SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A-1
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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COMMISSION FILE NUMBER 1-6788
THE UNITED ILLUMINATING COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CONNECTICUT 06-0571640
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
157 CHURCH STREET, NEW HAVEN, CONNECTICUT 06506
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 203-499-2000
------------------------------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE ON
REGISTRANT TITLE OF EACH CLASS WHICH REGISTERED
---------- ------------------- ------------------------
The United Illuminating Company Common Stock, no par value New York Stock Exchange
United Capital Funding Partnership L.P.(1) 9 5/8% Preferred Capital New York Stock Exchange
Securities, Series A (Liquidation
Preference $25 per Security)
(1) The 9 5/8% Preferred Capital Securities, Series A, were issued on April 3,
1995 by United Capital Funding Partnership L.P., a special purpose limited
partnership in which The United Illuminating Company owns all of the
general partner interests, and are guaranteed by The United Illuminating
Company.
SECURITIES REGISTERED PURSUANT TO
SECTION 12(G) OF THE ACT: COMMON STOCK, NO PAR VALUE,
OF THE UNITED ILLUMINATING COMPANY
-----------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the registrant's voting stock held by
non-affiliates on January 31, 1999 was $699,286,165, computed on the basis of
the average of the high and low sale prices of said stock reported in the
listing of composite transactions for New York Stock Exchange listed securities,
published in The Wall Street Journal on February 1, 1999.
The number of shares outstanding of the registrant's only class of common stock,
as of January 31, 1999, was 14,334,922.
DOCUMENTS INCORPORATED BY REFERENCE
Document Part of this Form 10-K into which document is incorporated
-------- ----------------------------------------------------------
None N/A
This amendment to the Annual Report on Form 10-K of The United
Illuminating Company (the "Company") for the fiscal year ended December 31, 1998
(the "Original Form 10-K") amends and modifies the Original Form 10-K by
restating Part III of the Original Form10-K in its entirety in order to set
forth in full the information required by Part III instead of incorporating such
information by reference to the Company's definitive Proxy Statement for its
1999 Annual Meeting of the Shareowners.
PART III
Item 10. Directors and Executive Officers of the Company.
DIRECTORS OF THE COMPANY
The following table provides information regarding all persons who were
directors at any time during the fiscal year ended December 31, 1998 and all
persons who will be nominated to become directors at the Company's 1999 Annual
Meeting of the Shareowners. All of such persons were elected as directors by the
shareowners of the Company at the Company's last Annual Meeting of the
Shareowners, except Messrs. Chase and Miglio, who are each being nominated to
become directors for the first time at the Company's 1999 Annual Meeting of the
Shareowners. All of the persons named below are being nominated to become
directors at the 1999 Annual Meeting of the Shareowners, except for Messrs.
Grossi and Devlin, who resigned as directors effective December 31, 1998 and
December 2, 1998, respectively.
NAME, PRINCIPAL OCCUPATION, OTHER
CORPORATE AFFILIATIONS AND PRINCIPAL OCCUPATIONS DIRECTOR
DURING THE PAST FIVE YEARS OF NOMINEE AGE(1) SINCE
------------------------------------------------ ----- --------
Thelma R. Albright 52 1995
President, Carter Products Division, Carter-Wallace, Inc., Cranbury, New Jersey.
From 1994 through 1995, Ms. Albright was General Manager and Executive Vice
President of Revlon Beauty Care Division. Also, Director, CTFA (Cosmetics,
Toiletry and Fragrance Association) and Consumer Healthcare Products
Association.
Marc C. Breslawsky 56 1995
President and Chief Operating Officer, Pitney Bowes, Inc., Stamford,
Connecticut. Also, Director, Pitney Bowes, Inc., Pitney Bowes Credit Corp., C.R.
Bard, Inc., the Family Foundation of North America, CBIA (Connecticut Business
and Industry Association) and United Way of Eastern Fairfield County; Vice
Chairman of the Governor's Council of Economic Competitiveness and Technology;
Member, Board of Governors, the State of Connecticut/Red Cross Disaster Relief
Cabinet and the Landmark Club; and Trustee, Norwalk Hospital.
David E. A. Carson 64 1993
President, Chief Executive Officer and Director, People's Bank, Bridgeport,
Connecticut, and President, Chief Executive Officer and Trustee, People's Mutual
Holdings, Bridgeport, Connecticut. Also, Chairman, Bridgeport Public Education
Fund, Business Advisory Committee of Connecticut Commission on Children and
Bridgeport Area Foundation; and Director, Mass Mutual Institutional Funds, MML
Series Investment Funds, American Skandia Trust, Old State House, Hartford,
Connecticut, The Bushnell, Hartford, Connecticut, and Hartford Stage Company.
NAME, PRINCIPAL OCCUPATION, OTHER
CORPORATE AFFILIATIONS AND PRINCIPAL OCCUPATIONS DIRECTOR
DURING THE PAST FIVE YEARS OF NOMINEE AGE(1) SINCE
------------------------------------------------ ------ --------
Arnold L. Chase 47
Executive Vice President, Chase Enterprises, Hartford, Connecticut. Also,
Director, First National Bank of Connecticut, Juvenile Diabetes Foundation
International, American Diabetes Association - Connecticut Affiliate, Old State
House Association, Connecticut Historic Society and Science Center of
Connecticut.
John F. Croweak 62 1987
Chairman of the Board of Directors, Anthem Blue Cross & Blue Shield of
Connecticut, Inc., North Haven, Connecticut. Prior to his retirement in 1997,
Mr. Croweak served as Chairman of the Board of Directors and Chief Executive
Officer of Anthem Blue Cross & Blue Shield of Connecticut and its predecessor,
Blue Cross & Blue Shield of Connecticut, Inc. Also Chairman of the Board of
Directors, Connecticut American Insurance Company, ProMed Systems, Inc., OPTIMED
Medical Systems and Signal Medical Services, Inc.; and Director, BCS Financial,
The New Haven Savings Bank, Quinnipiac College, Opticare and Anthem, Inc.
J. Hugh Devlin 56 1989
Managing Director and Consultant, Barr Devlin Associates, Incorporated, New
York, New York. From 1975 through 1988, Mr. Devlin was a Managing Director of
Morgan Stanley & Co., Inc., during which time he served as head of its Public
Utility Group. From January 1989 to April 1990 Mr. Devlin served as Advisory
Director of Morgan Stanley & Co., Inc.
