As filed with the Securities and Exchange Commission on
February 20, 2004
File No. 70-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________________________________
APPLICATION-DECLARATION
ON FORM U-1
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
_________________________________________________
UNITIL CORPORATION
6 Liberty Lane West
Hampton, New Hampshire 03842-1720
________________________________________________
(Name of companies filing this statement and
address of principal executive offices)
UNITIL CORPORATION
6 Liberty Lane West
Hampton, New Hampshire 03842-1720
_________________________________________________
(Name of top registered holding company parent)
Mark H. Collin
Senior Vice President, Chief Financial Officer & Treasurer
UNITIL CORPORATION
6 Liberty Lane West
Hampton, New Hampshire 03842-1720
_________________________________________________
(Name and address of agent for service)
The Commission is requested to mail copies of
all orders, notices and communications to:
Sheri E. Bloomberg, Esq.
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, New York 10019
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTIONS
Unitil Corporation, a New Hampshire corporation ("Unitil" or
"Applicant") and a registered holding company under the Public Utility Holding
Company Act of 1935, as amended (the "Act"), hereby submits this
application-declaration on Form U-1 (the "Application-Declaration") to the
Securities and Exchange Commission (the "Commission") for authorization and
approval under Sections 6(a) and 7 of the Act with respect to the issuance of up
to 177,500 shares of common stock, no par value ("Common Stock"), of Unitil
under the Unitil Corporation 2003 Restricted Stock Plan (the "Plan"), such
number of shares to be subject to adjustment in accordance with the provisions
of the Plan.
The Plan was adopted by the Board of Directors of Unitil (the "Board")
in January 2003 and became effective after the adoption was approved by Unitil's
shareholders in April 2003. In accordance with the terms of the Plan, awards for
shares of restricted stock may be granted under the Plan and are evidenced by an
Award Agreement, entered into by the participant and Unitil, setting forth the
terms and provisions applicable to the award. Persons eligible to participate in
the Plan include all employees, directors and consultants of Unitil, its
subsidiaries and its affiliates (collectively, the "Unitil Companies"). The
Company entered into the initial set of award agreements under the Plan with
employees of the Unitil Companies in May 2003 relating to 10,600 shares, the
restrictions on which begin to lapse in May 2004 in accordance with the terms of
the Plan (described in detail below).
The aggregate maximum number of shares of restricted stock available
for awards to participants under the Plan (including these subject to the
initial set of awards) is 177,500/1 The maximum aggregate number of shares of
restricted stock that may be awarded in any one calendar year to any one
participant is 20,000. In the event of any change in capitalization of Unitil,
the Compensation Committee of the Board (the "Compensation Committee) is
authorized to make proportionate adjustments to prevent dilution or enlargement
of rights, including, without limitation, an adjustment in the maximum number
and kinds of shares available for awards and in the annual award limit.
The Plan is administered by the Compensation Committee. Except as
limited by law or by the Articles of Incorporation or the By-laws of Unitil, and
subject to the provisions of the Plan, the Compensation Committee shall have
full power to select the persons who shall participate in the Plan; determine
the sizes of awards; determine the terms and conditions of awards in a manner
consistent with the Plan; construe and interpret the Plan and any agreement or
instrument entered into under the Plan as they apply to participants; establish,
amend, or waive rules and regulations for the Plan's administration as they
apply to participants; and, subject to the provisions of the Plan, amend the
terms and conditions of any outstanding award to the extent such terms and
conditions are within the discretion of the Compensation Committee as provided
in the Plan.
______________________________________
\1 At the time that the Plan was adopted, Unitil also terminated its stock
option plan previously approved by the Commission (Holding Co. Act release
No. 26978 (Feb. 17, 1999)) under which 177,500 options and underlying shares
of Common Stock remained authorized for issuance.
The objectives of the Plan are to optimize the profitability and growth
of Unitil through incentives that are consistent with Unitil's goals and that
link the personal interests of Plan participants to those of Unitil's
shareholders, to attract and retain employees and directors of outstanding
ability, and to promote teamwork among participants. The Plan shall remain in
effect, subject to the right of the Board to amend or terminate the Plan at any
time, until all shares subject to it shall have been purchased or acquired
according to the Plan's provisions.
Awards under the Plan will vary each year based on the achievement of
annual performance objectives that directly correlate with the annual
performance objectives as defined by the Unitil Management Incentive Plan
("Incentive Plan"). Whereas the Incentive Plan provides cash incentive payments
that are tied directly to achievement of Unitil's strategic goals, the Plan
provides for awards for restricted shares of Common Stock that are tied directly
to achievement of the Unitil's strategic goals. Annual performance objectives
are established each year by the Board. The percentage of the target award that
a Plan participant receives is also based upon subjective evaluations by the
Compensation Committee, such as management's performance in capitalizing on
unplanned opportunities and responding to unforeseen problems. Target grant
awards have been established that vary based upon the grade level of each
participant's position in the Unitil. The actual number of shares of Common
Stock received under awards can be less than or greater than the target grant
depending upon actual results achieved.
