6, 1994, as President and Chief Executive
Officer of New Dartmouth Bank, also of Manchester, New Hampshire. From
August 22, 1994 until March 15, 1995, he served as President and Chief
Executive Officer of Independent Bancorp of Arizona, Inc. of Phoenix,
Arizona and Chairman and Chief Executive Officer of Caliber Bank, also of
Phoenix, Arizona. Since June 1995, he has served as President and Chief
Executive Officer of Dartmouth Capital Group, Inc., and since September 30,
1995, as Chairman, President and Chief Executive Officer of Commerce
Security Bancorp, Inc. of Huntington Beach, California. He is also a
director of Freedom Energy Company, LLC, Source One Mortgage Servicing
Company, White Mountain Holdings, Inc. and Centricut, Inc.
Hannah M. McCarthy - Ms. McCarthy is currently President of Daniel
Webster College in Nashua, New Hampshire, a position which she has held
since June, 1980. She earned her B.A. at Simmons College, and has done
graduate work at Rivier College and New Hampshire College. Ms. McCarthy
serves as a Director of the New Hampshire College and University Council and
the Boys & Girls Club of Nashua.
Charles J. Staab - Mr. Staab is Vice President, Treasurer and Chief
Financial Officer of the Company and has been Treasurer since 1983. He
holds a Master of Business Administration degree from Rivier College, and is
a Certified Public Accountant. He is a past Director of the Nashua
Childrens' Association and the United Way of Greater Nashua, a member of the
Finance Committee of the National Association of Water Companies and
President of the Northern New England chapter of the Financial Executives
Institute. Mr. Staab also serves as Vice President and Treasurer of
Pennichuck Water Works, Inc., The Southwood Corporation and Pennichuck Water
Service Corporation.
Davis P. Thurber - Mr. Thurber is Chairman of the Bank of New
Hampshire Corporation of Manchester, New Hampshire and since April 1996, he
has been a Director of Peoples Heritage Financial Group, Inc. of Portland,
Maine. He has been affiliated with the Bank of New Hampshire since 1949 and
served as its President from March 1981 to April 1996. He is a trustee of
the Charles H. Nutt Surgical Hospital, Nashua, New Hampshire.
Bonalyn J. Hartley - Ms. Hartley has been with the Company since 1979
and was elected Vice President-Controller of the Company, Pennichuck Water
Works, Inc. and The Southwood Corporation in 1991. She is also a director
and officer of Pennichuck Water Service Corporation. She is a graduate of
Rivier College with a Bachelor of Science Degree in Business Management.
Ms. Hartley serves as a Director and past Chairperson of Home Health and
Hospice Care of Nashua and Merrimack, New Hampshire, a trustee of Southern
New Hampshire Regional Medical Center and a Trustee of the YWCA in Nashua,
New Hampshire. She is also a Director of the New England Chapter of the
National Association of Water Companies and a member of the New England
Water Works Association. Ms. Hartley is 52 years old.
Donald L. Ware - Mr. Ware is Vice President of Engineering for the
Company. He joined the Company in April 1995 and also serves as the Vice
President of Engineering for Pennichuck Water Works, Inc. and The Southwood
Corporation . Prior to joining the Company, Mr. Ware was the general manager
of the Augusta Water District in Augusta, Maine. He holds a Bachelor of
Science degree in Civil Engineering from Bucknell University and is a
licensed professional engineer in New Hampshire and Maine. Mr. Ware is 39
years old.
During the year ended December 31, 1996, the Board of Directors of the
Company held seven meetings. The Board of Directors has established an
Audit Committee, a Compensation and Benefits Committee and a Nominating
Committee. These committees served the specific functions, and held the
number of meetings, as described below. Each director nominee and
continuing director, except for Mr. Thurber, attended 75% or more of the
total of the number of meetings of the Board of Directors and the number of
meetings of all committees of the Board on which he or she served.
Audit Committee
The Audit Committee, presently comprised of Messrs. Keller and
Bellavance and Ms. McCarthy, met twice in 1996. The Audit Committee is
required to recommend an independent firm to serve as the Company's auditors
and to review with such firm the scope of its audit and its findings with
respect thereto.
Compensation and Benefits Committee
The Compensation and Benefits Committee, comprised of Messrs. Clough,
Clancy and Keller, held four meetings in 1996. The Compensation and
Benefits Committee is charged generally (i) to establish compensation for
employees of the Company, (ii) to monitor the operation of the Company's
qualified noncontributory, defined benefit pension plan and the Company's
Savings Plan for Employees and the performance of the trustee and
administrator of these Plans, and to recommend changes to the Board, as and
when appropriate, and (iii) to administer the Company's 1985 and 1995 Stock
Option Plans.
