Table of Contents

Shareholders can help avoid the necessity and expense of follow-up letters to ensure that a quorum is present at the Annual Meeting by promptly voting their shares.

YOU MAY VOTE YOUR SHARES BY ANY OF THE FOLLOWING MEANS:

YoU MaY VoTe YoUR sHaRes bY anY of THe folloWInG Means:

Beneficial owners of shares of Common Stock held in street name through a bank or brokerage account should follow the voting instructions enclosed with their materials.

Shareholders are invited to view the Investor Relations section of our website atwww.middlesexwater.comand the following websitewww.proxyvote.comuntil 11:59 p.m. on May 19, 2014 to transmit voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Daylight Time, on May 20, 2013.instructions. (Shareholders will need the 12-digit control number from the proxy card or NOIA to view proxy materials atwww.proxyvote.com.).

1500 Ronson Road

Iselin, New Jersey 08830-0452

NOTICE OF ANNUAL MEETING OF SHAREHOLDERSnoTICe of annUal MeeTInG of sHaReHolDeRs
AND PROXY STATEMENTanD PRoXY sTaTeMenT

The Annual Meeting of Shareholders (the “Annual Meeting”) of Middlesex Water Company will be held at the Company’s headquarters, the J. Richard Tompkins Center, 1500 Ronson Road, Iselin, New Jersey 08830 on Tuesday, May 21, 201320, 2014 at 11:00 a.m. Eastern Time:, for the following purposes:

We may also transact such other business that may properly come before the meetingAnnual Meeting or any postponement or adjournment thereof.

The Board of Directors has fixed the close of business on March 25, 201324, 2014 as the record date for the determination of the shareholders entitled to notice of, and to vote at, the Annual Meeting.

Please note that in the absence of specific instructions as to how to vote, brokers may not vote your shares on the election of directors or the non-binding advisory proposal regarding the compensation of our executive officers. Please return your proxy card so your vote can be counted.

An

Our Annual Report to Shareholders outlining the Company’s operations during 20122013 accompanies this Notice of Annual Meeting and Proxy Statement.

Thank you for your continued interest in, and support of, Middlesex Water Company.

	By Order of the Board of Directors,
	KENNETH J. QUINN
	A. BRUCE O’CONNOR Vice President, General Counsel
	Secretary Treasurer and TreasurerChief Financial Officer

Iselin, New Jersey

April 9, 2013

8, 2014

ANNUAL MEETING OF SHAREHOLDERSannUal MeeTInG of sHaReHolDeRs
MAY 21, 201320, 2014

This Proxy Statement and the accompanying form of proxy are being furnished to the shareholders of Middlesex Water Company (hereinafter referred to as the “Company”) in connection with the solicitation of proxies by the Board of Directors of the Company, to be used at the Annual Meeting of the Shareholders to be held at 11:00 a.m. at the Company’s headquarters, the J. Richard Tompkins Center, 1500 Ronson Road, Iselin, New Jersey on Tuesday, May 21, 201320, 2014 (the "Annual Meeting"“Annual Meeting”), and at any adjournments thereof.

The Board is making these materials available to you on the Internet or, upon your request, delivering printed versions of these materials to you by mail. On or about April 9, 20138, 2014, we expect to mail a notice to shareholders containing instructions on how to access the Proxy Statement and Annual Report and how to vote.

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS

AND THE ANNUAL MEETINGQUesTIons anD ansWeRs aboUT THe PRoXY MaTeRIals
anD THe annUal MeeTInG

1. What is the purpose of the Meeting?At the Annual Meeting, shareholders of the Company will consider and vote upon three proposals:

Shareholders may also vote upon such other matters as may properly come before the Annual Meeting or any postponement or adjournment thereof.

2.Where can I obtain financial information about Middlesex Water?the Company?Our Annual Report to Shareholders, including our Form 10-K with financial statements for 2012,2013, is enclosed in the same mailing with this proxy statement.Proxy Statement. The Company’s Proxy Statement and Annual Report to Shareholders are also available atwww.middlesexwater.com. www.middlesexwater.com. Information on our website does not constitute part of this proxy statement.Proxy Statement.

3. What is a proxy?A proxy is your legal designation of another person to vote the stock you own. If you designate someone as your proxy or proxy holder in a written document, that document is called a proxy or a proxy card. James F. Cosgrove, Jr. and John C. Cutting and Walter G. Reinhard, Esq. have been designated as proxies or proxy holders for the Annual Meeting. Proxies properly executed and received by our Corporate Secretary prior to the Annual Meeting, and not revoked, will be voted in accordance with the terms thereof.

4. How are other proxy materials being furnished?Under rules adopted by the U.S. Securities and Exchange Commission (SEC), we have chosen to furnish our proxy materials, including this Proxy Statement and the Annual Report to Shareholders, to our shareholders over the Internet and to provide a Notice of Internet Availability (NOIA) of proxy materials by mail, rather than mailing a full set of the printed proxy materials. As a result, of the Notice and Access rule, Middlesex WaterCompany is able to reduce printing and postage costs, as well as minimize ouradverse impact on the environment and help preserve our natural resources. If you receive a NOIA, you will not receive a printed copy of our proxy materials in the mail unless you request them by following the instructions provided in the NOIA. Instead, the NOIA instructs you how to access and review all of the important information contained in the Proxy Statement and Annual Report to Shareholders. The NOIA also explains how you may submit your proxy over the Internet. If you would like to receive a printed copy of our proxy materials, you should follow the instructions in the NOIA.

5. Who is entitled to vote?Shareholders of record at the close of business on March 25, 2013,24, 2014, which we refer to as the Record Date, are entitled to notice of, and to vote at, the Annual Meeting. On the Record Date, we had 15,814,16915,985,184 shares

of Middlesex Water Company common stock issued and outstanding, each entitled to one vote. A complete list of the shareholders entitled to vote at the meeting will be available for examination by any shareholder of record at our offices at 1500 Ronson Road, Iselin, NJ 08830 for a period of 10 days prior to the Annual Meeting. The list will also be available for examination by any shareholder of record at the Annual Meeting.

6. What is the difference between a “shareholder of record” and an owner holding shares in “street name?”name”?You are a “Shareholder of Record” if you hold a stock certificate or if you have an account directly with our transfer agent, Registrar & Transfer Company. If your shares are held in a brokerage account, by a broker, bank or other holder of record, your shares are held in “street name” and you are considered the beneficial owner of those shares.

7. How are Proxies Used?used?All shares that have been properly voted, whether by Internet, telephone or mail, and not revoked, will be voted at the Annual Meeting in accordance with your instructions. If you sign your proxy card but do not give voting instructions, the shares represented by that proxy will be voted as recommended by the Board. The Board recommends a vote for the election of three directorDirector nominees named in this Proxy Statement,Statement; for the ratification of the appointment by the Audit Committee of ParenteBeard LLC as the independent registered public accounting firm;firm for fiscal year ending December 31, 2014; and for ana non-binding advisory vote approving named executive officer compensation. If any other matters are properly presented at the Annual Meeting for consideration and if you have voted your shares by Internet, telephone or mail, the persons named as proxies in the proxy card will have the discretion to vote on those registered matters for you. At the date we filed this Proxy Statement with the SEC, we do not know of any other matters to be raised at the Annual Meeting.

8. How many votes must be present to hold the Annual Meeting?In order for the Annual Meeting to be conducted, a majority of the outstanding shares of Common Stock as of the record date must be present in person or represented by proxy at the Annual Meeting. This is referred to as a quorum.

9. What vote is needed to elect a director?Director?Directors are elected (Proposal 1) by a plurality of votes cast by shareholders present in person or represented by proxy at the Annual Meeting, and entitled to vote on the election of directors. Abstentions and broker non-votes will not be included in determining the number of votes cast concerning any matter.Directors.