Awards will fully vest over a period of four (4) years (the "Period of
Restriction") at a rate of 25% each year. During the Period of Restriction, the
Plan provides that the restricted shares underlying the award may not be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated by the
recipient and no share certificates are issued. Prior to the end of the Period
of Restriction, the award of restricted shares shall be subject to forfeiture if
the participant ceases to be employed by the Unitil Companies other than due to
the participant's death. Awards may be subject to such additional restrictions
as the Compensation Committee may determine to be appropriate and as are set
forth in the particular Award Agreement. Subject to restrictions under
applicable law or as may be imposed by the Unitil, restricted shares underlying
each award made under the Plan shall become freely transferable by the Plan
participant after the last day of the applicable Period of Restriction.
During the Period of Restriction, cash dividends paid on restricted
shares underlying granted awards may be credited to the recipient's account. In
the event any non-cash dividends or other distributions, whether in property, or
in stock of another company, are paid on any restricted shares during the Period
of Restriction, such non-cash dividends or other distributions shall be retained
by Unitil until such time as the Period of Restriction has lapsed. In the event
of forfeiture of the restricted shares, such non-cash dividend or other
distributions shall be retained by Unitil.
Awards may be grossed-up to offset the participant's tax obligation in
connection with the award. This gross-up feature was intended to prevent a
participant from having to sell a portion of the shares granted in the award or
previous awards in order to pay the taxes on the award, which would be a direct
contradiction to one of the stated objectives of the Plan, which is to encourage
stock ownership in Unitil. The Compensation Committee will take into account the
value of the gross-up feature and reduce the size of the awards accordingly.
2
Upon the occurrence of a Change in Control, unless otherwise
specifically prohibited under applicable laws, or by the rules and regulations
of any governing governmental agencies or national securities exchanges, any
restrictions and transfer limitations imposed on restricted shares shall
immediately lapse.
The Board may at any time amend or terminate the Plan or any award
granted under the Plan in whole or in part, that no amendment that requires
shareholder approval in order for the Plan to continue to comply with any
applicable tax or securities laws or regulations, or the rules of any securities
exchange on which the securities of Unitil are listed, shall be effective unless
such amendment shall be approved by the requisite vote of shareholders of Unitil
and that no such amendment or termination shall adversely affect any award
previously granted under the Plan without the consent of the participant.
Unitil is authorized under its articles of incorporation to issue
8,000,000 shares of common stock, and as of December 31, 2003, 5,500,610 shares
of common stock were issued and outstanding/2 Unitil will file a registration
statement on Form S-8 (the "Registration Statement") with the Commission in
order to register this proposed offering under the Securities Act of 1933, as
amended (the "Securities Act"), which registration statement will become
effective upon filing in accordance with the rules promulgated by the Commission
under the Securities Act.
At December 31, 2003, Unitil's unaudited consolidated capitalization
ratio was approximately as follows: (in $1,000)
Long-Term Debt $114,224 49.1%
Short-Term Debt 22,410 9.6
Preferred Stock 3,269 1.4
Common Stock 92,805 39.9
-------- -----
Total $232,708 100.0%
======== =====
Assuming that all of the shares of Common Stock reserved for issuance
under the Plan are issued and vested under the Plan, Unitil's consolidated
capitalization ratios would have been approximately as follows: (in $1,000)
Long-Term Debt $114,224 49.1%
Short-Term Debt 22,410 9.6
Preferred Stock 3,269 1.4
Common Stock 92,805 39.9
-------- -----
Total $232,708 100.0%
======== =====
Unitil is requesting that the Commission approve the issuance of
restricted stock under the Plan in accordance with its terms.
___________________
\2 For purposes of its GAAP balance sheet, Unitil has treated the shares
underlying outstanding award agreements as outstanding.
3
The proposed transactions may be subject to Rules 53 and 54 under the
Act. Neither Unitil nor any subsidiary thereof presently has, or as a
consequence of the proposed transactions will have, an interest in any EWG or
FUCO. None of the proceeds from the proposed transactions will be used to
acquire any securities of, or any interest in, an EWG or FUCO. Consequently, all
applicable requirements of Rule 53(a)-(c) under the Act are satisfied as
required by Rule 54 under the Act.
ITEM 2. FEES, COMMISSIONS AND EXPENSES
The fees, commissions and expenses of the Applicant expected to be paid
or incurred, directly or indirectly, in connection with the transactions
described above are estimated as follows:
Filing and Listing Fees ............................ $ *
Legal fees.......................................... *
Accounting Fees..................................... *
Transfer Agent & Registrar Fees *
Printing Fees....................................... *
Miscellaneous....................................... *
Total...................................... $ *
*To be filed by amendment
ITEM 3. APPLICABLE STATUTORY PROVISIONS
Sections 6(a) and 7 of the Act are directly applicable to this
Application-Declaration.
ITEM 4. REGULATORY APPROVALS
No state or federal agency other than the Commission has jurisdiction
with respect to any of the transactions for which authorization is sought hereby
other than as described in this item. In order for the shares of Common Stock to
be freely tradable once the relevant Restricted Period ends, the Commission must
declare the Registration Statement to be effective under the Securities Act.
ITEM 5. PROCEDURE
It is requested that the Commission issue and publish no later than
March 5, 2004 the requisite notice under Rule 23 with respect to this
Application-Declaration; such notice specifying a date not later than March 31,
2004 as the date after which an order granting and permitting this
Application-Declaration to become effective may be entered by the Commission and
that the Commission enter not later than April 2, 2004, an appropriate order
granting and permitting this Application-Declaration to become effective.
