Unitil
March 19, 1998
Dear Fellow Shareholder,
The Annual Meeting of Common Shareholders is scheduled to be held on
Thursday, April 16, 1998, at 10:30 a.m., at the office of the Company, 6
Liberty Lane West, Hampton, New Hampshire.
Enclosed you will find a 1997 annual report, a notice of meeting, a proxy
statement and a proxy card to be used in connection with the meeting. This
year, shareholders are being asked to vote on the election of four
Directors.
We hope that you are able to attend the Annual Meeting. Your vote is
important whether you own one share or many. Whether or not you plan to be
present, we urge you to sign and promptly return the enclosed proxy card in
the envelope provided.
Thank you for your continued interest in the Company.
Sincerely,
Robert G. Schoenberger
Chairman of the Board of Directors
and Chief Executive Officer
Unitil
NOTICE OF ANNUAL MEETING OF COMMON SHAREHOLDERS
Hampton, New Hampshire
March 19, 1998
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 April 16, 1998, at 10:30 A.M., for the
following purposes:
1. To elect four Directors.
2. To act on such other matters as may properly come before the
meeting and any adjournments thereof.
The enclosed form of proxy has been prepared at the direction of the
Board of Directors of Unitil and is sent to you at its request. The persons
named in said proxy have been designated by the Board of Directors.
If you do not expect to be present personally and you wish your stock
voted at the meeting, please sign, date and return the proxy card enclosed
herewith by mail in the postage-paid envelope, also enclosed. If you later
find that you can be present, or for any other reason desire to revoke or
change your proxy, you may do so at any time before it is voted.
The Board of Directors fixed March 2, 1998 as the record date for the
determination of those shareholders entitled to notice of and to vote at
this meeting and all persons who were holders of record of Common Stock on
such date and no others are entitled to notice of and to vote at this
meeting and any adjournments thereof.
By Order of the Board of Directors,
Mark H. Collin
Secretary
Unitil
6 Liberty Lane West
Hampton, New Hampshire 03842-1720
March 19, 1998
Proxy Statement
ANNUAL MEETING OF COMMON SHAREHOLDERS, APRIL 16, 1998
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
1998 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 1997 is enclosed herewith and
includes financial statements which are not part of this proxy statement.
The voting securities of Unitil issued and outstanding on March 2,
1998 consisted of 4,483,767 shares of Common Stock, no par value, entitling
the holders thereof to one vote per share. Holders of Common Stock of record
on such date are entitled to notice of and to vote at the annual meeting and
any adjournments thereof. A majority of the outstanding shares of Common
Stock constitutes a quorum.
Except as set forth below, no person owns of record and, to the
knowledge of Unitil, no person owns beneficially more than five percent of
the Common Stock of Unitil which may be voted at the meeting and any
adjournments thereof.
Name and Address Shares of Common Stock Percent of Shares
of Beneficial Owner Beneficially Owned Outstanding
- - ---------------------------------------------------------------------------
Charles H. Tenney II 275,420 (1) 6.08%
300 Friberg Parkway
Westborough, MA 01581
- - ---------------------------------------------------------------------------
NOTES:
<F1> Based on information provided by Mr. Tenney. See notes 2, 3 and 6 to
the table below under the heading "As to the Election of Directors."
The eleven Directors and the officers of Unitil as a group have
beneficial ownership as of March 2, 1998 of 302,101 shares (6.74%) of Common
Stock, of which they have direct beneficial ownership of 152,004 shares
(3.39%), which excludes options to purchase 129,091 shares (2.88%) pursuant
to the exercise of those options, and indirect beneficial ownership of
150,097 shares (3.35%). 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 eleven Directors.
In October 1997 the Board of Directors elected Robert G. Schoenberger
as Chairman and Chief Executive Officer of the Company after an extensive
candidate search lead by the Executive Committee. Mr. Schoenberger was
elected to replace the former Chairman and Chief Executive Officer, Peter J.
Stulgis, who passed away in May 1997. Mr. Schoenberger will fill the vacancy
on the Board created by the death of Mr. Stulgis for the remaining unexpired
term of office.
