SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
[X] Definitive Proxy Statement RULE 14C-5(D)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
UNITIL CORPORATION
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
UNITIL CORPORATION
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
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6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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[_] Fee paid previously.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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Notes:
UNITIL Corporation
216 Epping Road, Exeter, New Hampshire 03833-4571
- --------------------------------------------------------------------------------
Telephone . 603/772-0775
Investor Relations . 800/999-6501
March 17, 1995
Dear Fellow Shareholder,
The Annual Meeting of Common Shareholders is scheduled to be
held on Thursday, April 20, 1995, at 10:30 a.m., at The
Sheraton Portsmouth Hotel, 250 Market Street, Portsmouth,
New Hampshire.
Enclosed you will find a 1994 annual report, a notice of
meeting, a proxy statement and a proxy card to be used in
connection with the meeting. This year, shareholders are
being asked to vote on the election of four Directors.
We hope that you are able to attend the Annual Meeting. Your
vote is important whether you own one share or many. Whether
or not you plan to be present, we urge you to sign and
promptly return the enclosed proxy card in the envelope
provided.
Thank you for your continued interest in the Company.
Sincerely,
/s/ Peter J. Stulgis
Peter J. Stulgis
Chairman of the Board of Directors
and Chief Executive Officer
UNITIL Corporation
- -------------------------------------------------------------------------------
- NOTICE OF ANNUAL MEETING OF COMMON SHAREHOLDERS -
Exeter, New Hampshire
March 17, 1995
To the Common Shareholders:
You are hereby notified that the annual meeting of common shareholders of
UNITIL Corporation will be held at The Sheraton Portsmouth Hotel, 250 Market
Street, Portsmouth, New Hampshire, on April 20, 1995, at 10:30 A.M., for the
following purposes:
1. To elect four Directors.
2. To act on such other matters as may properly come before the meeting and
any adjournments thereof.
The enclosed form of proxy has been prepared at the direction of the Board
of Directors of UNITIL and is sent to you at its request. The persons named in
said proxy have been designated by the Board of Directors.
IF YOU DO NOT EXPECT TO BE PRESENT PERSONALLY AND YOU WISH YOUR STOCK VOTED
AT THE MEETING, PLEASE SIGN, DATE AND RETURN THE PROXY CARD ENCLOSED HEREWITH
BY MAIL IN THE POSTAGE-PAID ENVELOPE, ALSO ENCLOSED. IF YOU LATER FIND THAT
YOU CAN BE PRESENT, OR FOR ANY OTHER REASON DESIRE TO REVOKE OR CHANGE YOUR
PROXY, YOU MAY DO SO AT ANY TIME BEFORE IT IS VOTED.
The Board of Directors fixed March 6, 1995 as the record date for the
determination of those shareholders entitled to notice of and to vote at this
meeting and all persons who were holders of record of Common Stock on such
date and no others are entitled to notice of and to vote at this meeting and
any adjournments thereof.
By Order of the Board of Directors,
Gail A. Siart
Secretary
UNITIL Corporation
216 Epping Road, Exeter, New Hampshire 03833-4571
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Telephone . 603/772-0775
Investor Relations . 800/999-6501
March 17, 1995
proxy statement
ANNUAL MEETING OF COMMON SHAREHOLDERS, APRIL 20, 1995
This proxy statement is furnished in connection with the solicitation by the
Board of Directors of proxies in the accompanying form for use at the 1995
annual meeting of common shareholders of UNITIL Corporation ("UNITIL" or "the
Company"). Each proxy can be revoked at any time before it is voted by written
notification to the Secretary of UNITIL at the above address prior to the
meeting, or in person at the meeting. Every properly signed proxy will be voted
unless previously revoked.
UNITIL presently has seven subsidiaries, Concord Electric Company ("CECo"),
Exeter & Hampton Electric Company ("E&H"), Fitchburg Gas and Electric Light
Company ("FG&E"), UNITIL Power Corp. ("UNITIL Power"), UNITIL Realty Corp.
("UNITIL Realty"), UNITIL Resources, Inc. ("UNITIL Resources") and UNITIL
Service Corp. ("UNITIL Service").
The annual report of UNITIL for the year 1994 is enclosed herewith and
includes financial statements which are not part of this proxy statement.
The voting securities of UNITIL issued and outstanding on March 6, 1995
consisted of 4,281,140 shares of Common Stock, no par value, entitling the
holders thereof to one vote per share. Holders of Common Stock of record on
such date are entitled to notice of and to vote at the annual meeting and any
adjournments thereof. A majority of the outstanding shares of Common Stock
constitutes a quorum.
Except as set forth below, no person owns of record and, to the knowledge of
UNITIL, no person owns beneficially more than five percent of the Common Stock
of UNITIL which may be voted at the meeting and any adjournments thereof.
Name and Address Shares of Common Stock Percent of Shares
of Beneficial Owner Beneficially Owned Outstanding
- --------------------------------------------------------------------------------
Charles H. Tenney II 267,808 (1) 6.20%
300 Friberg Parkway
Westborough, MA
01581
- --------------------------------------------------------------------------------
NOTES:
(1) Based on information provided by Mr. Tenney. See notes 2, 3 and 8 to
the table below under the heading "As to the Election of Directors."
The twelve Directors and the officers of UNITIL as a group have beneficial
ownership as of March 1, 1995 of 312,001 shares (7.29%) of Common Stock, of
which they have direct beneficial ownership of 156,832 shares (3.66%), which
excludes options to purchase 119,266 shares (2.79%) pursuant to the exercise of
those options, and indirect beneficial ownership of 155,169 shares (3.63%). To
the knowledge of UNITIL, each of said Directors and officers has voting and
investment power with respect to the shares directly owned. With regard to
certain of the indirect beneficial ownership by said group, see the footnotes
to the table contained in the section of this proxy statement entitled "AS TO
THE ELECTION OF DIRECTORS" setting forth certain information about the
Directors of UNITIL.
