SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
PROVIDENCE AND WORCESTER RAILROAD COMPANY
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)
(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how
it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a) (2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party
4) Date Filed:
<PAGE>
PROVIDENCE AND WORCESTER RAILROAD COMPANY
75 Hammond Street
Worcester, Massachusetts 01610
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 30, 1997
PLEASE TAKE NOTICE that the 1997 annual meeting of the
shareholders of Providence and Worcester Railroad Company (the
"Company") will be held at the Holiday Inn, 500 Lincoln Street,
Worcester, Massachusetts, on Wednesday, April 30, 1997 at 10:00
o'clock A.M., local time, for the following purposes:
(1) To elect 4 directors (by the holders of Common Stock
only) and 7 directors (by the holders of Preferred Stock
only) to serve for terms of one year and until their
successors are elected and qualified;
(2) To approve the appointment of Deloitte & Touche LLP as
independent auditors of the accounts of the Company for 1997
(by the holders of Common Stock and Preferred Stock, voting
as separate classes);
(3) To approve the Company's Employee Stock Purchase Plan,
as described in the accompanying proxy statement (by the
holders of Common Stock and Preferred Stock, voting as
separate classes); and
(4) To transact such other business, if any, as may properly
come before the meeting or any adjournment or adjournments
thereof (by the holders of Common Stock and Preferred Stock,
voting as separate classes).
Holders of record of the Common Stock or Preferred Stock
on the books of the Company as of the close of business on
February 28, 1997 will be entitled to vote.
By Order of the Board of Directors
HEIDI J. EDDINS
Secretary and General Counsel
PROVIDENCE AND WORCESTER RAILROAD COMPANY
Worcester, Massachusetts
March 18, 1997
If you are the holder of record of only one class of the
Company's capital stock, only one proxy card is enclosed. If you
are the holder of record of both Common Stock and Preferred
Stock, two proxy cards are enclosed. Kindly fill in, date and
sign the enclosed proxy card(s) and promptly return the same in
the enclosed addressed envelope, which requires no postage if
mailed in the United States. If you are personally present at
the meeting, the proxy or proxies will not be used without your
consent.
<PAGE>
PROVIDENCE AND WORCESTER RAILROAD COMPANY
PROXY STATEMENT
Annual Meeting of Shareholders
April 30, 1997
SOLICITATION AND REVOCATION OF PROXIES
The accompanying proxy or proxies are solicited by the
Board of Directors of Providence and Worcester Railroad Company
(herein called the "Company"), in connection with the annual
meeting of the shareholders to be held April 30, 1997; the
Company will bear the cost of such solicitation. It is expected
that the solicitation of proxies will be primarily by mail.
Proxies may also be solicited personally by regular employees of
the Company at nominal cost. The Company may reimburse brokerage
houses and other custodians, nominees and fiduciaries holding
stock for others in their names, or in those of their nominees,
for their reasonable out-of-pocket expenses in sending proxy
materials to their principals or beneficial owners and obtaining
their proxies. Any shareholder giving a proxy has the power to
revoke it at any time prior to its exercise, but the revocation
of a proxy will not be effective until notice thereof has been
given to the Secretary of the Company. Notice of revocation may
be delivered in writing to the Secretary prior to the meeting or
may be transmitted orally to the Secretary at the meeting. Every
properly signed proxy will be voted in accordance with the
specifications made thereon.
This proxy statement and the accompanying proxy or proxies
are expected to be first sent to shareholders on March 18, 1997.
VOTING AT MEETING
Only shareholders of record at the close of business on
February 28, 1997 will be entitled to vote at the meeting. Under
the Company's charter, the holders of the Company's Common Stock,
voting separately as a class, are entitled to one vote for each
share held in the election of one-third (1/3) of the Board of
Directors of the Company proposed to be elected at the meeting.
The holders of the Company's Preferred Stock, voting separately
as a class, are entitled to one vote for each share held in the
election of the balance of the Board of Directors proposed to be
elected at the meeting. The holders of the Company's Common
Stock and the holders of the Company's Preferred Stock are
entitled to one vote per share, voting as separate classes and
not together, upon all other matters presented to the
shareholders for their approval.
Common Stock directors will be elected in each case by vote
of the holders of a majority of the Common Stock present or
represented at the meeting, and the Preferred Stock directors
will be similarly elected by the holders of a majority of the
Preferred Stock.
Shares represented by proxies which are marked "withhold
authority" with respect to the election of any particular nominee
for director, "abstain" with respect to any other matter, or to
deny discretionary authority on any other matters will be counted
as shares present and entitled to vote, and accordingly any such
marking of a proxy will have the same effect as a vote against
the proposal to which it relates.
<PAGE>
Brokers who hold shares in street name may lack authority
to vote such shares on certain items, absent specific
instructions from their customers. Shares subject to such "broker
non-votes" will not be treated as shares entitled to vote on the
matters to which they relate and therefore will be treated as not
present at the meeting for those purposes, but otherwise will
have no effect on the outcome of the voting on such matters. It
is not presently anticipated that any matter which might be the
subject of a "broker non-vote" will come before the annual meeting.
On the record date, there were 2,189,799 shares of the
Company's Common Stock and 653 shares of the Company's Preferred
Stock outstanding.
