SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
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Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] 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)
------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-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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(3) Per unit price or other underlying value of transaction computed
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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[_] 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,
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________________________________________________________________________
[ART APPEARS HERE]
March 18, 1996
Dear Fellow Shareholder,
The Annual Meeting of Common Shareholders is scheduled to be
held on Thursday, April 18, 1996, at 10:30 a.m., at The
Sheraton Portsmouth Hotel, 250 Market Street, Portsmouth,
New Hampshire.
Enclosed you will find a 1995 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 three 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,
[ART APPEARS HERE]
Peter J. Stulgis
Chairman of the Board of Directors
and Chief Executive Officer
[ART APPEARS HERE]
NOTICE OF ANNUAL MEETING OF COMMON SHAREHOLDERS
Exeter, New Hampshire
March 18, 1996
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 18, 1996, at 10:30 A.M., for the
following purposes:
1. To elect three 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 4, 1996 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
[ART APPEARS HERE]
216 EPPING ROAD
EXETER, NEW HAMPSHIRE 03833-4571
March 18, 1996
Proxy Statement
ANNUAL MEETING OF COMMON SHAREHOLDERS, APRIL 18, 1996
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 1996
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 1995 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 4, 1996
consisted of 4,338,434 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 270,659 (1) 6.18%
300 Friberg Parkway
Westborough, MA
01581
- --------------------------------------------------------------------------------
NOTES:
(1) Based on information provided by Mr. Tenney. See notes 2, 3 and 6 to
the table below under the heading "As to the Election of Directors."
The eleven Directors and the officers of Unitil as a group have beneficial
ownership as of March 1, 1996 of 312,071 (7.19%) of Common Stock, of which they
have direct beneficial ownership of 157,009 shares (3.62%), which excludes
options to purchase 137,234 shares (3.16%) pursuant to the exercise of those
options, and indirect beneficial ownership of 155,062 shares (3.57%). 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 eleven Directors.
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Information About Nominees for Directors
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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, 1996 (1)
Director -----------------------------
Since Shares
- ------------------------------------------------------------------------------
DOUGLAS K. MACDONALD, AGE 67 1984 924
- ----------------------------------
Retired since 1988. Prior to his
retirement, Mr. Macdonald was
Vice President and Controller of
Unitil and President of CECo.
CHARLES H. TENNEY II, AGE 77 1984 270,659 (2)(3)(4)(5)(6)
- ----------------------------------
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 the Chairman
of the Board of Directors of Bay
State Gas Company, Westborough,
MA (natural gas distributor).
2
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Information About Nominees for Directors . . . continued
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Common Stock Owned
Beneficially on March 1, 1996 (1)
Director -----------------------------
Since Shares
- --------------------------------------------------------------------------------
WILLIAM W. TREAT, AGE 77 1984 20,345 (7)
- ------------------------------------
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 former Director
of the Colonial Group, Inc.,
Boston, MA (investments).
----------------------------------------------------------------
Information About Directors Whose Terms of Office Continue
----------------------------------------------------------------
Common Stock Owned
Beneficially on March 1, 1996 (1)
Director Term to -----------------------------
Since Expire Shares
- --------------------------------------------------------------------------------
MICHAEL J. DALTON, AGE 55 1984 1998 56,442 (2)(3)(5)(8)
- -----------------------------
President and Chief
Operating Officer of
Unitil.
G. ARNOLD HAYNES, AGE 67 1992 1998 3,444
- -----------------------------
President and Principal of
Haynes Management, Inc.,
Wellesley Hills, MA (real
estate development and
management).
J. PARKER RICE, JR., AGE 70 1992 1998 1,016
- -----------------------------
Director, former President
and Treasurer of
Hyland/Rice Office
Products, Inc., Fitchburg,
MA (office products
dealer).
PETER J. STULGIS, AGE 45 1984 1997 48,942 (2)(3)(5)(9)
- -----------------------------
Chairman of the Board and
Chief Executive Officer of
Unitil.
CHARLES H. TENNEY III, AGE
48 (4) 1992 1997 2,568
- -----------------------------
Elected officer (Clerk) of
Bay State Gas Company,
Westborough, MA (natural
gas distributor).
W. WILLIAM VANDERWOLK, JR.,
AGE 72 1984 1997 15,140 (10)
- -----------------------------
Owner of Horizon
Management, Manchester, NH
(property and restaurant
management).
3
-----------------------------------------------------------
Information About Directors Whose Terms of Office
Continue . . . continued
-----------------------------------------------------------
Common Stock Owned
Beneficially on March 1, 1996 (1)
Director Term to -----------------------------
Since Expire Shares
- -------------------------------------------------------------------------------
JOAN D. WHEELER, AGE 58 1994 1998 1,000
- -----------------------------
Owner of the Russian
Gallery, Marblehead, MA
(art gallery). 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.
