SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No.)
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14a-6(e)(2))
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[ ] Definitive Additional Materials
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Unitil Corporation
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[Unitil Logo]
March 10, 2000
Dear Fellow Shareholder,
The Annual Meeting of Common Shareholders is scheduled to be held on
Thursday, April 20, 2000, at 10:30 A.M., at the office of the Company, 6
Liberty Lane West, Hampton, New Hampshire.
Enclosed you will find a 1999 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,
/s/ Robert G. Schoenberger
Robert G. Schoenberger
Chairman of the Board of Directors
and Chief Executive Officer
[Unitil Logo]
NOTICE OF ANNUAL MEETING OF COMMON SHAREHOLDERS
Hampton, New Hampshire
March 10, 2000
To the Common Shareholders:
You are hereby notified that the annual meeting of common shareholders
of Unitil Corporation will be held at the office of the Company, 6 Liberty
Lane West, Hampton, New Hampshire, on Thursday, April 20, 2000, 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.
Regardless of whether or not you plan to attend the meeting, you can
be sure your shares are represented at the meeting by promptly signing,
dating and returning the enclosed proxy card in the postage-paid envelope,
also enclosed. If for any reason you desire to revoke or change your proxy,
you may do so at any time before it is voted.
The Board of Directors fixed February 23, 2000 as the date for
determining holders of record of Common Stock who are thereby entitled to
notice of and to vote at this meeting and any adjournments thereof.
By Order of the Board of Directors,
Mark H. Collin
Treasurer & Secretary
[Unitil Logo]
6 Liberty Lane West
Hampton, New Hampshire 03842-1720
March 10, 2000
Proxy Statement
ANNUAL MEETING OF COMMON SHAREHOLDERS, APRIL 20, 2000
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
2000 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 1999 is enclosed herewith and
includes consolidated financial statements which are not part of this proxy
statement.
The voting securities of Unitil issued and outstanding on February 23,
2000 consisted of 4,717,022 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
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Charles H. Tenney II 270,964 (1) 5.74%
30 Cedar Road
Chestnut Hill, MA 02167
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NOTES:
<FN>
<F1> Based on information provided by Mr. Tenney. Total shares of Common
Stock owned by Mr. Tenney include 3,456 shares which are held in trust
under the terms of the Unitil Tax Deferred Savings and Investment Plan
("401(k)"). Mr. Tenney has voting power only with respect to the
shares credited to his account. (See "Other Compensation
Arrangements"). Mr. Tenney is the former Chairman and CEO and a former
Director of the Company. Mr. Tenney did not stand for reelection to
the Board of Directors in April, 1999, as a result of the age
limitation policy adopted by the Board of Directors in 1998.
</FN>
The twelve Directors and the officers of Unitil as a group have
beneficial ownership as of February 23, 2000 of 91,995 shares (1.95%) of
Common Stock, of which they have direct beneficial ownership of 75,719
shares (1.61%), which excludes options to purchase 113,296 shares (2.40%)
pursuant to the exercise of those options, and indirect beneficial ownership
of 16,277 shares (0.35%). To the knowledge of Unitil, each of said Directors
and officers has voting and investment power with respect to the shares
directly owned. With regard to certain of the indirect beneficial ownership
by said group, see the footnotes to the table contained in the section of
this proxy statement entitled "As to the Election of Directors" setting
forth certain information about the Directors of Unitil.
Assuming a quorum is present, the favorable vote of a majority of the
shares of Common Stock represented and voting will be required for approval
of all matters, including the election of Directors, which may come before
the meeting.
As to the Election of Directors
--------------------------------------------------
The By-Laws of Unitil provide for a Board of between nine and fifteen
Directors divided into three classes, each class being as nearly equal in
number as possible, and each with their respective terms of office arranged
so that the term of office of one class expires in each year, at which time
a corresponding number of Directors is elected for a term of three years.
Unitil currently has twelve Directors.
The Board of Directors has a stock ownership policy of the Board that
no person be nominated as a candidate for Director for election to a second
term as part of the slate of Directors proposed by the Company unless he or
she is a beneficial owner, either directly or indirectly, of at least 1,000
shares of Unitil Common Stock. The Board of Directors also has an age
limitation policy of the Board, which has been in effect since January,
1999, that no person be nominated as a candidate for Director for reelection
as part of the slate of Directors proposed for election by the Company after
he or she has reached age 70. W. William VanderWolk, Jr. and Franklin Wyman,
Jr. will not stand for re-election this year as a result of this policy.