ELECTION OF DIRECTORS
At the annual meeting, 4 Common Stock directors and 7
Preferred Stock directors are to be elected, and each will hold
office until the next annual meeting and until his successor is
elected and qualified. The proxies named in the accompanying
proxy or proxies, who have been designated by the Board of
Directors, intend to vote, unless otherwise instructed, for the
election to the Board of Directors of the persons named below,
all of whom are now directors of the Company. Certain
information concerning such nominees is set forth below:
<TABLE>
<S> <C> <C>
Principal Occupation Director
Name and Age During Past Five Years Since
Common Stock Director Nominees:
Robert H. Eder (64) Chairman of the Company 1965
Ronald P. Chrzanowski (54) Vice President of the Company 1989
William J. LeDoux (65) Attorney 1990
Charles M. McCollam, Jr. (64) President, Bertha M. McCollam, 1996
Inc. (insurance) and President,
McCollam Associates (consultant)
Preferred Stock Director Nominees:
Orville R. Harrold (64) President of the Company 1978
Frank W. Barrett (57) Executive Vice President, 1995
Springfield Institution for
Savings
Phillip D. Brown (53) President and CEO, Unibank for 1995
Savings
John H. Cronin (63) Retired; until September 1995, 1986
President, Ideal Products, Inc.
(restaurant supplies)
Robert J. Easton (53) Treasurer of the Company 1989
J. Joseph Garrahy (66) President, J. Joseph Garrahy & 1992
Associates, Inc.
(business consultants)
John J. Healy (60) President of Worcester 1991
Affiliated Mfg. L.L.C.
(Mfg. Consultant)
(prior to January 1997,
President and Chief
Executive Officer, HMA
Behavioral Health, Inc.)
</TABLE>
<PAGE>
Dates of directorships include directorships of the
Company's predecessors.
Mr. Eder is also a director of Capital Properties, Inc.
(a real estate holding company).
Mr. Garrahy is also a director of Grove Investment Company.
Mr. Barrett is also a director of Dairy Mart Convenience
Store, Inc.
Except as noted in the above table, all of the present
directors and nominees have been engaged in their present
principal occupations in the same or similar capacities during
the past five years.
In 1996, the Board created a Stock Option & Compensation
Committee currently comprised of William J. LeDoux, Chairman,
John J. Healy, and Frank W. Barrett.
The Board of Directors has an Audit Committee currently
comprised of John H. Cronin, Chairman, J. Joseph Garrahy, and
Phillip D. Brown. The Audit Committee is primarily responsible
for overseeing the Company's internal accounting procedures and
its relationship with its independent auditors. The Board does
not have a nominating committee.
The Board of Directors held four meetings; the Audit
Committee held three meetings and the Stock Option & Compensation
Committee held one meeting during the fiscal year ended December
31, 1996.
During the fiscal year ended December 31, 1996, each
director who was not an employee of the Company received a base
fee of $500 for each attended meeting of the Board of Directors
plus $50 per attended meeting for each year of service as a
director, and each member of the Audit Committee and the Stock
Option & Compensation Committee received $300 for each attended
meeting of the committee (other than the Chairman, who received
$350).
During the month of January of each year, directors of the
Company who were serving as such on the preceding December 31 and
are not fulltime employees of the Company are granted options for
the purchase of 100 shares of the Common Stock of the Company,
plus options for an additional ten shares for each full year of
service to the Company. The exercise price is the last sale
price of the Common Stock on the last business day of the
preceding year, and the term of each option is ten years (subject
to earlier termination if the grantee ceases to serve as a
director), provided, no option is exercisable within six months
following the date of grant.
<PAGE>
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid or
accrued by the Company to its Chief Executive Officer and each of
its four most highly compensated executive officers who earned
more than $100,000 in salary and bonus in 1996, for services
rendered in all capacities to the Company during 1996.
SUMMARY COMPENSATION TABLE
Annual Compensation
<TABLE>
<S> <C> <C> <C> <C>
Long Term
Compensation
Awards
Name and Securities All Other
Principal Underlying Compensation
Position Year Salary($) Options/SARs (#) ($)(1)
Robert H. Eder 1996 $289,216 - $47,617
Chairman and 1995 $272,513 - $48,117
Chief Executive 1994 $265,002 - $47,413
Officer
Orville R. Harrold 1996 $231,787 932 $40,508
President 1995 $222,421 888 $40,510
1994 $203,962 877 $39,784
Ronald P. 1996 $129.059 451 $ 9,066
Chrzanowski 1995 $123,003 448 $ 7,396
Vice President 1994 $118,804 463 $ 7,160
Heidi J. Eddins 1996 $133,997 313 $ 9,381
Secretary and 1995 $127,444 301 $ 7,713
General Counsel 1994 $118,658 268 $ 7,203
Robert J. Easton 1996 $120,191 210 $ 8,430
Treasurer 1995 $113,706 203 $ 6,880
1994 $107,136 244 $ 6,474
</TABLE>
(1) Includes (i) premiums paid for life insurance coverage and
(ii) amounts paid directly to the accounts of officers under
the Company's simplified employee pension plan, as follows:
<TABLE>
<S> <C> <C>
Life Insurance Premiums Employee Pension Plan
Mr. Eder $37,117 $10,500
Mr. Harrold $30,008 $10,500
Mr. Chrzanowski $ 9,066
Mrs. Eddins $ 9,381
Mr. Easton $ 8,430
<PAGE>
Option/SAR Grants in Last Fiscal Year(1)
</TABLE>
<TABLE>
Individual Grants
Number of
Securities % of Total
Underlying Options/SARs
Options/ Granted to Exercise or
SARs Employee in Base Price Expiration
Name Granted (#) Fiscal Year ($/Share) Date(2)
<S> <C> <C> <C> <C>
Orville R. Harrold 932 13% $6.88 January 2, 2006
Ronald P. 451 6% $6.88 January 2,2006
Chrzanowski
Heidi J. Eddins 313 4% $6.88 January 2,2006
Robert J. Easton 210 3% $6.88 January 2,2006
</TABLE>
(1) An "SAR" is a stock appreciation right, a form of incentive
compensation usually based on increases in the market value of a
company's publicly traded stock. The Company does not grant
SARs, but it does grant options for shares of its Common Stock
under its Non-Qualified Stock Option Plan.