Assuming a quorum is present, the favorable vote of a majority of the shares
of Common Stock represented and voting will be required for approval of all
matters, including the election of Directors, which may come before the
meeting.
-------------------------------
AS TO THE ELECTION OF DIRECTORS
-------------------------------
The By-Laws of UNITIL provide for a Board of between nine and fifteen
Directors divided into three classes, each class being as nearly equal in
number as possible, and each with their respective terms of office arranged so
that the term of office of one class expires in each year, at which time a
corresponding number of Directors is elected for a term of three years. UNITIL
currently has twelve Directors. Upon the retirement of Endicott Smith, who will
not stand for re-election this year as a Director, the UNITIL Board will
consist of eleven directors.
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Information About Nominees for Directors
Each nominee has been a member of the Board of Directors since the date
indicated. Proxies will be voted for the persons whose names are set forth
below unless instructed otherwise. If any nominee shall be unable to serve, the
proxies will be voted for such person as may be designated by management to
replace such nominee. Each of the nominees has consented to being named in this
proxy statement and to serve if elected. Unless otherwise indicated, all shares
shown represent sole voting and investment power.
Common Stock Owned
Beneficially on March 1, 1995 (1)
Director -----------------------------
Since Shares
- ------------------------------------------------------------------------------------
MICHAEL J. DALTON, AGE 54 1984 52,383 (2)(3)(5)(6)
- ------------------------------------
President and Chief Operating
Officer of UNITIL.
G. ARNOLD HAYNES, AGE 66 1992 2,444
- ------------------------------------
President and Principal of Haynes
Management, Inc., Wellesley Hills,
MA (real estate development and
management).
J. PARKER RICE, JR., AGE 69 1992 1,015
- ------------------------------------
Director, former President and
Treasurer of Hyland/Rice Office
Products, Inc., Fitchburg, MA
(office products dealer).
2
- --------------------------------------------------------------------------------
Information About Nominees for Directors . . . continued
Common Stock Owned
Beneficially on March 1, 1995 (1)
Director -----------------------------
Since Shares
- -------------------------------------------------------------------------------
JOAN D. WHEELER, AGE 57 1994 1,000
- ------------------------------------
Owner of the Russian Gallery,
Marblehead, MA (art gallery
specializing in works on paper and
crafts from artists living and
working in Russia). Ms. Wheeler is
a former Director of Shaw's
Supermarkets, Inc. (1979-1987) and
of Granite Bank (1984-1989),
Keene, NH, and a former Trustee of
Franklin Pierce College. She is
also Moderator of the Hollis-
Brookline (NH) School District.
- --------------------------------------------------------------------------------
Information About Directors Whose Terms of Office Continue
Common Stock Owned
Beneficially on March 1, 1995 (1)
Director Term to -----------------------------
Since Expire Shares
- ---------------------------------------------------------------------------------------------
DOUGLAS K. MACDONALD, AGE 66 1984 1996 924
- ---------------------------------
Retired since 1988. Prior
to his retirement, Mr.
Macdonald was Vice
President and Controller
of UNITIL and President of
CECo.
PETER J. STULGIS, AGE 44 1984 1997 43,866 (2)(3)(5)(7)
- ---------------------------------
Chairman of the Board and
Chief Executive Officer of
UNITIL.
CHARLES H. TENNEY II, AGE 76 1984 1996 267,808 (2)(3)(4)(5)(8)
- ---------------------------------
Retired since 1992. Prior
to his retirement, Mr.
Tenney was Chairman of the
Board and Chief Executive
Officer of UNITIL and
FG&E. Mr. Tenney is also
Chairman of the Board of
Directors of Bay State Gas
Company, Westborough, MA
(natural gas distributor).
CHARLES H. TENNEY III, AGE 47 (4) 1992 1997 2,109
- ---------------------------------
Elected officer (Clerk) of
Bay State Gas Company,
Westborough, MA (natural
gas distributor).
3
- -------------------------------------------------------------------------------
Information About Directors Whose Terms of Office Continue . . . continued
Common Stock Owned
Beneficially on March 1, 1995 (1)
Director Term to -----------------------------
Since Expire Shares
- ------------------------------------------------------------------------------------------
WILLIAM W. TREAT, AGE 76 1984 1996 20,276 (9)
- ----------------------------------
Lawyer; sole private
practice, former Director
and Chairman of the Board
of Directors of Bank
Meridian, Hampton, NH, and
a former Director of
Amoskeag Bank Shares,
Inc., Manchester, NH. Mr.
Treat is also a Director
of the Colonial Group,
Inc., Boston, MA
(investments).
W. WILLIAM VANDERWOLK, JR., AGE 71 1984 1997 14,208 (10)
- ----------------------------------
Owner of Horizon
Management, Manchester, NH
(property and restaurant
management).
FRANKLIN WYMAN, JR., AGE 73 1992 1997 5,000
- ----------------------------------
Chairman of the Board and
Treasurer of Wright Wyman,
Inc., Boston, MA
(corporate financial
consultants). Mr. Wyman is
a Trustee and Vice
President of Brookline
Savings Bank, Brookline,
MA.
- -------------------------------------------------------------------------------
NOTES:
Except as otherwise noted, each of the persons named above has held his
present position (or another executive position with the same employer) for
more than the past five (5) years.
(1) Based on information furnished to UNITIL by the nominees and continuing
Directors.
(2) Included are 454, 225 and 251 shares which are held in trust for
Messrs. Stulgis, Dalton and Tenney, respectively, under the terms of
the UNITIL Tax Deferred Savings and Investment Plan ("401(k)"); they
have voting power only with respect to the shares credited to their
accounts. For further information regarding 401(k), see "Other
Compensation Arrangements--Tax-Qualified Savings and Investment Plan"
below.
