File No. 70-_____
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
-------------------------------------------
FORM U-1
APPLICATION AND DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
UNITIL CORPORATION
6 Liberty Lane West
Hampton, New Hampshire 03833
UNITIL CORPORATION
---------------------
(name of top registered holding company parent)
Mark H. Collin
Treasurer
UNITIL CORPORATION
6 Liberty Lane West
Hampton, New Hampshire 03833
(Name and address of agent for service)
The Commission is requested to mail copies of
all orders, notices and communications to:
Sheri E. Bloomberg, Esq.
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, New York 10019-5389
<PAGE>
Item 1. DESCRIPTION OF THE PROPOSED TRANSACTIONS
Unitil Corporation, a New Hampshire corporation ("Unitil") and a registered
holding company under the Public Utility Holding Company Act of 1935, as amended
(the "Act") hereby applies for the approval of the Securities and Exchange
Commission (the "Commission") under Sections 6(a) and 7 of the Act for: (i) the
granting of options (the "Stock Options") which will entitle the holders thereof
to purchase up to 350,000 shares of its no par value common stock (the "Common
Stock") under its 1998 Stock Option Plan (the "Plan") and (ii) the issuance of
up to 350,000 shares of Common Stock upon the exercise of options to be granted
under the Plan.
A. Authorization to Grant Options to Purchase Common Stock
Effective December 11, 1998, by action of its board of directors Unitil
will adopt the Plan. The purpose of the Plan is to provide an incentive to key
employees and directors of Unitil and its affiliates who are in a position to
contribute materially to the long-term success of Unitil and/or its affiliates,
to increase their interest in the welfare of Unitil and its affiliates and to
aid in attracting and retaining employees and directors of outstanding ability.
There are approximately 28 employees and directors of Unitil and its
affiliates who are eligible to participate in the Plan. The Plan is administered
by a committee (the "Committee") consisting of members of the Unitil Board of
Directors. The Committee has authority to determine the eligibility of employees
and directors to participate in the Plan, to grant Stock Options under the Plan,
to interpret the Plan, to prescribe, amend, and rescind rules and regulations
relating to the Plan, to determine the terms and provisions of Stock Option
agreements executed pursuant to the Plan (including the purchase price and the
period during which such Options may be exercised) and to make all other
determinations necessary or advisable for the administration of the Plan. While
Committee members are eligible to receive Stock Options under the Plan, no
member of the Committee will have the authority to render any decision with
respect to his or her participation in or entitlement to benefits under the
Plan. From time to time, the Committee will determine and designate those
employees and directors who are to be granted Stock Options and shall specify
the number of shares of Common Stock subject to each Stock Option.
The Plan contains provisions regarding the effect of termination of
director status or employment with Unitil on outstanding Stock Options. If the
employment or status as a director of a grantee of a Stock Option pursuant to
the Plan is terminated for any reason other than for cause (as defined in the
Plan attached as Exhibit A-2 hereto), only those Stock Options held by such
grantee which are immediately exercisable at the time of such termination shall
be exercisable by such grantee following the termination. Any such Stock Options
must be exercised within 3 months after such termination of employment or status
as a director, but in no event after expiration of the Stock Option's term, or
they will be forfeited. If a grantee's employment or status as a director is
terminated by Unitil or an affiliate for cause (as defined in the Plan attached
as Exhibit A-2 hereto), all then outstanding Stock Options held by such grantee
will expire immediately and will not be exercisable after the termination of the
grantee's employment or status as a director.
If a grantee's employment or status as a director is terminated on account
of the grantee's death, or in the case of an employee, on account of such
employee's disability (as defined in the Plan attached as Exhibit A-2 hereto),
only those Stock Options held by the grantee which were immediately exercisable
at the date of his or her death or disability will be exercisable by the
grantee, or the grantee's guardian or legal representative, or the grantee's
estate or beneficiaries thereof to whom the Stock Options have been transferred.