Robert L. Fiscus 61 1992
Vice Chairman of the Board of Directors and Chief Financial Officer, The United
Illuminating Company. Mr. Fiscus served as President and Chief Financial Officer
of the Company during the period January 1994 to February 1998. Also, Director,
Bridgeport Regional Business Council, Griffin Health Services Corporation, The
Aristotle Corporation, Bridgeport Area Foundation and Susquehanna University;
Governor, University of New Haven; and Trustee, Central Connecticut Coast Young
Men's Christian Association, Inc.
Richard J. Grossi 63 1988
Formerly Chairman of the Board of Directors and Chief Executive Officer, The
United Illuminating Company. Also, Director, The New Haven Savings Bank, Anthem
Blue Cross & Blue Shield of Connecticut, Inc., and University of Connecticut
Foundation, Inc.; Chairman, New York Independent System Operator Board, and
Science Park Development Corp. in New Haven, Connecticut; and Member,
Representative Policy Board of South Central Regional Water District.
Betsy Henley-Cohn 46 1989
Chairman of the Board of Directors, Joseph Cohn & Son, Inc., New Haven,
Connecticut. Also, Chairwoman of Birmingham Utilities, Inc.; and Director, The
Aristotle Corporation and Citizens Bank of Connecticut.
John L. Lahey 52 1994
President, Quinnipiac College, Hamden, Connecticut. Also, Director, Yale-New
Haven Hospital and Long Wharf Theater; Vice Chairman and Director, Regional Plan
Association Board, New York, New York; Co-Chairman, Connecticut Committee of the
Regional Plan Association Board; and Member, Greater New Haven Regional
Leadership Council and Accreditation Committee of the American Bar Association.
- 2 -
NAME, PRINCIPAL OCCUPATION, OTHER
CORPORATE AFFILIATIONS AND PRINCIPAL OCCUPATIONS DIRECTOR
DURING THE PAST FIVE YEARS OF NOMINEE AGE(1) SINCE
------------------------------------------------ ------ --------
F. Patrick McFadden, Jr. 61 1987
Chairman, Citizen's Bank of Connecticut, New Haven, Connecticut. From 1994
through 1997, Mr. McFadden was President, Chief Executive Officer and Director,
The Bank of New Haven and BNH Bancshares, Inc. Also, Chairman of the Board of
Directors, Yale-New Haven Health Services Corporation.
Daniel J. Miglio 58
Formerly Chairman, President and Chief Executive Officer of Southern New England
Telecommunications Corporation 1994-1998. Director, Aristotle Corporation,
Yale-New Haven Health Services Corporation, Connecticut Public Television and
Radio, New Haven Symphony Orchestra and the Bishop's Fund for Children. Also,
Chairman, International Festival of Arts and Ideas; and Co-Chair, Governor's
Council on Economic Competitiveness and Technology.
Frank R. O'Keefe, Jr. 69 1989
Retired; former President, Long Wharf Capital Partners, Inc. 1988-1990; retired
Chairman, President and Chief Executive Officer, Armtek Corporation 1986-1988;
President and Chief Operating Officer, Armstrong Rubber Company 1980-1986; and
Director, Aetna Inc.
James A. Thomas 60 1992
Associate Dean, Yale Law School. Also, Trustee, Yale-New Haven Hospital and
People's Mutual Holdings; and Director, People's Bank and Sea Research
Foundation.
Nathaniel D. Woodson 57 1998
Chairman of the Board of Directors, President and Chief Executive Officer, The
United Illuminating Company. Mr. Woodson served as President of the Energy
Systems Business Unit of Westinghouse Electric Corporation during the period
January 1, 1993 to April 30, 1996. He has served as President of the Company
since February 23, 1998, Chief Executive Officer since May 20, 1998 and Chairman
of the Board of Directors since January 1, 1999.
- -------------------------
(1) Age at May 19, 1999
EXECUTIVE OFFICERS OF THE COMPANY
See "EXECUTIVE OFFICERS OF THE COMPANY" in Part I of this Annual Report
on Form 10-K for information regarding the Company's Executive Officers.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires UI's
directors and officers, and persons who own more than ten percent of a
registered class of UI's equity securities, to file with the Securities and
Exchange Commission (SEC) and The New York Stock Exchange initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of UI. Directors, officers and certain greater-than-ten-percent
shareowners are required by SEC regulations to furnish UI with copies of all
Section 16(a) forms they file.
To UI's knowledge, based solely on review of reports furnished to UI
and written representations that no other reports were required, during the
fiscal year ended December 31, 1998 all Section 16(a) filing requirements
applicable to its directors, officers and greater-than-ten-percent shareowners
were complied with.
- 3 -
Item 11. Executive Compensation.
EXECUTIVE COMPENSATION
The following table shows the annual and long-term compensation, for
services in all capacities to UI for the years 1998, 1997 and 1996, of the two
persons who served as the chief executive officer during 1998 and of the four
other most highly compensated persons during 1998 who were serving as executive
officers at December 31, 1998:
LONG-TERM COMPENSATION
----------------------
NAME AND ANNUAL COMPENSATION SECURITIES UNDERLYING LTIP ALL OTHER
----------------------
PRINCIPAL POSITION(1) YEAR SALARY($) BONUS($)(2) OPTIONS/SARS(#) PAYOUTS($) COMPENSATION(5)
--------------------- ---- --------- ----------- --------------- ---------- ---------------
Richard J. Grossi 1998 $331,000 $95,000 $375,165(3) $2,342,459
Chairman of the Board of Directors 1997 324,000 125,000 119,700(4) 6,925
and Chief Executive Officer 1996 318,000 125,000 6,287
Nathaniel D. Woodson 1998 $341,668 $105,000 80,000(6) $38,756
President and Chief Executive
Officer
Robert L. Fiscus 1998 $224,900 $55,000 $260,691(3) $7,745
Vice Chairman of the Board of 1997 220,400 70,000 59,850(4) 7,360
Directors and Chief Financial 1996 218,400 66,000 6,692
Officer
James F. Crowe 1998 $181,200 $37,000 $200,531(3) $7,235
Group Vice President 1997 177,600 55,000 42,750(4) 6,830
1996 176,600 51,000 6,235
Anthony J. Vallillo 1998 $175,700 $46,000 $72,191(3) $6,679
Group Vice President 1997 170,000 55,000 6,840(4) 6,144
1996 125,875 36,000 5,701
Albert N. Henricksen 1998 $147,650 $36,000 $96,255(3) $6,876
Group Vice President 1997 140,600 38,000 13,680(4) 6,401
1996 136,900 37,000 5,871
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(1) None of the persons named received any cash compensation in any of the
years shown other than the amounts appearing in the columns captioned
"Salary," "Bonus," "LTIP Payouts" and "All Other Compensation." None of
these persons received, in any of the years shown, any cash-equivalent form
of compensation, other than through participation in UI's group life,
health and hospitalization plans, which are available on a uniform basis to
all salaried employees of UI and the dollar value of which, together with
the dollar value of all other non-cash perquisites and other personal
benefits received by such person, did not exceed the lesser of $50,000 or
10% of the total salary and bonus compensation received by him for such
year.