10. What vote is needed to ratify the appointment by the Audit Committee of ParenteBeard LLC?The ratification of the appointment by the Audit Committee of ParenteBeard LLC (Proposal 2) requires the affirmative vote of the majority ofthat the votes cast by shareholders present in person or by proxy atfavor of the Annual Meeting.ratification exceed the number of votes opposing the ratification.

11. What vote is needed to approve the non-binding advisory vote approving named executive officer compensation?The approval of the non-binding advisory vote regarding the compensation of our named executive officers (Proposal 3) requires that the votes cast in favor of the proposal exceed the number of votes cast against the proposal.

12. What are the voting recommendations of the Board?For the reasons set forth in more detail later in this Proxy Statement,THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE:

13. How will my shares be voted if I do not provide instructions to my broker?It is possible for a proxy to indicate that some of the shares represented are not being voted with respect to certain proposals. This occurs, for example, when a broker, bank or other nominee does not have discretion under the rule of the New York Stock Exchange (the “NYSE”) to vote on a matter without instructions from the beneficial owner of the shares and has not received such instructions. In these cases, non-voted shares will not be considered present and entitled to vote with respect to that matter, although they may be considered present and entitled to vote for other purposes and will be counted in determining the presence of a quorum.

Accordingly, if the quorum is present at the meeting, non-voted shares concerning a particular proposal will not affect the outcome of that proposal.

Please note that your bank, broker or other nominee may not vote your shares with respect to matters considered non-routinenon- routine (i) the election of the three nominees for director,Director, and (ii) the nonbindingnon-binding advisory proposal regarding the approval of the compensation of our named executive officers in the absence of your specific instructions as to how to vote with respect to these matters. Under the NYSE rules as currently in effect, brokers, banks or other nominees have discretionary voting power to vote without receiving voting instructions from the beneficial owner on “routine” matters but not on “non-routine” matters. Under the rules of the NYSE, routine matters include, among other things, the ratification of appointment of the independent registered public accounting firm. “Non-routine” matters include the election of directors,Directors, whether contested or not. This means that if you hold your shares through a broker, bank or other nominee, and you do not provide voting instructions by the tenth day before the Annual Meeting, the broker, bank or other nominee has the discretion to vote your shares on the “routine” matter, but not on any “non-routine” matters.Please return your proxy card so your vote can be counted.

14. How are abstentions and broker non-votes counted?For purposes of determining the votes cast with respect to any matter presented for consideration at the Annual Meeting, only those votes cast “for” or “against” are included. As described above, where brokers do not have discretion to vote or did not exercise suchauthorized discretion, the inability or failure to vote is referred to as a “broker non-vote.” Proxies marked as abstaining, and any proxies returned by brokers as “non-votes” on behalf of shares held in street name because beneficial owners’ discretion has been withheld as to one or more matters to be acted upon at the Annual Meeting, will be treated as present for purposes of determining whether a quorum is present at the Annual Meeting. Broker non-votes and withheld votes will not be included in the vote total for the proposal to elect the nominees for directorDirector and will not affect the outcome of the vote for these proposals. In addition, under New Jersey corporation law, abstentions are not counted as votes cast on a proposal. Therefore, abstentions and broker non-votes will not count either in favor of or against the nonbindingnon-binding advisory proposal regarding the approval of the compensation of our named executive officers, or the ratification of the appointment of ParenteBeard LLC.

15. What if I change my vote after I have voted?Whether you vote by telephone, Internet or by mail, you may later change or revoke your proxy at any time before it is exercisedcounted at the Annual Meeting by: (a) submitting a properly signed proxy with a later date; (b) voting by telephone onor the Internet at a later time; or (c) by voting in person at the Annual Meeting. Attendance at the Annual Meeting will not by itself revoke a previously granted proxy, unless you specifically request it. You may change your proxy instructions for shares in “street name” by submitting new voting instructions to your broker or nominee.

16. Who will count the vote?Votes will be counted by representatives of Broadridge Financial Solutions, Inc. who will tally the votes and certify the results.

17. Who can attend the Annual Meeting?All shareholders of record as of the close of business on March 25, 201324, 2014 can attend the meeting.Annual Meeting. Seating, however, is limited. Attendance at the Annual Meeting will be on a first arrival basis. Shareholders are not permitted to bring cameras recording devices or other electronicrecording devices to the Annual Meeting.

18. Will there be a management presentation at the Annual Meeting?Yes. Management will give a brief presentation during the meeting.Annual Meeting.

19. When are shareholder proposals due for the 20142015 Annual Meeting?Should a shareholder intend to present a proposal at the Annual Meeting to be held in the year 2014,2015, you must submit your proposal to the Secretary of the Company at 1500 Ronson Road,P.O. Box 1500, Iselin, New Jersey 08830-0452, not later than December 11, 2013,10, 2014, in order to be considered for inclusion in the Company's proxy statementCompany’s Proxy Statement and form of proxy relating to the 20142015 Annual Meeting.

20. Where can I find the voting results of the annual meeting?Annual Meeting?Announcement of the preliminary voting results will occur at the Annual Meeting and issued in a press release and filed on form 8-K on or about May 22, 2013.21, 2014.

PRoPosal 1
eleCTIon of DIReCToRs

PROPOSAL 1

ELECTION OF DIRECTORS

The Board consists of eight members divided into three classes with staggered three-year terms of office. In 2012, theThe Corporate Governance and Nominating Committee reviewedperiodically reviews the efficacy of declassifying the Board. This matter was last presented to the full Board for further evaluation.evaluation in 2013. Upon thorough discussion, the boardBoard concluded that at this time, maintaining its present classification structure with three classes of directorsDirectors with as nearly equal number of members as practicable, provides for the most effective continuance of the knowledge and experience gained by members of the boardBoard and that maintaining the current boardBoard classification structure serves the best interests of the Company.shareholders and customers.

The Corporate Governance and Nominating Committee recommends the following nominees, Steven M. Klein, Amy B. MansueJames F. Cosgrove, Jr., P.E., John R. Middleton, M.D., and Walter G. Reinhard, Esq.,Jeffries Shein, each of whom is currently serving as a Director, be elected at the Annual Meeting, of Shareholders, to serve for three (3) years or until their respective successors have been duly elected and qualified. The present terms of these Class II directorsIII Directors expire at the year 20132014 Annual Meeting of Shareholders.Meeting. There were no nominee recommendations from shareholders or from any group of shareholders submitted in accordance with regulations of the Securities and Exchange Commission.SEC.

All nominees proposed by the Board have consented to serve if elected. Unless otherwise indicated on a proxy, the proxy holders intend to vote the shares each proxy represents for all of the nominees for election as directors.Directors.

Directors shall be elected by a plurality of the votes cast at the election.Annual Meeting. If at the time of the election any of the nominees listed should be unable to serve, it is the intention of the persons designated as proxies to vote, in their discretion, for other nominees, unless the number of Directors is reduced.

There is shown as to each nominee, and as to each Director whose term of office will continue after the year 20132014 Annual Meeting, his or her age as of the date of the Annual Meeting, Class,class, period of service as a Director of the Company, and business and professional experience during the last five years.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
FOR PROPOSAL 1, THE ELECTION OF STEVEN M. KLEIN, AMY B. MANSUE AND

WALTER G. REINHARD, ESQ.

THe boaRD of DIReCToRs UnanIMoUslY ReCoMMenDs THaT
sHaReHolDeRs VoTefoRTHe eleCTIon of

JAMES F. COSGROVE, JR., P.E., JOHN R. MIDDLETON, M.D. AND JEFFRIES SHEIN.