Information About Nominees for Directors
--------------------------------------------------
Each nominee has been a member of the Board of Directors since the
date indicated. Proxies will be voted for the persons whose names are set
forth below unless instructed otherwise. If any nominee shall be unable to
serve, the proxies will be voted for such person as may be designated by
management to replace such nominee. Each of the nominees has consented to
being named in this proxy statement and to serve if elected. Unless
otherwise indicated, all shares shown represent sole voting and investment
power.
Nominees for Directors whose terms will expire in the year 2003
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Common Stock Owned
Beneficially on
Director February 23, 2000(1)
Since Shares
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William E. Aubuchon, III, Age 55 1999(2) 0
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Chairman and Chief Executive Officer of W.E. Aubuchon
Company, Inc. (retail hardware company), Westminster, MA,
since 1993. Mr. Aubuchon is also a Director of the North Central
Massachusetts Chamber of Commerce, since 1991, and a
Director of the Mt. Wachusett Community College Foundation,
Inc., Gardner, MA, since 1999.
Robert G. Schoenberger, Age 49 1997 73,590 (3)(4)(5)
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Chairman of the Board and Chief Executive Officer of Unitil
since 1997. Prior to his employment with Unitil,
Mr. Schoenberger was President and Chief Operating Officer at
the New York Power Authority ("NYPA") from 1993 until 1997.
Prior to 1993, Executive Vice President - Finance and
Administration, also at NYPA (state owned public power
enterprise). Mr. Schoenberger is also a Director of the Greater
Seacoast (NH) United Way since 1998, Director of Exeter Health
Resources, Exeter, NH, since 1998, Director of Enermetrix.com,
Maynard, MA, since 1999, and a Director of the New England
Gas Association, since 1999.
Charles H. Tenney III, Age 52 1992 2,885
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Director of Corporate Services, Log On America, Inc.,
Providence, RI (New England regional competitive local
exchange carrier and information/Internet service provider) since
1999. Mr. Tenney is the former Secretary (1997-1999) of
Northern Utilities, Inc., Portsmouth, NH (natural gas distributor)
and former Secretary (1997-1999) of Granite State Gas
Transmission, Inc., Portsmouth, NH. Mr. Tenney is also the
former Clerk (1991-1999) of Bay State Gas Company, a
subsidiary of NIPSCO Industries, Inc., Merrillville, IN. (utility
holding company)
Information About Directors
Whose Terms of Office Continue
--------------------------------------------------
Common Stock Owned
Beneficially on
Director Term to February 23, 2000(1)
Since Expire Shares
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Michael J. Dalton, Age 59 1984 2001 61,753 (3)(6)(7)(8)
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President and Chief Operating Officer of Unitil. Mr. Dalton is
also a Director, since 1996, and Secretary, since 1997, of the
University of New Hampshire Foundation, and Chairman of the
University of New Hampshire President's Council since 1995.
Albert H. Elfner, III, Age 55 1999 2002 1,155
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Retired Chairman (1994 - 1999) and Chief Executive Officer
(1995 - 1999) of Evergreen Investment Management
Company, Boston, MA. Mr. Elfner is also a Director of Polaris
International Investment Trust Company, Taipei, Taiwan,
ROC. Mr. Elfner is a former Chairman and Director
(1995 - 1999) of Keystone Trust Company, Portsmouth, NH,
and a former Director (1998 - 1999) of Investment Mutual
Insurance Company, Washington, DC.
Ross B. George, Age 67 1999 2002 2,655
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Chairman of the Board, since 1999 (Director since 1988) of
Simonds Industries, Inc., ("Simonds") Fitchburg, MA.
Mr. George served as Chief Executive Officer (1995 - 1999)
and President and Chief Operating Officer (1988 - 1995), also
at Simonds (industrial cutting tools manufacturing company).
Bruce W. Keough, Age 43 1998 2001 2,355
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Real estate developer and private equity investor. Mr. Keough
is also Chairman of the Board of Trustees of the University
System of New Hampshire since 1999 (Trustee since 1997).
Mr. Keough is also a former New Hampshire State Senator
(1994 - 1996) and a member of the Board of Governors of
New Hampshire Public Television since 1997.
J. Parker Rice, Jr., Age 74 1992 2001 1,807
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Retired, since 1999, Director, former President and Treasurer
of Hyland/Rice Office Products, Inc., Fitchburg, MA (office
products dealer).
M. Brian O'Shaughnessy, Age 57 1998 2002 455
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Chairman of the Board, Chief Executive Officer and President
of Revere Copper Products, Inc., Rome, NY, since 1988.
