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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-8858
UNITIL CORPORATION
(Exact name of registrant as specified in its charter)
New Hampshire 02-0381573
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6 Liberty Lane West, Hampton, New Hampshire 03842-1720
(Address of principal executive offices (Zip Code)
Registrant's telephone number, including area code: (603) 772-0775
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Exchange on Which Registered
Common Stock, No Par Value American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendments to this Form 10-K [ X ]
Based on the closing price of March 1, 1998, the aggregate market value of
common stock held by non-affiliates of the registrant was $115,457,000.
The number of common shares outstanding of the registrant was 4,483,767 as
of March 1, 1998.
Documents Incorporated by Reference:
Portions of the Proxy Statement relating to the Annual Meeting of
Shareholders to be held April 16, 1998, are incorporated by reference into
Part III of this Report.
UNITIL CORPORATION
FORM 10-K
For the Fiscal Year Ended December 31, 1997
Table of Contents
Item Description Page
PART I
1. Business
The Unitil System ......................... 2
Utility Operations .................................. 2
Rates and Regulation ................................. 3
Electric Utility Industry Restructuring and Competition.. 5
Gas Utility Industry Restructuring and Competition.... 7
Electric Power Supply ................................. 8
Gas Supply ........................................... 10
Environmental Matters .................................. 10
Capital Requirements .................................. 11
Financing Activities .............................. 11
Employees ........................................... 11
Executive Officers of the Registrant ............. 12
2. Properties .......................................... 13
3. Legal Proceedings ...................................... 14
4. Submission of Matters to a Vote of Securities Holders ........ 14
PART II
5. Market for Registrant's Common Equity and Related Stockholder
Matters .............................. 15
6. Selected Financial Data ................................ 16
7. Management's Discussion and Analysis of Financial Condition
and Results of Operations .......... 17
8. Financial Statements and Supplementary Data ........... 26
9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure ......... 46
PART III
10. Directors and Executive Officers of the Registrant......... 47
11. Executive Compensation ................................ 47
12. Security Ownership of Certain Beneficial Owners and Management 47
13. Certain Relationships and Related Transactions ............ 47
PART IV
14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K ........................................... 48
Signatures ..................................... 55
Schedule VIII Valuation and Qualifying Accounts and Reserves..57
Exhibit 4.22 Note Purchase Agreement dated July 1, 1997 for the 8.00%
Senior Secured Notes due August 1, 2017.
Exhibit 10.1 Labor Agreement between Concord Electric Company and The
International Brotherhood of Electric Workers, Local Union
No. 1837
Exhibit 10.3 Labor Agreement between Fitchburg Gas and Electric Light
Company and The Brotherhood of Utility Workers, Local Union
No.340.
Exhibit 11.1 Computation in Support of Earnings per Share
Exhibit 12.1 Computation in Support of Ratio of Earnings to Fixed Charges
Exhibit 21.1 Subsidiaries of Registrant
Exhibit 27 Financial Data Schedule
Exhibit 99.1 1997 Proxy Statement
PART I
Item 1. Business.
THE UNITIL SYSTEM
Unitil Corporation (Unitil or the Company) was incorporated under
the laws of the State of New Hampshire in 1984. Unitil is a
registered public utility holding company under the Public Utility
Holding Company Act of 1935 (the 1935 Act), and is the parent
company of the Unitil System. The following companies are wholly
owned subsidiaries of Unitil, which together make up the Unitil
System:
State and
Unitil Corporation Year of
Subsidiaries Organization Principal Type of Business
Concord Electric Retail Electric Distribution
Company (CECo) NH - 1901 Utility
Exeter & Hampton Retail Electric Distribution
Electric Company (E&H) NH - 1908 Utility
Fitchburg Gas and Retail Electric & Gas
Electric Light Company(FG&E) MA - 1852 Distribution Utility
Unitil Power Corp. Wholesale Electric Power
(Unitil Power) NH - 1984 Utility
Unitil Realty Corp.
(Unitil Realty) NH - 1986 Real Estate Management
Unitil Service Corp.
(Unitil Service) NH - 1984 System Service Company
Unitil Resources, Inc.
(Unitil Resources) NH - 1993 Energy Marketing and Services
The Unitil System's principal business is the retail sale and
distribution of: electricity and related services in several cities and
towns in the seacoast and capital city areas of New Hampshire, and both
electricity and gas and related services in north central Massachusetts,
through Unitil's three wholly owned retail distribution utility subsidiaries
(CECo, E&H and FG&E, collectively referred to as the Retail Distribution
Utilities). The Company's wholesale electric power utility subsidiary,
Unitil Power Corp., principally provides all the electric power supply
requirements to CECo and E&H for resale at retail, and also engages in
various other wholesale electric power services with affiliates and
non-affiliates throughout the New England region.
Unitil has three additional wholly owned subsidiaries: Unitil Realty
Corp. (Unitil Realty), Unitil Service Corp. (Unitil Service) and Unitil
Resources Inc. (Unitil Resources). Unitil Realty owns and manages the
Company's corporate office building and property located in Hampton, New
Hampshire and leases this facility at cost to Unitil Service under a
long-term lease arrangement. Unitil Service provides, at cost, centralized
management, administrative, accounting, financial, engineering, information
systems, regulatory, planning, procurement, and other services to the Unitil
System companies. Unitil Resources is the Company's wholly owned non-utility
subsidiary and has been authorized by the Securities and Exchange Commission,
pursuant to the rules and regulations of the 1935 Act, to engage in business
transactions as a competitive marketer of electricity, gas and other energy
commodities in wholesale and retail markets, and to provide energy brokering,
consulting and management related services within the United States.
UTILITY OPERATIONS
CECo is engaged principally in the distribution and sale of
electricity at retail to approximately 26,400 customers in the City of
Concord, which is the state capitol, and twelve surrounding towns, all in
New Hampshire. CECo's service area consists of approximately 240 square miles
in the Merrimack River Valley of south central New Hampshire. The service
area includes the City of Concord and major portions of the surrounding
towns of Bow, Boscawen, Canterbury, Chichester, Epsom, Salisbury and Webster,
and limited areas in the towns of Allenstown, Dunbarton, Hopkinton, Loudon
and Pembroke.
The State of New Hampshire's government operations are located
within CECo's service area, including the executive, legislative, judicial
branches and offices and facilities for all major state government services.
In addition, CECo's service area is a retail trading center for the north
central part of the state and has over sixty diversified businesses relating
to insurance, printing, electronics, granite, belting, plastic yarns,
furniture, machinery, sportswear and lumber. Of CECo's 1997 retail electric
revenues, approximately 33% were derived from residential sales, 54% from
commercial, government and nonmanufacturing sales, and 13% from
industrial/manufacturing sales.
E&H is engaged principally in the distribution and sale of electricity
at retail to approximately 38,400 customers in the towns of Exeter and
Hampton and in all or part of sixteen surrounding towns, all in New Hampshire.
E&H's service area consists of approximately 168 square miles in southeastern
New Hampshire. The service area includes all of the towns of Atkinson,
Danville, East Kingston, Exeter, Hampton, Hampton Falls, Kensington, Kingston,
Newton, Plaistow, Seabrook, South Hampton and Stratham, and portions of the
towns of Derry, Brentwood, Greenland, Hampstead and North Hampton.
Commercial and industrial customers served by E&H are quite
diversified and include retail stores, shopping centers, motels, farms,
restaurants, apple orchards and office buildings, as well as manufacturing
firms engaged in the production of sportswear, automobile parts and
electronic components. It is estimated that there are over 150,000 daily
summer visitors to E&H's territory, which includes several popular resort
areas and beaches along the Atlantic Ocean. Of E&H's 1997 retail electric
revenues, approximately 47% were derived from residential sales, 43% from
commercial and nonmanufacturing sales, 10% from industrial/manufacturing
sales.
FG&E is engaged principally in the distribution and sale of both
electricity and natural gas in the City of Fitchburg and several surrounding
communities. FG&E's service area encompasses approximately 170 square miles
in north central Massachusetts.
Electricity is supplied and distributed by FG&E to approximately
27,200 customers in the communities of Fitchburg, Ashby, Townsend and
Lunenburg. FG&E's industrial customers include paper manufacturing and allied
products companies, rubber and plastics manufacturers, chemical products
companies and printing, publishing and allied industries. Of FG&E's 1997
electric revenues, approximately 35% were derived from residential sales, 34%
from commercial and nonmanufacturing sales, and 31% from
industrial/manufacturing sales.
Natural gas is supplied and distributed by FG&E to approximately
15,400 customers in the communities of Fitchburg, Lunenburg, Townsend, Ashby,
Gardner and Westminster, all located in Massachusetts. Of FG&E's 1997 gas
operating revenues, approximately 52% were derived from residential sales,
24% from commercial sales, 12% from firm sales to industrial customers, and
12% from interruptible sales (which are sales to customers that have agreed
to discontinue use of the Company-supplied service temporarily upon notice
by the Company, and which customers usually have an alternate fuel capability,
e.g., fuel oil, that they can employ during the interruption periods). FG&E's
industrial gas revenue is primarily derived from firm sales to paper
manufacturing and allied products companies, fabricated metal products
manufacturers, rubber and plastics manufacturers, primary iron manufacturers
and other miscellaneous industries.
Natural gas sales in New England are seasonal, and the Company's
results of operations reflect this seasonality. Accordingly, results of
operations are typically positively impacted by gas operations during the
five heating season months from November through March of the following year.
Electric sales in New England are far less seasonal than natural gas sales;
however, the highest usage typically occurs in the summer and winter months
due to air conditioning and heating requirements, respectively. The Unitil
System is not dependent on a single customer or a few customers for its
electric and gas sales.
(For details on the Unitil System's Results of Operations see Part II,
Item 7 herein.)
(For segment information see Part II, Item 8, Footnote 12 herein.)
RATES AND REGULATION
The Company is registered with the Securities and Exchange Commission
(SEC) as a holding company under the 1935 Act, and it and its subsidiaries
are subject to the provisions of the 1935 Act. Accordingly, the Securities
and Exchange Commission (SEC) has jurisdiction over Unitil and its
subsidiaries with respect to, among other things, securities issues, sales
and acquisitions of securities and utility assets, intercompany loans,
services performed by and for affiliated companies, certain accounts and
records, and involvement in non utility operations. The Company and its
subsidiaries, where applicable, are subject to regulation by the Federal
Energy Regulatory Commission (FERC), the New Hampshire Public Utilities
Commission (NHPUC) and the Massachusetts Department of Telecommunications
and Energy (MDTE) with respect to rates, adequacy of service, issuance of
securities, accounting and other matters. Unitil Power, as a wholesale
utility, is subject to rate regulation by the FERC. Both CECo and E&H,as
retail electric utilities in New Hampshire, are subject to rate regulation
by the NHPUC, and FG&E is subject to MDTE regulation with respect to gas and
electric retail rates, and FERC regulation with respect to New England Power
Pool (NEPOOL) interchanges and other wholesale sales of electricity.
Current Rate Regulation--- The revenues of Unitil's Retail Distribution
Utilities are collected pursuant to rates on file with the NHPUC, the MDTE
and, to a minor extent, the FERC. In general, the Retail Distribution
Companies current retail rates are comprised of a base rate component,
established during comprehensive base rate cases, and various periodic rate
adjustment mechanisms, which track and reconcile particular expense elements
with associated collected revenues. The last comprehensive regulatory
proceedings to increase base rates for Unitil's Retail Distribution Utilities
were in 1985 for CECo, 1984 for FG&E, and 1982 for E&H. The majority of the
Unitil System's utility operating revenues are presently collected under
various rate adjustment mechanisms, including revenues collected from
customers for fuel, purchased power, cost of gas, and demand-side management
program costs.
The Unitil System Agreement (System Agreement), as approved by the
FERC, governs wholesale sales by Unitil Power to its New Hampshire retail
distribution affiliates, CECo and E&H, and provides for recovery by Unitil
Power of all costs incurred in the provision of service. Unitil Power has
continued to adjust its wholesale rates every six months in accordance with
the System Agreement, and CECo and E&H have continued to file corresponding
semiannual changes in their retail fuel and purchased power adjustment
clauses with the NHPUC which have been routinely approved.
Recent changes in legislation and regulation in Massachusetts has
changed the way FG&E provides service to its electric customers. Instead of
supplying energy on demand to all its customers, FG&E will deliver energy to
its customers on behalf of competitive suppliers and will supply energy to
customers who do not choose Standard Offer Service, and to customers whose
supplier fails to deliver Default Service. The result of these changes will
be the replacement of FG&E's quarterly filed electric fuel charge with:
a) an annually determined Standard Offer Service charge and reconciliation
adjustment mechanism; and b) a monthly determined Default Service charge and
reconciliation adjustment mechanism both of which are designed to allow FG&E
to recover all its power supply costs. In addition FG&E has implemented a
Transition Cost Charge and reconciliation adjustment mechanism enabling it
to recover all its stranded costs.
FG&E's gas costs are recovered through a cost of gas adjustment (CGA)
mechanism, through which firm gas customers pay the costs incurred for
procuring and transporting gas to FG&E's local distribution system for
delivery to customers. FG&E gas operations have been incurring FERC-approved
transition charges from interstate pipeline suppliers, resulting from the
transition to a comprehensive set of new regulations under FERC Order 636.
These costs have been recovered directly from FG&E's gas customers through
the CGA mechanism, as authorized by the MDTE.
Millstone Unit No. 3 Unitil's Massachusetts operating subsidiary, Fitchburg
Gas and Electric Light Company, has a 0.217% ownership (2.49 MW) in the
Millstone Unit No. 3 (Millstone 3) nuclear generating unit. Millstone 3 has
been out of service since March 1996, and has been classified as a Category 3
facility by the Nuclear Regulatory Commission (NRC) since June 28, 1996. The
NRC assigns this rating to plants which it deems to have significant
weaknesses that warrant maintaining the plant in shutdown condition until the
operator demonstrates that adequate programs have been established and
implemented to ensure substantial improvement in the operation of the plant.
Millstone 3 must receive restart authorization by a vote of the NRC
Commissioners prior to resuming power operation.
The Company can only project when Millstone 3 may be authorized by
the NRC to restart, but forecasts received by the Company from the operating
majority owner of the facility estimate the unit's restart in mid 1998.
During the period that Millstone 3 remains out of service, FG&E will continue
to incur its proportionate share of the unit's ongoing Operations and
Maintenance (O&M) costs, and may incur additional O&M costs and capital
expenditures to meet NRC requirements. FG&E will also incur costs to replace
the power that was expected to be generated by the unit. In August 1997, the
Company, in concert with other nonoperating joint owners, filed a demand for
arbitration in Connecticut and a lawsuit in Massachusetts, in an effort to
recover costs associated with the extended unplanned shutdown and the
associated costs from the operating owner. The arbitration and legal cases
are actively proceeding.
The MDTE, which regulates recovery of the Company's purchased power
costs as discussed above, has allowed the Company to collect the increased
purchased power expense related to the outage of Millstone 3 from customers
on an ongoing basis but has not issued any final rulings relative to the
performance or operations of the Company's share of Millstone 3.
SFAS No. 71 --- The Company follows the provisions of Statement of Financial
Accounting Standards (SFAS) No. 71, "Accounting for the Effects of Certain
Types of Regulation, " requiring the Company to record the financial
statement effects of the rate regulation to which the Company is currently
subject. Future regulatory changes could result in the Company no longer
meeting the provisions of SFAS 71 for all or part of its business; thereby
requiring the elimination of the financial statement effect of regulation for
the portion of the business.
(For a discussion of utility rates and regulation under a more competitive
environment, see the following sections on Electric Utility Industry
Restructuring and Competition, and Gas Utility Industry Restructuring and
Competition)
ELECTRIC UTILITY INDUSTRY RESTRUCTURING AND COMPETITION
Regulatory activity in both Massachusetts and New Hampshire has
focused on the restructuring of the electric industry and the process of
deregulating the retail sale of electric energy. March 1, 1998 was the
"Retail Access Date" for Massachusetts consumers, while July 1, 1998 is
targeted as "Choice Date" for New Hampshire consumers. Under these
restructuring proposals, electricity consumers would be allowed to choose
their supplier of electricity from the competitive market, and have their
local utility deliver that electricity over its distribution system at
regulated rates.
Unitil has been preparing for the electric industry
restructuring by developing transition plans that will move its utility
subsidiaries into this new market structure in a way that will ensure
fairness in the treatment of the Company's assets and obligations that are
dedicated to the current regulated franchises and, at the same time, provide
choice for all customers. Simultaneous with this transition process for
Unitil's regulated utilities, the Company is moving to position its
competitive market subsidiary, Unitil Resources, Inc., to pursue growth
areas both within and beyond the Company's traditional franchises in the
emerging, competitive electric energy market.
New Hampshire In New Hampshire, House Bill 1392 (now known as "RSA 374-F")
was signed into law by the Governor in May, 1996. RSA 374-F establishes
principles, standards and a timetable for the New Hampshire Public Utilities
Commission (NHPUC) to implement full, open retail electric competition as
early as January 1, 1998, but no later than July 1, 1998. The law also
directs the NHPUC to set interim access charges for the recovery of above
market "stranded" power supply costs and to make a final determination on
these access charges within two years of implementation of full competition.
As required by RSA 374-F, the NHPUC set a procedural schedule for
opening up the state to retail competition. After months of hearings, the
NHPUC issued its Plan on February 28, 1997: a) requiring all New Hampshire
utilities to file restructuring plans for its consideration; b) providing
for full recovery of stranded costs by those utilities whose rates were below
the New England average (this includes both of Unitil's New Hampshire Retail
Operating subsidiaries) and partial recovery of stranded costs by those
utilities with rates above the New England average; c) requiring all
utilities to file unbundled rates and interim stranded cost recovery charges;
and d) prohibiting marketing affiliates of New Hampshire utilities from
selling energy on a competitive basis in their service territories and
imposing other constraints on their ability to sell energy anywhere in New
Hampshire.
In April, 1997, all of the New Hampshire utilities and several other
parties filed for rehearing on many issues resulting from the NHPUC's Plan.
In addition, the Public Service Company of New Hampshire (PSNH) filed suit in
Federal Court seeking to overturn several of the requirements of the NHPUC's
Plan. Unitil and all of the other New Hampshire electric utilities
subsequently intervened in the PSNH federal court appeal as party plaintiffs.
Ninety days of mediation between PSNH and some of the parties failed to
arrive at an acceptable solution and the mediation effort was terminated on
September 2, 1997.
In September, 1997, New Hampshire Governor Shaheen filed a Plan with
the NHPUC, designed to put aside all contentious issues, make the Federal
Court suit moot and set the framework for bringing competition to the Granite
State by July 1, 1998. Several key members of the New Hampshire Legislature
supported the Governor's proposal. In addition, the NHPUC began the rehearing
process, but limited its efforts to the issues that PSNH took to federal
court.
Several companies, including the Unitil Companies, have begun
negotiations with various stakeholders to reach resolution of the many issues
left unresolved by the NHPUC in an attempt to revive the process and bring
about competition by July 1, 1998. One New Hampshire utility has reached
settlement with some of the parties and filed that settlement with the NHPUC
for its approval. The Unitil Companies have reached an agreement in
principle with several parties and are proceeding to negotiate a detailed
settlement to be filed with the NHPUC that could bring about competition by
July 1.
The Unitil proposed settlement plan would provide Unitil's retail electric
distribution consumers with access to the retail energy supply market in New
Hampshire. Under this plan, all of the Company's New Hampshire customers will
continue to enjoy Unitil's very competitive electric rates -- among the
lowest in New England -- and also will benefit from market competition and
the resulting innovation and energy savings. Unitil's settlement plan
guarantees all its customers competitive retail delivery prices, open and
nondiscriminatory access to competitive electricity suppliers, reliable
electric service and comprehensive consumer protection standards. The
Company's settlement plan achieves these benefits and safeguards for
consumers, while providing for full recovery of Unitil's obligations that
were undertaken to serve customers in the Company's New Hampshire franchises,
and providing a sensible framework enabling its marketing affiliate to
compete anywhere in New Hampshire and ensuring full and fair competition
among all competitive suppliers.
On March 20, 1998, the NHPUC issued Order 22,875 ("the Order") in
response to the April 1997 requests for reconsideration and clarification in
which it affirms, clarifies and modifies the Plan. This latest order requires
all New Hampshire utilities except PSNH to submit a compliance filing by May
1, 1998, in which they will propose their restructuring plans, responding to
specific PUC requirements. The Order modifies the Plan by allowing utility
marketing affiliates to conduct business in the utility service territory,
and allows all affiliates to use the trade name. The Order affirms the Plan
by continuing to provide the Unitil Companies with full stranded cost
recovery, and requiring them to unbundle their rates, divest their power
supply portfolio and mitigate stranded costs to the maximum extent possible.
NH Pilot Program -- In June 1996, the New Hampshire Retail Competition Pilot
Program (Pilot Program), mandated by legislation enacted a year earlier,
became operational. During the two-year term of the Pilot Program, up to 3%
or some 17,000 New Hampshire electric consumers are allowed to choose from
competing electric suppliers, and have this supply delivered across the local
utility system. The Company's subsidiary, Unitil Resources, Inc., began
competitive marketing efforts in May 1996, and began making sales in June,
1996. As of March 1, 1998, Unitil Resources, Inc. is marketing energy
competitively to over 700 customers outside the Unitil companies' traditional
franchise territories under the Pilot Program. The Pilot Program is expected
to conclude for the Unitil Companies on June 30, 1998.
Massachusetts In November 1997, the Massachusetts Legislature enacted
restructuring legislation (the Act) that, in early December, was signed into
law by Governor Cellucci. The Act required all electric utilities that did
not have a restructuring plan on file with the MDTE to file a plan by
December 31, 1997, and set March 1, 1998 as the date that competition would
start for all Massachusetts electricity consumers, the "Retail Access Date".
The Act required utilities to provide: a) an estimate and detailed
accounting of its total transition costs eligible for recovery; b) a
description of its strategies to mitigate its transition costs; c) unbundled
prices for distribution, transmission, generation and other services;
d) proposed charges for recovery of transition costs; e) proposed programs
for universal service for all customers; f) proposed programs and recovery
mechanisms to promote energy conservation and demand side management;
g) procedures for ensuring direct retail access to all generation suppliers;
and h) discussions of the impact of the plan on the company's employees and
the communities served by the Company. In addition, the Act required all
Massachusetts utilities to reduce their rates to all consumers by 10%,
effective March 1, 1998.
Unitil's Massachusetts operating subsidiary, Fitchburg Gas and
Electric Light Company (FG&E), filed its Restructuring Plan (The Plan) with
the MDTE on December 31, 1997. The Plan, which substantially complies with
the Act, was conditionally approved by the MDTE in February 1998, and was the
subject of an MDTE investigation, including evidentiary hearings that were
held in mid-March, which will result in final MDTE approval in the second
quarter of 1998.
As part of The Plan, FG&E has agreed to divest itself of all power
supply assets and contracts. The Company has developed and started to
implement its divestiture plan with a goal of completing divestiture by year
end 1998. Divestiture will place an actual "market value" on these assets
thereby enabling the Company to recover all "above-market" or "transition" or
"stranded", costs via a non-bypassable Transition Charge approved by the MDTE.
The Company included its estimate and a detailed accounting of those costs
and a description of its strategies to mitigate them.
The Plan also provides its customers with choice of supplier on March
1, 1998, unbundled rates (i.e., rates separated into Distribution,
Transmission, Generation and Transition components), and a 10 percent
discount effective March 1, to be followed by an additional 5 percent
discount when divestiture is completed. To ensure universal service so that
all consumers may receive electric service, the Plan provides for offering
"Standard Offer Service", "Default Service" and "Open Access" to transmission
facilities. FG&E's Plan includes a substantial commitment to our environment
- -- increasing the Company's annual expenditures on energy efficiency programs
and providing funding for a state-run renewable resources program. Finally,
the Plan includes a discussion as to why there will be no adverse impacts on
the Company's employees or the communities we serve.
Standard Offer Service will be offered to consumers, who choose not
to choose a competitive supplier, for up to seven years, from supplies
secured by FG&E from the market at no profit to FG&E. The purpose of this
service is to provide consumers with a "fixed-price" power supply against
which they can measure competitive offers before they are ready to enter the
competitive market.
Default Service will be offered to all consumers who for whatever
reason do not receive their power supply from their chosen supplier. This
service will be offered at market rates, at no profit to FG&E.
Open Access guarantees all consumers access to competitive power
supplies from any registered supplier, once the supplier delivers the power
to the New England transmission grid now controlled by an "Independent
System Operator."
GAS UTILITY INDUSTRY RESTRUCTURING AND COMPETITION
Unitil's retail distribution gas operations have historically been
subject to competition from fuel oil suppliers, electric utilities and
propane suppliers, and other fuel providers for heating, water heating,
cooking, industrial processes and other purposes. However, over the past
several years changes in both federal and state regulation of the natural
gas industry have resulted in increased "gas on gas" competition for the
retail sale of natural gas.
In April, 1992 the FERC issued Order 636, which substantially revised
the regulation of interstate pipelines. Order 636 mandated, among other
things, the unbundling of interstate pipeline sales and transportation
services and required pipelines to provide open-access transportation on an
equal basis for all gas supplies. This unbundling of services at the
interstate pipeline level has changed the historical relationships of the
natural gas industry, whereby producers sold to pipelines, pipelines sold to
local gas distribution companies (LDCs), such as FG&E, and local distribution
companies to end-use customers. Now local gas distribution companies or
end-use customers may directly utilize pipeline services for purchases, or
simply for the transportation of gas purchased from third parties.
During 1996, the MDTE ordered all Massachusetts gas distribution
utilities to offer "unbundled" gas services to interruptible and special
contract customers, as a means of promoting greater retail sales competition.
Unbundled service separates the supply and transportation of gas to the
city-gate (i.e. the point where the local distribution utility takes gas
from the interstate pipeline into its distribution system ) from the delivery
of that gas to the customers facility through that distribution system.
In July 1997, the MDTE directed all Massachusetts gas Local
Distribution Companies to form a collaborative with other stakeholders to
develop common principles and appropriate regulations by which unbundling by
all LDCs might proceed. On September 15, 1997 the Massachusetts Gas
Unbundling Collaborative had its first meeting. Since that time, a great
deal of effort has been expended toward achieving the MDTE's stated goal.
However, a great deal more work needs to be done before the principles and
regulations are completed and presented to the MDTE for its review.
On August 18, 1997 the MDTE further directed FG&E and four
other LDCs to file unbundled gas rates for its review to become effective
November 1, 1998. The Company is currently engaged in carrying out this
directive and plans to file its unbundled rates by April 15, 1998.
Unlike the electric industry restructuring which will provide
all customers with choice of suppliers at the same time, gas industry
restructuring appears to be heading towards a multi-year phase in of choice
of gas supplier starting November 1, 1998.
While Unitil's retail gas distribution operations have been, and
continue to be, subject to competition from electricity, oil, propane, coal
and other fuels, federal and state regulatory changes have created the
potential for increased competition among existing and new suppliers or
natural gas marketers for retail gas sales. In particular, gas marketers can
be expected to seek to provide sales services to end-use customers within
FG&E's retail service territory. The Company expects that any third-party
sales that are made within its gas service territory, will continue to be
delivered over FG&E's local distribution system to customers. Because the
company earns its margin on its gas distribution services and not on gas
sales, the level of margins for distribution services provided to third
parties is currently the same to the Company as if it sold the gas supplies
directly to the same end-users. Similar opportunities may exist for the
Company to market gas to new or existing retail customers, whether or not
located within FG&E's franchise territory. Several gas distribution
companies in Massachusetts have proposed that they be allowed to exit the
business of the regulated sales of gas to retail customers and remain
responsible only for the delivery of gas over their distribution system.
These proposals are similar to restructuring proposals on the electric side
of the business in that customers will be allowed to choose there own gas
supplier. Unitil believes that these proposals, if adopted by the MDTE,
will not have a material adverse effect on the Company's gas operations.
ELECTRIC POWER SUPPLY
New England Power Pool --- FG&E, Unitil Power Corp., CECo and E&H are
electric utility members of the New England Power Pool (NEPOOL). In addition,
Unitil Resources, Inc. also became a member of NEPOOL on March 1, 1997.
NEPOOL was formed to assure reliable operation of the bulk power system in
the most economic manner for the region. Under the NEPOOL Agreement, to which
virtually all New England electric utilities are parties, substantially all
operation and dispatching of electric generation and bulk transmission
capacity in New England is performed on a regional basis. NEPOOL is governed
by an agreement that is filed with the FERC and its provisions are subject to
continuing FERC jurisdiction. The NEPOOL Agreement imposes generating
capacity and reserve obligations, provides for the use of major transmission
facilities and payments associated therewith. The most notable benefits of
NEPOOL are coordinated power system operation in a reliable manner and
providing a supportive business environment for the development of a
competitive electric marketplace.
As a result of ongoing legislative and regulatory initiatives which
are primarily focused on the deregulation of the generation and supply of
electricity and the corresponding development of a competitive market place
from which customers could choose their electric energy supplier, the NEPOOL
Agreement is being restructured. NEPOOL's membership provisions have been
broadened to cover all entities engaged in the electricity business in New
England, including power marketers and brokers, independent power producers,
load aggregators and retail customers in states that have enacted retail
access statutes. The regional bulk power system will be operated by a new
independent corporate entity, so that there will be no opportunity for
conflicting financial interests between the system operator and the
market-driven participants. Various energy and capacity products will be
traded in open, competitive markets, with transmission access and pricing
subject to a regional tariff designed to promote competition among power
suppliers. The implementation of the capacity markets is expected to begin on
April 1, 1998. The implementation of the bid-based energy markets has been
delayed by NEPOOL until the fourth quarter of 1998.
Energy Resources --- Effective April 1, 1998, each electric utility's
capability responsibility under the NEPOOL Agreement involves carrying an
allocated share of New England capacity requirements which is determined for
each month based on regional reliability criteria. Unitil Power Corp., the
full requirements supplier to CECo and E&H, had a capability responsibility
for December, 1997 of 224.01 MW and a corresponding monthly peak demand of
180.99. FG&E's capability responsibility for December, 1997 was 96.37 MW,
with a corresponding monthly peak demand of 77.46 MW.
To meet the needs of CECo and E&H, Unitil Power has contracted for
generating capacity and energy and for associated transmission services as
needed to meet NEPOOL requirements and to provide a diverse and economical
energy supply. Unitil Power's purchases are from various utility and
non-utility generating units using a variety of fuels and from several
utility systems in the U.S. and Canada. For the twelve months ending December
31,1997, Unitil Power's energy needs were provided by the following fuel
sources: nuclear (29%), oil (22%), coal (17%), gas (21%), wood and refuse
(4%) , hydro (1%), and system and other (6%).
FG&E meets its capacity requirements through purchase power contracts
and ownership interests in three generating units in which FG&E participates
on a tenancy-in-common basis as a nonoperating owner. FG&E's purchases are
from various utility and non-utility generating units using a variety of
fuels and from several utility systems in the U.S. and Canada. For the twelve
months ending December 31, 1997, FG&E's energy needs, including generation
from joint-owned units, were provided from the following fuel sources: oil
(23%), wood (29%), hydro (4%), coal (26%) and nuclear, system and other (18%).
FG&E has a 4.5% ownership interest, or 20.12 MW, in an oil and natural
gas-fired generating plant in New Haven, Connecticut, which is operated by
The United Illuminating Company, the plant's majority owner. FG&E also has a
0.1822% ownership interest, or 1.13 MW, in an oil-fired generating plant in
Yarmouth, Maine, which is operated by Central Maine Power Company as the
majority owner, and a 0.217% ownership interest, or 2.5 MW, in the Millstone
3 nuclear unit operated by Northeast Utilities, parent of the principal
owners of that unit. In addition, FG&E operates an oil-fired combustion
turbine with a current capability of 26.6 MW under a long-term financing
lease.
Fuel --- Oil: Approximately 23% of FG&E's and 22% of Unitil Power's
electric power in 1997 was provided by oil-fired units, some of which are
owned by FG&E. Most fuel oil used by New England electric utilities is
acquired from foreign sources and is subject to interruption and price
increases by foreign governments.
Coal: Approximately 26% of FG&E's and 17% of Unitil Power's 1997
requirements were from coal-burning facilities. The facilities generally
purchase their coal under long term supply agreements with prices tied to
economic indices. Although coal is stored both on-site and by fuel suppliers,
long term interruptions of coal supply may result in limitations in the
production of power or fuel switching to oil and thus result in higher energy
prices.
Nuclear: FG&E has a 0.217% ownership interest in Millstone Unit No. 3
(the Unit). The Unit has contracted for certain segments of the nuclear fuel
production cycle through various dates. This cycle includes, among other
things, mining, enrichment and disposal of used fuel. Contracts for various
segments of the fuel cycle will be required in the future, and their
availability, prices and terms cannot now be predicted.