NOMINEES FOR ELECTION AS DIRECTORSnoMInees foR eleCTIon as DIReCToRs WITH TERMS EXPIRING IN 2016TeRMs eXPIRInG In 2017

DIReCToRs WITH TeRMs eXPIRInG In 2015

DIReCToRs WITH TeRMs eXPIRInG In 2016

CORPORATE GOVERNANCE GUIDELINES AND BOARD MATTERS CoRPoRaTe GoVeRnanCe GUIDelInes anD boaRD MaTTeRs

General Information

Management of the Company is under the general direction of the Board of Directors (the “Board”) who are elected by the shareholders. The Company’s business and affairs are managed under the direction of the Board in accordance with the New Jersey Business Corporation Act and our Certificate of Incorporation and By-laws. Members of the Board are kept apprised of our business through discussions with the Chairman and Chief Executive Officer and other Company Officers, by reviewing briefing materials and other relevant information provided to them, and by participating in meetings of the Board and its Committees.

Board Size

The Board shall consist of not less than five nor more than twelve members in accordance with the By-laws.

Board Meetings and Attendance at Annual Meeting of Shareholders

The frequency and length of Board meetings, as well as agenda items, is determined by the Chairman and Committee Chairs with input from all other directors.Directors. Meeting schedules are approved by the full Board.

The Board of Directors holds monthly meetings and meets on other occasions when required. The Board of Directors held twelve meetings and the Board Committees held fourteenseventeen meetings during fiscal year 2012.2013. Each incumbent Director attended 78%91% or more of the total number of meetings of the Board and Committees on which each served. All of the directorsDirectors serving at the time of the fiscal year 2012 Annual Meeting of Shareholders held in May 20122013 attended that meeting.

Executive Sessions

The non-management directorsDirectors shall periodically meet without management in executive session. The Lead Director is designated to preside at the executive sessions.

Board Standards of Independence

The Company’s Common Stock is listed on the NASDAQ Global Select Market. NASDAQ listing rules require that a majority of the Company’s directorsDirectors be “independent directors” as defined by NASDAQ corporate governance standards. “Independent Director” means a person other than an Executive Officer or employee of the Company or any other individual having a relationship which, in the opinion of the Company’s Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.Director. For purposes of this rule, “Family Member” means a person’s spouse, parents, children and siblings, whether by blood, marriage or adoption, or anyone residing in such person’s home.

As defined by NASDAQ corporate governance requirements, a member of the Board is not independent if:

With the exception of Mr. Doll, who is an Executive Officer of the Company, the Board has determined that each member of the Board is independent under the NASDAQ listing standards.

The Board based this determination primarily on a review of the responses of the Directors to questionsa comprehensive annual questionnaire regarding employment and compensation history, affiliations, family and other relationships, together with an examination of those companies with whom the Company transacts business.

The Directors certify individually as to their representations.

The Board reviewed the related party transactions between Walter G. Reinhard, Esq., an attorney for Norris, McLaughlin

& Marcus, P.A., and the Company. Mr. Reinhard currently serves as Chair of the Corporate Governance Committee and is a member of the Pension Committee. Mr. Reinhard had formerly served as Chair of the Corporate Governance and Nominating Committee, until this committee was separated in November 2013 into a distinct Corporate Governance Committee and is a memberdistrict Nominating Committee, whereby Mr. Cosgrove was named Chair of the PensionNominating Committee. The Company paid Norris, McLaughlin & Marcus $104,063$31,723 for legal services during 2012.2013. The amount paid represents less than 0.18%0.05% of Norris, McLaughlin & Marcus P.A. fee revenue. Mr. Reinhard is not a controlling shareholder of the firm. Based upon the foregoing, and in connection with the definition of “Independent Director” under the NASDAQ Listing Guidelines, the Board determined that Mr. Reinhard was an independent directorIndependent Director in 2012.2013.

Board Leadership Structure

The Board does not have a formal policy on whether or not the role of the Chief Executive Officer and Chairman of the Board should be separate or, if it is to be separate, whether the Chairman should be selected from the directorsDirectors or be an employee. Currently, the Company operates with one individual, Mr. Doll, serving as Chairman of the Board as well as President and Chief Executive Officer, coupled with a strong independent Lead Director and independent standing Board committees. The Board believes that combining the Chairman of the Board and President and Chief Executive Officer roles is the appropriate corporate governance structure at this time because it most effectively utilizes Mr. Doll’s extensive utility and management experience and knowledge regarding the Company, as well as his capabilities in effectively identifying strategic priorities and leading discussions on, and execution of, the Company’s strategy.

The Board has embedded in its culture, a philosophy of “constructive tension” whereby, the Board fulfills its mission to support the strategic direction and operation of the Company while simultaneously fully representing the interests of our shareholders. The Board accomplishes this by challenging the President and Chief Executive Officer and the Company’s management on an ongoing basis. Mr. Doll was elected by the Board as President and Chief Executive Officer in 2006 and Chairman of the Board on May 25,in 2010. The Company’s independent directorsDirectors bring significant experience, oversight and expertise from outside the companyCompany and industry.

Lead Director

In order to ensure that the independent directorsDirectors play a leading role in our current leadership structure, the Board established the position of Lead Director in June 2010 and named Jeffries Shein to the position. Mr. Shein, directorDirector since 1990, serves on the Compensation, Corporate Governance, and Nominating and the Ad Hoc Pricing Committee.

Committees. The Lead Director has the following responsibilities:

As part of our Board’s annual assessment process, the Board evaluates our boardBoard leadership structure to ensure it remains appropriate. The Board recognizes there may be circumstances that would lead it to conclude that separate roles of Chief Executive Officer and Chairman of the Board may be appropriate, but believes that the absence of a formal policy requiring either the separation or combination of the roles of Chairman and Chief Executive Officer provides the flexibility to determine the most appropriate governance structure, as conditions potentially change in the future.

Stock Ownership

As part of their annual compensation, each directorDirector receives an award of Middlesex WaterCompany common stock valued at $15,000. The Board has determined that directorsDirectors should have a meaningful ownership stake in the Company to underscore the importance of aligning their interests with the long-term interests of our shareholders. In 2013, the Corporate Governance and Nominating Committee will be establishing formal director stock ownership guidelines which further align the interests of directors with those of our shareholders, and further reinforce the company’s commitment to sound corporate governance. 

Shareholder Communications with the Board

Any shareholder wishing to communicate with a Director may do so by contacting the Company’s Corporate Secretary, who will forward to the Director a written, email,e-mail, or phone communication. The Corporate Secretary has been authorized by the Board to screen frivolous or unlawful communications or commercial advertisements.

Board Committees^

The Company’s Board of Directors maintains a number of standing committees to assist with the performance of its responsibilities.The number, structure and function of Board Committees are reviewed periodically by the Corporate Governance and Nominating Committee. The Committees regularly report to the Board on their deliberations and recommendations. The Committees also bring to the Board for consideration those matters and decisions which the Committees judge to be of special significance.

^ In October 2013, the Corporate Governance and Nominating Committee was separated into two committees. Mr. Reinhard formerly served as Chair of the Corporate Governance and Nominating Committee. Mr. Cosgrove was named Chair of the Nominating Committee.

* Indicates Committee Chair

+ Indicates Audit Committee Financial Expert

Board Committee Responsibilities

Audit Committee

The Audit Committee held four meetings and three teleconferences during 2012.2013. The Audit Committee reviews with the independent registered public accounting firm the scope and results of the annual audit;audit and quarter review; receives and reviews the independent registered public accounting firm’s annual report; reviews the independence of the independent registered public accounting firm and services provided by them and their fees. In addition, the Audit Committee recommends to the Board of Directors the inclusion of the audited financial statements in the Company’s Annual Report to the Securities and Exchange CommissionSEC on Form 10-K;10-K and is directly responsible for the annual appointment of an independent registered public accounting firm.