FRANKLIN WYMAN, JR., AGE 74 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 3,176, 3,522 and 3,918 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 38,743, 40,532 and 38,743 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 1.12%, 1.29% and 6.18%, respectively, of the total
outstanding shares, no Director or officer owns more than one percent
of the total outstanding shares.
(6) Included are 124,522 shares (2.87%) 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.
(7) Included are 5,387 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, and also 500 shares owned by a member of
Mr. Treat's family; he has no voting or investment power with respect
to, and no beneficial interest in, such shares.
(8) Included are 12,303 shares held by Mr. Dalton jointly with his wife
with whom he shares voting and investment power. Included are 49 shares
held by Mr. Dalton as custodian for one of his children; he has voting
and investment power with respect to such shares.
(9) Included are 6,209 shares held by Mr. Stulgis jointly with his wife
with whom he shares voting and investment power.
(10) Included are 3,254 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 1995. During 1995, Directors
attended an average of 99% 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 1995 and through March 1, 1996 were met, except that G. Arnold
Haynes, a director of the Company, filed a Form 4 to report the purchase of 100
shares of Common Stock of the Company approximately 30 days after such form was
required to be filed.
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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.
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Committees of the Board of Directors
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Executive
Committee
------------------
The Executive Committee of the Board of Directors held two meetings in 1995.
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.
5
Audit
Committee
------------------
The Audit Committee of the Board of Directors, which held two meetings in
1995, 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 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 1995, consists of Charles H. Tenney II (Chairman), J. Parker Rice,
Jr. and Joan D. Wheeler. 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.
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Compensation Committee Interlocks and Insider Participation
---------------------------------------------------------------------
Charles H. Tenney II served as the Chairman of the Compensation Committee
during fiscal 1995. 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.
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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.
Directors Emeriti Richard L. Brickley, Philip H. Bradley, Theodore C.
Haffenreffer, Jr. and Endicott Smith were initially appointed to their
positions in 1992, 1993, 1994, and 1995, 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.
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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
6
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. 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. This plan was tailored to emphasize
dividend and stock value growth as a prerequisite to the maximization of value
to the participants.
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 3.4% in 1995 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
1995 was based upon the Unitil System's operating results for 1994 under the
MPCP discussed above and a distribution from a performance pool related to the
1995 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 25% of his total compensation. This MPCP payment is
formula-driven and reflected the achievement in 1994 of earnings which were
above target levels; a rate of return which was in the 89th percentile of peer
companies; cost control results which were at the 100th percentile of peer
companies; and residential utility rates which were at the 97th percentile of
the peer group. The distribution from the Unitil Resources 1995 performance
pool was based upon its contribution to System earnings and was equal to 9.2%
of his total compensation. In setting the compensation of Mr. Stulgis for 1995,
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 below. 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 1995 following the principles and procedures outlined in this
report.
Compensation Committee Members
----------------------------------------------------------
Charles H. Tenney II, Chairman, J. Parker Rice, Jr., and
Joan D. Wheeler
---------------------------------------
STOCK PERFORMANCE GRAPH AND INFORMATION
---------------------------------------
[GRAPH APPEARS HERE]
COMPARATIVE FIVE-YEAR CUMULATIVE TOTAL RETURNS
- --------------------------------------------------------------------------------
UNITIL S&P NE UTILITIES
1990 100 100 100
1991 120 130 131
1992 144 140 158
1993 164 154 159
1994 146 155 144
1995 203 213 181
- --------------------------------------------------------------------------------
The graph to the left assumes $100 invested on December 31, 1990, 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
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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
$100,000 during the year 1995.
SUMMARY COMPENSATION TABLE
Long Term Compensation
----------------------------
Annual Compensation Awards Payouts
---------------------------------------------------------------
Name and Other Restricted All Other
Principal Salary Bonus Annual Stock Options LTIP Compensation
Position (1) Year ($) ($) (2) Comp. ($) Awards ($) (#) Payouts ($)
- --------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
- --------------------------------------------------------------------------------------------------------
PETER J. STULGIS 1995 $215,300 $110,411 -- -- -- -- $12,529 (3)
Chairman of the Board & 1994 208,300 94,394 -- -- -- --
Chief Executive Officer 1993 202,000 74,307 -- -- -- --
MICHAEL J. DALTON 1995 $164,400 $ 63,347 -- -- -- -- $ 8,659 (4)
President & Chief 1994 159,600 61,932 -- -- -- --
Operating Officer 1993 155,000 50,216 -- -- -- --
GAIL A. SIART (5) 1995 $ 90,000 $ 47,228 -- -- 3,000 (6) -- $ 4,364 (7)
Chief Financial Officer, 1994 79,033 24,928 -- -- -- --
Treasurer & Secretary 1993 75,100 17,558 -- -- -- --
JAMES G. DALY (5) 1995 $ 88,675 $ 47,228 -- -- 3,000 (6) -- $ 4,471 (8)
Senior Vice President, 1994 76,517 29,128 -- -- -- --
Unitil Service 1993 72,150 21,216 -- -- -- --
GEORGE R. GANTZ (5) 1995 $ 89,000 $ 42,428 -- -- 3,000 (6) -- $ 4,644 (9)
Senior Vice President, 1994 78,408 27,228 -- -- -- --
Unitil Service 1993 75,050 19,558 -- --
- --------------------------------------------------------------------------------------------------------
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 1994 and 1995 are comprised of Management
Performance Compensation Program (MPCP) cash and stock awards and
distributions from the System's non-utility subsidiary, Unitil
Resources. Unitil maintains 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 several factors designed to reflect the Company's performance and the
attainment of individual performance goals.