4
No recommended decision by a hearing officer or other responsible
officer of the Commission is necessary or required in this matter. The Division
of Investment Management of the Commission may assist in the preparation of the
Commission's decision in this matter. There should be no thirty-day waiting
period between the issuance and effective date of any order issued by the
Commission in this matter, and it is respectfully requested that any such order
be made effective immediately upon the entry thereof.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS
(a) Exhibits
Exhibit No. Description of Exhibit
----------- ----------------------
A-1 Articles of Incorporation of Unitil (Filed as
exhibit 3.1 to the 1992 Form S-14 Registration
Statement of Unitil, File No. 2-93769, and
incorporated by reference herein).
A-2 Articles of Amendment to Articles of Incorporation
(Filed as exhibit 3.2 to the 1992 Form S-14
Registration Statement of Unitil, File No.
2-93769, and incorporated by reference herein).
A-3 By-laws of Unitil (Filed as exhibit 3.2 to the 1992
Form 10-K of Unitil and incorporated by reference
herein).
B-1 Unitil Corporation 2003 Restricted Stock Plan
B-2 Registration Statement on Form S-8 under the
Securities Act relating to the Additional Common
Stock (To be filed with the Commission under the
Securities Act and incorporated by reference herein).
F-1 Opinion of Counsel (To be filed by Amendment).
F-2 "Past Tense" Opinion of Counsel (To be filed
by Amendment).
G-1 Proposed Form of Notice.
5
(b) Financial Statements
No. Description of Financial Statement
---- ----------------------------------
FS-1 Unitil Corporation Consolidated Actual Balance Sheet
and Statement of Earnings, December 31, 2002 and
Unaudited Actual Balance Sheet and Statement of
Earnings, March 31, 2003, June 30, 2003 and
September 30, 2003 (Filed with the Commission with
Unitil's Form 10-K for the year ended
December 31, 2002 and Form 10-Q for the quarters
ended March 31, 2003, June 30, 2003 and
September 30, 2003, and incorporated by reference
herein).
FS-2 Unitil Corporation Consolidated Pro
Forma Balance Sheet and Statement of
Earnings as of December 31, 2003.
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS
None of the matters that are the subject of this
Application-Declaration involve a "major federal action" nor do they
"significantly affect the quality of the human environment" as those terms are
used in Section 102(2)(C) of the National Environmental Policy Act. None of the
proposed transactions that are the subject of this Application-Declaration will
result in changes in the operation of the Applicant that will have an impact on
the environment. The Applicant are not aware of any federal agency which has
prepared or is preparing an environmental impact statement with respect to the
transactions proposed herein.
6
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the Applicant has duly caused this Application-Declaration to be signed
on its behalf by the undersigned thereunto duly authorized.
Dated: February 20, 2004
UNITIL CORPORATION
By: /s/ Mark H. Collin
--------------------------
Name: Mark H. Collin
Title: Senior Vice President,
Chief Financial Officer & Treasurer
7
Unitil Corporation
2003 Restricted Stock Plan
Table of Contents
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Page
----
ARTICLE 1 Establishment, Objectives, and Duration......................1
ARTICLE 2 Definitions..................................................1
ARTICLE 3 Administration...............................................4
ARTICLE 4 Shares Subject to the Plan and Maximum Awards................4
ARTICLE 5 Eligibility and Participation................................5
ARTICLE 6 Restricted Stock.............................................5
ARTICLE 7 Termination of Service.......................................6
ARTICLE 8 Restrictions on Shares.......................................7
ARTICLE 9 Performance Measures.........................................7
ARTICLE 10 Beneficiary Designation.....................................7
ARTICLE 11 Rights of Participants......................................8
ARTICLE 12 Change in Control...........................................8
ARTICLE 13 Amendment or Termination....................................8
ARTICLE 14 Withholding.................................................9
ARTICLE 15 Indemnification.............................................9
ARTICLE 16 Successors..................................................9
ARTICLE 17 Legal Construction.........................................10
i
Unitil Corporation
2003 Restricted Stock Plan
ARTICLE 1
Establishment, Objectives, and Duration
1.1 Establishment of the Plan. Unitil Corporation, a corporation organized
and existing under New Hampshire law (the "Company"), established the Unitil
Corporation 2003 Restricted Stock Plan (the "Plan") effective January 1, 2003
(the "Effective Date"). The Plan shall remain in effect as provided in Section
1.3 hereof.
1.2 Objectives of the Plan. The objectives of the Plan are to optimize the
profitability and growth of the Company through incentives which are consistent
with the Company's goals and which link the personal interests of Participants
to those of the Company's shareholders; to provide Participants with an
incentive for excellence in individual performance; and to promote teamwork
among Participants.
1.3 Duration of the Plan. The Plan shall remain in effect, subject to the
right of the Board to amend or terminate the Plan at any time pursuant to
Article 13 hereof, until all Shares subject to it shall have been purchased or
acquired according to the Plan's provisions.
ARTICLE 2
Definitions
Whenever used in the Plan, the following terms shall have the meanings
set forth below, and, when the meaning is intended, the initial letter of the
word shall be capitalized:
2.1 "Affiliate" means any parent or subsidiary of the Company which meets
the requirements of Section 425 of the Code.