Any such Stock Options must be exercised by the earlier of (i) 12 months from
the date of the grantee's death or disability, or (ii) the expiration of the
Stock Option's term, or they will be forfeited.
Stock Options granted under the Plan will entitle the holders thereof to
purchase Common Stock at a price established by the Committee. Under the Plan,
Stock Options for shares constituting not more than 5% of the outstanding Common
Stock may be issued in any one year to eligible grantees. Assuming no change in
the number of shares outstanding as of November 1, 1998, the maximum number of
shares which may be issued in connection with the Plan during the first year is
227,385. In the event of any stock dividend, stock-split, recapitalization or
other similar change to the Common Stock, the Committee will make proportionate
adjustments with respect to the Plan. The Board of Directors of Unitil may also
amend, suspend, discontinue or terminate the Plan, provided that such action may
not adversely affect the rights of any grantee under a Stock Option previously
granted thereto. For further information concerning the provisions of the Plan,
reference is made to Exhibit A-2 hereto.
Unitil hereby requests authorization to grant Stock Options under to the
Plan to purchase Common Stock which will entitle the holders thereof to purchase
up to 350,000 shares of Common Stock.
B. Authorization to Issue Shares of Common Stock Under the Plan
Unitil anticipates that the Stock Options to be granted under to the Plan
could result in the issuance of up to 350,000 shares of Common Stock. Unitil
intends to file a registration statement with the Commission for the purpose of
registering the shares of Common Stock to be issued upon exercise of the Stock
Options under the Securities Act of 1933, as amended (the "1933 Act"). Unitil
hereby requests authorization for the issuance of up to 350,000 shares of Common
Stock upon the exercise of Stock Options to be granted under the Plan.
C. Involvement of Unitil and its Affiliates with Exempt Wholesale
Generators and Foreign Utility Companies.
The proposed transactions may be subject to Rules 53 and 54. Neither Unitil
nor any subsidiary thereof presently has, or as a consequence of the proposed
transactions will have, an interest in any exempt wholesale generator ("EWG") or
foreign utility company ("FUCO"), as those terms are defined in Sections 32 and
33 of the Act, respectively. None of the proceeds from the proposed transactions
will be used by Unitil to acquire any securities of, or any interest in, an EWG
or FUCO. Moreover, neither Unitil nor any subsidiary thereof is, or as a
consequence of the proposed transaction will become, a party to, and such
entities do not and will not have any rights under, a service, sales or
construction contract with any affiliated EWGs or FUCOs except in accordance
with the rules and regulations promulgated by the Commission with respect
thereto. Consequently, all applicable requirements of Rule 53 (a)-(c) are
satisfied as required by Rule 54.
Item 2 FEES, COMMISSIONS AND EXPENSES
The fees, commissions and expenses of Unitil expected to be paid or
incurred, directly or indirectly, in connection with the transactions described
above are estimated as follows:
Commission Filing fees relating to
1933 Act Registration. . . . . . .. . . . $ 2,700
Legal fees. . . . . . . . . . . . . . . . . $25,000
Exchanging, printing and
engraving of stock certificates . . . . . $ 4,000
Miscellaneous . . . . . . . . . . . . . . .$12,000
Total . . . . . . . . . .$43,700
Item 3 APPLICABLE STATUTORY PROVISIONS
Sections 6 and 7 of the Act are directly applicable to this application and
declaration. The proposed issuance and sale of shares through the 1998 Stock
Option Plan are subject to Sections 6 and 7 of the Act. Unitil requests that
this declaration be allowed to become effective under Section 7 of the Act for
the maximum number of shares described in Item 1 above (350,000) to be issued
pursuant to the Plan. Item 4 REGULATORY APPROVALS
No commission, other than this Commission, has jurisdiction over the
proposed transaction described in this Application.
