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ORDINANCE AMENDED O-19-040

7. In Chapter 5 “Administration of Government”, Part 3 “Administrative Code”, Article XI
“Financial Services Division”, delete Section 5-53.1 “Additional departments” in its entirety:

Ҥ 5-534, Additional departments.

The Fj ‘al Services Division shall} ised of the follow ‘ditional
departments:

#c—— Purchasing Department “The rayor shalt appoint ¢ Purchasing Manager ia

8. In Chapter 5 “Administration of Government”, Part 3 “Administrative Code”, Article XII
“Information Technology Division”, delete the Article in its entirety:

ORDINANCE AMENDED O-19-046

“AR-HCLE SH
Infermation-Feehnelegy-Division

9. In Chapter 5 “Administration of Government”, Part 4 “Officers and Employees”, Article
XVII “Purchasing Manager”, Section 5-92 “Information Technology Division participation in
purchasing process”:

Ҥ 5-92. Information Technology Division participation in purchasing process.

For major purchases and contracts solicited in accordance with § 5-78 which include
computers or communications equipment or related software, including but not limited to
workstations, servers, surveillance equipment and wired and wireless transmission
equipment, the Information Technology Division Department shall participate in the
purchasing process, providing advice, input, and recommendations, which will be so
noted on the purchasing memorandum.”

10. In Chapter 5 “Administration of Government”, Part 2 “Board of Aldermen”, Article II
“General Provisions”, Section 5-10.1 “Electronic submission and distribution of materials”,
subsections B and C:

Ҥ 5-10.1. Electronic submission and distribution ef materials.

B. Standards. The Information Technology Divisten Direeter Department Manager,
in coordination....”

C. Member choices for electronic devices....

(1) Use of a City-owned tablet device. The Information Technology Divisier
Department Director shall select one or more options...., as determined by
the Information Technology Divisiern Department Director.

(2) Use of a personally-owned device. A member may choose....to any
constraints the Information Technology Dsisiern Department Director
may develop for such devices.”

ORDINANCE AMENDED O-19-040

11. In Chapter 12 “Boards, Committees and Commissions”, Article VI “Cable Television
Advisory Board”, Section 12-20 “Membership”, subsection G:

Ҥ 12-20. Membership.

CTAB will consist of 15 members total....The members are as follows:

G. The Director of the Information Technology Divisien Department or his or her
designee.”

12. In Chapter 5 “Administration of Government”, Part 4 “Officers and Employees”, Article
XIII “Generally”, Section 5-59 “Joint Employee / Administration Health Insurance Advisory
Committee”, subsection B:

Ҥ 5-59. Joint Employee / Administrative Health Insurance Advisory Committee.

B. The Committee shall consist of 2+ 24 members as follows: Mayor or designee;
Director of Administrative Services or designee: the Insurance and Risk Manager
or designee; the City Solicitor / Corporation Counsel or designee; the Chief
Financial Officer or designee; the Human Resources Manager Director or
designee; the Superintendent of Schools or designee; and the presidents of each of
the City’s collective bargaining units (45 17 units) or designees.”

13. In Chapter 5 “Administration of Government”, Part 4 “Officers and Employees”, Article
XVII “Purchasing Manager”, Section 5-69 “Position established; supervision”:

Ҥ 5-69. Position established; supervision.

The Purchasing Manager shall report to the Director of the Financial Administrative
Services-D#vision.”

14. In Chapter 5 “Administration of Government”, Part 4 “Officers and Employees”, Article
XVII “Purchasing Manager”, Section 5-70 “Duties”, subsection B:

Ҥ 5-70. Duties.

B. The Manager shall be appointed by the Mayor, in consultation with the Director
of Administrative Services, according to § 5-53440.”

ORDINANCE AMENDED 0O-19-040

15. In Chapter 50 “Personnel”, Article 1 “General Provisions”, Section 50-3 “Amendments”,
subsection B:

Ҥ50-3. Amendments.

B, The merit system may from time to time be amended or changed by
ordinance....For all amendments or changes introduced by the Board of
Aldermen, the views of the Director of Administrative Services, the Director of
the Financial Services Division, the Human Resources Department and the
Personnel Advisory Board with the Mayor shall be sought with respect to each
amendment or change.”

16. In Chapter 50 “Personnel”, Article Il] “Employment of New Personnel’, Section 50-9
“Human Resources Department and Human Resources Manager”:

-9. Human Resources Department and Human Resources irector.
Ҥ 50-9. H R Depart tand H R Direct

C. The Human Resources Manager Director, with the approval of the Mayor_and the
Director of Administrative Services, shall issue policies needed to implement this
chapter.”

This ordinance shall become effective upon passage.

PENNICHUCK” 25 MANCHESTER STREET

PO BOX 1947
MERRIMACK, NH 03054-1947

(603) 882-5191
FAX (603) 913-2305

VIA HAND DELIVERY

WWW.PENNICHUCK.COM

March 25, 2019

Ms. Lori Wilshire, President
Board of Aldermen

City of Nashua

229 Main Street

Nashua, NH 03060

Dear President Wilshire:

On behalf of the Pennichuck Corporation Board of Directors, I am enclosing the following items
with respect to the Annual Meeting of Sole Shareholder to be held on Saturday, May 4, 2019, at
the DoubleTree Hilton, 2 Somerset Parkway, in Nashua:

1. Notice of Annual Meeting of Sole Shareholder and Proxy Statement;
2. Proxy Card; and

3. Annual Report to the Sole Shareholder (includes the Audited Consolidated
Financial Statements for December 31, 2018 and 2017).

Please contact ‘Thomas J. Leonard, Chairman of the Board of Directors, or me, if you need
further information.

Regards,

CLAS
Larry D. Goodhue
Chief Executive Officer,

Chief Financial Officer
and Treasurer

ce. Mayor James Donchess
Board of Aldermen
Steven Bolton, Corporation Counsel
Patricia Piecuch, City Clerk

YW, PENNICHUCK’

OE

PENNICHUCK CORPORATION
25 Manchester Street
Merrimack, New Hampshire 03054

NOTICE OF ANNUAL MEETING OF SOLE SHAREHOLDER
To be Held on Saturday, May 4, 2019 at 9:00 a.m.

To the City of Nashua, New Hampshire, in its capacity as the Sole Shareholder of Pennichuck
Corporation:

In accordance with the By-Laws of Pennichuck Corporation and applicable laws, Pennichuck
Corporation hereby provides notice that you are cordially invited to attend the Annual Meeting
of Sole Shareholder of Pennichuck Corporation. The City of Nashua, New Hampshire, is the
Sole Shareholder of Pennichuck Corporation.

The Annual Meeting will be held at the DoubleTree by Hilton, 2 Somerset Parkway, Nashua,
New Hampshire, on Saturday, May 4, 2019 at 9:00 a.m., for the following purpose:

1. To elect four directors, each for a three-year term, and to elect one director, for
a one-year term, and until their successors are elected and qualified.

To facilitate the City’s review of the matters to be addressed at the Annual Meeting, the
Pennichuck Corporation Board of Directors have approved the delivery of the Proxy Statement
attached to this Notice.

By Order of the Board of Directors,
> f)

S pAh

LARRY D. GOODHUE

Chief Executive Officer,

Chief Financial Officer
and Treasurer

Merrimack, New Hampshire
March 25, 2019

V2 PENNICHUCK”

PENNICHUCK CORPORATION
25 Manchester Street
Merrimack, New Hampshire 03054

PROXY STATEMENT

2019 Annual Meeting of Sole Shareholder
To be Held on Saturday, May 4, 2019 at 9:00 a.m.

This Proxy Statement is furnished to the City of Nashua, New Hampshire (the “City”), in its
capacity as the Sole Shareholder of Pennichuck Corporation (“Pennichuck Corporation” or the
“Company’’), by the Board of Directors of Pennichuck Corporation, in connection with the
solicitation of a proxy to be voted at the Annual Meeting of Sole Shareholder for the purpose set
forth in the accompanying Notice of Annual Meeting of Sole Shareholder.

The Annual Meeting will be held at the DoubleTree by Hilton, 2 Somerset Parkway, Nashua,
New Hampshire, on Saturday, May 4, 2019 at 9:00 a.m.

Matter to be Voted Upon at the Annual Meeting

At the Annual Meeting, the City, in its capacity as the Sole Shareholder of Pennichuck Corporation,
is being asked to consider and vote upon the following:

(1) To elect C. George Bower, Jay N. Lustig, John D. McGrath and Preston J.
Stanley, Jr. to the Pennichuck Corporation Board of Directors, as Class A directors,
each for a three-year term, and until their successors are elected and qualified; and to
elect Deborah Novotny to the Pennichuck Corporation Board of Directors, as a Class
B director, for a one-year term, and until her successor is elected and qualified.

Voting at the Annual Meeting

Background. Pennichuck Corporation was acquired by the City on January 25, 2012. This
acquisition was accomplished pursuant to an Agreement and Plan of Merger reached between the
City and Pennichuck Corporation dated November 11, 2010 (the “Merger Agreement”). The
transaction, in which the City issued $150.6 million of general obligation bonds to acquire the
outstanding stock of Pennichuck Corporation and pay all transaction costs, was authorized by
special legislation enacted by the State Legislature in 2007 and 2010. The Mayor and the Board

of Aldermen unanimously approved the acquisition pursuant to this special legislation on
January 11,2011. The New Hampshire Public Utilities Commission approved the Merger
Agreement on November 23, 2011, concluding that “the transaction is in the public interest and
will not have an adverse effect on rates, terms, service, or operation of the utilities.”

Corporate Structure. As part of the acquisition, the corporate structure of Pennichuck
Corporation and its utility subsidiaries was retained. Under this structure, the City is the sole
shareholder of Pennichuck Corporation. Pennichuck Corporation continues to own five
corporate subsidiaries, including three regulated public utilities (Pennichuck Water Works, Inc.,
Pennichuck East Utility, Inc., and Pittsfield Aqueduct Company, Inc.), an unregulated service
company (Pennichuck Water Service Corporation), and a real estate holding company (The
Southwood Corporation).

Election of the Board of Directors. Under this corporate governance system, the City exercises
its control over Pennichuck Corporation in its capacity as the Company’s Sole Shareholder in
accordance with the Articles of Incorporation, the By-Laws and the New Hampshire laws
governing business corporations. In accordance with these rules, Pennichuck Corporation’s
business affairs are managed and overseen by a Board of Directors. One of the most important
responsibilities of the City, in its capacity as Sole Shareholder, is to elect members of the Board
of Directors from individuals nominated by the Pennichuck Corporation Board of Directors at
the Company’s Annual Meeting.

Voting at the Annual Meeting. \t is important to remember that the City itself is the Sole
Shareholder, not any individual person who may hold an office with the City. The City must
exercise its responsibilities as Sole Shareholder through public meetings of the City’s Board of
Aldermen and Mayor, acting in accordance with applicable New Hampshire laws and the
provisions of the City Charter. As a municipal entity, the City is not typically in a position to
“attend” an annual meeting, or any other meeting of the Sole Shareholder, “in person.”

Traditional corporate law principles provide a ready solution for this type of “institutional”
voting of shares. As the Sole Shareholder, the City may review the proposed vote and take
action at appropriate City meetings determined by the City. The City may then either designate
an individual person to attend the Annual Meeting in person with the authority to vote the City’s
shares in accordance with the City’s determination, or the City may vote its shares by proxy.

To facilitate these options, the Pennichuck Corporation Board of Directors has prepared this
Proxy Statement which contains details of the business to be conducted at the Annual Meeting.
If the City determines to vote its shares by proxy, it should cause the enclosed proxy card to be
completed and returned to Pennichuck Corporation prior to the Annual Meeting. By executing
the enclosed proxy card, the City will be designating the actions it has determined to take with
respect to the matters to be heard at the Annual Meeting and will be authorizing the officers of
the Company named on the proxy card to act as the City’s proxy to vote on the City’s behalf at
the Annual Meeting in accordance with the instructions set forth on the proxy card.

Corporate Governance Matters

Current Board of Directors. The Pennichuck Corporation Board of Directors is divided into
three classes, each class serving for three years following their election and until their successors
have been elected and qualified.

The number of Directors is currently fixed at eleven. There is a vacancy on the Board in Class B
due to the resignation of a Board member in September 2017. The Board of Directors is
nominating Deborah Novotny for election as a Class B director to fill the vacancy in Class B.

The Board currently has ten “seated” directors. Of the ten directors, four have terms ending in
2019 (Class A), three have terms ending in 2020 (Class B), and three have terms ending in 2021
(Class C).

The current members of the Company’s Board of Directors are as follows:

Term Expiring 2019 Term Expiring 2020 Term Expiring 2021
Class A Class B Class C
C. George Bower James P. Dore David P. Bernier
Jay N. Lustig Elizabeth A. Dunn Stephen D, Genest
John D. McGrath John M. Murphy Thomas J. Leonard
Preston J. Stanley, Jr. [Vacancy]

Board Meetings, Committee Meetings and Attendance. \n 2018, the Company’s Board of
Directors held 12 Board meetings and 15 Committee meetings. Each current member of the
Board attended 75% or more of the total number of meetings of the Board of Directors and the
number of meetings of all committees of the Board on which they served. All but one member
of the Board of Directors attended the 2018 Annual Meeting of Sole Shareholder.

Board Compensation. \n 2018, cach director received an annual retainer of $12,000.

Annual Performance Evaluation. The Board of Directors conducts an annual self-evaluation
of the Board and its Committees to determine whether they are functioning effectively. Each
Committee is also required to evaluate their performance.

Corporate Code of Conduct. The Company has adopted a written Corporate Code of Conduct
that applies to its directors, officers and employees. A current copy of the Corporate Code of
Conduct can be found on the Company’s website at www.pennichuck.com, under the “Board of
Directors — Meetings, Minutes and Corporate Governance” caption.

Board Committees. The Board of Directors has established four standing committees: the
Audit, Finance and Risk Committee, the Communications Committee, the Compensation and
Benefits Committee, and the Nominating and Governance Committee.

Each Committee has adopted a written Charter which sets forth its purpose, membership,
duties and responsibilities. A copy of each Charter can be found on the Company’s website at
www.pennichuck.com, under the “Board of Directors — Meetings, Minutes and Corporate
Governance” caption.

The current members of the Board Committees are as follows:

Audit, Finance and Risk Committee Communications Committee
James P. Dore, Chairman Jay N. Lustig, Chairman
C. George Bower James P. Dore
Thomas J. Leonard Thomas J. Leonard
John D. McGrath Preston J. Stanley, Jr.
John M. Murphy
Compensation and Benefits Committee Nominating and Governance Committee
Stephen D. Genest, Chairman Elizabeth A. Dunn, Chairman
David P. Bernier Stephen D. Genest
C. George Bower Thomas J. Leonard
Elizabeth A. Dunn Jay N. Lustig
Thomas J. Leonard Preston J. Stanley, Jr.

Jay N. Lustig

Audit, Finance and Risk Committee. The Audit, Finance and Risk Committee is responsible for
the appointment, compensation and retention of the independent auditors; preapproval of all
audit and non-audit services to be provided by the independent auditors; review and approval of
all related party transactions; review and evaluation of the qualifications, performance and
independence of the lead partner of the independent auditors; oversight of the integrity of the
Company’s financial statements and internal controls; oversight of Company financing activities;
oversight of the policies and procedures established to assess, monitor and control operational
and financial risk; and oversight of the Company’s insurance programs. The Audit, Finance and
Risk Committee held 4 meetings in 2018.

Communications Committee. The Communications Committee develops and assists with the
policies and strategies of external communications between the Board, the Company and the
Sole Shareholder, other stakeholders, and the public, as needed. The Communications
Committee held 2 meetings in 2018.

Compensation and Benefits Committee. The Compensation and Benefits Committee 1s
responsible for annually reviewing and approving corporate goals and objectives relevant to
Chief Executive Officer compensation; evaluating the Chief Executive Officer’s performance in
light of those goals and objectives, and determining and recommending to the Board of Directors
the Chief Executive Officer’s compensation based on evaluation of performance; reviewing and
approving executive salaries; reviewing and approving any employment agreements, special
compensation and benefits, or severance arrangements as they pertain to executive officers other
than the Chief Executive Officer; overseeing the Company’s compensation and benefit policies;
and recommending to the Board of Directors the establishment, termination or amendment of
existing compensation and employee benefit plans. The Compensation and Benefits Committee
held 5 meetings in 2018.