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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
[X] Filed by the Registrant
[_] Filed by a Party other than the Registrant
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of 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
BIW LIMITED
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than 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)(1)
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):
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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:
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BIW LIMITED
230 BEAVER STREET
ANSONIA, CT 06401-0426
April 8, 2005
Dear Fellow Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of BIW
Limited, which we will hold at 2:00 p.m., local time, on Tuesday, May 10, 2005
at the offices of BIRMINGHAM UTILITIES' EASTERN DIVISION, 130 NATIONAL DRIVE,
GLASTONBURY, CONNECTICUT 06033 (For directions, visit the Company's website at
www.buiweb.com or call Henrietta Vitale at (203) 735-1888). Company officials
will be available at 1:30 p.m. should you wish to arrive early. At the Annual
Meeting, we will ask you to elect ten (10) nominees to serve on our Board of
Directors for the ensuing year and ratify the selection of Dworken, Hillman,
LaMorte & Sterczala, P.C. as our independent auditors for the year ending
December 31, 2005.
Only stockholders of record who hold shares of BIW Limited common stock at the
close of business on March 15, 2005, the record date for the Annual Meeting,
will be entitled to vote at the Annual Meeting. A list of stockholders entitled
to vote will be kept at the offices of BIW Limited, 230 Beaver Street, Ansonia,
Connecticut, for the ten days prior to the Annual Meeting.
It is important that your shares be represented and voted at the Annual Meeting,
whether or not you are able to attend personally. You are therefore urged to
complete, sign, date, and return the enclosed proxy card promptly in the
accompanying envelope, which requires no postage if mailed in the United States.
You are, of course, welcome to attend the meeting and vote in person, even if
you have previously returned your proxy card. I look forward to your support.
Sincerely,
/s/ John S. Tomac
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President
BIW LIMITED
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
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Notice is hereby given that the Annual Meeting of Stockholders of
BIW Limited (the "Company") will be held on Tuesday, May 10, 2005 at 2:00 p.m.,
at the offices of Birmingham Utilities' Eastern Division, 130 National Drive,
Glastonbury, Connecticut 06033 (For directions, visit the Company's website at
www.buiweb.com or call Henrietta Vitale at (203) 735-1888), for the following
purposes:
(1) To elect ten (10) directors of the Company to serve for the
ensuing year;
(2) To ratify the selection of Dworken, Hillman, LaMorte &
Sterczala, P.C. as the Company's independent auditors for the
year ending December 31, 2005; and
(3) To transact such other business as may properly come before
the Annual Meeting or any adjournment thereof.
Stockholders of record at the close of business on March 15, 2005
will be entitled to notice of and to vote at the Annual Meeting or any
adjournment thereof. All stockholders are cordially invited to attend the Annual
Meeting in person. Stockholders who are unable to attend the Annual Meeting in
person are requested to complete and date the enclosed proxy card and return it
promptly in the envelope provided. No postage is required if mailed in the
United States. Stockholders who attend the Annual Meeting may revoke their proxy
and vote their shares in person.
By Order of the Board of Directors
John S. Tomac
PRESIDENT
Ansonia, Connecticut
April 8, 2005
BIW LIMITED
230 BEAVER STREET
ANSONIA, CT 06401-0426
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PROXY STATEMENT
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GENERAL INFORMATION
PROXY SOLICITATION
This proxy statement and the accompanying proxy card are furnished
to the holders of common stock of BIW Limited in connection with the
solicitation of proxies for use at the Annual Meeting of Stockholders to be held
on Tuesday, May 10, 2005, or at any adjournment of the Annual Meeting. The
purposes of the meeting and the matters to be acted upon are described in the
accompanying Notice of Annual Meeting of Stockholders.
Proxies for use at the meeting are being solicited by BIW Limited.
Proxies will be mailed to stockholders on or about April 8, 2005 and will be
solicited chiefly by mail. We will make arrangements with brokerage houses and
other custodians, nominees and fiduciaries to send proxies and proxy material to
the beneficial owners of the shares and will reimburse them for their expenses
in so doing. Should it appear desirable to do so in order to ensure adequate
representation of shares at the meeting, our officers, agents and employees may
communicate with stockholders, banks, brokerage houses and others by telephone,
e-mail, facsimile, or in person to request that proxies be furnished. We will
pay all expenses incurred in connection with this solicitation.
REVOCABILITY AND VOTING OF PROXY
A form of proxy for use at the Annual Meeting and a return envelope
for the proxy are enclosed. Stockholders may revoke the authority granted by
their execution of proxies at any time before their effective exercise by filing
with our Secretary a written notice of revocation or a duly executed proxy
bearing a later date, or by voting in person at the meeting. Shares of common
stock represented by executed and unrevoked proxies will be voted in accordance
with the choice or instructions specified. If no specifications are given, the
proxies intend to vote the shares represented to approve Proposals No. 1 and 2
as described in the accompanying Notice of Annual Meeting of Stockholders and in
accordance with their best judgment on any other matters which may properly come
before the meeting.
RECORD DATE AND VOTING RIGHTS
Only stockholders of record at the close of business on March 15,
2005 are entitled to notice of and to vote at the Annual Meeting or any
adjournment of the Annual Meeting. On March 15, 2005 there were 1,659,579 shares
of common stock outstanding. Each share is entitled to one vote on each of the
matters to be presented at the Annual Meeting. The holders of a majority of the
outstanding shares of common stock, present in person or by proxy, will
constitute a quorum at the Annual Meeting. Abstentions and broker non-votes will
be counted for purposes of determining the presence or absence of a quorum.