In March 1998, the Board of Directors adopted 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's management unless he or she is a beneficial owner, either directly
or indirectly, of at least 1,000 shares of Unitil Common Stock. Also in
March 1998, the Board of Directors approved an age limitation policy of the
Board, effective as of 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's management after he or she has
reached age 70.
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 Director whose terms will expire in the year 2001
- - -----------------------------------------------------------------------------------------
Common Stock Owned
Director Beneficially on March 2, 1998 (1)
Since Shares
- - -----------------------------------------------------------------------------------------
Michael J. Dalton, Age 57 1984 63,162 (2)(3)(4)(5)
- - --------------------------------------
President and Chief Operating
Officer of Unitil.
Bruce W. Keough, Age 41 - 0
- - --------------------------------------
Real estate developer and private
equity investor since 1991.
Mr. Keough is a former New Hampshire
State Senator (1994 - 1996). During
his term in office, Mr. Keough
served on the New Hampshire Senate
Finance Committee and also as the
Chairman of the Capital Budget
Committee. Mr. Keough is a Trustee
of the University System of New
Hampshire since 1997, serves on the
Board of Governors of New Hampshire
Public Television since 1997, and
on the Board of Governors of the
American Independence Museum, Exeter,
NH, since 1995.
J. Parker Rice, Jr., Age 72 1992 1,254
- - --------------------------------------
Director, former President and
Treasurer of Hyland/Rice Office
Products, Inc., Fitchburg, MA
(office products dealer).
Joan D. Wheeler, Age 60 1994 1,000
- - --------------------------------------
Owner of the Russian Gallery,
Marblehead, MA (art gallery).
Ms. Wheeler is a former Director
of Shaw's Supermarkets, Inc.
(1979 - 1987) and of Granite Bank
(1984 - 1989), Keene, NH,
and a former Trustee of Franklin
Pierce College.
Information about Directors whose Terms of Office Continue
----------------------------------------------------------
Common Stock Owned
Director Term to Beneficially on March 2, 1998 (1)
Since Expire Shares
- - --------------------------------------------------------------------------------------------------------
Douglas K. Macdonald, Age 69 1984 1999 924
- - --------------------------------------
Retired since 1988. Prior to his
retirement, Mr. Macdonald was
Vice President and Controller of
Unitil and President of CECo.
Robert G. Schoenberger, Age 47 1997 2000 25,335 (3)
- - --------------------------------------
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 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).
Charles H. Tenney II, Age 79 (7) 1984 1999 275,420
(2)(3)(4)(6)
- - --------------------------------------
Retired since 1992. Prior to his
retirement, Mr. Tenney was Chairman
of the Board and Chief Executive
Officer of Unitil and FG&E. Mr.
Tenney is a Director and former
Chairman (retired as Chairman in
1996) of Bay State Gas Company,
Westborough, MA (natural gas
distributor).
Charles H. Tenney III, Age 50 (7) 1992 2000 2,530
- - --------------------------------------
Clerk (Corporate Secretary) of Bay
State Gas Company, Westborough, MA
(natural gas distributor). Mr.
Tenney is also Corporate Secretary
of Northern Utilities, Inc.,
Portsmouth, NH (natural gas
distributor) and Corporate
Secretary of Granite State Gas
Transmission, Inc., Portsmouth,
NH, since 1997.
William W. Treat, Age 79 1984 1999 18,486 (8)
- - --------------------------------------
Lawyer; sole private practice,
former Director and Chairman of
the Board of Directors of Bank
Meridian, Hampton, NH, and a
former Director of Amoskeag Bank
Shares, Inc., Manchester, NH.
Mr. Treat is also a former
Director of the Colonial Group,
Inc., Boston, MA (investments).
W. William VanderWolk, Jr., Age 74 1984 2000 16,786 (9)
- - --------------------------------------
Owner of Horizon Management,
Manchester, NH (property and
restaurant management).
Franklin Wyman, Jr., Age 76 1992 2000 5,000
- - --------------------------------------
Chairman of the Board and
Treasurer of Wright Wyman, Inc.,
Boston, MA (corporate financial
consultants). Mr. Wyman is a
Trustee and Vice President of
Brookline Savings Bank,
Brookline, MA.
