PENNICHUCK CORPORATION
4 Water Street
Nashua, New Hampshire 03061
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Friday, April 17,1998
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 17, 1998, 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, 1998; 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 11,
1998 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 17, 1998
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 17,1998
GENERAL INFORMATION
This Proxy Statement and the accompanying proxy are being mailed to
shareholders beginning on or about March 17, 1998. 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 17, 1998, 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 11,
1998. Shareholders are not entitled to cumulate their votes. On March 11,
1998, 810,933 shares of common stock of the Company were issued and
outstanding, all of which were entitled to vote, and 2,956 shares were held
as treasury stock.
A copy of the Annual Report to Shareholders for the year ended
December 31, 1997 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, 1998. 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, there were no person(s) or group
of persons, as defined in Section 13(d)(3) of the Securities Exchange Act of
1934, as amended, who beneficially owned more than 5% of the Company's
outstanding common stock as of February 27, 1998.
Security Ownership of Management
To the best knowledge of the Company, the following table sets forth
information as of February 27, 1998 with respect to the shares of the
Company's common stock beneficially owned by each nominee and director, and
by all nominees, directors and officers as a group:
<TABLE>
<CAPTION>
Amount and % of Common
Nature of Stock Out-
Beneficial standing (if
Name of Beneficial Owner Ownership(1)(3) more than 1%)(2)
------------------------------------------------------------------
<S> <C> <C>
Maurice L. Arel(3)(5) 18,704 2.2%
Joseph A. Bellavance(3)(4) 6,608 -
Charles E. Clough 9,983 1.2%
Stephen J. Densberger(3)(5) 7,120 -
Robert P. Keller 779 -
John R. Kreick 100 -
Hannah M. McCarthy 100 -
Martha E. O'Neill(6) 11,351 1.4%
Charles J. Staab(3)(5) 6,220 -
All directors and
officers as a group
(12 persons)(3)(5) 68,604 8.1%
- --------------------
<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 February 27, 1998. 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 842,058 shares,
which total includes shares outstanding and entitled to vote of
810,933, plus 31,125 shares which have not been issued but which may
be issued within 60 days of February 27, 1998 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 (6) 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. Kreick - 100
shares, Mr. Staab - 1,420 shares, and non-director officers as a
group - 1,009 shares.
<F4> Mr. Bellavance disclaims beneficial ownership of 989 of these shares.
<F5> Includes shares subject to unexercised stock options previously
granted which officers have a right to acquire within 60 days of
February 27, 1998. Mr. Arel holds options to acquire 8,000 shares,
Mr. Densberger holds options to acquire 5,000 shares, Mr. Staab
holds options to acquire 4,200 shares and the officers of the
Company as a group hold options to acquire a total of 23,100 shares
within 60 days of February 27, 1998.
<F6> Includes 5,478 shares owned by the Charles H. Nutt Surgical Hospital
Trust, of which Ms. O'Neill is a trustee. Ms. O'Neill shares voting
and investment power with the other Trustees over these shares. Ms.
O'Neill disclaims beneficial ownership of these shares.
</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 Charles E. Clough, John R. Kreick and Martha E. O'Neill for
election to three-year terms expiring at the Annual Meeting of Shareholders
in 2001. Mr. Clough is an incumbent director whose term expires this year
while Mr. Kreick and Ms. O'Neill are nominees who will be replacing Frank B.
Clancy and Davis P. Thurber as directors. Messrs. Clancy and Thurber, who
have served on the Company's Board for 23 and 15 years, respectively, are
retiring from the Board in accordance with the Company's mandatory
retirement age of 70.
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>
Charles E. Clough 67 1968 1998 --
John R. Kreick 53 N/A
Martha E. O'Neill 40 N/A
Continuing Directors(1)
- -----------------------
Hannah M. McCarthy 51 1994 1999 --
Stephen J. Densberger 47 1986 1999 Executive
Vice President
Charles J. Staab 48 1986 1999 Vice President-
Treasurer
Maurice L. Arel 60 1984 2000 President and
Chief Executive
Officer
Joseph A. Bellavance 58 1983 2000 --
Robert P. Keller 60 1983 2000 --
- --------------------
<F1> Except for Messrs. Densberger and Staab, all continuing directors
(including Mr. Clough) 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 other wholly-owned subsidiaries,
Pennichuck Water Service Corporation, Pennichuck East Utility, Inc.
and Pittsfield Aqueduct Company, Inc.
</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 Chairman and a director of
Pittsfield Aqueduct Company, Inc. 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 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.
Charles E. Clough - Mr. Clough is currently President of Freedom
Partners, 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 Aldermen. 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. He is a
director and President of Pittsfield Aqueduct Company and a director of
Pennichuck East Utility, Inc. 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. and Eldorado Bank of Laguna Hills, California. He is
also a director of Freedom Partners, LLC, White Mountain Holdings, Inc. and
Centricut, Inc.
John R. Kreick - Dr. Kreick served as President of Sanders Associates
and as a vice president of the Lockheed Martin Corporation from January 1988
until March 1998. Dr. Kreick received his Bachelor of Science degree in
physics from the University of Michigan in 1965. As a Rackman graduate
fellow, he worked at University's Space Physics Research Laboratory and
received his Masters of Science degree in physics in 1966. He received his
Ph.D. in theoretical physics from the University of Michigan in 1969 and he
holds eight patents in infrared and electro-optical technology. Dr. Kreick
is a member of the National Research Council's Commission of Physical
Sciences, Mathematics and Applications; a trustee of Rivier College; a
member of the board of directors of the New England Council; and has served
on numerous Department of Defense panels and committees. In 1993, Dr. Kreick
received the Electronic Warfare Association's highest award - the Gold Medal
of Electronic Warfare and a recipient of Aviation Week magazine's Aerospace
Laurels Award for his long-term contributions to electronic warfare.