Joan D. Wheeler, Age 62 1994 2001 1,355
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Owner of the Russian Gallery, Marblehead, MA (art gallery).
Ms. Wheeler is a former Director of Shaw's Supermarkets,
Inc. (1979 - 1987), a former Director of Granite Bank, Keene,
NH, and a former Trustee of Franklin Pierce College.
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NOTES:
<FN>
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.
<F1> Based on information furnished to Unitil by the nominees and
continuing Directors. No Director standing for election, no Director
whose term is continuing and no officer owns more than one percent of
the total outstanding shares.
<F2> Mr. Aubuchon is a Director nominee elected to the Board by the Board
of Directors upon recommendation by the Executive Committee in
December, 1999. Mr. Aubuchon has not previously been elected by the
shareholders of the Company.
<F3> Included are 1,294 and 4,439 shares which are held in trust for
Messrs. Schoenberger and Dalton, respectively, under the terms of the
Unitil Tax Deferred Savings and Investment Plan ("401(k)"). Messrs.
Schoenberger and Dalton 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.
<F4> Included are 28,296 options which Mr. Schoenberger has the right to
purchase pursuant to the exercise of those options under the terms of
the 1989 Key Employee Stock Option Plan ("KESOP"). For further
information regarding the KESOP, see "Other Compensation Arrangements"
below.
<F5> Included are 40,000 options which Mr. Schoenberger has the right to
purchase upon the exercise of those options under the terms of the
1998 Stock Option Plan ("Option Plan"). See "Other Compensation
Arrangements." Mr. Schoenberger was granted 20,000 options in March,
1999, and 20,000 options in January, 2000, all of which will vest at a
rate of 25% in year one, 25% in year two, and 50% in year three,
following the dates of the respective grants.
<F6> Included are 20,000 options which Mr. Dalton has the right to purchase
upon the exercise of those options under the terms of the 1998 Stock
Option Plan ("Option Plan"). See "Other Compensation Arrangements."
Mr. Dalton was granted 10,000 options in March, 1999, and 10,000
options in January, 2000, all of which will vest at a rate of 25% in
year one, 25% in year two, and 50% in year three, following the dates
of the respective grants.
<F7> Included are 100 shares held by Mr. Dalton jointly with his wife with
whom he shares voting and investment power.
<F8> Included are 9,501 shares held by a member of Mr. Dalton's family. He
has no voting rights or investment power with respect to, and no
beneficial interest in, such shares.
</FN>
The Board of Directors met six times in 1999. During 1999, Directors
attended an average of 97% 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 1999 and
through February, 2000, were met.
Compensation of Directors
--------------------------------------------------
In 1999, members of the Board of Directors who are not officers of
Unitil or any of its subsidiaries received an annual retainer fee of $7,000
in cash and $5,500 in Unitil Common Stock, and $500 for each Board meeting
attended. Members of the Executive Committee, who are not officers of Unitil
or any of its subsidiaries, received an annual retainer fee of $3,000 and
$400 for each meeting attended. The Chairman of the Executive Committee
received an annual retainer fee of $15,000, and $400 for each meeting
attended. Members of the Audit Committee and Compensation Committee received
an annual retainer fee of $1,000 and $400 for each meeting attended. The
Chairman of the Audit Committee and the Chairman of the Compensation
Committee received an annual retainer fee of $2,000, respectively, 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 received 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.
As part of the Company's overall support for charitable institutions,
in 1999 the Company instituted a program which provides a perpetual gift of
$1,000 annually to the Greater Seacoast United Way ("United Way") on behalf
of each Director who retires from the Board. The Director(s) receive no
financial benefit from this program as the charitable deductions accrue
solely to the Company. In 1999, three Directors retired from the Board.
In 1999, the Board of Directors approved the Unitil Corporation
Directors' Deferred Compensation Plan ("Deferred Plan") for the purpose of
allowing non-employee members of the Board to defer payment of all or a
specified part of compensation for services performed as Directors. The
Deferred Plan is administered by the Compensation Committee and stipulates
that eligible Directors may elect to defer all or a portion of their cash
retainer and meeting fees. Separate accounts are maintained for each
Director participant, which are an unfunded liability of the Company.
Additionally, accounts are credited monthly with interest based on the
current rate of 60-month Treasury bills. Funds contributed and interest
credited is tax deferred until withdrawn from the Deferred Plan. Director
participants may elect to withdraw funds from the Deferred Plan after a
fixed amount of time, upon resignation or retirement from the Board, upon
death or disability, or upon a Change in Control. Withdrawals may be taken
in cash, either in one lump sum or in a series of installments.
