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Monday, April 25, 2011

Pennichuck shareholders to vote on sale to Nashua June 15

June 15 is a big day for Pennichuck Corp. and the city of Nashua.

The company has selected that date for the shareholders meeting to vote on the sale of the company to the city for $138 million, or $29 a share.

Letters went out Friday inviting shareholders to attend the 10 a.m. special meeting at the company’s Merrimack headquarters at 25 Manchester St.

Two-thirds of the company’s shareholders must approve the deal, and plenty of people are hoping they do. Mayor Donnalee Lozeau, Nashua’s Board of Aldermen, Pennichuck executives and the company’s board of directors have all agreed to the sale, which would put to rest nine years of fighting over control of Nashua’s water supply.

If the sale is approved, the current CEO, chief financial officer and general counsel will leave the company. They will receive a combined severance of $1.46 million – three times the amount they would have received if they were fired or quit under other circumstances.

John Patenaude, a consultant who advised the city through its efforts to negotiate a stock purchase of the water company, will take over as CEO with an annual salary of $190,000.

Current CEO Duane Montopoli collected $451,100 in total compensation in 2010, according to documents filed with the U.S. Securities and Exchange Commission. Of that, $268,846 was base salary and the rest came from bonuses, stock options and other forms of compensation.

In November, the city of Nashua reached a historic deal to take ownership of Pennichuck, ending a legal battle that began in 2002, when Nashua officials initiated eminent domain proceedings after learning Pennichuck planned to sell to an out-of-state company. That sale fell through, but the city moved forward.

The shareholder vote is one of three steps necessary for the sale to be finalized. The first was approval by the Board of Aldermen, which came in January. The third is approval by the state Public Utilities Commission, which has yet to come.

Ashley Smith can be reached at 594-6446 or asmith@nashuatelegraph.com.