2.2 "Award" means, individually or collectively, an award under this Plan
of Restricted Stock.
2.3 "Award Agreement" means an agreement entered into by the Company and
each Participant setting forth the terms and provisions applicable to Awards
made under the Plan.
2.4 "Board" means the Board of Directors of the Company.
2.5 "Change in Control" means the satisfaction of any one or more of the
following conditions (and the "Change in Control" shall be deemed to have
occurred as of the first day that any one or more of the following conditions
shall have been satisfied):
(a) the Company receives a report on Schedule 13D filed with the
Securities and Exchange Commission pursuant to Rule 13(d) of the Exchange Act,
disclosing that any person, group, corporation or other entity is the
beneficial owner, directly or indirectly, of 25% or more of the outstanding
Shares;
(b) any "person" (as such term is used in Section 13(d) of the Exchange
Act), group, corporation or other entity other than the Company or a
wholly-owned subsidiary of the Company, purchases Shares pursuant to a tender
offer or exchange offer to acquire any Shares (or securities convertible into
Shares) for cash, securities or any other consideration, provided that after
consummation of the offer, the person, group, corporation or other entity in
question is the "beneficial owner" (as such term is defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of 25% or more of the outstanding
Shares (calculated as provided in paragraph (d) of Rule 13d-3 under the Exchange
Act in the case of rights to acquire Shares);
(c) consummation of a transaction which involves (1) any consolidation or
merger of the Company in which the Company is not the continuing or surviving
corporation, or pursuant to which Shares of the Company would be converted into
cash, securities or other property (except where the Company's shareholders
before such transaction will be the owners of more than 75% of all classes of
voting securities of the surviving entity); or (2) any sale, lease, exchange or
other transfer (in one transaction or a series of related transactions) of all
or substantially all the assets of the Company.
(d) there shall have been a change in a majority of the members of the
Board within a 25-month period, unless the election or nomination for election
by the Company's shareholders of each new director was approved by the vote of
at least two-thirds of the directors then still in office who were in office at
the beginning of the 25-month period.
2.6 "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
2.7 "Committee" means the Compensation Committee of the Board, as
specified in Article 3 herein, or such other Committee appointed by the Board
to administer the Plan with respect to grants of Awards.
2.8 "Company" means Unitil Corporation, a corporation organized and
existing under New Hampshire law, and any successor thereto as provided in
Article 16 herein.
2.9 "Consultant" means an independent contractor who is performing
consulting services for one or more entities in the Group and who is not an
employee of any entity in the Group.
2.10 "Director" means a member of the Board or a member of the board of
directors of an Affiliate.
2
2.11 "Disability" shall have the meaning ascribed to such term in the
long-term disability plan maintained by the Company, or if no such plan exists,
at the discretion of the Committee.
2.12 "Effective Date" shall have the meaning ascribed to such term in
Section 1.1 hereof.
2.13 "Employee" means any employee of the Group, including any employees
who are also Directors.
2.14 "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.
2.15 "Fair Market Value" means as of any date, the closing price based
upon composite transactions on a national stock exchange for one Share or, if no
sales of Shares have taken place on such date, the closing price on the most
recent date on which selling prices were quoted. In the event the Company's
Shares are no longer traded on a national stock exchange, Fair Market Value
shall be determined in good faith by the Committee.
2.16 "Group" means the Company and its Affiliates.
2.17 "Named Executive Officer" means a Participant who, as of the date of
vesting of an Award, is one of the group of "covered employees," as defined in
the regulations promulgated under Code Section 162(m), or any successor section.
2.18 "Nonemployee Director" shall have the meaning ascribed to such term
in Rule 16b-3 of the Exchange Act.
2.19 "Outside Director" shall have the meaning ascribed to such term
under the regulations promulgated with respect to Code Section 162(m).
2.20 "Participant" means a current or former Employee, Director, or
Consultant who has outstanding an Award granted under the Plan.
2.21 "Performance-Based Exception" means the performance-based exception
from the tax deductibility limitations of Code Section 162(m).
2.22 "Period of Restriction" means the period during which the transfer of
Shares of Restricted Stock is limited in some way (based on the passage of time,
the achievement of performance goals, or upon the occurrence of other events as
determined by the Committee, at its discretion), and the Shares are subject to a
substantial risk of forfeiture, as provided in Article 6 herein.
2.23 "Restricted Stock" or "Restricted Share" means an Award granted to a
Participant pursuant to Article 6 herein.
2.24 "Shares" means the shares of common stock (no par value) of the
Company.
3
2.25 "Termination of Service" means, (i) if an Employee, termination of
employment with all entities in the Group, (ii) if a Director, termination of
service on the Board and the board of directors of any Affiliate, as applicable,
and (iii) if a Consultant, termination of the consulting relationship with all
entities in the Group; provided, however, that if a Participant serves the Group
in more than one of the above capacities, Termination of Service shall mean
termination of service in all such capacities.
ARTICLE 3
Administration
3.1 The Committee. The Plan shall be administered by the Committee. To
the extent the Company deems it to be necessary or desirable with respect to
any Awards made hereunder, the members of the Committee may be limited to
Nonemployee Directors or Outside Directors, who shall be appointed from time to
time by, and shall serve at the discretion of, the Board.