Committees of the Board of Directors
--------------------------------------------------
Executive Committee
----------------------
The Executive Committee of the Board of Directors held 11 meetings in
1999. Its members are Bruce W. Keough, Robert G. Schoenberger, W. William
VanderWolk, Jr. (Chairman), Joan D. Wheeler 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. The
Executive Committee's duties also include the review and recommendation of
corporate governance standards and the annual review of Board member and CEO
performance.
Audit Committee
----------------------
The Audit Committee of the Board of Directors, which held two meetings
in 1999, consists of Ross B. George, M. Brian O'Shaughnessy, and J. Parker
Rice, Jr. (Chairman). 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. In
addition, beginning in 1998 and throughout 1999, the Audit Committee also
had the responsibility of monitoring the Company's progress regarding the
Year 2000 date recognition matter. At the Committee's meetings, reports from
management were presented regarding the Company's Year 2000 remediation and
testing efforts. Additionally, the Committee, at its discretion, meets
independently with the Company's external auditors and/or the Company's
internal auditor.
Compensation Committee
----------------------
The Compensation Committee of the Board of Directors, which held three
meetings in 1999, consists of Albert H. Elfner, III, Bruce W. Keough
(Chairman), and Charles H. Tenney III. The duties of this Committee include
studying and making recommendations to the Board of Directors with respect
to base and incentive compensation plans and payments and other benefits to
be paid to the officers of Unitil. The Compensation Committee's duties also
include the annual review of management succession planning, administration
of the Company's Stock Option Plans, administration of merit, incentive and
commission compensation plans for all appropriate personnel and
administration of the Directors' Deferred Compensation Plan.
Report of the Compensation Committee
--------------------------------------------------
Upon the recommendation of the Compensation Committee, the Board of
Directors votes to approve the compensation of the Chief Executive Officer.
The Committee reports all of its decisions to the Board. The Board
unanimously has accepted each of the recommendations described below made in
1999 and to date in 2000. The Committee also votes the compensation of all
other Company executive officers listed in the Summary Compensation Table,
as well as other senior employees. The Board has ratified the compensation
decision for these executive officers.
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 attract, retain and reward managers who
are committed to solid financial performance and foster excellence in the
management of the assets of the Company and who can successfully lead the
Company as the industry undergoes unprecedented change and restructuring. To
help meet these objectives, 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.
The Company pays both "base" and "variable" compensation to its
officers. The base component of compensation is determined under Unitil's
salary policy 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
Unitil's Management Incentive Plan ("Incentive Plan"). The factors under the
Incentive Plan provide a cash incentive opportunity if the Company meets
certain targets for earnings and a high performing work force. The bonus
opportunities are set by level of the executive position according to other
companies in the utility industry. In 1999, threshold levels of the goals
defined under the Incentive Plan were not achieved. Given earnings for 1999,
there would have been no payout for 1999 according to the provisions of the
Incentive Plan. The terms and provisions of the Incentive Plan provide the
Committee with discretion to take extenuating circumstances into account
when reviewing actual performance. In exercising its duties under the
Incentive Plan, the Committee determined that it needed to take into account
the bankruptcy of the Company's largest customer, adverse regulatory
rulings, another record warm winter, continued cost pressures of industry
restructuring, and the Company's investment in growth initiatives, all of
which occurred during 1999. After consideration of these factors, and upon
consultation with a nationally known compensation consulting firm, the
Committee decided to grant an incentive payout of 60% of target. The payout
for 1999 performance was made in February, 2000, and will therefore be
reflected on the "Compensation of Officers" Table in the 2000 Proxy
Statement.
In addition, to further align the interest of the Company's management
with shareholders and customers, the Company, in 1998, instituted a Stock
Option Plan ("Option Plan"). The Option Plan provides grants of options to
buy common shares of Company Stock. The Option Plan anticipates the granting
of options over a period of five years, and each grant will vest over a
three-year period. Each option grant is priced at the market price on the
date of the grant. This plan emphasizes long-term growth of the price of the
Company's common stock. In March, 1999, the Committee granted a total of
62,000 options to the members of senior management.
The compensation of the Chief Executive Officer ("CEO"), is governed
by these same plans and objectives. As Chairman of the Board and CEO, Mr.
Schoenberger was paid an annual base salary of $267,048 in 1999. This
amount, based on the terms of Mr. Schoenberger's 1997 employment agreement
calling for $245,000 per annum with an annual performance and salary review,
was determined in accordance with Unitil's salary policy. Mr. Schoenberger's
employment agreement with the Company is further detailed on page 15.
