Unitil [LOGO]
March 17, 1997
Dear Fellow Shareholder,
The Annual Meeting of Common Shareholders is scheduled to be held on Thursday,
April 17, 1997, at 10:30 a.m., at the office of the Company, 6 Liberty Lane
West, Hampton, New Hampshire.
Enclosed you will find a 1996 annual report, a notice of meeting, a proxy
statement and a proxy card to be used in connection with the meeting. This
year, shareholders are being asked to vote on the election of four Directors.
We hope that you are able to attend the Annual Meeting. Your vote is important
whether you own one share or many. Whether or not you plan to be present, we
urge you to sign and promptly return the enclosed proxy card in the envelope
provided.
Thank you for your continued interest in the Company.
Sincerely,
/s/ PETER J. STULGIS
Peter J. Stulgis
Chairman of the Board of Directors
and Chief Executive Officer
NOTICE OF ANNUAL MEETING OF COMMON SHAREHOLDERS
Hampton, New Hampshire
March 17, 1997
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 17, 1997, 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 3, 1997 as the record date for the
determination of those shareholders entitled to notice of and to vote at this
meeting and all persons who were holders of record of Common Stock on such date
and no others are entitled to notice of and to vote at this meeting and any
adjournments thereof.
By Order of the Board of Directors,
Gail A. Siart
Secretary
Unitil [LOGO]
6 Liberty Lane West
Hampton, New Hampshire 03842-1720
March 17, 1997
Proxy Statement
ANNUAL MEETING OF COMMON SHAREHOLDERS, APRIL 17, 1997
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 1997
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 1996 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 3, 1997
consisted of 4,394,723 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.
<TABLE>
<CAPTION>
Name and Address Shares of Common Stock Percent of Shares
of Beneficial Owner Beneficially Owned Outstanding
- - -------------------------------------------------------------------------------
<S> <C> <C>
Charles H. Tenney II 272,901 (1) 6.15%
300 Friberg Parkway
Westborough, Ma 01561
<FN>
- - -------------------------------------------------------------------------------
NOTES:
<F1> (1) Based on information provided by Mr. Tenney. See notes 2, 3 and 9 to the
table below under the heading "As to the Election of Directors."
</FN>
</TABLE>
The eleven Directors and the officers of Unitil as a group have
beneficial ownership as of March 3, 1997 of 319,562 (7.27%) of Common Stock, of
which they have direct beneficial ownership of 161,396 shares (3.67%), which
excludes options to purchase 145,703 shares (3.32%) pursuant to the exercise of
those options, and indirect beneficial ownership of 158,166 shares (3.60%). 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.
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.
<TABLE>
<CAPTION>
Common Stock Owned
Director Beneficially on March 3, 1997 (1)
Since Shares
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Peter J. Stulgis, Age 46 1984 53,355 (2)(3)(4)(5)
- - ----------------------------------------------------------
Chairman of the Board and Chief Executive Officer
of Unitil.
Charles H. Tenney III, Age 49 (6) 1992 2,530
- - ----------------------------------------------------------
Clerk (Corporate Secretary) of Bay State Gas
Company, Westborough, MA (natural gas distributor).
W. William VanderWolk, Jr., Age 73 1984 15,984 (7)
- - ----------------------------------------------------------
Owner of Horizon Management, Manchester, NH
(property and restaurant management).
Franklin Wyman, Jr., Age 75 1992 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.
</TABLE>
Information about Directors whose Terms of Office Continue
------------------------------------------------------------
<TABLE>
<CAPTION>
Common Stock Owned
Director Term to Beneficially on March 3, 1997 (1)
Since Expire Shares
- - -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Michael J. Dalton, Age 56 1984 1998 60,005 (2)(3)(4)(8)
- - ----------------------------------------------------------
President and Chief Operating Officer of Unitil.
G. Arnold Haynes, Age 68 1992 1998 3,444
- - ----------------------------------------------------------
President and Principal of Haynes Management, Inc.,
Wellesley Hills, MA (real estate development and
management).
Douglas K. Macdonald, Age 68 1984 1999 924
- - ----------------------------------------------------------
Retired since 1988. Prior to his retirement, Mr.
Macdonald was Vice President and Controller of Unitil
and President of CECo.
J. Parker Rice, Jr., Age 71 1992 1998 1,238
- - ----------------------------------------------------------
Director, former President and Treasurer of Hyland/Rice
Office Products, Inc., Fitchburg, MA (office products
dealer).