(2) The amounts appearing in this column are awards earned in the years 1996,
1997 and 1998 pursuant to the Executive Incentive Compensation Program
described below.
(3) This is the amount earned for the 1996-1998 performance period under the
1996 Long-Term Incentive Program as described below. The cash payouts were
made in March 1999.
(4) This is the amount earned for the 1995-1997 performance period under the
1993 Dividend Equivalent Program. Under this program, which was terminated
when the Long-Term Incentive Program described below was established in
1996, each officer of UI was awarded a number of Dividend Equivalent Units
(Units) prior to the commencement of the 1995 performance period and, due
to the ranking of UI's total shareowner return during the performance
period relative to the total shareowner returns of a preselected peer group
of companies, the officer earned a number of Units that resulted in a cash
payment equal to that number of Units multiplied by the
- 4 -
sum of all dividends paid per share on UI Common Stock during the
performance period. The cash payments were made in February, 1998.
(5) The amounts appearing in this column, except the amounts shown for Messrs.
Grossi and Woodson, are cash contributions by UI to its Employee Stock
Ownership Plan (ESOP) on behalf of each of the persons named for (i) a
match of pre-tax elective deferral contributions by him to UI's 401(k) Plan
from his salary and bonus compensation (included in the columns captioned
"Salary" and "Bonus"), and (ii) an additional contribution by UI equal to
25% of the dividends paid on his shares in the ESOP. Cash contributions of
$7,353 and $5,403 were made on behalf of Messrs. Grossi and Woodson,
respectively, for these purposes during 1999, and are included in the
amounts appearing in this column for each of them. Mr. Grossi retired on
December 31, 1998, at which time there was payable to him, under the terms
of his employment agreement with UI, a supplemental retirement benefit
having a net present lump sum value of $2,335,106. Mr. Woodson was
reimbursed, during 1998, for $33,353 of his relocation expenses when he
moved from Pennsylvania to Connecticut at the commencement of his
employment by UI.
(6) These are phantom stock options on shares of UI Common Stock granted to Mr.
Woodson in February of 1998 at the time of his employment by UI as its
President. The options are exercisable at the rate of 16,000 options on
each of the first five anniversaries of the grant date during the term of
Mr. Woodson's employment agreement with UI, which is described below.
UI's Executive Incentive Compensation Program was established in 1985
for the purposes of (i) helping to attract and retain executives and key
managers of high ability, (ii) heightening the motivation of those executives
and key managers to attain goals that are in the interests of shareowners and
customers, and (iii) encouraging effective management teamwork among the
executives and key managers of UI. Under this program, cash awards may be made
each year to officers and key employees based on their achievement of
pre-established performance levels with respect to specific shareowner goals,
customer goals and individual goals for the preceding year, and upon an
assessment of the officers' performance as a group with respect to strategic
opportunities during that year. Eligible officers, performance levels and
specific goals are determined each year by directors who are not employees of
UI, and incentive awards are paid following action by the Board of Directors
after the close of the year. Incentive awards are made from individual target
incentive award amounts, which are prescribed percentages of the individual
participants' salaries, ranging from 20% to 35% depending on each participant's
payroll salary grade. A participant may, by achieving his or her pre-established
performance levels with respect to specific shareowner goals, customer goals and
individual goals for a year, become eligible for an incentive award of up to
150% of his or her target incentive award amount for that year.
The Company's 1996 Long-Term Incentive Program was established for the
purposes of (i) promoting the long-term success of UI by attracting, retaining
and providing financial incentives to key employees who are in a position to
make significant contributions toward that success, (ii) linking the interests
of these key employees to the interests of the shareowners, and (iii)
encouraging these key employees to maintain proprietary interests in UI and
achieve extraordinary job performance levels. Under the program, an initial
three-year Performance Period commenced on January 1, 1996, three-year
Performance Periods commenced on January 1, 1997, January 1, 1998 and January 1,
1999, and a series of three-year Performance Periods will commence on January 1,
2000 and on each January 1 thereafter to and including January 1, 2005. The
Board of Directors designates the officers, if any, who will be participants in
the program for each Performance Period, the number of Contingent Performance
Shares to be awarded each officer-participant for that Performance Period, and a
peer group of companies comparable to UI for that Performance Period. Each
Contingent Performance Share is a share unit, equivalent to one share of UI
Common Stock, credited to an officer-participant's performance share account in
the program on a conditional basis at the beginning of a Performance Period. At
the end of each Performance Period, the number of Performance Shares earned for
the Performance Period is calculated on the basis of UI's total shareowner
return during the Performance Period relative to the peer group of companies
preselected by the Board of Directors for that Performance Period. Total
shareowner return for UI, and for each member of the peer group, for a
Performance Period is measured by the formula:
Change in Market Price from + Dividends Declared During the Period
Beginning to End of Period
------------------------------------------------------------------------
Market Price at Beginning of Period
- 5 -
If UI's total shareowner return for the Performance Period ranks at the
ninetieth percentile among the total shareowner returns of the peer group
companies, the number of Performance Shares earned by the officer-participant is
equal to the number of Contingent Performance Shares awarded to that
officer-participant at the commencement of the Performance Period. If UI's total
shareowner return ranks below the thirtieth percentile among those of the peer
group companies, no Performance Shares are earned for the Performance Period. If
UI's total shareowner return ranks between the thirtieth and the ninetieth
percentiles, the number of Performance Shares earned is calculated from a scale
rising from 15% to 100%. On each dividend payment date with respect to the
Company's Common Stock, the earned Performance Shares in an
officer-participant's Performance Share account are credited with an additional
number of Performance Shares in an amount equal to the dividend payable on the
earned Performance Shares in the account divided by the market price of UI
Common Stock on the dividend payment date. Upon the termination of an
officer-participant's employment by UI, the officer-participant is paid, in
cash, an amount equal to the number of earned Performance Shares in his or her
Performance Share account multiplied by the market price of UI Common Stock on
the employment termination date. An officer-participant is also entitled to
payment at any time, in cash, of the value of the earned Performance Shares in
his or her Performance Share account, provided that the officer-participant is
in compliance with the minimum stock ownership requirement for such officer
prescribed by the Board of Directors at that time. In 1998, for the 1998-2000
three-year Performance Period, the Board of Directors awarded Messrs. Grossi,
Woodson, Fiscus, Crowe, Vallillo and Henricksen 8,000, 5,000, 4,000, 2,500,
2,500 and 2,500 Contingent Performance Shares, respectively, under the 1996
Long-Term Incentive Program. The Board of Directors has not made any award of
Contingent Performance Shares in 1999, for the 1999-2001 three-year Performance
Period.