In March 2013,2014, the Board of Directors re-approved the written Charter for the Audit Committee which is available in the Investor Relations section of our websitewww.middlesexwater.com under Corporate Governance. Please refer to this Charter for a full listing of Audit Committee responsibilities. All of the members of the Audit Committee have been determined by the Board to be independent directors,Directors, as defined in the listing standards of NASDAQ.

Compensation Committee

The Compensation Committee held twofour meetings during 2012.2013. The Compensation Committee reviews and makes recommendations to the Board of Directors as to the salaries, benefits and incentive compensation of the Executive Officers of the Company. Executive Officer incentive compensation is awarded under the Restricted Stock Plan. (Please refer to page 2021 for a description of how awards are madegranted under the Restricted Stock Plan.)

In February 2013,2014, the Board of Directors re-approved athe written Charter for the Compensation Committee which is available in the Investor Relations section of our websitewww.middlesexwater.comunder Corporate Governance. Please refer to this Charter for a full listing of Compensation Committee responsibilities. All of the members of the Compensation Committee have been determined by the Board to be independent directorsDirectors as defined in the listing standards of NASDAQ.

Compensation Committee Interlocks and Insider Participation

The members of the 20122013 Compensation Committee were Steven M. Klein, Amy B. Mansue, John R. Middleton, M.D. and Jeffries Shein. During 2012,2013, no member of the Compensation Committee was at any time an officer or employee of the Company or its subsidiaries. No current member is related to any other member of the Compensation Committee, any other member of the Board or any executive officer of the Company.

Corporate Governance Committee and Nominating Committee

In October 2013, the Corporate Governance and Nominating Committee

made a recommendation to the Board of Directors to separate into two distinct committees. The Board approved this recommendation. The Corporate Governance and Nominating Committee held three meetings during 2012. All of the members ofin 2013. Following this separation, the Corporate Governance andCommittee met once in 2013. In November 2013, the Board of Directors re-approved the written Charter for the Corporate Governance Committee, which is available in the Investor Relations section of our websitewww.middlesexwater.comunder Corporate Governance. Please refer to this Charter for a full listing of Corporate Governance Committee responsibilities.

In February 2014, the Nominating Committee have been determinedCommittee’s written charter was re-approved by the Board to be independent directors as defined in the listing standards of NASDAQ.Board.

The committeeCorporate Governance Committee reviews and makes recommendations relating to the governanceperformance of the Company, risk management, the performance and composition of the Board and Board committees, succession planning and significant organization changes. The Committee makes recommendations to the Board of Directors, with respectcommittee structures, risk management and the composition of the Board. This includes reviewing and making recommendations on matters related to nominations for the Board and screens candidates considered for electionDirectors’ compensation as well as recommendations related to any management proposals to make significant organizational changes to the Board.Company. In addition, the Committee will assist the Nominating Committee and management in attracting and evaluating qualified candidates for Board membership. In this capacity, the Committee focuses on the composition of the Board with respect to depth of experience, balance of professional interests, required expertise and other factors and evaluates prospective nominees identified by the Corporate Governance and Nominating Committee or referred by other Board members, management, shareholders or other sources.

Risk Management Oversight

In 2012, Risk Management Oversight was formally added to the Corporate Governance Committee’s responsibilities in 2012 and Nominating Committee’s responsibilities.remains under the supervision of the Corporate Governance Committee. Specifically, the Committee is responsible for overseeing the process by which significant business risks are identified throughout the enterprise and the strategies developed to mitigate any identified risks. This added oversight is reflected in the Corporate Governance and Nominating Committee’s Charter, which was revised and approved by the Board, of Directors and is available in the Investor Relations section of our websitewww.middlesexwater.com under Corporate Governance.The primary purpose of the Committee in fulfilling its risk management oversight responsibilities is accomplished by (i) assessing and reporting to the Board on the Company’s risk environment, including its material strategic, and operational risks (including but not limited to the brand and reputation of the Company; the health and safety of the Company’s employees and the business operations of the enterprise); (ii) ensuring that management understands and accepts its responsibility for identifying, assessing, and managing risk, (iii) facilitating management’s strategic focus on the Company’s risk management vision and its evolution, (iv) verifying that the guidelines and policies governing the process by which risk assessment and management is undertaken and handledadministered, are comprehensive and that they evolve in relation tocommensurate with the risk profile of the Company, and (v) reviewing those risks that the Committee and management deemdeems material to the Company’s shareholders. Management retains responsibility for all day-to-day activities of the Company, including administration of the Company’s formal risk management program. The Committee will updateupdates the Board with aon risk management status report as necessary or atactivities routinely throughout the discretionyear.

Nominating Committee

In October 2013, the Corporate Governance and Nominating Committee made a recommendation to the Board of Directors to separate into two distinct committees. The Board approved this recommendation. Following this separation, the Nominating Committee held a meeting in November 2013 during which its written Charter was approved. This Charter was re-approved in February 2014, and is available in the Investor Relations section of our websitewww.middlesexwater.com under Corporate Governance. The Nominating Committee seeks and identifies qualified candidates for Board membership and recommends to the Board candidates for nomination and election to the Board. Please refer to this Charter for a full listing of Nominating Committee responsibilities.

All of the Committee.members of the Nominating Committee have been determined by the Board to be independent Directors as defined in the listing standards of NASDAQ.

Process for Identifying and Evaluating Director Candidates

The Corporate Governance and Nominating Committee periodically identifies director nominees based primarily on recommendations from management, Board members, shareholders and other sources. The Committee recommends to the boardBoard nominees that are independent of management and satisfy SEC and NASDAQ requirements and possess qualities such as personal and professional integrity, sound business judgment, and utility, technical or financial expertise. The Committee also considers age and diversity (broadly construed to mean a variety of opinions, perspectives, personal and professional experiences and backgrounds, such as gender, race and ethnicity differences, as well as other differentiating characteristics) in making its recommendations for nominees to the full Board. Although theThe Committee has the authority to retain assistance from independent third parties in identifying and evaluating prospective candidates for nomination and election to the Board, the Committee does not currently employ an executive search firm or pay a fee to any other third party to locate qualified candidates for director positions.Board.

Director Candidate Recommendations and Nominations by Shareholders

The Nominating Committee will consider shareholders’ recommendations for nominees for election to the Board. Shareholder nominees will be evaluated under the same standards as nominees recommended by management or the non- management members of the Board. Nominations must be accompanied by the written consent of any such person to serve if nominated, and elected and by biographical material, to permit evaluation of the individual recommended, including appropriate references. Recommendations should be sent to Middlesex Water Company, Office of the Corporate Secretary, 1500 Ronson Road, P.O. Box 1500, Iselin, New Jersey 08830-0452; or sent via the Internet to the following e-mail address: jkooper@middlesexwater.com. The Company did not receive any recommendations for nominations from any shareholders in connection with the 2014 Annual Meeting. In order to be considered for inclusion in the Company’s Proxy Statement and form of proxy relating to the 2015 Annual Meeting, nominations for Director must be received by the Company by the close of business on December 10, 2014.

Pension Committee

The Pension Committee held five meetings during 2012.2013. The Pension Committee reviews investment policies and determines recommended investment objectives for the Company’s Pension and Retiree Plans. The Committee also reviews the performanceassets of the Company’s 401(k) Plan Administrator and reviews options offered in the Company’s 401(k) plan. The Committee meets quarterly with the Company’s outside Investment Managers.retiree benefit plans. In January 2013,2014, the Board of Directors re-approved athe written Charter for the Pension Committee, which is available in the Investor Relations section of our websitewww.middlesexwater.comunder Corporate Governance. Please refer to this Charter for a full listing of Pension Committee responsibilities.