"Broker non-votes" are shares held by brokers or nominees which are present in
person or represented by proxy, but which are not voted on a particular matter
because instructions have not been received from the beneficial owner. Under
Connecticut law, the effect of broker non-votes on a particular matter depends
on whether the matter is one as to which the broker or nominee has discretionary
voting authority under the applicable rule of the American Stock Exchange. The
effect of broker non-votes on the specific items to be brought before the Annual
Meeting is discussed under each item.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
Our By-laws provide for not less than seven nor more than fifteen
directors to be elected at the Annual Meeting of Stockholders, each to serve for
the ensuing year and until his or her successor is elected and has qualified.
The Board of Directors currently consists of ten (10) persons. Each person named
below is now a director of BIW Limited. All nominees have consented to be named
and have indicated their intent to serve if elected. BIW Limited has no reason
to believe that any of the nominees will be unable to serve or that any vacancy
on the Board of Directors will occur. In the event any of these nominees is
unable to serve as a director, the shares represented by the executed and
unrevoked proxies will be voted for the person, if any, who is designated by the
Board of Directors to replace the nominee.
The nominees, their ages, the year in which each first became a
director and their principal occupations or employment during the past five
years are as follows:
Year First Principal Occupation
Nominee Age Became Director During the Past Five Years
------- --- --------------- --------------------------
Michael J. Adanti 64 2000 President Emeritus, Southern Connecticut State
University, Retired 2003; Director of Griffin Hospital
(non-profit).
Mary Jane Burt 51 2000 Associate, H. Pearce, Real Estate Company; Principal,
The Laurel Group (Business Consultants) since 1998.
Previously Director, INSITE ONE (1999-2002); President,
Burt Medical Lab (1984-1998).
James E. Cohen 58 1982 Lawyer in private practice in Derby, CT since 1971;
Attorney Trial Referee for the Connecticut Superior
Court since 1996.
Betsy Henley-Cohn 52 1981 Chairwoman of the Board of Directors of the Company
since 1992; Chairperson/Treasurer, Joseph Cohn & Sons,
Inc. (construction subcontractors) since 1979; Director,
UIL Holdings Corporation, since 1990; Director,
Aristotle Corp. (1995-2002); Director, Citizens Bank of
Connecticut (1997-1999).
Juri Henley-Cohn* 27 2004 President, Johnson Point Productions; Writer; Producer;
Graduate of Harvard University.
Alvaro da Silva 59 1997 President, DSA Corp. (a management company) since 1979;
President B.I.D., Inc. (land development and home
building company); Managing Partner, Connecticut
Commercial Investors, LLC (a commercial real estate and
investment partnership) since 1976; Director of Great
Country Bank (1991-1995).
Themis Klarides 39 2001 Lawyer in practice in Shelton, CT since 1998; State
Representative, 114th District Connecticut General
Assembly, since 1998.
B. Lance Sauerteig 59 1996 Principal in BLS Strategic Capital, Inc. (financial and
investment advisory company) since 1994; Principal in
Tortoise Capital Partners, LLC (real estate investments)
since 2000; Director, Chemworth, Inc. since 2003;
Director, United Aluminum Corporation since 2002.
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Kenneth E. Schaible 63 1994 Real Estate Developer and Director of AuthX, Inc.;
previously, Senior Vice President, Webster Bank,
1995-1996; President, Shelton Savings Bank and Shelton
Bancorp., Inc. 1972-1995.
John S. Tomac 51 1999 President of Company since October 1, 1998; Treasurer of
the Company since December 1997; previously, Vice
President of the Company (December 1, 1997-September 30,
1998); Assistant Controller, BHC Company, (1991-1997).
* Mr. Henley-Cohn is the son of Ms. Henley-Cohn, the Chairwoman of the Board and
Chief Executive Officer of BIW Limited.
INFORMATION REGARDING BOARD OF DIRECTORS
BIW Limited became the holding company for Birmingham Utilities,
Inc. in June 2002. Where the context requires in this proxy statement,
references to "the Company" or "us" with respect to events prior to June 2002
refer to our current subsidiary, Birmingham Utilities, Inc.
The Board of Directors' Executive Committee consists of Ms.
Henley-Cohn, Ms. Burt and Messrs. Tomac, Cohen, Henley-Cohn and Sauerteig. The
Executive Committee met fifteen times in 2004. The Executive Committee reviews
strategic planning alternatives and advises the Board of Directors on financial
policy, issuance of securities and other high priority issues.
The Board of Directors' Audit Committee consists of Messrs.
Schaible, da Silva, Adanti and Ms. Klarides. The Audit Committee met four times
in 2004. The Audit Committee is directly responsible for the appointment,
compensation and oversight of the independent auditors and reviews the degree of
their independence; approves the scope of the audit engagement, including the
cost of the audit; approves any non-audit services rendered by the auditors and
the fees therefor; reviews with the auditors and management our policies and
procedures with respect to internal accounting and financial controls and, upon
completion of an audit, the results of the audit engagement; and reviews
internal accounting and auditing procedures with our financial staff and the
extent to which recommendations made by the independent auditors have been
implemented. Mr. Schaible is an "audit committee financial expert" as that term
is defined in the regulations of the Securities and Exchange Commission. All
members of the Audit Committee are independent as defined in the listing
standards of the American Stock Exchange. On June 13, 2000, the Board of
Directors adopted an Audit Committee Charter. The charter, as amended on March
25, 2004, meets the current requirements of the Securities and Exchange
Commission and the American Stock Exchange and is available on BIW Limited's
website, www.buiweb.com.