(3) Included are 36,168, 37,824 and 36,168 shares which Messrs. Stulgis,
Dalton and Tenney, respectively, have the right to purchase pursuant to
the exercise of options under the Key Employee Stock Option Plan. (See
"Other Compensation Arrangements--Key Employee Stock Option Plan").
(4) Charles H. Tenney II is the father of Charles H. Tenney III.
(5) With the exception of Messrs. Stulgis, Dalton and Tenney, who own
shares totaling 1.02%, 1.21% and 6.20%, respectively, of the total
outstanding shares, no Director or officer owns more than one percent
of the total outstanding shares.
(6) Included are 11,249 shares held by Mr. Dalton jointly with his wife
with whom he shares voting and investment power. Included are 46 shares
held by Mr. Dalton as custodian for one of his children; he has voting
and investment power with respect to such shares.
(7) Included are 4,648 shares held by Mr. Stulgis jointly with his wife
with whom he shares voting and investment power.
(8) Included are 124,552 shares (2.91%) owned by two trusts of which Mr.
Tenney is Co-Trustee with shared voting and investment power; he has a
1/6 beneficial interest in both trusts and disclaims any beneficial
ownership of such shares other than such 1/6 beneficial interest.
(9) Included are 5,386 shares owned by three trusts of which Mr. Treat is
Trustee with voting and investment power; he has no beneficial interest
in such shares. Also included are 10,500 shares owned by one
organization in which Mr. Treat has shared voting and investment power
and a 1/3 beneficial interest.
(10) Included are 3,063 shares owned by a member of Mr. VanderWolk's
family; he has no voting or investment power with respect to, and no
beneficial interest in, such shares.
4
The Board of Directors met five times in 1994. During 1994, Directors
attended an average of 95% of all meetings of the Board of Directors held and
of all meetings held by all Committees of the Board on which they served, if
any.
Section 17(a) of the Public Utility Holding Company Act of 1935 and Section
16(a) of the Securities Exchange Act of 1934 require the Company's officers and
directors, and persons who own more than ten percent of a registered class of
the Company's equity securities, to file certain reports of ownership and
changes in share ownership with the Securities and Exchange Commission and the
American Stock Exchange and to furnish the Company with copies of all Section
17(a) and Section 16(a) forms they file. Based solely on its review of the
copies of such forms received by it, or written representations from certain
reporting persons that such forms were not required for those persons, the
Company believes that all filing requirements applicable to its officers and
directors during 1994 and through March 1, 1995 were met, without exception.
- --------------------------------------------------------------------------------
Compensation of Directors
Members of the Board of Directors who are not officers of UNITIL or any of
its subsidiaries receive an annual retainer fee of $7,000 and $500 for each
Board meeting attended. Members of the Executive Committee, who are not
officers of UNITIL or any of its subsidiaries, receive an annual retainer fee
of $2,000 and $400 for each meeting attended. Members of the Audit Committee
and Compensation Committee receive an annual retainer fee of $1,000 and $400
for each meeting attended. Those Directors of UNITIL who also serve as
Directors of CECo, E&H or FG&E and who are not officers of UNITIL or any of its
subsidiaries receive a meeting fee of $100 per subsidiary meeting attended and
no annual retainer fee from CECo, E&H or FG&E. All Directors are entitled to
reimbursement of expenses incurred in connection with attendance at meetings of
the Board of Directors and any Committee on which they serve.
In 1992, the Company entered into a Senior Advisory Agreement with Charles H.
Tenney II. Mr. Tenney was Chief Executive Officer and Chairman of the Board of
the Company until his retirement in 1992. The agreement, which is reviewed on
an annual basis, provides that Mr. Tenney will be compensated $105,000 per
annum for his role as Chairman of the Executive Committee of the Board of the
Company, as well as for other advisory services which he will provide. In
consideration of this Agreement, Mr. Tenney is waiving all Board-related fees
and retainers that he is otherwise entitled to receive as a Director of the
Company.
- --------------------------------------------------------------------------------
Committees of the Board of Directors
Executive Committee
- ------------------------------
The Executive Committee of the Board of Directors held four meetings in 1994.
Its members are Charles H. Tenney II (Chairman), Peter J. Stulgis, William W.
Treat, W. William VanderWolk, Jr. and Franklin Wyman, Jr. This Committee's
responsibility is to review and oversee corporate policies related to the
Company's long-range strategic business, financial and operating plans. In
addition, the Executive Committee also acts as a nominating committee. In its
function as a nominating committee, the committee coordinates suggestions or
searches for potential nominees for Board members; reviews and evaluates
qualifications of potential Board members; and recommends to the Board of
Directors nominees for vacancies occurring from time to time on the Board of
Directors. The Committee will consider nominees recommended by shareholders
upon timely submission of the names of such nominees with qualifications and
biographical information forwarded to the Executive Committee of the Board of
Directors.
Audit Committee
- ------------------------------
The Audit Committee of the Board of Directors, which held two meetings in
1994, consists of William W. Treat (Chairman), J. Parker Rice, Jr. and W.
William VanderWolk, Jr. The duties of this Committee encompass making
recommendations on the selection of UNITIL's independent
5
auditors; conferring with such auditors regarding, among other things, the
scope of their examination, with particular emphasis on areas where special
attention should be directed; reviewing the accounting principles and practices
being followed by UNITIL; assessing the adequacy of UNITIL's interim and annual
financial statements; reviewing the internal audit controls of UNITIL and its
subsidiaries; performing such other duties as are appropriate to monitor the
accounting and auditing policies and procedures of UNITIL and its subsidiaries;
and reporting to the full UNITIL Board from time to time.
Compensation Committee
- ------------------------------
The Compensation Committee of the Board of Directors, which held three
meetings in 1994, consists of Charles H. Tenney II (Chairman), J. Parker Rice,
Jr. and Endicott Smith. The duties of this Committee include studying and
making recommendations to the Board of Directors of UNITIL and the appropriate
Board of each of its subsidiaries with respect to salaries and other benefits
to be paid to the officers of UNITIL and such subsidiaries.