Pursuant to the Nuclear Waste Policy Act of 1982, the participants
in Millstone 3 were required to enter into contracts with the United States
Department of Energy, prior to the operation of that Unit, for the transport
and disposal of spent fuel at a nuclear waste repository. Under the Act, a
national repository for nuclear waste was anticipated to be in operation by
1998. FG&E cannot predict whether the Federal government will be able to
provide interim storage or permanent disposal repositories for spent fuel.
GAS SUPPLY
FG&E distributes gas purchased from domestic and Canadian suppliers
under long term contracts as well as gas purchased from producers and
marketers on the spot market. The following tables summarize actual gas
purchases by source of supply and the cost of gas sold for the years 1995
through 1997.
Sources of Gas Supply
(Expressed as percent of total MMBtu of gas purchased)
Natural Gas: 1997 1996 1995
Domestic firm....................... . 82.7% 80.8% 82.3%
Canadian firm........................... 5.7% 7.0% 5.6%
Domestic spot market.................... 10.5% 10.7% 11.1%
Total natural gas........................... 98.9% 98.5% 99.0%
Supplemental gas............................. 1.1% 1.5% 1.0%
Total gas purchases........................ 100.0% 100.0% 100.0%
Cost of Gas Sold
1997 1996 1995
Cost of gas purchased and sold per MMBtu......$3.55 $3.95 $3.03
Percent Increase (Decrease) from prior year...10.1% 30.4% (12.7)%
As a supplement to pipeline natural gas, FG&E owns a propane air gas
plant and has under a financial lease a liquefied natural gas (LNG) storage
and vaporization facility. These plants are used principally during peak load
periods to augment the supply of pipeline natural gas.
ENVIRONMENTAL MATTERS
The Company does not expect that compliance with environmental laws
or regulations will have a material effect on its business, or the businesses
of its subsidiaries. The Company does not know whether, or to what extent,
such regulations may affect it or its subsidiaries by impinging on the
operations of other electric and gas utilities in New England.
Unitil Power and FG&E purchase wholesale capacity and energy from a
diverse group of suppliers using various fuel sources and FG&E has ownership
interests in certain generating plants. Some of the purchase power contracts
contain cost adjustment provisions that may allow the supplier to pass
through environmental remediation costs. The Company has not been informed
whether any of these suppliers are likely to incur significant environmental
remediation costs and, if so, which if any such costs may be passed through.
In 1997, Fitchburg Gas and Electric Light Company completed the
majority of work at two former manufactured gas plant (MGP) sites under the
requirements of the Massachusetts Contingency Plan (MCP).
In July, the Logan Street MGP site in Gardner achieved permanent
closure and was closed-out with the MCP. This was accomplished by capping
the site so that exposure to soils was eliminated, and also by placing an
"Activities and Use Limitation" on the deed for this site. This limitation
informs future buyers of the potential hazards at the site.
In December 1997, the Company submitted a Phase III report that
provides for temporary closure for the majority of the Sawyer Passway
MGP site. This temporary closure allows the Company to monitor the site every
five years to determine if a more feasible remediation alternative has been
developed. There is a portion of the Sawyer Passway MGP site which still
remains open under the MCP rule, but it is expected that this portion will be
closed out in 1998.
The costs of remedial action at these sites is initially funded from
traditional sources of capital and recovered from customers under a rate
recovery mechanism approved by the MDTE. The Company also has a number of
liability insurance policies that may provide coverage for environmental
remediation at these sites.
CAPITAL REQUIREMENTS
Net capital expenditures decreased approximately $4.6 million in 1997
compared to 1996, reflecting spending, in 1996, for the construction of the
Company's new corporate headquarters. The Company also received cash payments
of $0.9 million and $2 million from the State of New Hampshire in 1996 and
1995, respectively, related to the eminent domain taking of is former
corporate headquarters for a highway expansion project.
In 1998, total capital expenditures are expected to approximate $16.4
million. This projection reflects normal capital expenditures for system
expansions, replacements and other improvements.
FINANCING ACTIVITIES
The change in Cash Flows from Financing Activities in 1997 compared
to 1996 reflects a decrease in borrowings due to the repayment of short-term
debt. Higher short-term borrowings in 1996 were primarily due to funding of
the timing difference (under collection) between payments on fuel, purchased
power and purchased gas costs and the corresponding recovery of these costs
in revenue billed under periodic cost recovery mechanisms as well as the
construction financing of the Company's new corporate headquarters.
During the year ended December 31, 1997, Unitil Realty Corporation
borrowed $7,500,000 to finance the construction of the Company's new
corporate headquarters. No long term debt was issued by any of the Unitil
System companies during 1996.
The Company currently has unsecured committed bank lines for
short-term debt aggregating $25,000,000 with four banks for which it pays
commitment fees. At December 31, 1997, the unused portion of the committed
credit lines outstanding was $7,000,000. The average interest rate on all
short-term borrowings were 5.98% and 5.79% during 1997 and 1996, respectively.
EMPLOYEES
As of December 31, 1997, the Company and its subsidiaries had 313
full-time employees. The Company considers its relationship with its
employees to be good and has not experienced any major labor disruptions
since the early 1960's.
There are 124 employees represented by labor unions. In 1995, E&H
reached a new three year pact with its employees covered by a collective
bargaining agreement which will expire effective May 30, 1998. In 1997,
CECo reached a new three year pact with its employees covered by a collective
bargaining agreement which will expire effective May 31, 2000. In 1997, FG&E
reached a one year pact with its employees covered by collective bargaining
agreements which will expire effective April 30, 1998. The agreements
provided for discreet salary adjustments, established work practices and
provided uniform benefit packages. The Company expects to successfully
negotiate new agreements prior to the expiration dates of these contracts.
The Company and its subsidiaries, where applicable, have in effect
funded Retirement Plans and related Trust Agreements providing retirement
annuities for participating employees at age 65. The Company's policy is to
fund the pension cost accrued (see Note 9 of Notes to Consolidated Financial
Statements contained in Part II, Item 8).
EXECUTIVE OFFICERS OF THE REGISTRANT
The names, ages and positions of all of the executive officers of the
Company as of March 1, 1998 are listed below, along with a brief account of
their business experience during the past five years. All officers are
elected annually by the Board of Directors at the Directors' first meeting
following the annual meeting which is held on the third Thursday in April,
or at a special meeting held in lieu thereof. There are no family
relationships among these officers, nor is there any arrangement or
understanding between any officer and any other person pursuant to which the
officer was selected. Officers of the Company also hold various Director and
Officer positions with subsidiary companies.
Name, Age and Position Business Experience During Past 5 years
Robert G. Schoenberger, 47 Mr. Schoenberger has been Chairman of the
Chairman of the Board of Board and Chief Executive Officer of Unitil
Directors and Chief since 1997. Prior to his employment with
Executive Officer 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).
Michael J. Dalton, 57, Mr. Dalton has been a Director, President and
President and Chief Chief Operating officer of the Company since
Operating Officer its incorporation in 1984.
Mark H. Collin, 39, Mr. Collin was appointed Treasurer and
Treasurer and Secretary Secretary in January, 1998. Mr. Collin has
and Vice President, been the system subsidiary Treasurer and
Unitil Service Vice President of Unitil Service Corporation
since 1992.
James G. Daly, 40 Mr. Daly has been Senior Vice President of
Senior Vice President Unitil Service since 1994. Mr. Daly was Vice
Energy Resources President of Unitil Service from 1992 to 1994.
Unitil Service
George R. Gantz, 46 Mr. Gantz has been Senior Vice President of
Senior Vice President Unitil Service since 1994. Mr. Gantz was Vice
Business Development President of Unitil Service from 1989 to 1994.
Unitil Service
Item 2. Properties
CECo's distribution service center building and adjoining
administration building, totaling 37,560 square feet of office, warehouse and
garage area, are located on land in the City of Concord owned by CECo in fee.
CECo's sixteen electric distribution substations constitute 106,400 KVA of
capacity for the transformation of electric energy from the 34.5 KV
transmission voltage to primary distribution voltage levels. The electric
substations are, with one exception, located on land owned by CECo in fee.
The sole exception is located on land occupied pursuant to a perpetual
easement.
CECo has in excess of 34 pole miles of 34.5 KV electric transmission
facilities located, with minor exceptions, either on land owned by CECo in
fee or on land occupied pursuant to perpetual easements. CECo also has a
total of approximately 626 pole miles of overhead electric distribution lines
and a total of approximately 42 conduit bank miles (113 cable miles) of
underground electric distribution lines. The electric distribution lines are
located in, on or under public highways or private lands pursuant to lease,
easement, permit, municipal consent, tariff conditions, agreement or license,
expressed or implied through use by CECo without objection by the owners. In
the case of certain distribution lines, CECo owns only a part interest in the
poles upon which its wires are installed, the remaining interest being owned
by telephone and telegraph companies.
Additionally, CECo owns in fee 137.7 acres of land located on the
east bank of the Merrimack River in the City of Concord. Of the total
acreage, 81.2 acres are located within an industrial park zone, as specified
in the zoning ordinances of the City of Concord.
The physical properties of CECo (with certain exceptions) and its
franchises are subject to the lien of its Indenture of Mortgage and Deed of
Trust, as supplemented, under which the respective series of First Mortgage
Bonds of CECo are outstanding.
E&H's distribution and engineering service center building is located
on land owned by E&H in fee. E&H's fourteen electric distribution
substations, together with a 5,000 KVA mobile substation, constitute 91,400
KVA of capacity for the transformation of electric energy from the 34.5 KV
transmission voltage to primary distribution voltage levels. The electric
substations are located on land owned by E&H in fee.
E&H has in excess of 68 pole miles of 34.5 KV electric transmission
facilities located on land either owned or occupied pursuant to perpetual
easements. E&H also has a total of approximately 701 pole miles of overhead
electric distribution lines and a total of approximately 81 conduit bank
miles of underground electric distribution lines. The electric distribution
lines are located in, on or under public highways or private lands pursuant
to lease, easement, permit, municipal consent, tariff conditions, agreement
or license, expressed or implied through use by E&H without objection by the
owners. In the case of certain distribution lines, E&H owns only a part
interest in the poles upon which its wires are installed, the remaining
interest being owned by telephone and telegraph companies.
Certain physical properties of E&H and its franchises are subject to
the lien of its Indenture of Mortgage and Deed of Trust, as supplemented,
under which the respective series of First Mortgage Bonds of E&H are
outstanding.
FG&E owns a liquid propane gas (LPG) plant and leases a liquid
natural gas (LNG) plant, both of which are located on land owned in fee. The
Company has entered into agreements for joint ownership with others of one
nuclear and two fossil fuel generating facilities. At December 31, 1997, the
electric properties of the Company consisted principally of 69 miles of
transmission lines, 16 transmission and distribution substations with a total
capacity of 473,525 KVA and 667 miles of distribution lines. Electric
transmission facilities (including substations) and steel, cast iron and
plastic gas mains owned by the Company are, with minor exceptions, located
on land owned by the Company in fee or occupied pursuant to perpetual
easements. The Company leases its service building, and its combustion
turbine electric peaking generator and LNG facility. (See Business - Electric
Power Supply and Gas Supply above for additional information regarding the
Company's plants, facilities and gas mains and services.)
Item 3. Legal Proceedings
The Company is involved in other legal and administrative proceedings
and claims of various types which arise in the ordinary course of business.
In the opinion of the Company's management, based upon information furnished
by counsel and others, the ultimate resolution of these claims will not have
a material impact on the Company's financial position.
Item 4. Submission of Matters to a Vote of Security Holders
None
PART II
Item 5. Market For Registrant's Common Equity and Related Stockholder
Matters
Common Stock Data
Dividends Paid Per Common Share 1997 1996
1st Quarter $0.335 $0.33
2nd Quarter 0.335 0.33
3rd Quarter 0.335 0.33
4th Quarter 0.335 0.33
The Year $1.34 $1.32
1997 1996
High/Ask Low/Bid High/Ask Low/Bid
1st Quarter 21 1/8 18 5/8 24 3/4 20 3/4
2nd Quarter 21 3/8 18 3/4 24 1/4 21 1/8
3rd Quarter 23 3/8 20 3/8 23 20 3/8
4th Quarter 24 5/16 21 1/8 21 1/2 18 1/4
Item 6. Selected Financial Data
1997 1996 1995 1994 1993
Consolidated Statements of
Earnings (000's)
Operating Income $15,562 $14,273 $14,225 $13,754 $14,073
Non-operating
Expense (Income) 160 (627) 217 64 (50)
Income Before
Interest expense 15,402 14,900 14,008 13,690 14,123
Interest Expense, Net 7,167 6,171 5,639 5,652 6,523
Net Income 8,235 8,729 8,369 8,038 7,600
Dividends on Preferred Stock 276 278 284 291 298
Net Income Applicable
to Common Stock $7,959 $8,451 $8,085 $7,747 $7,302
Balance Sheet Data (000's)
Utility Plant
(Original Cost) $219,475 $207,545 $190,177 $178,777 $171,540
Total Assets 237,977 232,108 211,702 204,521 201,509
Capitalization and
Short-term Debt:
Common Stock Equity $71,644 $67,974 $63,895 $59,997 $56,234
Preferred Stock 3,891 3,891 3,999 4,094 4,198
Long-Term Debt 68,366 62,211 63,505 65,580 57,378
Total Capitalization $143,901 $134,076 $131,399 $129,671 $117,810
Capitalization Ratios:
Common Stock Equity 50% 51% 49% 46% 48%
Preferred Stock 3% 3% 3% 3% 3%
Long-Term & Short-Term Debt 47% 46% 48% 51% 49%
Common Stock Data (000's)
Shares of Common
Stock (Year-End) 4,464 4,384 4,330 4,268 4,205
Shares of Common
Stock (Average) 4,413 4,354 4,299 4,234 4,181
Per Share Data
Basic Earnings Per
Average Share $1.80 $1.94 $1.88 $1.83 1.75
Diluted Earnings per Share $1.76 $1.89 $1.85 $1.80 $1.72
Dividends Paid Per Share $1.34 $1.32 $1.28 $1.24 $1.15
Book Value Per Share $16.05 $15.50 $14.76 $14.06 $13.37
Electric and Gas Statistics
Electric Sales - (MWH) 1,491,103 1,523,788 1,401,292 1,358,165 1,303,326
Customers Served - Year End 92,672 89,865 88,316 86,782 85,383
Gas Sales -
(000's of Therms) 23,716 24,508 22,303 23,057 22,763
Customers Served - Year End 15,372 14,848 14,846 15,012 15,340
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
EARNINGS AND DIVIDENDS
Basic earnings per average common share were $1.80 for the year ended
December 31, 1997, compared to $1.94 and $1.88 for 1996 and 1995,
respectively. The average return on common equity in 1997 was 11.4%. Diluted
earnings per share were $1.76, $1.89 and $1.85 for 1997, 1996 and 1995,
respectively.
The decrease of $0.14 in basic earnings per share in 1997, compared
to 1996, was due to lower kilowatt-hour and therm sales, and higher interest,
depreciation and property tax expenses, offset by lower operation and
maintenance expenses.
Unitil's common stock dividends in 1997 were $1.34 per share, an
increase of 1.5% over 1996's annual dividend of $1.32 per share. This annual
dividend of $1.34 in 1997 resulted in a payout ratio of 74%. At its January
1998 meeting, the Unitil Board of Directors increased the quarterly dividend
rate by an additional 1.5%, resulting in the current effective annualized
dividend of $1.36 per share.
ENERGY SALES
The Unitil System's total electric kilowatt-hour sales decreased by
2.7% in 1997 compared to 1996, primarily due to two factors: 1) the loss of
a major industrial customer as further explained below, and 2) a milder
winter heating season. The 1997 winter heating season was 12% warmer than
the same period in 1996 but about the same as the mild winter in 1995.
Increased electricity sales for residential and small commercial
customers were offset by a decrease in large commercial and industrial sales.
Sales to residential customers increased by 1.3% in 1997 compared to 1996 and
they were 5.3% higher than 1995 sales. Sales to small commercial customers
increased by 1.2% in 1997 compared to 1996 and by 2.1% in the 2 year period
from 1995 to 1997. These increases are due to growth and expansion within
our utility service territories and healthy regional economic conditions.
Large commercial and industrial sales in 1997 were depressed by the
curtailment of operations by a major industrial customer. Electric energy
sales to all large industrial and commercial customers were down 8.5% in 1997
compared to 1996 (exclusive of this customer, sales improved 2.2%). In
contrast, 1997 sales to this group of customers were up 11.1% in the 2 year
period from 1995 to 1997. The major customer who began operations in February,
1996 and curtailed operations in September, 1996, emerged from bankruptcy and
has plans to resume and expand its operations by the end of the third quarter
of 1998.
The following table details total kilowatt-hour sales for the last
three years by major customer class:
KWH SALES (000's)
1997 1996 1995
Residential 533,907 527,107 507,233
Small Commercial 389,319 384,840 381,292
Large Commercial/Industrial 556,436 608,433 500,945
Other Sales 11,441 11,635 11,822
Total KWH Sales 1,491,103 1,532,015 1,401,292
Total firm therm gas sales decreased 3.2% in 1997 when compared to
1996. The decrease in sales is attributable to significantly milder weather
in the first quarter of 1997 as compared to the weather in 1996. Sales to
residential and commercial customers, which are most sensitive to weather,
decreased by 5.8% and 1.5%, respectively, while sales to industrial customers
were up by 2.7%. Total firm therm sales increased 6.3% in the 2 year period
from 1995 to 1997.
The following table details total firm therm gas sales for the last
three years by major customer class:
FIRM THERM GAS SALES (000's)
1997 1996 1995
Residential 13,038 13,835 12,523
Commercial 6,628 6,728 6,208
Industrial 4,050 3,945 3,572
Total Therm Sales 23,716 24,508 22,303
GROWTH AND MARKET OPPORTUNITIES
For each of the three years prior to 1997 the Unitil System was a
leader in electric energy sales growth in New England, reflecting the solid
economic growth in our markets. Unitil's energy prices are among the lowest
in the region, which is a contributing factor to the Company's sales growth.
Unitil continues to pursue growth and market opportunities. The
Company has made investments in brand awareness, operational readiness, and
product development and testing. These investments will support our Company's
transition and enhance the Company's competitive position as restructuring
and deregulation reshape our industry. (See Regulatory Matters discussion,
below.)
OPERATING REVENUE
The following table compares the major components of Operating
Revenue for 1997, 1996 and 1995:
OPERATING REVENUE (000's)
1997 1996 1995
Base Electric Revenue $48,364 $48,588 $45,458
Fuel & Purchased Power 100,356 100,007 90,558
Conservation Program Costs 1,253 1,101 2,083
Total Electric Revenue 149,973 149,696 138,099
Base Gas Revenue 7,421 7,676 7,105
Cost of Gas 10,126 10,439 8,202
Interruptible Revenue 2,182 2,990 2,323
Total Gas Revenue 19,729 21,105 17,630
Other Revenue 36 45 941
Total Operating Revenue $169,738 $170,846 $156,670
Electric Operating Revenue increased by $0.3 million, or 0.2%, in 1997
compared to 1996. Total electric operating revenue is comprised of electric
base revenue, fuel and purchased power revenue and conservation and load
management program revenue. Fuel and purchased power revenues are collected
from customers through periodic cost recovery adjustment mechanisms. Changes
in this component of operating revenue do not affect net income as they
normally mirror corresponding changes in fuel and purchased power costs.
Conservation and load management program revenue is also collected from
customers through periodic cost recovery mechanisms, reflecting underlying
changes in conservation and load management program costs.
Electric base revenue is that portion of electric operating revenue
that has a direct impact on net income. In 1997, electric base revenue
decreased by approximately $0.2 million when compared to 1996. This 0.5%
decrease in electric base revenue was primarily due to lower overall sales
volume. 1997 electric base revenue increased by approximately $2.9 million,
or 6.4%, when compared to 1995.
Gas Operating Revenue amounted to approximately 12% of Unitil's total
operating revenues and decreased by $1.4 million, or 6.5%, in 1997 compared
to 1996. Gas operating revenue is comprised of three components: cost of gas
revenue, interruptible revenue and firm gas base revenue. Cost of gas
revenue, including interruptible revenue, is collected from customers through
the operation of a cost of gas adjustment mechanism. Changes in this
component of gas operating revenue does not affect net income as it tracks
corresponding changes in gas supply costs.
Interruptible revenue decreased by $0.8 million in 1997 compared to
1996. This decrease is the result of lower therm sales and lower margins in
1997 as the wholesale price of natural gas approached the price of oil.
Margins earned on interruptible gas sales are used to directly lower rates
to firm gas customers through the cost of gas adjustment mechanism.
Firm base gas revenue is that portion of gas operating revenue that
has a direct impact on net income. In 1997, firm base gas revenue decreased
$0.3 million compared to 1996 due to lower sales volume. 1997 firm base gas
revenue increased $0.3 million, or 4.4%, compared to 1995.
Other Revenue declined from $45,000 in 1996 to $36,000 in 1997. The
decrease in Other Revenue from $941,000 in 1995 is the result of the
termination of a service agreement between Unitil Resources, Inc. and a
principal customer.
OPERATING EXPENSES
Fuel and Purchased Power expense is the cost of fuel used in electric
generation and wholesale energy and capacity purchased to meet the Unitil
System's electric energy requirements. Fuel and purchased power expenses
(normally recoverable from customers through periodic cost recovery
adjustment mechanisms) decreased $0.8 million, or 0.8% in 1997 compared to
1996. The change reflects a decrease in the System's total energy
requirements in 1997. The combined power supply portfolio of the Unitil
System is comprised of a variety of resources. For 1997, the portfolio was
comprised of: 17% owned generation; 61% purchased power from utilities; and
22% purchased power from non-utility generators.
Gas Purchased for Resale reflects gas purchased and made to supply the
System's total gas energy requirements. Purchased Gas is recoverable from
customers through the cost of gas adjustment mechanism. Purchased Gas costs
decreased by approximately $1.3 million or 9.7% in 1997 as compared to 1996,
reflecting a decrease in therms purchased in 1997 and higher wholesale gas
prices in 1996. Gas purchased for resale increased by $1.5 million, or 14%
in the 2 year period from 1995 to 1997, based on higher wholesale prices and
an increase in therms purchased.
Under Order 636, the Federal Energy Regulatory Commission
(FERC) has allowed gas pipeline suppliers to recover prudently incurred cost
resulting from the transition into a deregulated environment. The Company's
combination gas and electric utility operating subsidiary has been incurring
FERC-approved transition charges from its natural gas pipeline supplier since
1992. Through the end of 1997, the amount of transition costs incurred by the
Company totaled approximately $3.1 million. These costs are being recovered
directly from gas customers through the cost of gas adjustment mechanism.
On the basis of estimates included in rate filings before the FERC and other
publicly available information, the Company currently estimates that it may
incur up to an additional $0.3 million of transition costs in future years.
The Company expects full recovery of these costs through billings to
customers.
Operation and Maintenance expense, which includes distribution
operating costs, conservation and load management program expenditures and
the company's share of operating costs related to power production at the
generation facilities in which the company has a partial ownership interest,
decreased by approximately $0.6 million, or 2.3% in 1997 compared to 1996.
The decrease reflects lower distribution operating expenses partially offset
by the higher production-related operating costs and an increase in expenses
for the Company's restructuring activities and new business initiatives.
In 1996, Operation and Maintenance expense increased over 1995 by
approximately $1.3 million, or 5.6%, primarily due to expenses in 1996 in
support of the Company's utility operations, regulatory activities, and new
business initiatives.
DEPRECIATION, AMORTIZATION AND TAXES
Depreciation expense increased $0.7 million, or 9.7%, for 1997 over
the prior year due to a higher level of plant in service.
Amortization of the Cost of Abandoned Properties relates to the
abandonment of an investment in the Seabrook Nuclear Power Plant by the
Company's Massachusetts retail operating subsidiary. A portion of the former
investment in this project is being recovered in rates to electric customers
as allowed by the Massachusetts Department of Telecommunications and Energy
(formerly known as the Massachusetts Department of Public Utilities).
Federal and State Income Taxes decreased in 1997 compared to 1996
by $0.5 million. This result reflects lower net income before taxes in 1997.
Local Property and Other Taxes increased $0.3 million, or 5.9%,
in 1997. This increase mainly reflects the annual property tax increases set
by local communities.
NON-OPERATING INCOME/EXPENSES
Non-Operating Income/Expenses in 1997 represent expenses of
approximately $0.2 million including expenditures related to the Company's
Community Emergency Preparedness Grant programs. In 1996 Non-Operating
Income of $0.6 million reflects the one time gain on the sale of the
Company's former corporate headquarters.
INTEREST EXPENSE
Interest Expense, Net increased 16.1% in 1997 over 1996, due to
increases in interest rates and long-term borrowings. Long-term debt
increased as a result of the construction financing of the Company's new
corporate headquarters.
CAPITAL REQUIREMENTS AND LIQUIDITY
The Unitil System requires capital for the acquisition of property,
plant and equipment in order to improve, protect, maintain and expand its
electric and gas distribution systems, to develop and market new
energy- related products and services and to improve customer service
operations and capabilities. The capital necessary to meet these
requirements is derived primarily from the Company's retained earnings and
through the sale of shares of common stock through the Company's Dividend
Reinvestment and Stock Purchase Plans. When internally-generated funds are
not available, it is the Company's policy to borrow funds on a short-term
basis to meet the capital requirements of its subsidiaries and, when
necessary, to repay short-term debt through the sale and issuance of
permanent financing.
Cash Flows from Operating Activities increased by $9.9 million in
1997 after decreasing by $10.8 million in 1996. In 1997, compared to 1996,
$8.3 million of the increase in operating cash flow was the result of a
decrease in the timing difference (undercollection) between the payment on
fuel, purchased power and purchased gas costs and the corresponding recovery
of these costs in revenue billed under periodic cost recovery mechanisms.
The balance of the increase reflects other changes in the Company's working
capital requirements as detailed in the Consolidated Statements of Cash
Flows.
Operating Activities (000's) 1997 1996 1995
Net Cash Provided by
Operating Activities $16,171 $6,230 $17,018
Cash Flows from Investing Activities decreased approximately $4.6
million in 1997 compared to 1996, reflecting spending, in 1996, for the
construction of the Company's new corporate headquarters. The Company also
received cash payments of $0.9 million and $2 million from the State of New
Hampshire in 1996 and 1995, respectively, related to the eminent domain
taking of is former corporate headquarters for a highway expansion project.
Investing Activities (000's) 1997 1996 1995
Net Cash Used in Investing Activities $(13,887) $(18,484) $(12,645)
The change in Cash Flows from Financing Activities in 1997 compared
to 1996 reflects a decrease in borrowings due to the repayment of short-term
debt. Higher short-term borrowings in 1996 were primarily due to funding of
the timing difference (undercollection) between payments on fuel, purchased
power and purchased gas costs and the corresponding recovery of these costs
in revenue billed under periodic cost recovery mechanisms as well as the
construction financing of the Company's new corporate headquarters.
Financing Activities (000's) 1997 1996 1995
Net Cash (Used In) Provided
by Financing Activities $(2,850) $11,759 ($4,785)
During 1997, the Company raised $1.7 million of additional common
equity capital through the issuance of 51,529 shares of common stock in
connection with the Dividend Reinvestment and Stock Purchase plans. The
Company raised $1.1 million of additional common equity capital in 1996 and
$1.0 million of additional equity capital in 1995, through the issuance of
52,081 and 58,457 shares, respectively of common stock in connection with
these plans. The Company also issued shares during each of the years from
1995 through 1997 as a result of the exercise of options granted under the
Company's Key Employee Stock Option Plan (KESOP). The total number of shares
issued under the KESOP plan in 1997, 1996 and 1995 were 28,222 shares, 2,400
shares and 3,291 shares, respectively.
REGULATORY MATTERS
Competition and Restructuring -- Regulatory activity in both Massachusetts
and New Hampshire has focused on the restructuring of the electric industry
and the process of deregulating the retail sale of electric energy. March 1,
1998 was the "Retail Access Date" for Massachusetts consumers, while July 1,
1998 is targeted as "Choice Date" for New Hampshire consumers. Under these
restructuring proposals, electricity consumers would be allowed to choose
their supplier of electricity from the competitive market, and have their
local utility deliver that electricity over its distribution system at
regulated rates.
In Massachusetts, regulators, gas utilities and other stakeholders
have also begun a collaborative effort to develop solutions to the many
issues that surround restructuring the local natural gas distribution
business. The Massachusetts Department of Telecommunications and Energy
(formerly known as the Department of Public Utilities, hereinafter referred
to as the MDTE) issued a directive to all gas distribution companies to file
unbundled rates to be effective November 1, 1998, the first step in a
multi-year phase in of a restructured natural gas industry in Massachusetts.
Unitil has been preparing for the electric industry restructuring by
developing transition plans that will move its utility subsidiaries into
this new market structure in a way that will ensure fairness in the treatment
of the Company's assets and obligations that are dedicated to the current
regulated franchises and, at the same time, provide choice for all customers.
Simultaneous with this transition process for Unitil's regulated utilities,
the Company is moving to position its competitive market subsidiary, Unitil
Resources, Inc., to pursue growth areas both within and beyond the Company's
traditional franchises in the emerging, competitive electric energy market.
Unitil also has been participating in the natural gas collaborative
process and is preparing a transition plan to be filed with the MDTE in the
second quarter of 1998.
Massachusetts (Electric) In November 1997, the Massachusetts Legislature
enacted restructuring legislation (the Act) that, in early December, was
signed into law by Governor Cellucci. The Act required all electric utilities
that did not have a restructuring plan on file with the MDTE to file a plan
by December 31, 1997, and set March 1, 1998 as the date that competition
would start for all Massachusetts electricity consumers, the "Retail Access
Date". The Act required utilities to provide: a) an estimate and detailed
accounting of its total transition costs eligible for recovery; b) a
description of its strategies to mitigate its transition costs; c) unbundled
prices for distribution, transmission, generation and other services;
d) proposed charges for recovery of transition costs; e) proposed programs
for universal service for all customers; f) proposed programs and recovery
mechanisms to promote energy conservation and demand side management;
g) procedures for ensuring direct retail access to all generation suppliers;
and h) discussions of the impact of the plan on the Company's employees and
the communities served by the Company. In addition, the Act required all
Massachusetts utilities to reduce their rates to all consumers by 10%,
effective March 1, 1998.
Unitil's Massachusetts operating subsidiary, Fitchburg Gas and
Electric Light Company (FG&E), filed its Restructuring Plan (The Plan) with
the MDTE on December 31, 1997. The Plan, which substantially complies with
the Act, was conditionally approved by the MDTE in February 1998, and will
be the subject of an MDTE investigation, including evidentiary hearings to
be held in mid-March, which will result in final MDTE approval in the second
quarter of 1998.
As part of The Plan, FG&E has agreed to divest itself of all power
supply assets and contracts. The Company has developed and started to
implement its divestiture plan with a goal of completing divestiture by year
end 1998. Divestiture will place an actual "market value" on these assets
thereby enabling the Company to recover all "above-market" or "transition"
or "stranded", costs via a non-bypassable Transition Charge approved by the
MDTE. The Company included its estimate and a detailed accounting of those
costs and a description of its strategies to mitigate them.
The Plan also provides its customers with choice of supplier on March
1, 1998, unbundled rates (i.e., rates separated into Distribution,
Transmission, Generation and Transition components), and a 10 percent
discount effective March 1, to be followed by an additional 5 percent
discount when divestiture is completed. To ensure universal service so that
all consumers may receive electric service, the Plan provides for offering
"Standard Offer Service", "Default Service" and "Open Access" to transmission
facilities. FG&E's Plan includes a substantial commitment to our environment
- -- increasing the Company's annual expenditures on energy efficiency programs
and providing funding for a state-run renewable resources program. Finally,
the Plan includes a discussion as to why there will be no adverse impacts on
the Company's employees or the communities we serve.
Standard Offer Service will be offered to consumers who choose not
to choose a competitive supplier for up to seven years, from supplies secured
by FG&E from the market at no profit to FG&E. The purpose of this service is
to provide consumers with a "fixed-price" power supply against which they can
measure competitive offers before they are ready to enter the competitive
market.
Default Service will be offered to all consumers who for whatever
reason do not receive their power supply from their chosen supplier. This
service will be offered at market rates, at no profit to the FG&E.
Open Access guarantees all consumers access to competitive power
supplies from any registered supplier, once the supplier delivers the power
to the New England transmission grid now controlled by an "Independent
System Operator".
Massachusetts (Gas) In July 1997, the MDTE directed all Massachusetts gas
Local Distribution Companies (LDCs) to form a collaborative with other
stakeholders to develop common principles and appropriate regulations by
which unbundling by all LDCs might proceed. On September 15, 1997 the
Massachusetts Gas Unbundling Collaborative had its first meeting. Since
that time, a great deal of effort has been expended toward achieving the
MDTE's stated goal. However, a great deal more work needs to be done before
the principles and regulations are completed and presented to the MDTE for
its review.