NOTES:
Except as otherwise noted, each of the persons named above has held
his present position (or another executive position with the same employer)
for more than the past five (5) years.
<F1> Based on information furnished to Unitil by the nominees and
continuing Directors.
<F2> Included are 3,977 and 3,689 shares which are held in trust for
Messrs. Dalton and Tenney, respectively, under the terms of the Unitil
Tax Deferred Savings and Investment Plan ("401(k)"); they have voting
power only with respect to the shares credited to their accounts. For
further information regarding 401(k), see "Other Compensation
Arrangements - Tax-Qualified Savings and Investment Plan" below.
<F3> Included are 25,335, 45,754 and 43,733 shares which Messrs.
Schoenberger, Dalton and Tenney, respectively, have the right to
purchase pursuant to the exercise of options under the Key Employee
Stock Option Plan. (See "Other Compensation Arrangements").
<F4> With the exception of Messrs. Dalton and Tenney, who own shares
totaling 1.40% and 6.08%, respectively, of the total outstanding
shares, no Director or officer owns more than one percent of the total
outstanding shares.
<F5> Included are 13,431 shares held by Mr. Dalton jointly with his wife
with whom he shares voting and investment power.
<F6> Included are 124,522 shares (2.75%) owned by two trusts of which Mr.
Tenney is Co-Trustee with shared voting and investment power; he has a
1/6 beneficial interest in both trusts and disclaims any beneficial
ownership of such shares other than such 1/6 beneficial interest.
<F7> Charles H. Tenney II is the father of Charles H. Tenney III.
<F8> Included are 5,387 shares owned by three trusts of which Mr. Treat is
Trustee with voting and investment power; he has no beneficial
interest in such shares. Also included are 7,500 shares owned by one
organization in which Mr. Treat has shared voting and investment power
and a 1/3 beneficial interest, and also 500 shares owned by a member
of Mr. Treat's family; he has no voting or investment power with
respect to, and no beneficial interest in, such shares.
<F9> Included are 3,508 shares owned by a member of Mr. VanderWolk's
family; he has no voting or investment power with respect to, and no
beneficial interest in, such shares.
The Board of Directors met seven times in 1997. During 1997, Directors
attended an average of 99% of all meetings of the Board of Directors held
and of all meetings held by all Committees of the Board on which they
served, if any.
Section 17(a) of the Public Utility Holding Company Act of 1935 and
Section 16(a) of the Securities Exchange Act of 1934 require the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file certain reports
of ownership and changes in share ownership with the Securities and Exchange
Commission and the American Stock Exchange and to furnish the Company with
copies of all Section 17(a) and Section 16(a) forms they file. Based solely
on its review of the copies of such forms received by it, or written
representations from certain reporting persons that such forms were not
required for those persons, the Company believes that all filing
requirements applicable to its officers and directors during 1997 and
through March 1, 1998 were met.
In March 1998, the Board of Directors adopted two resolutions with
regard to Board Function, including that Board of Directors will review and
approve an Annual Strategic Plan, and also that the Board will approve the
performance measures to be used in association with the Company's Management
Performance and Incentive Compensation Plans.
Compensation of Directors
--------------------------------------------------------
In 1997, 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
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 $2,000 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. 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. In March 1998, The Board of Directors
approved an increase of $5,500 in the annual compensation received by
Directors, to be paid in Unitil Common Stock, effective January 1, 1998. The
annual retainer fee of $7,000 and $500 for each Board Meeting attended
remain unchanged.
In 1992, the Company entered into a Senior Advisory Agreement (the
"Agreement") with Charles H. Tenney II. Mr. Tenney was Chief Executive
Officer and Chairman of the Board of the Company until his retirement in
1992. The Agreement, which is reviewed on an annual basis, provides that Mr.
Tenney will be compensated for his role as Chairman of the Executive
Committee of the Board of the Company, as well as for other advisory
services which he will provide. In consideration of this Agreement, Mr.
Tenney waives all Board-related fees and retainers that he is otherwise
entitled to receive as a Director of the Company. In accordance with this
Agreement, in 1997 Mr. Tenney was compensated $105,000. As of October 1997,
Mr. Tenney no longer serves as Chairman of the Executive Committee, (see
"Executive Committee" below) and therefore the Agreement has been
discontinued. As a result of the discontinuation of the Agreement, Mr.