UI has entered into an employment agreement with Mr. Woodson, which
will continue in effect until terminated by UI at any time or by the officer on
six months' notice. This agreement provides that the annual salary rate of Mr.
Woodson will be $400,000, subject to upward revision by the Board of Directors
at such times as the salary rates for other officers of UI are reviewed by the
Directors, and subject to downward revision by the Board of Directors
contemporaneously with any general reduction of the salary rates of other
officers of UI, except in the event of a change in control of UI. The salary
paid to Mr. Woodson in 1998, shown on the above table, was paid pursuant to this
agreement. This agreement also provides that when the officer's employment by UI
terminates after he has served in accordance with its terms, UI will pay him an
annual supplemental retirement benefit in an amount equal to the excess, if any,
of (A) over (B), where (A) is 2.0% of his highest three-year average total
salary and bonus compensation from UI times the number of years (not to exceed
30) of his deemed service as an employee of UI, and (B) is the annual benefit
payable to him under UI's pension plan. If UI terminates the officer's
employment without cause, he will be paid the actuarial present value of this
supplemental retirement benefit and either a severance payment of up to two
years compensation at his then-current salary and bonus rate, or an increase of
a total of six years of age and/or service in the calculation of his retirement
benefit, at his election.
UI has also entered into employment agreements with Messrs. Fiscus and
Crowe, each of which will continue in effect until terminated by UI on three
years' notice or by the officer on six months' notice. These agreements provide
that the annual salary rates of Messrs. Fiscus and Crowe will be $218,400 and
$176,600, respectively, subject to upward revision by the Board of Directors at
such times as the salary rates of other officers of UI are reviewed by the
Directors, and subject to downward revision by the Board of Directors
contemporaneously with any general reduction of the salary rates of other
officers of UI, except in the event of a change in control of UI. The salaries
paid to Messrs. Fiscus and Crowe in 1996, 1997 and 1998, shown on the above
table, were paid pursuant to these agreements. Each of these agreements also
provides that when the officer's employment by UI terminates after he has served
in accordance with its terms, UI will pay him an annual supplemental retirement
benefit in an amount equal to the excess, if any, of (A) over (B), where (A) is
2.2% of his highest three-year average total salary and bonus compensation from
UI times the number of years (not to exceed 30) of his service deemed as an
employee of UI, and (B) is the annual benefit payable to him under UI's pension
plan. If UI terminates the officer's employment without cause, he will be paid
the actuarial present value of this supplemental retirement benefit and, if the
termination occurs in connection with a change in control of UI, the officer
will be entitled to either a severance payment of two years compensation at his
then-current salary and bonus rate, or an increase of a total of six years of
age and/or service in the calculation of his retirement benefit, at his
election.
- 6 -
UI has also entered into employment agreements with Messrs. Vallillo
and Henricksen, each of which will continue in effect until terminated by UI at
any time or by the officer on six months' notice. These agreements provide that
the annual salary rates of Messrs. Vallillo and Henricksen will be $140,000 and
$136,900, respectively, subject to upward revision by the Board of Directors at
such times as the salary rates for other officers of UI are reviewed by the
Directors, and subject to downward revision by the Board of Directors
contemporaneously with any general reduction of the salary rates of other
officers of UI, except in the event of a change in control of UI. The salaries
paid to Messrs. Vallillo and Henricksen in 1996, 1997 and 1998, shown on the
above table, were paid pursuant to these agreements. Each of these agreements
also provides that when the officer's employment by UI terminates after he has
served in accordance with its terms, UI will pay him an annual supplemental
retirement benefit in an amount equal to the excess, if any, of (A) over (B),
where (A) is 2.0% of his highest three-year average total salary and bonus
compensation from UI times the number of years (not to exceed 30) of his service
as an employee of UI, and (B) is the annual benefit payable to him under UI's
pension plan. If UI terminates the officer's employment without cause, he will
be paid the actuarial present value of this supplemental retirement benefit and
either a severance payment of two years compensation at his then-current salary
and bonus rate, or an increase of a total of six years of age and/or service in
the calculation of his retirement benefit, at his election.
A trust fund has been established by UI for the funding of the
supplemental retirement benefits accruing under the employment agreements with
Messrs. Woodson, Fiscus, Crowe, Vallillo and Henricksen, and to ensure the
performance of UI's other payment obligations under each of these employment
agreements in the event of a change in control of UI.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
NUMBER OF % OF TOTAL POTENTIAL REALIZABLE VALUE
SECURITIES OPTIONS/SARS AT ASSUMED ANNUAL RATES
UNDERLYING GRANTED TO EXERCISE OR OF STOCK PRICE APPRECIATION
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION FOR OPTION TERM
---------------
NAME GRANTED (#) FISCAL YEAR ($/SHARE) DATE 5%($) 10%($)
- ---- ----------- ----------- --------- ---- ----- ------
Nathaniel D. Woodson 80,000(1) 100% $45.1563 02/23/08 $1,806,520 $3,612,504
- -------------------
(1) These are phantom stock options on shares of UI Common Stock granted to Mr.
Woodson on February 23, 1998 at the time of his employment by UI as its
President. The options are exercisable at the rate of 16,000 options on
each of the first five anniversaries of the grant date during the term of
Mr. Woodson's employment agreement with UI, which is described above.