The Board of Directors' Personnel and Pension Committee consists of
Messrs. Sauerteig and Adanti, Ms. Burt and Ms. Klarides. The Personnel and
Pension Committee met four times in 2004. The Personnel and Pension Committee
reviews executive officer compensation and proposes the same to the full Board
of Directors for action. It also proposes to the full Board overall payroll pool
levels and pension plan arrangements for all employees.
The Committee on Directors consists of Messrs. Cohen, da Silva and
Schaible. The committee met twice in 2004. That Committee makes recommendations
to the Board of Directors for Board replacements when they become available and
for compensation levels for the Board of Directors. All members of the Committee
on Directors are independent as defined in the listing standards of the American
Stock Exchange. The Committee has a charter which is available on BIW Limited's
website, www.buiweb.com. The Committee on Directors does not set specific,
minimum qualifications that nominees must meet in order for the committee to
recommend them to the Board of Directors, but rather believes that each nominee
should be evaluated based
3
on his or her individual merits, taking into account the needs of BIW Limited
and the composition of the Board of Directors. Members of the Committee on
Directors discuss and evaluate possible candidates in detail, and suggest
individuals to explore in more depth. Once a candidate is identified whom the
committee wants to seriously consider and move toward nomination, the Chairman
of the Committee on Directors enters into a discussion with that nominee. The
Committee on Directors will consider nominees recommended by stockholders. The
policy adopted by the Committee on Directors provides that nominees recommended
by stockholders are given appropriate consideration in the same manner as other
nominees. Stockholders who wish to submit nominees for director for
consideration by the Committee on Directors for election at our 2006 Annual
Meeting of Stockholders may do so by submitting in writing the names of such
nominees with their qualifications and biographical information forwarded to the
Committee in care of the corporate Secretary of BIW Limited between December 1,
2005 and December 31, 2005.
In 2004 the Board of Directors held thirteen meetings. Each director
attended at least 75% of the aggregate number of meetings of the full Board of
Directors and any Committee(s) of the Board of Directors on which such director
served during 2004.
COMPENSATION OF DIRECTORS
The Company's directors, other than Ms. Henley-Cohn, Mr. Tomac, and
Mr. Henley-Cohn received an annual fee of $5,750. Mr. Henley-Cohn received a
prorated annual fee of $4,500 after joining the Board upon his election at last
year's Annual Meeting of Shareholders. Additionally, each Company director,
other than Ms. Henley-Cohn and Mr. Tomac, received $600 for each full Board
meeting attended prior to May 11, 2004, $500 for each Committee meeting attended
prior to May 11, 2004, $750 for each full Board meeting attended after May 11,
2004 and $600 for each Committee meeting attended after May 11, 2004. Ms.
Henley-Cohn and Mr. Tomac received no separate compensation for their service as
directors.
COMMUNICATIONS WITH DIRECTORS
In order to provide our stockholders and other interested parties
with a direct and open line of communication to the Board of Directors, the
Board of Directors has adopted the following procedures for communications to
directors. BIW Limited's stockholders and other interested persons may
communicate with the non-management directors of the Company by sending an
e-mail to the corporate Secretary at hvitale@buwater.com. Communications may
also be sent by mail addressed in care of the corporate Secretary, BIW Limited,
230 Beaver Street, Ansonia, Connecticut 06401.
All communications received in accordance with these procedures will
be reviewed initially by our corporate Secretary. The Secretary will relay all
such communications to the appropriate director or directors unless the
Secretary determines that the communication:
o does not relate to the business or affairs of BIW Limited or the
functioning or constitution of the Board of Directors or any of
its committees;
o relates to routine or insignificant matters that do not warrant
the attention of the Board of Directors;
o is an advertisement or other commercial solicitation or
communication;
o is frivolous or offensive; or
o is otherwise not appropriate for delivery to directors.
The director or directors who receive any such communication will
have discretion to determine whether the subject matter of the communication
should be brought to the attention of the full Board of
4
Directors or one or more of its committees and whether any response to the
person sending the communication is appropriate. Any such response will be made
only in accordance with applicable law and regulations relating to the
disclosure of information.
Our Secretary will retain copies of all communications received
pursuant to these procedures for a period of at least one year. The Committee on
Directors of the Board of Directors will review the effectiveness of these
procedures from time to time and, if appropriate, recommend changes.
We have not established a formal policy regarding director
attendance at our annual meetings of stockholders, but our directors generally
do attend the annual meeting. The Chairman of the Board presides at the annual
meeting of stockholders, and the Board of Directors holds one of its regular
meetings in conjunction with the annual meeting of shareholders. All of the
members of the Board at the time of the Company's 2004 Annual Meeting of
Stockholders attended that meeting.
CODE OF ETHICS
Our Board of Directors has approved a Code of Ethics in accordance
with the rules of the Securities and Exchange Commission and the American Stock
Exchange that governs the conduct of each of our employees and directors,
including our principal executive officer, principal financial officer,
principal accounting officer and controller. Our Code of Ethics is available on
our website at www.buiweb.com.
VOTE REQUIRED
Assuming that a quorum is present, the nominees receiving the
affirmative vote of holders of a majority of the shares of common stock issued,
outstanding and entitled to vote, present or represented at the meeting, shall
be elected as directors. Broker non-votes with respect to this matter will be
treated as neither a vote "for" nor a vote "against" the matter, although they
will be counted in determining if a quorum is present. However, instructions on
the accompanying proxy card to withhold authority to vote for one or more
nominees will be considered in determining the number of votes required to
attain a majority of the shares present or represented at the meeting and
entitled to vote. Accordingly, an instruction to withhold authority by a
stockholder present in person or by proxy at the meeting has the same legal
effect as a vote "against" the nominee because it represents a share present or
represented at the meeting and entitled to vote, thereby increasing the number
of affirmative votes required to approve the nominee.