(3) All Other Compensation for Mr. Stulgis for the year 1995 includes the
company's contribution to the Tax Qualified Savings and Investment Plan
("401(K)"), Supplemental Life Insurance payment, and Group Term Life
Insurance payment, valued at $4,500, $6,937 and $1,092, respectively.
(4) All Other Compensation for Mr. Dalton for the year 1995 includes, 401(K)
company contribution, Supplemental Life Insurance payment and Group Term
Life Insurance payment, valued at $4,500, $2,558, and $1,601,
respectively.
(5) 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.
(6) Options were granted under the Key Employee Stock Option Plan (see the
table "Option Grants in Last Fiscal Year" and subsequent notes).
(7) All Other Compensation for Ms. Siart for the year 1995 includes 401(K)
company contribution, Supplemental Life Insurance payment and Group Term
Life Insurance payment, valued at $3,825, $369 and $170, respectively.
(8) All Other Compensation for Mr. Daly for the year 1995 includes 401(K)
company contribution, Supplemental Life Insurance payment and Group Term
Life Insurance payment, valued at $3,786, $517 and $168, respectively.
(9) All Other Compensation for Mr. Gantz for the year 1995 includes 401(K)
company contribution, Supplemental Life Insurance payment and Group Term
Life Insurance payment, valued at $3,651, $732 and $261, respectively.
8
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Other Compensation Arrangements
---------------------------------------------------------------------
- -------------------------------------------------------------------------------
OPTION GRANTS IN LAST FISCAL YEAR (1)
- -------------------------------------------------------------------------------
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term
- -------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g)
- -------------------------------------------------------------------------------------------------
Option Price
----------------
Number of % of Total
Securities Options Market
Underlying Granted to Exercise or Price on
Name Options Employees in Base Price Date of Exp.
Name Granted (#) Fiscal Year ($/Sh) Grant Date 5% ($) 10% ($)
PETER J. STULGIS -- -- -- -- -- -- --
Chairman of the Board &
Chief Executive Officer
- ----------------------------------------------------------------------------------------------------------
MICHAEL J. DALTON -- -- -- -- -- -- --
President &
Chief Operating Officer
- ----------------------------------------------------------------------------------------------------------
GAIL A. SIART 3,000 17.65% $14.56 $17.125 3/7/99 $18,767 $31,538
Chief Financial Officer,
Treasurer & Secretary
- ----------------------------------------------------------------------------------------------------------
JAMES G. DALY 3,000 17.65% $14.56 $17.125 3/7/99 $18,767 $31,538
Senior Vice President,
Unitil Service
- ----------------------------------------------------------------------------------------------------------
GEORGE R. GANTZ 3,000 17.65% $14.56 $17.125 3/7/99 $18,767 $31,538
Senior Vice President,
Unitil Service
- ----------------------------------------------------------------------------------------------------------
NOTES:
(1) Upon the exercise of any option by an employee and upon payment of the
option price for shares of Unitil Common Stock as to which the option
was granted (the "Primary Shares"), Unitil will cause to be delivered to
such employee (i) the Primary Shares and (ii) the number of shares of
Unitil Common Stock (the "Dividend Equivalent Shares") equal to the
dollar amount of dividends which would have been paid on the Primary
Shares (and previously accrued Dividend Equivalent Shares) had they been
outstanding, divided by the fair market value of Unitil Common Stock
determined as of the record date for each dividend.
9
The table below provides information with respect to options to purchase
shares of the Company's Common Stock exercised in fiscal 1995 and the value of
unexercised options granted in prior years under the Option Plan to the named
executive officers in the Summary Compensation Table and held by them as of
December 31, 1995.