Tenney will receive the annual retainer fee and all other Board-related fees
he is entitled to as a Director of the Company.
Committees of the Board of Directors
--------------------------------------------------------
Executive Committee
----------------------------------
The Executive Committee of the Board of Directors held seventeen
meetings in 1997. Its members are Charles H. Tenney II, Robert G.
Schoenberger, William W. Treat, W. William VanderWolk, Jr. and Franklin
Wyman, Jr. From January 1997 until October 1997, Charles H. Tenney II served
as Chairman of the Committee. From October 1997, William W. Treat assumed
the role of Chairman of the Committee. Additionally, Peter J. Stulgis, the
former Chairman and Chief Executive Officer of the Company, served as a
member of this Committee until his death in May 1997. 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. In January 1998, the Board of Directors
approved the expansion of the duties of the Executive Committee to include
the review and setting of corporate governance standards and the annual
review of Board member performance.
Audit Committee
----------------------------------
The Audit Committee of the Board of Directors, which held two meetings
in 1997, consists of William W. Treat (Chairman), J. Parker Rice, Jr. and W.
William VanderWolk, Jr. The duties of this Committee encompass making
recommendations on the selection of Unitil's independent auditors;
conferring with such auditors regarding, among other things, the scope of
their examination, with particular emphasis on areas where special attention
should be directed; reviewing the accounting principles and practices being
followed by Unitil; assessing the adequacy of Unitil's interim and annual
financial statements; reviewing the internal audit controls of Unitil and
its subsidiaries; performing such other duties as are appropriate to monitor
the accounting and auditing policies and procedures of Unitil and its
subsidiaries; and reporting to the full Unitil Board from time to time.
Compensation Committee
----------------------------------
The Compensation Committee of the Board of Directors, which held two
meetings in 1997, consists of Charles H. Tenney II (Chairman), J. Parker
Rice, Jr. and Joan D. Wheeler. The duties of this Committee include studying
and making recommendations to the Board of Directors of Unitil and the
appropriate Board of each of its subsidiaries with respect to salaries and
other benefits to be paid to the officers of Unitil and such subsidiaries.
In March 1998, the Board of Directors approved the expansion of the
Compensation Committee's duties to include the annual review of management
succession planning and the current duties of the KESOP Committee.
Compensation Committee Interlocks and Insider Participation
-----------------------------------------------------------
Charles H. Tenney II served as the Chairman of the Compensation
Committee during fiscal 1997. Mr. Tenney is the former Chairman of the Board
of Directors and Chief Executive Officer of the Company, serving as such
until his retirement in April 1992. During 1997, he had a Senior Advisory
Agreement with the Company (see "Compensation of Directors") and also served
as Chairman of the Executive Committee of the Board of Directors until
October 1997.
Director Emeritus
--------------------------------------------------------
The Company has a directors' advisory council composed of retired
members of the Company's Board of Directors. Each member, known as a
Director Emeritus, is appointed yearly by the Board of Directors to render
advisory services to the Board. Directors Emeriti have no vote with respect
to any matter acted upon by the Board, nor is their presence counted for
purposes of determining a quorum. Directors Emeriti Richard L. Brickley,
Philip H. Bradley, Theodore C. Haffenreffer, Jr. and Endicott Smith were
initially appointed to their positions in 1992, 1993, 1994, and 1995,
respectively. Directors Emeriti receive an annual retainer of $7,000 and
$500 for each Board meeting attended, as well as reimbursement for any
expenses incurred in connection with attendance at any meeting. In March
1998, the Board of Directors approved the discontinuation of the Director
Emeritus program. The current Directors Emeriti will continue to receive the
$7,000 annual retainer for 1998 and 1999.
Report of the Compensation Committee
--------------------------------------------------------
The overall objective of the Company's Board of Directors, and
specifically this Compensation Committee, in setting compensation for
Unitil's executive officers is to foster excellence in the management of the
assets of the Company. To help meet this objective, the Committee believes
it is important for the Company to provide compensation to its executive
officers which varies directly with the performance of the Company and to
make payment of annual compensation with both cash and Company stock in
place of all-cash.