Item 5 PROCEDURE
It is requested that the Commission issue and publish no later than
December 18, 1998, the requisite notice under Rule 23 with respect to the filing
of this Declaration, such notice to specify a date not later than January 12,
1999 as the date after which an order granting and permitting this Declaration
to become effective may be entered by the Commission and that the Commission
enter not later than January 12, 1999, an appropriate order granting and
permitting this Declaration to become effective.
Unitil respectfully requests that appropriate and timely action be taken by
the Commission in this matter. No recommended decision by a hearing officer or
other responsible officer of the Commission is necessary or required in this
matter. The Division of Investment Management of the Commission may assist in
the preparation of the Commission's decision in this matter. There should be no
thirty-day waiting period between the issuance and the effective date of any
order issued by the Commission in this matter, and it is respectfully requested
that any such order be made effective immediately upon the entry thereof.
Item 6 EXHIBITS AND FINANCIAL STATEMENTS
a) Exhibits
A-1 Articles of Incorporation of Unitil Corporation
(Incorporated by Reference to Exhibit 3.1 to Form S-14
Registration Statement 2-93769. 1992 Amendment to Articles
of Incorporation Incorporated by Reference to Exhibit 3.2 to
Form 10-K for 1992)
A-2 Unitil Corporation 1998 Stock Option Plan
F-1 Opinion of Counsel
G-1 Financial Data Schedule
H-1 Proposed Form of Notice
b) Financial Statements
1. Consolidated Condensed Balance Sheets, September 30, 1998
(per book and pro forma)
2. Consolidated Condensed Statement of earnings, twelve months
ended September 30, 1998 (per book and pro forma)
3. Consolidated Statements of cash flows, twelve months ended
September 30, 1998 (per book and pro forma)
Item 7 INFORMATION AS TO ENVIRONMENTAL EFFECTS
The proposed transactions described herein involve the acquisition,
issuance or sale of securities and not any major action which will significantly
affect the quality of the human environment.
No federal agency has prepared or is preparing an environmental impact
statement with respect to the transactions proposed herein.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act of
1935, the undersigned company has duly caused this statement to be signed on its
behalf by the undersigned thereunto duly authorized.
UNITIL CORPORATION
By: /s/ Mark H. Collin
--------------------------
Name: Mark H. Collin
Title: Treasurer
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, New York 10019-5389
December 11, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Gentlemen:
This opinion is furnished to the Securities and Exchange Commission (the
"Commission") in connection with the filing with the Commission of the
Declaration on Form U-1 (File 70-_____) of Unitil Corporation (the "Company")
under the Public Utility Holding Company Act of 1935, as amended. The
Declaration seeks approval for the granting of options (the "Options") to
purchase shares of the Company's common stock, no par value (the "Common
Stock"), under the 1998 Stock Option Plan of the Company (the "Plan") and the
issuance of the underlying shares of Common Stock upon exercise thereof.
We have acted as counsel for the Company in connection with the adoption of
the Plan and the filing of the Declaration. In connection with this opinion we
have examined originals or copies certified or otherwise identified to our
satisfaction of:
(1) The charter documents and by-laws of the Company, as amended to
date;
(2) Minutes of meetings of the Company's directors, as kept in the
minute book;
(3) The form of the Plan filed as an exhibit to the Declaration; and
(4) Such other certificates, documents and papers as we have deemed
necessary or appropriate for the purpose of rendering this
opinion.
In such examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity to
the authentic documents of all documents submitted to us as copies. As to any
facts material to our opinion, we have, when relevant facts were not
independently established, relied upon the aforesaid agreements, instruments,
certificates and documents. In addition, we have examined such questions of law
as we have considered necessary or appropriate for the purpose of rendering this
opinion.