- --------------------------------------------------------------------------------
Compensation Committee Interlocks and Insider Participation
Charles H. Tenney II served as the Chairman of the Compensation Committee
during fiscal 1994. Mr. Tenney is the former Chairman of the Board of Directors
and Chief Executive Officer of the Company, serving as such until his
retirement in April 1992. He currently has a Senior Advisory Agreement with the
Company (see "Compensation of Directors") and is also Chairman of the Executive
Committee of the Board of Directors.
- --------------------------------------------------------------------------------
Director Emeritus
The Company has a directors' advisory council composed of retired members of
the Company's Board of Directors. Each member, known as a Director Emeritus, is
appointed yearly by the Board of Directors to render advisory services to the
Board. Directors Emeriti have no vote with respect to any matter acted upon by
the Board, nor is their presence counted for purposes of determining a quorum.
In April, 1995, upon the expiration of his current term as Director, Endicott
Smith will be appointed Director Emeritus. Mr. Smith will join Directors
Emeriti Richard L. Brickley, Philip H. Bradley and Theodore C. Haffenreffer,
Jr. who were appointed to their positions in 1992, 1993 and 1994, respectively.
Directors Emeriti receive an annual retainer of $7,000 and $500 for each Board
meeting attended, as well as reimbursement for any expenses incurred in
connection with attendance at any meeting.
- --------------------------------------------------------------------------------
Report of the Compensation Committee
The overall objective of the Company's Board of Directors, and specifically
this Compensation Committee, in setting compensation for UNITIL's executive
officers is to foster excellence in the management of the assets of the
Company. To help meet this objective, the Committee believes it is important
for the Company to provide compensation to its executive officers which varies
directly with the performance of the Company and to make payment of annual
compensation with both cash and Company stock in place of all cash.
Accordingly, the Company pays both "base" and "variable" compensation to its
officers. The base component of compensation is determined under the UNITIL
System's salary matrix which is reviewed from time to time by outside
consultants as to its competitiveness. Variable compensation is based on
factors that measure the success of the Company for any given year and is
governed by the System's Management Performance Compensation Plan ("MPCP") and
the profitability of the System's non-utility subsidiary, UNITIL Resources. The
factors under the MPCP relate to the earnings of the Company and the rate of
return achieved on shareholder-provided equity as well as cost control and the
competitiveness of the rates charged to the UNITIL System's utility customers.
(See "Other Compensation Arrangements" for a detailed discussion of these
factors.) In addition, to further bolster ownership in the Company by the
executive officers, the Company, in 1989, instituted a "Key Employee Stock
Option Plan" with the approval of the Company's shareholders.
6
This plan was tailored to emphasize dividend and stock value growth as a
prerequisite to the maximization of value to the participants. (See "Other
Compensation Arrangements" for a more detailed discussion of this plan.)
The compensation of the Chief Executive Officer ("CEO"), Peter J. Stulgis, is
governed by these same plans and objectives. The base compensation for Mr.
Stulgis was increased by approximately 3.1% in 1994 which reflected the
percentage increase in the UNITIL System's salary matrix which covers all non-
bargaining unit employees. The variable compensation paid to Mr. Stulgis in
1994 was based upon the UNITIL System's operating results for 1993 under the
MPCP discussed above and a distribution from a performance pool related to the
1994 results of the System's newly formed non-utility subsidiary, UNITIL
Resources. Under the MPCP, Mr. Stulgis received a payment in cash and Company
stock which represented 23% of his total compensation. This MPCP payment is
formula-driven and reflected the achievement in 1993 of earnings which were
above target levels; a rate of return which was in the 72nd percentile of peer
companies; cost control results which were at the 100th percentile of peer
companies; and residential utility rates which were at the 93rd percentile of
the peer group. The distribution from the UNITIL Resources 1994 performance
pool was based upon its contribution to System earnings and was equal to 7.9%
of his total compensation. In setting the compensation of Mr. Stulgis for 1994,
the Committee independently reviewed the current compensation data for over
fifty companies which included all of the companies used as the peer group in
the Stock Performance Graph shown on the following page. Based upon this
review, the Committee found that the total compensation to be paid to the CEO
fell within the same range of compensation paid to the CEO's of companies of
like size, location and industry, and believes it was appropriately linked to
corporate performance.
The Committee also approved the compensation of UNITIL's other executive
officers for 1994 following the principles and procedures outlined in this
report.
Compensation Committee Members
------------------------------------
Charles H. Tenney II, Chairman
J. Parker Rice, Jr.
Endicott Smith
- --------------------------------------------------------------------------------
Stock Performance Graph and Information
----------------------------------------------
COMPARATIVE FIVE-YEAR CUMULATIVE TOTAL RETURNS
----------------------------------------------
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG TOTAL PEER GROUP, S & P 500 AND UNITIL CORPORATION
Measurement period TOTAL PEER UNITIL
(Fiscal Year Covered) GROUP S & P 500 CORPORATION
- --------------------- -------- -------- --------
1989 $ 100.00 $ 100.00 $ 100.00
1990 $ 94.51 $ 96.90 $ 96.21
1991 $ 123.64 $ 126.36 $ 115.30
1992 $ 149.03 $ 135.96 $ 136.64
1993 $ 150.73 $ 149.69 $ 157.96
1994 $ 136.16 $ 150.59 $ 140.84
------------------
The graph to
the left
assumes $100
invested on
December 31,
1989, in each
category and
the
reinvestment
of all
dividends
during the
period. The
Peer Group is
comprised of
the 11
investor-owned
New England
electric
utilities.
------------------
7
- -------------------------------------------------------------------------------
Compensation of Officers
The tabulation below shows the compensation UNITIL, or any of its
subsidiaries, has paid to its Chief Executive Officer and its most highly
compensated officers whose total annual salary and bonus were in excess of
$100,000 during the year 1994.