The Committee periodically reviews each component of the Company's
executive compensation program to ensure that pay levels and incentive
opportunities are competitive and that incentive opportunities are linked to
Company performance. The Company engaged a nationally known compensation
consulting firm in 1998 to review the competitiveness of the total
compensation package for the CEO and other executive positions. As a result
of this review, the Company adopted a new salary policy, new base salary
ranges, a new Management Incentive Plan (see "Other Compensation
Arrangements") and a new non-qualified Stock Option Plan (see "Other
Compensation Arrangements"). These new policies and plans brought the
Company's compensation practices into line with current market conditions
for competitive pay levels of utility executives, and better support the
achievement of the Company's mission and strategies.
Compensation Committee Members
-----------------------------------------------------
Albert H. Elfner, III, Bruce W. Keough, Chairman,
and Charles H. Tenney III
Stock Performance Graph and Information
--------------------------------------------------
Comparative Five-Year Cumulative Total Returns
- ----------------------------------------------------------------------------
1994 1995 1996 1997 1998 1999
--------------------------------------------
Unitil $100 $138 $141 $183 $180 $300
Peer Group $100 $132 $132 $157 $146 $151
S&P 500 $100 $137 $167 $221 $282 $335
The graph above assumes $100 invested on December 31, 1993, in each category
and the reinvestment of all dividends during the period. The Peer Group is
comprised of the S&P 40 Utilities.
- ----------------------------------------------------------------------------
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
$100,000 during the year 1999.
SUMMARY COMPENSATION TABLE
- ----------------------------------------------------------------------------
Long Term Compensation
-----------------------------------
Annual Compensation Awards Payouts
-------------------------------- ------------------------ -------
Other
Name and Annual Restricted All Other
Principal Salary Bonus Comp. Stock LTIP Comp.
Position(1) Year ($) ($)(2) ($) Awards($) Options(#) Payouts ($)
- --------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
- --------------------------------------------------------------------------------------------------------------------------
Robert G. Schoenberger(3) 1999 $267,048 $109,415 -- -- 20,000(5) -- $ 6,080(7)
Chairman of the Board & 1998 245,003 -- -- -- -- --
Chief Executive Officer 1997 65,833(4) -- -- -- 25,000(6) --
Michael J. Dalton 1999 $199,500 $ 67,882 -- -- 10,000(5) -- $ 7,271(8)
President & Chief 1998 190,005 67,959 -- -- -- --
Operating Officer 1997 174,000 63,834 -- -- -- --
Anthony J. Baratta, Jr.(9) 1999 $159,078 $ 33,606 -- -- 10,000(5) -- $26,667(11)
Senior Vice President & 1998 107,501(10) -- -- -- -- --
Chief Financial Officer 1997 -- -- -- -- -- --
James G. Daly(12) 1999 $151,668 $ 38,074 -- -- 2,500(5) -- $ 4,962(13)
Senior Vice President, 1998 142,092 39,314 -- -- -- --
Unitil Service 1997 125,625 33,568 -- -- -- --
George R. Gantz 1999 $132,420 $ 32,261 -- -- 2,500(5) -- $ 4,540(14)
Senior Vice President, 1998 120,399 39,314 -- -- -- --
Unitil Service 1997 104,475 33,658 -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------
NOTES:
<FN>
<F1> Officers of the Company also hold various positions with subsidiary
companies. Compensation for those positions is included in the above
table.
<F2> Bonus amounts reflected are comprised of the Unitil Management
Incentive Plan ("Incentive Plan") cash awards paid in February, 1999,
for 1998 results. The terms of the Incentive Plan provide a cash
incentive opportunity if the Company meets certain pre-established
performance targets (see "Other Compensation Arrangements").
<F3> Robert G. Schoenberger was elected Chairman of the Board and Chief
Executive Officer in October 1997. Mr. Schoenberger was not employed
by the Company or any of its subsidiary companies prior to October
1997.
<F4> Base salary paid to Mr. Schoenberger for 1997 includes salary for the
months of November and December, and a $25,000 payment received on his
first day of employment with the Company. Mr. Schoenberger's annual
base salary in 1997 was $245,000.
<F5> Options were granted in March, 1999, under the 1998 Stock Option Plan
("Option Plan"). Options will vest at a rate of 25% in year one, 25%
in year two, and 50% in year three, following the date of the grant.
As of February, 2000, no options are vested and no options are
exercisable.
<F6> Options were granted to Mr. Schoenberger on November 3, 1997, under
the Key Employee Stock Option Plan (see "Other Compensation
Arrangements" and subsequent notes).