Based on the foregoing, and subject to the final paragraph hereof, we are
of the opinion that:
(1) The Company is validly existing as a corporation under the laws
of the state of New Hampshire;
(2) Provided that the Commission shall have duly entered an
appropriate order granting and permitting the Declaration to
become effective with respect to the Plan and the proposed
transactions shall have been consummated in accordance with the
Declaration, the Commission's order with respect thereto, the
Plan, the terms of the Company's Articles of Incorporation and
the resolutions adopted by the Company's board of directors,
including without limitation, payment of the consideration called
for therein:
(a) all State laws that are applicable to the proposed
transactions will have been complied with;
(b) the Options to be granted by the Company will be duly and
validly issued;
(c) the shares of Common Stock to be issued by the Company upon
exercise of the Options will be validly issued, fully paid
and non-assessable, and the holders thereof will be entitled
to the rights and privileges pertaining thereto as set forth
in the Company's Articles of Incorporation; and
(d) the consummation of the transactions described in the
Declaration will not violate the legal rights of the holders
of any securities issued by the Company.
We hereby consent to the use of this opinion as an exhibit to the
Declaration.
We are not, in this opinion, opining on any laws other than the laws of the
State of New Hampshire and the federal laws of the United States.
Very truly yours,
/s/ LeBoeuf, Lamb, Greene & MacRae, L.L.P.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> OCT-01-1998
<PERIOD-END> SEP-30-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 156,612
<OTHER-PROPERTY-AND-INVEST> 42
<TOTAL-CURRENT-ASSETS> 27,756
<TOTAL-DEFERRED-CHARGES> 57,131
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 241,541
<COMMON> 36,819
<CAPITAL-SURPLUS-PAID-IN> 1,461
<RETAINED-EARNINGS> 34,039
<TOTAL-COMMON-STOCKHOLDERS-EQ> 72,319
3,619
225
<LONG-TERM-DEBT-NET> 74,152
<SHORT-TERM-NOTES> 12,575
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 1,175
0
<CAPITAL-LEASE-OBLIGATIONS> 4,163
<LEASES-CURRENT> 1,046
<OTHER-ITEMS-CAPITAL-AND-LIAB> 72,267
<TOT-CAPITALIZATION-AND-LIAB> 241,541
<GROSS-OPERATING-REVENUE> 168,969
<INCOME-TAX-EXPENSE> 3,591
<OTHER-OPERATING-EXPENSES> 150,115
<TOTAL-OPERATING-EXPENSES> 153,706
<OPERATING-INCOME-LOSS> 15,263
<OTHER-INCOME-NET> 197
<INCOME-BEFORE-INTEREST-EXPEN> 15,066
<TOTAL-INTEREST-EXPENSE> 7,071
<NET-INCOME> 7,995
275
<EARNINGS-AVAILABLE-FOR-COMM> 7,720
<COMMON-STOCK-DIVIDENDS> 6,042
<TOTAL-INTEREST-ON-BONDS> 5,380
<CASH-FLOW-OPERATIONS> 14,361
<EPS-PRIMARY> 1.72
<EPS-DILUTED> 1.68
</TABLE>
Filings Under the Public Utility Holding Company Act of
1935, as amended ("Act")
SECURITIES AND EXCHANGE COMMISSION
Release No. _______
Unitil Corporation
(70-____)
Unitil Corporation, 6 Liberty Lane West, Hampton, New Hampshire 03833
("Unitil"), a registered holding company, has filed a declaration with the
Commission pursuant to Sections 6(a) and 7 of the Act.
Effective December 11, 1998, Unitil adopted an employee stock option plan,
known as the Unitil Corporation 1998 Stock Option Plan ("Plan"), pursuant to
which its directors and certain key employees of Unitil and its affiliates may
be granted stock options ("Stock Options") to purchase shares of Unitil no par
value common stock ("Common Stock") as incentive compensation.