Accordingly, the Company pays both "base" and "variable" compensation
to its officers. The base component of compensation is determined under the
Unitil System's salary matrix which is reviewed from time to time by outside
consultants as to its competitiveness. Variable compensation is based on
factors that measure the success of the Company for any given year and is
governed by the System's Management Performance Compensation Plan ("MPCP")
The factors under the MPCP relate to the earnings of the Company and the
rate of return achieved on shareholder-provided equity as well as cost
control and the competitiveness of the rates charged to the Unitil System's
utility customers. In addition, to further bolster ownership in the Company
by the executive officers, the Company, in 1989, instituted a "Key Employee
Stock Option Plan" with the approval of the Company's shareholders. This
plan was tailored to emphasize dividend and stock value growth as a
prerequisite to the maximization of value to the participants.
The compensation of the Chief Executive Officer ("CEO"), is governed
by these same plans and objectives. Peter J. Stulgis served as the Company's
CEO until his death in May 1997. The base compensation for Mr. Stulgis was
increased by 3% in April 1997 in accordance with the Unitil System's salary
matrix. The variable compensation paid to Mr. Stulgis in 1997 was based upon
the Unitil System's operating results for 1996 under the MPCP discussed
above. Unitil's performance achieved top ratings in all but one of the
categories versus other New England utilities in 1996. Accordingly, under
the MPCP, Mr. Stulgis received a payment in cash of $104,800. This MPCP
payment is formula-driven and reflected the achievement in 1996 of earnings
which were above target levels; a rate of return which was in the 94th
percentile of peer companies; cost control results which were at the 100th
percentile of peer companies; and residential utility rates which were at
the 100th percentile of the peer group.
Upon his employment with the Company in November 1997 as Chairman of
the Board and CEO, Mr. Schoenberger will be paid an annual base salary of
$245,000. This amount was determined in accordance with the Unitil's
System's salary matrix and was based upon a 1996 review and recommendation
of an outside salary consultant who analyzed competitive pay levels in
similar companies in the New England Region. In addition, Mr. Schoenberger
will also participate in the Company's MPCP program. Mr. Schoenberger
entered into an employment agreement with the Company which is further
detailed on page 14. The Committee also approved the compensation of
Unitil's other executive officers for 1997 following the principles and
procedures outlined in this report. The Company has currently engaged a
nationally known salary compensation firm to review the CEO's, as well as,
other executive positions total compensation package.
Compensation Committee Members
--------------------------------------------------------
Charles H. Tenney II, Chairman, J. Parker Rice, Jr., and Joan D. Wheeler
Stock Performance Graph and Information
--------------------------------------------------------
Comparative Five-Year Cumulative Total Returns
1992 1993 1994 1995 1996 1997 The graph to the
----------------------------------------------- left assumes
$100 invested on
Unitil 100 113.94 101.59 140.6 143.13 185.87 December 31,
Peer Group 100 101.14 91.36 115 96.06 122.65 1992, in each
S&P 500 100 110.1 110.76 151.74 185.28 244.92 category and the
reinvestment of
all dividends
during the period.
The Peer Group
is comprised of
the eleven
investor-owned
New England
electric 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
$100,000 during the year 1997.