Charles H. Tenney II, Age 78 (6) 1984 1999 272,901 (2)(3)(4)(9)
- - ----------------------------------------------------------
Retired since 1992. Prior to his retirement, Mr. Tenney
was Chairman of the Board and Chief Executive Officer
of Unitil and FG&E. Mr. Tenney is the Chairman of the
Board of Directors of Bay State Gas Company,
Westborough, MA (natural gas distributor).
William W. Treat, Age 78 1984 1999 23,415 (10)
- - ----------------------------------------------------------
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).
Joan D. Wheeler, Age 59 1994 1998 1,000
- - ----------------------------------------------------------
Owner of the Russian Gallery, Marblehead, MA (art
gallery). Ms. Wheeler is a former Director of Shaw's
Supermarkets, Inc. (1979 - 1987) and of Granite Bank
(1984 - 1989), Keene, NH, and a former Trustee of
Franklin Pierce College.
<FN>
- - -------------------------------------------------------------------------------
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> (1) Based on information furnished to Unitil by the nominees and continuing
Directors.
<F2> (2) Included are 3,639, 3,729 and 3,771 shares which are held in trust for
Messrs. Stulgis, Dalton and Tenney, respectively, under the terms of the
Unitil Tax Deferred Savings and Investment Plan ("401(k)"); they have
voting power only with respect to the shares credited to their accounts.
For further information regarding 401(k), see "Other Compensation
Arrangements - Tax-Qualified Savings and Investment Plan" below.
<F3> (3) Included are 41,132, 43,032 and 41,132 shares which Messrs. Stulgis,
Dalton and Tenney, respectively, have the right to purchase pursuant to
the exercise of options under the Key Employee Stock Option Plan. (See
"Other Compensation Arrangements").
<F4> (4) With the exception of Messrs. Stulgis, Dalton and Tenney, who own shares
totaling 1.20%, 1.35% and 6.15%, respectively, of the total outstanding
shares, no Director or officer owns more than one percent of the total
outstanding shares.
<F5> (5) Included are 7,742 shares held by Mr. Stulgis jointly with his wife with
whom he shares voting and investment power.
<F6> (6) Charles H. Tenney II is the father of Charles H. Tenney III.
<F7> (7) Included are 3,399 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.
<F8> (8) Included are 13,193 shares held by Mr. Dalton jointly with his wife with
whom he shares voting and investment power. Included are 51 shares held
by Mr. Dalton as custodian for one of his children; he has voting and
investment power with respect to such shares.
<F9> (9) Included are 124,522 shares (2.81%) 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.
<F10> (10) 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 12,500 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.
</FN>
</TABLE>
The Board of Directors met five times in 1996. During 1996, 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 1996 and through March 1, 1997
were met.
Compensation of Directors
------------------------------------------------------------
Members of the Board of Directors who are not officers of Unitil or any
of its subsidiaries receive an annual retainer fee of $7,000 and $500 for each
Board meeting attended. Members of the Executive Committee, who are not
officers of Unitil or any of its subsidiaries, receive an annual retainer fee
of $2,000 and $400 for each meeting attended. Members of the Audit Committee
and Compensation Committee receive an annual retainer fee of $1,000 and $400
for each meeting attended. Those Directors of Unitil who also serve as
Directors of CECo, E&H or FG&E and who are not officers of Unitil or any of its
subsidiaries receive a meeting fee of $100 per subsidiary meeting attended and
no annual retainer fee from CECo, E&H or FG&E. All Directors are entitled to
reimbursement of expenses incurred in connection with attendance at meetings of
the Board of Directors and any Committee on which they serve.
In 1992, the Company entered into a Senior Advisory Agreement with
Charles H. Tenney II. Mr. Tenney was Chief Executive Officer and Chairman of
the Board of the Company until his retirement in 1992. The agreement, which is
reviewed on an annual basis, provides that Mr. Tenney will be compensated
$105,000 per annum for his role as Chairman of the Executive Committee of the
Board of the Company, as well as for other advisory services which he will
provide. In consideration of this Agreement, Mr. Tenney is waiving all
Board-related fees and retainers that he is otherwise entitled to receive as a
Director of the Company.