Options granted under the Plan will entitle the holders thereof to purchase
Common Stock at a price to be determined by a committee consisting of
non-employees members of the Unitil Board of Directors ("Committee"). The Plan
provides for the issuance of Stock Options exercisable for an aggregate of
350,000 shares of Common Stock; provided that Unitil may not grant Stock Options
for more than 5% of the outstanding Common Stock in any one year to eligible
grantees. Based upon the number of shares outstanding as of November 1, 1998,
the maximum number of shares which may be issued in connection with the Plan
during the first year is 227,385. In the event of any stock dividend,
stock-split, recapitalization or other similar change to the Common Stock, the
Committee shall make proportionate adjustments with respect to the Stock Options
and shares of Common Stock to be granted under the Plan. The Board of Directors
of Unitil may also amend, suspend or terminate the Plan, provided that such
action may not adversely affect the rights of any grantee of a Stock Option
thereunder.
Accordingly, Unitil requests authorization, from time to time, to grant
Options pursuant to the terms of the Plan, and, in connection with the exercise
of such Options, to issue up to an aggregate maximum of 350,000 shares of its
Common Stock.
For the Commission, by the Division of Investment Management, pursuant to
delegated authority.
Unitil Corporation
Consolidated Statement of Cash Flows
($000)
(Unaudited)
<TABLE>
<CAPTION>
Twelve Months Ended
September 30, 1998
----------------------------------------------------------
Proforma
1998 Adjustments Adjusted
---------------- --------------- ------------
<S> <C> <C> <C>
Net Cash Flow from Operating Activities:
Net Income $ 7,995 $ (42) $ 7,953
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation and Amortization 9,889 9,889
Deferred Taxes 349 349
Amortization of Investment Tax Credit (368) (368)
Provision for Doubtful Accounts 815 815
Amortization of Debt Issuance Costs 62 62
Issuance of Stock Options 0 63 63
Changes in Assets and Liabilities
(Increase) Decrease in:
Accounts Receivable 239 239
Materials and Supplies (727) (727)
Prepayments & Prepaid Pension (543) (543)
Accrued Revenue 2,280 2,280
Increase (Decrease) in:
Accounts Payable (2,295) (2,295)
Refundable Customer Deposits (1,089) (1,089)
Taxes & Interest Payable 836 (21) 815
Other, Net (828) (828)
-------------- -------------- -------------
Net Cash Provided by Operating Activities 16,615 0 16,615
Net Cash Flows from Investing Activities:
Acqusition of Property, Plant and Equipment (15,349) (15,349)
Proceeds from Taking of Land & Building 0 0
-------------- -------------- -------------
Net Cash Used in Investing Activities (15,349) 0 (15,349)
Cash Flows from Financing Activities:
Proceeds From (Repayment of) Short-Term (675) (675)
Debt
Proceeds from Issuance of Long-Term Debt 20,000 20,000
Repayment of Long-Term Debt (13,183) (13,183)
Dividends Paid (6,277) (6,277)
Issuance of Common Stock 2,041 2,041
Retirement of Preferred Stock (47) (47)
Repayment of Capital Lease Obligations (985) (985)
-------------- -------------- -------------
Net Cash Provided By (Used in) Financing Activities 874 0 874
Net (Decrease) Increase in Cash 2,140 0 2,140
Cash at Beginning of Year 2,235 2,235
-------------- -------------- -------------
Cash at September 30, $ 4,375 0 $ 4,375
============== ============== =============
</TABLE>
<PAGE>
Unitil Corporation
Consolidated Condensed Balance Sheet
($000)
(Unaudited)
<TABLE>
<CAPTION>
September 30, Proforma
1998 Adjustments Adjusted
---------------- --------------- ------------
<S> <C> <C> <C>
ASSETS
Utility Plant:
Electric $ 172,371 $ 172,371
Gas 31,314 31,314
Common 20,655 20,655
Construction in Progress 5,096 5,096
------------- ------------- -------------
Total Utility Plant 229,436 $ 0 229,436
Less: Accumulated Depreciation 72,824 72,824