--------------------------
SUMMARY COMPENSATION TABLE
--------------------------
Long Term Compensation
--------------------------
Annual Compensation Awards Payouts
-------------------------------------------------------------------------
Name and Other Restricted Option/ All Other
Principal Salary Bonus Annual Stock SARs LTIP Compensation
Position (1) Year ($) ($) (2) Comp. ($) Awards ($) (#) Payouts ($)
- --------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
- --------------------------------------------------------------------------------------------------
PETER J. STULGIS (3) 1994 $208,300 $94,394 -- -- -- -- $16,760 (4)
Chairman of the Board & 1993 202,000 74,307 -- -- -- --
Chief Executive Officer 1992 174,925 18,914 -- -- -- --
MICHAEL J. DALTON 1994 $159,600 $61,932 -- -- -- -- $16,575 (5)
President & Chief 1993 155,000 50,216 -- -- -- --
Operating Officer 1992 150,200 25,023 -- -- -- --
GAIL A. SIART (6) 1994 $ 79,033 $24,928 -- -- -- -- $ 3,525 (7)
Chief Financial Officer, 1993 75,100 17,558 -- -- -- --
Treasurer & Secretary 1992 68,800 8,099 -- -- -- --
JAMES G. DALY (6) 1994 $ 76,517 $29,128 -- -- -- -- $ 3,717 (8)
SENIOR VICE PRESIDENT, 1993 72,150 21,216 -- -- -- --
UNITIL Service 1992 68,075 4,813 -- -- -- --
GEORGE R. GANTZ (6) 1994 $ 78,408 $27,228 -- -- -- -- $ 4,012 (9)
Senior Vice President, 1993 75,050 19,558 -- -- -- --
UNITIL Service 1992 71,750 7,151 -- -- -- --
- --------------------------------------------------------------------------------------------------
NOTES:
(1) Officers of the Company also hold various positions with subsidiary
companies. Compensation for those positions is included in the above
table.
(2) Bonus amounts for the years 1993 and 1994 are comprised of Management
Performance Compensation Program (MPCP) cash and stock awards (see
"Other Compensation Arrangements") and distributions from the System's
non-utility subsidiary, UNITIL Resources (see "Other Compensation
Arrangements").
(3) Mr. Stulgis was elected Chairman of the Board and named Chief Executive
Officer in April, 1992.
(4) All Other Compensation for Mr. Stulgis for the year 1994 includes the
company's contribution to the Tax Qualified Savings and Investment Plan
("401(K)"), company funding of Supplemental Executive Retirement Plan
("SERP"), Supplemental Life Insurance payment, and Group Term Life
Insurance payment, valued at $4,500, $5,410, $6,136 and $714,
respectively.
(5) All Other Compensation for Mr. Dalton for the year 1994 includes, 401(K)
company contribution, company funding of SERP, Supplemental Life
Insurance payment and Group Term Life Insurance payment, valued at
$4,500, $7,968, $2,558, and $1,549, respectively.
(6) Ms. Siart was named Chief Financial Officer of the Company and Senior
Vice President of UNITIL Service in December 1994. Mr. Daly and Mr.
Gantz were named Senior Vice Presidents of UNITIL Service in December,
1994.
(7) All Other Compensation for Ms. Siart for the year 1994 includes 401(K)
company contribution, Supplemental Life Insurance payment and Group Term
Life Insurance payment, valued at $3,016, $369 and $140, respectively.
(8) All Other Compensation for Mr. Daly for the year 1994 includes 401(K)
company contribution, Supplemental Life Insurance payment and Group Term
Life Insurance payment, valued at $3,067, $517 and $134, respectively.
(9) All Other Compensation for Mr. Gantz for the year 1994 includes 401(K)
company contribution, Supplemental Life Insurance payment and Group Term
Life Insurance payment, valued at $3,067, $732 and $214, respectively.
8
- --------------------------------------------------------------------------------
Other Compensation Arrangements
In 1988, in order to enhance quality of service and shareholder value, UNITIL
adopted a management performance compensation program ("MPCP") for certain
management employees, including Executive Officers. The MPCP provides for
awards to be calculated annually and paid in a combination of cash and UNITIL
Common Stock. Awards are based on the following criteria: (i) UNITIL's
performance as measured by (a) the achievement of earnings per share sufficient
to provide adequate coverage of common dividends paid, (b) return on common
equity measured over a three-year performance period as compared to that
achieved by a specified group of other electric utility companies, (c) cost per
customer measured over a two-year performance period as compared to that of a
specified group of other electric utility companies, and (d) residential
electric rates measured over a one-year performance period as compared to
residential electric rates of a specified group of other electric utility
companies; and (ii) achievement of annual individual performance goals. Target
incentive awards are established each year for individuals participating in
MPCP and are calculated as a percentage of the individual's assigned base
salary range midpoint. The target incentive awards for participants range from
10% to 25% of salary range midpoints. Depending on UNITIL meeting its
objectives and the achievement of annual individual performance goals,
individuals can receive from 0% of their target award to 150% of their target
award. A discretionary award may also be made to certain management employees
in recognition of their contribution to the profitability of the System's non-
utility subsidiary, UNITIL Resources. Amounts paid under these arrangements to
Executive Officers during 1994 are shown in column (d) in the Summary
Compensation Table shown on the preceding page.
In 1989, the shareholders ratified the Key Employee Stock Option Plan
("Option Plan"). The Option Plan is administered by a committee appointed by
the Board of Directors which is comprised of members of the Board who are not
eligible to receive grants under the Option Plan (the "Committee"). The
Committee selects key management employees, including Executive Officers, of
UNITIL and its subsidiaries who will receive grants under the Option Plan, the
amount or number of shares of UNITIL Common Stock subject to each grant, the
terms and conditions of each grant and whether and to what extent key employees
who receive grants will be allowed or required to defer receipt of any grant
upon the occurrence of specified events, subject to certain limitations
contained in the Option Plan. The maximum exercise period for any option is ten
years, and no options may be granted under the Option Plan more than ten years
after its adoption.