THE BOARD OF DIRECTORS DEEMS "PROPOSAL NO. 1 - ELECTION OF
DIRECTORS" TO BE IN THE BEST INTERESTS OF BIW LIMITED AND ITS STOCKHOLDERS AND
RECOMMENDS A VOTE "FOR" APPROVAL OF THIS PROPOSAL.
EXECUTIVE COMPENSATION
RETIREMENT PLAN
Birmingham Utilities, Inc., a wholly-owned subsidiary of the
Company, has a noncontributory defined benefit plan, which covers most of its
employees. The retirement plan generally provides a retirement benefit based
upon the participant's years of credited service and his or her final average
earnings, with final average earnings consisting of the total compensation
(including salary, bonus and overtime earnings) of the participant during the
five years of highest total compensation of the participant in the 10 years
preceding the participant's retirement or termination date. Retirement benefits
are payable either as a straight life annuity, a joint and survivor annuity or
in other optional forms. Normal retirement is at age 65, but certain early
retirement benefits may be payable to participants who have attained age 55 and
completed 10 years of continuous service, and survivor benefits may be payable
to the surviving spouse of a vested participant who dies prior to early or
normal retirement. A participant's benefit under the retirement plan vests after
five years of credited service, all
5
benefits funded by Birmingham Utilities, Inc. are based upon actuarial
computations, and no contributions are made by participants.
The following table shows estimated annual benefits payable under
the plan to participants in specified compensation (final average earnings) and
years-of-service classifications on a straight life annuity basis, assuming
normal retirement at age 65 in 2004. The benefits listed in the following table
are not subject to any deduction for social security or other offset amounts.
FINAL AVERAGE YEARS OF SERVICE(B)
- ------------- -------------------
EARNINGS(A)
-----------
15 20 25 30 35
-- -- -- -- --
125,000 24,375 32,500 40,625 48,750 56,875
150,000 29,250 39,000 48,750 58,500 68,250
175,000 34,125 45,500 56,875 68,250 79,625
200,000 39,000 52,000 65,000 78,000 91,000
(a) The current final average earnings as of December 31, 2004 for Betsy
Henley-Cohn and John S. Tomac are $78,183 and $142,427, respectively.
(b) Years of credited service under the retirement plan as of December 31, 2004
for Betsy Henley-Cohn and John S. Tomac are 11 and 7, respectively.
EMPLOYMENT CONTRACTS
John S. Tomac
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Effective October 1, 1998, we entered into an employment agreement
with our President, John S. Tomac. The agreement has a three-year term with
automatic three-year extensions, unless either party gives written notice that
the agreement will no longer be automatically extended. No notice was given in
2001 and this agreement was extended to September 30, 2004. No notice was given
in 2004 and this agreement was again extended to September 30, 2007. The
employment agreement terminates upon the death of Mr. Tomac or upon mutual
agreement of the parties. The agreement can be terminated by us: (i) for "cause"
(as defined in the employment agreement), (ii) in the event Mr. Tomac becomes
disabled, or (iii) without cause, during a six month period during each term;
provided however, that if Mr. Tomac is terminated without cause during such six
month period, he is entitled to receive a severance package equal to his base
salary plus benefits for one year from the date of such termination. Mr. Tomac
may terminate the agreement in the event of a Change of Control (as defined in
the employment agreement) or in the event that we breach this agreement. If Mr.
Tomac elects to terminate the agreement upon a Change of Control, he will be
entitled to receive a lump sum payment, payable within 90 days of making the
election, equal to two times the greater of (x) his compensation during the last
full fiscal year immediately preceding the election and (y) his average annual
compensation with respect to the two most recent fiscal years preceding such
election. Mr. Tomac's compensation for purposes of the foregoing calculation
includes base salary, bonus and any other cash incentives paid to him. If Mr.
Tomac does not elect to terminate the agreement upon a Change of Control, the
agreement will continue in effect for a period of three years from the Change of
Control and then terminate.
The employment agreement provides for an annual salary of $100,000
and provides that the Board of Directors shall review Mr. Tomac's salary
annually. Mr. Tomac's annual salary for 2004 is set forth below in the Summary
Compensation Table included in the section "Executive Officers: Annual and
Long-Term Executive Compensation". In addition, we agree to provide an
automobile for Mr. Tomac and pay all expenses in connection with the operation
of the vehicle. Pursuant to the employment agreement, Mr. Tomac is entitled
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to four weeks paid vacation, to be taken each year and is also entitled to
participate in any employee welfare and retirement plan or program available
generally to our employees including hospital, medical and dental benefits.
Under the employment agreement, we agree to indemnify Mr. Tomac to
the fullest extent permissible under Connecticut law against all costs, charges
and expenses incurred by him in connection with any action, suit or proceeding
to which he may be made a party by reason of his being or having been a
director, officer or employee of the Company or his serving or having served any
other enterprise as a director, officer or employee at the request of the
Company. In addition, Mr. Tomac is entitled to the protection of any insurance
policies the Company may elect to maintain generally for the benefit of its
directors and officers with respect to such costs, charges and expenses.