(2) All options are fully exercisable during the period July 2,
1996-January 2, 2006, subject to earlier termination in the event
of the termination of the grantee's employment.
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal
Year-End Option/SAR Values
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs at
at FY-End (#) FY-End ($)
<TABLE>
Shares
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($)(1) Unexercisable(2) Unexercisable(3)
<S> <C> <C> <C> <C>
Orville R. 587 $ 448 1,593 $ 272
Harrold
Ronald P. 451 $ 452 417 $ 0
Chrzanowski
Heidi J. Eddins 50 $ 19 843 $ 383
Robert J. Easton 187 $ 234 830 $ 478
</TABLE>
(1) Based on the last sale price of the Common Stock on the
date of exercise minus the exercise price.
(2) All options are presently exercisable.
(3) Based on the last sale price of the Common Stock on
December 31, 1996 minus the exercise price.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table set forth below reflects the only persons
(including any "group" as that term is used in Section 13(d)(3)
of the Securities Exchange Act of 1934) who, to the best of the
Company's knowledge, were on February 28, 1997 the beneficial
owners of more than five percent of the Company's outstanding
Common Stock, $.50 par value, or Preferred Stock, $50 par value.
Each share of the Company's outstanding Preferred Stock is
convertible at any time, at the option of the holder, into one
hundred shares of Common Stock of the Company. Footnote 1 to the
table below sets forth the percentages of the outstanding Common
Stock which would be held by the indicated owners if such owners'
Preferred Stock were converted in whole into Common Stock.
Name and Address Number of Shares Percent of Class
<TABLE>
<S> <C> <C>
Robert H. and Linda Eder 996,492(Common) 46% (1)
2441 S.E. Bahia Way 500(Preferred) 77%
Stuart, Florida 34996
Massachusetts Capital Resource 200,000(Common) (2) 8.4% (2)
Company (MCRC)
420 Boylston Street
Boston, Massachusetts 02116
</TABLE>
(1) Assuming no conversion of Preferred Stock. If their
Preferred Stock were converted in whole to Common Stock, Mr. and
Mrs. Eder would own 48% of the outstanding Common Stock.
(2) Represents 200,000 shares issuable upon exercise of
Common Stock Purchase Warrant.
Of the shares owned by Mr. and Mrs. Eder, 921,912 Common
shares and 500 Preferred shares were held directly by Mr. Eder,
and 74,580 Common shares were held directly by Mrs. Eder. By
reason of their ownership, Mr. and Mrs. Eder may be deemed to be
"control persons" with respect to the Company.
The following table reflects as of February 28, 1997, the
beneficial ownership of shares of Common Stock and Preferred
Stock of the Company by directors, nominees for director and
officers of the Company, all shares being owned directly except
as otherwise noted:
<TABLE>
Name of Individual Common Shares Common Shares Percent of
Identification of Group Owned (1) Subject to Options (2) Class (1)
<S> <C> <C> <C>
Frank W. Barrett 500 - *
Phillip D. Brown 100 - *
Ronald P. Chrzanowski 4,441 417 *
John H. Cronin 1,210 100 *
Robert J. Easton 1,003(a) 830 *
Heidi J. Eddins 2,641(b) 575 *
Robert H. Eder See "Security Ownership of Certain Beneficial Owners and
Management", above.
J. Joseph Garrahy 620 240 *
Orville R. Harrold 19,852(c) 1,593 *
John J. Healy 300 390 *
William J. LeDoux 600 720 *
Charles M. McCollam, Jr 100 - *
All directors and officers
as a group (12 persons) 1,027,859 4,865 47%
</TABLE>
<PAGE>
(1) Assumes no conversion of Preferred Stock and excludes shares
which may be acquired by the exercise of options.
(2) Includes options exercisable within 60 days.
* Less than 1%
(a) Includes 18 shares held by Mr. Easton's wife in her name.
(b) Includes 700 shares held by Mrs. Eddins' minor children
under the Uniform Gift to Minors Act.
(c) Includes 1700 Common shares held by Mr. Harrold's wife in
her own name, and 2600 Common shares held by a custodian in
an individual retirement account for the benefit of Mr.
Harrold.
COMPLIANCE WITH SECTION 16 (a) OF THE SECURITIES EXCHANGE ACT OF
1934
Section 16(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), requires the Company's officers,
directors and persons who beneficially own more than ten percent
of a registered class of the Company's equity securities to file
reports of securities ownership and changes in such ownership
with the Securities and Exchange Commission. Officers, directors
and greater than ten-percent beneficial owners also are required
by rules promulgated by the Securities and Exchange Commission to
furnish the Company with copies of all Section 16(a) forms they
file.
Based solely upon a review of the copies of such forms
furnished to the Company or written representations that no Form
5 filings were required, the Company believes that during 1996
its officers, directors and greater than ten-percent beneficial
owners complied with all applicable Section 16(a) filing
requirements.