- --------------------------------------------------------------------------------
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR (FY) AND FY-END OPTION VALUES(1)
- --------------------------------------------------------------------------------
Number of Unexercised Value of Unexercised
Shares Options at In-the-Money Options
R Acquired FY-End (#) (2) at FY-End ($)
Name on Value ---------------------------------------------
Exercise Realized Exercisable/ Exercisable/
(#) ($) Unexercisable Unexercisable
- -----------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
- -----------------------------------------------------------------------------------------
PETER J. STULGIS -- -- exercisable 24,000 exercisable $296,280
Chairman of the Board & unexercisable 0 unexercisable $0
Chief Executive Officer
- -----------------------------------------------------------------------------------------
MICHAEL J. DALTON -- -- exercisable 24,000 exercisable $292,200
President & unexercisable 0 unexercisable $0
Chief Operating Officer
- -----------------------------------------------------------------------------------------
GAIL A. SIART -- -- exercisable 5,078 exercisable $ 48,266
Chief Financial Officer, unexercisable 0 unexercisable $0
Treasurer & Secretary
- -----------------------------------------------------------------------------------------
JAMES G. DALY -- -- exercisable 5,032 exercisable $ 42,998
Senior Vice President, unexercisable 0 unexercisable $0
Unitil Service
- -----------------------------------------------------------------------------------------
GEORGE R. GANTZ -- -- exercisable 5,078 exercisable $ 48,266
Senior Vice President, unexercisable 0 unexercisable $0
Unitil Service
- -----------------------------------------------------------------------------------------
NOTES:
(1) 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
substantially the same manner as in the Severance Agreements as defined
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.
(2) Amounts listed in column (d) in the table above do not include non-
preferential dividend equivalents associated with options outstanding.
10
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 below 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.
---------------------------------------------------------------------
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
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, 1996, Executive Officers Stulgis, Dalton, Siart,
Daly and Gantz had 16, 28, 13, 7 and 12 credited years of service,
respectively, under the Retirement Plan.
Unitil Service also maintains 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. Annual benefits are 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. 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, the
participant will not be entitled to any benefits. Under the SERP, Messrs.
Stulgis and Dalton would be entitled to receive an annual benefit of $155,533
and $53,452, 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.
11
Unitil and certain subsidiaries maintain severance agreements (the "Severance
Agreements") with certain management employees, including Executive Officers.
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 in the
Severance Agreements. If an employee's stipulated compensation and benefits,
position, responsibilities and other conditions of employment are reduced
during the thirty-six month period following a Change in Control, the employee
is entitled to a severance benefit.
The severance benefit is a lump sum cash amount 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 401(k) 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. 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.
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 1996. 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 1997 annual meeting of shareholders must be received by Unitil
at its Corporate Headquarters not later than December 18, 1996.
12
---------------------------------------------------------------------
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 18, 1996, a copy of its annual report on
Form 10-K, including financial statements and schedules thereto, required to be
filed with the Securities and Exchange Commission for the fiscal year 1995,
upon written request to Gail A. Siart, Chief Financial Officer, Unitil
Corporation, 216 Epping Road, Exeter, New Hampshire 03833-4571.
- --------------------------------------------------------------------------------
13
DETACH HERE
PROXY
UNITIL CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all previous proxies, hereby appoints MICHAEL J.
DALTON, GAIL A. SIART and PETER J. STULGIS, and each of them, proxies with power
of substitution to each, to vote for the undersigned at the Annual Meeting of
Common Shareholders of UNITIL Corporation (the "Company") to be held at The
Sheraton Portsmouth Hotel, 250 Market Street, Portsmouth, New Hampshire on
Thursday, April 18, 1996, at 10:30 A.M., and at any and all 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
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
-----------------
[LOGO OF UNITIL APPEARS HERE]
- --------------------------------------------------------------------------------
THIS IS YOUR PROXY.
YOUR VOTE IS IMPORTANT.
Regardless of whether you plan to attend the Annual Meeting of Shareholders,
you can be sure your shares are represented at the Meeting by promptly
returning your proxy (attached below) in the enclosed envelope. Thank you for
your attention to this important matter.
- --------------------------------------------------------------------------------
DETACH HERE
[X] Please mark ++++++
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 vote in favor of the
election of the three Directors listed in item 1.
1. To Elect three Directors:
Nominees: Douglas K. Macdonald, Charles M. Tenney II, William W. Treat
The Board of Directors recommends a vote "FOR" each of the nominees listed
above.
FOR WITHHELD
[_] ALL [_] FROM ALL
NOMINEES NOMINEES
[_]
--------------------------------------
For all nominees except as noted above
MARK HERE MARK HERE
FOR ADDRESS [_] IF YOU PLAN [_]
CHANGE AND TO ATTEND
NOTE AT LEFT THE MEETING
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:_______