EXECUTIVE OFFICERS: ANNUAL AND LONG-TERM EXECUTIVE COMPENSATION
The following table sets forth the annual and long-term compensation
paid or accrued by the Company to those persons who were the Chief Executive
Officer and the executive officers of the Company at the end of 2004 whose total
annual salary exceeded $100,000 (collectively, the "Named Executive Officers"),
for services rendered by them in all capacities in which they served the Company
during 2002, 2003 and 2004. The following table does not contain a column for
"Other Annual Compensation" because the amount of perquisites and other personal
benefits received by the Named Executive Officers was less than the lesser of
$50,000 or 10% of the total salary and bonus reported for each person.
SUMMARY COMPENSATION TABLE
--------------------------
ANNUAL COMPENSATION
-------------------
NAME AND PRINCIPAL POSITION
---------------------------
YEAR SALARY($) BONUS
---- --------- -----
John S. Tomac 2004 $147,822 $500
President & Treasurer 2003 $138,567 $19,613
2002 $133,233 $500
Betsy Henley-Cohn 2004 $78,811 $0
Chairman of the Board 2003 $76,490 $15,000
and Chief Executive Officer 2002 $72,509 $0
No grants of stock options were made during the year ended December
31, 2004 to the Named Executive Officers.
7
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
NUMBER OF
SHARES VALUE SECURITIES UNDERLYING VALUE OF UNEXERCISED IN-
ACQUIRED ON REALIZED UNEXERCISED OPTIONS THE-MONEY OPTIONS AT FISCAL
EXERCISE(#) ($) AT FISCAL YEAR-END(#) YEAR-END($)(A)
----------- --- --------------------- --------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
John. S. Tomac 9,178 117,150 4,740 0 $42,660 --
Betsy Henley-Cohn 0 -- 0 0 -- --
(a) Computed based upon the difference between the closing price of BIW Limited
common stock on December 31, 2004 ($19.75) and the exercise price.
PERSONNEL AND PENSION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Board of Directors' Personnel and Pension Committee is comprised
of four independent, non-employee directors. The Personnel and Pension Committee
consists of Messrs. Sauerteig, and Adanti, Ms. Burt and Ms. Klarides. As members
of the Personnel and Pension Committee, it is our responsibility to administer
BIW Limited's executive compensation programs, monitor corporate performance and
its relationship to compensation of executive officers, and make appropriate
recommendations concerning matters of executive compensation.
Compensation Policies
---------------------
We have formulated a compensation philosophy that is designed to
enable us to attract, retain and reward capable employees who can contribute to
the success of the Company. Four key principles serve as the guiding framework
for compensation decisions for all employees of the Company:
o To attract and retain the most highly qualified management
and employee team.
o To pay competitively compared to similar water utility
companies.
o To motivate senior executives to achieve annual and
long-term business goals by providing equity-based incentive
opportunities.
o To strive for fairness in administration by emphasizing
performance - related measures as the basis of pay
decisions.
To implement these policies, we have designed the framework for a
three-part executive compensation program consisting of base salary, long-term
incentive opportunities for senior management, and other employment benefits.
BASE SALARY. We will seek to maintain levels of compensation that
are competitive with similar water utility companies. Our philosophy regarding
base salaries is conservative, and will seek to maintain salaries for the
aggregate officer group at approximately the competitive industry average.
Periodic increases in base salary will relate to individual contributions
evaluated against established objectives, length of service, and the industry's
pay practices. We have determined that the base salary for 2004 for our Chief
Executive Officer and for the other executive officers was generally at or below
the competitive industry average.
8
LONG TERM INCENTIVES. We believe that a compensation program should
provide executives with an opportunity to increase their ownership in the
Company and gain financially from its stock price increases. Therefore, Company
executives are eligible to receive stock options, giving them the right to
purchase shares of common stock at a specified price in the future. We believe
that the use of stock options as the basis for long-term incentive compensation
meets our defined compensation strategy and business needs by retaining key
employees and aligning their interests with those of stockholders.
OTHER BENEFITS. Our philosophy is to provide competitive health- and
welfare-oriented benefits to executives and employees, but to maintain a
conservative posture relative to executive benefits. Consistent with industry
practices, we provide a company automobile to certain executive officers.
Compliance With Section 162(m) of the Internal Revenue Code
-----------------------------------------------------------
Section 162(m) of the Internal Revenue Code generally disallows a
tax deduction to a public corporation for compensation over $1 million paid to a
corporation's chief executive officer and the four other most highly compensated
executive officers. Qualifying performance-based compensation will not be
subject to the cap if certain requirements are met.
We intend to structure the compensation of our executive officers in
a manner that should ensure that the Company does not lose any tax deductions
because of the $1 million compensation limit. The salaries for our highest paid
executives are established based on independent studies, at levels approximating
the average for companies of comparable size in similar industries and are not
expected to approach $1 million in the foreseeable future.
2004 Compensation for the Chief Executive Officer
In 2004, Betsy Henley-Cohn received an annual base salary of
$78,811. Ms. Henley-Cohn's base salary and bonus are set below the industry
average on account of her significant equity ownership in BIW Limited. Her
annual salary was nonetheless increased in 2004 in response to her contributions
to the Company's performance. Total compensation for each executive depends upon
the executive's experience level and scope of responsibility within the company
as well as individual performance. No option or restricted stock grants were
made to Ms. Henley-Cohn in 2004, since the Committee believed that the level of
her existing equity ownership aligned her interests with those of the Company's
other stockholders.