STOCK OPTION EXERCISES IN 1998 AND YEAR-END OPTION VALUES
The following table shows aggregated Common Stock option exercises
during 1998 by the chief executive officers and each of the other four most
highly compensated executive officers of UI, including the aggregate value of
gains realized on the dates of exercise. In addition, this table shows the
number of shares covered by both exercisable and non-exercisable options as of
December 31, 1998. Also reported are the values as of December 31, 1998 for
"in-the-money" options, calculated as the positive spread between the exercise
price of existing options and the year-end fair market value of UI's Common
Stock.
- 7 -
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/SARS
ACQUIRED ON VALUE OPTIONS/SARS AT FY-END(#) AT FY-END ($)(2)
------------------------- -------------
NAME EXERCISE(#) REALIZED($)(1)EXERCISABLE NOT EXERCISABLE EXERCISABLE NOT EXERCISABLE
---- ------------- ----------- ----------------------------- ----------- ---------------
Richard J. Grossi 41,000 $459,900 0 0 $ 0 $ 0
Robert L. Fiscus 30,000 397,551 10,500 0 158,813 0
James F. Crowe 7,500 60,938 0 0 0 0
Anthony J. Vallillo 1,200 8,400 0 0 0 0
Albert N. Henricksen 2,400 19,900 0 0 0 0
Nathaniel D. Woodson 0 0 0 80,000 0 507,496
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(1) Fair market value at exercise date less exercise price.
(2) Fair market value of shares at December 31, 1998 ($51.50) less exercise
price.
RETIREMENT PLANS
The following table shows the estimated annual benefits payable as a
single life annuity under UI's qualified defined benefit pension plan on
retirement at age 65 to persons in the earnings classifications and with the
years of service shown. Retirement benefits under the plan are determined by a
fixed formula, based on years of service and the person's average annual
earnings from UI during the three years during which the person's earnings from
UI were the highest, applied uniformly to all persons.
AVERAGE
ANNUAL EARNINGS DURING
THE HIGHEST 3 ESTIMATED ANNUAL BENEFITS PAYABLE AT AGE 65(3)
-------------------------------------------
YEARS OF SERVICE(1)(2) 20 YEARS(4) 25 YEARS(4) 30 YEARS(4) 35 YEARS(4) 40 YEARS(4)
---------------- -------- -------- -------- -------- --------
$100,000 $32,000 $40,000 $48,000 $48,000 $48,000
$150,000 $48,000 $60,000 $72,000 $72,000 $72,000
$200,000 $51,200(2) $64,000(2) $76,800(2) $76,800(2) $76,800(2)
$250,000 $51,200(2) $64,000(2) $76,800(2) $76,800(2) $76,800(2)
$300,000 $51,200(2) $64,000(2) $76,800(2) $76,800(2) $76,800(2)
$350,000 $51,200(2) $64,000(2) $76,800(2) $76,800(2) $76,800(2)
$400,000 $51,200(2) $64,000(2) $76,800(2) $76,800(2) $76,800(2)
$450,000 $51,200(2) $64,000(2) $76,800(2) $76,800(2) $76,800(2)
- -------------------------
(1) Earnings include annual salary and cash bonus awards paid pursuant to UI's
Executive Incentive Compensation Program. See "Executive Compensation"
above.
(2) Internal Revenue Code Section 401(a)(17) limits earnings used to calculate
qualified plan benefits to $160,000 for 1998. This limit was used in the
preparation of this table. (In addition, qualified plan benefits cannot
exceed an Internal Revenue Code Section 415(b) limit of $125,000 for 1998).
The Board of Directors has adopted a supplemental executive retirement plan
that has permitted the Directors to award supplemental retirement benefits
to Messrs. Grossi, Woodson, Fiscus, Crowe, Vallillo and Henricksen and to
other officers individually selected by the Directors in amounts sufficient
to prevent these Internal Revenue Code limitations from adversely affecting
their retirement benefits determined by the pension plan's fixed formula.
(3) The amounts shown in the table are not subject to any deduction for Social
Security or other offset amounts.
(4) As of their last employment anniversary dates, Messrs. Grossi, Woodson,
Fiscus, Crowe, Vallillo and Henricksen had accrued 41, 1, 26, 34, 30, and
35 years of service, respectively.
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BOARD OF DIRECTORS
COMPENSATION AND EXECUTIVE DEVELOPMENT COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
All of the members of the Compensation and Executive Development
Committee of the Board of Directors (the Committee) are non-employee Directors.
The Committee formulates all of the objectives and policies relative to
the compensation of the officers of UI, subject to approval by the entire Board
of Directors; and the Committee recommends to the Board of Directors all of the
elements of the officers' compensation arrangements, including the design and
adoption of compensation programs, the identity of program participants, salary
grades and structure, annual payments of salaries and any awards under the
annual incentive compensation program and the long-term incentive program.
UI's basic executive compensation program consists of three components:
annual salaries, bonuses under an annual incentive compensation program, and
long-term incentive program awards. The overall objective of this program is to
attract and retain qualified executives and to produce strong financial
performance for the benefit of UI's shareowners while providing a high level of
customer service and value for its customers. Accordingly, all of the
Committee's decisions, in 1998 and in prior years, have ultimately been based on
the Committee's assessment of UI's overall performance relative to other
electric utilities of comparable size, the compensation practices and programs
of other companies that are most likely to compete with UI for services of
executive officers, UI's strategic objectives, and the challenges it faces.
The Committee formulates annual salary ranges for officers by periodic
comparisons to rates of pay for comparable positions in other electric utilities
as reported in the Edison Electric Institute's Executive Compensation Survey
(the EEI Survey). Within the applicable range, each individual officer's annual
salary is then set at a level that will compensate the officer for day-to-day
performance, in the light of the officer's level of responsibility, past
performance, prior year's salary and bonus, and potential future contributions
to UI's strategic objectives.
As described in detail above at "Executive Compensation", UI's annual
bonus program and its long-term incentive program have somewhat different
purposes. Under the annual Executive Incentive Compensation Program, cash awards
may be made each year to officers based on their achievement of performance
levels formulated by the Committee with respect to (1) specific shareowner
goals, (2) specific customer goals, (3) specific team/individual goals, and (4)
a qualitative assessment of the officers' performance as a group with respect to
strategic opportunities of UI during that year. UI's Long-Term Incentive Program
rewards officers for achieving a return to shareowners over three-year periods
of time. The Long-Term Incentive Program links long-term incentive awards to
total return to shareowners compared to a peer group of electric utilities.