On August 18, 1997 the MDTE further directed FG&E and four other
LDCs to file unbundled gas rates for its review to become effective November
1, 1998. The Company is currently engaged in carrying out this directive
and plans to file its unbundled rates by April 15, 1998.
Unlike the electric industry restructuring which will provide all
customers with choice of suppliers at the same time, gas industry
restructuring appears to be heading towards a multi-year phase in of choice
of gas supplier starting November 1, 1998.
New Hampshire In New Hampshire, House Bill 1392 (now known as "RSA 374-F")
was signed into law by the Governor in May, 1996. RSA 374-F establishes
principles, standards and a timetable for the New Hampshire Public Utilities
Commission (NHPUC) to implement full, open retail electric competition as
early as January 1, 1998, but no later than July 1, 1998. The law also
directs the NHPUC to set interim access charges for the recovery of above
market "stranded" power supply costs and to make a final determination on
these access charges within two years of implementation of full competition.
As required by RSA 374-F, the NHPUC set a procedural schedule for
opening up the state to retail competition. After months of hearings, the
NHPUC issued its Plan on February 28, 1997: a) requiring all New Hampshire
utilities to file restructuring plans for its consideration; b) providing
for full recovery of stranded costs by those utilities whose rates were
below the New England average (this includes both of Unitil's New Hampshire
Retail Operating subsidiaries) and partial recovery of stranded costs by
those utilities with rates above the New England average; c) requiring all
utilities to file unbundled rates and interim stranded cost recovery charges;
and d) prohibiting marketing affiliates of New Hampshire utilities from
selling energy on a competitive basis in their service territories and
imposing other constraints on their ability to sell energy anywhere in New
Hampshire.
In April, 1997, all of the New Hampshire utilities and several other
parties filed for rehearing on many issues resulting from the NHPUC's Plan.
In addition, the Public Service Company of New Hampshire (PSNH) filed suit in
Federal Court seeking to overturn several of the requirements of the NHPUC's
Plan. Unitil and all of the other New Hampshire electric utilities
subsequently intervened in the PSNH federal court appeal as party plaintiffs.
Ninety days of mediation between PSNH and some of the parties failed to
arrive at an acceptable solution and the mediation effort was terminated on
September 2, 1997.
In September, 1997, New Hampshire Governor Shaheen filed a Plan with
the NHPUC, designed to put aside all contentious issues, make the Federal
Court suit moot and set the framework for bringing competition to the Granite
State by July 1, 1998. Several key members of the New Hampshire Legislature
supported the Governors proposal. In addition, the NHPUC began the rehearing
process, but limited its efforts to the issues that PSNH took to federal
court.
Several companies, including the Unitil Companies, have begun
negotiations with various stakeholders to reach resolution of the many issues
left unresolved by the NHPUC in an attempt to revive the process and bring
about competition by July 1, 1998. One New Hampshire utility has reached
settlement with some of the parties and filed that settlement with the NHPUC
for its approval. The Unitil Companies have reached an agreement in
principle with several parties and are proceeding to negotiate a detailed
settlement to be filed with the NHPUC that could bring about competition by
July 1.
The Unitil proposed settlement plan would provide Unitil's retail electric
distribution consumers with access to the retail energy supply market in New
Hampshire. Under this plan, all of the Company's New Hampshire customers
will continue to enjoy Unitil's very competitive electric rates -- among the
lowest in New England -- and also will benefit from market competition and
the resulting innovation and energy savings. Unitil's settlement plan
guarantees all its customers competitive retail delivery prices, open and
nondiscriminatory access to competitive electricity suppliers, reliable
electric service and comprehensive consumer protection standards. The
Company's settlement plan achieves these benefits and safeguards for
consumers, while providing for full recovery of Unitil's obligations that
were undertaken to serve customers in the Company's New Hampshire
franchises, and while providing a sensible framework enabling its marketing
affiliate to compete anywhere in New Hampshire and ensuring full and fair
competition among all competitive suppliers.
NH Pilot Program -- In June 1996, the New Hampshire Retail Competition Pilot
Program (Pilot Program), mandated by legislation enacted a year earlier,
became operational. During the two-year term of the Pilot Program, up to 3%
or some 17,000 New Hampshire electric consumers are allowed to choose from
competing electric suppliers, and have this supply delivered across the
local utility system. The Company's subsidiary, Unitil Resources, Inc.,
began competitive marketing efforts in May 1996, and began making sales in
June, 1996. The Pilot Program is expected to conclude for the Unitil
Companies on June 30, 1998.
Rate Cases The last comprehensive regulatory proceedings to increase base
rates for Unitil's three retail operating subsidiaries occurred in 1985 for
Concord Electric Company, 1984 for Fitchburg Gas and Electric Light Company
and 1982 for Exeter & Hampton Electric Company. A majority of the System's
operating revenues are collected under various periodic rate adjustment
mechanisms including fuel, purchased power, cost of gas and energy
efficiency program cost recovery mechanisms. Restructuring will change the
methods of how certain costs are recovered from customers and from suppliers.
Transition costs ( aka "stranded costs"), Standard Offer Service and Default
Service power supply costs, internal and external transmission service costs
and energy efficiency and renewable energy program costs are expected to be
recovered via fully reconciling rate adjustment mechanisms.
Millstone Unit No. 3 Unitil's Massachusetts operating subsidiary, Fitchburg
Gas and Electric Light Company, has a 0.217% ownership (2.49 MW) in the
Millstone Unit No. 3 (Millstone 3) nuclear generating unit. Millstone 3 has
been out of service since March 1996, and has been classified as a Category 3
facility by the Nuclear Regulatory Commission (NRC) since June 28, 1996. The
NRC assigns this rating to plants which it deems to have significant
weaknesses that warrant maintaining the plant in shutdown condition until the
operator demonstrates that adequate programs have been established and
implemented to ensure substantial improvement in the operation of the plant.
Millstone 3 must receive restart authorization by a vote of the NRC
Commissioners prior to resuming power operation.
The Company can only project when Millstone 3 may be authorized by
the NRC to restart, but forecasts the unit's restart in mid 1998. During the
period that Millstone 3 remains out of service, FG&E will continue to incur
its proportionate share of the unit's ongoing Operations and Maintenance
(O&M) costs, and may incur additional O&M costs and capital expenditures to
meet NRC requirements. FG&E will also incur costs to replace the power that
was expected to be generated by the unit. In August 1997, the Company, in
concert with other nonoperating joint owners, filed a demand for arbitration
in Connecticut and a lawsuit in Massachusetts, in an effort to recover costs
associated with the extended unplanned shutdown and the associated costs. The
arbitration and legal cases are actively proceeding.
ENVIRONMENTAL ISSUES
In 1997, Fitchburg Gas and Electric Light Company completed the
majority of work at two former manufactured gas plant (MGP) sites under
the requirements of the Massachusetts Contingency Plan (MCP).
In July, the Logan Street MGP site in Gardner achieved permanent
closure and was closed-out with the MCP. This was accomplished by capping
the site so that exposure to soils was eliminated, and also by placing an
"Activities and Use Limitation" on the deed for this site. This limitation
informs future buyers of the potential hazards at the site.
In December 1997, the Company submitted a Phase III report that
provides for temporary closure for the majority of the Sawyer Passway MGP
site. This temporary closure allows the Company to monitor the site every
five years to determine if a more feasible remediation alternative has been
developed. There is a portion of the Sawyer Passway MGP site which still
remains open under the MCP rule, but it is expected that this portion will
be closed out in 1998.
The costs of remedial action at these sites is initially funded from
traditional sources of capital and recovered from customers under a rate
recovery mechanism approved by the MDTE. The Company also has a number of
liability insurance policies that may provide coverage for environmental
remediation at these sites.
YEAR 2000
The Company has conducted a preliminary evaluation of the Company's
computer systems to determine if the software that the Company currently
uses is "Year 2000" compliant. Certain of the software applications
currently in use by the company are certified to be Year 2000 compliant by
the software vendors from whom the applications were purchased.
Certain other software applications currently in use by the Company
are not Year 2000 compliant. The company has made plans to replace or upgrade
those applications which are not Year 2000 compliant before January 1, 2000.
The Company is conducting surveys and compiling cost estimates of the effort
involved to perform those replacements and upgrades. Currently, Management
believes the cost to bring all of its software applications into Year 2000
compliance will not have a material adverse effect on the Company's results
of operations, and involves a Capital outlay of approximately $0.2 million
to $0.5 million.
NEW ACCOUNTING STANDARD
During 1997, the Company adopted Statement of Financial Standards
(SFAS) No. 128, "Earnings per Share." This Statement supersedes all previous
accounting pronouncements regarding the reporting of earnings per share data
and requires the presentation of basic and diluted earnings per share
information by all publicly traded entities. The adoption of this reporting
standard by the Company is effective with the reporting years presented in
the financial statements.
FORWARD-LOOKING INFORMATION
This report contains forward-looking statements which are subject to
the inherent uncertainties in predicting future results and conditions.
Certain factors that could cause the actual results to differ materially
from those projected in these forward-looking statements include, but are
not limited to; variations in weather, changes in the regulatory environment,
customers' preferences on energy sources, general economic conditions,
increased competition and other uncertainties, all of which are difficult to
predict, and many of which are beyond the control of the Company.
Item 8. Financial Statements and Supplemental Data
Report of Independent Certified Public Accountants
To the Shareholders of Unitil Corporation:
We have audited the accompanying consolidated balance sheets and
consolidated statements of capitalization of Unitil Corporation and
subsidiaries as of December 31, 1997 and 1996, and the related consolidated
statements of earnings, cash flows and changes in common stock equity for
each of the three years in the period ended December 31, 1997. These
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Unitil Corporation and subsidiaries as of December 31, 1997 and 1996, and
the consolidated results of their operations and their consolidated cash
flows for each of the three years in the period ended December 31, 1997, in
conformity with generally accepted accounting principles.
We have also audited Schedule VIII of Unitil Corporation and
subsidiaries as of December 31, 1997 and for the three years then ended
included in Part IV Item 14(a)(2). In our opinion, the schedule presents
fairly, in all material respects, the information required to be set forth
therein.
GRANT THORNTON LLP
Boston, Massachusetts
February 10, 1998
CONSOLIDATED BALANCE SHEETS (000's)
ASSETS
December 31, 1997 1996
Utility Plant:
Electric $166,636 $157,875
Gas 30,473 28,729
Common 19,689 18,780
Construction Work in Progress 2,677 2,161
Utility Plant 219,475 207,545
Less: Accumulated Depreciation 68,360 63,787
Net Utility Plant 151,115 143,758
Other Property & Investments 42 42
Current Assets:
Cash 2,337 2,903
Accounts Receivable - Less Allowance for
Doubtful Accounts of $653 and $660 16,890 16,383
Materials and Supplies 2,663 2,479
Prepayments 434 481
Accrued Revenue 6,796 8,859
Total Current Assets 29,120 31,105
Deferred Assets:
Debt Issuance Costs 918 829
Cost of Abandoned Properties 23,885 25,432
Prepaid Pension Costs 8,120 7,348
Other Deferred Assets 24,777 23,594
Total Deferred Assets 57,700 57,203
TOTAL $237,977 $232,108
(The accompanying Notes are an integral part of these statements.)
CONSOLIDATED BALANCE SHEETS (Cont.) (000's)
CAPITALIZATION AND LIABILITIES
December 31, 1997 1996
Capitalization:
Common Stock Equity $71,644 $67,974
Preferred Stock, Non-Redeemable,
Non-Cumulative 225 225
Preferred Stock, Redeemable, Cumulative 3,666 3,666
Long-Term Debt, Less Current Portion 63,896 60,917
Total Capitalization 139,431 132,782
Capitalized Leases, Less Current Portion 4,733 4,630
Current Liabilities:
Long-Term Debt, Current Portion 4,470 1,294
Capitalized Leases, Current Portion 883 1,000
Accounts Payable 14,734 15,104
Short-Term Debt 18,000 21,400
Dividends Declared and Payable 212 191
Refundable Customer Deposits 2,187 1,585
Taxes (Refundable) (554) (147)
Interest Payable 1,087 1,484
Other Current Liabilities 2,635 2,044
Total Current Liabilities 43,654 43,955
Deferred Liabilities:
Investment Tax Credits 1,437 1,610
Other Deferred Liabilities 7,864 8,489
Total Deferred Liabilities 9,301 10,099
Deferred Income Taxes 40,858 40,642
TOTAL $237,977 $232,108
(The accompanying Notes are an integral part of these statements.)
CONSOLIDATED STATEMENTS OF EARNINGS
(000's except common shares and per share data)
Year Ended December 31, 1997 1996 1995
Operating Revenues:
Electric $149,973 $149,696 $138,099
Gas 19,729 21,105 17,630
Other 36 45 941
Total Operating Revenues 169,738 170,846 156,670
Operating Expenses:
Fuel and Purchased Power 99,974 100,768 92,346
Gas Purchased for Resale 12,032 13,323 10,523
Operation and Maintenance 23,550 24,110 22,824
Depreciation 7,631 6,954 6,315
Amortization of Abandoned
Properties 1,547 1,822 1,518
Provisions for Taxes:
Local Property and Other 5,276 4,983 4,784
Federal and State Income 4,166 4,613 4,135
Total Operating Expenses 154,176 156,573 142,445
Operating Income 15,562 14,273 14,225
Non-Operating Expenses (Income) 160 (627) 217
Income Before Interest Expense 15,402 14,900 14,008
Interest Expense, Net 7,167 6,171 5,639
Net Income 8,235 8,729 8,369
Less Dividends on
Preferred Stock 276 278 284
Net Income Applicable to
Common Stock $7,959 $8,451 $8,085
Average Common Shares Outstanding 4,412,869 4,354,297 4,298,752
Basic Earnings Per Share $1.80 $1.94 $1.88
Diluted Earnings Per Share $1.76 $1.89 $1.85
(The accompanying Notes are an integral part of these statements.)
CONSOLIDATED STATEMENTS OF CAPITALIZATION (000's)
December 31, 1997 1996
Common Stock Equity
Common Stock, No Par Value
(Authorized - 8,000,000 shares;
Outstanding - 4,463,816 and
4,384,065 Shares) $35,653 $33,984
Stock Options 1,452 1,506
Retained Earnings 34,539 32,484
Total Common Stock Equity 71,644 67,974
Preferred Stock
CECo Preferred Stock, Non-Redeemable,
Non-Cumulative: 225 225
6% Series, $100 Par Value
CECo Preferred Stock, Redeemable,
Cumulative: 215 215
8.70% Series, $100 Par Value
E&H Preferred Stock, Redeemable,
Cumulative:
5% Series, $100 Par Value 91 91
6% Series, $100 Par Value 168 168
8.75% Series, $100 Par Value 344 344
8.25% Series, $100 Par Value 406 406
FG&E Preferred Stock, Redeemable,
Cumulative:
5.125% Series, $100 Par Value 1,035 1,035
8% Series, $100 Par Value 1,407 1,407
Total Preferred Stock 3,891 3,891
Long-Term Debt
CECo First Mortgage Bonds:
Series C, 6.75%, Due January 15, 1998 1,520 1,552
Series H, 9.43%, Due September 1, 2003 5,200 5,850
Series I, 8.49%, Due October 14, 2024 6,000 6,000
E&H First Mortgage Bonds:
Series E, 6.75%, Due January 15, 1998 498 504
Series H, 8.50%, Due December 15, 2002 700 805
Series J, 9.43%, Due September 1, 2003 4,000 4,500
Series K, 8.49%, Due October 14, 2024 9,000 9,000
FG&E Long-term Notes:
Twelve year Notes, 8.55%,
Due March 31, 2004 15,000 15,000
Thirty year Notes, 6.75%,
Due November 30, 2023 19,000 19,000
Unitil Realty Corp. Senior Secured Notes:
8.00% Notes Due August 1, 2017 7,448
Total Long-Term Debt 68,366 62,211
Less: Long-Term Debt, Current Portion 4,470 1,294
Total Long-Term Debt,
Less Current Portion 63,896 60,917
Total Capitalization $139,431 $132,782
(The accompanying Notes are an integral part of these statements.)
CONSOLIDATED STATEMENTS OF CASH FLOWS (000's)
Year Ended December 31, 1997 1996 1995
Cash Flows From Operating Activities:
Net Income $8,235 $8,729 $8,369
Adjustments to Reconcile
Net Income to Net Cash Provided
by Operating Activities:
Depreciation and Amortization 9,178 8,776 7,833
Deferred Taxes 660 458 (315)
Amortization of Investment
Tax Credit (172) (194) (202)
Amortization of Debt Issuance Costs 60 56 72
Provision for Doubtful Accounts 853 912 889
(Gain) Loss on Taking of
Land and Building ---- (875) 141
Changes in Assets and Liabilities:
(Increase) Decrease In:
Accounts Receivable (1,359) (2,363) (2,539)
Materials and Supplies (184) (203) (186)
Prepayments and Prepaid
Pension (725) (705) (913)
Accrued Revenue 2,063 (6,281) (286)
Increase (Decrease) In:
Accounts Payable (370) 539 2,074
Refundable Customer Deposits 602 (1,629) 731
Taxes and Interest Payable (804) (306) 612
Other, Net (1,866) (684) 738
Net Cash Provided by
Operating Activities 16,171 6,230 17,018
Cash Flows From Investing Activities:
Acquisition of Property,
Plant & Equipment (13,887) (19,359) (14,645)
Proceeds from Taking of
Land & Building ---- 875 $2,000
Net Cash Used in
Investing Activities (13,887) (18,484) (12,645)
Cash Flows from Financing Activities:
(Repayment of) Proceeds
From Short-Term Debt (3,400) 18,700 2,700
Proceeds From Issuance of
Long-Term Debt 7,500 ---- ----
Repayment of Long-Term Debt (1,345) (1,294) (2,075)
Dividends Paid (6,159) (5,998) (5,760)
Issuance of Common Stock 1,669 1,162 1,070
Retirement of Preferred Stock ---- (108) (95)
Repayment of Capital
Lease Obligations (1,115) (703) (625)
Net Cash (Used In)
Provided by Financing
Activities (2,850) 11,759 (4,785)
Net Decrease in Cash (566) (495) (412)
Cash at Beginning of Year 2,903 3,398 3,810
Cash at End of Year $2,337 $2,903 $3,398
Supplemental Cash Flow Information:
Interest Paid $7,531 $6,133 $5,943
Federal Income Taxes Paid $3,340 $3,982 $3,435
Non-Cash Financing Activities:
Capital Leases Incurred $1,057 $1,858 $1,263
(The accompanying Notes are an integral part of these statements.)
CONSOLIDATED STATEMENTS OF
CHANGES IN COMMON STOCK EQUITY (000's)
Deferred
Common Stock Option Retained
Shares Plan Earnings Total
Balance at January 1, 1995 $31,752 $1,062 $27,183 $59,997
Net Income for 1995 8,369 8,369
Dividends on preferred shares (284) (284)
Dividends on common shares -
at an annual rate of $1.28
per share (5,495) (5,495)
Stock Option Plan 248 248
Exercised stock options -
3,291 shares 61 (11) 50
Issuance of 58,457
common shares (a) 1,009 1,009
Balance at December 31, 1995 32,822 1,299 29,773 63,894
Net Income for 1996 8,729 8,729
Dividends on preferred shares (278) (278)
Dividends on common shares -
at an annual rate of $1.32 per share (5,740) (5,740)
Stock Option Plan 237 237
Exercised stock options -
2,400 shares 50 (30) 20
Issuance of 52,081
common shares (a) 1,112 1,112
Balance at December 31, 1996 33,984 1,506 32,484 67,974
Net Income for 1997 8,235 8,235
Dividends on preferred shares (276) (276)
Dividends on common shares -
at an annual rate of $1.34 per share (5,904) (5,904)
Stock Option Plan 330 330
Exercised stock options -
28,222 shares 626 (384) 242
Issuance of 51,529 common
shares (a) 1,043 1,043
Balance at December 31, 1997 $35,653 $1,452 $34,539 $71,644
(a) Shares sold and issued in connection with the Company's
Dividend Reinvestment and Stock Purchase Plan and
Employee 401(k) Tax Deferred Savings and Investment Plan
(See Note 2).
(The accompanying Notes are an integral part of these statements.)
Note 1: Summary of Significant Accounting Policies
Nature of Operations -- Unitil Corporation (Unitil or the Company) is
registered with the Securities and Exchange Commission (SEC) as a public
utility holding company under the Public Utility Holding Company Act of 1935
(the 1935 Act), and is the parent of the Unitil System. The following
companies are wholly owned subsidiaries of Unitil: Concord Electric Company
(CECo), Exeter & Hampton Electric Company (E&H), Fitchburg Gas and Electric
Light Company (FG&E), Unitil Power Corp. (UPC), Unitil Realty Corp. (URC),
Unitil Service Corp. (USC), and Unitil Resources, Inc. (URI).
Unitil's principal business is the retail sale and distribution of
electricity in New Hampshire and both electric and gas services in
Massachusetts through its retail distribution subsidiaries CECo, E&H, and
FG&E. The Company's wholesale electric power subsidiary, UPC, principally
provides all the electric power supply requirements to CECo and E&H for
resale at retail, and also engages in various other wholesale electric power
services with affiliates and non-affiliates throughout the New England
region. URI is engaged in business transactions as a competitive marketer
of electricity. Finally, URC and USC provide centralized operations to
support the Unitil System.
With respect to rates and accounting practices, CECo and E&H are subject to
regulation by the New Hampshire Public Utilities Commission (NHPUC), FG&E is
regulated by the Massachusetts Department of Telecommunications & Energy
(MDTE) (formerly known as the Massachusetts Department of Public Utilities),
and UPC is regulated by the Federal Energy Regulatory Commission (FERC).
Unitil conforms with generally accepted accounting principles, as applied to
regulated public utilities, and with the accounting requirements and
ratemaking authorities having jurisdiction.
Basis of Presentation
Principles of Consolidation --- Unitil Corporation (the Company) is the parent
company of the Unitil System (the System). The consolidated financial
statements include the accounts of the Company and all of its wholly-owned
subsidiaries. All material intercompany balances and transactions have been
eliminated in consolidation.
Use of Estimates --- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, and requires disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from
those estimates.
Revenue Recognition --- The Company's operating subsidiaries record electric
and gas operating revenues based upon the amount of electricity and gas
delivered to customers through the end of the accounting period.
Depreciation --- Depreciation provisions for the Company's utility operating
subsidiaries are determined on a group straight-line basis. Provisions for
depreciation were equivalent to the following composite rates, based on the
average depreciable property balances at the beginning and end of each year:
1997 - 3.45 percent; 1996 - 3.45 percent; and 1995 - 3.48 percent.
Amortization of Abandoned Properties --- FG&E is recovering a portion of its
former investment in the Seabrook Nuclear Power Plant in rates to its
customers through a Seabrook Amortization Surcharge as ordered by the MDTE.
Federal Income Taxes --- Deferred tax assets and liabilities are determined
based on differences between the financial reporting and tax bases of assets
and liabilities, and are measured by applying tax rates applicable to the
taxable years in which those differences are expected to reverse. The Tax
Reduction Act of 1986 eliminated investment tax credits. Investment tax
credits generated prior to 1986 are being amortized, for financial reporting
purposes, over the productive lives of the related assets.
New Accounting Standard --- During 1997, the Company adopted Statement of
Financial Accounting Standards (SFAS) No. 128, "Earnings per Share." This
Statement supersedes all previous accounting pronouncements regarding the
reporting of earnings per share data and requires the presentation of basic
and diluted earnings per share information by all publicly traded entities.
The adoption of this reporting standard by the Company is effective with the
reporting years presented in the financial statements.
Reclassifications --- Reclassifications are made periodically to amounts
previously reported to conform with current year presentation.
Note 2: Common Stock
New Shares Issued --- During 1997, the Company raised $1,042,974 of
additional common equity capital through the issuance of 51,529 shares of
common stock in connection with the Dividend Reinvestment and Stock Purchase
Plan and Employee 401(k) Tax Deferred Savings and Investment Plan. The
Dividend Reinvestment and Stock Purchase Plan provides participants in the
plan a method for investing cash dividends on the Company's Common Stock and
cash payments in additional shares of the Company's Common Stock. The
Employee 401(k) Tax Deferred Savings and Investment Plan is described in
Note 9 below. In 1996, the Company raised $1,111,261 of additional common
equity capital through the issuance of 52,081 shares of common stock in
connection with these plans.
The Company maintains a Key Employee Stock Option Plan (KESOP),
which provides for the granting of options to key employees. The number of
shares granted under this plan, as well as the terms and conditions of each
grant, are determined by the Board of Directors, subject to plan limitations.
All options granted under the KESOP vest upon grant. No option can be issued
under the current plan after 1999. The plan provides options and dividend
equivalents on options granted, which are recorded at fair value as
compensation expense. The total compensation expenses recorded by the
Company with respect to this plan were $330,098, $237,044 and $248,127 for
the years ended December 31, 1997, 1996 and 1995, respectively.
Share Option Activity of the KESOP is presented in the following table:
1997 1996 1995
Beginning Options Outstanding
& Exercisable 182,495 173,362 147,981
Options Granted 25,000 1,000 17,000
Dividend Equivalents Earned 12,092 10,533 11,672
Options Exercised (28,222) (2,400) (3,291)
Options Canceled --- --- ---
Ending Options Outstanding
& Exercisable 191,365 182,495 173,362
Range of Option Exercise
Price per Share $12.11-$18.28 $12.11-$18.28 $12.11-$14.93
The Company has adopted Statement of Financial Accounting
Standards (SFAS) No. 123, "Accounting for Stock Based Compensation," and
recognizes compensation costs at fair value.
The weighted average fair value per share of options granted during
1997, 1996 and 1995 was $3.21, $3.23 and $2.57, respectively. The fair value
of options at the date of grant was estimated using the Black-Scholes model
with the following weighted average assumptions:
1997 1996 1995
Expected Life (Years) 2 3 4
Interest Rate 6.0% 6.0% 6.0%
Volatility 19.5% 19.4% 19.4%
Dividend Yield 5.5% 6.6% 6.6%
Restrictions on Retained Earnings ---Unitil Corporation has no restriction
on the payment of common dividends from retained earnings. Its three retail
distribution subsidiaries do have restrictions. Under the terms of the First
Mortgage Bond Indentures, CECo and E&H had $5,616,373 and $8,315,152,
respectively, available for the payment of cash dividends on their common
stock at December 31, 1997. Under the terms of long-term debt Purchase
Agreements, FG&E had $15,527,069 of retained earnings available for the
payment of cash dividends on its common stock at December 31, 1997.
Note 3: Preferred Stock
Certain of the Unitil subsidiaries have redeemable Cumulative
Preferred Stock outstanding and one subsidiary, CECo, has a Non-Redeemable,
Non-Cumulative Preferred Stock issue outstanding. All such subsidiaries are
required to offer to redeem annually a given number of shares of each series
of Redeemable Cumulative Preferred Stock and to purchase such shares that
shall have been tendered by holders of the respective stock. All such
subsidiaries may redeem, at their option, the Redeemable Cumulative Preferred
Stock at a given redemption price, plus accrued dividends.
The aggregate purchases of Redeemable Cumulative Preferred Stock
during 1997, 1996 and 1995 were: 1997 - $0; 1996 - $108,000; and
1995 - $94,700. The aggregate amount of sinking fund requirements of the
Redeemable Cumulative Preferred Stock for each of the five years following
1997 are $206,000 per year.
Note 4: Long-Term Debt
Certain of the Company's long-term debt agreements contain provisions
which, among other things, limit the incurring of additional long-term debt.
Total sinking fund payments relating to long-term debt amounted to
$1,294,000 and $1,294,000 in 1997 and 1996, respectively.
The aggregate amount of sinking fund requirements and normal
scheduled redemptions for each of the five years following 1997 are:
1998 - $4,469,795; 1999 - $2,466,307; 2000 - $2,480,940; 2001 - $5,146,788,
and 2002 - $5,663,951.
The fair value of the Company's long-term debt is estimated based on
the quoted market prices for the same or similar issues, or on the current
rates offered to the Company for debt of the same remaining maturities. In
management's opinion, the carrying value of the debt approximated its fair
value at December 31, 1997 and 1996.
Note 5: Credit Arrangements
At December 31, 1997, the Company had unsecured committed bank lines
for short-term debt aggregating $25,000,000 with four banks for which it pays
commitment fees. At December 31, 1997, the unused portion of the committed
credit lines outstanding was $7,000,000. The average interest rates on all
short-term borrowings were 5.98% and 5.79% during 1997 and 1996,
respectively.
Note 6: Leases
The Company's subsidiaries conduct a portion of their operations in
leased facilities and also lease some of their machinery and office
equipment. FG&E has a facility lease for twenty-two years which began in
February 1981. The lease allows five, five-year renewal periods at the option
of FG&E. The equipment leases include a twenty-five-year lease, which began
on April 1, 1973, for a combustion turbine and a liquefied natural gas
storage and vaporization facility. In addition, Unitil's subsidiaries lease
some equipment under operating leases.
The following is a schedule of the leased property under capital
leases by major classes:
Asset Balances at
December 31,
Classes of Utility Plant (000's) 1997 1996
Electric $2,054 $2,054
Gas 726 726
Common 6,420 5,823
Gross Plant 9,200 8,603
Less: Accumulated Depreciation 3,584 2,973
Net Plant $5,616 $5,630
The following is a schedule by years of future minimum lease payments
and present value of net minimum lease payments under capital and operating
leases as of December 31, 1997:
Year Ending December 31, (000's) Capital Operating
1998 $1,641 $12
1999 1,539
2000 1,299
2001 951
2002 775
2003 - 2007 1,982
Total Minimum Lease Payments $8,187 $12
Less: Amount Representing Interest 2,571
Present Value of Net Minimum Lease Payments $5,616
Total rental expense charged to operations for the years ended
December 31, 1997, 1996 and 1995 amounted to $110,000, $161,000; and $447,000,
respectively.
Note 7: Income Taxes
Federal Income Taxes were provided for the following items for the years
ended December 31, 1997, 1996 and 1995, respectively:
1997 1996 1995
Current Federal Tax Provision (000's):
Operating Income $2,999 $3,658 $3,960
Amortization of Investment Tax Credits (172) (194) (202)
Total Current Federal Tax Provision 2,827 3,464 3,758
Deferred Federal Tax Provision (000's):
Accelerated Tax Depreciation 500 603 545
Abandoned Properties (589) (655) (579)
Allowance for Funds Used During Construction
("AFUDC") and Overheads (65) (72) (73)
Post Retirement Benefits Other Than Pensions (33) (20) (20)
Remediation 112 --- ---
Deferred Maintenance Cost and Other 251 (175) (86)
Percentage Repair Allowance 108 124 107
Deferred Advances 52 304 (482)
Deferred Pensions 237 212 289
Total Deferred Federal Tax Provision 573 321 (299)
Total Federal Tax Provision $3,400 $3,785 $3,459
The components of the Federal and State income tax provisions reflected in
the accompanying consolidated statements of earnings for the years ended
December 31, 1997, 1996 and 1995 were as follows:
1997 1996 1995
Federal (000's):
Current $2,999 $3,658 $3,960
Deferred 573 321 (299)
Amortization of Investment Tax Credits (172) (194) (202)
Total Federal Tax Provision 3,400 3,785 3,459
State (000's):
Current 679 691 692
Deferred 87 137 (16)
Total State Tax Provision 766 828 676
Total Provision for Federal and State
Income Taxes (000's) $4,166 $4,613 $4,135
The differences between the Company's provisions for Federal Income Taxes
and the provisions calculated at the statutory federal tax rate, expressed
in percentages, are shown below:
Year Ended December 31, 1997 1996 1995
Statutory Federal Income Tax Rate 34% 34% 34%
Income Tax Effects of:
Investment Tax Credits (1) (1) (1)
Donation of Appreciated Land --- --- (1)
Abandoned Property (5) (5) (5)
Other, Net 1 2 2
Effective Federal Income Tax Rate 29% 30% 29%
Temporary differences which gave rise to deferred tax assets and
liabilities are shown below:
Deferred Income Taxes for the Year Ended December 31,
(000's) 1997 1996
Accelerated Depreciation $24,625 $24,374
Abandoned Property 9,098 9,688
Contributions in Aid to Construction (2,750) (2,811)
Percentage Repair Allowance 1,792 1,693
Cathodic Protection 372 349
Retirement Loss 1,823 1,526
Deferred Pensions 2,758 2,518
AFUDC 45 62
Overheads 249 301
KESOP (544) (535)
Bad Debts (246) (249)
Accumulated Deferred 3,441 3,885
Remediation 132 ---
Other 63 (159)
Total Deferred Income Taxes $40,858 $40,642
Note 8: Joint Ownership Units
FG&E is participating, on a tenancy-in-common basis with other New
England utilities, in the ownership of three generating units. New Haven
Harbor is a dual-fired oil-and-gas station, and Wyman Unit No. 4 is an
oil-fired station. They have been in commercial operation since August 1975
and December 1978, respectively. Millstone Unit No. 3, a nuclear generating
unit, has been in commercial operation since April 1986. Kilowatt-hour
generation and operating expenses of the joint ownership units are divided
on the same basis as ownership. FG&E's proportionate costs are reflected in
the 1997 Consolidated Statements of Earnings. FG&E has filed a plan for the
divestiture of its generating assets, with the MDTE, in accordance with the
State of Massachusetts' 1997 restructuring legislation (See Regulatory
Matters, Note 11). Information with respect to these units as of December 31,
1997 is set forth in the table below:
Company's Share (000's)
Amount of Accumulated
Utility Depreciation
Joint Ownership Proportionate Share of Plant in
Units State Ownership % Total MW Service
Millstone Unit No.3 CT 0.2170 2.50 $11,461 $3,825
Wyman Unit No.4 ME 0.1822 1.13 408 288
New Haven Harbor CT 4.5000 20.12 7,360 5,317
23.75 $19,229 $9,430
Note 9: Benefit Plans
Pension Plans --- Four of the Company's subsidiaries have Retirement and
Pension plans and related Trust Agreements to provide retirement annuities
for participating employees at age 65. The entire cost of the plans is borne
by the respective subsidiaries.
