Company: MSEX
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001174947-25-000251
Chunk: 677

Company: MIDDLESEX WATER CO
Filing Date: 2025-02-28
Form: 10-K
Item: Item 3
Chunk 677
---
The Company issues common shares under a restricted
stock plan for certain management employees, which is described in Note 7 – Employee Benefit Plans.

The Company maintains a stock plan for its independent
Directors as a component of outside members of the Board of Directors compensation. For the years ended December 31, 2024, 2023 and 2022,
7,570, 4,608 and 2,664 shares, respectively, of Middlesex common stock were granted and issued to the Company’s independent Directors
under the plan. The maximum number of shares authorized for grant under the plan is 100,000, of which 34,283 shares remain available for
future awards.

In the event dividends on the preferred stock
are in arrears, no dividends may be declared or paid on the common stock of the Company.

Preferred Stock

At December 31, 2024 and 2023, there were 120,000
shares of preferred stock authorized and less than 16,000 shares of preferred stock outstanding. There were no preferred stock dividends
in arrears.

The Company may not pay any dividends on its common
stock unless full cumulative dividends to the preceding dividend date for all outstanding shares of preferred stock have been paid or
set aside for payment. If four or more quarterly dividends are in arrears, the preferred shareholders, as a class, are entitled to elect
two members to the Board of Directors in addition to Directors elected by holders of the common stock. In addition, if Middlesex were
to liquidate, holders of preferred stock would be paid back the stated value of their preferred shares before any distributions could
be made to common stockholders.

The conversion feature of the no par $7.00 Series
Cumulative and Convertible Preferred Stock allows the security holders to convert one convertible preferred share for twelve shares of
the Company's common stock. In 2024, 4,275 shares of the Company’s no par $7.00 Series Cumulative and Convertible Preferred Stock
were converted into 51,300 shares (approximately $0.4 million) of the Company’s common stock. In addition, the Company may redeem
up to 10% of the outstanding convertible stock in any calendar year at a price equal to the fair value of twelve shares of the Company's
common stock for each share of convertible stock redeemed.

Long-term Debt

Subject to regulatory approval, the Company periodically
issues long-term debt to fund its investments in utility plant. To