CERTAIN TRANSACTIONS
In 1988, in accordance with a plan of distribution, shares
of the Company were distributed to the stockholders of Capital
Properties, Inc. ("Capital Properties") on a pro rata basis. Mr.
Eder and his wife own 52.3% of the outstanding common stock of
Capital Properties. As part of the plan, the Company issued to
Capital Properties a promissory note in the amount of $9,377,000
payable over a period of twenty years with interest at 12% per
year, prepayable at any time without penalty.
During 1995, the Company and Capital Properties negotiated
an agreement reducing the interest rate to 10% and providing for
the Company's prepayment of $1,800,000 on its note. The
prepayment by the Company together with the interest rate
adjustment results in a current monthly payment of principal and
interest over the remaining twelve-year term of the note in the
amount of $53,000. At December 31, 1996, the balance on the note
due Capital Properties is $4,211,000. The agreement further
provides that the first $200,000 of any future prepayments will
reduce the required monthly payment; thereafter, 50% of any
additional prepayments will reduce the required monthly payments.
Prior to negotiating the agreement, the Company made
additional voluntary prepayments totaling $200,000, $55,000 and
$300,000 during 1996, 1995 and 1994, respectively.
During 1995, the Company also entered into an agreement with
Capital Properties releasing a portion of the collateral securing
the note in exchange for the right to have the Company convey the
Wilkesbarre Pier in East Providence, Rhode Island for the sum of
$1 to a purchaser of Capital Properties' petroleum terminal
facilities in
<PAGE>
East Providence, Rhode Island; in any such
conveyance the Company would retain certain rights to use the
pier. The note is now secured by a first mortgage on a
significant portion of the Company's operating right-of-way in
Massachusetts, exclusive of the track structure which includes
rails, ties, fasteners and ballast.
INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee of the Board of Directors has
recommended that Deloitte & Touche LLP, who acted as independent
auditors of the accounts of the Company for 1996, be appointed as
independent auditors of the accounts of the Company for the year
1997. As a matter of corporate practice, the shareholders will
be asked to approve the appointment. The Company has recently
been advised by Deloitte & Touche LLP that they have no direct
financial interest or any material indirect financial interest in
the Company, nor have they had any connection during the past
four years with the Company in the capacity of promoter,
underwriter, voting trustee, director, officer or employee.
It is expected that a representative of Deloitte & Touche
LLP will be present at the annual meeting with the opportunity to
make a statement if he so desires, and that such representative
will be available to respond to appropriate questions.
EMPLOYEE STOCK PURCHASE PLAN
In response to expressions of interest from a number of
employees, the Company has developed an Employee Stock Purchase
Plan (the "Plan"). The Plan offers employees the opportunity to
purchase shares of common stock of the Company with convenient
payroll deductions without payment of any brokerage fees or
commissions and is intended to provide employees with an
opportunity to acquire a proprietary interest in the Company.
It is the intention of the Company to have the plan qualify under
Section 423 of the Internal Revenue Code of 1986, as amended.
Description of Plan
The following is a summary of the principal provisions of
the Plan. The summary is qualified in its entirety by reference
to the full text of the Plan, set forth as Exhibit A to this
Proxy Statement.
The Plan. The Plan was approved by the Company's Board of
Directors on January 29, 1997. The Plan allows participants to
purchase Common shares through payroll deductions (in a minimum
amount of $10 per week and a maximum amount of $30 per week) at a
discount of 15% of the fair market value of the Common shares on
the date of purchase, without brokerage fees or commissions.
Payroll deductions are applied to purchase Common shares as of
the last day of each calendar quarter. A Participant may
discontinue participation in any offering by giving written
notice of termination at least five days prior to the Offering
Termination Date as defined in the Plan.
Upon purchase of the Common shares, Participants shall have
all of the rights of ownership of such Common shares, including
voting and dividend rights; except that Participants may not
sell, assign, pledge or otherwise transfer such Common shares
within two years of purchase.
The aggregate number of Common shares of the Company which
may be issued under the Plan shall not exceed 200,000 shares.
Eligibility. Any employee of the Company with certain
exceptions, who shall have completed one year of employment as of
the preceding December 31 shall be eligible to participate. The
eligibility criteria covers a group of approximately 136 employees.
<PAGE>
Participants' Accounts. The Company will establish a Stock
Purchase Account for each Participant which account shall be
credited with the payroll deductions elected by the Participant.
Purchase of Common Shares. As of the Offering Termination
Date, the Participant's account shall be debited to reflect the
purchase of Common shares. Fractional shares will not be issued.
Purchase Price. The purchase price of Common shares shall
be equal to 85% of the closing price on the nearest prior
business day on which trading occurred on the exchange on which
the Common shares are primarily traded. As of February 28, 1997,
the closing price was $8.75.
Restrictions on Participation. No employee shall be
granted an option to purchase Common shares under the Plan:
(a) if, immediately after such purchase, the employee would
own stock, and/or hold outstanding options to purchase stock,
possessing 5% or more of the voting power or outstanding shares
of any class of stock of the Company or of the total combined
voting power or outstanding shares of any class of stock of the
Company; or
(b) which permits the Participant's rights to purchase
stock under all employee stock purchase plans of the Company to
accrue at a rate which exceeds $25,000 in fair market value for
each calendar year in which such option is outstanding.
Termination of Employment and Death. Upon termination of
the Participant's employment, the Participant's Stock Purchase
Account shall be returned to him/her without interest, as soon as
administratively practicable.