------------- ------------- -------------
Net Utility Plant 156,612 0 156,612
------------- ------------- -------------
------------- ------------- -------------
Other Property & Investments 42 42
------------- ------------- -------------
Cash 4,375 4,375
Accounts Receivable and Other 23,381 23,381
------------- ------------- -------------
Total Current Assets 27,756 0 27,756
------------- ------------- -------------
Deferred Assets 57,131 57,131
------------- ------------- -------------
Total $ 241,541 $ - $ 241,541
============= ============= =============
CAPITALIZATION AND LIABILITIES
Capitalization:
Common Stock $ 36,819 $ - $ 36,819
Misc. PIC - Stock Options 1,461 1,264 2,725
Retained Earnings 34,039 (834) 33,205
Preferred Stock 3,844 3,844
Long-Term Debt 74,152 74,152
------------- ------------- -------------
Total Capitalization 150,315 430 150,745
------------- ------------- -------------
Capitalized Lease Obligations 4,163 4,163
------------- ------------- -------------
Current Liabilities:
Long-Term Debt, Current Portion 1,175 1,175
Short-Term Debt 12,575 12,575
Accounts Payable and Other 23,308 (430) 22,878
------------- ------------- -------------
Total Current Liabilities 37,058 (430) 36,628
------------- ------------- -------------
Deferred Liabilities 9,387 9,387
------------- ------------- -------------
Deferred Income Taxes 40,618 40,618
------------- ------------- -------------
Total $ 241,541 $ - $ 241,541
============= ============= =============
</TABLE>
NOTES:
The pro forma adjustment reflects the issuance of 350,000 options over
five years
Issuance of 350,000 options 350,000
Calculated Compensation Expense:
Fair Value per share, per Black-Scholes Options Pricing $ 3.61
Model
Total Compensation Expense to be recorded over $ 1,264
Vesting Period ($000)
=============
Times Effective tax rate -- 34% 34%
Income Taxes (34% effective tax rate) ($000) $ (430)
=============
<PAGE>
Unitil Corporation
Consolidated Condensed Statement of Earnings
($000)
<TABLE>
<CAPTION>
Twelve Months Ended
September 30, 1998
Proforma
1998 Adjustments Adjusted
-------------- ---------------- -------------
<S> <C> <C> <C>
Operating Revenues:
Electric $ 150,909 $ - $ 150,909
Gas 18,031 18,031
Other 29 29
-------------- ---------------- -------------
Total Operating Revenues 168,969 - 168,969
-------------- ---------------- -------------
Operating Expenses:
Fuel and Purchased Power 100,279 100,279
Gas Purchased for Resale 10,749 10,749
Operation and Maintenance 23,779 63A 23,842
Depreciation and Amortization 9,890 9,890
Provisions for Taxes:
Local Property and Other 5,418 5,418
Federal and State Income 3,591 (21)B 3,570
-------------- ---------------- -------------
Total Operating Expenses 153,706 42 153,748
-------------- ---------------- -------------
Operating Income 15,263 (42) 15,221
Non-Operating Expenses (Income) 197 197
-------------- ---------------- -------------
Income Before Interest Expense 15,066 (42) 15,024
Interest Expense, Net 7,071 7,071
-------------- ---------------- -------------
Net Income 7,995 (42) 7,953
-------------- ---------------- -------------
Less Dividends on Preferred Stock 275 275
-------------- ---------------- -------------
Net Income Applicable to Common Stock $ 7,720 $ (42) $ 7,678
============== ================ =============
Average Common Shares Outstanding 4,480,415 4,480,415
Basic Earnings per Share $ 1.72 $ 1.71
Diluted Earnings per Share $ 1.68 $ 1.67
</TABLE>
NOTES:
The proforma adjustments represent the following:
Year 1: Issuance of 70,000 options 70,000
Calculated Compensation Expense:
Fair Value per share, per Black-Scholes Options $ 3.61
Pricing Model
Total Compensation Expense to be recorded $ 252
over Vesting Period ($000)
Vesting, Year 1 25%
Year 1 Compensation Expense ($000) $ 63 A
Times Effective tax rate -- 34% 34%
Income Taxes (34% effective tax rate) ($000) $ (21)B
=============