Net periodic pension (income) cost for 1997, 1996 and 1995 included
the following components:
(000's) 1997 1996 1995
Service Cost -- Benefits Earned During the Period $767 $703 $616
Interest Cost on Projected Benefit Obligation 2,023 1,921 1,812
Actual Return on Plan Assets (6,970) (4,836) (6,412)
Net Amortization and Deferral 3,873 2,016 3,652
Net Periodic Pension (Income) $(307) $(196) $(332)
The following table sets forth the plans' funded status at December 31, 1997,
1996 and 1995:
Projected Benefit Obligation (000's): 1997 1996 1995
Vested $23,310 $21,395 $24,251
Non-Vested 1,290 1,137 148
Accumulated 24,600 22,532 24,399
Due to Recognition of Future Salary Increases 5,253 4,375 3,838
Total 29,853 26,907 28,237
Plan Assets at Fair Value 42,304 36,547 32,859
Funded Status 12,451 9,640 4,622
Unrecognized Net (Gain) Loss (4,667) (2,625) 1,737
Unrecognized Prior Service Cost 98 111 125
Unrecognized Transition Obligation 238 222 205
Prepaid Pension Cost $8,120 $7,348 $6,689
Plan assets are invested in common stock, short-term investments and
various other fixed income security funds.The weighted-average discount rates
used in determining the projected benefit obligation in 1997, 1996 and 1995
were 7.25%, 7.75%, and 7.75%, respectively, while the rate of increase in
future compensation levels was 4.50% for the last three years. The expected
long-term rates of return on assets in 1997, 1996 and 1995 were 9.25%, 9.25%,
and 9.50%, respectively.
Unitil Service Corp. has a Supplemental Executive Retirement Plan
(SERP). The SERP is an unfunded retirement plan with participation limited
to executives selected by the Board of Directors. The cost associated with
the SERP amounted to $112,000; $71,000; and $60,000 for the years ended
December 31, 1997, 1996 and 1995, respectively.
Employee 401(k) Tax Deferred Savings Plan --- The Company sponsors a defined
contribution plan (under Section 401 (k) of the Internal Revenue Code)
covering substantially all of the Company's employees. Participants may elect
to defer from 1% to 12% of current compensation to the plan. The Company
matches contributions, with a maximum matching contribution of 3% of current
compensation. Employees may direct the investment of their savings plan
balances into a variety of investment options, including a Company common
stock fund. Participants are 100% vested in contributions made on their
behalf, once they have completed three years of service. The Company's share
of contributions to the plan were $389,888; $356,574; and $301,486 for the
years ended December 31, 1997, 1996 and 1995, respectively.
Post-Retirement Benefits --- The Company's subsidiaries provide health care
benefits to retirees for a twelve-month period following their retirement.
The Company's subsidiaries continue to provide life insurance coverage to
retirees. Life insurance and limited health care post-retirement benefits
require the Company to accrue post-retirement benefits during the employee's
years of service with the Company and the recognition of the actuarially
determined total post retirement benefit obligation earned by existing
retirees. At December 31, 1997, 1996 and 1995, the accumulated post
retirement benefit obligation (transition obligation) was approximately
$321,000, $342,000 and $364,000, respectively, and the period cost associated
with these benefits for 1997, 1996 and 1995 was approximately $75,000,
$132,000 and $132,000, respectively. This obligation is being recognized on
a delayed basis over the average remaining service period of active
participants and such period will not exceed 20 years. The Company has
omitted certain disclosures relating to SFAS No. 106, as the accumulated
post-retirement benefit obligation (transition obligation) is not material.
Note 10: Earnings Per Share
The following table reconciles basic and diluted earnings per share assuming
all stock options were converted to common shares per SFAS 128.
(000's except share and per share data) 1997 1996 1995
Basic Income Available to Common Stock $7,959 $8,451 $8,085
Average Common Shares Outstanding 4,412,869 4,354,297 4,298,752
Plus: Incremental Shares from 107,512 106,366 71,959
Assumed Conversion
Average Common Shares Outstanding plus
Assumed Options converted 4,520,381 4,460,663 4,370,711
Basic Earnings per Share $1.80 $1.94 $1.88
Diluted Earnings per Share $1.76 $1.89 $1.85
Note 11: Commitments and Contingencies
Environmental Matters --- In 1997, Fitchburg Gas and Electric Light Company
completed the majority of work at two former manufactured gas plant (MGP)
sites under the requirements of the Massachusetts Contingency Plan (MCP).
In July, the Logan Street MGP site in Gardner achieved permanent closure and
was closed-out with the MCP. This was accomplished by capping the site so
that exposure to soils was eliminated, and also by placing an "Activities and
Use Limitation" on the deed for this site. This limitation informs future
buyers of the potential hazards at the site.
In December 1997, the Company submitted a Phase III report that provides for
temporary closure for the majority of the Sawyer Passway MGP site. This
temporary closure allows the Company to monitor the site every five years to
determine if a more feasible remediation alternative has been developed.
There is a portion of the Sawyer Passway MGP site which still remains open
under the MCP rule, but it is expected that this portion will be closed out
in 1998.
The costs of remedial action at these sites is initially funded from
traditional sources of capital and recovered from customers under a rate
recovery mechanism approved by the MDTE. The Company also has a number of
liability insurance policies that may provide coverage for environmental
remediation at these sites.
Regulatory Matters
Competition and Restructuring -- Regulatory activity in both Massachusetts
and New Hampshire has focused on the restructuring of the electric industry
and the process of deregulating the retail sale of electric energy. March 1,
1998 is the "Retail Access Date" for Massachusetts consumers, while July 1,
1998 is targeted as "Choice Date" for New Hampshire consumers. Under these
restructuring proposals, electricity consumers would be allowed to choose
their supplier of electricity from the competitive market, and have their
local utility deliver that electricity over its distribution system at
regulated rates.
In Massachusetts, regulators, gas utilities and other stakeholders
have also begun a collaborative effort to develop solutions to the many
issues that surround restructuring the local natural gas distribution
business. The Massachusetts Department of Telecommunications and Energy
(formerly known as the Department of Public Utilities, hereinafter referred
to as the MDTE) issued a directive to all gas distribution companies to file
unbundled rates to be effective November 1, 1998, the first step in a
multi-year phase in of a restructured natural gas industry in Massachusetts.
Unitil has been preparing for the electric industry restructuring by
developing transition plans that will move its utility subsidiaries into this
new market structure in a way that will ensure fairness in the treatment of
the Company's assets and obligations that are dedicated to the current
regulated franchises and, at the same time, provide choice for all customers.
Simultaneous with this transition process for Unitil's regulated utilities,
the Company is moving to position its competitive market subsidiary, Unitil
Resources, Inc., to pursue growth areas both within and beyond the Company's
traditional franchises in the emerging, competitive electric energy market.
Unitil also has been participating in the natural gas collaborative
process and is preparing a transition plan to be filed with the MDTE in the
second quarter of 1998.
Massachusetts (Electric)-In November 1997, the Massachusetts Legislature
enacted restructuring legislation (the Act) that, in early December, was
signed into law by Governor Cellucci. The Act required all electric utilities
that did not have a restructuring plan on file with the MDTE to file a plan
by December 31, 1997, and set March 1, 1998 as the date that competition
would start for all Massachusetts electricity consumers, the "Retail Access
Date". The Act required utilities to provide: a) an estimate and detailed
accounting of its total transition costs eligible for recovery; b) a
description of its strategies to mitigate its transition costs; c) unbundled
prices for distribution, transmission, generation and other services;
d) proposed charges for recovery of transition costs; e) proposed programs
for universal service for all customers; f) proposed programs and recovery
mechanisms to promote energy conservation and demand side management;
g) procedures for ensuring direct retail access to all generation suppliers;
and h) discussions of the impact of the plan on the company's employees and
the communities served by the Company. In addition, the Act required all
Massachusetts utilities to reduce their rates to all consumers by 10%,
effective March 1, 1998.
Unitil's Massachusetts operating subsidiary, Fitchburg Gas and
Electric Light Company (FG&E), filed its Restructuring Plan (The Plan) with
the MDTE on December 31, 1997. The Plan, which substantially complies with
the Act, was conditionally approved by the MDTE in February 1998, and will be
the subject of an MDTE investigation, including evidentiary hearings to be
held in mid-March, which will result in final MDTE approval in the second
quarter of 1998.
As part of The Plan, FG&E has agreed to divest itself of all power
supply assets and contracts. The Company has developed and started to
implement its divestiture plan with a goal of completing divestiture by year
end 1998. Divestiture will place an actual "market value" on these assets
thereby enabling the Company to recover all "above-market" or "transition"
or "stranded", costs via a non-bypassable Transition Charge approved by the
MDTE. The Company included its estimate and a detailed accounting of those
costs and a description of its strategies to mitigate them.
The Plan also provides its customers with choice of supplier on March
1, 1998, unbundled rates (i.e., rates separated into Distribution,
Transmission, Generation and Transition components), and a 10 percent
discount effective March 1, to be followed by an additional 5 percent
discount when divestiture is completed. To ensure universal service so that
all consumers may receive electric service, the Plan provides for offering
"Standard Offer Service", "Default Service" and "Open Access" to transmission
facilities. FG&E's Plan includes a substantial commitment to our environment
- -- increasing the Company's annual expenditures on energy efficiency programs
and providing funding for a state-run renewable resources program. Finally,
the Plan includes a discussion as to why there will be no adverse impacts on
the Company's employees or the communities we serve.
Standard Offer Service will be offered to consumers who choose not to
choose a competitive supplier for up to seven years, from supplies secured by
FG&E from the market at no profit to FG&E. The purpose of this service is to
provide consumers with a "fixed-price" power supply against which they can
measure competitive offers before they are ready to enter the competitive
market.
Default Service will be offered to all consumers who for whatever
reason do not receive their power supply from their chosen supplier. This
service will be offered at market rates, at no profit to FG&E.
Open Access guarantees all consumers access to competitive power
supplies from any registered supplier, once the supplier delivers the power
to the New England transmission grid now controlled by an "Independent System
Operator".
Massachusetts (Gas) In July 1997, the MDTE directed all Massachusetts gas
Local Distribution Companies (LDCs) to form a collaborative with other
stakeholders to develop common principles and appropriate regulations by
which unbundling by all LDCs might proceed. On September 15, 1997 the
Massachusetts Gas Unbundling Collaborative had its first meeting. Since
that time, a great deal of effort has been expended toward achieving the
MDTE's stated goal. However, a great deal more work needs to be done before
the principles and regulations are completed and presented to the MDTE for
its review.
On August 18, 1997 the MDTE further directed FG&E and four other LDCs
to file unbundled gas rates for its review to become effective November 1,
1998. The Company is currently engaged in carrying out this directive and
plans to file its unbundled rates by April 15, 1998.
Unlike the electric industry restructuring which will provide all
customers with choice of suppliers at the same time, gas industry
restructuring appears to be heading towards a multi-year phase in of choice
of gas supplier starting November 1, 1998.
New Hampshire In New Hampshire, House Bill 1392 (now known as "RSA 374-F")
was signed into law by the Governor in May, 1996. RSA 374-F establishes
principles, standards and a timetable for the New Hampshire Public Utilities
Commission (NHPUC) to implement full, open retail electric competition as
early as January 1, 1998, but no later than July 1, 1998. The law also
directs the NHPUC to set interim access charges for the recovery of above
market "stranded" power supply costs and to make a final determination on
these access charges within two years of implementation of full competition.
As required by RSA 374-F, the NHPUC set a procedural schedule for
opening up the state to retail competition. After months of hearings, the
NHPUC issued its Plan on February 28, 1997: a) requiring all New Hampshire
utilities to file restructuring plans for its consideration; b) providing for
full recovery of stranded costs by those utilities whose rates were below the
New England average (this includes both of Unitil's New Hampshire Retail
Operating subsidiaries) and partial recovery of stranded costs by those
utilities with rates above the New England average; c) requiring all
utilities to file unbundled rates and interim stranded cost recovery charges;
and d) prohibiting marketing affiliates of New Hampshire utilities from
selling energy on a competitive basis in their service territories and
imposing other constraints on their ability to sell energy anywhere in New
Hampshire.
In April, 1997, all of the New Hampshire utilities and several other
parties filed for rehearing on many issues resulting from the NHPUC's Plan.
In addition, the Public Service Company of New Hampshire (PSNH) filed suit in
Federal Court seeking to overturn several of the requirements of the NHPUC's
Plan. Unitil and all of the other New Hampshire electric utilities
subsequently intervened in the PSNH federal court appeal as party plaintiffs.
Ninety days of mediation between PSNH and some of the parties failed to
arrive at an acceptable solution and the mediation effort was terminated on
September 2, 1997.
In September, 1997, New Hampshire Governor Shaheen filed a Plan with
the NHPUC, designed to put aside all contentious issues, make the Federal
Court suit moot and set the framework for bringing competition to the Granite
State by July 1, 1998. Several key members of the New Hampshire Legislature
supported the Governors proposal. In addition, the NHPUC began the rehearing
process, but limited its efforts to the issues that PSNH took to federal
court.
Several companies, including the Unitil Companies, have begun
negotiations with various stakeholders to reach resolution of the many issues
left unresolved by the NHPUC in an attempt to revive the process and bring
about competition by July 1, 1998. One New Hampshire utility has reached
settlement with some of the parties and filed that settlement with the NHPUC
for its approval. The Unitil Companies have reached an agreement in
principle with several parties and are proceeding to negotiate a detailed
settlement to be filed with the NHPUC that could bring about competition by
July 1.
The Unitil proposed settlement plan would provide Unitil's retail
electric distribution consumers with access to the retail energy supply
market in New Hampshire. Under this plan, all of the Company's New Hampshire
customers will continue to enjoy Unitil's very competitive electric rates,
among the lowest in New England, and also will benefit from market
competition and the resulting innovation and energy savings. Unitil's
settlement plan guarantees all its customers competitive retail delivery
prices, open and nondiscriminatory access to competitive electricity
suppliers, reliable electric service and comprehensive consumer protection
standards. The Company's settlement plan achieves these benefits and
safeguards for consumers, while providing for full recovery of Unitil's
obligations that were undertaken to serve customers in the Company's New
Hampshire franchises, and providing a sensible framework enabling its
marketing affiliate to compete anywhere in New Hampshire and ensuring full
and fair competition among all competitive suppliers.
NH Pilot Program -- In June 1996, the New Hampshire Retail Competition Pilot
Program (Pilot Program), mandated by legislation enacted a year earlier,
became operational. During the two-year term of the Pilot Program, up to 3%
or some 17,000 New Hampshire electric consumers are allowed to choose from
competing electric suppliers, and have this supply delivered across the local
utility system. The Company's subsidiary, Unitil Resources, Inc., began
competitive marketing efforts in May 1996, and began making sales in June,
1996. The Pilot Program is expected to conclude for the Unitil Companies on
June 30, 1998.
Rate Cases The last formal regulatory hearings to increase base rates for
Unitil's three retail operating subsidiaries occurred in 1985 for Concord
Electric Company, 1984 for Fitchburg Gas and Electric Light Company and 1981
for Exeter & Hampton Electric Company. A majority of the System's operating
revenues are collected under various periodic rate adjustment mechanisms
including fuel, purchased power, cost of gas and energy efficiency program
cost recovery mechanisms. Restructuring will change the methods of how
certain costs are recovered from customers and from suppliers. Transition
costs ( aka "stranded costs"), Standard Service and Default Service power
supply costs, internal and external transmission service costs and energy
efficiency and renewable energy program costs are expected to be recovered
via fully reconciling rate adjustment mechanisms.
Millstone Unit No. 3 Unitil's Massachusetts operating subsidiary, Fitchburg
Gas and Electric Light Company, has a 0.217% ownership (2.49 MW) in the
Millstone Unit No. 3 (Millstone 3) nuclear generating unit. Millstone 3 has
been out of service since March 1996, and has been classified as a Category 3
facility by the Nuclear Regulatory Commission (NRC) since June 28. The NRC
assigns this rating to plants which it deems to have significant weaknesses
that warrant maintaining the plant in shutdown condition until the operator
demonstrates that adequate programs have been established and implemented to
ensure substantial improvement in the operation of the plant. Millstone 3
must receive restart authorization by a vote of the NRC Commissioners prior
to resuming power operation.
The Company can only project when Millstone 3 may be authorized by
the NRC to restart, but forecasts the unit's restart in mid 1998. During the
period that Millstone 3 remains out of service, FG&E will continue to incur
its proportionate share of the unit's ongoing Operations and Maintenance
(O&M) costs, and may incur additional O&M costs and capital expenditures to
meet NRC requirements. FG&E will also incur costs to replace the power that
was expected to be generated by the unit. In August 1997, the Company, in
concert with other nonoperating joint owners, filed a demand for arbitration
in Connecticut and a lawsuit in Massachusetts, in an effort to recover costs
associated with the extended unplanned shutdown and the associated costs. The
arbitration and legal cases are actively proceeding.
Litigation --- The Company is also involved in other legal and administrative
proceedings and claims of various types which arise in the ordinary course of
business. In the opinion of the Company's management, based upon information
furnished by counsel and others, the ultimate resolution of these claims will
not have a material impact on the Company's financial position.
Purchased Power and Gas Supply Contracts --- FG&E and Unitil Power have
commitments under long-term contracts for the purchase of electricity and gas
from various suppliers. Generally, these contracts are for fixed periods and
require payment of demand and energy charges. Total costs under these
contracts are included in Electricity and Gas Purchased for Resale in the
Consolidated Statements of Earnings. These costs are normally recoverable in
revenues under various cost recovery mechanisms. The Company plans to divest
its generating assets and to sell its purchased power contracts in 1998, in
accordance with restructuring legislation in Massachusetts and New Hampshire
(See Regulatory Matters).
The status of the electric purchased power contracts at December 31, 1997,
is as shown below:
Est. Annual Min.
Payments Which
Unit 1997 Energy Cover Future
Fuel MW Winter Purchased Contract Debt Service
Type Entitlements (MWH's) End Date Requirements (000's)
Unitil Power
Gas 22.5 136,138 2010 $5,471 [1]
Gas 1.5 7,415 2012 None
Oil/Gas 2.0 4,773 2013 None
Oil/Gas 23.0 59,218 1998 None
Oil 15.6 86,586 2006 None
Oil 4.0 10,344 1998 None
Oil 10.0 49,516 2005 None
Coal 25.3 175,611 2005 None
Nuclear 28.5 205,138 2001 None
Nuclear 2.0 2005 None
Nuclear 10.1 68,573 2010 None
Nuclear 2.0 13,129 2013 None
Hydro 4.6 2001 $1,042 [2]
Refuse 6.0 43,789 2003 None
System 18.3 1,169 2002 None
Various 9.8 14,752 1999 None
Various 173,520 Short-term None
FG&E
Hydro 2.7 2001 $467 [2]
Hydro 10.0 17,553 2012 None
Wood 17.4 140,632 2012 None
System 15.0 123,094 2001 None
Various 211,778 Short-term None
Notes:
[1] Total estimated 1997 annualized capacity payments, including debt
service requirements.
[2] Total support charges including debt service requirements.
Note 12: Segment Information
The following additional information is presented about the electric
and gas operations of the Company:
Electric Operations (000's) 1997 1996 1995
Operating Revenues $149,973 $149,696 $138,099
Operating Income Before Income Taxes 17,341 16,587 16,781
Identifiable Assets as of December 31 181,486 179,999 174,984
Depreciation 6,739 6,098 5,505
Construction Expenditures 10,475 10,834 9,159
Gas Operations (000's) 1997 1996 1995
Operating Revenues $19,729 $21,105 $17,630
Operating Income Before Income Taxes 2,387 2,298 1,578
Identifiable Assets as of December 31 36,045 33,473 30,446
Depreciation 892 856 811
Construction Expenditures 2,182 1,915 2,008
Total Company (000's) 1997 1996 1995
Electric and Gas Operating Revenues $169,702 $170,801 $155,729
Other Revenue 36 45 941
Total Operating Revenues $169,738 $170,846 $156,670
Operating Income Before Income Taxes $19,728 $18,886 $18,360
Income Tax Expense 4,166 4,613 4,135
Non-Operating (Income) Expense 160 (627) 217
Net Interest and Other Expenses 7,167 6,171 5,639
Net Income $8,235 $8,729 $8,369
Dividend Requirements on Preferred Stock 276 278 284
Net Income Applicable to Common Stock $7,959 $8,451 $8,085
Identifiable Assets as of December 31 $217,531 $213,472 $205,430
Unallocated Assets 20,446 18,636 6,272
Total Assets as of December 31 $237,977 $232,108 $211,702
Depreciation $7,631 $6,954 $6,315
Construction Expenditures $13,887 $19,359 $14,645
Expenses used to determine operating income before taxes are charged
directly to either segment or are allocated in accordance with factors
contained in cost of service studies which were included in rate applications
approved by the NHPUC and MDTE. Assets allocated to each segment are based
upon specific identification of such assets provided by Company records.
Assets not so identified represent primarily working capital items and real
property.
PART III
Item 10. Directors and Executive Officers of the Registrant
Information required by this Item is set forth in Exhibit 99.1 on
pages 2 through 8 of the 1997 Proxy Statement.
Item 11. Executive Compensation
Information required by this Item is set forth in Exhibit 99.1 on
pages 9 through 14 of the 1997 Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Information required by this Item is set forth in Exhibit
99.1 on pages 3 through 5 of the 1997 Proxy Statement and is
incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
None
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) (1) and (2) -
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The following financial statements are included herein under Part II,
Item 8, Financial Statements and Supplementary Data.
Report of Independent Certified Public Accountants
Consolidated Balance Sheets - December 31, 1997 and 1996
Consolidated Statements of Earnings - for the years ended
December 31, 1997, 1996 and 1995
Consolidated Statements of Capitalization - December 31, 1997 and 1996
Consolidated Statements of Cash Flows
for the years ended December 31, 1997, 1996 and 1995
Consolidated Statements of Changes in Common Stock Equity -
for the years ended December 31, 1997, 1996 and 1995
Notes to Consolidated Financial Statements
The following consolidated financial statement schedules of the
Company and subsidiaries are included in Item 14:
Report of Independent Certified Public Accountants
Schedule VIII Valuation and Qualifying Accounts for December 31,
1997, 1996 and 1995
All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not
required under the related instructions, are inappropriate, or information
required is included in the financial statements or notes thereto and,
therefore, have been omitted.
(3) - List of Exhibits
Exhibit No. Description of Exhibit Reference*
3.1 Articles of Incorporation Exhibit 3.1 to Form
of the Company. S-14 Registration
Statement 2-93769
3.2 Articles of Amendment to the
Articles of Incorporation
filed on March 4, 1992 and Exhibit 3.2 to Form
April 30, 1992. 10-K for 1992
3.3 By-Laws of the Company. Exhibit 3.2 to
Form S-14 Registration
Statement 2-93769
3.4 Articles of Exchange of Concord
Electric Company (CECo),
Exeter & Hampton Exhibit 3.3 to
Electric Company (E&H) 10-K
and the Company for 1984
3.5 Articles of Exchange of CECo,
E&H, and the Company -
Stipulation of the Parties Exhibit 3.4 to
Relative to Recordation and Form 10-K
Effective Date. for 1984
3.6 The Agreement and Plan of Merger
dated March 1, 1989 among the Exhibit 25(b) to
Company, Fitchburg Gas and Electric Form 8-K
Light Company (FG&E) and dated
UMC Electric Co., Inc. (UMC). March 1, 1989
3.7 Amendment No. 1 to The Agreement
and Plan of Merger dated March 1, Exhibit 28(b) to
1989 among the Company, FG&E Form 8-K, dated
and UMC December 14, 1989
4.1 Indenture of Mortgage and Deed of
Trust dated July 15, 1958 of
CECo relating to First
Mortgage Bonds, Series B, 4 3/8%
due September 15, 1988 and all
series unless supplemented. **
4.2 First Supplemental Indenture
dated January 15, 1968 relating
to CECo's First Mortgage
Bonds, Series C, 6 3/4% due January
5, 1998 and all additional series
unless supplemented. **
4.3 Second Supplemental Indenture
dated November 15, 1971 relating
to CECo's First Mortgage
Bonds, Series D, 8.70% due November
15, 2001 and all additional series
unless supplemented. **
4.4 Fourth Supplemental Indenture
dated March 28, 1984 amending
CECo's Original First Mortgage
Bonds Indenture, and First, Second and
Third Supplemental Indentures
and all additional series unless
supplemented. **
4.5 Fifth Supplemental Indenture
dated June 1, 1984 relating
to CECo's First Mortgage
Bonds, Series F, 14 7/8% due June 1,
1999 and all additional series
unless supplemented. **
4.6 Sixth Supplemental Indenture
dated October 29, 1987 relating
to CECo's First Mortgage
Bonds, Series G, 9.85% due October Exhibit 4.6 to
15, 1997 and all additional series Form 10-K
unless supplemented. for 1987
4.7 Seventh Supplemental Indenture
dated August 29, 1991 relating
to CECo's First Mortgage
Bonds, Series H, 9.43% due September Exhibit 4.7 to
1, 2003 and all additional series Form 10-K
unless supplemented. for 1991
4.8 Eighth Supplemental Indenture
dated October 14, 1994 relating
to CECo's First Mortgage Bonds, Exhibit 4.8 to
Series I, 8.49% due October 14, From 10-K
2024 and all additional for 1994
series unless supplemented.
4.9 Indenture of Mortgage and Deed
of Trust dated December 1,
1952 of E&H Exhibit 4.5 to
relating to all series unless Registration
supplemented. Statement 2-49218
4.10 Third Supplemental Indenture
dated June 1, 1964 relating
to E&H's First Mortgage Bonds,
Series D, 4 3/4% due June 1, 1994 Exhibit 4.5 to
and all additional series unless Registration
supplemented. Statement 2-49218
4.11 Fourth Supplemental Indenture
dated January 15, 1968 relating to
E&H's First Mortgage Bonds, Series E, Exhibit 4.6 to
6 3/4% due January 15, 1998 and Registration
all additional series unless Statement 2-49218
supplemented.
4.12 Fifth Supplemental Indenture
dated November 15, 1971 relating
to E&H's First Mortgage Bonds,
Series F, 8.70% due November 15, Exhibit 4.7 to
2001 and all additional series Registration
unless supplemented. Statement 2-49218
4.13 Sixth Supplemental Indenture
dated April 1, 1974 relating to
E&H's First Mortgage Bonds, Series G,
8 7/8% due April 1, 2004 and all
additional series unless supplemented. **
4.14 Seventh Supplemental Indenture
dated December 15, 1977 relating
to E&H's Exhibit 4 to
First Mortgage Bonds, Series H, Form 10-K
8.50% due December 15, 2002 and for 1977
all additional series unless (File No. 0-7751)
supplemented.
4.15 Eighth Supplemental Indenture
dated October 29, 1987 relating
to E&H's First Mortgage Bonds,
Series I, 9.85% due October 15, Exhibit 4.15
1997 and all additional series From 10-K
unless supplemented. for 1987
4.16 Ninth Supplemental Indenture
dated August 29, 1991 relating
to E&H's
First Mortgage Bonds, Series J,
9.43% due September 1, 2003 and Exhibit 4.18 to
all additional series unless Form 10-K
supplemented. for 1991
4.17 Tenth Supplemental Indenture
dated October 14, 1994 relating
to E&H's First Mortgage Bonds,
Series K 8.49% due October 14, 2024 Exhibit 4.17
and all additional series unless Form 10-K
supplemented. for 1994
4.18 Bond Purchase Agreement dated
August 29, 1991 relating to
E&H's Exhibit 4.19 to
First Mortgage Bonds, Series J Form 10-K
9.43% due September 1, 2003 for 1991
4.19 Purchase Agreement dated March 20,
1992 for the 8.55% Senior Notes Exhibit 4.18 to Form
due March 31, 2004 10-K for 1993
4.20 Note Agreement dated November 30,
1993 for the 6.75% Notes due Exhibit 4.18 to Form
November 30, 2023 10-K for 1993
4.21 First Mortgage Loan Agreement
dated October 24, 1988 with an
Institutional Investor in connection
with Unitil Realty Corp.'s Exhibit 4.16 to
acquisition of the Company's Form 10-K
facilities in Exeter, New Hampshire. for 1988
4.22 Note Purchase Agreement dated July 1,
1997 for the 8.00% Senior Secured
Notes due August 1, 2017. Filed herewith
10.1 Labor Agreement effective June 1, 1997
between CECo and The
International Brotherhood of
Electrical Workers, Local Union
No. 1837 Filed herewith
10.2 Labor Agreement effective June 25,
1995 between E&H and The
International Brotherhood of
Electrical Workers, Local Union Exhibit 10.2 to Form
No. 1837, Unit 1. 10-K for 1995
10.3 Labor Agreement effective May 1,
1997 between FG&E and The
Brotherhood of Utility Workers of
New England, Inc., Local
Union No. 340. Filed herewith
10.4 Unitil System Agreement dated
June 19, 1986 providing that
Unitil Power will supply wholesale Exhibit 10.9 to
requirements electric Form 10-K
service to CECo and E&H for 1986
10.5 Supplement No. 1 to Unitil System
Agreement providing that Unitil
Power will supply wholesale Exhibit 10.8 to
requirements electric service to Form 10-K
CECo and E&H. for 1987
10.6 Transmission Agreement Between
Unitil Power Corp. and Public Exhibit 10.6 to
Service Company of New Hampshire, Form 10-K
Effective November 11, 1992 for 199
10.7 Form of Severance Agreement
dated February 21, 1989, Exhibit 10.55 to
between the Company and Form 8
the persons named in the dated
schedule attached thereto. April 12, 1989
10.8 Key Employee Stock Option Exhibit 10.56 to
Plan effective as of Form 8 dated
January 17, 1989. April 12, 1989
10.9 Unitil Corporation Key Employee Exhibit 10.63 to
Stock Option Plan Award Form 10-K
Agreement. for 1989
10.10 Unitil Corporation Management Exhibit 10.94 to
Performance Compensation Program. Form 10-K/A for 1993
10.11 Unitil Corporation Supplemental
Executive Retirement Plan Exhibit 10.95 to
effective as of January 1, 1987. Form 10-K/A for 1993
11.1 Statement Re Computation in
Support of Earnings Per Share
for the Company Filed herewith
12.1 Statement Re Computation in
Support of Ratio of Earnings
to Fixed Charges for the Company. Filed herewith
21.1 Statement Re Subsidiaries of
Registrant. Filed herewith
27 Financial Data Schedule Filed herewith
99.1 1997 Proxy Statement Filed herewith
* The exhibits referred to in this column by specific designations and
dates have heretofore been filed with the Securities and Exchange
Commission under such designations and are hereby incorporated by
reference.
** Copies of these debt instruments will be furnished to the Securities
and Exchange Commission upon request.
(b) Report on Form 8-K
No reports on Form 8-K were filed during the fourth quarter
of the year ended December 31, 1997.
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated February 10, 1998, accompanying the
consolidated financial statements and schedule included in the
Annual Report of Unitil Corporation and subsidiaries on Form 10-K
for the year ended December 31, 1997. We hereby consent to the
incorporation by reference of said report in the Registration
Statements of Unitil Corporation and subsidiaries on Form S-3 and on
Form S-8.
GRANT THORNTON LLP
Boston, Massachusetts
March 27, 1998
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto
duly authorized.
Unitil Corporation
Date March 26, 1998 By Robert G. Schoenberger
Robert G. Schoenberger
Chairman of the Board of Directors,
and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on the
dates indicated.