Upon termination of the Participant's employment by reason
of death, the Participant's beneficiaries shall have the right to
elect to withdraw the Participant's Stock Purchase Account,
without interest, or to exercise the Participant's option on the
Offering Termination Date next following the date of the
Participant's death.
Non Transferability. Neither payroll deductions nor the
right to purchase shares are transferable by the Participant
except by will or the laws of descent and distribution.
Administration. The Plan is administered by the Stock
Option and Compensation Committee of the Board of Directors (the
"Committee"). Among other things, the Committee has the power to
interpret the terms and provisions of the Plan, and to establish
rules and regulations for the proper administration of the Plan.
Committee members are compensated for attendance at Committee
meetings. The Committee is appointed by the Board of Directors
of the Company and serves at the pleasure of the Board.
Federal Income Tax Treatment of Plan Participation. No
income is recognized by a participant upon the purchase of Common
shares under the Plan. Upon sale of the Common shares at least
two years after purchase, the participant will have taxable
ordinary income in the year of disposition in an amount equal to
the lesser of (i) the excess of the fair market value per share
at the time of disposition over the purchase price, or (ii) the
excess of the fair market value per share on the Offering
Termination Date (as defined in the Plan) over the purchase
price. A participant will have capital gain or loss on the
difference between the sales proceeds and the sum of the purchase
price plus any ordinary income recognized as described above.
The Company is not entitled to any tax deduction.
Employee Retirement Income Security Act of 1974. The Plan
is not subject to the terms of the Employee Retirement Income
Security Act of 1974 and is not qualified under Section 401(a) of
the Internal Revenue Code.
Period of Plan. The Plan will continue in effect through
March 31, 2007 unless earlier terminated by the Board of
Directors. The Board of Directors of the Company may terminate
or amend the Plan, provided, however, that the Board shall not,
without the approval of the shareholders of the Company (i)
increase the maximum number
<PAGE>
of shares which may be issued under
any Offering, except as set forth in the Plan or (ii) amend the
requirements as to the class of employees eligible to
participate.
Benefits Under the Plan. Assuming the Plan is approved by
the shareholders, officers and employee directors, with certain
exceptions, may elect to participate in the Plan. The benefits
to be received under the Plan by such officers and employee
directors cannot be determined.
Recommendations of Board of Directors. The Board of
Directors recommends that the shareholders vote FOR approval of
the Employee Stock Purchase Plan. The affirmative votes of the
holders of majorities of the outstanding Common Stock and
Preferred Stock, voting as separate classes, will be required for
such approval.
FINANCIAL STATEMENTS
A copy of the annual report of the Company for the year
ended December 31, 1996 is enclosed. Such report is not part of
this proxy statement.
PROPOSALS FOR 1998 ANNUAL MEETING
The 1998 annual meeting of the shareholders of the Company
is scheduled to be held April 29, 1998. If a shareholder
intending to present a proposal at that meeting wishes to have a
proper proposal included in the Company's proxy statement and
form of proxy relating to the meeting, the shareholder must
submit the proposal to the Company not later than November 27, 1997.
OTHER MATTERS
No business other than that set forth in the attached
Notice of Meeting is expected to come before the annual meeting,
but should any other matters requiring a vote of shareholders
arise, including a question of adjourning the meeting, the
persons named in the accompanying proxy will vote thereon
according to their best judgment in the interests of the Company.
In the event any of the nominees for the office of director
should withdraw or otherwise become unavailable for reasons not
presently known, the persons named as proxies will vote for other
persons in their place in what they consider the best interests
of the Company.
By Order of the Board of Directors
HEIDI J. EDDINS
Secretary and General Counsel
PROVIDENCE AND WORCESTER RAILROAD COMPANY
Dated: March 18, 1997
<PAGE>
Exhibit A
PROVIDENCE AND WORCESTER RAILROAD COMPANY
EMPLOYEE STOCK PURCHASE PLAN
This Providence and Worcester Railroad Company Employee
Stock Purchase Plan (the "Plan") is adopted by the Providence and
Worcester Railroad Company (the "Company") as of the 1st day of
April, 1997.
1. Introduction. The Plan is intended to provide employees of
the Company an opportunity to acquire a proprietary interest in
the Company through the purchase of shares of the Common Stock,
$.50 par value ("Common Shares") of the Company with accumulated
payroll deductions. It is the intention of the Company to have
the Plan qualify as an "employee stock purchase plan" under
Section 423 of the Internal Revenue Code of 1986, as amended (the
"Code").
2. Definitions. For purposes of this Plan, the following
terms shall have the meanings set forth below:
"Beneficiary(ies)" means the person(s) designated by the
Participant to the Treasurer of the Company to be the beneficiary
of the Participant's Stock Purchase Account in the event the
Participant dies with a balance remaining. If a Participant
fails to make any such designation, the Participant's Beneficiary
shall be the Participant's estate.
"Board" means the Board of Directors of the Company.
"Committee" means the Stock Option and Compensation
Committee of the Board, or any other committee of the Board or
otherwise to which the Board may subsequently delegate the
authority to administer the Plan.
"Employee" means any person who is customarily employed on a
full-time or part-time basis by the Company and is regularly
scheduled to work more than 20 hours per week.
"Offering" means the opportunity to purchase Common Shares
with accumulated payroll deductions commencing on the Offering
Commencement Date and ending on the Offering Termination Date.
"Offering Commencement Date" means January 1, April 1, July
1, and October 1 of each calendar year.
"Offering Termination Date" means March 31, June 30,
September 30, and December 31 of each calendar year.