Summary
-------
The Board of Directors' Personnel and Pension Committee believes
that we have implemented a comprehensive compensation program for Company
executives that is appropriate and competitive with the total compensation
programs provided by other similar water utility companies with which we
compete. We believe our compensation philosophy ties compensation to stockholder
returns and thereby links compensation to the achievement of annual and
longer-term operational results of the Company on behalf of our stockholders. We
look forward to providing the stockholders with an update in our next annual
report to you.
Personnel and Pension Committee
of the Board of Directors
- B. Lance Sauerteig
- Michael J. Adanti
- Themis Klarides
- Mary Jane Burt
9
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our
executive officers and directors, and persons who beneficially own more than ten
percent of our common stock, to file initial reports of ownership and reports of
changes in ownership with the SEC and the American Stock Exchange. Executive
officers, directors, and persons who beneficially own more than ten percent of
our common stock, are required by the SEC to furnish us with copies of all
Section 16(a) forms they file.
Based upon a review of the copies of these forms furnished to us and
written representations from our executive officers and directors, we believe
that during fiscal 2004 all executive officers, directors, and persons who
beneficially own more than ten percent of our common stock, complied with
Section 16(a) filing requirements.
COMPANY PERFORMANCE
The following graph shows the cumulative total stockholder return on
our common stock since January 1, 2000, compared to the returns of the American
Stock Exchange Market Index, and the reporting companies in SIC Code 4941 -
Water Supply Companies.
- ----------------------------------------------------------------------------------------------------
FISCAL YEAR ENDED
- ----------------------------------------------------------------------------------------------------
COMPANY/MARKET/INDEX 12/31/1999 12/31/2000 12/31/2001 12/31/2002 12/29/2003 12/31/2004
- ---------------------- ------------ ------------ ------------ ------------ ------------ ------------
BIW Limited 100.00 56.36 88.27 88.80 95.52 102.26
- ---------------------- ------------ ------------ ------------ ------------ ------------ ------------
Water Supply 100.00 121.18 156.47 111.43 138.57 177.87
- ---------------------- ------------ ------------ ------------ ------------ ------------ ------------
AMEX Market Index 100.00 98.77 94.22 90.46 123.12 140.99
- ----------------------------------------------------------------------------------------------------
10
STOCK OWNERSHIP
PRINCIPAL STOCKHOLDERS
The following tables set forth information as of March 15, 2005 with
respect to the only persons known to us to be the beneficial owners (for
purposes of the rules of the SEC) of more than 5% of the outstanding shares of
our common stock as of that date.
NAME AND ADDRESS OF AMOUNT AND NATURE OF
BENEFICIAL OWNERS BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ----------------- -------------------- ----------------
Group consisting of Betsy
Henley-Cohn, Cohn Realty &
Investment, Betsy Cohn Spray
Trust and Betsy Cohn Income
Trust, 80 Hamilton Street,
New Haven, Connecticut 06511 213,824(1) 12.88 %
(1) Of the 213,824 shares owned by this Group, Betsy Henley-Cohn owns 20,000
shares directly; Cohn Realty & Investment (a Connecticut general partnership
consisting of three investment trusts whose managing agent is Betsy Henley-Cohn,
whose beneficiaries are certain members of the Cohn Family and whose Trustees
are Rhoda Cohn and Stanley Bergman) has beneficial ownership of 68,300 shares;
Juniper LLC, Betsy Henley-Cohn and Juri Henley-Cohn, as trustees for Jesse
Henley-Cohn, have beneficial ownership of 45,028 shares; Betsy Cohn Spray Trust
has beneficial ownership of 59,176 shares; Betsy Cohn Income Trust has
beneficial ownership of 21,320 shares; Betsy Henley-Cohn has either a
controlling or a beneficial interest in Cohn Realty & Investment, Betsy Cohn
Spray Trust and Betsy Cohn Income Trust. No member of the Group owns or has the
right to acquire, directly or indirectly, any other shares. Unless otherwise
indicated, the named beneficial owner of the shares has sole voting and
dispositive power with respect thereto.
The following table sets forth information as of March 15, 2005 with
respect to shares of BIW Limited common stock beneficially owned (for the
purpose of the rules of the SEC) by the Company's executive officers, directors
and nominees.
- --------------------------------------------------------------------------------
Common Shares Beneficially
Name Owned As of March 15, 2005(1) Percent of Class(2)
- -------------------------- ------------------------------- -------------------
Michael J. Adanti 14,900 *
Mary Jane Burt 16,982 (3) 1.02%
James E. Cohen 80,296 (4) 4.84%
Betsy Henley-Cohn 213,824 (5) 12.88%
Juri Henley-Cohn 66,102 (6) 3.98%
Alvaro da Silva 15,200 (7) *
Themis Klarides 6,450 *
B. Lance Sauerteig 10,400 *
Kenneth E. Schaible 12,960 (8) *
John S. Tomac 13,918 *
Executive Officers,
Directors and Nominees
as a group, 10 in number 406,004 (9) 24.46%
- --------------------------------------------------------------------------------
11
* Less than 1%
(1) Includes options to purchase shares of common stock exercisable within 60
days of March 15, 2005, as follows: Mr. da Silva, 10,000; Mr. Sauerteig, 10,000;
Mr. Schaible, 5,000; Ms. Burt, 8,750; Mr. Adanti, 8,750; Ms. Klarides, 6,250 and
Mr. Tomac 4,740.
(2) For the purpose of calculating the percentage of common stock beneficially
owned (a) by the individual persons listed in the table, the number of options
held by such person is included in both the number of shares beneficially owned
by the person and in the total number of shares outstanding in the class with
respect to the individual person's percentage calculation, and (b) by the
directors and officers as a group, the total number of shares beneficially owned
by the group and the total number of shares outstanding includes the 53,490
shares issuable upon the exercise of options exercisable by all persons in the
group within 60 days of the record date.