SUMMARY COMPENSATION TABLE
Long Term Compensation
--------------------------------
Annual Compensation Awards Payout
------------------------------------- --------------------- ------
Name and Other Restricted All Other
Principal Salary Bonus Annual Stock Options LTIP Compensation
Position (1) Year ($) ($) Comp.($) Awards($) (#) Payout ($)
- - ----------------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
- - ----------------------------------------------------------------------------------------------------------------------------------
Robert G. Schoenberger (2) 1997 $ 65,833 (3) - - - 25,000 (4) - $13,207 (5)
Chairman of the Board & - - - - - - -
Chief Executive Officer - - - - - - -
Peter J. Stulgis (6) 1997 $218,499 $104,800 (7) - - - - $ 3,791 (8)
Chairman of the Board & 1996 241,025 100,036 - - - -
Chief Executive Officer 1995 215,300 110,411 - - - -
Michael J. Dalton 1997 $174,000 $ 63,834 (7) - - - - $10,912 (9)
President & Chief Operating 1996 169,200 61,959 - - - -
Officer 1995 164,400 63,347 - - - -
Gail A. Siart (10) 1997 $135,000 $ 33,568 (7) - - - - $ 5,432 (11)
Chief Financial Officer, 1996 97,500 32,580 - - - -
Treasurer & Secretary 1995 90,000 47,228 - - 3,000 (12) -
James G. Daly 1997 $125,625 $ 33,658 (7) - - - - $ 5,466 (13)
Senior Vice President, 1996 95,625 32,580 - - - -
Unitil Service 1995 88,675 47,228 - - 3,000 (12) -
George R. Gantz 1997 $104,475 $ 33,568 (7) - - - - $ 4,369 (14)
Senior Vice President, 1996 95,625 32,580 - - - -
Unitil Service 1995 89,000 42,428 - - 3,000 (12) -
NOTES:
<F1> Officers of the Company also hold various positions with subsidiary
companies. Compensation for those positions is included in the above
table.
<F2> 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.
<F3> 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 is $245,000.
<F4> Options were granted to Mr. Schoenberger on November 3, 1997 under the
Key Employee Stock Option Plan (see "Other Compensation Arrangements"
and subsequent notes).
<F5> All Other Compensation for Mr. Schoenberger for the year 1997 includes
the Supplemental Life Insurance payment, Group Term Life Insurance
payment, and taxable relocation payment valued at $64, $255 and
$12,888, respectively.
<F6> Peter J. Stulgis served as Chairman of the Board and Chief Executive
Officer of the Company until his death in May 1997.
<F7> Bonus amounts are comprised of Management Performance Compensation
Program (MPCP) cash and stock awards and distributions from the
System's non-utility subsidiary, Unitil Resources. Unitil maintains a
management performance compensation program ("MPCP") for certain
management employees, including Executive Officers. The MPCP provides
for awards to be calculated annually and paid in a combination of cash
and Unitil Common Stock. Awards are based on several factors designed
to reflect the Company's performance and the attainment of individual
performance goals. There was no distribution from Unitil Resources in
1996 or 1997.
<F8> All Other Compensation for Mr. Stulgis for the year 1997 includes the
company's contribution to the Tax Qualified Savings and Investment
Plan ("401(K)") and Group Term Life Insurance payment, valued at
$3,283 and $508, respectively.
<F9> All Other Compensation for Mr. Dalton for the year 1997 includes,
401(K) company contribution, Supplemental Life Insurance payment and
Group Term Life Insurance payment, valued at $4,800, $3,452 and
$2,660, respectively.
<F10> Gail A. Siart resigned from the Company effective January 23, 1998.
<F11> All Other Compensation for Ms. Siart for the year 1997 includes 401(K)
company contribution, Supplemental Life Insurance payment and Group
Term Life Insurance payment, valued at $4,742, $424 and $266,
respectively.
<F12> Options were granted in 1995 under the Key Employee Stock Option Plan
(see "Other Compensation Arrangements" and subsequent notes).
<F13> All Other Compensation for Mr. Daly for the year 1997 includes 401(K)
company contribution, Supplemental Life Insurance payment and Group
Term Life Insurance payment, valued at $4,452, $603 and $411,
respectively.
<F14> All Other Compensation for Mr. Gantz for the year 1997 includes 401(K)
company contribution, Supplemental Life Insurance payment and Group
Term Life Insurance payment, valued at $3,134, $682 and $553,
respectively.
Other Compensation Arrangements
--------------------------------------------------------
OPTION GRANTS IN LAST FISCAL YEAR (1)
Potential Realizable
Value at Assumed
Individual Grants Annual Rates of Stock
--------------------------------------- Price Appreciation
for Option Term
(a) (b) (c) (d) (e) (f) (g)
- - -----------------------------------------------------------------------------------------------------------------------------------
Option Price
Number of % of Total ----------------------------
Securities Options/SARs
Underlying Granted to Exercise or Market Price
Options/SARs Employees Base Price on Date of Exp.