"Participant" means an eligible Employee who has an active
payroll deduction
authorization form on file with the Treasurer of the Company.
"Stock Purchase Account" means the account established on
behalf of each Participant in accordance with Section 7 hereof
3.Administration. The Plan shall be administered by the
Committee. The Committee may establish, subject to the
provisions of the Plan, such rules and regulations as it deems
necessary for the proper administration of the Plan, and make
such determinations and take such actions in connection therewith
or in relation to the Plan as it deems necessary or advisable,
consistent with the Plan.
4.Eligibility. Any Employee of the Company who shall have
completed one year of employment as of the preceding December 31
shall be eligible to participate in Offerings under the Plan.
5.Common Shares Subject to the Plan. The aggregate number
of Common Shares of the Company which may be issued under the
Plan shall not exceed 200,000 shares; subject, however, to the
adjustment provided in Section 16 hereof in the event of certain
changes in the Company's capital structure. The Common Shares to
<PAGE>
be issued and delivered by the Company under the Plan may be
either authorized but unissued shares or treasury shares.
6.Participation in Offering/Payroll Deductions.
(a) An Employee meeting the eligibility requirements of
Section 4 hereof may elect to participate in any Offering by
completing a payroll deduction authorization form provided by the
Company and filing it with the Treasurer of the Company on or
before the date set therefor by the Treasurer, which date shall
be prior to the Offering Commencement Date for the Offering.
Each Participant electing to participate in any Offering shall
authorize the Company to withhold an amount not less than $10 per
week nor more than $30 per week from the Participant's base pay.
Payroll deductions shall commence as of the next following
Offering Commencement Date and shall continue through the
Offering Termination Date and successive Offerings unless and
until the Participant files a notice to terminate participation
with the Treasurer of the Company.
(b) A Participant may discontinue participation in any
Offering by giving written notice of termination to the Treasurer
of the Company at least five days prior to the Offering
Termination Date applicable to such Offering. Such termination
of participation shall be effective as of the date of receipt of
such notice. No further payroll deductions shall be made, and
the Participant's Stock Purchase Account shall be distributed in
accordance with Section 11 hereof. The Participant may elect to
participate in any succeeding Offering by filing a new payroll
deduction authorization form with the Treasurer in accordance
with subparagraph (a) above.
(c) A Participant may alter the amount of payroll
deductions as of the next following Offering Commencement Date by
completing a new payroll deduction authorization form and filing
it with the Treasurer of the Company on or before the date set
therefor by the Committee. A Participant may not alter the
amount of payroll deductions during any Offering.
7.Participants' Accounts. The Company shall establish an
account for each Participant in the Plan to be known as the Stock
Purchase Account. A Participant's Stock Purchase Account shall
be credited with the payroll deductions elected by the
Participant. As of each Offering Termination Date, the
Participant's Stock Purchase Account shall be debited to reflect
the purchase of Common Shares upon the terms and conditions
described herein.
8. Purchase of Common Shares.
(a) Unless a Participant gives written notice to the
Company to terminate participation in the Plan as provided in
Section 6(b) hereof at least five days prior to an Offering
Termination Date, the Participant shall be deemed to have
exercised on the Offering Termination Date an option to purchase
the number of full Common Shares which the balance in the
Participant's Stock Purchase Account at that time will purchase
at the applicable purchase price as described in Section 9
hereof. Any excess in the Participant's Stock Purchase Account
at that time will remain in the Participant's Stock Purchase
Account and be available for purchases of Common Shares in future
Offerings. Fractional shares will not be issued under the Plan.
(b) As promptly as practicable after the Offering
Termination Date of each Offering, the Company will cause the
Common Shares purchased on behalf of each Participant to be
registered in the name of such Participant, or if the Participant
so directs by written notice to the Treasurer of the Company
prior to the Offering Termination Date applicable thereto, in the
names of the Participant and one such other person as may be
designated by the Participant, as joint tenants with rights of
survivorship or as tenants by the entireties, to the extent
permitted by applicable law. A Participant shall have all of the
rights and privileges of a shareholder with respect to all Common
Shares registered in the Participant's name, subject, however, to
the restrictions described in subparagraph (c) below.
(c) Notwithstanding any provision herein to the contrary,
no Participant may sell, assign, transfer, pledge or otherwise
dispose of such Common Shares prior to the expiration of two
years from the Offering Termination Date upon which such Common
Shares were purchased.
(d) No certificates for Common Shares shall be delivered to
a Participant until the expiration of the restrictions described
<PAGE>
in subparagraph (c) above. Upon written request of the
Participant at any time after the expiration of such
restrictions, the Company shall deliver to the Participant stock
certificates representing the Common Shares registered in his or
her name.
9.Purchase Price. The purchase price of Common Shares
purchased under the Plan shall be equal to 85% of the closing
price of the Common Shares on the Offering Termination Date or
the nearest prior business day on which trading occurred on the
exchange on which the Common Shares are primarily traded.
10. Restrictions on Participation. Notwithstanding any
provisions of the Plan to the contrary, no Employee shall be
granted an option to purchase Common Shares under the Plan:
(a) if, immediately after such purchase, the Employee would
own stock, and/or hold outstanding options to purchase stock,
possessing 5% or more of the voting power or outstanding shares
of any class of stock of the Company or of the total combined
voting power or outstanding shares of any class of stock of the
Company; or
(b) which permits the Participant's rights to purchase
stock under all employee stock purchase plans of the Company to
accrue at a rate which exceeds $25,000 in fair market value of
the Common Shares (determined at the time such option is granted)
for each calendar year in which such option to purchase Common
Shares is outstanding.