Options granted under the Option Plan may be either incentive stock options
or non-qualified stock options. The option price per share granted under the
Option Plan is determined by the Committee, but will not be less than: (i) in
the case of an incentive stock option, 100% of the fair market value of the
shares of UNITIL Common Stock subject to the option as of the date the option
is granted; and (ii) in the case of a non-qualified stock option, at least 85%
of the fair market value of the shares of UNITIL Common Stock subject to the
option as of the date the option is granted. For purposes of the Option Plan,
"fair market value" means, as of the applicable date, the closing price of
UNITIL Common Stock on the American Stock Exchange ("AMEX"), or, if no sales
took place on such day, the closing price on the most recent day on which
selling prices were quoted.
Upon the exercise of any option by an employee and upon payment of the option
price for shares of UNITIL Common Stock as to which the option was granted (the
"Primary Shares"), UNITIL will cause to be delivered to such employee (i) the
Primary Shares and (ii) the number of shares of UNITIL Common Stock (the
"Dividend Equivalent Shares") equal to the dollar amount of dividends which
would have been paid on the Primary Shares (and previously accrued Dividend
Equivalent Shares) had they been outstanding, divided by the fair market value
of UNITIL Common Stock determined as of the record date for each dividend.
The Option Plan authorizes the Committee to provide in the award agreements
that the participant's right to exercise the options provided for therein will
be accelerated upon the occurrence of a "Change in Control" of UNITIL. The term
"Change in Control" is defined in
9
substantially the same manner as in the Severance Agreements, which are
described below. All of the award agreements entered into with participants in
the Option Plan to date contain such a "Change in Control" provision. Each
award agreement also provides that, upon the exercise of an option on or after
a Change in Control, UNITIL shall pay to the optionee, within five business
days, a lump sum cash amount equal to the economic benefit of the optionee's
outstanding options and associated dividend equivalents that the optionee would
have received had the option remained unexercised until the day preceding the
expiration of the grant.
The table below provides information with respect to options to purchase
shares of the Company's Common Stock exercised in fiscal 1994 and the value of
unexercised options granted in prior years under the Option Plan to the named
executive officers in the Summary Compensation Table and held by them as of
December 31, 1994. No options were granted in fiscal 1994 to any of the named
Executive Officers. The Company has no compensation plan under which Stock
Appreciation Rights (SARs) are granted.
--------------------------------------------------------------------------
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR (FY) AND FY-END OPTION/SAR
VALUES
-----------------------------------------------------------------------------
Shares Number of Unexercised Value of Unexercised
Acquired Value Options/SARs at In-the-Money Options/SARs at
on Realized FY-End (#) (1) FY-End ($)
Name Exercise ($) ---------------------- ----------------------------
(#)
Exercisable/ Exercisable/
Unexercisable Unexercisable
- -----------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
- -----------------------------------------------------------------------------------------------
PETER J. STULGIS -- -- exercisable 24,000 exercisable $ 169,920
Chairman of the Board & unexercisable 0 unexercisable $0
Chief Executive Officer
- -----------------------------------------------------------------------------------------------
MICHAEL J. DALTON -- -- exercisable 24,000 exercisable $ 165,360
President & unexercisable 0 unexercisable $0
Chief Operating Officer
- -----------------------------------------------------------------------------------------------
GAIL A. SIART -- -- exercisable 2,078 exercisable $ 13,882
Chief Financial Officer, unexercisable 0 unexercisable $0
Treasurer & Secretary
- -----------------------------------------------------------------------------------------------
JAMES G. DALY -- -- exercisable 2,032 exercisable $ 10,180
Senior Vice President, unexercisable 0 unexercisable $0
UNITIL Service
- -----------------------------------------------------------------------------------------------
GEORGE R. GANTZ -- -- exercisable 2,078 exercisable $ 13,882
Senior Vice President, unexercisable 0 unexercisable $0
UNITIL Service
- -----------------------------------------------------------------------------------------------
NOTES:
(1) Amounts listed in column (d) in the table above do not include non-
preferential dividend equivalents associated with options outstanding.
- --------------------------------------------------------------------------------
UNITIL maintains a tax-qualified defined benefit pension plan and related
trust agreement (the "Retirement Plan"), which provides retirement annuities
for eligible employees of UNITIL and its subsidiaries. Since the Retirement
Plan is a defined benefit plan, no amounts were contributed or accrued
specifically for the benefit of any officer of UNITIL under the Retirement
Plan. Directors of UNITIL who are not and have not been officers of UNITIL or
any of its subsidiaries are not eligible to participate in the Retirement Plan.
The table on the following page sets forth the estimated annual benefits
(exclusive of Social Security payments) payable to participants in the
specified compensation and years of service classifications, assuming continued
active service until retirement. The average annual earnings used to compute
the annual benefits are subject to a $150,000 limit.