Ad Hoc Pricing Committee

The ad hoc Pricing Committee did not meet in 2012.2013. The ad hoc Pricing Committee meets, as needed, to review financial matters including, but not limited to, the pricing and issuance of common stock and long-term corporate bonds.debt.

Board and Committee Self-Evaluation

The Board periodically evaluates its performance regularly in a Self Assessment Questionnaireself assessment questionnaire, which is reviewed by the Corporate Governance and Nominating Committee. The Board conducts such evaluations as determined by the Corporate Governance and Nominating Committee.

Shareholder Proposals

In order to be eligible for inclusion in our proxy materials for our 20132014 Annual Meeting, of Shareholders, any shareholder proposal must have been received by the Secretary of the Company, 1500 Ronson Road, Iselin, New Jersey 08830 no later than December 12, 2012.11, 2013. No shareholder proposals were received by the Company for the 20132014 Annual Meeting.

Advance Notice of Business to be Conducted at an Annual Meeting of Shareholders

For business to be properly brought before an annual meetingAnnual Meeting by a shareholder, the business must be an

appropriate matter to be voted by the shareholders at an Annual Meeting and the shareholder must have given proper and timely notice in writing to the Corporate Secretary of the Company at 1500 Ronson Road, P.O. Box 1500, Iselin, New Jersey 08830-0452.

Shareholders are entitled to submit proposals on matters appropriate for shareholder action consistent with regulations of the Securities and Exchange Commission.SEC. A shareholder’s notice to the Corporate Secretary must set forth as to each matter the shareholder proposes to bring before the Annual Meeting (a) a brief description of the business desired to be brought before the Annual Meeting and reasons for conducting such business at the Annual Meeting, (b) the name and address, as they appear on the Company’s books, of the shareholder proposing such business, (c) the class and number of shares of the Company which are beneficially owned by the shareholder and (d) any material interest of the shareholder in such business.

Director Candidate Recommendations and Nominations by Shareholders

The Corporate Governance and Nominating Committee will consider shareholders’ recommendations for nominees for election to the Board of Directors. Shareholder nominees will be evaluated under the same standards as nominees recommended by management or the non-management members of the board. Nominations must be accompanied by the written consent of any such person to serve if nominated and elected and by biographical material to permit evaluation of the individual recommended, including appropriate references. Recommendations should be sent to Middlesex Water Company, Office of the Corporate Secretary, 1500 Ronson Road, P.O. Box 1500, Iselin, New Jersey 08830-0452; or sent via the Internet to the following e-mail address: kquinn@middlesexwater.com. The Company did not receive any recommendations for nominations from any shareholders in connection with the 2013 Annual Meeting. In order to be considered for inclusion in the Company’s proxy statement and form of proxy relating to the 2014 Annual Meeting of Shareholders, nominations for Director must be received by the Company by the close of business on December 11, 2013.

Code of Business Conduct

The Board of Directors has adopted a Code of Conduct that applies to all Directors, Officers and employees. This Code coversencompasses all areas of professional conduct, as well as strict adherence to all laws and regulations applicable to the conduct of our business. In addition, the Company has established an internal hotline where Code of Conduct violations may be reported.reported by any employee or member of the general public.

The Company’s Code of Conduct, as well as the charters for the Audit, Compensation, Corporate Governance, and Nominating, and Pension Committees, are available on our websitewww.middlesexwater.comunder the heading Investor Relations – (CorporateRelations—(Corporate Governance). The foregoing information is available in print to any shareholder who requests it. Requests should be addressed to Kenneth J. Quinn, Vice President, General Counsel,Corporate Secretary, and Treasurer, Middlesex Water Company, 1500 Ronson Road, P.O. Box 1500, Iselin, New Jersey 08830-0452.

DIRECTOR COMPENSATIONDIReCToR CoMPensaTIon

For 2012,2013, Middlesex Water Company paid each of the Board members who are not employed by the Company (“outside Directors”) an annuala cash retainer fee of $15,000 payable in monthly installments. Additionally, directors are paidand a common stock award of $15,000 per year, payable June 1, 2012.retainer equal to $15,000. In addition, Board members are compensated for attendance at Committee meetings. Mr. Doll, Chairman of the BoardandBoard and an Executive Officer of the Company, receives no fee or common stock award for his service as a member of the Board.Board or the Boards of the Company’s subsidiaries.

The Board committee meeting fees for outside Directors amounted to $750 per Director for each Board committee meeting attended. In the event that a Special Board or a Special Committee meeting via teleconference were to be held, the meeting fees for outside Directors are $400 and $200 per meeting, respectively.

Each Committee Chairperson is paid an annual fee, which is generally paid in October of each year as follows: the Audit Committee Chairperson--Chairperson—$7,500; Compensation Committee Chairperson -- $5,000;Chairperson—$5,000; all other Committee Chairpersons -- $2,500.Chairpersons—$2,500. The Lead Director receives a fee of $5,000 for this service, payable annually at the same time as Committee Chair fees are paid.

DIRECTOR COMPENSATIONDIReCToR CoMPensaTIon

SECURITY OWNERSHIP OF DIRECTORS, MANAGEMENT

AND CERTAIN BENEFICIAL OWNERSanD CeRTaIn benefICIal oWneRs

The following table sets forth, as of March 25, 2013,24, 2014, beneficial ownership of Middlesex Water Companythe Company’s Common Stock by the elected Directors, Executive Officers named in the table appearing under Executive Compensation, and all elected Directors and Executive Officers as a group. All Directors own stock in Middlesex Waterthe Company. Jeffries Shein owned 1.97%1.98% of the shares outstanding as of March 25, 2013.24, 2014. All other individual elected Directors and Executive Officers owned less than 1%1.35% of the shares outstanding on March 25, 2013.24, 2014.

(1) Beneficial owner has the sole power to vote and dispose of such shares.

**Represents 3.07%3.33% of the shares outstanding on March 25, 2013.24, 2014. Percentage of each individual is based on 15,814,16915,985,184 shares outstanding as of March 25, 2013.24, 2014.

Section 16(A) Beneficial Ownership Reporting Compliance

Under Section 16 of the Securities Exchange Act of 1934, officersOfficers and directors,Directors, and certain beneficial owners of the Company’s equity securities are required to file reports of ownership and changes in ownership with the SEC on specified due dates. Based solely on a review of the copies of these reports furnished to us, we believe that all filing requirements applicable to such officersOfficers and directorsDirectors (we are not aware of any five percent holder) were complied withmet during fiscal year 2012.2013.

Other Security Holders

The following table sets forth as of March 25, 2013,24, 2014, certain information with respect to the beneficial ownership of shares of Common Stock by each person or group we know to beneficially own more than five percent of the outstanding shares of such stock.

(1) This information is based on a Schedule 13F filed with the SEC on December 31, 2012 by BlackRocis.

(2) This information is based on a Schedule 13F filed with the SEC on December 31, 2012 by The Vanguard Group, Inc.

AUDIT COMMITTEE REPORTaUDIT CoMMITTee RePoRT

The Audit Committee of the Board of Directors is comprised of four independent directors, one of whom is designated by the Board as the “Audit Committee Financial Expert,” as defined by the Securities and Exchange Commission. The Committee for the year 2012,2013 was comprised of: Steven M. Klein, John C. Cutting, Amy B. Mansue and John R. Middleton, M.D. Mr. Klein serves as Audit Committee Chair and is the designated Audit Committee Financial Expert. The Audit Committee operates under a written Charter adopted by the Board of Directors which is reviewed and adopted annually by the Committee and the Board of Directors.Board. The Charter is available on the Company’s website at www.middlesexwater.com.