Committees of the Board of Directors
------------------------------------------------------------
Executive Committee
--------------------------
The Executive Committee of the Board of Directors held two meetings in
1996. Its members are Charles H. Tenney II (Chairman), Peter J. Stulgis,
William W. Treat, W. William VanderWolk, Jr. and Franklin Wyman, Jr. This
Committee's responsibility is to review and oversee corporate policies related
to the Company's long-range strategic business, financial and operating plans.
In addition, the Executive Committee also acts as a nominating committee. In
its function as a nominating committee, the committee coordinates suggestions
or searches for potential nominees for Board members; reviews and evaluates
qualifications of potential Board members; and recommends to the Board of
Directors nominees for vacancies occurring from time to time on the Board of
Directors. The Committee will consider nominees recommended by shareholders
upon timely submission of the names of such nominees with qualifications and
biographical information forwarded to the Executive Committee of the Board of
Directors.
Audit Committee
--------------------------
The Audit Committee of the Board of Directors, which held two meetings in
1996, 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 1996, 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.
Compensation Committee Interlocks and Insider Participation
------------------------------------------------------------
Charles H. Tenney II served as the Chairman of the Compensation Committee
during fiscal 1996. Mr. Tenney is the former Chairman of the Board of Directors
and Chief Executive Officer of the Company, serving as such until his
retirement in April 1992. He currently has a Senior Advisory Agreement with the
Company (see "Compensation of Directors") and is also Chairman of the Executive
Committee of the Board of Directors.
Director Emeritus
------------------------------------------------------------
The Company has a directors' advisory council composed of retired members
of the Company's Board of Directors. Each member, known as a Director Emeritus,
is appointed yearly by the Board of Directors to render advisory services to
the Board. Directors Emeriti have no vote with respect to any matter acted upon
by the Board, nor is their presence counted for purposes of determining a
quorum. 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.
Report of the Compensation Committee
------------------------------------------------------------
The overall objective of the Company's Board of Directors, and
specifically this Compensation Committee, in setting compensation for Unitil's
executive officers is to foster excellence in the management of the assets of
the Company. To help meet this objective, the Committee believes it is
important for the Company to provide compensation to its executive officers
which varies directly with the performance of the Company and to make payment
of annual compensation with both cash and Company stock in place of all-cash.
Accordingly, the Company pays both "base" and "variable" compensation to
its officers. The base component of compensation is determined under the Unitil
System's salary matrix which is reviewed from time to time by outside
consultants as to its competitiveness. Variable compensation is based on
factors that measure the success of the Company for any given year and is
governed by the System's Management Performance Compensation Plan ("MPCP") and
the profitability of the System's non-utility subsidiary, Unitil Resources. The
factors under the MPCP relate to the earnings of the Company and the rate of
return achieved on shareholder-provided equity as well as cost control and the
competitiveness of the rates charged to the Unitil System's utility customers.
In addition, to further bolster ownership in the Company by the executive
officers, the Company, in 1989, instituted a "Key Employee Stock Option Plan"
with the approval of the Company's shareholders. This plan was tailored to
emphasize dividend and stock value growth as a prerequisite to the maximization
of value to the participants.
The compensation of the Chief Executive Officer ("CEO"), Peter J.
Stulgis, is governed by these same plans and objectives. The total compensation
for Mr. Stulgis was increased by approximately 4.7% in 1996 which reflected a
regrading of the CEO's position based upon the review and recommendation of an
outside salary consultant who analyzed competitive pay levels in similar
companies in the New England region and the results of performance based
incentive plans. The variable compensation paid to Mr. Stulgis in 1996 was
based upon the Unitil System's operating results for 1995 under the MPCP
discussed above. No distribution related to the 1996 results of the System's
non-utility subsidiary, Unitil Resources, was made to Mr. Stulgis. Unitil's
performance achieved top ratings in all categories versus other New England
utilities in 1995. Accordingly, under the MPCP, Mr. Stulgis received a payment
in cash and Company stock which represented 29% of his total compensation. This
MPCP payment is formula-driven and reflected the achievement in 1995 of
earnings which were above target levels; a rate of return which was in the 97th
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. In further assessing the reasonableness of
the total compensation of Mr. Stulgis for 1996, in addition to the outside
consultant's study referred to above, the Committee independently reviewed the
current compensation data for over fifty companies which included all of the
companies used as the peer group in the Stock Performance Graph shown below.
Based upon this review, the Committee found that the total compensation to be
paid to the CEO fell within the same range of compensation paid to the CEO's of
companies of like size, location and industry, and believes it was
appropriately linked to corporate performance.