Signature Capacity Date
Robert G. Schoenberger Principal Executive March 26, 1998
Robert G. Schoenberger Officer; Director
(Chairman of the Board of Directors
and Chief Executive Officer)
Michael J. Dalton Principal Operating March 26, 1998
Michael J. Dalton Officer; Director
(President and Chief
Operating Officer)
Mark H. Collin Principal Financial March 26, 1998
Mark H. Collin Officer
(Treasurer and Secretary)
Bruce W. Keough Director March 26, 1998
Bruce W. Keough
Douglas K. Macdonald Director March 26, 1998
Douglas K. Macdonald
J. Parker Rice, Jr. Director March 26, 1998
J. Parker Rice, Jr.
Charles H. Tenney III Director March 26, 1998
Charles H. Tenney III
William W. Treat Director March 26, 1998
William W. Treat
W. William VanderWolk, Jr. Director March 26, 1998
W. William VanderWolk, Jr.
Franklin Wyman, Jr. Director March 26, 1998
Franklin Wyman, Jr.
SCHEDULE VIII
UNITIL CORPORATION
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
Column A Column B Column C Column D Column E
Additions
Balance at Charged to Charged to Deductions Balance at
Beginning Costs and Other from End of
Description of Period Expenses Accounts (A) Reserves (B) Period
Year Ended
December 31,
1997
Reserves
Deducted
from A/R
Electric 518,606 670,548 262,523 907,453 544,224
Gas 141,508 177,733 41,284 251,626 108,899
660,114 848,281 303,807 1,159,079 653,123
Year Ended
December 31,
1996
Reserves
Deducted
from A/R
Electric 490,272 691,880 155,853 819,399 518,606
Gas 132,324 213,258 44,949 249,023 141,508
622,596 905,138 200,802 1,068,422 660,114
Year Ended
December 31,
1995
Reserves
Deducted
from A/R
Electric 504,790 627,197 170,563 812,278 490,272
Gas 69,059 254,387 49,271 240,393 132,324
573,849 881,584 219,834 1,052,671 622,596
(A) Collections on Accounts Previously Charged Off
(B) Bad Debts Charged Off
EXHIBIT 4.22
TRUST INDENTURE
Dated as of July 1, 1997
From
UNITIL REALTY CORP.
To
STATE STREET BANK AND TRUST COMPANY
TABLE OF CONTENTS
SECTION HEADING PAGE
Parties 1
SECTION 1. INTERPRETATION OF AGREEMENT; DEFINITIONS 2
Section 1. 1. Definitions 2
Section 1.2. Accounting Principles 5
Section 1.3. Directly or Indirectly 5
SECTION 2. THE NOTES 5
Section 2.1. The Notes 5
Section 2.2. Denominations; Execution of Notes; Certificate
of Authentication 6
Section 2.3. Payment of Notes 6
Section 2.4. The Register 6
Section 2.5. Transfers and Exchanges 7
Section 2.6. The New Notes 8
Section 2.7. Cancellation of Notes 8
Section 2.8. Ownership 8
SECTION 3. PARTICULAR COVENANTS OF THE COMPANY 9
Section 3.1. Payment of Principal, Premium and Interest 9
Section 3.2. Office for Notices 9
Section 3.3. Mortgage Covenants 9
Section 3.4. Corporate Existence, Etc 9
Section 3.5. Insurance 9
Section 3.6. Taxes, Claims for Labor and Materials,
Compliance with Laws 10
Section 3.7. Maintenance, Etc 10
Section 3.8. Merger, Consolidation and Dispositions of Asset 10
Section 3.9. Repurchase of Notes 10
Section 3.10. Rights of Inspection 11
Section 3.11. Right of Trustee to Perform Covenants, Etc 11
SECTION 4. POSSESSION, USE, SUBSTITUTION AND RELEASE OF
PROPERTY 11
Section 4. 1. Company's Right of Possession 11
Section 4.2. Release of Mortgaged Property; Consent of
Noteholders 12
SECTION 5. PREPAYMENT OF NOTES 12
Section 5. 1. Required Prepayment without Premium in the
Event of Casualty or Condemnation 12
Section 5.2. Optional Prepayment with Premium 12
Section 5.3. Notice of Optional Prepayments 12
Section 5.4. Allocation of Prepayments 12
Section 5.5. Amortization Schedules 13
SECTION 6. APPLICATION OF AMOUNTS; RECEIVED By TRUSTEE 13
SECTION 7. EVENTS OF DEFAULT AND REMEDIES THEREFOR 13
Section 7. 1. Events of Default 13
Section 7.2. Notice to Holders and the Trustee 14
Section 7.3. Acceleration of Maturities 14
Section 7.4. Rescission of Acceleration 15
Section 7.5. Remedies 15
Section 7.6. Foreclosure and Sale of Mortgaged Property 16
Section 7.7. Adjournment of Sale 17
Section 7.8. Trustee May Execute Conveyances and Deliver
Possession; Sale a Bar 17
Section 7.9. Receipt Sufficient Discharge for Purchaser 17
Section 7. 1 0. Sale to Accelerate Notes 18
Section 7.1 1. Application of Proceeds; of Sale and Other
Amounts 18
Section 7.12. Purchase of Trust Estate 18
Section 7.13. Trustee Entitled to Appointment of Receiver 19
Section 7.14. Trustee May Enforce Rights without Notes 19
Section 7.15. Limitation on Noteholders' Right to Sue 19
Section 7.16. Remedies Cumulative 20
Section 7.17. Delay or Omission Not a Waiver 20
Section 7.18. Waiver of Extension, Appraisement, Stay, Laws 20
Section 7.19. Control of Remedies by Noteholders 20
Section 7.20. Trustee May File Proofs of Claims 21
Section 7.21. Remedies Subject to Provisions of Law 21
SECTION 8. CONCERNING THE TRUSTEE 21
Section 8. 1. Duties of Trustee 22
Section 8.2. Trustee Liability 22
Section 8.3. No Responsibility of Trustee for Recitals 23
Section 8.4. Compensation and Expenses of Trustee:
Indemnification; lien Therefor 24
Section 8.5. Moneys Received by Trustee; Trust Funds-
Segregation 24
Section 8.6. Trustee May Hold Notes 24
Section 8.7. Resignation of Trustee 24
Section 8.8. Removal of Trustee 25
Section 8.9. Appointment of Successor Trustee 25
Section 8. 1 0. Succession of Successor Trustee 25
Section 8.1 1. Eligibility of Trustee 26
Section 8.12. Successor Trustee by Merger 26
SECTION 9. SUPPLEMENTAL INDENTURES; WAIVERS 26
Section 9. 1. Supplemental Indentures without Noteholders'
Consent 26
Section 9.2. Waivers and Consents by Noteholders:
Supplemental Indentures With Noteholders'
Consent 27
Section 9.3. Notice of Supplemental Indenture 27
Section 9.4. Opinion of Counsel Conclusive as to
Supplemental Indenture 28
SECTION 10. ACTION BY NOTEHOLDERS 28
Section 10.1. Evidence of Action by Noteholders 28
SECTION 11. MISCELLANEOUS PROVISIONS 28
Section 11.1. Indenture for Benefit of Parties Hereto 28
Section 11.2. Severability 28
Section 11.3. Basis of Opinions of Counsel and
Certificates 28
Section 11.4. Addresses for Notices and Demands 29
Section 11.5. Successors and Assigns 29
Section 11.6. Counterparts; Descriptive Headings 29
Section 11.7. Governing Law 30
Signature Page 31
ATTACHMENTS To TRUST INDENTURE
Exhibit A Registered Note
TRUST INDENTURE
TRUST INDENTURE dated as of July 1, 1997 (herein, as the same may be amended
or supplemented from time to time, called the "Indenture") between UNITIL
REALTY CORP., a New Hampshire corporation (the "Company"), whose address is
6 Liberty Lane West, Hampton, New Hampshire 03842, and STATE STREET BANK AND
TRUST COMPANY, a Massachusetts trust company (the "Trustee"), whose address
is 225 Franklin Street, Boston, MA 02110.
WHEREAS, the defined terms used in this Indenture shall have the respective
meanings indicated in Section 1. 1 unless elsewhere defined or the context
shall otherwise require; and
WHEREAS, the Company has the power and proposes to issue its 8.00% Senior
Secured Notes due August 1, 2017 (the "Notes"), which Notes are to be issued
under and secured by this Indenture; and
WHEREAS, the Notes shall also be secured by (i) the Mortgage and Security
Agreement dated as of July 1, 1997 from the Company to the Trustee (the
"Mortgage "), (ii) the Assignment of Lease dated as of July 1, 1997 between
the Company and the Trustee (the "Lease Assignment"), pursuant to which the
Company is assigning to the Trustee all its right, title and interest in and
to the Lease dated June 15, 1997 (the "Lease ") between the Company, as
Landlord, and Unitil Service Corp., as Tenant (the "Tenant") and (iii) the
Guaranty Agreement dated as of July 1, 1997 from Unitil Corporation, a New
Hampshire corporation (the "Guarantor") pursuant to which the Notes have
been unconditionally guaranteed; and
WHEREAS, all things necessary to make this Indenture the valid obligation of
the Company according to its tenor and effect have been done or authorized;
NOW, THEREFORE, in consideration of the premises and of the sum of Ten
Dollars and of other good and valuable consideration, receipt whereof upon
the delivery of this Indenture the Company hereby acknowledges, and in order
to secure the equal and pro rata payment of both the principal of and
interest and premium, if any, upon the Notes at any time outstanding
hereunder according to their tenor and the provisions hereof, and to secure
the faithful performance and observance of all the covenants and provisions
in the Notes, the Note Purchase Agreements, the Mortgage, the Lease
Assignment and this Indenture, and to declare the terms and conditions upon
which the Notes will be secured, authenticated, issued, transferred and
exchanged, and upon which the trusts hereof are to be administered by the
Trustee;
THE TRUSTEE DOES HEREBY DECLARE THAT it will hold in trust for the benefit
of the holders of the Notes the right, title and interest in and to the
Mortgage, the Lease Assignment and the Guaranty Agreement, together with all
right, title and interest thereby granted, conveyed, mortgaged or assigned
and all proceeds and avails thereof (the Property described in the Mortgage
together with the buildings and improvements thereon being herein referred
to as "Mortgaged Property", as more particularly defined in Section 1.2 of
the hereinafter referred to Note Purchase Agreements);
TO HAVE AND TO HOLD all and singular the Mortgaged Property whether now
owned or held or hereafter acquired, unto the Trustee, its successors in
trust and assigns forever;
IN TRUST, NEVERTHELESS, with power of sale, for the equal and ratable
benefit and security of the Notes from time to time outstanding hereunder,
without preference, priority or distinction of any thereof over any other by
reason of difference in time of issuance, sale, authentication, delivery or
otherwise, and for the enforcement of the payment of the principal of,
premium, if any, and interest on the Notes in accordance with their terms,
and all other sums payable under this Indenture or on the Notes, and the
observance and performance of the provisions of the Note Purchase Agreements,
the Mortgage, the Lease Assignment and this Indenture, all as herein
provided.
IT IS HEREBY COVENANTED, DECLARED AND AGREED, that the Notes are to be
issued, authenticated, delivered and secured, and that the Mortgaged
Property is to be held, dealt with and disposed of by the Trustee, upon and
subject to the provisions of this Indenture.
SECTION 1. INTERPRETATION OF AGREEMENT; DEFINITIONS.
Section 1. 1. Definitions. Unless the context otherwise requires, the terms
hereinafter set forth when used herein shall have the following meanings and
the following definitions shall be equally applicable to both the singular
and plural forms of any of the terms herein defined:
"Default" shall mean any event which would constitute an Event of Default if
all requirements in connection therewith for the giving of notice, the lapse
of time, and the happening of any further condition, event or act, had been
satisfied.
"Event of Default" shall mean any of the Events of Default described in
Section 7.1 of this Indenture.
"Executive Officer" shall mean any of the following officers of the
Company: the Chairman of the Board of Directors, the President, any Vice
President or the Treasurer.
"Guaranty Agreement" is defined in the "Whereas" clauses of this Indenture.
"Initial Purchasers" shall mean American United Life Insurance Company and
The State Life Insurance Company, as Purchasers under the Note Purchase
Agreements, respectively, and any Person affiliated therewith, so long as
the Initial Purchasers or any such Person or the respective nominees of any
thereof are holders of any of the Notes.
"Institutional Holder" shall mean any holder of a Note which is an Initial
Purchaser or an insurance company, bank, savings and loan association, trust
company, investment company, charitable foundation, employee benefit plan
(as defined in ERISA) or other institutional investor or financial
institution and, for purposes of the direct payment provisions of this
Agreement, shall include any nominee of any such holder.
"Lease" is defined in the "whereas" clauses of this Indenture.
Make-Whole Amount: In connection with any prepayment or acceleration of the
Notes the excess, if any, of (i) the aggregate present value as of the date
of such prepayment of each dollar of principal being prepaid (taking into
account the application of such prepayment required by Section 5.4) and the
amount of interest (exclusive of interest accrued to the date of prepayment)
that would have been payable in respect of such dollar if such prepayment
had not been made, determined by discounting such amounts at the
Reinvestment Rate from the respective dates on which they would have been
payable, over (ii) 100% of the principal amount of the outstanding Notes
being prepaid. If the Reinvestment Rate is equal to or higher than 8.00%,
the Make-Whole Amount shall be zero. For purposes of any determination of
the Make-Whole Amount:
"Reinvestment Rate" shall mean the arithmetic mean of the yields for the two
columns under the heading "Week Ending " published in the Statistical
Release under the caption "Treasury Constant Maturities" for the maturity
(rounded to the nearest month) corresponding to the Weighted Average Life to
Maturity of the principal being prepaid (taking into account the application
of such prepayment required by Section 5.4). If no maturity exactly
corresponds to such Weighted Average Life to Maturity, yields for the
published maturity next longer than the Weighted Average Life to Maturity
and for the published maturity next shorter than the Weighted Average Life
to Maturity shall be calculated pursuant to the immediately preceding
sentence and the Reinvestment Rate shall be interpolated from such yields on
a straight-line basis, rounding in each of such relevant periods to the
nearest month. For the purposes of calculating the Reinvestment Rate, the
most recent Statistical Release published prior to the date of determination
of the Make-Whole Amount shall be used.
"Statistical Release" shall mean the then most recently published statistical
release designated "H. 15(519)" or any successor publication which is
published weekly by the Federal Reserve System and which establishes yields
on actively traded U.S. Government Securities adjusted to constant
maturities or, if such statistical release is not published at the time of
any determination hereunder, then such other reasonably comparable index
which shall be designated by the holders of 66-2/3% in aggregate principal
amount of the outstanding Notes.
"Weighted Average Life to Maturity" of the principal amount of the Notes
being prepaid shall mean, as of the tin-le of any determination thereof, the
number of years obtained by dividing the then Remaining Dollar-Years of such
principal by the aggregate amount of such principal. The term "Remaining
Dollar-Years" of such principal shall mean the amount obtained by (i)
multiplying (x) the amount of principal that would have become due on each
scheduled payment date if such prepayment had not been made, by (y) the
number of years (calculated to the nearest one-twelfth) which will elapse
between the date of determination and such scheduled payment date, and (ii)
totalling the products obtained in (i).
"Mortgage" shall mean that certain Mortgage and Security Agreement dated as
of July 1, 1997 from the Company to the Trustee.
"Mortgaged Property" is defined on page I hereof.
"Note or Notes Outstanding." "Note" shall mean any of, and "Notes" shall
mean all of, the then outstanding Notes. "Outstanding" when used with
reference to Notes shall mean, as of any particular time, all Notes
authenticated and delivered by the Trustee under this Indenture, except:
(a) Notes theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(b) Notes for which payment or prepayment has been made pursuant
to the terms of this Indenture; provided, that if such
Notes are to be prepaid prior to the maturity thereof,
notice of such prepayment shall have been given as provided
in Section 5.4 hereof; and
(c) Notes in lieu of or in substitution for which other Notes
shall have been authenticated and delivered pursuant to the
terms of Section 2.2.
"Note Purchase Agreements" shall mean the separate and several Note Purchase
Agreements, each dated as of July 1, 1997 between the Company and the
Initial Purchasers, respectively.
"Officers' Certificate" shall mean a certificate signed by any Executive
Officer.
"Opinion of Counsel" shall mean an opinion in writing signed by legal
counsel who shall be satisfactory to the Trustee, and who may be counsel
to, or an employee of, the Company.
"Person " shall mean an individual, partnership, corporation, limited
liability company, trust, unincorporated association or other organization,
or a government or any department or agency thereof.
"Property" shall mean any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Register" shall have the meaning specified in Section 2.4.
"Security" shall have the same meaning as in Section 2(l) of the Securities
Act of 1933, as amended.
"SNDA Agreement" shall mean the Subordination, Non-Disturbance and
Attornment Agreement dated as of July 1, 1997 among the Company, the Initial
Purchasers and the Tenant.
The term "subsidiary" shall mean, as to any particular parent corporation,
any corporation of which more than 50% (by number of votes) of the Voting
Stock shall be owned by such parent corporation and/or one or more
corporations which are themselves subsidiaries of such parent corporation.
The term "Subsidiary" shall mean a subsidiary of the Guarantor.
"Transaction Documents" shall mean, collectively, the Note Purchase
Agreements, the Notes, this Indenture, the Lease, the Lease Assignment, the
SNDA Agreement, the Guaranty Agreement and the Mortgage.
"Voting Stock" shall mean Securities of any class or classes, the holders
of which are ordinarily, in the absence of contingencies, entitled to elect
a majority of the corporate directors (or Persons performing similar
functions).
Section 1.2. Accounting Principles. Where the character or amount of any
asset or liability or item of income or expense is required to be determined
or any consolidation or other accounting computation is required to be made
for the purposes of this Indenture, the same shall be done in accordance
with generally accepted accounting principles, to the extent applicable.
Section 1.3. Directly or Indirectly. Where any provision in this Indenture
refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether the
action in question is taken directly or indirectly by such Person.
SECTION 2. THE NOTES.
Section 2. I. The Notes. (a) The Notes shall be issuable as fully registered
Notes in the form attached hereto as Exhibit A and shall be designated the
Company's 8.00% Senior Secured Notes and shall be issued in an aggregate
principal amount of $7,500,000.
(b) The Notes shall be dated the date of issuance thereof, shall bear
interest on the unpaid principal amount thereof at the rate of 8.00% per
annum and at 9.00% on any overdue principal thereof and on any overdue
premium and (to the extent permitted by law) on any overdue interest thereon
(computed on the basis of a 360-day year consisting of twelve consecutive
30-day months) and will be expressed to be payable in the aggregate as
follows:
(i) one installment of interest only for the period from and including
the date of issue to but not including August 1, 1997, payable on August 1,
1997;
(ii) two hundred and thirty-nine equal installments, including both
principal and interest, each in the aggregate amount of $62,733.00 payable
monthly commencing on September 1, 1997 and on the first day of each month
thereafter to and including July 1, 2017; and
(iii) a final installment on August 1, 2017 in an amount equal to the
entire principal and interest remaining unpaid as of said date.
(c) The Notes and the Trustee's certificate of authentication to be
borne by such Notes shall be substantially of the tenor and purport as set
forth in Exhibit A hereto, and the Notes may have such letters, numbers or
other marks of identification or designation and such legends or
endorsements thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Indenture, or as may be required to
comply with any law or any rule or regulation made pursuant thereto.
Section 2.2. Denominations; Execution of Notes; Certificate of
Authentication. Each Note shall be in the denomination of $100,000 or any
multiple of $1,000 in excess of $100,000, except as may be necessary to
reflect any principal amount not evenly divisible by $ 1,000. The Notes
shall be signed on behalf of the Company by an Executive Officer, under its
corporate seal attested by its Secretary or an Assistant Secretary. In case
any officer who shall have signed any Note shall cease to be such officer
before such Note shall have been authenticated by the Trustee or delivered
by the Company, such Notes may nevertheless be executed and delivered with
the same force and effect as though the Person or Persons who signed such
Note had not ceased to be such officer of the Company; and any Note may be
signed on behalf of the Company by a Person who, at the actual date of
execution of such Note, shall be a proper officer of the Company, although
at the date of such Note, such Person was not then such officer of the
Company. Only such Notes as shall bear thereon a certificate of
authentication substantially in the form set forth in Exhibit A shall be
entitled to the benefits of this Indenture or be valid or obligatory for any
purpose. Such certificate by the Trustee upon any Note executed by the
Company shall be conclusive evidence that the Note so authenticated has been
duly authenticated and delivered hereunder and that the holder is entitled
to the benefits of this Indenture. The authentication by the Trustee of
any Note issued hereunder shall not be construed as a representation or
warranty by the Trustee as to the validity or security of this Indenture or
of such Note, and the Trustee shall in no respect be liable or answerable
for the use made of such Note or the proceeds thereof.
Section 2.3. Payment of Notes. The principal of, premium, if any, and
interest on the Notes shall be payable to the holders of the Notes pursuant
to the direct payment instructions set forth in 5.1 of the Note Purchase
Agreements.
Section 2.4. The Register. The Company shall cause to be kept at the
principal office of the Trustee a register for the registration and transfer
of Notes (herein called the "Register"). The names and addresses of the
holders of the Notes, the transfers of the Notes and the names and addresses
of the transferees of all Notes shall be registered in the Register. The
Trustee is hereby appointed the agent of the Company for the registration,
transfer and exchange of Notes. Upon request of the Company, the Trustee
shall promptly provide the names and addresses of all holders of the
Notes.
Section 2.5. Transfers and Exchanges. (a) The holder of any Note may
transfer such Note upon the surrender thereof at the principal office of the
Trustee. Thereupon, the Company shall execute in the name of the transferee
a new Note or Notes in aggregate principal amount equal to the aggregate
unpaid principal amount of the Note so surrendered, and the Trustee shall
authenticate and deliver such new Note or Notes to such transferee.
(b) The holder of any Note may at any time surrender such Note at the
principal office of the Trustee in exchange for an equal aggregate principal
amount of Notes in any authorized denominations.
(c) All Notes presented or surrendered for exchange or transfer shall
be accompanied by a written instrument or instruments of assignment or
transfer, in form satisfactory to the Trustee, duly executed by the
registered holder or by his attorney duly authorized in writing. The
Company shall not be required to make a transfer or an exchange of any Note
for a period of ten days preceding any payment date with respect thereto.
(d) In case any Note shall become mutilated or be destroyed, lost or
stolen, the Company, upon the written request of the holder thereof, shall
execute, and the Trustee shall authenticate and deliver, a new Note in
exchange and substitution for the mutilated Note, or in lieu of and
substitution for the Note so destroyed, lost or stolen, which new Note shall
be in a principal amount equal to the aggregate principal amount of such
destroyed, lost or stolen Note. In every such case, the applicant for a
substituted Note shall furnish to the Company and to the Trustee such
security or indemnity as may be required by them to save each of them
harmless from all risks, and the applicant shall also furnish to the Company
and to the Trustee evidence to their satisfaction of the mutilation,
destruction, loss or theft of the applicant's Note and of the ownership
thereof. In case any Note which has matured or will mature within thirty
days shall become mutilated or be destroyed, lost or stolen, the Company
may, instead of issuing a substituted Note, pay or authorize the payment of the
same (without surrender thereof except in the case of a mutilated Note), if
the applicant for such payment shall furnish to the Company and to the
Trustee such security or indemnity as they may require to save them
harmless, and evidence to the satisfaction of the Company and the Trustee of
the mutilation, destruction, loss or theft of such Note and of the ownership
thereof. If an Initial Purchaser or its nominee is the owner of any
mutilated, destroyed, lost or stolen Note, then the affidavit of its
President, Vice President, Assistant Vice President or Treasurer in form
satisfactory to the company and the Trustee setting forth the fact of
destruction, loss or theft and the Initial Purchaser's ownership of the
Note at the time of such mutilation, destruction, loss or theft shill be
accepted as satisfactory evidence thereof and no indemnity shall be
required as a condition to execution and delivery of a new Note other than
the written agreement of the Initial Purchaser, in form satisfactory to the
Company and the Trustee, to indemnify the Company and the Trustee.
(e) No notarial act shall be necessary for the transfer or exchange of
any Note pursuant to this Section 2.5, and the holder of any Note issued as
provided in this Section 2.5 shall be entitled to any and all rights and
privileges granted under this Indenture to a holder of a Note.
Section 2.6. The New Notes. (a) Each new Note (herein in this Section 2.6
called a New Note) issued pursuant to Section 2.5(a), (b) or (d) in exchange
for or in substitution or in lieu of an outstanding Note (herein in this
Section 2.6 called an Old Note) shall be dated the date of such Old Note.
The Trustee shall mark on each New Note (i) the date to which principal and
interest have been paid on such Old Note, and (ii) all payments and
prepayments of principal previously made on such Old Note which are
allocable to such New Note. In making such markings, the Trustee may rely
upon the Company as to all principal and interest paid to date on any such
Notes and the Company agrees to promptly furnish the Trustee with such
information upon request of the Trustee. Interest shall be deemed to have
been paid on such New Note to the date on which interest shall have been
paid on such Old Note, and all payments and prepayments of principal marked
on such New Note, as provided in clause (ii) above, shall be deemed to have
been made thereon.
(b) Upon the issuance of a New Note pursuant to Section 2.5(a), (b) or
(d), the Company may require the payment of a sum to reimburse it for, or to
provide it with funds for, the payment of any tax or other governmental
charge and, in the case of the issuance of more than three New Notes
pursuant to Section 2.5(b), the reasonable out-of-pocket costs of the
Company connected therewith but no other charge shall be made in connection
with the transfer or exchange.
(c) All New Notes issued pursuant to Section 2.5(a), (b) or (d) in
exchange for, in substitution for, or in lieu of, Old Notes shall be valid
obligations of the Company evidencing the same outstanding debt as the Old
Notes and shall be entitled to the benefits and security of this Indenture
to the same extent as the Old Notes.
Section 2.7. Cancellation of Notes. All Notes surrendered for the purpose
of payment, redemption, transfer or exchange shall be cancelled by the
Trustee, and no Notes shall be issued in lieu thereof except as expressly
required or permitted by any of the provisions of this Indenture. The
Trustee ,;hall hold all such cancelled Notes until this Indenture shall have
been discharged, at which time the Trustee shall either deliver such
cancelled Notes in a manner necessary to effect the discharge and release of
this Indenture of record or, if no such delivery is necessary, shall deliver
such cancelled Notes to the Company. The Trustee shall deliver a
certificate to the Company specifying any cancellation of Notes which has
been made. If the Company shall acquire any of the Notes, however, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Notes unless and until the same are
surrendered to the Trustee for cancellation.
Section 2.8. Ownership. The Person in whose name any Note shall be
registered shall be deemed and treated as the owner thereof for all purposes
of this Indenture and neither the Company nor the Trustee shall be affected
by any notice to the contrary.
Payment of or on account of the principal of premium, if any, and interest
on such Note shall be made only to or upon the order in writing of such
registered owner. For the purpose of any request, direction or consent
hereunder, the Company and the Trustee may deem and treat the registered
owner of any Note as the owner thereof without production of such Note.
SECTION 3. PARTICULAR COVENANTS OF THE COMPANY.
The Company covenants with the Trustee for the benefit of the Trustee and
the holders of the Notes as follows:
Section 3. 1. Payment of Principal, Premium and Interest. The Company will
duly and punctually pay, or cause to be paid, the Principal of, premium, if
any, and interest on, each and every Note, at the dates and the places and
in the manner mentioned in the Notes and in this Indenture, according to the
true intent and meaning thereof and hereof.
Section 3.2. Office for Notices. The Company will keep an office while any
of the Notes issued hereunder are outstanding, al[ Hampton, New Hampshire
where notices, presentations and/or demands to or upon the Company in
respect of said Notes, the Mortgage or this Indenture may be given or made,
until such time as the Company shall so notify the Trustee and the holders
of the Note,; of any change of location of such office.
Section 3.3. Mortgage Covenants. Each and all of the terms, provisions,
restrictions, covenants and agreements set forth in the Mortgage, and in
each and every supplement thereto or amendment thereof which may at any
time or from time to time be executed and delivered by the parties thereto
or their successors and assigns, are incorporated herein by reference to the
same extent as though each and all of said terms, provisions, restrictions,
covenants and agreements were fully set out herein and as though any
amendment or supplement to the Mortgage were fully set out in an amendment
or supplement to this Indenture; and the Company does hereby covenant and
agree well and truly to abide by, perform and be governed and restricted by
each and all of the matters provided for by the Mortgage and so incorporated
herein to the same extent and with the same force and effect as if each and
all of said terms, provisions, restrictions, covenants and agreements so
incorporated herein by reference were set out and repeated herein at length.
Section 3.4. Corporate Existence, Etc. The Company will preserve and keep
in force and effect its corporate existence and all licenses and permits
necessary to the proper conduct of its business, provided that the foregoing
shall not prevent any transaction permitted by Section 3.8.
Section 3.5. Insurance. The Company will maintain or cause to be maintained
insurance coverage, by financially sound and[ reputable insurers in such
forms and amounts and against such risks as are customary for corporations
of established reputation engaged in the same or a similar business and
owning and operating similar properties. Notwithstanding the foregoing, the
Company shall maintain or cause to be maintained insurance with respect to
the Mortgaged Property in accordance with Article 5 of the Lease and Section
2.6 of the Mortgage.
Section 3.6. Taxes, Claims for Labor and Materials, Compliance with Laws.
The Company will promptly pay and discharge all lawful taxes, assessments
and governmental charges or levies imposed upon the Company, or upon or in
respect of all or any part of the property or business of the Company, all
trade accounts payable in accordance with usual and customary business
terms, and all claims for work, labor or materials, which if unpaid might
become a lien or charge upon any property of the Company; provided the
Company shall not be required to pay any such tax, assessment, charge, levy,
account payable or claim if (i) the validity, applicability or amount
thereof is being contested in good faith by appropriate actions or
proceedings which will prevent the forfeiture or sale of any property of the
Company or any material interference with the use thereof by the Company,
and (ii) the Company shall set aside on its books, reserves deemed by it to
be adequate with respect thereto. The Company will promptly comply with all
laws, ordinances or governmental rules and regulations to which it is
subject, including without limitation, the Occupational Safety and Health
Act of 1970, as amended, ERISA and all laws, ordinances, governmental rules
and regulations relating to environmental protection in all applicable
jurisdictions, the violation of which would materially and adversely affect
the properties, business, prospects, profits or condition of the Company.
Section 3.7. Maintenance, Etc. The company will maintain, preserve and
keep its properties which are used or useful in the conduct of its
business (whether owned in fee or a leasehold interest) in good repair and
working order and from time to time will make all necessary repairs,
replacements, renewals and additions so that at all times the efficiency
thereof shall be maintained.
Section 3.8. Merger, Consolidation and Dispositions of Asset. The Company
will not consolidate with or be a party to a merger with, or sell, lease or
otherwise dispose of all or substantially all of its property to, any other
Person, provided, however, that the Company may consolidate or merge with,
or dispose of all or substantially all of its property to, any other entity
if (i) in the case of a merger or consolidation, the Company shall be the
surviving or continuing entity (the "Successor Company") and at the time of
such consolidation or merger and after giving effect thereto no Default or
Event of Default shall have occurred and be continuing or (ii) if than
Successor Company is not the Company, the Successor Company shall (A)
expressly assume in writing the due and punctual performance and observance
of all the terms, covenants, agreements and conditions of the Transaction
Documents to be performed or observed by the Company to the same extent as
if such Successor Company had been the original party thereto and (B)
furnish a true and complete copy of the assumption agreement to each holder
of Notes, together with an Opinion of Counsel opining favorably as to the
due authorization, execution, delivery and enforceability of the assumption
agreement and the enforceability of the Guaranty Agreement after giving
effect to such assumption.
Section 3.9. Repurchase of Notes. Neither the Company nor any Subsidiary or
Affiliate, directly or indirectly, may repurchase or make any offer to
repurchase any Notes unless the offer has been made to repurchase Notes, pro
rata, from all holders of the Notes at the same time and upon the same
terms. In case the Company or any Subsidiary repurchases any Notes, such
Notes shall thereafter be cancelled and no Notes shall be issued in
substitution therefor.
Section 3. 1 0. Rights of Inspection. The Company will permit the Trustee,
each Initial Purchaser, so long as it is a holder of Notes, and each
Institutional Holder of the then outstanding Notes (or such Persons as the
Trustee, such Initial Purchaser or such Institutional Holder may designate)
to visit and inspect, under the Company's guidance, any of the properties of
the Company, to examine all of its books of account, records, reports and
other papers, to make copies and extracts therefrom, and to discuss its
affairs, finances and accounts with its officers, employees, and independent
public accountants (and by this provision the Company authorizes said
accountants to discuss with such parties the finances and affairs of the
Company) all at such reasonable times and as often as may be reasonably
requested. The Company shall not be required to pay or reimburse the
Trustee, such Initial Purchaser or any such Institutional Holder for
expenses which the Trustee, such Initial Purchaser or any such Institutional
Holder may incur in connection with any such visitation or inspection,
except that if such visitation or inspection is made during any period when
an Event of Default shall have occurred and be continuing, the Company
agrees to reimburse the Trustee, such Initial Purchaser or such
Institutional Holder for all such expenses promptly upon demand.