Although this program is designed to provide strong incentives for superior
future performance, it also encourages officers to continue serving UI, because
the earning of each incentive award is conditioned upon the officer's continued
service for the award's three-year performance period.
For 1998, the annual bonus opportunities of UI's officers were targeted
by the Committee such that the combination of each officer's 1998 salary and
annual Executive Incentive Compensation Program award, assuming that
pre-established performance goals were met, would approximate, on average, the
50th percentile of compensation for comparable positions as reported in the 1997
EEI Survey. Goals were established to focus the officers' attention on a
"balanced scorecard," covering financial, operational, customer and human
resource measures. A prerequisite threshold level of recurring earnings per
share was specified in order for any bonus to be earned. For 1998 the
pre-established performance goals, accounting for 50% of each officer's bonus
award, included measures of: recurring earnings per share from operations,
recurring cash from operations available to pay down debt, sales revenues,
utility costs, customer satisfaction, reliability, safety, innovation and
training. For each of the business unit leaders, the President, the Chief
Financial Officer and the Chief Executive Officer, 30% of the bonus award for
1998 was based on the achievement of business unit "balanced scorecard" goals.
The remaining 20% of each officer's bonus award for 1998 was based on the
Committee's qualitative assessment of the performance of UI's officers as a
group with respect to 1998 strategic opportunities. For 1998, this assessment
focused on the officers' achievements in the development and implementation of a
comprehensive plan to prepare
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for the eventuality of either retail customer choice or some other form of
competition that is more intense than the current framework. The comprehensive
plan was to include items such as: addressing the issues of (i) price, (ii) past
investment costs and (iii) ratio of Common Stock equity to total capitalization;
and meeting the objectives of UI's becoming competitive in both the customer and
financial markets.
Some of the officers' achievements with respect to 1998 pre-established
performance goals were especially strong, including 150% of the recurring cash
available to pay down debt goal and 150% of the sales revenue goal. The
recurring earnings per share from operations goal was achieved at 68%, between
the threshold and target levels, and the utility costs goal did not achieve the
threshold level. For the remaining goals, innovation, safety and training,
achievements were 0%, 71% and 117%, respectively. Business unit leader,
President, Chief Financial Officer and Chief Executive Officer achievements of
business unit goals ranged between 50% and 117% of the several goals.
Overall, the Committee's bonus awards for 1998 under the Executive
Incentive Compensation Program ranged between 71% and 105% of the
pre-established targeted awards, depending on the individual officer's
achievements, reflecting a strong performance by UI's officers.
Under the Company's Long-Term Incentive Program, a total of 30,400
Contingent Performance Shares were awarded in 1998 to 11 officers of the Company
for the three-year Performance Period 1998-2000.
During 1998, UI conducted, with the assistance of an outside
compensation consulting firm, an extensive competitive review of its executive
compensation program. The review found executive pay levels to be well-aligned
with comparably-sized utility companies and resulted in modifications to the
long-term incentive component of the executive pay program, as detailed below,
in recognition of the utility industry's transition to a more competitive
environment.
As a result of this competitive review of UI's executive compensation
program, the Committee recommended and Board approved a change in the long-term
incentive plan to be effective in 1999. Stock options, granted under a proposed
1999 Stock Option Plan, if it is approved by the shareowners, will replace
contingent performance shares as the form of long-term incentive. The Committee
believes that the use of stock options provides an even stronger link between
the officers and the interests of shareowners, as options only provide the
optionee value once the stock price appreciates above the grant price.
Long-term incentives, in recognition of the increasingly competitive
business environment for utilities, are based on a competitive blend of utility
and general industry award levels. It is the intention of the Compensation and
Executive Development Committee (the Committee) to transition, over a period of
several years, to a 50%/50% blend of median utility and general industry
long-term incentive awards.
The options will be granted to officers annually, as approved by the
Committee. The number of options granted to each officer in 1999 will be based
on a competitive blend of median EEI (utility) and general industry long-term
award levels for comparably sized companies. Grants made in 1999 will be based
on a weighted blend of 70% EEI and 30% general industry competitive long-term
incentive data. The partial use of general industry data recognizes the more
competitive environment for utilities and was deemed by the Committee to be an
important step toward ensuring UI's ability to continue attracting, retaining
and motivating experienced executive talent given similar changes in the
compensation programs at other utilities.
It is not expected that any compensation paid to an executive officer
during 1999 will become non-deductible under Internal Revenue Code Section
162(m) (the "million dollar pay cap").
CHIEF EXECUTIVE OFFICER COMPENSATION FOR 1998
In March of 1998, the Committee recommended, and the Board of Directors
approved, a 1998 annual salary of $333,200 for Mr. Grossi, as Chairman of the
Board of Directors and Chief Executive Officer of the Company. This annual
salary was below the median salary for this officership position at other
electric utilities of
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comparable size, as reported in the 1997 EEI Survey; but it was consistent with
the Committee's judgment that a greater proportion of the targeted combination
of base salary and targeted annual performance bonus should be shifted to the
performance bonus component of his compensation. Mr. Grossi's annual bonus
performance target for 1998 under the Executive Incentive Compensation Program
was set at $116,620, consisting of a prerequisite threshold level recurring
earnings per share from operations goal and pre-established goals with respect
to recurring cash from operations available to pay down debt, sales revenues,
utility costs, customer satisfaction, reliability, innovation, safety, training,
business unit, and strategic opportunities, as detailed above. At the conclusion
of 1998, the Committee recommended, and the Board of Directors approved, a 1998
bonus award of $95,000 to Mr. Grossi, representing 81% of his targeted annual
performance bonus based on the achievements as described above.
Mr. Woodson succeeded Mr. Grossi as Chief Executive Officer on May 20,
1998. In March of 1998, the Committee recommended, and the Board of Directors
approved, a 1998 annual salary of $400,000 for Mr. Woodson, as Chief Executive
Officer and President of the Company. This annual salary was between the median
and the 75th percentile salary for this officership position at other electric
utilities of comparable size, as reported in the 1997 EEI Survey; and below the
25th percentile of general industry sample for companies of similar size. It was
the Committee's judgment that the salary was appropriate for an executive with
the skills and abilities of Mr. Woodson to lead UI forward in the competitive
business environment. Mr. Woodson's prorated annual bonus performance target for
1998 under the Executive Incentive Compensation Program was set at $119,692,
consisting of a prerequisite threshold level recurring earnings per share from
operations goal and pre-established goals with respect to recurring cash from
operations available to pay down debt, sales revenues, utility costs, customer
satisfaction, reliability, innovation, safety, training, business unit, and
strategic opportunities, as detailed above. At the conclusion of 1998, the
Committee recommended, and the Board of Directors approved, a 1998 bonus award
of $105,000 to Mr. Woodson, representing 88% of his prorated targeted annual
performance bonus based on the achievements as described above.