(3) Includes 1,732 shares held for Ms. Burt's children.
(4) Includes 64,696 shares held by Mr. Cohen as Trustee for the David B. Cohen
Family Trust, and 3,600 shares held in a brokerage custodial account for Mr.
Cohen's benefit.
(5) Ms. Henley-Cohn is a member of the shareholder group described in the
preceding table. The 213,824 shares set forth in this table is the aggregate
number of shares held by all of the members of the group. See note (1) to the
preceding table for information concerning shares beneficially held by Ms.
Henley-Cohn.
(6) Includes 45,028 shares beneficially owned by Juniper LLC, Betsy Henley-Cohn
and Juri Henley-Cohn, as trustees for Jesse Henley-Cohn. In addition to the
21,074 shares held by him directly, Mr. Henley-Cohn is one of the beneficiaries
of (i) the trusts held by Cohn Realty & Investment which has beneficial
ownership of 68,300 shares, (ii) the Betsy Cohn Spray Trust which has beneficial
ownership of 59,176 shares, and (iii) the Betsy Cohn Income Trust which has
beneficial ownership of 21,320 shares. Mr. Henley-Cohn however, does not have
either voting or dispositive power with respect to any such shares.
(7) Includes 2,000 shares owned with Cynthia da Silva.
(8) Includes 1,000 shares owned with Dorothy Schaible.
(9) The 45,028 shares beneficially owned by Juniper LLC, Betsey Henley-Cohn and
Juri Henley-Cohn, as trustees for Jesse Henley-Cohn were only counted once in
this total.
PROPOSAL NO. 2 - RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Audit Committee has selected Dworken, Hillman, LaMorte &
Sterczala, P.C. as BIW Limited's independent auditors for the year ending
December 31, 2005, and has directed that management submit the selection of
independent auditors for ratification by stockholders at the Annual Meeting.
Representatives of Dworken, Hillman, LaMorte & Sterczala, P.C. will be present
at the Annual Meeting to respond to questions of shareholders, but, although
they have been offered the opportunity to do so, they do not otherwise propose
to make any statement.
Stockholder ratification of the selection of Dworken, Hillman,
LaMorte & Sterczala, P.C. as BIW Limited's independent auditors is not required
by our Bylaws or otherwise. However, the Board is submitting the selection of
Dworken, Hillman, LaMorte & Sterczala, P.C. to the stockholders for ratification
as a matter of good corporate practice. If the stockholders fail to ratify the
selection, the Board will reconsider the selection of that firm. The Audit
Committee of the Board in its discretion may direct the appointment of a
different independent accounting firm at any time during the year if the Board
determines that such a change would be in the best interests of BIW Limited and
its stockholders.
VOTE REQUIRED
Assuming a quorum is present, the affirmative vote of holders of a
majority of the shares of common stock issued, outstanding and entitled to vote,
present or represented at the meeting, is required for the adoption of this
12
proposal. Broker non-votes with respect to this matter will be treated as
neither a vote "for" nor a vote "against" the matter, although they will be
counted in determining if a quorum is present. However, abstentions will be
considered in determining the number of votes required to attain a majority of
the shares present or represented at the meeting and entitled to vote.
Accordingly, an abstention from voting by a stockholder present in person or by
proxy at the meeting has the same legal effect as a vote "against" the matter
because it represents a share present or represented at the meeting and entitled
to vote, thereby increasing the number of affirmative votes required to approve
this proposal.
THE BOARD OF DIRECTORS DEEMS "PROPOSAL NO. 2 - RATIFICATION OF
SELECTION OF INDEPENDENT AUDITORS" TO BE IN THE BEST INTERESTS OF BIW LIMITED
AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" APPROVAL OF THIS PROPOSAL.
AUDITOR MATTERS
REPORT OF THE AUDIT COMMITTEE
The Audit Committee reviews BIW Limited's financial reporting
process on behalf of the Board of Directors. Management has the primary
responsibility for the financial statements and the reporting process. BIW
Limited's independent auditors are responsible for expressing an opinion on the
conformity of our audited financial statements to generally accepted accounting
principles.
In this context, the Audit Committee has reviewed and discussed with
management and the independent auditors, the audited financial statements for
the fiscal year ended December 31, 2004. The Audit Committee has discussed with
the independent auditors the matters required to be discussed by Statement on
Auditing Standards No. 61 (Communication with Audit Committees). In addition,
the Audit Committee has received from the independent auditors the written
disclosures required by Independence Standards Board No. 1 (Independence
Discussions with Audit Committees) and discussed with them their independence
from BIW Limited and its management. The Audit Committee has also considered
whether the provision of non-audit services to BIW Limited by its independent
auditors is compatible with the auditor's independence.
In reliance on the reviews and discussions referred to above, the
Audit Committee recommended to the Board of Directors, and the Board has
approved, that the audited financial statements for the fiscal year ended
December 31, 2004 be included for filing in the Company's annual report on SEC
Form 10-K for the year ended December 31, 2004.
Audit Committee of the Board of Directors
- Kenneth E. Schaible
- Alvaro da Silva
- Themis Klarides
- Michael J. Adanti
AUDIT FEES
The aggregate fees billed to BIW Limited by our auditors Dworken,
Hillman, LaMorte & Sterczala, P.C. for professional services rendered in
connection with the audit of our annual financial statements for the 2003 and
2004 fiscal years and the reviews of the interim financial statements included
in our Quarterly Reports on Form 10-Q for such years were $95,800 and $90,600,
respectively.