<F7> All Other Compensation for Mr. Schoenberger for the year 1999 includes
401(K) company contribution, and Group Term Life Insurance payment
valued at $4,800 and $1,280, respectively.
<F8> All Other Compensation for Mr. Dalton for the year 1999 includes,
401(K) company contribution and Group Term Life Insurance payment,
valued at $4,800 and $2,471, respectively.
<F9> Anthony J. Baratta, Jr. began his employment with the Company as
Senior Vice President and Chief Financial Officer in April, 1998. Mr.
Baratta was not employed by the Company or any of its subsidiary
companies prior to April, 1998.
<F10> Base salary paid to Mr. Baratta for 1998 includes salary for the
months of April through December. Mr. Baratta's annual salary in
1998 was $150,000.
<F11> All Other Compensation for Mr. Baratta for the year 1999 includes,
401(K) company contribution, Group Term Life Insurance payment, and
taxable relocation payment valued at $4,770, $1,897 and $20,000,
respectively.
<F12> Mr. Daly resigned from the Company on February 7, 2000.
<F13> All Other Compensation for Mr. Daly for the year 1999 includes 401(K)
company contribution and Group Term Life Insurance payment, valued at
$4,550 and $411, respectively.
<F14> All Other Compensation for Mr. Gantz for the year 1999 includes 401(K)
company contribution and Group Term Life Insurance payment, valued at
$3,973 and $568, respectively.
</FN>
Other Compensation Arrangements
--------------------------------------------------
The table below provides information with respect to options granted
in fiscal 1999 under the 1998 Stock Option Plan (See also "Other
Compensation Arrangements") to the named executive officers in the Summary
Compensation table. The Company has no compensation plan under which Stock
Appreciation Rights (SARs) are granted and thus reference to SARs has been
omitted from the table.
OPTION GRANTS IN LAST FISCAL YEAR
- ----------------------------------------------------------------------------
Potential Realizable
Value at Assumed
Individual Grants Annual Rates of Stock
Price Appreciation for
Option Term
- ----------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g)
- ----------------------------------------------------------------------------------------------------------------
% of Total Option Price
Number of Options -----------------------
Securities Granted to Market
Underlying Employees Exercise or Price on
Options in Fiscal Base Price Date of Exp.
Name Granted(#) Year ($/Sh) Grant Date 5%($) 10%($)
- ----------------------------------------------------------------------------------------------------------------
Robert G. Schoenberger
Chairman of the Board & 20,000 32.3% $23.375 $23.375 3/5/09 $294,000 $745,000
Chief Executive Officer
Michael J. Dalton
President & 10,000 16.1% $23.375 $23.375 3/5/09 $147,000 $372,500
Chief Operating Officer
Anthony J. Baratta, Jr.
Senior Vice President & 10,000 16.1% $23.375 $23.375 3/5/09 $147,000 $372,500
Chief Financial Officer
James G. Daly
Senior Vice President, 2,500 4.0% $23.375 $23.375 3/5/09 $ 36,750 $ 93,125
Unitil Service
George R. Gantz
Senior Vice President, 2,500 4.0% $23.375 $23.375 3/5/09 $ 36,750 $ 93,125
Unitil Service
The table below provides information with respect to options to
purchase shares of the Company's Common Stock exercised in fiscal 1999 under
the 1989 Key Employee Stock Option Plan ("KESOP") and the value of
unexercised options granted in prior years and in 1999 under the KESOP and
the 1998 Stock Option Plan ("Option Plan"), respectively, to the named
executive officers in the Summary Compensation Table and held by them as of
December 31, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR (FY)
AND FY-END OPTION VALUES (1)(2)
- ----------------------------------------------------------------------------
Number of Unexercised Value of Unexercised
Shares Options at In-the-Money Options
Acquired FY-End (#) at FY-End ($)
on Value ---------------------------- -------------------------
Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
- ------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
- ------------------------------------------------------------------------------------------------------------
Robert G. Schoenberger -- -- exercisable 25,000(3)(4) exercisable $487,750
Chairman of the Board & unexercisable 20,000 unexercisable $247,500
Chief Executive Officer
Michael J. Dalton 12,000 $197,280 exercisable 0 exercisable $ 0
President & unexercisable 10,000 unexercisable $123,750
Chief Operating Officer
Anthony J. Baratta, Jr. -- -- exercisable 0 exercisable $ 0
Senior Vice President & unexercisable 10,000 unexercisable $123,750
Chief Financial Officer
James G. Daly -- -- exercisable 0 exercisable $ 0
Senior Vice President, unexercisable 2,500 unexercisable $ 30,938
Unitil Service
George R. Gantz 5,078 $ 69,873 exercisable 0 exercisable $ 0
Senior Vice President, unexercisable 2,500 unexercisable $ 30,938
Unitil Service
- ------------------------------------------------------------------------------------------------------------
NOTES:
<FN>
<F1> The KESOP authorizes the Compensation 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 on pages 14 and 15. All of the award agreements entered into
with participants in the KESOP 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. 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. All options, with
the exception of Mr. Schoenberger's options (see Note 3), associated
with the KESOP were exercised as of March 7, 1999.