Name Granted (#) in Fiscal Year ($/Sh) Grant Date 5%($) 10%($)
- - -----------------------------------------------------------------------------------------------------------------------------------
Robert G. Schoenberger
Chairman of the Board & 25,000 100% $18.17 $21.38 3/7/99 $116,298 $153,371
Chief Executive Officer
Peter J. Stulgis (2)
Chairman of the Board & - - - - - - -
Chief Executive Officer
Michael J. Dalton
President & - - - - - - -
Chief Operating Officer
Gail A. Siart (3)
Chief Financial Officer, - - - - - - -
Treasurer & Secretary
James G. Daly
Senior Vice President, - - - - - - -
Unitil Service
George R. Gantz
Senior Vice President, - - - - - - -
Unitil Service
NOTES:
<F1> Upon the exercise of any option by an employee and upon payment of the
option price for shares of Unitil Common Stock as to which the option
was granted (the "Primary Shares"), Unitil will cause to be delivered
to such employee (i) the Primary Shares and (ii) the number of shares
of Unitil Common Stock (the "Dividend Equivalent Shares") equal to the
dollar amount of dividends which would have been paid on the Primary
Shares (and previously accrued Dividend Equivalent Shares) had they
been outstanding, divided by the fair market value of Unitil Common
Stock determined as of the record date for each dividend.
<F2> Peter J. Stulgis served as Chairman of the Board and Chief Executive
Officer of the Company until his death in May 1997.
<F3> Gail A. Siart resigned from the Company effective January 23, 1998.
The table below provides information with respect to options to
purchase shares of the Company's Common Stock exercised in fiscal 1997 and
the value of unexercised options granted in prior years under the Key
Employee Stock Option Plan ("Option Plan") to the named executive officers
in the Summary Compensation Table and held by them as of December 31, 1997.
The Company has no compensation plan under which Stock Appreciation Rights
(SARs) are granted.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR (FY)
AND FY-END OPTION VALUES (1)
Number of Unexercised Value of Unexercised
Shares Options at In-the-Money Options
Acquired FY-End (#) (2) at FY-End ($)
on Value ----------------------------- ---------------------------
Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
- - ---------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
- - ---------------------------------------------------------------------------------------------------------------------
Robert G. Schoenberger - - exercisable 0 exercisable $ 0
Chairman of the Board & unexercisable 25,000 (3) unexercisable $153,563
Chief Executive Officer
Peter J. Stulgis (4) 5,280 $73,709 exercisable 18,720 exercisable $313,981
Chairman of the Board & unexercisable 0 unexercisable $ 0
Chief Executive Officer
Michael J. Dalton - - exercisable 24,000 exercisable $398,700
President & unexercisable 0 unexercisable $ 0
Chief Operating Officer
Gail A. Siart (5) 5,078 $68,350 exercisable 0 exercisable $ 0
Chief Financial Officer, unexercisable 0 unexercisable $ 0
Treasurer & Secretary
James G. Daly - - exercisable 5,032 exercisable $ 67,492
Senior Vice President, unexercisable 0 unexercisable $ 0
Unitil Service
George R. Gantz - - exercisable 5,078 exercisable $ 72,425
Senior Vice President, unexercisable 0 unexercisable $ 0
Unitil Service
NOTES:
<F1> The Option Plan authorizes the KESOP 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 page 14. All of the award agreements entered into with
participants in the Option Plan to date contain such a "Change in
Control" provision. Each award agreement also provides that, upon the
exercise of an option on or after a Change in Control, Unitil shall
pay to the optionee, within five business days, a lump sum cash amount
equal to the economic benefit of the optionee's outstanding options
and associated dividend equivalents that the optionee would have
received had the option remained unexercised until the day preceding
the expiration of the grant.
<F2> Amounts listed in column (d) in the table above do not include non-
preferential dividend equivalents associated with options outstanding.
<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 Key Employee Stock Option Plan. The
options granted to Mr. Schoenberger are not exercisable until November
3, 1998.
<F4> Peter J. Stulgis served as Chairman of the Board and Chief Executive
Officer of the Company until his death in May 1997.
<F5> Gail A. Siart resigned from the Company effective January 23, 1998.
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, 1998,
Executive Officers Schoenberger, Dalton, Siart, Daly and Gantz had .17, 30,
15, 9 and 14 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 $14,238 and $21,859, respectively, assuming their
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 the date thereof.