The Committee also approved the compensation of Unitil's other executive
officers for 1996 following the principles and procedures outlined in this
report.
Compensation Committee Members
- - -------------------------------------------------------------------------------
Charles H. Tenney II, Chairman, J. Parker Rice, Jr., and Joan D. Wheeler
Stock Performance Graph and Information
------------------------------------------------------------
Comparative Five-Year Cumulative Total Returns
- - -------------------------------------------------------------------------------
-----------------------
----------------------------------------- The graph to the left
| | assumes $100 invested
| | on December 31, 1991,
| | in each category and
| | the reinvestment of all
| [Insert Graph Here] | dividends during the
| | period. The Peer Group
| | is comprised of the
| | eleven investor-owned
| | New England electric
----------------------------------------- utilities.
-----------------------
[Figures represented by graph]
1991 1992 1993 1994 1995 1996
Unitil 100 120.24 137.00 122.15 169.06 172.10
Peer Group 100 120.53 121.91 110.12 138.62 115.57
S & P 100 107.60 118.47 119.18 163.27 199.36
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
$100,000 during the year 1996.
<TABLE>
<CAPTION>
Long Term Compensation
- - -------------------------------------------------------------------------------------------------------------------------------
Annual Compensation Awards Payouts
- - -------------------------------------------------------------------------------------------------------------------------------
Name and Other Restricted All Other
Principal Salary Bonus (2) Annual Stock Options LTIP Compensation
Position (1) Year ($) ($) Comp.($) Awards($) (#) Payouts ($)
- - -------------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
- - -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Peter J. Stulgis 1996 $241,025 $100,036 -- -- -- -- $13,058 (3)
Chairman of the Board & 1995 215,300 110,411 -- -- -- --
Chief Executive Officer 1994 208,300 94,394 -- -- -- --
Michael J. Dalton 1996 $169,200 $ 61,959 -- -- -- -- $10,628 (4)
President & Chief 1995 164,400 63,347 -- -- -- --
Operating Officer 1994 159,600 61,932 -- -- -- --
Gail A. Siart 1996 $ 97,500 $ 32,580 -- -- -- -- $4,152 (5)
Chief Financial Officer, 1995 90,000 47,228 -- -- 3,000 (6) --
Treasurer & Secretary 1994 79,033 24,928 -- -- -- --
James G. Daly 1996 $ 95,625 $ 32,580 -- -- -- -- $4,244 (7)
Senior Vice President, 1995 88,675 47,228 -- -- 3,000 (6) --
Unitil Service 1994 76,517 29,128 -- -- -- --
George R. Gantz 1996 $ 95,625 $ 32,580 -- -- -- -- $4,765 (8)
Senior Vice President, 1995 89,000 42,428 -- -- 3,000 (6) --
Unitil Service 1994 78,408 27,228 -- -- -- --
<FN>
- - -----------------------------------------------------------------------------------------------------------
NOTES:
<F1> (1) Officers of the Company also hold various positions with subsidiary
companies. Compensation for those positions is included in the above
table.
<F2> (2) 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.
<F3> (3) All Other Compensation for Mr. Stulgis for the year 1996 includes the
company's contribution to the Tax Qualified Savings and Investment Plan
("401(K)"), Supplemental Life Insurance payment, and Group Term Life
Insurance payment, valued at $4,500, $7,340 and $1,218, respectively.
<F4> (4) All Other Compensation for Mr. Dalton for the year 1996 includes, 401(K)
company contribution, Supplemental Life Insurance payment and Group Term
Life Insurance payment, valued at $4,500, $3,558 and $2,570,
respectively.
<F5> (5) All Other Compensation for Ms. Siart for the year 1996 includes 401(K)
company contribution, Supplemental Life Insurance payment and Group Term
Life Insurance payment, valued at $3,597, $369 and $186, respectively.
<F6> (6) Options were granted in 1995 under the Key Employee Stock Option Plan
(see "Other Compensation Arrangements" and subsequent notes).
<F7> (7) All Other Compensation for Mr. Daly for the year 1996 includes 401(K)
company contribution, Supplemental Life Insurance payment and Group Term
Life Insurance payment, valued at $3,541, $517 and $186, respectively.
<F8> (8) All Other Compensation for Mr. Gantz for the year 1996 includes 401(K)
company contribution, Supplemental Life Insurance payment and Group Term
Life Insurance payment, valued at $3,541, $732 and $492, respectively.