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 BA 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.
Martha E. O'Neill - Ms. O'Neill has been practicing as an attorney
with the law firm of Clancy & O'Neill, P. A. in Nashua since 1982. She is a
graduate of Wellesley College and Georgetown University Law Center. Ms.
O'Neill serves on the Rivier College Board of Trustees, Rivier College
Paralegal Department Advisory Board, Mary A. Sweeney Home Board of Trustees,
Charles H. Nutt Surgical Hospital Board and the Boys and Girls Club of
Greater Nashua, Inc. Charitable Foundation Board of Trustees.
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
Children's Association and the United Way of Greater Nashua, a member of the
Finance Committee of the National Association of Water Companies and former
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. and The Southwood Corporation. He is treasurer
and a director of Pennichuck Water Service Corporation, Pennichuck East
Utility, Inc. and the Pittsfield Aqueduct Company.
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 controller
and a director of Pennichuck Water Service Corporation, Pennichuck East
Utility, Inc. and Pittsfield Aqueduct Company. She is a graduate of Rivier
College with a Bachelor of Science Degree in Business Management. Ms.
Hartley serves as a trustee of the Southern New Hampshire Regional Medical
Center and as a director of the Rivier College Alumni Association. 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 53 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. He is also a vice president and director of Pennichuck Water
Service Corporation, Pennichuck East Utility, Inc. and Pittsfield Aqueduct
Company, Inc. 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, Massachusetts and Maine.
Mr. Ware is 40 years old.
During the year ended December 31, 1997, 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 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 1997. 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, did not meet during 1997. 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 1997. 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, 1997, 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, except
Messrs. Arel and Ware, each of whom did not file a Form 4 with respect to
the exercise of certain stock options during 1997. However, each such person
reported this transaction on a Form 5 report filed on February 10, 1998.
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
Executive Officers
The following table sets forth information for the fiscal years ended
December 31, 1997, 1996 and 1995 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, 1997.
<TABLE>
<CAPTION>
Securities
Name and Fiscal Year Underlying All Other
Principal 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 1997 $143,125 $37,512 -0- 1,000 $38,862
1996 $133,005 $33,551 -0- 1,000 $36,902
1995 $128,250 $15,384 -0- 2,000 $36,136
Stephen J. Densberger,
Executive Vice
President 1997 $ 90,742 $15,503 -0- 500 $ 3,966
1996 $ 87,050 $14,360 -0- 500 $ 3,314
1995 $ 83,021 $ 7,521 -0- 1,500 $ 2,938
- --------------------
<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, 1997, 1996 and 1995,
respectively, for Mr. Arel includes (i) the cost to the Company for
the purchase of a term life insurance policy ($3,041, $2,102 and
$2,192), (ii) Company contributions to the elective Savings Plan for
Employees of Pennichuck Corporation ($5,300, $4,530, and $4,209) and
(iii) Company contributions to insurance premium paid with respect
to Insurance Funded Deferred Compensation Agreement ($30,521,
$30,270 and $29,735). For fiscal years ended December 31, 1997, 1996
and 1995, respectively, for Mr. Densberger includes (i) the cost to
the Company for the purchase of a term life insurance policy ($813,
$477 and $442) and (ii) Company contributions to the elective
Savings Plan for Employees of Pennichuck Corporation ($3,153, $2,837
and $2,496).
</TABLE>
Stock Option Grants During the Fiscal Year Ended December 31, 1997
The following table sets forth information concerning the grant of
stock options to acquire shares of the Company's common stock under the 1995
Stock Option Plan to the Chief Executive Officer and the Named Executive
Officer during the fiscal year ended December 31, 1997.
<TABLE>
<CAPTION>
Individual Grants (1)
Number of ------------------------
Securities Percent of Total
Underlying Options Granted to Exercise Expiration
Name Options Granted Employees in Fiscal Year Price($/Share) Date
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Maurice L. Arel 1,000 22% $16.25 Jan 10, 2007
Stephen J. Densberger 500 11% $16.25 Jan 10, 2007
- --------------------
<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, 1997, and the number and value of
unexercised options held by those officers at fiscal year end. The value
realized on the shares acquired on exercise is the difference between the
exercise price and the fair market value on the date of exercise. The value
of unexercised, in-the-money options at December 31, 1997, 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
Number of Unexercised In-the-Money Options
Shares Options at Fiscal Year End at Fiscal Year End(1)
Acquired Value -------------------------- ---------------------------
Name On Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Maurice L. Arel 500 $2,750 6,500 -0- $30,250 -0-
Stephen J. Densberger -0- -0- 4,600 -0- $22,750 -0-
- --------------------
<F1> The average of the closing bid and ask prices of the Company's common
stock as reported on the Over-the-Counter Bulletin Board on December
31, 1997 was $20.00 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, 1998, 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, 1998. 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 interest rates tied to the
Bank's cost of funds. At December 31, 1997, the outstanding balance on this
line of credit was $3,680,000. 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 16, 1999, will be required to advise the
Company in writing of the proposal on or prior to December 1, 1998.
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.
DETACH HERE
PROXY
PENNICHUCK CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Pennichuck Corporation ("Company")
hereby appoints Robert P. Keller 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 17, 1998 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.
SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE SIDE
The Board of Directors Recommends a vote "FOR" Proposals 1 and 2.
1. Election of Directors.
Nominees: Charles E. Clough, John R. Kreick and Martha E. O'Neill
[ ] FOR [ ] WITHHELD
[ ]
For all nominees except as noted above
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, 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting 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:
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