The Committee's qualitative assessment of the performance of the
officers as a group with respect to strategic opportunities during 1998 was
positive and, in the judgment of the Committee, reflected favorably on Messrs.
Grossi's and Woodson's leadership.
COMPENSATION AND EXECUTIVE DEVELOPMENT COMMITTEE
Marc C. Breslawsky, Chair
Thelma R. Albright
David E. A. Carson
Betsy Henley-Cohn
James A. Thomas
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No director of UI who served as a member of the Compensation and
Executive Development Committee during 1998 was, during 1998 or at any time
prior thereto, an officer or employee of UI. During 1998, no director of UI was
an executive officer of any other entity on whose Board of Directors an
executive officer of UI served.
DIRECTOR COMPENSATION
Directors who are employees of UI receive no compensation for their
service as directors of UI.
The remuneration of non-employee directors of the Company includes an
annual retainer fee of $21,000, payable $9,000 for service during the first
quarter of the year and $4,000 each for service during the second, third and
fourth quarters of the year (the $9,000 retainer fee payable for service during
the first quarter of the year is payable in shares of UI Common Stock or by
credit to a stock account under the Non-Employee Directors' Common Stock and
Deferred Compensation Plan described below), plus a fee of $1,000 for each
meeting of the Board of Directors or committee of the Board of Directors
attended. Committee chairpersons receive an additional fee of
- 11 -
$750 per quarter year. Non-employee directors are also provided travel/accident
insurance coverage in the amount of $200,000.
UI's Non-Employee Directors' Common Stock and Deferred Compensation
Plan (the "Plan") has two features: a mandatory Common Stock feature; and an
optional Deferred Compensation feature. Each non-employee director has two
accounts in the Plan: a stock account for the accumulation of units that are
equivalent to shares of Common Stock ("Stock Units"), and on which amounts equal
to cash dividends on the shares of UI Common Stock represented by Stock Units in
the account accrue as additional Stock Units; and a cash account for
accumulation of the director's fees payable in cash that the director elects to
defer, and on which interest accrues at the prime rate in effect at the
beginning of each month at Citibank, N.A.
Under the Common Stock feature of the Plan, a credit of Stock Units to
each non-employee director's stock account in the Plan is made on or about the
first day of March in each year, unless the director elects to receive shares of
UI Common Stock in lieu of having an equivalent number of Stock Units credited
to his or her stock account. Each annual credit consists of a number of whole
and fractional Stock Units equal to the sum of 200 plus the quotient resulting
from dividing the retainer fee for the first quarter of the year by the market
value of UI Common Stock on the date of the credit.
Under the Deferred Compensation feature of the Plan, a non-employee
director may elect to defer receipt of all or part of (i) his or her retainer
fee for service during the second, third and fourth quarters of each year, (ii)
his or her committee chairperson fees, and/or (iii) his or her meeting fees,
which are payable in cash. All amounts deferred are credited when payable, at
the director's election, to either the director's cash account or to the
director's stock account (in a number of whole and fractional Stock Units based
on the market value of UI Common Stock on the date the fee is payable) in the
Plan.
All amounts credited to a non-employee director's cash account or stock
account in the Plan are at all times fully vested and nonforfeitable, and are
payable only upon termination of the director's service on the Board of
Directors. At that time, the cash account is payable in cash and the stock
account is payable in an equivalent number of shares of UI Common Stock.
- 12 -
SHAREOWNER RETURN PRESENTATION
Set forth below is a line graph comparing the yearly change in the
Company's cumulative total shareowner return on its Common Stock with the
cumulative total return on the S&P Composite-500 Stock Index, the S&P Public
Utility Index and the S&P Electric Power Companies Index for the period of five
fiscal years commencing 1994 and ending 1998.
[GRAPH OMITTED]
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
UIL $100 $ 83 $111 $103 $157 $193
S&P 500 100 101 139 170 227 292
S&P Pub. Uty. 100 93 129 133 164 188
S&P El. Co. 100 87 113 113 141 163
* ASSUMES THAT THE VALUE OF THE INVESTMENT IN THE COMPANY'S COMMON STOCK AND
EACH INDEX WAS $100 ON DECEMBER 31, 1993 AND THAT ALL DIVIDENDS WERE
REINVESTED. FOR PURPOSES OF THIS GRAPH, THE YEARLY CHANGE IN CUMULATIVE
SHAREOWNER RETURN IS MEASURED BY DIVIDING (I) THE SUM OF (A) THE CUMULATIVE
AMOUNT OF DIVIDENDS FOR THE YEAR, ASSUMING DIVIDEND REINVESTMENT, AND (B) THE
DIFFERENCE IN THE FAIR MARKET VALUE AT THE END AND THE BEGINNING OF THE YEAR,
BY (II) THE FAIR MARKET VALUE AT THE BEGINNING OF THE YEAR. THE CHANGES
DISPLAYED ARE NOT NECESSARILY INDICATIVE OF FUTURE RETURNS MEASURED BY THIS
OR ANY METHOD.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
PRINCIPAL SHAREOWNERS
Statements filed with the Securities and Exchange Commission (SEC),
pursuant to Section 13(d) of the Securities Exchange Act of 1934 (the 1934 Act),
by the following persons disclose beneficial ownership of shares of UI's Common
Stock (percentages are of the 14,334,922 shares outstanding as of the close of
business on March 11, 1999): (1) Rhoda L. Chase, 420,000 shares, or
approximately 2.93%; (2) her daughter, Cheryl A. Chase, 79,200 shares, or
approximately 0.55%; (3) her son, Arnold L. Chase, 230,300 shares, or
approximately 1.61%; (4) The Darland Trust, a trust for the benefit of Cheryl A.