3.2 Authority of the Committee. Except as limited by law or by the
Articles of Incorporation or the By-laws of the Company, and subject to the
provisions herein, the Committee shall have full power to select the persons
who shall participate in the Plan; determine the sizes of Awards; determine the
terms and conditions of Awards in a manner consistent with the Plan; construe
and interpret the Plan and any agreement or instrument entered into under the
Plan as they apply to Participants; establish, amend, or waive rules and
regulations for the Plan's administration as they apply to Participants; and
(subject to the provisions of Article 13 herein) amend the terms and conditions
of any outstanding Award to the extent such terms and conditions are within the
discretion of the Committee as provided in the Plan. Further, the Committee
shall make all other determinations which may be necessary or advisable for the
administration of the Plan. As permitted by law, the Committee may delegate its
authority as identified herein.
3.3 Decisions Binding. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders and
resolutions of the Board shall be final, conclusive and binding on all persons,
including the Company, its shareholders, Affiliates, Participants, and their
estates and beneficiaries.
ARTICLE 4
Shares Subject to the Plan and Maximum Awards
4.1 Number of Shares Available for Grants.
(a) Subject to adjustment as provided in Section 4.2, the maximum
number of Shares available for Awards to Participants under the Plan shall be
177,500. If any Award under the Plan expires before vesting or is forfeited,
the Shares subject to such Award shall again be available for issuance under
the Plan.
4
(b) The maximum aggregate number of Shares of Restricted Stock that
may be granted in any one calendar year to any one Participant shall be 20,000,
subject to adjustment in accordance with Section 4.2.
4.2 Adjustments in Authorized Shares. In the event of any change in
corporate capitalization affecting the Shares, including, without limitation, a
stock split, reverse stock split, stock dividend or other distribution,
recapitalization, consolidation, subdivision, split-up, spin-off, split-off,
combination or other exchange of Shares or other form of reorganization or
recapitalization, partial or complete liquidation, or other change affecting the
Shares, the Committee shall authorize and make such proportionate adjustments,
if any, as the Committee shall deem appropriate to prevent dilution or
enlargement of rights, including, without limitation, an adjustment in the
maximum number and kind of Shares that may be delivered pursuant to Section 4.1
and in the Award limit set forth in Section 4.1(b); provided, however, that the
number of Shares subject to any Award shall always be rounded to the nearest
whole number, with one-half (1/2) of a share rounded up to the next higher
number.
ARTICLE 5
Eligibility and Participation
5.1 Eligibility. Persons eligible to participate in this Plan include all
Employees, Directors and Consultants of the Group.
5.2 Actual Participation. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible Employees, Directors
and Consultants those to whom Awards shall be made and shall determine the
nature and amount of each Award.
ARTICLE 6
Restricted Stock
6.1 Grant of Restricted Stock. Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock to Participants in such amounts as the Committee shall
determine.
6.2 Restricted Stock Agreement. Each Restricted Stock grant shall be
evidenced by an Award Agreement that shall specify the Period(s) of Restriction,
the number of Shares of Restricted Stock granted, and such other provisions as
the Committee shall determine.
6.3 Transferability. Except as provided in this Article 6, the Shares of
Restricted Stock granted herein may not be sold, transferred, pledged, assigned
or otherwise alienated or hypothecated until the end of the applicable Period of
Restriction established by the Committee and specified in the Award Agreement.
5
6.4 Restrictions.
(a) Subject to the terms hereof, the Committee shall impose such
conditions and/or restrictions on any Shares of Restricted Stock granted
pursuant to the Plan as it may deem advisable and as are expressly set forth in
the Award Agreement including, without limitation, a requirement that
Participants pay a stipulated purchase price for each Share of Restricted Stock,
restrictions based upon the achievement of specific performance goals
(Company-wide, divisional, and/or individual), time-based restrictions, and/or
restrictions under applicable federal or state securities laws.
(b) The Company shall retain the certificates representing Shares of
Restricted Stock in the Company's possession until such time as all conditions
and/or restrictions applicable to such Shares have been satisfied. The
Participant shall execute appropriate stock powers in blank and such other
documents as the Committee shall prescribe.
(c) Subject to restrictions under applicable law or as may be imposed
by the Company, Restricted Shares covered by each Award made under the Plan
shall become freely transferable by the Participant after the last day of the
applicable Period of Restriction.
6.5 Voting Rights. During the Period of Restriction, subject to any
limitations imposed under the By-laws of the Company, Participants holding
Shares of Restricted Stock granted hereunder may exercise full voting rights
with respect to those Shares.
6.6 Dividends and Other Distributions. During the Period of Restriction,
Participants holding Shares of Restricted Stock granted hereunder may be
credited with regular dividends paid with respect to the underlying Shares while
they are so held. The Committee may apply any restrictions to the dividends that
the Committee deems appropriate and as are expressly set forth in the Award
Agreement. Without limiting the generality of the preceding sentence, if the
grant or vesting of Restricted Shares granted to a Named Executive Officer is
designed to comply with the requirements of the Performance-Based Exception, the
Committee may apply any restrictions it deems appropriate to the payment of
dividends declared with respect to such Restricted Shares, such that the
dividends and/or the Restricted Shares maintain eligibility for the
Performance-Based Exception.