11. Voluntary Withdrawal from Plan. Upon the election by a
Participant to terminate participation in any Offering as
provided in Section 6(b) hereof, the Participant's Stock Purchase
Account will be paid to him as soon as administratively
practicable, without interest. A Participant's withdrawal of his
or her Stock Purchase Account during any Offering will not have
any effect upon the Participant's eligibility to participate in
any succeeding Offering.
12.Termination of Employment.
(a) Upon termination of the Participant's employment for
any reason other than death, the Participant's Stock Purchase
Account shall be returned to him, without interest, as soon as
administratively practicable.
(b) Upon termination of the Participant's employment by
reason of death, the Participant's Beneficiaries shall have the
right to elect, by written notice given to the Treasurer of the
Company prior to the earlier of the Offering Termination Date or
the expiration of a period of sixty (60) days commencing with the
date of the death of the Participant, either:
(i) to withdraw the Participant's Stock Purchase Account,
without interest, or
(ii)to exercise the Participant's option on the Offering
Termination Date next following the date of the
Participant's death to purchase the number of full
Common Shares which the balance in the Participant's
Stock Purchase Account at the date of the Participant's
death will purchase at the applicable purchase price,
and any excess in such Stock Purchase Account will be
returned to such Beneficiaries without interest.
In the event that no such written notice of election shall
be duly received by the office of the Treasurer of the Company,
the Beneficiary shall automatically be deemed to have elected,
pursuant to subparagraph (ii) above, to exercise the
Participant's option to purchase Common Shares.
(c) Upon termination of employment for any reason,
including death, the Company shall deliver to the Participant all
certificates for Common Shares registered in the name of such
Participant pursuant to this Plan. Certificates for Common
Shares which were purchased less than two years prior to such
termination of employment shall bear the appropriate legend
reflecting that such Common Shares are subject to the
restrictions contained in Section 8(c) hereof.
<PAGE>
13. Compliance with Securities Laws. Common Shares
issued by the Company under the Plan shall be granted and issued
only in full compliance with all applicable securities laws,
including laws, rules and regulations of the Securities and
Exchange Commission and applicable state Blue Sky Laws. With
respect thereto, the Committee may impose such conditions on
transfer, restrictions and limitations as it may deem necessary
and appropriate to assure compliance with such applicable
securities laws.
14. Transferability. Neither payroll deductions credited to
a Participant's Stock Purchase Account nor any rights with regard
to the purchase of Common Shares under the Plan may be assigned,
transferred, pledged, or otherwise disposed of in any way by the
Participant other than by will or the laws of descent and
distribution. Any such attempted assignment, transfer, pledge,
or other disposition shall be without effect, except that the
Company may treat such act as an election to withdraw funds in
accordance with Section 11 hereof.
15. Use of Funds. All payroll deductions received or
held by the Company under this Plan may be used by the Company
for any corporate purpose, and the Company shall not be obligated
to segregate such payroll deductions.
16. Readjustment of Stock or Recapitalization.
(a) Upon any recapitalization or readjustment of the
Company's capital stock whereby the character of the present
Common Shares shall be changed, appropriate adjustments shall be
made so that the stock to be purchased under the Plan shall be
the equivalent of the present Common Shares after such
readjustment or recapitalization. In the event of a subdivision
or combination of the Common Shares, the number of shares that
may be purchased under the Plan and the purchase price shall be
proportionately adjusted. In the case of reclassification or
other change in the Common Shares, the Board of Directors shall
take such action as it deems appropriate.
(b) Upon the dissolution or liquidation of the Company, or
upon a reorganization, merger, or consolidation of the Company
with one or more corporations, regardless of whether or not the
Company is the surviving corporation, or upon a sale of
substantially all of the property or stock of the Company to
another corporation, unless the Board determines otherwise, the
Plan shall be terminated and Stock Purchase Accounts shall be
distributed to Participants, without interest, as soon as
administratively practicable.
17. Amendment and Termination. The Board shall have
complete power and authority to terminate or amend the Plan for
any reason, including a change in control as provided in Section
16(b) hereof, provided, however, that the Board shall not,
without the approval of the shareholders of the Company (i)
increase the maximum number of shares which may be issued under
any Offering (except pursuant to Section 16 hereof ); or (ii)
amend the requirements as to the class of employees eligible to
purchase stock under the Plan. No termination, modification, or
amendment of the Plan may, without the consent of a Participant,
adversely affect the rights of such Participant with respect to
Common Shares already purchased under the Plan.
18. No Effect on Employment Status. The Plan does not,
directly or indirectly, create any right for the benefit of any
Employee to purchase Common Shares under the Plan, or create in
any Employee any right with respect to continuation of employment
by the Company. The Plan shall not be deemed to interfere in any
way with the Company's right to terminate, or otherwise modify,
an Employee's employment at any time.
19. Company Responsibility. All expenses of this Plan,
including the cost of maintaining records, shall be borne by the
Company. The Company shall have no responsibility or liability
(other than under applicable securities laws) for any act or
thing done or left undone with respect to the price, time,
quantity, or other conditions and circumstances of the purchase
of Common Shares under the terms of the Plan, so long as the
Company acts in good faith.