Management is responsible for the Company’s financial statements and internal controls. The Company’s independent accountants, ParenteBeard LLC, are responsible for performing an integrated independent audit of the Company’s annual consolidated financial statements and internal controls over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (PCAOB) (United States) and for issuing a report thereon. The Committee’s responsibility is to oversee the quality and integrity of the Company’s accounting, auditing and financial reporting practices.

In this context, in addition, the Committee has met with the independent accountants without management present. Management represented to the Committee that the Company’s consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Committee has reviewed and discussed the consolidated audited financial statements with management and the independent accountants. The Committee discussed with the independent accountants the matters required to be discussed pursuant tounder the rules adopted by the PCAOB AU 380 (Communications with Audit Committee) which included, among other things:

The independent accountants also provided to the Committee the written disclosures required by PCAOB Rule 3526, (Communications with Audit Committees Concerning Independence), and the Committee discussed with the independent accountants the firm’s independence with respect to Middlesex Waterthe Company and its management. The Committee has the sole authority to pre-approve permitted non-audit services performed by the independent accountants and has considered whether the independent accountants’ provision of non-audit services to the Company is compatible with maintaining their independence.

Based on the Committee’s discussions with management and the independent accountants, the Committee’s review of the audited financial statements, the representations of management regarding the audited financial statements and the report of the independent accountants to the Committee, the Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012,2013, for filing with the Securities and Exchange Commission.SEC.

The Committee also discussed with management the process used for the establishment and maintenance of disclosure controls and procedures in quarterly and annual reports which is required by the Securities and Exchange Commission (SEC)SEC and the Sarbanes-Oxley Act of 2002, for certain of the Company’s filings with the SEC.

PRoPosal 2

PROPOSAL 2

RATIFICATION OF APPOINTMENT BY THE AUDIT COMMITTEE OFRaTIfICaTIon of aPPoInTMenT bY THe aUDIT CoMMITTee of
THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTHe InDePenDenT ReGIsTeReD PUblIC aCCoUnTInG fIRM

The shares represented by the proxies will be voted for ratification of the appointment by the Audit Committee of ParenteBeard LLC as our independent registered public accounting firm, to issue a report to the Board of Directors and shareholders on our financial statements for the fiscal year ending December 31, 2013.2014.

Although submission of the appointment of an independent registered public accounting firm to shareholders for ratification is not required by law or regulation, the Board is submitting the selection of an independent registered public accounting firm for shareholder ratification. Under the Sarbanes-Oxley Act of 2002 and the rules of the SEC promulgated thereunder, the Audit Committee is solely responsible for the appointment, compensation and oversight of the work of ourthe independent registered public accounting firm. Representatives of ParenteBeard LLC are expected to be present at the Annual Meeting and will be afforded an opportunity to make a statement, if they so desire, and to respond to appropriate questions.

The affirmative vote of a majority of the votes cast by shareholders in person or represented by proxy at the Annual Meeting is required for the approval of this Proposal. The Board has not determined what action it would take if the shareholders do not approve the selection of ParenteBeard LLC, but may reconsider the selection if the shareholders’ action so warrants. Even if the selection is ratified, the Audit Committee, exercising its own discretion, may select different auditors at any time during the year if it determines that such a change would be in the Company’s best interests and in the best interests of the shareholders.

THe boaRD ReCoMMenDs THaT sHaReHolDeRs VoTe

THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE
FORfoRTHE RATIFICATION OF THE APPOINTMENT OF PARENTEBEARD LLC.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEESInDePenDenT ReGIsTeReD PUblIC aCCoUnTInG fIRM fees

ParenteBeard LLC has been previously approved and appointed by the Audit Committee as the Company’s independent registered public accounting firm. Aggregate fees billed to the Company for the years ending December 31, 20122013 and 20112012 by ParenteBeard LLC are as follows:

{a}(a) Audit fees were incurred for audits of the financial statements and internal control over financial reporting of the Company, an audit of the financial statements of a subsidiary of the Company, and reviews of the financial statements included in the Company’s quarterly reports on Form 10-Q. In addition, the above audit fees include fees incurred for certain financing transactions.

{b}(b) Tax fees were incurred for the preparation of the Company’s tax returns.

The Audit Committee has established pre-approval policies and procedures for all audit and non-audit services to be performed by ParenteBeard LLC. The Audit Committee approves 100% of the services related to Audit Fees, Audit-Related Fees, Tax Fees and All Other Fees in excess of $5,000.

eXeCUTIVe CoMPensaTIon

EXECUTIVE COMPENSATIONCoMPensaTIon CoMMITTee RePoRT

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the section entitled “Compensation Discussion and Analysis” included in this Proxy Statement. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors that the “Compensation Discussion and Analysis” be included in this Proxy Statement. The members of the Compensation Committee are: Amy B. Mansue, Chair; Steven M. Klein, John R. Middleton, M.D. and Jeffries Shein.

COMPENSATION DISCUSSION AND ANALYSISCoMPensaTIon DIsCUssIon anD analYsIs

Persons Covered.This discussion and analysis addresses compensation for 20122013 of the following executive officers:Executive Officers: Dennis W. Doll, President and Chief Executive Officer; A. Bruce O’Connor, Vice President and Chief Financial Officer; Richard M. Risoldi, Vice President – President—Operations and Chief Operating Officer; Kenneth J. Quinn, Vice President – President—General Counsel and Corporate Secretary and Treasurer; and Bernadette M. Sohler, Vice President – President—Corporate Affairs. These executives are referred to in this discussion as the “Named Executive Officers.”

Executive Summary.A primary objective of our executive compensation program is to align the interests of our senior leadership with those of our customers and shareholders. The key components of the Company’s compensation program are designed, augmented and modified, as appropriate, to ensure we attract and retain qualified executive talent, and appropriately reward performance. We strive to create a compensation program that provides adequate balance between shorter and longer-term operational and financial performance. Our 20122013 compensation program included further migration toward competitively benchmarked: 1) base salaries, 2) incentive compensation and 3) total compensation. The Company remains committed to a disciplined and balanced approach to meeting the shortshort- and long-term needs of its customers, shareholders and employees. This compensation philosophy is consistent with the Company’s overall approach to risk management. The Company’s formal risk managementEnterprise Risk Management program seeks to mitigate, transfer or eliminate risk while simultaneously maximizing opportunity for shareholders. The Company’s compensation program seeks to achieve an appropriate balance among all these objectives and therefore, does not encourage or reward inappropriate risk-taking.

Role of the Compensation Committee.The Compensation Committee of the Board of Directors is responsible for making recommendations to the full Board of Directors with respect to the compensation of the Named Executive Officers. As part of these duties, the Committee administers the Company’s equity-based incentive compensation plan and conducts an annual formal performance reviewevaluation of the Chief Executive Officer and, in consultation with the Chief Executive Officer, reviews the performance of the other Named Executive Officers. The Board of Directors has ultimate authority to determine the compensation of all Named Executive Officers.

The Compensation Committee is governed by a formal charter that describes the Committee’s scope of authority and responsibility. The Compensation Committee consists of four Directors, all of whom are “independent” as set forth in the listing requirements for NASDAQ Global Select securities. The Corporate Governance and Nominating Committee of the Board of Directors evaluates the independence of Committee members at least annually, using the standards contained in the NASDAQ Global Select listing requirements. This evaluation, and the determination that each member of the Committee is independent, was made most recently in February 2013.2014.