Section 3. 1 1. Right of Trustee to Perform Covenants, Etc. If the Company
shall fail to make any payment or perform any act required to be made or
performed hereunder, the Trustee, after five days' prior written notice to
the Company and without waiving or releasing any obligation or Default, may
(but shall be under no obligation to) at any time thereafter make such
payment or perform such act for the account and at the expense of the
Company, and may enter upon the Mortgaged Property or any part thereof for
such purpose and take all such action thereon as, in the opinion of the
Trustee, may be necessary or appropriate therefor. All sums so paid by the
Trustee and all costs and expenses (including without limitation, reasonable
attorneys' fees and expenses) so incurred, together with interest thereon at
the rate of 9.00% per annum from the date of payment or incurrence, shall
be secured hereby in priority to the indebtedness evidenced by the Notes and
shall be paid by the Company to the Trustee on demand. The Trustee in
making any payment authorized under this Section relating to taxes or
assessments may do so according to any bill, statement or estimate procured
from the appropriate public office without inquiry into the accuracy of such
bill, statement or estimate or into the validity of any tax assessment,
sale, forfeiture, tax lien or title or claim thereof.
SECTION 4. POSSESSION, USE, SUBSTITUTION AND RELEASE OF PROPERTY.
Section 4. I. Company's Right of Possession. Provided no Default or Event
of Default has occurred and is continuing, the Company shall be suffered and
permitted to remain in full possession, enjoyment and control of the
Mortgaged Property subject always to the observance and performance of the
terms of this Indenture and the Mortgage.
Section 4.2. Release of Mortgaged Property; Consent of Noteholders. In
addition to the release of Mortgaged Property pursuant to Section 3.2 of the
Mortgage, the Company may sell or otherwise dispose of any Mortgaged
Property then subject to the lien of this Indenture or any indenture
supplemental hereto, and the Trustee shall release the same from the lien
hereof or thereof to the extent and on the terms and upon compliance with
the conditions provided for in any written consent given thereto at any time
or from time to time by the holder or holders of all of the then outstanding
Notes.
SECTION 5. PREPAYMENT OF NOTES.
Section 5. I. Required Prepayment without Premium in the Event of Casualty
or Condemnation. In the event of a casualty or condemnation of all or a
portion of the Mortgaged Property which results in a termination of the
Lease, the Company shall prepay the Notes in whole, but not in part, by
payment of the principal amount of the Notes then outstanding, together with
accrued interest thereon to the date of such prepayment, which prepayment
shall be made taking into account the proceeds paid under any insurance
policies carried pursuant to the Mortgage, but without premium.
Section 5.2. Optional Prepayment with Premium. The Company shall have the
privilege, on any scheduled installment date referred to in Section 2. 1 (b)
which occurs after August 1, 2000, of prepaying the Notes in whole, or in
part (but if in part in a minimum principal amount of $100,000), by payment
to the holders of the Notes of the principal amount of the Notes then
outstanding, and accrued interest thereon, to the date of prepayment,
together with a premium equal to the Make-Whole Amount, determined as of
five business days prior to the date of such prepayment pursuant to this
Section 5.2.
Section 5.3. Notice of Optional Prepayments. The Company will give
written notice of any optional prepayment of any of the Notes to each holder
(with a copy to the Trustee) not less than 30 days nor more than 60 days
before the date fixed for such optional prepayment in the case of any
prepayment pursuant to Section 5.2 hereof in any such case specifying (a)
such date, (b) the Section of this Indenture under which the prepayment is
to be made, (c) the principal amount of the holder's Notes to be prepaid on
such date, and (d) the estimated premium, if any, and accrued interest
applicable to the prepayment. Such notice of prepayment shall also certify
all facts which are conditions precedent to any such prepayment. Notice of
prepayment having been so given, the aggregate principal amount of the Notes
specified in such notice, together with premium, if any, and accrued
interest thereon shall become due and payable on the prepayment date
specified in said notice. Not later than two business days prior to the
prepayment date specified in such notice, the Company shall provide each
holder of a Note written notice of the premium, if any, payable in
connection with such prepayment and, whether or not any premium is payable,
a reasonably detailed computation of the Make-Whole Amount.
Section 5.4. Allocation of Prepayments. The aggregate principal amount of
each required or optional partial prepayment of the Notes shall be allocated
in units of $1,000 or multiples thereof among the holders of the Notes to be
prepaid at the time outstanding in proportion, as nearly as practicable, to
the respective unpaid principal amounts of the Notes to be prepaid then
outstanding, with adjustments, to the extent practicable, to equalize for
any prior prepayments not in such proportion. Partial optional prepayments
shall be credited in each case first against the principal of the Notes due
on final maturity of the Notes and then against the principal portion of the
installments due on the Notes in the inverse order of the due dates thereof.
Section 5.5. Amortization Schedules. On the date of the optional partial
prepayment of any Note, the Company shall deliver to the Trustee an
amortization schedule with respect to such Note setting forth the number of
the remaining installment payments to be made on such Note after the date of
such partial prepayment, the unpaid principal balance of such Note after
each such installment payment and the revised allocation of principal and
interest of each such installment. The Trustee shall deliver one such copy
of the applicable schedule to the holder of each such Note at its address
set forth in the Register.
SECTION 6. APPLICATION OF AMOUNTS RECEIVED BY TRUSTEE.
If an Event of Default has occurred and is continuing to the knowledge of
the Trustee, all amounts received by the Trustee, whether received as Base
Rent or Additional Rent (or interest thereon) under the Lease, or otherwise,
shall be applied in the manner provided for in Section 7 hereof in respect
of proceeds and avails of the Mortgaged Property.
SECTION 7. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
Section 7. 1. Events of Default. Any one or more of the following shall
constitute an "Event of Default" as the term is used herein:
(a) Default shall occur in the payment of principal, premium or interest
on any Note when the same shall have become due and such Default shall
continue for five days; or
(b) Default shall occur in the observance or performance of any
provision of this Indenture or any provision of the Note Purchase
Agreements, the Mortgage, the Lease Assignment or the Guaranty Agreement and
such default continues for 30 days or more after the earlier of (i) the day
on which the Company first obtains knowledge of such default or (ii) the day
on which written notice thereof is given to the Company by the Trustee or
any holder of a Note; or
(c) any of the Mortgage, the Lease, the Lease Assignment or the Guaranty
Agreement shall cease to be in full force and effect; or
(d) Default shall occur under any indenture, agreement or other
instrument under which the Guarantor or any Subsidiary has indebtedness for
borrowed money outstanding thereunder which individually or in the aggregate
exceeds $5,000,000 in principal amount and either (i) such indebtedness
shall have been accelerated so that the same shall be or become due and
payable prior to the date on which the same would otherwise have become due
and payable or (ii) such default shall be a payment default which is not
paid at the final maturity of such indebtedness; or
(e) If any representation or warranty made by the Company or the
Guarantor in the Note Purchase Agreements, or made by the Company or the
Guarantor in any statement or certificate furnished by the Company or the
Guarantor in connection with the consummation of the issuance and delivery
of the Notes or furnished by the Company or the Guarantor pursuant to any
Transaction Document, is untrue in any material respect as of the date of
the issuance or making thereof; or
(f) If any representation or Warranty made by the Tenant in the SNDA
Agreement or the Estoppel Certificate referred to in Section 3.3 of the Note
Purchase Agreements prove untrue in any material respect as of the date of
issuance or making thereof which causes a material loss or damage to a
holder of the Notes; or
(g) The Company or the Guarantor becomes insolvent or bankrupt, or makes
an assignment for the benefit of creditors, or the Company or the Guarantor
causes or suffers an order for relief to be entered with respect to it under
applicable Federal bankruptcy law or applies for or consents to the
appointment of a custodian, trustee or receiver for the Company or the
Guarantor or for the major part of the property of any of them; or
(h) A custodian, trustee or receiver is appointed for the Company or the
Guarantor or for the major part of the property of any of them and is not
discharged within 30 days after such appointment; or
(i) Bankruptcy, reorganization, arrangement or insolvency proceedings,
or other proceedings for relief under any bankruptcy or similar law or laws
for the relief of debtors, are instituted by or against the Company or the
Guarantor and, if instituted against the Company or the Guarantor, are
consented to or are not dismissed within 60 days after such institution.
Section 7.2. Notice to Holders and the Trustee. When any Event of Default
described in the foregoing Section 7.1 has occurred and is continuing, or if
any holder of a Note gives any notice or takes any other action with respect
to a claimed default, the Company agrees to give notice within three
business days of such event to all holders of the Notes then outstanding and
to the Trustee and the holders of the Notes, such notice to be in writing
and sent by registered or certified mail or by telegram.
Section 7.3. Acceleration of Maturities. When any Event of Default
described in paragraph (a) of Section 7.1 has happened and is continuing,
the Trustee, at the direction of any holder of the Notes, shall or any
holder of a Note may, and when any Event of Default described in paragraphs
(b) through (f), inclusive, of said Section 7.1 has happened and is
continuing, the Trustee, at the direction of the holder or holders of 25% or
more of the principal amount of Notes at the time outstanding (the "25%
Holders") shall, and the 25% Holders, by notice in writing sent by
registered or certified mail to the Company, may (and
to the Trustee if such notice is delivered by a holder or holders of Notes),
declare the entire principal and all interest accrued on all Notes to be,
and all Notes shall thereupon become, forthwith due and payable, without any
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived. When any Event of Default described in paragraph
(g), (h) or (i) of Section 7.1 has occurred, then all outstanding Notes
shall immediately become due and payable without presentment, demand or
notice of any kind. Upon the Notes becoming due and payable as a result of
any Event of Default as aforesaid, the Company will forthwith pay, or cause
to be paid, to the Trustee the entire principal and interest accrued on the
Notes and, to the extent not prohibited by applicable law, an amount as
liquidated damages for the loss of the bargain evidenced hereby (and not as
a penalty) equal to the Make-Whole Amount, determined as of the date on
which the Notes shall so become due and payable. No course of dealing on
the part of any holder of a Note nor any delay or failure on the part of any
holder of ;i Note to exercise any right shall operate as a waiver of such
right or otherwise prejudice such holder's rights, powers and remedies. The
Company further agrees, to the extent permitted by law, to pay to the holder
or holders of the Notes all costs and expenses incurred by them in the
collection of any Notes upon any default hereunder or thereon, including
reasonable compensation to such holder's or holders' attorneys for all
services rendered in connection therewith.
Section 7.4. Rescission of Acceleration. The provisions of Section 7.3 are
subject to the condition that if the principal of and accrued interest on
all or any outstanding Notes have been declared immediately due and payable
by reason of the occurrence of any Event of Default described in paragraphs
(a) through (f), inclusive, of Section 7.3, the Trustee, at the direction
of the holders of 66-2/3% in ;aggregate principal amount of the Notes then
outstanding (the "66-2/3% Holders") shall, and the 66-2/3% Holders may, by
written instrument filed with the Company (and with the Trustee if such
instrument is filed by a holder or holders of the Notes), rescind and annul
such declaration and the consequences thereof, provided that at the time
such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the payment of any
monies due pursuant to the Notes or this Indenture;
(b) all arrears of interest upon all the Notes and all other sums
payable under the Notes and under this Indenture (except any principal,
interest or premium on the Notes which has become due and payable solely by
reason of such declaration under Section 7.3) shall have been duly paid;
and
(c) each and every other Default and Event of Default shall have been
made good, cured or waived pursuant to Section 9.2;
and provided further, that no such rescission and annulment shall extend to
or affect any subsequent Default or Event of Default or impair any right
consequent thereto.
Section 7.5. Remedies. In case of tube happening and continuance of an
Event of Default the Trustee from time to time in its discretion may
exercise, in addition to the acceleration rights described in Section
7.3 above and all other rights and powers described herein or permitted
under applicable law, all or any of the following remedies as it may deem
best for the protection and enforcement of the interests and rights of the
Trustee and of the holders of the Notes then outstanding:
(a) the Trustee may in its own name and as trustee of an express trust
protect and enforce its rights and the rights of the holders of the Notes by
bringing such actions, at law or in equity or before an, administrative
tribunal, as the Trustee, being advised by counsel, shall deem appropriate,
including, without limitation, actions for the specific performance of any
covenant hereof, or of the Notes, for the foreclosure of the Mortgage and
for enforcement of the Guaranty Agreement; and the Trustee shall be entitled,
in its own name and as trustee of an express trust, to recover judgment for
any and all sums then, or upon any Event of Default, becoming due and
payable by the Company under any provision hereof or of the Notes or
Mortgage, including, without limitation, any deficiency in the payment of
all amounts due under the provisions hereof or of the Notes or Mortgage,
remaining after any sale of the Mortgaged Property in foreclosure
proceedings or by virtue of the Trustee's power of sale or otherwise, and,
in addition thereto, such amounts as shall be sufficient to cover the
reasonable costs and expenses of collection, including reasonable attorneys'
fees, and of other proceedings hereunder, and to collect out of the
Mortgaged Property in any manner provided by law all amounts adjudged or
decreed to be payable;
(b) the Trustee as a matter of contract right and not as a penalty shall
be entitled to the appointment of a receiver of, or may enter upon and take
possession of, all or any part of the Mortgaged Property and such receiver
or the Trustee shall thereupon be entitled to operate all or any part of the
Mortgaged Property and to make all expenditures and to take all actions
necessary or desirable therefor, and to collect and retain all income and
earnings arising from such Mortgaged Property or business and to apply any
such income and earnings as provided in Section 7.8 in respect of the
proceeds of a sale of Mortgaged Property;
(c) the Trustee may, with or without entry as aforesaid, sell all or any
part of the Mortgaged Property at public or private sale, upon such
notice, in such manner, at such time or times, and upon such terms
consistent with the applicable laws of the respective States wherein such
Mortgaged Property is located, as the Trustee may determine; and
(d) the Company, to the extent permitted by law, shall not claim any
rights under any stay, valuation, exemption or extension law, and hereby
waives any right of redemption which it may have in respect of the Mortgaged
Property.
Section 7.6. Foreclosure and Sale of Mortgaged Property. In the event of
any sale made under or by virtue of this Indenture, whether made under the
power of sale herein granted or under or by virtue of judicial proceedings
or decree of foreclosure and sale, the whole of the Mortgaged Property may
be sold in one parcel and as an entirety, or in separate parcels or lots, as
the Trustee may reasonably determine, or as the Trustee may be directed by
the written direction of the holders of not less than a majority in
principal amount of the Notes then outstanding.
Section 7.7. Adjournment of Sale. The Trustee may adjourn from time to
time any sale by it to be made under the provisions of this Indenture, by
announcement at the time and place appointed for such sale or for such
adjourned sale or sales; and, except as otherwise provided by law, the
Trustee, without further notice or publication, may make such sale at the
time and place to which the same shall be so adjourned.
Section 7.8. Trustee May Execute Conveyances and Deliver Possession; Sale
a Bar. Upon the completion of any sale or sales made under or by virtue of
this Indenture, the Trustee shall execute and deliver to the accepted
purchaser or purchasers a good and sufficient deed, or good and sufficient
deeds, and other instruments conveying, assigning and transferring all its
estate, right, title and interest in and to the Mortgaged Property,
privileges and rights so sold. The Trustee is hereby irrevocably appointed
the true and lawful attorney-in-fact of the Company, in its name and stead
or in the name of the Trustee, to make all necessary conveyances,
assignments, transfers and deliveries of the premises and the Mortgaged
Property, privileges and rights so sold and for that purpose the Trustee may
execute all necessary deeds and instruments of assignment and transfer, and
may substitute one or more Persons with like power, the Company hereby
ratifying and confirming all that its said attorneys or such substitute or
substitutes shall lawfully do by virtue hereof. Nevertheless, the Company,
if so requested in writing by the Trustee, shall ratify and confirm any such
sale or sales by executing and delivering to the Trustee or to such
purchaser or purchasers all such instruments as may be advisable, in the
judgment of the Trustee, for the purpose and as may be designated in such
request.
Any such sale or sales made under or by virtue of this Indenture, whether
made under the power of sale herein granted or under or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale,
shall operate to divest all estate, right, title, interest, claim or demand
whatsoever, whether at law or in equity, of the Company, in and to the
premises, Mortgaged Property, privileges and rights so sold, and shall be a
perpetual bar both at law and in equity against the Company, its successors
and assigns, and against any and all Persons claiming or who may claim the
same, or any part thereof from, through or under the Company, its successors
or assigns to the exercise or assertion of any right, title or interest to
such premises, Mortgaged Property, privileges and rights and to challenges
regarding the right, title and interest of the purchasers thereof.
Section 7.9. Receipt Sufficient Discharge for Purchaser. The receipt of
the Trustee or of the court officer conducting any such sale for the
purchase money paid at any such sale shall be a sufficient discharge
therefor to any purchaser of the Mortgaged Property, or any part thereof,
sold as aforesaid; and no such purchaser or his representatives, grantees or
assigns, after paying such purchase money and receiving such receipt, shall
be bound to see the application of such purchase money upon or for any trust
or purpose of this Indenture, or shall be answerable in any manner
whatsoever for any loss, misapplication or nonapplication of any such
purchase money or arty part thereof, nor shall any such purchaser be bound
to inquire as to the necessity or expediency of any such sale.
Section 7. 1 0. Sale to Accelerate Notes. In the event of any sale made
under or by virtue of this Indenture, whether made under the power of sale
herein granted or under or by virtue of judicial proceedings or of a valid
judgment or decree of foreclosure and sale, the principal of the Notes, if
not previously due, immediately thereupon shall become due and payable,
anything in the Notes or in this indenture to the contrary
notwithstanding.
Section 7. 1 1. Application of Proceeds of Sale and Other Amounts. The
purchase money proceeds or avails of any such sale, together with any
amounts received by the Trustee as a result of an acceleration of the Notes
and any other sums which then may be held by the Trustee under this
Indenture as part of the Mortgaged Property or the proceeds thereof or under
the Guaranty Agreement, whether under the provisions of this Section 7 or
otherwise, shall be applied as follows:
First: To the payment pro rata of the reasonable costs and expenses of
foreclosure or suit, if any, and of such sale, and to the extent permitted
by applicable law, the reasonable compensation of the Trustee, its agents,
attorneys and counsel, and of all proper expenses, liability and advances
incurred or made hereunder by the Trustee, and of all taxes, assessments or
liens superior to the lien of these presents, except any taxes, assessments
or other superior lien subject to which said sale may have been made;
Second: To the amount then owing or unpaid on the Notes for principal,
premium, if any, and interest; and in case such proceeds shall be
insufficient to pay in full the whole amount so due, owing or unpaid upon
the Notes, then ratably according to the aggregate of such principal and the
accrued and unpaid interest and premium, if any, with application on each
Note to be made, first, to the unpaid principal thereof, second, to unpaid
premium, if any, thereon, and third, to unpaid interest thereon;
Third: To the payment of any other sums required to be paid by the Company
pursuant to any provision of this Indenture, the Mortgage, the Lease
Assignment, the Notes or any other instrument given to secure the Notes;
and
Fourth: To the payment of the surplus, if any, to the Company, its
successors or assigns.
Section 7.12. Purchase of Trust Estate. Upon any sale made under or by
virtue of this Indenture, whether made under the power of sale herein
granted or under or by virtue of judicial proceedings or of a judgment or
decree of foreclosure and sale, the Trustee or any holder or holders of the
Notes may bid for and purchase the Mortgaged Property being sold, and upon
compliance with the terms of sale, may hold, retain and possess and dispose
of such Mortgaged Property in its or their own absolute right without
further accountability; and any purchaser at any such sale may, in paying
the purchase price, turn in any of the Notes in lieu of cash to the amount
which shall, upon distribution of the net proceeds of such sale, be payable
thereon. Said Notes, in case the amounts so payable thereon shall be less
than the amount due thereon, shall be returned to the holders thereof after
a notation of such partial payment shall have been made thereon.
Section 7.13. Trustee Entitled to Appointment of Receiver. The Company
further covenants that upon the happening of any Event of Default and
thereafter during the continuance of such Event of Default unless the same
shall have been waived as hereinafter provided, the Trustee shall be
entitled, as a matter of right, if it shall so elect, (a) forthwith and
without declaring the principal of the Notes to be due and payable, or (b)
after declaring the same to be due and payable, or (c) upon the filing of a
bill in equity to foreclose this Indenture or to enforce the specific
performance hereof or in aid thereof or upon the commencement of any other
judicial proceeding to enforce any right of the Trustee or of the holders of
the Notes, to the appointment of a receiver or receivers of the Mortgaged
Property and of all the earnings, revenues, rents, issues, profits and
income thereof, with such powers as the court making such appointment shall
confer. The Company, if requested so to do by the Trustee, will consent to
the appointment of any such receiver as aforesaid.
Section 7.14. Trustee May Enforce Rights without Notes. All rights of action
under this Indenture or under any of the Notes may be enforced by the
Trustee without the possession of any of the Notes and without the
production thereof at any trial or other proceedings relative thereto. Any
such suit or proceedings instituted by the Trustee shall be brought in its
own name or as Trustee, and any recovery of judgment shall be, subject to
the rights of the Trustee, for the ratable benefit of the holders of the
Notes outstanding.
Section 7.15. Limitation on Noteholders' Right to Sue. No holder of any
Note shall have any right to institute any suit, action or proceeding at law
or in equity growing out of any provision of this Indenture, or for the
foreclosure or enforcement of this Indenture, unless and until an Event of
Default shall have occurred and is continuing and unless and
until such holder shall have previously given to the Trustee written notice
of the happening of such Event of Default and of the continuance thereof as
hereinbefore provided, and also (except as hereinafter provided) unless and
until the holders of at least 25% in principal amount of the Notes then
outstanding shall have made written request upon the Trustee and shall have
afforded to it a reasonable opportunity to institute such action, suit or
proceeding in its own name, and unless also the Trustee :;hall have been
offered security and indemnity satisfactory to it against the costs,
expenses and liabilities to be incurred therein or thereby, and the Trustee
shall have neglected or refused to institute any such action, suit or
proceeding within a reasonable time after receipt of such notification,
request and offer of indemnity; and such notification, request, offer of
indemnity and refusal or neglect are hereby declared in every such case to
be conditions precedent to the institution by such Noteholder of any such
action, suit or proceeding; it being understood and intended and being
expressly covenanted by the holder of every Note with every other holder and
with the Trustee that no one or more holders of the Notes shall be entitled
to take any action or institute any such suit to enforce the payment of his
Notes if and to the extent that the taking of such action or the institution
or prosecution of any such suit or the entry of judgment therein would under
applicable law result in a surrender, impairment, waiver or loss of the lien
of this Indenture upon the Mortgaged Property, or any part thereof, as
security for Notes held by any other Noteholder, or shall have any right in
any manner whatever to affect, disturb or prejudice the rights of the
holders of any other of the Notes, or to enforce any right hereunder, except
in the manner herein provided, and for the equal, ratable and common benefit
of all holders of the Notes. Nothing in this Section 7 or elsewhere in this
Indenture or in the Notes contained, however, shall affect or impair the
obligation of the Company, which is unconditional and absolute, to pay the
principal of, and premium, if any, and the interest on, the Notes to the
respective holders of the Notes, in the manner and at the time and places
therein respectively expressed, nor shall it affect or impair the right of
the respective holders of the Notes, by an action at law upon the promises
to pay therein contained, to enforce such payment.
Section 7.16. Remedies Cumulative. No remedy herein conferred upon or
reserved to the Trustee or to the holders of the Notes is intended to be
exclusive of any other remedy or remedies, and each and every such remedy
shall be cumulative, and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute.
Section 7.1 7. Delay or Omission Not a Waiver. No delay or omission of the
Trustee, or of any holder of the Notes, to exercise any right or power
accruing upon any Event of Default, shall impair any such right or power, or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and every power and remedy given by this Indenture to
the Trustee or to the holders of the Notes may be exercised from time to
time and as often as may be deemed expedient by the Trustee or by the
holders of the Notes.
Section 7.18. Waiver of Extension, Appraisement, Stay, Laws. The Company
will not at any time insist upon, or plead, or in any manner whatever claim
or take any benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the
covenants and terms of performance of this Indenture; nor claim, take or
insist upon any benefit or advantage of any law now or hereafter in force
providing for the valuation or appraisement of the Mortgaged Property, or
any part thereof, prior to any sale or sales thereof which may be made
pursuant to any provision herein contained, or pursuant to the decree,
judgment or order of any court of competent jurisdiction; nor after any such
sale or sales, claim or exercise any right under any statute heretofore or
hereafter enacted by the United States of America or by any state or
territory, or otherwise, to redeem the Mortgaged Property so sold or any
part thereof; and the Company hereby expressly waives all benefits or
advantage of any such law or laws, and covenants not to hinder, delay or
impede the execution of any power herein granted or delegated to the
Trustee, but to suffer and permit the execution of every power as though no
such law or laws had been made or enacted.
Section 7.19. Control of Remedies by Noteholders. Notwithstanding any
other provision of this Section 7, the holders of at least 66-2/3% in
principal amount of the Notes from time to time outstanding shall have the
right, by an instrument in writing delivered to the Trustee, to determine
which of the remedies, if any, herein set forth shall be adopted, to direct
the time, method and place of conducting all proceedings to be taken under
the provisions of this Indenture for the enforcement thereof or of the Notes
and to rescind any such direction; provided, however, that the Trustee shall
have the right to decline to follow any such direction if the Trustee shall
be advised by counsel that the action or proceeding so directed may not
lawfully be taken or would be unjustly prejudicial to holders of Notes not
parties to such direction.
Section 7.20. Trustee May File Proofs of Claims. The Trustee is hereby
appointed, and each and every holder of the Notes, by receiving and
holding the same, shall be conclusively deemed to have appointed the
Trustee the true and lawful attorney-in-fact of
such holder, with authority to make or file, in its own name as trustee of
an express trust or otherwise as it shall deem advisable, in any
receivership, insolvency, liquidation, bankruptcy, arrangement,
reorganization or other judicial proceedings relative to the Company or any
other obligor upon the Notes or to their respective creditors or to the
Mortgaged Property, any and all claims, proofs of debt, petitions, consents,
other documents and amendments of any thereof, as may be necessary or
advisable in order to have the claims of the Trustee and of the holders of
the Notes allowed in any such proceeding, and to collect and receive any
moneys or other Property payable or deliverable on any such claim, proof of
debt, petition or other document and to distribute the same after the
deduction of the charges and expenses of the Trustee, and to execute and
deliver any and all other papers and documents and to do and perform any and
all other acts and things, as they may deem necessary or advisable in order to
enforce in any such proceedings any of the claims of the Trustee and of any
such holders in respect of any of the Notes; and any receiver, assignee,
trustee or debtor in any such proceedings is hereby authorized, and each and
every holder of the Notes, by receiving and holding the same, shall be
deemed to have authorized any such receiver, assignee, trustee or debtor, to
make any such payment or delivery to or on the order of the Trustee, and in
the event that the Trustee shall consent to the making of such payments or
deliveries directly to the holders of the Notes to pay to the Trustee any
amount due them for compensation and expenses, including counsel fees,
incurred by them down to the date of such payment or delivery; provided,
however, that nothing herein contained shall be deemed to authorize or
empower the Trustee to consent to or accept or adopt, on behalf of any
holder of Notes, any plan of reorganization or readjustment of the Company
affecting the Notes or the rights of any holder thereof, or to authorize or
empower the Trustee to vote in respect of the claim of any holder of any
Note in any such proceedings.
Section 7.21. Remedies Subject to Provisions of Law. All rights, remedies
and powers provided by this Section 7 may be exercised only to the extent
that the exercise thereof does not violate any applicable provision of law
in the premises, and all the provisions of this Section 7 are intended to be
subject to all applicable mandatory provisions of law which may be
controlling in the premises and to be limited to the extent necessary so
that they will not render this Indenture invalid or unenforceable under the
provisions of any applicable law.
SECTION 8. CONCERNING THE TRUSTEE.
The Trustee accepts the trusts hereunder and agrees to perform the same, but
only upon the terms and conditions hereof, including the following, to all
of which the Company and the respective holders of the Notes at any time
outstanding by their acceptance thereof agree:
Section 8. 1. Duties of Trustee. The Trustee undertakes (a) except while an
Event of Default of which the Trustee has acquired knowledge in the manner
specified in Section 8.2(g) hereof shall have occurred and be continuing, to
perform such duties and only such duties as are specifically set forth in
this Indenture, and (b) while an Event of Default of which the Trustee has
acquired knowledge in the manner specified in Section 8.2(g) shall have
occurred and be continuing, to exercise such of the rights and powers as are
vested in it by this Indenture, and to use the same degree of care and skill
in its exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
The Trustee, upon receipt of instruments furnished to the Trustee pursuant
to the provisions of this Indenture, shall examine the same to determine
whether or not such instruments appear to conform to the requirements of
this Indenture.
Section 8.2. Trustee Liability. No provision of this Indenture shall be
construed to relieve the Trustee from liability for its own negligent
action, negligent failure to act, or its own willful misconduct, except
that:
(a) unless an Event of Default shall have occurred and be continuing,
the Trustee shall not be liable except for the performance of such duties as
are specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Trustee but the
duties and obligations of the Trustee shall be determined solely by the
express provisions of this Indenture; and
(b) in the absence of bad faith on the part of the Trustee, the Trustee
may rely upon the authenticity of, and the truth of the statements and the
correctness of the opinions expressed in, and shall be protected in acting
upon, any resolution, Officers' Certificate, Opinion of Counsel, Note,
request, notice, consent, waiver, order, signature guaranty, notarial seal,
stamp, acknowledgment, verification, appraisal, report, stock certificate,
or other paper or document believed by the Trustee to be genuine and to have
been signed, affixed or presented by the proper party or parties; and
(c) in the absence of bad faith on the part of the Trustee, whenever the
Trustee, or any of its agents, representatives, experts or counsel, shall
consider it necessary or desirable that any matter be proved or established,
such matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by an
Officers' Certificate; provided, however, that the Trustee, or such agent,
respectively, expert or counsel, may require such further and additional
evidence and make such further investigation as it or they may consider
reasonable; and
(d) the Trustee may consult with counsel and the advice or opinion of
such counsel shall be full and complete authorization and protection in
respect of any action taken or suffered hereunder in good faith and in
accordance with such advice or opinion; and
(e) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by them in good faith in accordance with any direction
or request of a holder or holders of the Notes with which the Trustee is
required by the provisions hereof to comply; and
(f) the Trustee shall not be liable for any error of judgment made in
good faith by an officer of the Trustee unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(g) the Trustee shall not be deemed to have knowledge of any Default or
Event of Default until it has received written advice thereof from the
holder of any Note; and
(h) whether or not an Event of Default shall have occurred, the Trustee
shall not be under any obligation to take any action under this Indenture
(including action under Section 7.16 hereof) which may tend to involve it in
any expense or liability, the payment of which within a reasonable time is
not, in its reasonable opinion, assured to it by the security afforded to it
by the terms of this Indenture, unless and until requested in writing so to
do by one or more holders of Notes outstanding hereunder and furnished, from
time to time as it may require, with reasonable security and indemnity;
and
(i) whether or not an Event of Default shall have occurred whenever it
is provided in this Indenture that the Trustee consents to any act or
omission by any person or that the Trustee exercise its discretion in any
manner, the Trustee may (but need not) seek the written acquiescence of the
holders of 66-2/3% in principal amount of the Notes then outstanding and,
unless written evidence of such acquiescence has been received by the
Trustee, it shall be fully justified in refusing so to consent or so to
exercise its discretion.
Section 8.3. No Responsibility of Trustee For Recitals. The recitals and
statements contained herein and in the Notes (except for the Trustee's
certificate of authentication endorsed on the Notes) shall be taken as the
recitals and statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same.
The Trustee makes no representation as, to the validity or sufficiency of
this Indenture, or of the Notes secured hereby, the security hereby or
thereby afforded, the title of the Company to the Mortgaged Property or the
descriptions thereof, or the filing or recording or registering of any of
the Mortgage or any, other document.
The Trustee shall not be concerned with or accountable to anyone for the use
or application of any deposited moneys which shall be released or withdrawn
in accordance with the provisions of this Indenture or of any Property or
Securities or the proceeds thereof which shall be released from the lien
hereof in accordance with the provisions of this Indenture.