13
TAX FEES
The aggregate fees billed to BIW Limited for tax-related services in
2003 and 2004 by our auditors Dworken, Hillman, LaMorte & Sterczala, P.C. were
$13,700 and $12,500, respectively.
ALL OTHER FEES
The aggregate fees billed to BIW Limited for professional services
rendered in 2003 and 2004 by our auditors Dworken, Hillman, LaMorte & Sterczala,
P.C. other than for services specifically described above, were $27,400 and
$55,000, respectively. During 2004, these services consisted of an audit of
operations of an acquisition target, and services in connection with the
refinancing of certain bonds and the analysis of proposed strategic
transactions. During 2003, these services consisted of an audit of operations of
an acquisition target.
After review and discussion, the Audit Committee has concluded that
Dworken, Hillman, LaMorte & Sterczala, P.C. provision of non-audit services to
BIW Limited is compatible with maintaining Dworken, Hillman, LaMorte &
Sterczala, P.C.'s auditor independence. The committee has adopted a policy
requiring pre-approval by the committee before Dworken, Hillman, LaMorte &
Sterczala, P.C.'s is engaged for any non-audit services.
STOCKHOLDER PROPOSALS
All stockholder proposals which are intended to be presented at the
2006 Annual Meeting of Stockholders must be received by us no later than
December 10, 2005 for inclusion in the Company's proxy statement and form of
proxy relating to that meeting.
OTHER BUSINESS
The Board of Directors knows of no other business to be acted upon
at the Annual Meeting. However, if any other business properly comes before the
Annual Meeting, it is the intention of the persons named in the enclosed proxy
to vote on such matters in accordance with their best judgment.
Our annual report, including financial statements, for the year 2004
is enclosed with this proxy mailing but is not a part of the proxy soliciting
material.
The prompt return of your proxy card will be appreciated and helpful
in obtaining the necessary vote. Therefore, whether or not you expect to attend
the Annual Meeting, please sign the proxy and return it in the enclosed
envelope.
By Order of the Board of Directors
John S. Tomac
President
Ansonia, Connecticut
April 8, 2005
14
BIW LIMITED
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 10, 2005
Betsy Henley-Cohn and John Tomac, and each of them, as the true and
lawful attorneys, agents and proxies of the undersigned, with full power of
substitution, are hereby authorized to represent and to vote all shares of
Common Stock of BIW Limited held of record by the undersigned on March 15, 2005,
at the Annual Meeting of Stockholders to be held at 2:00 p.m. on Tuesday, May
10, 2005, at the offices of Birmingham Utilities' Eastern Division, 130 National
Drive, Glastonbury, Connecticut 06033 and at any adjournment thereof. Any and
all proxies heretofore given are hereby revoked.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS DESIGNATED BY THE
UNDERSIGNED. IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED FOR PROPOSALS
NO. 1 AND 2.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
ANNUAL MEETING OF STOCKHOLDERS OF
BIW LIMITED
MAY 10, 2005
Please date, sign and mail
your proxy card in the
envelope provided as soon as possible.
* Please detach and mail in the envelope provided. *
====================================================================================================================================
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS AND "FOR" PROPOSAL 2. PLEASE SIGN, DATE AND RETURN
PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
====================================================================================================================================
1. ELECTION OF DIRECTORS 2. APPROVAL OF APPOINTMENT OF DWORKEN, HILLMAN, LAMORTE &
Nominees STERCZALA, P.C AS THE COMPANY'S INDEPENDENT AUDITORS:
[_] FOR ALL NOMINEES ( ) Michael J. Adanti [_] FOR [_] AGAINST [_] ABSTAIN
( ) Mary Jane Burt
[_] WITHHOLD AUTHORITY ( ) James E. Cohen DISCRETIONARY AUTHORITY IS HEREBY GRANTED WITH RESPECT TO
FOR ALL NOMINEES ( ) Betsy Henley-Cohn SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
( ) Juri Henley-Cohn
[_] FOR ALL EXCEPT ( ) Alvaro da Silva THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL
(See instructions below) ( ) Themis Klarides MEETING OF STOCKHOLDERS AND THE PROXY STATEMENT FURNISHED
( ) B. Lance Sauerteig THEREWITH.
( ) Kenneth E. Schaible
( ) John S. Tomac PLEASE SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
-------------------------------------------------------------
INSTRUCTION: To withhold authority to vote for any individual
nominee(s), mark "FOR ALL EXCEPT" and fill in the circle next to
each nominee you wish to withhold, as shown here: ( )
- ----------------------------------------------------------------
- ----------------------------------------------------------------
To change the address on your account, please check the
box at right and indicate your new address in the address [_]
space above. Please note that changes to the registered
name(s) on the account may not be submitted via this method.
- ----------------------------------------------------------------
Signature of Stockholder Date: Signature of Stockholder
-------------------------------- ------------ -----------------------------
Date:
-------------
NOTE: THIS PROXY MUST BE SIGNED EXACTLY AS THE NAME APPEARS HEREON. WHEN SHARES ARE HELD JOINTLY, EACH HOLDER SHOULD SIGN. WHEN
SIGNING AS AN EXECUTOR, ADMINISTRATOR, ATTORNEY, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF THE SIGNER IS A
CORPORATION, PLEASE SIGN FULL CORPORATE NAME BY DULY AUTHORIZED OFFICER, GIVING FULL TITLE AS SUCH. IF SIGNER IS A
PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON.