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. It 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.