Section 8.4. Compensation and Expenses of Trustee: Indemnification; lien
Therefor. The Company covenants to pay to the Trustee; such compensation
for its services hereunder as shall be agreed to by the Company and the
Trustee, or, in the absence of such agreement, reasonable compensation
therefor (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an. express trust), and to pay, or
reimburse, the Trustee for all reasonable expenses incurred hereunder,
including the reasonable compensation, expenses and disbursements of such
agents, representatives, experts and counsel as the Trustee may employ in
connection with the exercise and performance of its powers and duties
hereunder.
The Company will also indemnify and save the Trustee, its agents, employees
and representatives, harmless against any expenses (including reasonable
attorneys' fees), liabilities and damages, not arising from their own wilful
misconduct or gross negligence, which they or any of them may incur in the
exercise and performance of their rights, powers, trusts, duties and
obligations hereunder.
As security for the performance of the obligations of the Company under
this Section 8.4, the Trustee shall be secured hereby in priority to the
indebtedness evidenced by the Notes.
Section 8.5. Moneys Received by Trustee; Trust Funds-Segregation. All
moneys received by the Trustee under or pursuant to any provision of this
Indenture shall constitute trust funds for the purpose for which they were
paid or are held, but need not be segregated in any manner from other
moneys, and may be held or deposited under such conditions as may be
prescribed by law for trust funds.
Section 8.6. Trustee May Hold Notes. The Trustee or any officer or director
of the Trustee may acquire and hold Notes, offset funds or deposits with it
other than funds held by it as Trustee and otherwise deal with the Company
or with any other corporation having relations with the Company, in the same
manner and to the same extent and with like effect as though it were not
Trustee or such officer or director; provided that nothing contained in
this Section 8.6 shall be deemed to modify, amend or waive any of the
duties and obligations of the Trustee to the holders of the Notes as set
forth in this Indenture.
Section 8.7. Resignation of Trustee. The Trustee may resign and be
discharged from the trusts created hereby by delivering notice thereof, by
certified mail, return receipt requested, to the Company and all holders of
the Notes at the time outstanding, specifying a date (not earlier than 60
days after the date of such notice) when such resignation shall take effect.
Such resignation shall take effect on the day specified in such notice,
unless previously a successor Trustee shall have been appointed as provided
in Section 8.9, in which event such resignation shall take effect
immediately upon the appointment of such successor Trustee.
Section 8.8. Removal of Trustee. The Trustee may be removed at any time,
for or without cause, by an instrument or instruments in writing executed by
the holders of at least 66-2/3% in aggregate principal amount of the Notes
at the time outstanding and delivered to the Trustee with a copy to the
Company, specifying the removal and the date when it shall take effect.
Section 8.9. Appointment of Successor Trustee. In case at any time the
Trustee shall resign or be removed or become incapable of acting, a
successor Trustee may be appointed by the holders of at least 66-2/3% in
aggregate principal amount of the Notes at the time outstanding, by an
instrument or instruments in writing executed by such holders and filed with
such successor Trustee with a copy of such instrument or instruments to the
Company.
Until a successor Trustee shall be so appointed by the holders of the Notes,
the Company shall appoint a successor Trustee to fill such vacancy, by an
instrument in writing executed by any Executive Officer of the Company and
delivered to the successor Trustee. If all or substantially all of the
Mortgaged Property shall be in the possession of one or more receivers,
trustees, liquidators or assignees for the benefit of creditors, then such
receivers, trustees, custodians, liquidators or assignees may, by an
instrument in writing delivered to the successor Trustee, appoint a
successor Trustee. Promptly after any such appointment, the Company, or any
such receivers, trustees, custodians, liquidators or assignees, as the case
may be, shall give notice thereof by first class mail, postage prepaid, to
each holder of Notes at the time outstanding.
Any successor Trustee so appointed by the Company, or such receivers,
trustees, custodians, liquidators or assignees shall immediately and without
further act be superseded by a successor Trustee appointed by the holders of
a majority in aggregate principal amount of the Notes then outstanding.
If a successor Trustee shall not be appointed pursuant to this Section
within 90 days after a vacancy shall have occurred in the office of Trustee,
the holder of any Note or such retiring Trustee (unless the retiring Trustee
is being removed) may apply to any court of competent jurisdiction to
appoint a successor- Trustee, and such court may thereupon, after such
notice, if any, as it may consider proper, appoint a successor Trustee.
Section 8.10. Succession of Successor Trustee. Any successor Trustee
appointed hereunder shall execute, acknowledge and deliver to the Company
and the predecessor Trustee an instrument accepting such appointment, and
thereupon such successor Trustee, without any further act, deed, conveyance
or transfer, shall become vested with the title to the Mortgaged Property,
and with all the rights, powers, trusts, duties and obligations of the
predecessor Trustee in the trust hereunder, with like effect as if
originally named as Trustee herein and such successor Trustee shall execute,
deliver and record such instruments as reasonably required by the Company to
document such appointment and update any public records.
Upon the request of any such successor Trustee, however, the Company and the
predecessor Trustee shall execute and deliver such instruments of conveyance
and further assurance and do such other things as may reasonably be required
for more fully and certainly vesting and confirming in such successor
Trustee the title to the Mortgaged Property and all such rights, powers,
trusts;, duties and obligations of the predecessor Trustee hereunder, and
the predecessor Trustee shall also assign and deliver to the successor
Trustee any property subject to the lien of this Indenture which may then be
in its possession.
Any Trustee which has resigned or been. removed shall nevertheless retain
all rights of indemnity, including any lien upon the Mortgaged Property
afforded to it by Section 8.4.
Section 8. 1 1. Eligibility of Trustee. The Trustee shall be a state or
national bank or trust company in good standing, organized under the laws of
the United States of America or any State thereof and having a capital,
surplus and undivided profits aggregating at least $50,000,000.
In case the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.7.
Section 8.12. Successor Trustee by Merger. Any corporation into which the
Trustee may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Trustee
shall be a party, or any state or national bank or trust company in any
manner succeeding to the corporate trust business of the Trustee as a whole
or substantially as a whole, if eligible as provided in Section 8.1 1, shall
be the successor of the Trustee hereunder without the execution or filing of
any paper or any further act on the part of any of the parties hereto,
anything to the contrary contained herein notwithstanding.
SECTION 9. SUPPLEMENTAL INDENTURES; WAIVERS.
Section 9. I. Supplemental Indentures without Noteholders' Consent. The
Company, when authorized by resolution of its Board of Directors, and the
Trustee from time to time and at any time, subject to the restrictions in
this Indenture contained, may, without consent of the holders of the Notes,
enter into an Indenture or indentures supplemental hereto and which
thereafter shall form a part hereof for any one or more or all of the
following purposes:
(a) to add to the covenants and agreements to be observed by, and to
surrender any right or power reserved to or conferred upon, the
Company;
(b) to evidence the succession of another corporation to the Company, or
successive successions, and the assumption by the successor corporation to
the covenants, agreements and obligations of the Company; provided that any
such succession and assumption is permitted by the terms of this
Indenture;
(c) to subject to the lien of this Indenture additional Property
hereafter acquired by the Company or others and intended to be subjected to
the lien of the Indenture, and to correct or amplify the description of any
Property subject to the lien of this Indenture; or
(d) for any other purpose not inconsistent with the terms of this
Indenture, or to cure any ambiguity or cure, correct or supplement any
defect or inconsistent provision of this Indenture or any supplement;
and the Company covenants to perform all requirements of any such
supplemental indenture. No restriction or obligation imposed upon the
Company may, except as otherwise provided in this Indenture, be waived or
modified by such supplemental indentures, or otherwise.
Section 9.2. Waivers and Consents b)) Noteholders: Supplemental Indentures
With Noteholders' Consent. Upon the waiver of consent of the holders of a
least 66-2/3% in aggregate principal amount of the Notes at the time
outstanding (a) the Company may take any action prohibited, or omit the
taking of any action required, by any of the provisions of this Indenture or
any indenture supplemental hereto, or (b) the Company, when authorized by
resolution of its Board of Directors, and. the Trustee, may enter into an
indenture or indentures supplemental hereto for the purpose of adding,
changing, or eliminating any provisions of this Indenture or of any
indenture supplemental hereto or modifying in any manner the rights and
obligations of the holders of the Notes and the Company; provided that no
such waiver or supplemental indentures shall:
(i) impair or affect the right of any holder to receive payments
or prepayments of the principal of and payments of the interest and premium,
if any, on its Note, as therein and herein provided, without the consent of
such holder,
(ii) permit the creation of any lien prior to, or on a parity with, the
lien of this Indenture with respect to any of the Mortgaged Property,
without the consent of the holders of all the Notes at the time
outstanding,
(iii) effect the deprivation of any holder of the Notes of the benefit of
the lien of this Indenture upon all or any part of the Mortgaged Property
without the consent of such holder of the Notes,
(iv) reduce the aforesaid percentage of the aggregate principal amount
of Notes, the holders of which are required to consent to any such waiver
or supplemental indenture pursuant to this Section, without the consent of
the holders of all of the Notes at the time outstanding, or
(v) modify the rights, duties or immunities of the Trustee without its
consent.
Section 9.3. Notice of Supplemental Indenture. Promptly after the execution
by the Company and the Trustee of any supplemental indenture or agreement
pursuant to the provisions of Section 9.1 or 9.2 hereof, the Company shall
give written notice, setting forth
in general terms the substance of such supplemental indenture together with
a conformed copy thereof, mailed first class postage prepaid, to each holder
of the Notes at its address set forth in the Register. Any failure of the
Company to give such notice, or any defect therein, shall not, however in
any way impair or affect the validity of any such supplemental indenture or
agreement.
Section 9.4. Opinion of Counsel Conclusive as to Supplemental Indenture.
The Trustee is hereby authorized to join with the Company in the execution
of any such supplemental indenture authorized or permitted by the terms of
this Indenture to make the further agreements and stipulations which may
be therein contained and the Trustee may receive an Opinion of Counsel and
an Officers' Certificate as conclusive evidence that any supplemental
indenture executed pursuant to the provisions of this Section 8 complies
with the requirements of this Section 9.
SECTION 10. ACTION BY NOTEHOLDERS.
Section 10.1. Evidence of Action by Noteholders. Whenever in this
Indenture it is provided that the holders of a specified percentage in
aggregate principal amount of the Notes may take any action (including the
making of any demand or request, the giving of any notice, consent or waiver
or the taking of any other action), the fact that at the time of taking any
such action the holders of such specified percentage have joined therein may
be evidenced by any instrument or any number of instruments of similar tenor
executed by holders of the Notes in person or by attorney or proxy appointed
in writing.
The holding by any Person of any of the Notes shall be proved by the
Register.
SECTION 11. MISCELLANEOUS PROVISIONS.
Section 11. 1. Indenture for Benefit of Parties Hereto. Nothing in this
Indenture, expressed or implied, is intended or shall be construed to confer
upon or to give to, any Person other than the parties hereto, and the
holders of the Notes, any right, remedy or claim under or by reason of this
Indenture or any covenant, condition or stipulation hereof; and the
covenants, stipulations and agreements in this Indenture contained are and
shall be for the sole and exclusive benefit of the parties hereto, their
successors and assigns, and the holders of the Notes.
Section 11.2. Severability. In case arty one or more of the provisions
contained in this Indenture or in the Notes shall be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein and therein shall not in any way
be affected or impaired thereby.
Section 11.3. Basis of Opinions of Counsel and Certificates. Any Opinion of
Counsel required to be furnished pursuant to any of the provisions of this
Indenture may, in lieu of stating the facts required by the provisions
hereof, state that the required conditions will be fulfilled on the
execution and delivery of designated instruments, which instruments shall
be delivered in form approved by such counsel. prior to or concurrently with
the taking or suffering by the Trustee of the action as a condition
precedent to which such opinion is required to be furnished under the terms
of this Indenture.
Any certificate or opinion of an officer of the Company or an accountant may
be based, insofar as it relates to legal matters, upon a certificate or
opinion of or upon representations by counsel, unless such officer or
accountant knows that the certificates or opinions or representations with
respect to the matters upon which his opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should have known that the
same were erroneous.
Any certificate or Opinion of Counsel may be based, insofar as it relates to
factual matters, on information with respect to which is in the possession
of the Company, upon the certificate or opinion of or representations by an
officer or officers of the Company unless such counsel knows that the
certificate or opinion or representations with respect to the matters upon
which his opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should have known that the same were erroneous.
Section 11.4. Addresses for Notices and Demands. Any notice to or demand
upon the Trustee may be served or presented, and such demand may be made,
at the principal office of the Trustee, 225 Franklin Street, Boston, MA
02110, Attention: Corporate Trust Department. Any notice to or demand upon
the Company shall be deemed to have been sufficiently given or served by the
Trustee for all purposes by being mailed by registered or certified mail,
postage prepaid, addressed to the Company at 6 Liberty Lane West, Hampton,
New Hampshire 03842, Attention: Treasurer, or to the Company at such other
address as may be filed in writing by the Company with the Trustee. Any
notice or report required by any provision of this Indenture to be given or
made to holders of the Notes shall be deemed to have been sufficiently given
or made if copies thereof are mailed by registered or certified mail,
postage prepaid, in a post office letter box, addressed to each holder of
the Notes at the address of such holder set forth in the Register.
Section 11.5. Successors and Assigns. Whenever in this Indenture any of the
parties hereto is named or referred to, the successors and assigns of such
party shall be deemed to be included, and all the covenants, promises ;and
agreements in this Indenture contained by or on behalf of the Company, or by
or on behalf of the Trustee, shall bind and inure to the benefit of the
respective successors and assigns, whether so expressed or not.
Section 11.6. Counterparts; Descriptive Headings. This Indenture is being
executed in any number of counterparts, each of which is an original and all
of which are identical. Each counterpart of this Indenture is to be deemed
an original hereof and all counterparts collectively are to be deemed but
one instrument. The descriptive headings of the several Sections of and
Exhibits to this Indenture were formulated, used and inserted in this
Indenture for convenience only and shall not be deemed to affect the meaning
or construction of any of the provisions hereof.
Section II. 7. Governing Law. This Indenture and the Notes shall be
governed by and construed in accordance with the laws of the State of New
Hampshire.
IN WITNESS WHEREOF, Unitil Realty Corp. has caused this Indenture to be
executed on its behalf by its Treasurer and its corporate seal to be
hereto affixed and attested by one of its Secretaries; and State Street
Bank and Trust Company, in evidence of its acceptance of the trusts hereby
created, has caused this Indenture to be executed on its behalf by one of
its Assistant Vice Presidents, all as of the date first above written.
UNITIL REALTY CORP.
By /s/ Mark H. Collin
Its Treasurer
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By /s/ Daniel Golden
Its Assistant Vice President
STATE OF NEW HAMPSHIRE
s s
COUNTY OF ROCKINGHAM
I, CAROL R. JACQUES, a Notary Public in and for the County and state aforesaid
do hereby certify that Mark H. Collin, personally known to me to be the same
person whose name is subscribed to the foregoing instrument, as
Treasurer of UNITIL REALTY CORP., a New Hampshire corporation, appeared
before me this day in person and acknowledged that he, being thereunto duly
authorized, signed, sealed with the seal of said corporation, and delivered
the said instrument as the free and voluntary act of said corporation and as
his own free and voluntary act, for the uses and purposes therein set
forth.
Given under my hand and notarial seal this 22nd day of July, 1997.
/s/ Carol R Jaques
Notary Public
(SEAL)
Commission expires: 7/15/99
Commonwealth of Massachusetts
COUNTY OF SUFFOLK,
I, Frank P. Conrad a Notary Public in and for the County and State aforesaid,
do hereby certify that Daniel Golden personally known to me to be the same
person whose name is subscribed to the foregoing instrument, as its Asst.
Vice President of STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust
company, appeared before me this day in person and acknowledged that he,
being thereunto duly authorized, signed, sealed with the seal of said
Massachusetts trust company, and delivered the said instrument as the free
and voluntary act of said Massachusetts trust company and as his own free
and voluntary act, for the uses and purposes therein set forth.
Given under my hand and notarial seat this 22nd day of July, 1997.
/s/ Frank P Conrad
Notary Public
(SEAL)
Commission expires: September 15, 2000
UNITIL REALTY CORP.
8.00% Senior Secured Note
Due August 1, 2017
No. R- 1997
UNITIL REALTY CORP., a New Hampshire corporation (the "Company") for value
received promises to pay to
or registered assigns
the principal sum of
DOLLARS( )
together with interest on the unpaid principal[ balance from the date hereof
until maturity at the rate of 8.00% per annum (computed on the basis of a
360-day year of twelve consecutive 30-day months) in installments equal to
this Note's Pro Rata Portion (as defined below) of the following payments,
each consisting of interest and principal as set forth on the amortization
schedule attached hereto as Annex 1:
(i) one installment of interest only for the period from and including
the date of issue to but not including August 1, 1997, payable on August 1,
1997;
(ii) two hundred and thirty-nine equal installments, including both
principal and interest, each in the amount of $62,733.00 payable monthly on
September 1, 1997 and on the first day of each month thereafter to and
including July 1, 2017; and
(iii) a final installment on August 1, 2017 in an amount equal to the
entire principal and interest remaining unpaid as of said date.
The term "Pro Rata Portion" of any monthly installment set forth above shall
mean an amount equal to the product of such monthly installment multiplied
by a faction the numerator of which shall be the face amount :)f this Note
and the denominator of which shall be the original aggregate principal
amount of the Notes.
The Company further promises to pay interest at the rate of 9.00% per annum
on each overdue installment of principal, premium, if any, and (to the
extent legally enforceable) upon each overdue installment of interest in
each case from and after the due date of each such installment until
paid.
Payments of principal, premium, if any, and interest of and on this Note
shall be made in such coin or currency of the United States of America as at
the time of payment is legal tender for the payment of public and private
debts, by check or draft mailed and addressed to the registered holder
hereof at the address shown in the register maintained by the Company for
such purpose, or, at the option of the holder hereof, at such other place in
the United States of America as the holder hereof shall have designated to
the Company in writing. Upon any partial prepayment of this Note, the
number of said installment payments shall be modified as provided by the
Indenture.
This Note is one of the Company's 8.00% Senior Secured Notes (the "Notes"),
which are equally and ratably secured by the Indenture of Trust dated as of
July 1, 1997 (the "Indenture") from the Company to State Street Bank and
Trust Company, as trustee, and the Company. Reference is hereby made to the
Indenture for a description of the property thereby mortgaged, conveyed,
assigned, affected and specially hypothecated, the nature and extent of the
security for the Notes, the rights of the holders of the Notes, the Trustee
and the Company in respect of such security and otherwise and the terms upon
which the Notes are to be authenticated and delivered. As provided in the
Indenture, the aggregate principal amount of Notes issued thereunder equals
$7,500,000.
This Note and the other Notes outstanding under the Indenture may be
declared due prior to their expressed maturity dates, voluntary prepayments
may be made thereon by the Company and certain prepayments are required to
be made thereon, all in the events, on the terms and in the manner and
amounts as provided in the Indenture.
The terms and provisions of the Indenture and the rights and obligations of
the Company and the rights of the holders of the Notes may be changed and
modified to the extent permitted by and as provided in the Indenture.
This Note is registered on the books of the Company and is transferable only
by surrender thereof at the principal office of the Trustee duly endorsed
or accompanied by a written instrument of transfer duly executed by the
registered holder of this Note or its attorney duly authorized in writing.
Payment of or on account of principal, premium, if any, and interest on this
Note shall be made only to or upon the order in writing of the registered
holder.
This Note shall not be valid until the certificate of authentication hereon
shall have been signed by the Trustee.
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed and
its corporate seal to be affixed hereto.
UNITIL REALTY CORP.
Dated: By
Its
[CORPORATE- SEAL]
ATTEST:
Assistant Secretary
This Note is one of the Notes described in the within mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By
Authorized Officer
MORTGAGE AND SECURITY AGREEMIENT
Dated as of July 1, 1997
From
UNITIL REALTY CORP.
(the "Company")
'To
STATE STREET BANK. AND TRUST COMPANY
(the "Mortgagee")
THIS MORTGAGE AND SECURITY AGREEMENT SECURES BOTH REAL AND PERSONAL
PROPERTY AND CONTAINS AFIFER-ACQUIRED PROPERTY PROVISIONS
Unitil Headquarters This instrument was
(6 Liberty Lane West, prepared by:
City of Hampton, Rockingham
County New Hampshire) James E. Jenz
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
TABLE OF CONTENTS
SECTION HEADING PAGE
Parties 1
Recitals 1
Granting Clauses 2
SECTION 1. DEFINITIONS 6
SECTION 2. GENERAL COVENANTS AINID WARRANTTEs 8
Section 2. 1. Note Purchase Agreements and
Indenture Covenants 8
Section 2.2. Ownership of Mortgaged Property 9
Section 2.3. Further Assurances 9
Section 2.4. Payment of Principal and Interest 9
Section 2.5. Maintenance of Mortgiged Property,
Other Liens, Compliance with Laws, Etc 9
Section 2.6. Insurance 11
Section 2.7. Payment of Taxes and Other Charges 12
Section 2.8. Limitation on Liens 13
Section 2.9. The Lease 14
Section 2.10. Advances 15
Section 2.11. Recordation 15
Section 2.12. After-Acquired Property 15
SECTION 3. POSSESSION, USE AND RELEASE OF PROPERTY 16
Section 3.1. Company's Right of Possession 16
Section 3.2. Release of Mortgaged ]Property 16
SECTION 4. APPLICATION OF INSURANCE AND CERTAIN
OTHER MONEYS RECEIVED BY THE MORTGAGEE 17
Section 4.1. Insurance Proceeds and
Condemnation Awards 17
Section 4.2. Mortgage Title Insurance 18
Section 4.3. Investment of Insurance Proceeds and
Condemnation Awards or Compensation 18
Section 4.4. Application if Event of Default Exists 18
SECTION 5. DEFAULTS AND REMEDIES THEREFOR 18
Section 5.1. Events of Default 18
Section 5.2. Remedies 19
Section 5.3. Application of Proceeds 21
Section 5.4. Waiver of Extension, Appraisement
and Stay Laws 22
Section 5.5. Costs and Expenses of Foreclosure 23
Section 5.6. Delay or Omission Not a Waiver 23
Section 5.7. Restoration of Positit'ons 23
Section 5.8. Notes to Become Due upon Sale by
Mortgagee 23
SECTION 6. MISCELLANEOUS 24
Section 6.1. Successors and Assigns 24
Section 6.2. Severability 24
Section 6.3. Addresses for Notices and Demands 24
Section 6.4. Headings and Table of Contents 24
Section 6.5. Release of Mortgage 24
Section 6.6. Counterparts 24
Section 6.7. Successor Mortgagee 24
Section 6.8. Governing Law 25
Section 6.9. Time 25
Section 6.10. Usury Savings Clause 25
Signature Page 26
ATTACHMENTS TO MORTGAGE:
Annex A Legal Description of Real. Property
MORTGAGE AND SECURITY AGREEMENT dated as of July 1, 1997 (the "Mortgage"),
from UNITIL REALTY CORP., a New Hampshire corporation (the "Company"),
having its principal office at 6 Liberty Lane West, Hampton, New Hampshire
03842 to STATE STREET BANK AND TRUST COMPANY, as Trustee for the Holders as
hereafter defined (the "Mortgagee"), whose office address is 225 Franklin
Street, Boston, MA 02110, Attention: Corporate Trust Department.
This Mortgage is also a Security Agreement and financing statement under the
Uniform Commercial Code of New Hampshire and in compliance therewith the
following information is set forth:
1. The names and addresses of the Debtor and Mortgagee are:
Debtor: Unitil Realty Corp.
Liberty Lane West
Hampton, New Hampshire 03842
Attention: Treasurer
Mortgagee: "5tate Street Bank and Trust Company
225 Franklin Street Boston, MA 02110
Attention: Corporate Trust Department
2. The property covered by this Security Agreement and financing
statement is described in the Granting Clauses hereof.
3. Some or all of the fixtures, equipment and other property described
herein is or may become fixtures.
4. The Debtor is the record owner of the real estate described in Annex
A attached hereto and made a part hereof.
RECITALS
A. The Company and American LJnlted Life Insurance Company and The
State Life Insurance Company (the latter two entities being collectively,
the "Purchasers" and together with other holders of any of the Notes, as
hereafter defined, herein being collectively referred to as the "Holders")
have executed and delivered the separate Note Purchase Agreements each dated
as of Jull@ 1, 1997 (the "Note Purchase Agreements") providing for the
commitment of the Purchasers to purchase the 8.00% Senior Secured Notes due
August 1, 2017 of the Company in an aggregate principal amount not to exceed
$7,500,000 (the "Notes").
B. The Company has leased the Mortgaged Property (as hereinafter defined)
to Unitil Service Corp., a New Hampshire corporation (the "Tenant"), under
and pursuant to the terms of that certain Lease dated June 15, 1997 (the
"Lease") and has or will assign all of its right, title and interest in and
to the Lease to the Mortgagee pursuant to that certain Assignment of Lease
dated as of July 1, 199'7 (the "Lease Assignment").
C. The aforesaid Notes are being issued under and secured by that
certain Trust Indenture from the Company to the Mortgagee dated as of July 1,
1997 (the "Indenture"). The Notes are further secured by this Mortgage, the
Lease Assignment and the Guaranty Agreement.
D. The Notes and all principal thereof, premium, if any, and interest
thereon and all additional amounts and other sums at any time due and owing
from, and required to be paid by the Company under the terms of the Notes
and the Note Purchase Agreements, the Lease Assignment, the Indenture and
this Mortgage are hereinafter sometimes referred to as the "Indebtedness
Hereby Secured."
E. The Company is duly authorized under all applicable provisions of
law and its articles of incorporation to issue the Notes., to execute and
deliver this Mortgage and to mortgage, convey and assign the Mortgaged
Property (as hereinafter defined) to the Mortgagee, WITH POWER OF SALE, as
security for the Notes and all corporate action and all consents, approvals
and other authorizations and all other acts and things necessary to make
this Mortgage the valid, binding and legal instrument for the security of
the Notes have been done and performed.
Now, THEREFORE, THIS MORTGAGE WITNESSETH: That the Company, in consideration
of the premises, the purchase and acceptance of the Notes by the Purchasers
and of the sum of Ten Dollars received by the Company from the Mortgagee and
other good and valuable consideration, receipt whereof is hereby acknowledged,
and in order to secure the payment of the principal of, premium, if any, and
interest on the Notes according to their tenor and effect, and to secure the
payment of all other Indebtedness Hereby Secured and the performance and
observance of all the covenants, agreements and conditions contained in or
incorporated by reference into the Notes, this Mortgage, the Indenture, the
Note Purchase Agreements or the Lease Assignment, the Company does hereby
grant, warrant, mortgage, pledge, assign, sell, demise, bargain, hypothecate,
convey, grant a security interest in, transfer and set over unto the Mortgagee
and its successors in trust and assigns for the Mortgagee and its successors
tnd assigns, WITH POWER OF SALE, in and to all and singular the following
described properties, rights, interest and privileges and all of the Company's
estate, right, title and interest therein, thereto and thereunder (all of
which properties hereby mortgaged, assigned and pledged or intended so to be
are hereinafter collectively referred to as the "Mortgaged Property"):
GRANTING CLAUSE FIRST
THE PROPERTY
The parcel of land in Rockingham County, State of New Hampshire, described in
Annex A attached hereto and made a part hereof, together with the entire
interest of the Company in and to all buildings, structures, improvements
and appurtenances now standing, or at any time hereafter constructed or
placed, upon such land, including all right, title and interest of the
Company, if any, in and to all building material, building equipment and
fixtures of every kind and nature whatsoever on said land or in any building,
structure or improvement now or hereafter standing on said land which are
classified as fixtures under applicable law and which are used in connection
with the operation, maintenance or protection of said buildings, structures
and improvements as such (including, without limitation, all boilers, air
conditioning, ventilating, plumbing, heating, lighting and electrical systems
and apparatus, all communications equipment and intercom systems and
apparatus, all sprinkler equipment and apparatus and allelevators and
escalators) and the reversion or reversions, remainder or
remainders, in and to said land, and together with the entire interest of
the Company in and to all and singular the tenements, hereditaments,
easements, rights of way, rights, privileges and appurtenances to said land,
belonging or in anywise appertaining thereto, including, without limitation,
the entire right, title and interest of the Company in, to and under any
streets, ways, alleys, gores or strips of land adjoining said land, and all
claims or demands whatsoevei- of the Company either in law or in equity, in
possession or expectancy, of, in and to said land, it being the intention of
the parties hereto that, so far as may be permitted by law, all property of
the character hereinabove described, which is now owned or is hereafter
acquired by the Company and is affixed or attached or annexed to said land,
shall be and remain or become and constitute a portion of said land and the
security covered by and subject to the lien ofthis Mortgage, together with
all accessions, parts and appurtenances
appertaining or attached thereto and all substitutions, renewals or
replacements of and additions, improvements, accessions and accumulations to
any and all thereof, and together with all rents, income, revenues, awards,
issues and profits thereof, and the present and continuing right to make
claim for, collect, receive and receipt for any and all of such rents,
income, revenues, awards, issues and profits arising therefrom or in
connection therewith.
GRANTING CLAUSE SECOND
THE LEASE
The Lease, and all of the Company's (,-state, right, title, interest, claim
and demand as landlord in, to and under the Lease, including all extensions
and renewals of the term thereof, and all existing or future amendments,
supplements or modifications of the Lease (and to any short memorandum form
of the Lease executed for recording purposes), together with all rights,
powers, privileges, options and other benefits of the Company as landlord
under the Lease, including, without limitation, (a) the immediate and
continuing right (whether or not an Event of Defau'tt under the Note Purchase
Agreements, the Indenture or this Mortgage shall have occurred and be
continuing) to receive and collect all rents (whether as Rent (as defined in
the lease) or otherwise), income, revenues, issues, profits, insurance
proceeds, condemnation iwards, bankruptcy claims, liquidated damages,
purchase price proceeds and other payments, tenders and security payable to
or receivable by the landlord under the Lease; (b) if the Tenant shall be
required to purchase the Mortgaged Property or the landlord's interest
therein, the right and power (such power and right being coupled with an
interest) to execute and deliver as agent and attorney-in-fact of the
landlord under the Lease, an appropriate deed or other instruments of
transfer necessary or appropriate for the conveyance and transfer to the
purchaser of the Mortgaged Property or the portion thereof being so
purchased, and all interest of the landlord therein and to perform in the
name and for and on behalf of the landlord, as such agent and attorney-infact,
any and all other necessary or appropriate acts with respect to any such
purchase, conveyance and transfer; (c) the right to make all waivers,
consents and agreements; (d) the right to give and receive copies of all
notices and other instruments or communications; (e) the right to take such
action upon the occurrence of an Event of Default under the Lease, including
the commencement, conduct and consummation of legal, administrative or other
proceedings, as shall be permitted by the Lease or by law; and (f) the right
to do any and all other things whatsoever which the Company or any landlord
is or may be entitled to do under the Lease: all rights under this Granting
Clause Second having also been granted to the Mortgagee in and by the Lease
Assignment, which Lease Assignment is hereby incorporated into this Granting
Clause Second, it being understood that the assignment made herein and in the
Lease Assignment are intended to be one and the same.
GRANTING CLAUSE THIRD
OTHER AND AFTER-ACQUIRED PROPERTY
Any and all moneys and other property (including each amendment or supplement
to any and all instruments included in the Mortgaged Property) which may
from time to time, by delivery to the Mortgagee or by any instrument,
including this Mortgage, be subjected to the lien hereof by the Company or by
anyone on the behalf of the Company or with the consent of the Company, or
which may come into the possession or be subject to the control of the
Mortgagee pursuant to this Mortgage, or pursuant to any instrument included
in the Mortgaged Property, it being the intention of the Company and the
Mortgagee and it being hereby agreed by them that all property hereafter
acquired by the Company and required to be subjected to the lien of this
Mortgage c)r intended so to be shall forthwith upon the acquisition thereof
by the Company be as fully embraced within the lien of this Mortgage as if
such property were now owned by the Company and were specifically described
in this Mortgage and granted hereby or pursuant hereto.
GRANTING CLAUSE FOURTH
PROCEEDS
All proceeds and products of the conversion, voluntary or involuntary, of any
of the foregoing into cash or other liquidated claims, including, without
limitation, all proceeds of insurance and condemnation awards and payments.
SUBJECT, HOWEVER, as to all property or rights in property at any time
subject to the lien hereof (whether now owned or hereafter acquired), to the
following:
(a) The agreement of the parties hereto that any and all trade fixtures,
signs, furniture, furnishings, equipment, machinery or other tangible
personal property located on the Mortgaged Property not owned by the Company,
whether or not classified as fixtures under applicable law, are expressly
excluded from the lien and security interest created by this Mortgage, and
that the same shall in no instance be deemed to be encompassed within the
term "Mortgaged Property"; and
(b) The Permitted Encumbrances, as defined in Section I hereof.