Role of Executives in Compensation Committee Activities.The executive officers who serve as a resource to the Compensation Committee are the Chief Executive Officer and the Vice President-HumanPresident—Human Resources. These executives provide the Compensation Committee with input regarding market-based compensation philosophy and processes. This communication assists in the design and alignment of incentive compensation programs. In addition to providing factual information, such as company-wideCompany-wide performance on relevant measures, these executives articulate management’s views and results on current compensation programs and processes, recommend relevant performance measures to be used for future evaluations and otherwise supply information to assist the Compensation Committee. The Chief Executive Officer

also provides information about individual performance assessments for the other Named Executive Officers, and expresses to the Compensation Committee views on the appropriate levels of compensation for the other Named Executive Officers.

The Compensation Committee periodically communicates directly with third-party consultants, providing such consultants with Company-specific information. Certain portions of such information may be provided by the Vice President-HumanPresident—Human Resources or the Chief Executive Officer, in assisting in the evaluation of the estimated effect on the Company’s financial statements regarding any proposed changes to the various elements of compensation. Executives participate in Committee activities purely in an informational and advisory capacity, and have no vote in the Committee’s decision-making process. The Chief Executive Officer and Vice President-HumanPresident—Human Resources do not attend those portions of Compensation Committee meetings during which their performance is evaluated or their compensation is determined. No executive officerExecutive Officer other than the Chief Executive Officer attends those portions of Compensation Committee meetings during which the performance of the other Named Executive Officers is evaluated or their compensation is determined. In addition, the Compensation Committee meets in executive session as it considers appropriate.

Use of Consultants.The Compensation Committee periodically engages qualified independent compensation consultants to assist in the compensation process for Named Executive Officers. The consultants are retained by, and report directly to, the Compensation Committee. The Chairman of the Compensation Committee serves as the primary contact with outside compensation consultants. The Compensation Committee places no restrictions on consultants within the scope of contracted services and such consultants are not engaged by management for any purpose. The consultants provide expertise and information about competitive trends in the employment marketplace, including established and emerging compensation practices at other companies both inside and outside the Company’s comparator group. The consultants also provide proxy statement and survey data, and assist in assembling relevant comparator groups. In addition, the consultants also assist in establishing benchmarks for base salary and incentives from the comparator group proxy statement and survey data.

In determining compensation for the Named Executive Officers in 2012,2013, the Committee relied on data from a 2011 comprehensive study, presented in January 2011, performed by Steven Hall & Partners. A new study is expected to be commissioned in 2014.

Compensation Objectives and Philosophy.The overall objectives of the Company’s compensation program are to retain, motivate, and reward employees (including the Named Executive Officers) for shortshort- and long-term operational and financial performance, and to provide competitive compensation to attract and retain appropriate executive talent to the Company. The methods used to achieve these goals for Named Executive Officers are influenced by the compensation and employment practices of our peers and competitors within the relevant comparator group, and elsewhere in the marketplace. Other considerations include each Named Executive Officer’s individual performance in achieving both financial and non-financial corporate objectives.

Our program is designed to compensate the Named Executive Officers based on their level of assigned management responsibilities, individual experience and performance levels and their knowledge and management of the Company’s operations. The creation of long-term value is highly dependent on the development and effective execution by our Named Executive Officers of our business strategy. Factors that influence the design of our executive compensation program include, among other things, the items listed below:

Our 2012 compensation program for Named Executive Officers includedincludes three key components. The first component iscomponents: (1) base salary. The second issalary, (2) an equity-based long-term incentive plan in the form of restricted common stock and the third is certain benefits and(3) perquisites at levels that are competitive in the marketplace and appropriate for the roles of the Named Executive Officers. The incentive-based component of our compensation program is designed to be clear, transparent and understandable to investors and recipients. This is intended to simplify analysis by our shareholders, as well as to emphasize the critical importance of a long-term focus in the water and wastewater utility industry on financial and operational performance.

Assembling the Components of Compensation.The Compensation Committee analyzes the level and relative mix of executive compensation elements by component (e.g., base salary, incentives, and benefits) and in the aggregate. The Chief Executive Officer provides recommendations to the Committee relating to base compensation changes relative to the Named Executive Officers, other than himself. Based on this analysis, the Compensation Committee reviews, challenges and recommends each Named Executive Officer’s compensation, subject to approval by the full Board of Directors.Board.

When evaluating the components comprising total compensation, the Compensation Committee considers, among other things, general market practices and the alignment of incentive awards with strategic objectives and Company operational and financial performance. The Compensation Committee seeks to create appropriate incentives without encouraging behaviors that result in inappropriate risk. These components are periodically evaluated in relation to benchmark data derived from information reported in publicly-available proxy statements and from market survey data.risk-taking.

AsThe Company last conducted a result of the competitive executive compensation marketplace assessment report delivered in January 2011 bythrough Steven Hall & Partners, at which time the Compensation Committee developed an implementationimplemented and executed a plan to bring executive compensation levels more in line with 2011 market levels over a two-year period. The full Board approved the phase-in plan and in April 2011, 60% of the proposed change was made and the remaining 40% was made in October 2012.

Base Salary.Base salary is designed to provide a reasonable level of predictable compensation commensurate with market standards of the position held, adjusted for specific job responsibilities assigned, individual experience and demonstrated performance. Named Executive Officers are eligible for periodic adjustments to their base salary based on these factors. The Compensation Committee reviews and recommends to the Board of Directors any base salary changes for Named Executive Officers, including the Chief Executive Officer. The Compensation Committee generally seeks to undertake a comprehensive review of the executive compensation program approximately every three years. The Compensation Committee has generally established the 50th percentile of peer proxycomparator and survey data as the targeted base compensation level, with adjustments made upward or downward for each Named Executive Officer’s specific experience, responsibilities and performance, estimated value in the marketplace and the Committee’s viewjudgment of each Named Executive Officers’Officer’s contribution to the success of the Company.

Incentives.The Company does not have any formal plan or program that provides for cash or other form of short-term incentive compensation for Named Executive Officers. The Company does havehas a long-term incentive plan in the form of restricted Company common stock (the Restricted Stock Plan). Awards under this plan are considered on an annual basis and are based on the achievement of certain financial and operational goals. The value of the restricted shares is determined as of the date vesting occurs, generally five years beyond the date of issue. There is no provision in the Restricted Stock Plan that specifically addresses re-pricing or cash buyouts relative to restricted stock awards, and such practices have never been employed.

The Restricted Stock Plan is designed to compensate the Named Executive Officers for executing specific financial and non-financial elements of the Company’s business plan. The target award is comprised of a single corporate financial goal, in addition to one or more individual non-financial performance goals. The corporate financial goal for 20122013 was budgeted Income Before Income Taxes. The corporate financial goal comprised 60% of the target award for Named Executive Officers other than the President and Chief Executive Officer, whose corporate financial goal comprised 80% of his target award. The remaining portion of the target award for all Named Executive Officers is based upon the level of achievement of the individual non-financial performance goals. The non-financial individual performance goals are intended to incent the Named Executive Officers to implement operational, technical, management and other initiatives that benefit the company’sCompany’s customers, shareholders and employees, and which require effort above and beyond what would normally be required as part of the Named Executive Officer’s base job responsibilities.

The Compensation Committee evaluates the reasonableness of attaining designated incentive goals relative to the importance of such goals and the required effort to achieve them. The Committee recognizes that some level of calculated risk is required to achieve business objectives that ultimately benefit shareholders and customers; however, the Committee

The Compensation Committee evaluates the reasonableness and likelihood of attaining designated incentive goals in an effort to ensurediscourages taking risk that, such targets appropriately reward performance, but do not encourage inappropriate risk taking or compromises in the qualityjudgment of servicethe Board, is inappropriate relative to the Company’sexpectations of our shareholders and customers. ActualDelivered performance during the applicable measurement period may exceed or fall short of the targets resulting in the Named Executive Officer receiving an annual incentive award that is above or below the initial targeted level. Annual incentive awards granted in prior years are not taken into account by the Compensation Committee in the process of setting performance targets or in evaluating achievements for the current year. Incentive-based awards are subject to the Company’s “clawback” policy, as may be amended from time to time. Such policy requires that incentive-based awards are subject to return to the Company, in whole or in part, if a financial statement restatement occurs within the three calendar years subsequent to an award, and such restatement effectively negates the achievement of financial targets that precipitated such prior award.