ARTICLE 7
Termination of Service
Each Award Agreement shall set forth the effect that Termination of
Service shall have upon that Award. Such provisions shall be determined in the
sole discretion of the Committee, need not be uniform among all Awards issued
pursuant to the Plan, and may reflect distinctions based on the reasons for
6
Termination of Service; provided, however, that the following shall
automatically apply to the extent different provisions are not expressly set
forth in a Participant's Award Agreement:
(a) Upon a Termination of Service for any reason other than death,
retirement or Disability, all unvested Restricted Shares shall be forfeited as
of the termination date.
(b) Upon a Termination of Service as a result of the Participant's
death, retirement or Disability, all unvested Restricted Shares shall vest as
of the termination date.
ARTICLE 8
Restrictions on Shares
All Shares issued pursuant to Awards granted hereunder, and a
Participant's right to receive Shares upon vesting of an Award, shall be subject
to all applicable restrictions contained in the Company's By-laws, shareholders
agreement or insider trading policy, and any other restrictions imposed by the
Committee, including, without limitation, restrictions under applicable
securities laws, under the requirements of any stock exchange or market upon
which such Shares are then listed and/or traded, and restrictions under any blue
sky or state securities laws applicable to such Shares.
ARTICLE 9
Performance Measures
If an Award is subject to Code Section 162(m) and the Committee
determines that such Award should be designed to comply with the
Performance-Based Exception, the performance measure(s), the attainment of which
determine the degree of vesting, to be used for purposes of such Awards shall be
chosen from among earnings per share, economic value added, market share (actual
or targeted growth), net income (before or after taxes), operating income,
return on assets (actual or targeted growth), return on capital (actual or
targeted growth), return on equity (actual or targeted growth), return on
investment (actual or targeted growth), revenue (actual or targeted growth),
share price, stock price growth, total shareholder return, or such other
performance measures as are duly approved by the Committee and the Company's
shareholders.
ARTICLE 10
Beneficiary Designation
Subject to the terms and conditions of the Plan and the applicable
Award Agreement, each Participant may, from time to time, name any beneficiary
or beneficiaries (who may be named contingently or successively) to whom Shares
under the Plan are to be transferred in the event of the Participant's death.
Each such designation shall revoke all prior designations by the same
Participant, shall be in a form prescribed by the Company, and will be effective
7
only when filed by the Participant in writing during the Participant's lifetime
with the party chosen by the Company, from time to time, to administer the Plan.
In the absence of any such designation, Shares shall be paid to the
Participant's estate following his death.
ARTICLE 11
Rights of Participants
11.1 Continued Service. Nothing in the Plan shall:
(a) interfere with or limit in any way the right of the Company to
terminate any Participant's employment, service as a Director, or service as a
consultant with the Group at any time, or
(b) confer upon any Participant any right to continue in the
service of any member of the Group as an Employee, Director or Consultant.
11.2 Participation. Participation is determined by the Committee. No
person shall have the right to be selected to receive an Award under the Plan,
or, having been so selected, to be selected to receive a future Award.
ARTICLE 12
Change in Control
Upon the occurrence of a Change in Control, unless otherwise
specifically prohibited under applicable laws, or by the rules and regulations
of any governing governmental agencies or national securities exchanges, any
restrictions and transfer limitations imposed on Restricted Shares shall
immediately lapse.
ARTICLE 13
Amendment or Termination
The Board may at any time and from time to time amend or terminate the
Plan or any Award hereunder in whole or in part; provided, however, that no
amendment which requires shareholder approval in order for the Plan to continue
to comply with any applicable tax or securities laws or regulations, or the
rules of any securities exchange on which the securities of the Company are
listed, shall be effective unless such amendment shall be approved by the
requisite vote of shareholders of the Company entitled to vote thereon; provided
further that no such amendment or termination shall adversely affect any Award
hereunder without the consent of the Participant.
8
ARTICLE 14
Withholding
14.1 Tax Withholding. The Company shall have the right to deduct or
withhold, or require a Participant to remit to the Company, an amount sufficient
to satisfy any taxes required by federal, state, or local law or regulation to
be withheld with respect to any taxable event arising in connection with an
Award.
14.2 Share Withholding. Participants may elect, subject to the approval
of the Committee, to satisfy all or part of such withholding requirement by
having the Company withhold Shares having a Fair Market Value equal to the
minimum statutory total tax which could be imposed on the transaction. All such
elections shall be irrevocable, made in writing, signed by the Participant, and
shall be subject to any restrictions or limitations that the Committee, in its
sole discretion, deems appropriate.
ARTICLE 15
Indemnification
Each person who is or shall have been a member of the Committee, or of
the Board, shall be indemnified and held harmless by the Company to the fullest
extent permitted by applicable law against and from any loss, cost, liability,
or expense that may be imposed upon or reasonably incurred by him or her in
connection with or resulting from any claim, action, suit, or proceeding to
which he or she may be a party or in which he or she may be involved by reason
of any action taken or failure to act under the Plan and against and from any
and all amounts paid by him or her in settlement thereof, with the Company's
approval, or paid by him or her in satisfaction of any judgment in any such
action, suit, or proceeding against him or her, provided he or she shall give
the Company an opportunity, at its own expense, to handle and defend the same
before he or she undertakes to handle and defend it on his or her own behalf.