</FN>
</TABLE>
Other Compensation Arrangements
------------------------------------------------------------
The table on the next page provides information with respect to options
to purchase shares of the Company's Common Stock exercised in fiscal 1996 and
the value of unexercised options granted in prior years under the Key Employee
Stock Option Plan ("Option Plan") to the named executive officers in the
Summary Compensation Table and held by them as of December 31, 1996. No options
were granted in fiscal 1996 to any of the named Executive Officers. The Company
has no compensation plan under which Stock Appreciation Rights (SARs) are
granted.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options at In-the-Money Options
Shares FY-End (#) (2) at FY-End ($)
Acquired ----------------------------------------------------------
on Value Exercisable/ Exercisable/
Exercise Realized Unexercisable (3) Unexercisable
Name (#) ($)
- - --------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
- - --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Peter J. Stulgis -- -- exercisable 24,000 exercisable $287,040
Chairman of the Board & unexercisable 0 unexercisable $0
Chief Executive Officer
- - --------------------------------------------------------------------------------------------------------------
Michael J. Dalton -- -- exercisable 24,000 exercisable $282,960
President & -- -- unexercisable 0 unexercisable $0
Chief Operating Officer
- - --------------------------------------------------------------------------------------------------------------
Gail A. Siart -- -- exercisable 5,078 exercisable $ 47,124
Chief Financial Officer, -- -- unexercisable 0 unexercisable $0
Treasurer & Secretary
- - --------------------------------------------------------------------------------------------------------------
James G. Daly -- -- exercisable 5,032 exercisable $ 42,168
Senior Vice President, -- -- unexercisable 0 unexercisable $0
Unitil Service
- - --------------------------------------------------------------------------------------------------------------
George R. Gantz -- -- exercisable 5,078 exercisable $ 47,124
Senior Vice President, -- -- unexercisable 0 unexercisable $0
Unitil Service
- - --------------------------------------------------------------------------------------------------------------
<FN>
- - -------------------------------------------------------------------------------
NOTES:
<F1> (1) 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
below. All of the award agreements entered into with participants in the
Option Plan to date contain such a "Change in Control" provision. Each
award agreement also provides that, upon the exercise of an option on or
after a Change in Control, Unitil shall pay to the optionee, within five
business days, a lump sum cash amount equal to the economic benefit of
the optionee's outstanding options and associated dividend equivalents
that the optionee would have received had the option remained unexercised
until the day preceding the expiration of the grant.
<F2> (2) Amounts listed in column (d) in the table above do not include
non-preferential dividend equivalents associated with options
outstanding.
<F3> (3) 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.
</FN>
</TABLE>
Unitil maintains a tax-qualified defined benefit pension plan and related
trust agreement (the "Retirement Plan"), which provides retirement annuities
for eligible employees of Unitil and its subsidiaries. Since the Retirement
Plan is a defined benefit plan, no amounts were contributed or accrued
specifically for the benefit of any officer of Unitil under the Retirement
Plan. Directors of Unitil who are not and have not been officers of Unitil or
any of its subsidiaries are not eligible to participate in the Retirement Plan.
The table below sets forth the estimated annual benefits (exclusive of
Social Security payments) payable to participants in the specified compensation
and years of service classifications, assuming continued active service until
retirement. The average annual earnings used to compute the annual benefits are
subject to a $150,000 limit.
<TABLE>
<CAPTION>
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
- - --------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
$ 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
</TABLE>
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, 1997, Executive Officers Stulgis, Dalton, Siart,
Daly and Gantz had 17, 29, 14, 8 and 13 credited years of service,
respectively, under the Retirement Plan.
Unitil Service also maintains a Supplemental Executive Retirement Plan
("SERP"), a non-qualified defined benefit plan. SERP provides for supplemental
retirement benefits to executives selected by the Board of Directors of Unitil
Service (the "Unitil Service Board"). At the present time, Messrs. Stulgis and
Dalton are eligible for SERP benefits upon attaining normal or early retirement
eligibility. Annual benefits are based on a participant's final average
earnings less the participant's benefits payable under the Retirement Plan, and
less other retirement income payable to such participant by Unitil. Early
retirement benefits are available to a participant, with the Unitil Service
Board's approval, if the participant has attained age 55 and completed 15 years
of service. Should a participant elect to begin receiving early retirement
benefits under SERP prior to attaining age 62, the benefits are reduced by 2%
for each year that commencement of benefits precedes attainment of age 62. If a
participant terminates employment for any reason prior to retirement, the
participant will not be entitled to any benefits. Under the SERP, Messrs.