Chase and her children, and its trustee, Rothschild Trust Cayman
- 13 -
Limited, 146,000 shares, or approximately 1.02%; (5) David T. Chase, husband of
Rhoda and father of Cheryl and Arnold, 870,000 shares, or approximately 6.07%,
all of which are included in the shares listed in (1), (2), (3) and (4) of this
sentence; and (6) DTC Holdings Corporation (DTCHC) (formerly known as American
Ranger, Inc.), 200,000 shares, or approximately 1.40%. DTCHC is a wholly-owned
subsidiary of D.T. Chase Enterprises, Inc. (DTCE) and is indirectly owned and
controlled by David, Rhoda, Arnold and Cheryl Chase, trusts for the benefit of
Arnold Chase and his children, and trusts for the benefit of Cheryl Chase and
her children. David, Rhoda, Arnold and Cheryl Chase, DTCHC and DTCE all have as
a business address One Commercial Plaza, Hartford, CT 06103. In the statements
filed with the SEC, none of the shareholders listed above except David T. Chase
has admitted beneficial ownership of any shares of the Company's Common Stock
not held in their individual names, and all of them have disclaimed membership
in any "group" with respect to the Common Stock for purposes of Section 13(d) of
the 1934 Act.
There is no other person or group of persons known to UI to be the
beneficial owner of more than 5% of the shares of UI Common Stock as of the
close of business on March 11, 1999.
STOCK OWNERSHIP OF DIRECTORS AND OFFICERS
The following table sets forth the number of shares of Common Stock of
UI beneficially owned, directly or indirectly, as of March 11, 1999, by each
director and nominee director, by each of the two persons who served as the
chief executive officer during 1998, and by each of the four other most highly
compensated officers during 1998, and by all directors and officers as a group:
Shares
Name of Individual or Beneficially
Number of Persons in Owned Directly
Group or Indirectly(1)(2)(3)
- --------------------------------------------------------------------------------
Thelma R. Albright 3,238
Marc C. Breslawsky 4,810
David E.A. Carson 8,186
Arnold L. Chase 230,300
John F. Croweak 3,640
Robert L. Fiscus 33,065
Betsy Henley-Cohn 3,913
John L. Lahey 2,041
F. Patrick McFadden, Jr. 3,969
Daniel J. Miglio 0
Frank R. O'Keefe, Jr. 5,036
James A. Thomas 2,350
Nathaniel D. Woodson 5,130
James F. Crowe 6,924
Albert N. Henricksen 3,070
Anthony J. Vallillo 2,352
Richard J. Grossi 0(4)
-------
22 Directors, Nominee Directors and Officers as a group,
including those named above 414,326
- -------------------------
(1) Based on reports furnished by the directors, nominee directors and
officers. The shares reported for Mr. Chase do not include shares held by
other members of his family and entities owned by them, which are described
at "Principal Shareowners" above. Mr. Chase does not admit beneficial
ownership of any shares other than those shown in the foregoing table, and
he has denied membership in any "group" with respect to the Company's
Common Stock for purposes of Section 13(d) of the Securities Exchange Act
of 1934. With respect to other directors, nominee directors and officers,
the shares reported in the foregoing table include, in some instances,
shares held by the immediate families of directors, nominee directors and
officers or entities controlled by directors, nominee directors and
officers, the reporting of which is not to be construed as an admission of
- 14 -
beneficial ownership. Each of the persons included in the foregoing table
has sole voting and investment power as to the shares of Common Stock
beneficially owned, directly or indirectly, by him or her, except for the
following (i) as to which such powers are shared: 17,591 shares with
respect to Mr. Fiscus, 110 shares with respect to Mr. Thomas, 706 shares
with respect to Mr. Crowe, 422 shares with respect to Mr. Henricksen and
19,018 shares with respect to all directors, nominee directors and officers
as a group, (ii) as to which such powers are held by other people or
entities: 149 shares with respect to Mr. Carson, 700 shares with respect to
Mr. Fiscus, 2,035 shares with respect to Ms. Henley-Cohn, 659 shares with
respect to Mr. O'Keefe, 50 shares with respect to Mr. Thomas, 5,000 shares
with respect to Mr. Woodson, 10 shares with respect to Mr. Crowe, and 8,823
shares with respect to all directors, nominee directors and officers as a
group.
(2) The number of shares includes those held for the benefit of officers in
UI's Employee Stock Ownership Plan and, in the cases of Robert L. Fiscus,
10,500 shares, and all directors, nominee directors and officers as a
group, 16,300 shares, that may be acquired currently through the exercise
of stock options under the Company's 1990 Stock Option Plan.
(3) Includes Stock Units, for which neither investment nor voting power is held
as follows: 3,009 shares with respect to Ms. Albright, 4,710 shares with
respect to Mr. Breslawsky, 7,754 shares with respect to Mr. Carson, 2,741
shares with respect to Mr. Croweak, 400 shares with respect to Ms.
Henley-Cohn, 224 shares with respect to Mr. Lahey, 2,082 shares with
respect to Mr. McFadden, 4,151 shares with respect to Mr. O'Keefe and 787
shares with respect to Mr. Thomas. These Stock Units are in stock accounts
under UI's Non-Employee Directors' Common Stock and Deferred Compensation
Plan, described below at "Director Compensation". Stock Units in this plan
are payable, in an equivalent number of shares of UI Common Stock, upon
termination of service on the Board of Directors.
(4) Mr. Grossi served as Chief Executive Officer of UI from January 1, 1998 to
May 20, 1998. He retired as an officer and director on December 31, 1998.
The number of shares of Common Stock beneficially owned by Mr. Chase,
as listed in the foregoing table, is approximately 1.6% of the 14,334,922 shares
of Common Stock outstanding as of March 11, 1999. The number of shares of Common
Stock beneficially owned by each of the other persons included in the foregoing
table is less than 1% of the outstanding shares of Common Stock as of March 11,
1999; and the number of shares of Common Stock beneficially owned by all of the
directors, nominee directors and officers as a group represents approximately
2.9% of the outstanding shares of Common Stock as of March 11, 1999.
Item 13. Certain Relationships and Related Transactions.
Since January 1, 1998, there has been no transaction, relationship
or indebtedness of the kinds described in Item 404 of Regulation S-K.
- 15 -
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act
of 1934, as amended, the registrant has caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Dated: April 9, 1999 THE UNITED ILLUMINATING COMPANY
By: /s/ Robert L. Fiscus
---------------------------------------
Robert L. Fiscus
Vice Chairman of the Board of Directors
and Chief Financial Officer
- 16 -