<F2> The Option Plan authorizes the Compensation 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, and will become 100% vested and
fully exercisable. The term "Change in Control" is defined in
substantially the same manner as in the Severance Agreements as
defined on pages 14 and 15. All of the award agreements entered into
with participants in the Option Plan to date contain such a "Change
in Control" provision. All options reported as "unexercisable" in the
table were granted in March, 1999, under the Option Plan.
<F3> In accordance with the terms of Mr. Schoenberger's employment
agreement, on November 3, 1997, he received 25,000 options to purchase
shares of Company stock under the KESOP. The options granted to Mr.
Schoenberger became exercisable on November 3, 1998. In 1998, the
Compensation Committee extended the expiration date of Mr.
Schoenberger's options until November 3, 2007 (ten years from the date
of the grant), because the Option Plan originally provided ten years
between the grant and expiration of options.
<F4> Mr. Schoenberger's exercisable options listed in column (d) in the
table above do not include non-preferential dividend equivalents
associated with options outstanding.
</FN>
In December, 1998, the Unitil Board of Directors adopted the Unitil
Corporation 1998 Stock Option Plan ("Option Plan"). The Company intends to
grant stock options each year through March 1, 2004 under the plan to
certain employees and directors, for the purchase of up to 350,000 shares of
Unitil Common Stock. To date, grants were made to certain management
employees in March, 1999, and in January, 2000. Each option grant will vest
over a three year period and each grant will expire ten years after the date
of grant.
The purpose of the Option Plan is to provide an incentive to key
employees and directors of Unitil and its affiliates who are in a position
to contribute materially to the long-term success of Unitil and/or its
affiliates, to increase their interest in the welfare of Unitil and its
affiliates, and to attract and retain employees and directors of outstanding
ability. The Compensation Committee will administer the plan. The Committee
has the authority to interpret the plan and to designate recipients of the
stock options.
Stock options granted under the Option Plan will entitle the holders
of those options to purchase up to the number of shares of common stock
specified in the grant at a price established by the Committee. All grants
will be issued at 100% of market value. Under the Option Plan, stock options
for shares constituting not more than five percent of the common stock may
be issued in any one year.
The Company adopted a new Management Incentive Plan and a new Employee
Incentive Plan in December, 1998, to provide cash incentive payments which
are tied directly to achievement of the Company's strategic goals. Annual
goals are established each year by the Board of Directors and payment of
awards are made in February of the year following achievement of the goals.
Target incentive payments have been established which vary based upon the
grade level of each position. Actual awards can be less than or greater than
the target payout depending upon actual results achieved.
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 $160,000 limit.
PENSION PLAN TABLE
- ----------------------------------------------------------------------------
ANNUAL PENSION
----------------------------------------------------
Average Annual Earnings 10 Years 20 Years 30 Years 40 Years
Used for Computing 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
160,000 32,000 64,000 80,000 88,000
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, 2000,
Messrs. Schoenberger, Dalton, Baratta, Daly and Gantz had 2, 32, 1, 11 and
16 credited years of service, respectively, under the Retirement Plan.
Unitil 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. At the present time, Messrs. Schoenberger 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, less other
retirement income payable to such participant by Unitil or any previous
employer and less income that a participant receives as a primary Social
Security benefit. Early retirement benefits are available to a participant,
with the Unitil 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 60, the benefits
are reduced by 5% for each year that commencement of benefits precedes
attainment of age 60. If a participant terminates employment for any reason
prior to retirement, the participant will not be entitled to any benefits.
Under the SERP, Messrs. Schoenberger and Dalton would be entitled to receive
an annual benefit of $38,551 and $28,191, respectively, assuming normal
retirement at age 65 and that their projected final average earnings are
equal to the average of their respective three consecutive years of highest
compensation prior to retirement.
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, if applicable, 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.