20. Tax Withholding. Any purchase of Common Shares
hereunder shall provide as determined by the Committee for
appropriate arrangements for the satisfaction by the Company and
the Participant of all federal, state, local or other income,
excise or employment taxes or tax withholding requirements
applicable to the purchase of Common Shares or the later
disposition of the Common Shares thereby acquired and all such
additional taxes or amounts as determined by the Committee in its
discretion, including, without limitation, the right of the
<PAGE>
Company to receive transfers of Common Shares or other property
from the Participant or to deduct or withhold in the form of
Common Shares from any transfer to a Participant, in such amount
or amounts deemed required or appropriate by the Committee in its
sole and absolute discretion.
21. Implied Consent. Every Participant, by his or her
participation in the Plan, shall be deemed to have consented to
be bound, on his own behalf and on behalf of his heirs, assigns,
and legal representatives, by all of the terms and conditions of
this Plan.
22. Effective Date. The Plan shall become effective as of
April 1, 1997, subject to approval by the holders of the majority
of the Common Shares and the majority of the Preferred Shares
present and represented at a special or annual meeting of the
shareholders held on or before April 30, 1997. If the Plan is
not so approved, the Plan shall not become effective. The Plan
shall terminate on March 31, 2007 unless earlier terminated by
the Board as provided in Section 17 hereof.
23. Rhode Island Law to Govern. This Plan shall be
construed and administered in accordance with and governed by the
laws of the State of Rhode Island.
IN WITNESS WHEREOF, the Company has caused this Providence
and Worcester Railroad Company Employee Stock Purchase Plan to be
executed by its duly authorized officer this ____ day of _________ 1997.
PROVIDENCE AND WORCESTER
RAILROAD COMPANY
By: _________________________
Title: ________________________
<PAGE>
PROXY PROVIDENCE AND WORCESTER RAILROAD COMPANY
(PREFERRED STOCK) Annual Meeting of Shareholders - April 30, 1997
The undersigned, whose signature appears on the reverse side
of this proxy, hereby appoints Robert H. Eder, Orville R. Harrold
and Ronald P. Chrzanowski, or a majority of such of them as
shall be present, attorneys with power of substitution and
with all the powers the undersigned would possess if personally
present, to vote the Preferred Stock of the undersigned in
Providence and Worcester Railroad Company at the annual meeting of
shareholders to be held on April 30, 1997 in Worcester,
Massachusetts, and at any adjournments thereof, as follows:
1. ELECTION OF DIRECTORS: FOR all nominees WITHHOLD AUTHORITY to vote for
listed below (except as all nominees listed below
marked to the contrary below) _____ _____
F. Barrett, P. Brown, J.Cronin, R. Easton, J. Garrahy, O. Harrold, J. Healy,
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided below.)
_____________________________________________________________________________
2. PROPOSAL TO APPROVE THE APPOINTMENT OF DELOITTE & TOUCHE LLP
as independent auditors of the Company
for 1997: __ FOR __ AGAINST __ ABSTAIN
3. PROPOSAL TO APPROVE THE COMPANY'S EMPLOYEE STOCK PURCHASE PLAN:
__ FOR __ AGAINST __ ABSTAIN
4. In their discretion, upon such other matters as may properly
come before the meeting.
This proxy when properly executed will be voted in the manner
directed herein by the undersigned stockholder. If no direction is made,
this proxy will be voted for Proposals 1, 2 and 3.
<PAGE>
PROXY PROVIDENCE AND WORCESTER RAILROAD COMPANY
(COMMON STOCK) Annual Meeting of Shareholders - April 30, 1997
The undersigned, whose signature appears on the reverse side
of this proxy, hereby appoints Robert H. Eder, Orville R. Harrold
and Ronald P. Chrzanowski, or a majority of such of them as
shall be present, attorneys with power of substitution and
with all the powers the undersigned would possess if personally
present, to vote the Common Stock of the undersigned in
Providence and Worcester Railroad Company at the annual meeting of
shareholders to be held on April 30, 1997 in Worcester,
Massachusetts, and at any adjournments thereof, as follows:
1. ELECTION OF DIRECTORS: FOR all nominees WITHHOLD AUTHORITY to vote for
listed below (except as marked to all nominees listed below __
the contrary below) _____
R. Chrzanowski, R. Eder, W. LeDoux, Charles M. McCollam, Jr.
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided below.)
____________________________________________________________________________
2. PROPOSAL TO APPROVE THE APPOINTMENT OF DELOITTE & TOUCHE LLP
as independent auditors of the Company for 1997:
__ FOR __ AGAINST __ ABSTAIN
3. PROPOSAL TO APPROVE THE COMPANY'S EMPLOYEE STOCK PURCHASE PLAN:
__ FOR __ AGAINST __ ABSTAIN
4. In their discretion, upon such other matters as may
properly come before the meeting.
This proxy when properly executed will be voted in the manner
directed herein by the undersigned stockholder. If no direction
is made, this proxy will be voted for Proposals 1, 2 and 3.
PLEASE DATE, SIGN AND RETURN THIS PROXY
(Sign exactly as your name appears hereon. Dated:...............1997
When signing as attorney, executor, administrator,
trustee, guardian or in a corporate capacity, Signed:..................
please give full title as such. In case of joint
tenants or multiple owners, each party must sign.)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
<PAGE>
PLEASE DATE, SIGN AND RETURN THIS PROXY
(Sign exactly as your name appears hereon. Dated:...............1997
When signing as attorney, executor, administrator,
trustee, guardian or in a corporate capacity, Signed:.................
please give full title as such. In case of joint
tenants or multiple owners, each party must sign.)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
