UNITIL CORPORATION Item 1.01 Entry into a Material Definitive Agreement
The disclosure required by this item is included in Item 5.02 and is incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers
New Equity Compensation Practices
OnJanuary 24, 2023 , the Compensation Committee (the "Compensation Committee") of the Board of Directors ofUnitil Corporation (the "Company") approved and adopted amendments to the Company's practices relating to the grant to the Company's executive officers and other senior management participants (collectively, "Participants") of restricted stock awards (the "New Equity Compensation Practices"). The New Equity Compensation Practices include:
(i) a revised form of restrictive stock agreement relating to awards of restricted shares of the Company's common stock that vest over time ("Time Restricted Shares"); and
(iii) a form of restricted stock agreement relating to awards of restricted shares of the Company's common stock that vest based on the satisfaction of certain performance metrics ("Performance Restricted Shares").
As disclosed in the Company's proxy statement datedMarch 29, 2022 relating to the Company's 2022 annual meeting of shareholders, in general, the Company previously granted to Participants, on an annual basis, Time Restricted Shares that vest over a four-year period subject to continued employment. Participants were selected by the Compensation Committee. The number of such awards was based upon the Company's achievement of key performance metrics under the Management Incentive Plan for the prior calendar year, which were approved by the Compensation Committee. Each Participant's target restricted stock award was based on market data for the median of the broad-based published compensation survey group grant at peer group and other comparable companies minus anticipated Federal and Medicare taxes on the Participant's award. In addition, the Company's Chief Executive Officer's and Chief Financial Officer's target restricted stock award was based in part on information from the proxy statements of the Company's peer group, at the 25th percentile target. Under the New Equity Compensation Practices, in general, the Company will grant to its Participants, on an annual basis, (i) Time Restricted Shares and (ii) Performance Restricted Shares. Participants will continue to be selected by the Compensation Committee. The number of such awards is no longer based upon the Company's achievement of key performance metrics under the Management Incentive Plan for the prior calendar year. Instead, the number of each Participant's Time Restricted Shares and Performance Restricted Shares, in the aggregate (the "Total Number"), is based upon (A) (i) the midpoint of the Participant's salary range multiplied by (ii) the Participant's multiplier minus (B) anticipated Federal and Medicare taxes on the Participant's award. The number of each of the Time Restricted Shares and the Performance Restricted Shares is 50% of the Total Number. The following table summarizes the current multiplier for each Participant that is the Chief Executive Officer, the Chief Financial Officer or a named executive officer of the Company. Name Principal Position Multiplier
135 %
Robert B. Hevert Senior Vice President, Chief Financial Officer and Treasurer 70 %
Todd R. Black Senior Vice President, External Affairs and Customer Relations 45 %
Justin Eisfeller Vice President & Chief Technology Officer 45 %
Christopher J. Leblanc Vice President, Gas Operations 45 %
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Time Restricted Shares
Time Restricted Shares generally vest over a period of four years at a rate of 25% each year. Prior to the end of the vesting period, Time Restricted Shares are subject to forfeiture if the Participant ceases to be employed by the Company other than due to the Participant's death, disability or retirement. During the vesting period, dividends on Time Restricted Shares generally are credited to a Participant's account.
Performance Restricted Shares
Performance Restricted Shares generally vest after a performance period of three years based on the attainment of certain performance thresholds of certain performance goals, each as set by the Compensation Committee towards the beginning of the performance period. The Compensation Committee has chosen two performance goals for the three-year performance period endingDecember 31, 2025 : 1. three-year average return on common equity (the "ROE Goal"); and
2. three-year average growth in book value per share (the "Book Value Goal").
In general:
• 25% of Performance Restricted Shares will vest if the Company attains the
minimum ROE Goal;
• 50% of Performance Restricted Shares will vest if the Company attains the
target ROE Goal; and
• 75% of Performance Restricted Shares will vest if the Company attains the
maximum ROE Goal.
Also, in general, an additional:
• 25% of Performance Restricted Shares will vest if the Company attains the
minimum Book Value Goal;
• 50% of Performance Restricted Shares will vest if the Company attains the
target Book Value Goal; and
• 75% of Performance Restricted Shares will vest if the Company attains the
maximum Book Value Goal.
If the Company's level of attainment of the ROE Goal or the Book Value Goal
exceeds the minimum but is less than the target, then the amount of vesting or
forfeiture will be determined on a straight-line basis between the minimum and
the target. If the level of achievement of the ROE Goal or the Book Value Goal
exceeds the target but is less than the maximum, then the amount of vesting or
forfeiture will be determined on a straight-line basis between the target and
the maximum.
Furthermore, if the number of a Participant's Performance Restricted Shares that
would vest exceeds 100% of such Participant's Performance Restricted Shares,
then the Company will issue additional shares ("Additional Shares") to the
Participant in an amount equal to the vesting percentage in excess of 100%
multiplied by the number of the Participant's Performance Restricted Shares.