In evaluating actual performance as comparedrelative to the established corporate financial goal, the Compensation Committee may, at its discretion, exclude individual items that are either additive or deductive which are considered non-recurring in nature. Such items are generally presumed to be infrequent. In addition, the Compensation Committee may increase or decrease a Restricted Stock award based upon additional consideration of a Named Executive Officer’s performance or achievements.

In 2012,2013, the Compensation Committee evaluated achievement of the corporate financial goal for 2011.2012. The Compensation Committee evaluated actual 20112012 Income Before Income Taxes and determined that there were no non-recurring items in 20112012 that should be considered in the determination of the level of achievement of the 20112012 corporate financial goal. Based on the Company’s reported 20112012 Income Before Income Taxes, the Compensation Committee determined that threshold financial performance was met in 20112012 and awards were made to the Named Executive Officers related to the 20112012 corporate financial goal. Detailed explanation of the factors contributing to 20112012 financial performance are articulated in the Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 20112012 Annual Report to Shareholders. Separately, the Compensation Committee also evaluated the level of achievement of the individual personal performance goals relative to the contribution to the various customer-related, strategic, competitive, operational and management objectives referenced above.

Broad-based Benefits.We also provide our Named Executive Officers with certain benefits available to all qualifying employees of the Company, as well as selected fringe benefits and perquisites, not generally available to all employees of the Company. The following summarizes the significant broad-based benefits in which the Named Executive Officers were eligible to participate in 2012:2013:

Executive Benefits and Perquisites.In addition to the benefits described above, theThe Named Executive Officers received the following fringe benefits and perquisites in 2012:2013:

The Compensation Committee reviews all components of executive compensation on an annual basis. Changes to the level or types of benefits within these categories, including considerations relating to the addition or elimination of benefits and plan design changes, are made by the Compensation Committee on an aggregate basis with respect to the group of employees entitled to those benefits, and not necessarily with reference to a particular Named Executive Officer’s compensation. Decisions about these components of compensation are made without reference to the Named Executive Officers’ salary and annual cash incentives, as they involve issues of more general application and often include consideration of trends in the industry or in the employment marketplace.

Stock Ownership Requirements.Prior to 2012, theThe Company did not haveestablished formal stock ownership requirements for Named Executive Officers. Based upon the results of the above-referenced executive compensation study,Officers in 2012 whereby, a formal beneficial stock ownership requirement of 3.0 times base salary has been established for the CEO, intended to be achieved within five years. As of December 31, 2012,2013, the CEO achieved a beneficial stock ownership level of 1.62.2 times base salary through a combination of personal purchases of stock on the open market over time, including in 2013, and awards of restricted stock. A beneficial stock ownership requirement of 1.5 times base salary has been established for the Chief Financial Officer and Chief Operating Officer. A beneficial stock ownership requirement of 1.0 times base salary has been established for all other Named Executive Officers.

Employment Agreements.The Company does not have any employment agreements with any of the Named Executive Officers. All Named Executive Officers are “at will” employees.

Supplemental Executive Retirement Plan (SERP).The Company’s Named Executive Officers are eligible to participate in a non-qualified Supplemental Executive Retirement Plan (SERP) at the discretion of the Board of Directors.Board. A participant, who retires on their normal retirement date, as defined in the SERP, is entitled to an annual retirement benefit of up to 75% of compensation, as defined in the SERP, generally reduced by the primary social securitySocial Security benefit, and further reduced by any benefit payable from the Company’s qualified defined benefit pension plan. Further reductions are made for certain retirement benefits from prior employment, where such benefits have accrued. The maximum annual retirement benefit to which two of the five Named Executive Officers may be entitled is 50% of compensation. Offsetting amounts related to Social Security and other benefit plans are calculated similarly for all Named Executive Officers. Generally, a participant is vested in the SERP at ten (10) years of service in the case of retirement, and in the event of a Change in Control, as described further herein. A participant’s right to receive benefits under the SERP generally commences upon retirement, to their spousal beneficiary at death, and in connection with a Change in Control, upon termination under the circumstances described in the SERP.

Benefits are generally payable upon achieving normal retirement, as defined in the SERP, for fifteen (15) years, either to the participant or the participant’s spousal beneficiary. A reduced benefit may be received upon early retirement, as defined in the SERP, after age 62. Retirement benefits may also be in the form of a single life annuity, joint and 50% survivor’s annuity, joint and 100% survivor’s annuity, single life annuity with a ten (10) year certain period or single life annuity with a fifteen (15) year certain period, paid on an actuarial equivalent basis.

The Company is not obligated to set aside or earmark any monies or other assets specifically for the purpose of funding the SERP, except that upon a Change in Control, the Company would be obligated to make contributions to a trust anticipated to be sufficient to meet the obligations under the SERP. Absent a Change in Control, benefit payments are in the form of an unfunded general obligation of the Company.

Exceptions to Usual Procedures.The Compensation Committee may recommend to the full Board of Directors that they approve the payment of special cash compensation to one or more Named Executive Officers, in addition to payments approved during the annual compensation-setting cycle. The Committee may make such a recommendation if it believes it would be appropriate to reward one or more Named Executive Officers in recognition of contributions to a particular project or initiative, or in response to customer, competitive or other factors that were not addressed during the recurring annual compensation-settingcompensation- setting cycle or, that may have changed since the annual compensation-setting cycle.

SUMMARY COMPENSATION TABLEsUMMaRY CoMPensaTIon Table

(1) The amounts in this column reflect the value of Restricted Stock Plan awardsAwards in the applicable year. These awards generally do not vest to the participants until the expiration of five years from the date of such award. During such five-year period, the participants have contingent ownership of such shares, including the right to vote the same and to receive dividends thereon.

(2) TheThis column represents the aggregate change in the actuarial present value of the accumulated benefits under all of our defined benefit pension plans for the named executive officers. A zero is shown in those cases where the present value of accumulated benefits declined during 2013 primarily due to the impact of the increase in the discount rate used to value the benefit from 3.99% in 2012 to 4.87% in 2013. The present value of accumulated benefits declined by $32,952, $146,124, $85,123 and $113,367 for Mr. Doll, Mr. O’Connor, Mr. Risoldi and Mr. Quinn, respectively. The increases for this amount fromin 2011 toand 2012 iswere driven primarily by a further reductionreductions in the discount rate applied to calculate the presentbenefit from 5.48% in 2010 to 4.37% in 2011 to 3.99% in 2012. Neither the increase or the decrease in pension value of future pension payments.resulting from changes in the discount rate results in any increase or decrease in benefits payable to participants under the plans. The Company does not have any nonqualifiednon-qualified deferred compensation plans or related earnings.

(3) The detail of “All Other Compensation” recognized for the benefit of the Named Executive Officers is set forth on Schedule A, as supplemental information to the Summary Compensation Table.table.

SCHEDULE A

SUMMARY - ALL OTHER COMPENSATION

sCHeDUle a—sUMMaRY—all oTHeR CoMPensaTIon

GRanTs of Plan-baseD aWaRDs

GRANTS OF PLAN-BASED AWARDS

OUTSTANDING EQUITY AWARDSoUTsTanDInG eQUITY aWaRDs

OPTIONS EXERCISEDOPTION EXERCISES AND STOCK VESTED