10
------------------
PENSION PLAN TABLE
------------------
ANNUAL PENSION
Average Annual Earnings -------------------------------------------
Used for Computing 10 Years 20 Years 30 Years 40 Years
Pension of Service of Service of Service of Service
- ----------------------------------------------------------------------------
$100,000 20,000 40,000 50,000 55,000
125,000 25,000 50,000 62,500 68,750
150,000 30,000 60,000 75,000 82,500
175,000 35,000 70,000 87,500 96,250
The present formula for determining annual benefits under the Retirement
Plan's life annuity option is (i) 2% of average annual salary (average annual
salary during the five consecutive years out of the last twenty years of
employment that give the highest average salary) for each of the first twenty
years of benefit service, plus (ii) 1% of average annual salary for each of the
next ten years of benefit service and (iii) 1/2% of average annual salary for
each year of benefit service in excess of thirty, minus (iv) 50% of age 65
annual Social Security benefit (as defined in the Retirement Plan), and (v) any
benefit under another UNITIL retirement plan of a former employer for which
credit for service is given under the Retirement Plan. A participant is
eligible for early retirement at an actuarially reduced pension upon the
attainment of age 55 with at least 15 years of service with UNITIL or one of
its subsidiaries. A participant is 100% vested in his benefit under the
Retirement Plan after 5 years of service with UNITIL or one of its
subsidiaries. As of January 1, 1995, Executive Officers Stulgis, Dalton, Siart,
Daly and Gantz had 15, 27, 12, 6 and 11 credited years of service,
respectively, under the Retirement Plan.
Effective January 1, 1987, UNITIL Service adopted a Supplemental Executive
Retirement Plan ("SERP"), a non-qualified defined benefit plan. SERP provides
for supplemental retirement benefits to executives selected by the Board of
Directors of UNITIL Service (the "UNITIL Service Board"). At the present time,
Messrs. Stulgis and Dalton are eligible for SERP benefits upon attaining normal
or early retirement eligibility. The formula for determining annual benefits
under SERP at normal retirement date is based on a participant's final average
earnings less the participant's benefits payable under the Retirement Plan and
less other retirement income payable to such participant by UNITIL. Early
retirement benefits are available to a participant, with the UNITIL Service
Board's approval, if the participant has attained age 55 and completed 15 years
of service. The above computation is adjusted, if the participant has not
attained age 62 by the early retirement date, by multiplying 60% of the
participant's final average earnings by a fraction, the numerator of which is
the years of actual service and the denominator of which is the service the
participant would have completed if the participant had remained employed by
UNITIL until age 62. Should a participant elect to begin receiving early
retirement benefits under SERP prior to attaining age 62, the benefits are
reduced by 2% for each year that commencement of benefits precedes attainment
of age 62. If a participant terminates employment for any reason prior to
retirement (as defined in the SERP), the participant will not be entitled to
any benefits under the SERP. A participant receiving benefits or entitled to
receive benefits will forfeit his benefits if he engages in competition with
UNITIL Service or is discharged for cause or performs acts of willful
malfeasance or gross negligence in a matter of material importance to UNITIL
Service. Benefits under the SERP are to be paid from the general assets of
UNITIL Service. Under the SERP, Messrs. Stulgis and Dalton would be entitled to
receive an annual benefit of $71,401 and $64,187, respectively, assuming their
normal retirement at age 65 and that their final average earnings are equal to
the average of their respective three consecutive years of highest compensation
prior to the date hereof.
In 1988, UNITIL and certain subsidiaries entered into severance agreements
(the "Severance Agreements") with certain management employees, including
Executive Officers, of UNITIL and its subsidiaries. The Severance Agreements
are intended to help assure continuity in the management and operation of
UNITIL and its subsidiaries in the event of a proposed "Change in Control".
Each Severance Agreement only becomes effective upon the occurrence of a Change
in Control of UNITIL as defined below. Upon the effectiveness of the Severance
Agreements, each employee's stipulated compensation and benefits, position,
responsibilities and other conditions of employment
11
may not be reduced during the thirty-six month period following a Change in
Control. In the event of such a reduction, the employee is entitled to a
severance benefit which is described hereafter. A "Change in Control" is
defined as occurring when (i) UNITIL receives a report on Schedule 13D filed
with the Securities and Exchange Commission under the Securities Exchange Act
of 1934, as amended, disclosing that any person, group, corporation, or other
entity (except UNITIL or a wholly-owned subsidiary of UNITIL), is the
beneficial owner, directly or indirectly, of 25% or more of UNITIL Common
Stock; (ii) any person, group, corporation, or other entity (except UNITIL or a
wholly-owned subsidiary of UNITIL), after purchasing UNITIL Common Stock in a
tender offer or exchange offer, becomes the beneficial owner, directly or
indirectly, of 25% or more of UNITIL Common Stock; (iii) the shareholders of
UNITIL approve any consolidation or merger in which UNITIL is not the
continuing or surviving corporation or pursuant to which the shares of UNITIL
Common Stock would be converted into cash, securities or other property or any
sale, exchange or other transfer of all or substantially all of UNITIL's
assets; or (iv) there is a change in a majority of the members of the UNITIL
Board of Directors within a twenty-five month period unless approved by two-
thirds of the Directors then still in office who were in office at the
beginning of the twenty-five month period.
In the event of a Change in Control each Severance Agreement further provides
that in the event (i) the employee's employment is terminated by UNITIL, or the
appropriate subsidiary, with the exception of a termination because of the
employee's acceptance of a position with another company or for cause (as
defined in the Severance Agreement); or (ii) the employee terminates employment
due to (a) reduction in the employee's position and responsibilities with
UNITIL, or the appropriate subsidiary, (b) reduction in the employee's total
compensation, (c) assignment to a location more than fifty miles from the
employee's current place of employment, (d) liquidation, merger, or sale of all
the assets of UNITIL, unless the successor corporation has a net worth at least
equal to that of UNITIL and assumes UNITIL's obligations under the Severance
Agreements, or (e) any other material breach of the Severance Agreement by
UNITIL, or the appropriate subsidiary, the employee is entitled to a severance
benefit. The amount payable to the employee upon the occurrence of any of the
foregoing events is a lump sum cash amount, payable within five business days
of such termination (with the exception noted below), equal to (i) the present
value of three years' base salary and bonus; (ii) the present value of the
additional amount the employee would have received under the Retirement Plan if
the employee had continued to be employed for such thirty-six month period;
(iii) the present value of contributions that would have been made by UNITIL or
its subsidiaries under the TDSIP if the employee had been employed for such
thirty-six month period; and (iv) the economic benefit on any outstanding
UNITIL stock options and associated dividend equivalents, assuming such options
remained unexercised until the day preceding the expiration of the grant,
including the spread on any stock options that would have been granted under
the Option Plan if the employee had been employed for such thirty-six month
period. Generally, the spread on any stock options which would have been
granted under the Option Plan shall be paid within five business days after the
expiration of the thirty-six month period. Each Severance Agreement also
provides for the continuation of all employee benefits for a period of thirty-
six months, commencing with the month in which the termination occurred. In
addition, pursuant to each Severance Agreement, UNITIL is required to make an
additional payment to the employee sufficient on an after-tax basis to satisfy
any additional individual tax liability incurred under Section 280G of the
Internal Revenue Code of 1986, as amended, in respect to such payments.