Stulgis and Dalton would be entitled to receive an annual benefit of $206,346
and $73,756, 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.
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 1997. 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 1998 annual meeting of shareholders must be received by
Unitil at its Corporate Headquarters not later than December 18, 1997.
Solicitation, Revocation and Use of Proxies
------------------------------------------------------------
Shares of Unitil Common Stock represented by properly executed proxies
received by Unitil prior to or at the meeting will be voted at the meeting in
accordance with the instructions specified on the proxies. If no instructions
are specified on such proxies, shares will be voted FOR the election of the
nominees for Directors. Abstentions and non-votes will have the same effect as
negative votes.
Any Unitil shareholder who executes and returns a proxy has the power to
revoke such proxy at any time before it is voted by filing with the Secretary
of Unitil, at the address of Unitil set forth above, written notice of such
revocation or a duly executed proxy bearing a later date, or by attending and
voting in person at the meeting. Attendance at the meeting will not in and of
itself constitute a revocation of a proxy.
Unitil will bear the costs of solicitation by the Board of Directors of
proxies from Unitil shareholders. In addition to the use of the mail, proxies
may be solicited by the Directors, officers and employees of Unitil by personal
interview, telephone, telegram or otherwise. Such Directors, officers and
employees will not be additionally compensated, but may be reimbursed for
out-of-pocket expenses in connection with such solicitation. Arrangements also
will be made with brokerage houses and other custodians, nominees and
fiduciaries for the forwarding of solicitation material to the beneficial
owners of stock held of record by such persons, and Unitil may reimburse such
custodians, nominees and fiduciaries for reasonable out-of-pocket expenses in
connection therewith.
By Order of the Board of Directors,
Gail A. Siart
Secretary
- - -------------------------------------------------------------------------------
Unitil will furnish without charge to any shareholder entitled to vote and to
any beneficial owner of shares entitled to be voted at the annual meeting of
common shareholders, to be held April 17, 1997, 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 1996,
upon written request to Gail A. Siart, Chief Financial Officer, Unitil
Corporation, 6 Liberty Lane West, Hampton, NH 03842-1720.
- - -------------------------------------------------------------------------------
[PROXY CARD]
DETACH HERE
UNITIL CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P The undersigned, revoking all previous proxies, hereby appoint
MICHAEL J. DALTON, GAIL A. SIART and PETER J. STULGIS, and each of them,
R proxies will power of substitution to each, to vote for the undersigned
at the Annual Meeting of Common Shareholders of Unitil Corporation (the
O "Company") to be held at the office of the Company, 6 Liberty Lane West,
Hampton, New Hampshire on Thursday, April 17, 1997, at 10:30 A.M., and at
X any and all adjournments thereof, with all powers the undersigned would
possess if personally present and voting and particularly with respect to
Y the matters set forth on the reverse side hereof.
PLEASE MARK, SIGN AND DATE THIS PROXY CARD ON THE REVERSE SIDE
HEREOF AND RETURN PROMPTLY USING THE ENCLOSED ENVELOPE.
-------------
| SEE REVERSE |
CONTINUED AND TO BE SIGNED ON REVERSE SIDE | SIDE |
-------------
Unitil [LOGO]
----------------------------------------------------------------------------
| 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 New 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 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 800/999-6601 if you would like additional information |
| |
----------------------------------------------------------------------------
[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: Peter J. Stulgis, Charles H. Tenney III,
W. William VanderWolk, Jr., Franklin Wyman, Jr.
The Board of Directors recommends a vote "FOR" each of the nominees
listed above.
[ ] FOR ALL NOMINEES [ ] WITHHELD FORM ALL NOMINEES
[ ] ____________________________________________________
For all nominees except as noted above
MARK HERE [ ] MARK HERE [ ]
FOR ADDRESS IF YOU PLAN
CHANGE AND TO ATTEND
NOTE AT LEFT THE MEETING
Please sign exactly as name appears
hereon. When shares are held by joint
tenants. both should sign. When
signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such.
PLEASE RETURN THIS PROXY PROMPTLY.
Signature _______________ Date: ______ Signature _______________ Date: ______