The Company entered into an employment agreement with Mr. Schoenberger
on November 1, 1997. The term of the agreement is for three years with an
expiration date of October 31, 2000. Under the terms of the employment
agreement, Mr. Schoenberger will receive an annual base salary of $245,000
which is subject to annual review by the Board for discretionary periodic
increases in accordance with the Company's compensation policies. Mr.
Schoenberger is entitled to participate in the Company's SERP, Executive
Supplemental Life Insurance Program and all other employee benefit plans
made available by the Company. On November 3, 1997, Mr. Schoenberger also
received 25,000 options to purchase shares of Company stock under the
Company's 1989 Key Employee Stock Option Plan ("KESOP"). In 1998, the
Compensation Committee extended the expiration date of the options granted
to Mr. Schoenberger under the KESOP until November 3, 2007. Said options
were originally set to expire on March 7, 1999. Mr. Schoenberger was
reimbursed for all reasonable interim living and reasonable travel expenses
during 1997 and 1998. In addition, in 1998, Mr. Schoenberger was reimbursed
for all direct moving expenses and received $50,000 when he relocated to the
area, as was stipulated in the terms of his employment agreement. The
agreement also provides that the Company and Mr. Schoenberger enter into a
Severance Agreement, more fully described above. Mr. Schoenberger and the
Company entered into said Severance Agreement in February, 1998. The
Company, by action of the Board, may terminate Mr. Schoenberger's employment
for any reason. If Mr. Schoenberger's employment is terminated by the
Company during the term of the agreement for any reason other than Cause,
death or disability, the Company shall pay Mr. Schoenberger's base pay at
the rate in effect on the date of employment termination and benefits until
the end of the term of the agreement, or if employment termination is after
November 1, 1999, for one year.
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 1999. 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 2001 annual meeting of shareholders must be received
by Unitil at its Corporate Headquarters not later than December 20, 2000.
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,
Mark H. Collin
Treasurer & Secretary
- ----------------------------------------------------------------------------
Unitil will furnish without charge to any shareholder entitled to vote and
to any beneficial owner of shares entitled to be voted at the annual meeting
of common shareholders, to be held April 20, 2000, 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 1999, upon written request to Mark H. Collin, Treasurer, Unitil
Corporation, 6 Liberty Lane West, Hampton, NH 03842-1720.
- ----------------------------------------------------------------------------
437-PS-00
PROXY
UNITIL CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all previous proxies, hereby appoints
ANTHONY J. BARATTA, JR., MARK H. COLLIN, MICHAEL J. DALTON and ROBERT G.
SCHOENBERGER, and each of them, proxies will full 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 office
of the Company, 6 Liberty Lane West, Hampton, New Hampshire on Thursday,
April 20, 2000, 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 |SEE REVERSE|
- ------------- -------------
[Unitil Logo]
your energy choice
c/o Equiserve
P.O. Box 8040
Boston, MA 02266-8040
THIS IS YOUR PROXY. YOUR VOTE IS IMPORTANT.
Regardless of whether or not 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.
Directions to Unitil's Corporate Headquarters
6 Liberty Lane West
Hampton, New Hampshire
From Route 95
- -------------
Take New Hampshire Exit 2. Immediately after the toll booth (50 cents) bear
left onto Rte. 101 East. Cross back over Rte. 95, then take the first
right, follow signs for Liberty Lane/Rte 27. Take the first left to the
Liberty Lane entrance. Stay right on the access road until it crosses under
Rte. 95, then turn left at the Liberty Lane West sign. Continue straight,
1/2 mile to Unitil on the right.
From Route 101 East
- -------------------
Cross over Rte. 95, then take the first right, follow signs for Liberty
Lane/Rte 27. Take the first left to the Liberty Lane entrance. Stay right
on the access road until it crosses under Rte. 95, then turn left at the
Liberty Lane West sign. Continue straight, 1/2 mile to Unitil on the right.
Please call 800/999-6501 if you would like additional information.
DETACH HERE
- --------------------------------------------------------------------------
[x] Please mark
vote as in
this example.
This proxy will be voted in accordance with the instructions given below.
If no instructions are given, this proxy will be voted in favor of the
election of the three Directors listed in Item 1.
The Board of Directors recommends a vote "FOR" each of the nominees listed
below.
1. To elect three Directors:
Nominees: William E. Aubuchon, III, Robert G. Schoenberger,
Charles H. Tenney, III
FOR [ ] [ ] WITHHELD
ALL FROM ALL
NOMINEES NOMINEES
[ ] ______________________________________
For all nominees except as noted above
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Please sign exactly as your 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: ______