Nominating Committee
The Nominating Committee, comprised of Messrs. Bellavance and Thurber
and Ms. McCarthy, met once during 1996. The Nominating Committee is charged
generally with recommending for nomination to the Board of Directors, and as
officers of the Company, those available individuals who are best qualified
to serve in such capacities. The Nominating Committee will consider
recommending names submitted by shareholders for nomination as Directors
provided that such names are delivered to the Secretary of the Company by
December 15 preceding the annual meeting at which such nominations will be
acted upon.
Compensation of Directors
The Directors of the Company currently receive a fee of $6,000
annually and $600 for each Board and committee meeting they attend. Each
Committee Chairman also receives an additional $1,500 annually. Directors
who are also salaried employees of the Company do not receive any separate
compensation for services as a Director of the Company or of its
subsidiaries.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and beneficial owners of more than ten
percent of the Company's common stock, to file reports of ownership and
changes in ownership of such common stock with the Securities and Exchange
Commission ("SEC"). Generally, these persons must file such reports at the
time they first become subject to Section 16(a) reporting, and thereafter on
a monthly basis following a change in ownership, if any. Officers,
directors and such greater than ten percent shareholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) reports
they file. The Company is required by SEC regulation to identify in its
proxy statement those individuals for whom one of the referenced reports was
not filed on a timely basis during the most recent fiscal year or prior
fiscal years.
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company, and written representations from each
of such persons that no other reports were required, the Company believes
that during the fiscal year ended December 31, 1996, all Section 16(a)
filing requirements applicable to its officers, directors and greater than
ten percent beneficial owners were complied with on a timely basis.
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
Executive Officers
The following table sets forth information for the fiscal years ended
December 31, 1996, 1995 and 1994 concerning the compensation paid to the
Chief Executive Officer and the other highest paid executive officer ("Named
Executive Officer") for services performed in all capacities; no other
executive officer of the Company received total cash compensation in excess
of $100,000 during the fiscal year ended December 31, 1996.
<TABLE>
<CAPTION>
Securities
Name and Principal Fiscal Year Underlying All Other
Position End Dec 31 Salary Bonus (1) Other (2) Options Compensation (3)
- ------------------ ----------- ------ --------- --------- ---------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Maurice L. Arel,
President and Chief
Executive Officer 1996 $133,006 $33,551 -0- 1,000 $36,902
1995 $128,250 $15,384 -0- 2,000 $36,136
1994 $123,387 $14,558 -0- 2,000 $35,949
Stephen J. Densberger,
Executive Vice President 1996 $ 87,050 $14,360 -0- 500 $ 3,314
1995 $ 83,021 $ 7,521 -0- 1,500 $ 2,938
1994 $ 80,561 $ 7,925 -0- 1,500 $ 1,855
- --------------------
<F1> Bonus awards for services rendered during such year and paid in the
following year.
<F2> No information is given with respect to other compensation paid to or
distributed in kind where such compensation did not exceed the lesser
of $50,000 or 10% of the total reported salary and bonus.
<F3> For the fiscal years ended December 31, 1996, 1995 and 1994,
respectively, for Mr. Arel includes (i) the cost to the Company for
the purchase of a term life insurance policy ($2,102, $2,192 and
$2,192), (ii) Company contributions to the elective Savings Plan for
Employees of Pennichuck Corporation ($4,530, $4,209 and $4,022) and
(iii) Company contributions to insurance premium paid with respect to
Insurance Funded Deferred Compensation Agreement ($30,270, $29,735 and
$29,735). For fiscal years ended December 31, 1996, 1995 and 1994,
respectively, for Mr. Densberger includes (i) the cost to the Company
for the purchase of a term life insurance policy ($477, $442 and $442)
and (ii) Company contributions to the elective Savings Plan for
Employees of Pennichuck Corporation ($2,837, $2,496 and $1,413).
</TABLE>
Stock Option Grants During the Fiscal Year Ended December 31, 1996
The following table sets forth information concerning the grant of
stock options to acquire shares of the Company's common stock under the 1995
Stock Option Plan to the Chief Executive Officer and the Named Executive
Officer during the fiscal year ended December 31, 1996.
<TABLE>
<CAPTION>
Individual Grants (1)
Number of ------------------------
Securities Percent of Total
Underlying Options Granted to Exercise Expiration
Name Options Granted Employees in Fiscal Year Price($/Share) Date
- ---- --------------- ------------------------ -------------- ----------
<S> <C> <C> <C> <C>
Maurice L. Arel 1,000 22% $17.25 Jan 12, 2006
Stephen J. Densberger 500 11% $17.25 Jan 12, 2006
- --------------------
<F1> The exercise price of the options granted is equal to the fair market
value of the Company's common stock on the date of grant. The options
are exercisable on the date of the grant and expire ten years
thereafter.
</TABLE>
Stock Option Exercises and Fiscal Year End Values
The following table sets forth information concerning the exercise of
stock options by the Chief Executive Officer and the Named Executive Officer
during the fiscal year ended December 31, 1996, and the number and value of
unexercised options held by those officers at fiscal year end. The value of
unexercised, in-the-money options at December 31, 1996, is the difference
between its exercise price and the fair market value of the underlying stock
on such date. These values have not been, and may never be, realized. The
underlying options have not been, and may never be, exercised; and actual
gains, if any, on exercise will depend on the value of Company common stock
on the date of exercise.