Prior to the end of the performance period, the Performance Restricted Shares
are subject to forfeiture if the Participant ceases to be employed by the
Company other than due to the Participant's death, disability or retirement. If
a Participant dies, becomes disabled, or retires during the performance period,
then vesting will be pro-rated based on the number of months of service before
the Participant's death, disability, or retirement during the performance
period.
During the performance period, dividends on Performance Restricted Shares
generally are credited to a Participant's account. No dividends on Additional
Shares will be credited to a Participant's account until the Company issues the
Additional Shares to the Participant.
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Summary of Time Restricted Shares and Performance Restricted Shares
The following table summarizes certain terms of the Time Restricted Shares and the Performance Restricted Shares.
Number of Vesting Performance Amount of Award
Award Awards Description Threshold (1) Vested (2)
Time Restricted 50% of n/a Award vests over
Shares Total Award vests over a four-year
Number a four-year period at a rate
period at a rate of 25% per year,
of 25% per year, generally
generally subject subject to
to continued continued
employment. employment.
Performance 50% of 50% of minimum 25% vesting of
Restricted Shares Total Performance Performance
Number Restricted Shares Restricted
will vest if Shares
Company achieves target 50% vesting of
its target ROE Performance
Goal Restricted
Shares
maximum 75% vesting of
Performance
Restricted
Shares
50% of minimum 25% vesting of
Performance Performance
Restricted Shares Restricted
will vest if Shares
Company achieves target 50% vesting of
its target Book Performance
Value Goal Restricted
Shares
maximum 75% vesting of
Performance
Restricted
Shares
(1) If the Company's level of attainment of the ROE Goal or the Book Value Goal
exceeds the minimum but is less than the target, then the amount of vesting
or forfeiture will be determined on a straight-line basis between the minimum
and the target. If the level of achievement of the ROE Goal or the Book Value
Goal exceeds the target but is less than the maximum, then the amount of
vesting or forfeiture will be determined on a straight-line basis between the
target and the maximum.
(2) If the number of a Participant's Performance Restricted Shares that would
vest exceeds 100% of such Participant's Performance Restricted Shares, then
the Company will issue Additional Shares to the Participant in an amount
equal to the vesting percentage in excess of 100% multiplied by the number of
the Participant's Performance Restricted Shares
The foregoing description of Time Restricted Shares is qualified in its entirety by reference to the full text of the form of Restricted Stock Agreement (Time Vesting), which is filed herewith as Exhibit 10.1 to this Current Report on Form 8-K and (ii) the Company's Second Amended and Restated 2003 Stock Plan, which is incorporated by reference herewith as Exhibit 10.3 to this Current Report on Form 8-K. The foregoing description of Performance Restricted Shares is qualified in its entirety by reference to the full text of the form of Restricted Stock Agreement (Performance Vesting), which is filed herewith as Exhibit 10.2 to this Current Report on Form 8-K and (ii) the Company's Second Amended and Restated 2003 Stock Plan, which is incorporated by reference herewith as Exhibit 10.3 to this Current Report on Form 8-K.
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Grants of Time Restricted Shares and Performance Restricted Shares
OnJanuary 24, 2023 , the Company granted Time Restricted Shares and Performance Restricted Shares to the Chief Executive Officer, the Chief Financial Officer and the named executive officers of the Company as follows: Amount of Amount of Time Performance Restricted Restricted Name Principal Position Shares Shares
6,820
Robert B. Hevert Senior Vice President, Chief Financial Officer and Treasurer 2,020 2,020
Todd R. Black Senior Vice President, External Affairs and Customer Relations 970 970
Justin Eisfeller Vice President & Chief Technology Officer 970 970
Christopher J. Leblanc Vice President, Gas Operations 970 970
The Company has entered into, or will enter into, agreements with each recipient
named in the table above in the forms filed herewith as Exhibit 10.1 (form of
Restricted Stock Agreement (Time Vesting)) and Exhibit 10.2 (form of Restricted
Stock Agreement (Performance Vesting)) to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Number Exhibit Reference*
10.1** Form of Restricted Stock Agreement
(Time Vesting) Filed herewith
10.2** Form of Restricted Stock Agreement
(Performance Vesting) Filed herewith
10.3** Unitil Corporation Second Amended Appendix 1 to the Proxy Statement
and Restated 2003 Stock Plan filed on Schedule 14A dated
March 13, 2012 (SEC File
No. 1-8858)
104 Cover Page Interactive Data File
(embedded within the Inline XBRL
document)
* The exhibits referred to in this column by specific designations and dates
have heretofore been filed with or furnished to the Securities and Exchange
Commission under such designations and are hereby incorporated by reference.
** These exhibits represent a management contract or compensatory plan.
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