Unitil and certain subsidiaries maintain severance agreements (the
"Severance Agreements") with certain management employees, including
Executive Officers. The Severance Agreements are intended to help assure
continuity in the management and operation of Unitil and its subsidiaries in
the event of a proposed "Change in Control". Each Severance Agreement only
becomes effective upon the occurrence of a Change in Control of Unitil as
defined in the Severance Agreements. If an employee's stipulated
compensation and benefits, position, responsibilities and other conditions
of employment are reduced during the thirty-six month period following a
Change in Control, the employee is entitled to a severance benefit.
The severance benefit is a lump sum cash amount equal to (i) the
present value of three years' base salary and bonus; (ii) the present value
of the additional amount the employee would have received under the
Retirement Plan if the employee had continued to be employed for such
thirty-six month period; (iii) the present value of contributions that would
have been made by Unitil or its subsidiaries under the 401(k) if the
employee had been employed for such thirty-six month period; and (iv) the
economic benefit on any outstanding Unitil stock options and associated
dividend equivalents, assuming such options remained unexercised until the
day preceding the expiration of the grant, including the spread on any stock
options that would have been granted under the Option Plan if the employee
had been employed for such thirty-six month period. Each Severance Agreement
also provides for the continuation of all employee benefits for a period of
thirty-six months, commencing with the month in which the termination
occurred. In addition, pursuant to each Severance Agreement, Unitil is
required to make an additional payment to the employee sufficient on an
after-tax basis to satisfy any additional individual tax liability incurred
under Section 280G of the Internal Revenue Code of 1986, as amended, in
respect to such payments.
The Company entered into an employment agreement with Mr. Schoenberger
on November 1, 1997. The term of the agreement is for three years and the
expiration date is October 31, 2000. Under the terms of the employment
agreement, Mr. Schoenberger shall receive an annual base salary of $245,000
and 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, Management Performance Compensation
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 Key Employee Stock
Option Plan. Mr. Schoenberger shall be reimbursed for all direct moving,
reasonable interim living and reasonable travel expenses. In addition, Mr.
Schoenberger shall receive $50,000 at the time he relocates to the area. The
agreement also provides that the Company and Mr. Schoenberger will enter
into a Severance Agreement, more fully described above. 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 1998. 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 1999 annual meeting of shareholders must be received
by Unitil at its Corporate Headquarters not later than December 17, 1998.
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
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 16, 1998, 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 1997, upon written request to Mark H. Collin, Treasurer, Unitil
Corporation, 6 Liberty Lane West, Hampton, NH 03842-1720.
- - ---------------------------------DETACH HERE-----------------------------------
PROXY
UNITIL CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all previous proxies, hereby appoints MARK
H. COLLIN, MICHAEL J. DALTON and ROBERT G. SCHOENBERGER, and each of them,
proxies with power of substitution to each, to vote for the undersigned at
the Annual Meeting of Common Shareholders of Unitil Corporation (the
"Company") to be held at the office of the Company, 6 Liberty Lane West,
Hampton, New Hampshire on Thursday, April 16, 1998, 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 | | SEE REVERSE |
|_____________| |_____________|
Unitil
your energy choice
THIS IS YOUR PROXY. YOUR VOTE IS IMPORTANT.
Regardless of whether you plan to attend the Annual Meeting of Shareholders,
you can be sure your shares are represented at the Meeting by promptly
returning your proxy (attached below) in the enclosed envelope. Thank you
for your attention to this important matter.
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,
following 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, following 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
votes as in
this example.
This proxy will be voted in accordance with the instructions given
below. If no instructions are given, this proxy will be voted in favor of
the election of the four Directors listed in Item 1.
1. To elect four Directors:
Nominees: Michael J. Dalton, Bruce W. Keough, J. Parker Rice,
Jr., Joan D. Wheeler
The Board of Directors recommends a vote "FOR" each of the nominees
listed above.
[ ] FOR [ ] WITHHELD
ALL FROM ALL
NOMINEES NOMINEES
[ ] ___________________________________________
For all nominees except as noted above
MARK HERE 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: _____