<TABLE>
<CAPTION>
Value of Unexercised In-the-
Number of Unexcercised Money Options at Fiscal Year
Shares Options at Fiscal Year End End (1)
Acquired Value ---------------------------- ----------------------------
Name On Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Maurice L. Arel -0- -0- 6,000 -0- $8,750 -0-
Stephen J. Densberger -0- -0- 4,100 -0- $6,000 -0-
- --------------------
<F1> The closing bid price of the Company's common stock as reported on the
Nasdaq National Market System on December 31, 1996 was $16.25 per
share and is used in calculating the value of unexercised options.
</TABLE>
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
The Board of Directors, as recommended by its Audit Committee, has
appointed Arthur Andersen LLP as the independent accountants for the Company
for the fiscal year ending December 31, 1997, subject to ratification of the
shareholders. The Board of Directors recommends a vote FOR the ratification
of the appointment of Arthur Andersen LLP as independent accountants for the
Company to audit the books and accounts of the Company for the fiscal year
ending December 31, 1997. No determination has been made as to what action
the Board of Directors would take if the shareholders do not ratify the
appointment. Representatives of Arthur Andersen LLP will be in attendance
at the Annual Meeting and will have the opportunity to make a statement,
should they desire to do so, and are expected to be available to respond to
questions.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Maurice L. Arel, the Company's President and Chief Executive Officer,
is a director of Fleet Bank-NH. The Company has available a $4,500,000
unsecured line of credit with Fleet Bank-NH at the bank's base lending rate.
At December 31, 1996, the outstanding balance on this line of credit was
$3,195,000. The Company also maintains its primary depository and
disbursing accounts with Fleet Bank-NH.
SHAREHOLDERS' PROPOSALS
Shareholders who desire to present proposals for consideration by the
Company's shareholders at the next Annual Meeting of Shareholders, which
will be held on or about April 17, 1998, will be required to advise the
Company in writing of the proposal on or prior to December 1, 1997.
OTHER MATTERS
The Board of Directors knows of no business which will be presented
for consideration at the Annual Meeting other than those items set forth in
the Proxy Statement. The enclosed proxy confers upon each person entitled
to vote the shares represented thereby discretionary authority to vote such
shares in accordance with his or her best judgment with respect to any other
matters which may properly be presented for action at the meeting.
FIRST SIDE OF PROXY CARD
PENNICHUCK CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Pennichuck Corporation ("Company")
hereby appoints Frank B. Clancy and Charles E. Clough, and each of them,
with full power of substitution in each, as proxies for the undersigned to
vote, as designated below, all shares of common stock of the Company which
the undersigned is entitled to vote at the Annual Meeting of Shareholders to
be held at 3:00 p.m. on Friday April 18, 1997 at the Nashua Marriot Hotel,
2200 Southwood Drive, Nashua, New Hampshire, or any adjournments thereof.
This proxy when properly executed will be voted as directed by the
undersigned shareholder. UNLESS CONTRARY DIRECTION IS GIVEN, THIS PROXY WILL
BE VOTED FOR ALL PROPOSALS. The undersigned shareholder may revoke this
proxy at any time before it is voted by delivering to the Secretary of the
Company at 4 Water Street, Nashua, New Hampshire, either a written
revocation of the proxy or a duly executed substitute bearing a later date,
or by appearing at the Annual Meeting and voting in person. The undersigned
shareholder hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders and the accompanying Proxy Statement.
If you receive more than one proxy card, please sign and return all
cards in the accompanying envelope.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
----------------------
| SEE REVERSE SIDE |
----------------------
SECOND SIDE OF PROXY CARD
[x] Please mark
votes as in
this example.
The Board of Directors recommends a vote "FOR" Proposals 1 and 2.
1. Election of Directors
Nominees: Maurice L. Arel, Joseph A. Bellavance and Robert P. Keller
[ ] FOR [ ] WITHHELD
[ ] _________________________________
For all nominees except as noted above
FOR AGAINST ABSTAIN
2. Proposal to ratify the appointment by [ ] [ ] [ ]
the Board of Directors of Arthur
Andersen LLP as independent
accountants of the Company for the
fiscal year ending December 31, 1997.
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting of Shareholders, or
any adjournments thereof.
MARK HERE [ ]
FOR ADDRESS
CHANGE AND
NOTE AT LEFT
IMPORTANT: THIS IS YOUR PROXY. Please date, sign and return this proxy
promptly in the enclosed envelope.
Please sign exactly as your name appears on the envelope in which this card
was mailed. When signing as attorney, executor, administrator, trustee or
guardian, please give your full title. If shares are held jointly, each
holder should sign.
Signature: ______________ Date: _____ Signature: ______________ Date: ____