The foregoing right of indemnification is subject to the person having been
successful in the legal proceedings or having acted in good faith and what is
reasonably believed to be a lawful manner in the Company's best interests. The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company's
Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or any
power that the Company may have to indemnify them or hold them harmless.
ARTICLE 16
Successors
All obligations of the Company under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company, whether the
9
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.
ARTICLE 17
Legal Construction
17.1 Gender and Number. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
17.2 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
17.3 Requirements of Law. The granting of Awards and the issuance of
Shares under the Plan shall be subject to, and may be made contingent upon
satisfaction of, all applicable laws, rules, and regulations, and to such
approvals by any governmental agencies or national securities exchanges as may
be required.
17.4 Governing Law. To the extent not preempted by federal law, the Plan,
and all agreements hereunder, shall be construed in accordance with and governed
by the laws of the state of New Hampshire.
IN WITNESS WHEREOF, this Plan has been executed as of the date first
written above.
UNITIL CORPORATION
_______________________________
By:
Its:
10
Exhibit G-1
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35- ___; 70 ___)
Unitil Corporation
Notice of Proposal to Issue Common Stock under Restricted Stock Plan
Unitil Corporation ("Unitil"), 6 Liberty Lane West, Hampton, New
Hampshire 03842, has filed an Application- Declaration with this Commission
pursuant to Sections 6(a) and 7 of the Public Utility Holding Company Act of
1935 ("Act").
Unitil proposes to issue of up to 177,500 shares of common stock, no
par value ("Common Stock"), of Unitil under the Unitil Corporation 2003
Restricted Stock Plan (the "Plan"), such number of shares to be subject to
adjustment in accordance with the provisions of the Plan.
The objectives of the Plan are to optimize the profitability and growth
of Unitil through incentives that are consistent with Unitil's goals and that
link the personal interests of Plan participants to those of Unitil's
shareholders, to attract and retain employees and directors of outstanding
ability, and to promote teamwork among participants.
In accordance with the terms of the Plan, awards for shares of
restricted stock may be granted under the Plan and are evidenced by an Award
Agreement, entered into by the participant and Unitil, setting forth the terms
and provisions applicable to the award. Persons eligible to participate in the
Plan include all employees, directors and consultants of Unitil, its
subsidiaries and its affiliates (collectively, the "Unitil Companies"). The Plan
is administered by the Compensation Committee of the Board of Directors of
Unitil. Awards under the Plan will vary each year based on the achievement of
annual performance objectives that directly correlate with the annual
performance objectives as defined by the Unitil Management Incentive Plan. The
maximum aggregate number of shares of restricted stock that may be awarded in
any one calendar year to any one participant is 20,000.
Awards will fully vest over a period of four (4) years (the "Period of
Restriction") at a rate of 25% each year. During the Period of Restriction, the
Plan provides that the restricted shares underlying the award may not be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated by the
recipient and no share certificates are issued. Prior to the end of the Period
of Restriction, the award of restricted shares shall be subject to forfeiture if
the participant ceases to be employed by the Unitil Companies other than due to
the participant's death. Awards may be subject to such additional restrictions
as the Compensation Committee may determine to be appropriate and as are set
forth in the particular Award Agreement. Subject to restrictions under
applicable law or as may be imposed by the Unitil, restricted shares underlying
each award made under the Plan shall become freely transferable by the Plan
participant after the last day of the applicable Period of Restriction.
During the Period of Restriction, cash dividends paid on restricted
shares underlying granted awards may be credited to the recipient's account. In
the event any non-cash dividends or other distributions, whether in property, or
in stock of another company, are paid on any restricted shares during the Period
of Restriction, such non-cash dividends or other distributions shall be retained
by Unitil until such time as the Period of Restriction has lapsed. In the event
of forfeiture of the restricted shares, such non-cash dividend or other
distributions shall be retained by Unitil.
Upon the occurrence of a Change in Control, unless otherwise
specifically prohibited under applicable laws, or by the rules and regulations
of any governing governmental agencies or national securities exchanges, any
restrictions and transfer limitations imposed on restricted shares shall
immediately lapse.
Interested persons wishing to comment or request a hearing on this
Application-Declaration should submit their views in writing by March _____,
2004 to the Secretary, Securities and Exchange Commission, Washington, D.C.
20549, and serve a copy on the declarant at the address specified above. Proof
of service (by affidavit or, in the case of an attorney at law, by certificate)
should be filed with the request. After said date, the declaration, as amended
or as it may be further amended, may be granted.
For the Commission by the Division of Investment Management, pursuant
to delegated authority.
UNITIL CORPORATION
CONSOLIDATED BALANCE SHEETS (000's) (A)
ASSETS: (Unaudited)
December 31,
2003 Adjustments Pro Forma
Utility Plant
Electric $209,288 $209,288
Gas 48,700 48,700
Common 27,441 27,441
Construction Work in Progress 3,228 3,228
Utility Plant 288,657 288,657
Less: Accumulated Depreciation 93,592 93,592
Net Utility Plant 195,065 195,065
Current Assets:
Cash 3,766 3,766
Accounts Receivable 17,461 17,461
Refundable Taxes 3,816 1 (B) 3,817
Materials and Supplies 2,861 2,861
Prepayments and Other 6,146 6,146
Accrued Revenue 10,029 10,029
Total Current Assets 44,079 1 44,080
Noncurrent Assets:
Regulatory Assets 227,528 227,528
Prepaid Pension Costs 10,972 10,972
Debt Issuance Costs, net 1,844 1,844
Other Noncurrent Assets 4,389 4,389
Total Noncurrent Assets 244,733 244,733
TOTAL $483,877 $1 $483,878
(The accompanying Notes are an integral part of these statements.)