----------------------------------------------
AS TO OTHER MATTERS TO COME BEFORE THE MEETING
----------------------------------------------
The Board of Directors does not intend to bring before the meeting any
matters other than the one referred to above and knows of no other matters
which may properly come before the meeting. If any other matters or motions
come before the meeting, it is the intention of the persons named in the
accompanying form of proxy to vote such proxy in accordance with their judgment
on such matters or motions, including any matters dealing with the conduct of
the meeting.
12
The Board of Directors has selected and employed the firm of Grant Thornton
as UNITIL's independent certified public accountants to audit UNITIL's
financial statements for the fiscal year 1995. A representative of the firm
will be present at the meeting and will be available to respond to appropriate
questions. It is not anticipated that such representative will make a prepared
statement at the meeting; however, he will be free to do so if he so chooses.
Any proposal submitted by a shareholder of UNITIL for inclusion in the proxy
material for the 1996 annual meeting of shareholders must be received by UNITIL
at its office in Exeter, New Hampshire, not later than December 20, 1995.
- --------------------------------------------------------------------------------
Solicitation, Revocation and Use of Proxies
Shares of UNITIL Common Stock represented by properly executed proxies
received by UNITIL prior to or at the meeting will be voted at the meeting in
accordance with the instructions specified on the proxies. If no instructions
are specified on such proxies, shares will be voted FOR the election of the
nominees for Directors. Abstentions and non-votes will have the same effect as
negative votes.
Any UNITIL shareholder who executes and returns a proxy has the power to
revoke such proxy at any time before it is voted by filing with the Secretary
of UNITIL, at the address of UNITIL set forth above, written notice of such
revocation or a duly executed proxy bearing a later date, or by attending and
voting in person at the meeting. Attendance at the meeting will not in and of
itself constitute a revocation of a proxy.
UNITIL will bear the costs of solicitation by the Board of Directors of
proxies from UNITIL shareholders. In addition to the use of the mail, proxies
may be solicited by the Directors, officers and employees of UNITIL by personal
interview, telephone, telegram or otherwise. Such Directors, officers and
employees will not be additionally compensated, but may be reimbursed for out-
of-pocket expenses in connection with such solicitation. Arrangements also will
be made with brokerage houses and other custodians, nominees and fiduciaries
for the forwarding of solicitation material to the beneficial owners of stock
held of record by such persons, and UNITIL may reimburse such custodians,
nominees and fiduciaries for reasonable out-of-pocket expenses in connection
therewith.
By Order of the Board of Directors,
Gail A. Siart
Secretary
- --------------------------------------------------------------------------------
UNITIL will furnish without charge to any shareholder entitled to vote and to
any beneficial owner of shares entitled to be voted at the annual meeting of
common shareholders, to be held April 20, 1995, a copy of its annual report on
Form 10-K, including financial statments and schedules thereto, required to be
filed with the Securities and Exchange Commission for the fiscal year 1994,
upon written request to Gail A. Siart, Chief Financial Officer, UNITIL
Corporation, 216 Epping Road, Exeter, New Hampshire 03833-4571.
- --------------------------------------------------------------------------------
13
UNITIL CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P
R The undersigned, revoking all previous proxies, hereby appoints MICHAEL
J. DALTON, GAIL A. SIART and PETER J. STULGIS, and each of them, proxies with
O power of substitution to each, to vote for the undersigned at the Annual
Meeting of Common Shareholders of UNITIL Corporation (the "Company") to be
X held at The Sheraton Portsmouth Hotel, 250 Market Street, Portsmouth, New
Hampshire on Thursday, April 20, 1995, at 10:30 A.M. and at any and all
Y adjournments thereof, with all powers the undersigned would possess if
personally present and voting and particularly with respect to the matters
set forth on the reverse side hereof.
PLEASE MARK, SIGN AND DATE THIS PROXY CARD ON THE REVERSE SIDE HEREOF
AND RETURN PROMPTLY USING THE ENCLOSED ENVELOPE.
-----------
SEE REVERSE
SIDE
-----------
PLEASE MARK
[X] VOTES AS IN
THIS EXAMPLE
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS GIVEN BELOW. IF NO
INSTRUCTIONS ARE GIVEN, THIS PROXY WILL BE VOTED IN FAVOR OF THE ELECTION OF THE
FOUR DIRECTORS LISTED IN ITEM 1.
1. TO ELECT FOUR DIRECTORS:
NOMINEES: MICHAEL J. DALTON, G. ARNOLD HAYNES, J. PARKER RICE, JR., JOAN D.
WHEELER
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES LISTED
ABOVE.
FOR WITHHOLD
[_] ALL [_] FROM ALL
NOMINEES NOMINEES
[_]
--------------------------------------
For all nominees except as noted above.
MARK HERE MARK HERE
FOR ADDRESS IF COMMENTS
CHANGE AND [_] AND NOTE [_]
NOTE AT LEFT HEREON
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. WHEN SHARES ARE HELD BY JOINT
TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH.
PLEASE RETURN THIS PROXY PROMPTLY.
Signature: Date:
----------------------------------- ------------------
Signature: Date:
----------------------------------- ------------------