UNITIL CORPORATION
CONSOLIDATED BALANCE SHEETS (000's) (A)
CAPITALIZATION AND LIABILITIES: (Unaudited)
December 31,
2003 Adjustments Pro Forma
Capitalization:
Common Stock Equity $ 92,805 $ (235)(C) $ 92,570
Preferred Stock, Non-Redeemable 225 225
Preferred Stock, Redeemable 3,044 3,044
Long-term Debt, Less Current Portion 110,961 110,961
Total Capitalization 207,035 (235) 206,800
Current Liabilities:
Long-term Debt, Current Portion 3,263 3,263
Capitalized Lease, Current Portion 567 567
Accounts Payable 15,024 15,024
Short-Term Debt 22,410 234 (E) 22,644
Dividends Declared and Payable 70 70
Refundable Customer Deposits 1,429 1,429
Interest Payable 1,356 2 (F) 1,358
Other Current Liabilities 4,254 4,254
Total Current Liabilities 48,373 236 48,609
Deferred Income Taxes 56,900 56,900
Noncurrent Liabilities
Power Supply Contract Obligations 167,341 167,341
Capitalized Leases, Less Current Portion 403 403
Other Noncurrent Liabilities 3,825 3,825
Total Noncurrent Liabilities 171,569 171,569
TOTAL $ 483,877 $ 1 $ 483,878
(The accompanying Notes are an integral part of these statements.)
UNITIL CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS (000's) (A)
(Unaudited)
Year Ended
December 31,
2003 Adjustments Pro Forma
Operating Revenues:
Electric $ 190,864 $ 190,864
Gas 28,612 28,612
Other 1,178 1,178
Total Operating Revenues 220,654 220,654
Operating Expenses:
Purchased Electricity 134,575 134,575
Gas Purchased for Resale 17,421 17,421
Operating and Maintenance 22,167 1,035 (C) 23,202
Conservation & Load Management 3,930 3,930
Depreciation and Amortization 18,756 18,756
Provisions for Taxes:
Local Property and Other 4,805 4,805
Federal and State Income 3,551 (1)(B) 3,550
Total Operating Expenses 205,205 1,034 206,239
Operating Income 15,449 (1,034) 14,415
Other Non-Operating Expenses (40) (40)
Income Before Interest Expense 15,489 (1,034) 14,455
Interest Expense, Net 7,531 2 (F) 7,533
Net Income 7,958 (1,036)(D) 6,922
Less Dividends on Preferred Stock 236 236
Earnings Applicable to Common Shareholders $ 7,722 $ (1,036) $ 6,686
Average Common Shares Outstanding-Basic 4,877,933 22,188 (G) 4,900,121
Average Common Shares Outstanding-Diluted 4,899,488 22,188 (G) 4,921,676
Earnings Per Common Share $ 1.58 $ 1.36 (G)
(The accompanying Notes are an integral part of these statements.)
UNITIL CORPORATION
Notes to Pro Forma Consolidated Financial Statements
(A) These statements have been pro formed to assume the awarding on January 1,
2003 of the maximum number of shares of restricted stock available to be
awarded to participants under the Plan (177,500 at a price per share of
$24.45) and is adjusted for the actual shares awarded and recorded in 2003
(10,600 shares). The pro forma assumes that the annual vested expense for
the awarded shares (25% of the aggregate award) is accordingly recorded in
2003 and the vesting became effective as of the beginning of the year. The
pro forma assumes dividends were declared and paid for the full twelve
month period on the aggregate awarded shares. The Statement of Earnings
reflects the corresponding impact on Operating and Maintenance Expense,
Interest Expense and Federal and State Income Taxes. Earnings Per Share
reflect the dilutive effect on the vested shares of Common Stock
issued under the Plan for the twelve month period and the resulting change
in Earnings Applicable to Common Shareholders
(B) The reduction in Refundable Taxes reflects the rise in Interest Expense and
the corresponding decline in income taxes.
(C) The rise in Operating and Maintenance Expense reflects the recording of the
annual vested expense on the awarded shares. The pro forma adjustment
reflects the recording of 177,500 shares beginning on January 1, 2003 for
the four year vesting period and includes the an adjustment for the 10,600
shares actually recorded effective April 1, 2003.
(D) Common Stock Equity reflects the following factors: the cost of the pro
formed vested shares of Common Stock; declaration of common dividends on
all of the adjusted new shares awarded and issued during the twelve-month
period (e.g. Retained Earnings); and decline in earnings from net Operating
and Maintenance, Interest expense (e.g. Retained Earnings).
(E) Reflects a higher net cash outlay related to increased Common Dividend
payments.
(F) Reflects the incremental increase in Short-Term Debt, described above, and
the resulting rise in Interest Expense.
(G) The Pro forma Average Common Shares outstanding and Earnings Per Share
assume the vesting of 44,375 additional shares of Common Stock under the
Plan at the beginning of the twelve month period.