TO HAVE AND TO HOLD the Mortgaged Property unto the Mortgagee and its
successors and assigns, with the purpose of securing performance of each
agreement, covenant and warranty of the Company contained herein and payment
of the indebtedness evidenced by the Notes from time to time issued under and
pursuant to the Indenture and the Note Purchase Agreements. It is understood
and agreed that this Mortgage is to secure the obligation of the Company to
repay, without preference or priority, all of the Notes executed and
delivered pursuant to the Indenture and the Note Purchase Agreements
including those heretofore executed, those of even date herewith and those
to be executed in the future as specified in said Indenture and Note
Purchase Agreements.
IN TRUST, NEVERTHELESS, WITH POWER OF SALE, upon the terms and trusts herein
set forth for the benefit and security of the Holders in accordance with
their terms and all other sums payable hereunder or under the Notes, and for
the performance and observance of the Notes and this Mortgage, all as herein
set forth.
PROVIDED, NEVERTHELESS, and these presents are upon the express condition
that if the Company performs the covenants herein contained and pays to the
Mortgagee, its successors or assigns, the full amount of all principal of,
and premium, if any, and interest on the Notes and all other sums due or
payable hereunder or under the Note Purchase Agreements or the Indenture,
the estate, right and interest of the Mortgagee in the property hereby
conveyed shall cease and this Mortgage shall become null and void, but
otherwise to remain in full force and effect.
It is agreed and understood by the parties hereto that:
1. The Mortgage, the Indenture, the Lease Assignment and the Guaranty
Agreement are intended to and shall[ constitute security for the entire
indebtedness represented by said Notes.
2. Any part of the security herein described, and any security described
in any other mortgage, assignment of lease or other instrument now or
hereafter given to secure the indebtedness which is secured by this Mortgage,
may be released by the Mortgagee without affecting the lien hereof on the
remainder.
3. The Company for itself and all who may claim through or under it
waives any and all right to have the property and estates comprising the
Mortgaged Property marshalled upon any foreclosure of the lien hereof, or to
have the Mortgaged Property hereunder and the property covered by any other
mortgage or assignment of lease securing the Notes marshalled upon any
foreclosure of any of said deeds of trust or assignments of leases, and
agrees that any court having jurisdiction to foreclose such lien may order
the Mortgaged Property sold as an entirety.
4. Upon the occurrence and during the continuance of an Event of Default
hereunder, the Mortgagee has, among other things, the right to foreclose on
the Mortgaged Property and dispose of' the same. The Mortgagee's deed or
other instrument of conveyance, transfer or release (which, if permitted by
law, may be in the name of the Mortgagee or as attorney for the Company and
the Mortgagee hereby is irrevocably appointed) shall be effective to convey
and transfer to the grantee an indefeasible title to the property covered
thereby, discharged of all rights of redemption by the Company or any person
claiming under it, and to bar forever all claims by the Company or the said
Mortgagee to the property covered thereby and no grantee from the Mortgagee
shall be under any duty to inquire as to the authority of the Mortgagee to
execute the same, or to see to the application of the purchase money.
SECTION 1. DEFINITIONS.
The following terms shall have the following meanings for all purposes of
this Mortgage:
"Affiliate" shall mean any Person, (i) which, directly or indirectly,
through one or more intermediaries controls, or is controlled by, or is under
common control with, the Company, (b) which beneficially owns or holds 5% or
more of any class of the Voting Stock of the Company, or (c) 5% or more of
the Voting Stock (or in the case of a Person which is not a corporation, 5%
or more of the Securities of such Person which shall have any rights or
interests similar to the Voting Stock of a corporation) of which is
beneficially owned or held by the Company or a Subsidiary. The term control"
means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether
through the ownership of Voting Stock, by contract or otherwise.
"Company" shall mean not only Unitil Realty Corp., but also its
successors and assigns.
"Default" shall mean any event whlich would constitute an Event of Default
if any requirement in connection therewith for the giving of notice, or the
lapse of time, or the happening of any further condition, event or action
had been satisfied.
"Event of Default" shall mean any events specified in Section 5 hereof.
"Guaranty Agreement" shall mean the Guaranty Agreement dated as of July 1,
1997 from Unitil Corporation, a Delaware corporation and corporate parent of
the Company.
"Holders" shall mean collectively thi,- Purchasers and each other registered
holder of any of the Notes.
"Indenture" shall mean the Trust Indenture dated as of July 1, 1997 from the
Company to the Mortgagee.
"Lease" shall mean the Lease Agre@ement dated as of June 15, 1997 between
the Company, as landlord, and the Tenant, as tenant, as the same may from
time to time be supplemented or amended.
"Lease Assignment" shall mean the Assignment of Lease dated as of July 1,
1997 among the Company, the Tenant and the Mortgagee pertaining to the
Mortgaged Property, as the same may from time to time be supplemented or
amended.
"Mortgagee" shall mean State Street Bank and Trust Company, and any
successor thereto appointed pursuant to Section 6.1 of this Mortgage, to the
extent required by law to permit the exercise of any remedies pursuant to
Section 5.2 of this Mortgage and for any other purpose hereunder shall mean
the Mortgagee.
"Note" shall mean any of, and "Notes" shall mean all of, the Senior Secured
Notes then outstanding under the Note Purchase Agreements. The term
"outstanding" when used with reference to Notes shall mean, as of any
particular time all Notes delivered by the Company under the Note Purchase
Agreements and secured hereby, except:
(a) Notes for the payment or prepayment of which moneys in the necessary
amount shall have been paid to the Mortgagee; and
(b) Notes in lieu of or in substitution for which other Notes shall have
been authenticated and delivered pursuant to the terms of Section 2.5 of the
Indenture.
"Note Purchase Agreements" shall mean the separate Note Purchase Agreements
each dated as of July 1, 1997 between the Company and the respective
Purchasers, providing for the commitment of the Purchasers to purchase the
Notes of the Company issued under and pursuant to the terms of the Indenture,
as the Note Purchase Agreements may from time to time be supplemented or
amended.
"Permitted Encumbrances" shall mean the liens described in clauses (a)
through (i) of Section 2.8 of this Mortgage.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization.
"Purchasers" is defined in recital A hereof.
"Security" shall have the same meaning as in Section 2(l) of the Securities
Act of 1933, as amended.
"SNDA Agreement" shall mean the Subordination, Non-Disturbance and Attornment
Agreement dated as of July 1, 1997 among the Mortgagee and the Tenant and
acknowledged and agreed to by the Company and the Guarantor under the
Guaranty Agreement.
"Subsidiary" shall mean any corporation ofwhichmore than 50% (by number of
votes) of the Voting Stock is owned and controlled by the Company and/or one
or more corporations which are Subsidiaries.
"Tenant" shall mean not only Unitil Service Corp. but also its successors
and assigns.
"Uniform Commercial Code" shall mi.-an the Uniform Commercial Code as in
effect in the State of New Hampshire, as amended.
"Voting Stock" shall mean Securities; of any class or classes of a
corporation, the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors (or
Persons performing similar functions).
SECTION 2. GENERAL COVENANTS AND WARRANTIES.
The Company covenants, waff ants and agrees as follows:
Section 2.1. Note Purchase Agreements and Indenture Covenants. Each and all
of the terms, provisions, restrictions, covenants and agreements set forth
in each of the Note Purchase Agreements and the Indenture or incorporated
therein by reference, and in each and every supplement thereto or amendment
thereof which may at any time or from time to time be executed and delivered
by the parties thereto or their successors and assigns, are incorporated
herein by reference to the same extent as though each and all of said terms,
provisions, restrictions, covenants and agreements were fully set out herein
and as though any amendment or supplement to each of the Note Purchase
Agreements and the Indenture was fully set out in an amendment or supplement
to this Mortgage; and the Company does hereby covenant and agree well and
truly to abide by, perform and be governed and restricted by each and all of
the matters provided for by each of the Note Purchase Agreements and the
Indenture and so incorporated herein to the same extent and with the same
force and effect as if each and all of said terms, provisions, restrictions,
covenants and agreements so incorporated herein by reference were set out and
repeated herein at length. Without limiting the foregoing, the Company
covenants and agrees to pay all taxes, assessments and governmental charges
or levies imposed upon this Mortgage, the Indenture or the Notes or any other
indebtedness secured hereby.
Section 2.2. Ownership of Mortga@7ed Property. The Company covenants and
warrants that it has good and marketable title to the Mortgaged Property
hereinbefore conveyed to the Mortgagee free and clear of all liens, charges
and encumbrances whatever except Permitted Encumbrances, and the Company has
full right, power and authority to grant, warrant, mortgage, pledge, assign,
sell[, demise, bargain, hypothecate, convey, grant a security interest in,
transfer and set over the same to the Mortgagee, WITH POWER OF SALE, for the
uses and purposes in this Mortgage set forth; and the Company will warrant
and defend the title to the Mortgaged Property, against all claims and
demands whatsoever. Without limiting the foregoing, the Company represents
and warrants that the restrictions, exceptions, reservations, limitations,
interests and other matters, if any, set forth immediately following the
specific descriptions of the parcels of land in Annex A attached hereto,
together with all other restrictions, exceptions, reservations, limitations,
interests and other matters, if any, existing on the date of execution and
delivery of this Mortgage, do not in the aggregate impair the value of the
Mortgaged Property or adversely affect the utility, structural integrity or
beneficial enjoyment of the Mortgaged Property for the uses to which the
Mortgaged Property is being put.
Section 2.3. Further Assurances. The Company will, at its own expense, do,
execute, acknowledge and deliver all and every further act, deed, conveyance,
transfer and assurance necessary or proper for the better assuring, conveying
assigning and confirming unto the Mortgagee all of the Mortgaged Property, or
property intended so to be, whether now owned or hereafter acquired.
Section 2.4. Payment of Principal and Interest. The Company will duly and
punctually pay the principal of, and premiuirn of, if any, and interest on
all Notes secured hereby according to the terms thereof.
Section 2.5. Maintenance of Mortgaged Property, Other Liens, Compliance with
Laws, Etc. (a) Without limiting the provisions of Sections 3.6 and 3.7 of the
Indenture, the Company shall (i) subject to Sections 3 and 4 hereof, promptly
repair, restore or rebuild any buildings or improvements now or hereafter
located on the Mortgaged Property which may become damaged or be destroyed,
(ii) keep the Mortgaged Property in good condition and repair, ordinary wear
and tear excepted, without waste, and free from all claims, liens, charges
and encumbrances other than Permitted Encumbrances, (iii) pay when due any
indebtedness which may be secured by a lien or charge on the Mortgaged
Property which does not constitute a Permitted Encumbrance, and upon request
exhibit satisfactory evidence of the discharge of such lien to the Mortgagee,
(iv) comply with all requirements of law or municipal ordinances with respect
to the Mortgaged Property and the use thereof (including, without limitation,
any law or municipal ordinance with respect to environmental protection or
hazardous wastes), failure to comply with which would result in any material
interference with the use or operation of the Mortgaged Property by the
Company, (v) promptly procure, maintain and comply with, all permits,
licenses and other authorizations required
for the use of the Mortgaged Property or any erection, installation,
operation and maintenance of the Mortgaged Property or any part thereof, and
(vi) make no material alterations in said Mortgaged Property except as
required by law or municipal ordinance and except for alterations which will
not materially decrease the market value of the Mortgaged Property; provided,
however, that so long as the Mortgaged Property is subject to the Lease,
(A) the requirements with respect to the maintenance, repair, restoration and
rebuilding of the Mortgaged Property contained in this Section 2.5 shall be
satisfied by the maintenance, repair, restoration and rebuilding of the
Mortgaged Property in accordance with and to the extent provided in the Lease,
(B) the Company shall not be required to comply with any requirement of law
or municipal ordinance or to obtain any permit, license or other authorization
so long as such requirement or the need for such authorization is being
contested by Tenant in accordance with the provisions of Section 10 of the
Lease and (C) the exercise by Tenant of any right granted to it under the
Lease shall not give rise to a default under this Mortgage if such right is
exercised in compliance with the Lease so long as neither the lien nor the
priority of this Mortgage is impaired by the exercise of such rights.
(b) The Company may, or may permit the Tenant to, (i) construct upon the
Mortgaged Property additional buildings, structures and other improvements
("Improvements") and (ii) install, assemble and place upon the Mortgaged
Property any trade fixtures, signs, furniture, furnishings, equipment,
machinery and other tangible personal property used or useful in the business
of the Compan, or the Tenant, as the case may be, whether or not classified
as fixtures under applicable law. All such buildings, structures and other
improvements shall be and remain part of the realty and shall be subject to
this Mortgage. Such trade fixtures, signs, furniture, furnishings, equipment,
machinery and other tangible personal property shall be and remain the
property of the Company or the Tenant as the case may be, shall not be
deemed part of the Mortgaged Property for purposes of condensation or
casualty@, and the Company or the Tenant, ;as the case may be, may remove
the same from the Mortgaged Property at any time prior to the expiration or
earlier termination of this Mortgage, provided that the Company, at its
expense, shall repair or shall cause the Tenant to repair any damage to the
Mortgaged Property resulting from such removal.
(c) Any repair, restoration, rebuilding, substitution, replacement,
modification, alteration of or addition to the Mortgaged Property pursuant
to Section 2.5(b) must not impair the market value or usefulness of the
Mortgaged Property for use in the ordinary course of business; shall be
performed in a good and workmanlike manner and be expeditiously completed in
compliance with all laws, ordinances, orders, rules, regulations and
requirements applicable thereto, including to the extent necessary to
maintain in full force and effect the policies of insurance required by
Section 2.6 hereof. All costs and expenses of each such repair, restoration,
rebuilding, substitution, replacement, the discharge of all liens filed
against the Mortgiged Property arising out of the same, together with all
costs and expenses necessary to obtain any permits or licenses required in
connection therewith shall be promptly paid by the Company or the Tenant.
(d) The Company will only use and operate the Mortgaged Property, or
permit the same to be used and operated, for any lawful purpose.
Section 2.6. Insurance.
(a) Insurance Against Loss or Damage. Without limiting the provisions
of Section 3.5 of the Indenture, the Company will maintain or cause to be
maintained with respect to the Mortgaged Property insurance, subject to an
80% co-insurance clause, against loss by fire, windstorm and explosion and
with extended coverage and against such other risks of physical loss as are
customarily insured against, and in such amounts as are customarily carried,
by companies owning property of a similar character and engaged in a business
similar to that engaged in by the Company; provided, however, that the amount
of such insurance with respect to the Mortgaged Property shall not at any
time be less than 100% of the full replacement value of the Mortgaged
Property, exclusive of foundations and excavations, as evidenced by
"Replacement Cost" or "Restoration" endorsements thereto. The term "full
replacement value" as used fierein means actual replacement value without
deduction for physical depreciation as determined upon request of the
Mortgagee at intervals not more than may be required by the company issuing
such insurance to provide the required "Replacement Cost" or "Restoration"
endorsements and at the expense of the Company, by independent appraisals.
The Company may self-insure with respect to the first portion of any loss
claimed under such insurance by way of deductible provisions in insurance
policies, provided that any such self-insurance level shall in no event
exceed $100,000.
(b) Insurance Against Public Liability and Property Damage. The Company
will maintain or cause to be maintained in effect, with insurers satisfactory
to the Mortgagee, insurance policies with respect to the Mortgaged Property,
insuring against liability for loss or damage to the person or property of
others from such risks and in such amounts as are customarily carried by
companies owning property of a similar character and engaged in a business
similar to that engaged in by the Company; provided, however, that in no
event shall the insurance maintained in accordance with this paragraph be
less than $3,000,000 combined single lin-tit for both bodily injury and
property damage resulting from a single occurrence, occurring in and around
the Mortgaged Property and any exterior signs maintained by the Tenant, and
automobile liability insurance with limits of not less than $3,000,000
combined single limit for both bodily injury and property damage resulting
from one occurrence, and provided further that any self-insurance maintained
by the Company shall in no event exceed $500,0190. All such insurance shall
designate the Mortgagee as an additional insured thereunder, as evidenced by
an insurance certificate with respect thereto.
(c) Form of Policies. Any insurance policies carried in accordance with
this Section 2.6 shall be written by companies of recognized national
standing authorized to do business in the state in which the Mortgaged
Property is located and: (i) in the case of policies covering loss or damage
to the Mortgaged Property, shall provide that losses, if any, shall be
payable to the Mortgagee under a standard mortgage loss payable clause
satisfactory to the Mortgagee, (ii) shall provide that the Niortgagee's
interest shall be insured regardless of any breach or violation by the
Company of any warranties, declarations or conditions contained in such
policies, (iii) such insurance, as to the interest of the Mortgagee therein,
shall not be invalidated by the use or operation of the Mortgaged Property
for purposes
which are not permitted by such policies, nor by any foreclosure or other
proceedings relating to the Mortgaged Property, nor by change in title to or
ownership of the Mortgaged Property, (iv) the insurers shall waive any right
of subrogation of the insurers to any set-off or counterclaim or any other
deduction, whether by attachment or otherwise, in respect of any liability
of the Company, (v) if such insurance would lapse or be canceled or
terminated for any reason whatsoever, the insurers will promptly notify the
Mortgagee and any such lapse, cancellation or termination shall not be
effective as to the Mortgagee for thirty days after the giving of such notice,
and (vi) appropriate certification in clause (v) shall be made to the
Mortgagee by each insurer with respect thereto. Provided no Default or
Event of Default has occurred or is continuing, the loss, if any, under any
policy pertaining to loss by reason of damage to or destruction of any
portion of the Mortgaged Property shall be adjusted with the insurance
companies by the@ Company, subject to the prior written approval of the
Mortgagee if the loss exceeds $500,000. The loss so adjusted shall be paid
to the Mortgagee pursuant to said loss payable clause unless said loss is
$500,000 or less, in which case said loss shall be paid to the Company.
The Company shall furnish Mortgagee with certificates or other satisfactory
evidence of maintenance of the insurance required hereunder and with respect
to any renewal policy or policies shall furnish certificates evidencing such
renewal not less than 10 days prior to the expiration date of the original
policy or renewal policies. All such policies shall provide that the same
shall not be cancelled without at least 30 days' prior written notice to
each insured named therein.
(d) So long as the Mortgaged Property is subject to the Lease,
maintenance of insurance by the Tenant of the scope and in the form and
substance of the insurance required in respect of the Mortgaged Property
pursuant to the Lease shall satisfy the requirements of this Section 2.6.
Section 2.7. Payment of Taxes and O,ther Charges. Without liniiting the
provisions of Section 3.6 of the Indenture, the Company will pay and
discharge or will cause to be paid and discharged, before the same shall
become@ delinquent, together with interest and penalties thereon, if any,
(a) all taxes, assessments (including assessments for benefits from public
works or improvements whenever begun or completed), levies, fees, water,
sewer, electrical and other utility service rents and charges, and all other
governmental charges, general and special, ordinary and extraordinary, and
whether or not within the contemplation of the parties hereto, which are at
any time levied upon or assessed against it or the Mortgaged Property or any
part thereof or upon this Mortgage, the Indenture or the Notes secured
thereby, or upon the revenues, rents, issues, ]Income and profits in respect
of the Mortgaged Property, or arising in respect of the occupancy, use or
possession thereof, which failure to pay would result in the creation of a
lien upon the Mortgaged Property or any part thereof, or upon the revenues,
rents, issues, income and profits of the Mortgaged Property or in the
diminution thereof or would result in any material interference with the use
or operation of the Mortgaged Property by the Company, (b) all franchise,
excise and other taxes, fees and charges assessed, levied or imposed in
respect of its corporate existence or its right to do business in any state,
(c) all income, excess profits, excise, sales, franchise, gross receipts and
other taxes, duties or imposts, whether of a like or different nature,
assessed, levied or
imposed by any governmental authority on it or the Mortgaged Property, or any
portion thereof, or upon the revenues, rents, issues, income and profits of
the Mortgaged Property if the failure to pay any such tax, duty or impost
might result in the creation of a lien upon any asset of the Company or the
Mortgaged Property or any part thereof or upon the revenues, rents, issues,
income and profits of the Mortgaged Property or in the diminution thereof,
and whether or not any such tax, duty or impost is payable directly by the
Company or is subject to withholding at the source and (cl) all lawful claims
and demands of mechanics, laborers, materialmen and others which, if unpaid,
might result in the creation of a lien on the Mortgaged Property or upon the
revenues, rents, issues, income and profits of the Mortgaged Property and, in
general, will do or cause to be done everything necessary so that the lien
hereof shall be fully preserved, at the cost of the Company, without expense
to the Mortgagee.
Nothing in this Section 2.7 shall require the payment of any sum which is
required to be paid by the Company pursuant to this Section 2.7 so long as
the Company shall in good faith contest its obligation so to do by
appropriate proceedings which will prevent the forfeiture or sale of any
property of the Company or any material interference with the use or
operation thereof by the Company, during the pendency of such proceedings
and shall set up a reserve, reasonably adequate, in the opinion of the
President or any Vice President of the Company (as defined in the Note
Purchase Agreements) against any such payment.
Section 2.8. Limitation on Liens. T'jhe Company will not create or incur or
suffer to be incurred or to exist, any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind upon the Mortgaged Property, whether
now owned or hereafter acquired, or upon any income or proceeds therefrom,
except the following:
(a) liens for property taxes and assessments or governmental charges or
levies and liens securing claims or demands of mechanics and materialmen,
provided that payment thereof is not overdue or, if overdue, is being
contested in good faith by appropriate actions or proceedings;
(b) liens of or resulting from any 'udgment or award, the time for the
appeal or petition for rehearing of which shall not have expired, or in
respect of which the Company shall at any time in good faith be prosecuting
an appeal or proceeding for a review and in respect of which a stay of
execution pending such appeal or proceeding for review shall have been
secured;
(c) liens, charges, encumbrances and priority claims incidental to the
conduct of business or the ownership of properties and assets (including
warehousemen's and attorneys' liens and statutory landlords' liens) and
deposits, pledges or liens to secure payment of premiums on insurance
purchased in the usual course of business or in connection with
self-insurance or in connection with workmen's compensation, unemployment
insurance or social security legislation, or to secure the performance of
bids, tenders or trade contracts, or to secure statutory obligations, surety
or appeal bonds or other liens of like general nature incurred in the
ordinary course of business and not in connection with the borrowing of money,
provided in each case, the obligation secured is not overdue or, if overdue,
is being contested in good faith by appropriate actions or proceedings;
(d) minor survey exceptions or minor encumbrances, easements or
reservations of, or rights of others for rights-of-way, utilities and other
similar purposes, or zoning or other restrictions as to the use of real
properties, which encumbrances, easements, reservations, rights and
restrictions do not in the aggregate materially detract from the value of
said properties or materially impair their use in the operation of the
business of the Company;
(e) the lien of this Mortgage;
(f) the lien of the Lease, provided that the lien thereof shall be and
is subject and subordinate to the terms of this Mortgage;
(g) the lien of the Lease Assignment;
(h) the security interest of the Indenture;
(i) the lien of any permitted sublease from the 'Tenant, as sublessor,
to any Person, as sublessee; provided that the@ lien thereof shall be
subject to the terms of the Lease; and
(j) easements, rights of way, reservations, restrictive agreements,
servitude and rights of others against the Mortgaged Property which are
listed on Schedule B to the ALTA Title Insurance Policy delivered to the
Mortgagee following the issuance and delivery of the Notes.
Section 2.9. The Lease. At all times, the Mortgaged Property shall be
leased to the Tenant under the Lease, provided that, to the extent permitted
thereby, the Lease may be assigned or the Mortgaged Property sublet by the
Tenant upon the terms and conditions set forth in the Lease. The Company
will punctually perform all obligations, covenants and agreements by it to
be performed under the Lease or the Lease Assignment strictly in accordance
with the terms thereof, and will at all times do all things necessary to
compel performance by the Tenant of all covenants and agreements by it to be
performed under the Lease or the Lease Assignment. The Company will take no
action and permit no action to be taken by other Persons which will release
the Tenant from its obligations and liabilities under the Lease or the Lease
Assignment or result in the termination, amendment or modification of, or
impair the validity of', the Lease or the Lease Assignment. The Company
will give to the Mortgagee notice of all defaults by the Tenant under the
Lease or the Lease Assignment promptly after they have become known to the
Company. Neither this Mortgage nor the Lease Assignment nor any action or
inaction on the part of the Mortgagee or the Holders shall constitute an
assumption on the part of the Mortgagee or the Holders of any obligation to
the Tenant or any other person under the Lease. No action or inaction on
the part of the Company shall adversely affect or limit in any way the rights
of the Mortgagee or the Holders under this Mortgage, the Indenture, the SNDA
Agreement or the Lease Assignment, or, through this Mortgage, the Indenture,
the SNDA Agreement or the Lease Assignment, under the Lease.
The Company will not, except with the prior written consent of the Mortgagee,
take or suffer to be taken any action or consent to or permit any prepayment
or discount of rent or payment of rent more than one month in advance, under
the Lease or any permitted sublease.
Section 2.10. Advances. If the Company shall fail to comply with the
covenants contained herein or in the Note Purchase Agreements, the Indenture
or the Lease Assignment and incorporated herein by reference, the Mortgagee,
after five days' prior written notice to the Company and without waiving or
releasing any obligation or Default, may (but shall be under no obligation to
at any time thereafter make such payment or perform such act for the account
and at the expense of the Company, and may enter upon the Mortgaged Property
or any part thereof for such purpose and take all such action thereon as, in
the opinion of the Mortgagee, may be necessary or appropriate therefor. All
sums so paid by the Mortgagee and all costs and expenses (including without
lin-iitation, reasonable attorneys' fees and expenses) so incurred, together
with interest thereon at the rate of 9.00% per annum from the date of payment
or incurrence, shall be secured hereby in priority to the indebtedness
evidenced by the Notes and shall be paid by the Company to the Mortgagee on
demand. The Mortgagee in making any payment authorized under this Section
relating to taxes or assessments may do so according to any bill, statement
or estimate procured from the appropriate public office without inquiry into
the accuracy of such bill, statement or estimate or into the validity of any
tax assessment, sale, forfeiture, tax lien or title or claim thereof. The
Mortgagee, in performing any act hereunder, shall be the sole judge of
whether the Company is required to perform the same under the terms of this
Mortgage.
Section 2.11. Recordation. The Company will, at its own expense, cause this
Mortgage, the Lease (or a memorandum thereof), the Lease Assignment, all
supplements hereto and thereto, and any financing stateirnents and
continuation statements required by law, including the Uniform Commercial
Code, in respect hereof and thereof at all times to be kept recorded and
filed at its own expense in such manner and in such places as may be required
by law in order to fully preserve and protect the rights of the Mortgagee
hereunder and thereunder, and will furnish to the Mortgagee promptly after
the execution and delivery of this Mortgage, the Lease, the Lease Assignment,
the SNDA Agreement and each supplement hereto and thereto an opinion of
counsel stating that, in the opinion of such counsel, this Mortgage, the
Lease, the Lease Assignment, the SNDA Agreement or such supplement, as the
case may be, has been properly recorded or filed for record so as to make
effective of record the lien intended to be created hereby and/or thereby.
Section 2.12. After-Acquired Property. Any and all property hereafter
acquired which is located on the Mortgaged Property and is of the kind or
nature described in the Granting Clauses hereof and is or intended to become
a part thereof, shall ipso facto, and without any further conveyance,
assignment or act on the part of the Company or the Mortgagee become and be,
subject to the lien of this Mortgage as fully and completely as though
specifically described herein; but nevertheless the Company shall from time
to time, if requested by the Mortgagee, execute and deliver any and all such
further assurances, conveyances and assignments thereof as the Mortgagee may
reasonably require for the purpose of expressly and specifically subjecting
to the lien of this Mortgage any and all such property.
SECTION 3. POSSESSION, USE AND RELEASE OF PROPERTY.
Section 3.1. Company's Right of F'ossession. Provided no Event of Default
has occurred and is continuing, the Company shall be suffered and permitted
to remain in full possession, enjoyment and control of the Mortgaged Property
subject always to the observance and performance of the terms of this
Mortgage, the Indenture, the SNDA Agreement and of the Note Purchase
Agreements and the Lease Assignment. It is expressly understood that the
use and possession of the@ Mortgaged Property by the Tenant or any of its
pern-dtted subtenants under and subject to the Lease shall not constitute a
violation of this Section 3.1.
Section 3.2. Release of Mortgaged Property.
(a) In the event the Mortgaged Property is damaged or destroyed by
casualty in the final year of the term of the Lease and such damage exceeds
50% of the replacement cost of the Demised Premises (as defined in the Lease),
the Company shall give the Mortgagee, within 60 days after the occurrence
thereof, written notice of such damage or destruction, which notice shall
specify whether (i) the Tenant has terminated the Lease as provided in
Section I 1.0 I (b) thereof and in consequence of which the Tenant will
prepay the Notes in accordance with the provisions of Section 4. 1 (a)(i)
hereof; or (ii) the Company will, or will cause the Tenant to, repair,
rebuild or restore the Mortgaged Property as provided in Section 11.02 of
the Lease and Section 4. 1 (a)(ii) hereof;
(b) The Company, immediately upon obtaining knowledge of the institution
of any proceedings for the condemnation of the Mortgaged Property or any
portion thereof, shall notify the Mortgagee of the pendency of such
proceedings. The Mortgagee may participate in any such proceedings, and the
Company from time to time will deliver or cause to be delivered to the
Mortgagee all instruments requested by it to permit such participation. In
the event of such condemnation proceedings, the award or compensation payable
to the Company or assigned to the Company by the Tenant under the Lease shall
be paid to the Mortgagee, and such award or compensation shall be retained
by the Mortgagee as part of the Mortgaged Property and applied in accordance
with Section 4.1 hereof. The Mortgagee shall be under no obligation to
question the amount of the award or compensation and the Mortgagee may accept
any such award or compensation. In any such condemnation proceedings the
Mortgagee may be represented by counsel, whose reasonable costs and
disbursements shall be paid by the Coirnpany. In the event such condemnation
results in (i) an entire taking and the termination of the Lease under
Section 12.01 thereof, the Company shall prepay the Notes@ in accordance with
Section 4. 1 (i) hereof; or (ii) a partial taking, the Company must use such
proceeds to repair, rebuild, restore or replace the Mortgaged Property in
accordance with Section 4. 1 (ii) hereof; and
(c) In the event that the Company will make such prepayment as set forth
in paragraphs (a) and (b) above, then the Mortgagee shall execute a release
in respect of the Mortgaged Property upon receipt of such prepayment.
SECTION 4. APPLICATION OF INSURANCE AND CERTAIN OTHER MONEYS RECEIVED
BY THE MORTGAGEE.
Section 4.1. Insurance Proceeds and Condemnation Awards. (a) The amounts
received by or payable to the Mortgagee from time to time which constitute
insurance or condemnation proceeds in respect of any damage to or
destruction or condemnation of the Mortgaged Property or any part thereof,
condemnation awards or compensation covering the Mortgaged Property (less
the actual costs, fees and expenses incurred in the collection thereof)
shall be held by the Mortgagee as part of the Mortgaged Property and shall
be applied by the Mortgagee as follows:
(i) if a casualty or condemnation occurs which results in a termination
of the Lease and the Company shall prepay the Notes pursuant to Section 5.1
of the Indenture, such proceeds, award or compensation, as the case may be,
shall be applied, together with any monies paid over separately by the
Company to the Mortgagee, in full payment and satisfaction of the outstanding
principal balance, and premium, if any, upon the terms and in the manner
provided in Section 5.1 of the Indenture, and the balance, if any, of any
such proceeds shall be paid to the Company; or
(ii) if a casualty or condemnation occurs which does not result in a
termination of the Lease, the Company shall, or shall cause the Tenant to,
repair or rebuild the Mortgaged Property, and all casualty insurance or
condemnation proceeds
resulting from such casualty or condemnation shall be paid over to the
Company or as it may direct from time to time upon a written application
signed by the President or any Vice President of the Company and accompanied
by such evidence in reasonable detail as may be satisfactory to the Mortgagee
supporting such application for the purpose of paying, or reimbursing the
Company or the Tenant, as the case may be, for the payment of, the reasonable
cost, as shown by such certificate, of repairing, rebuilding, restoring or
replacing part or all of the Mortgaged Property damaged or destroyed
("Restoration"), but only for and to the extent that the Company shows by
such evidence of costs that the proceeds, award or compensation remaining on
deposit with the Mortgagee, together with any additional funds irrevocably
allocated or otherwise provided for in a manner satisfactory to the Mortgagee
for such purpose, shall be sufficient to complete such Restoration and
restore the Mortgaged Property (as nearly as practicable) at least to the
market value and condition which existed immediately prior to the damage,
destruction, condemnation or taking, as the case may be, free from liens or
encumbrances except Permitted Encumbrances. Every such application for the
payment of such proceeds, award or compensation shall state that no Event of
Default has occurred and is continuing. Any proceeds in excess of the amount
needed for Restoration rer-riaining after the Restoration has been completed
shall be paid to the Company. The Mortgagee shall receive a supplement
hereto sufficient, as shown by an opinion of counsel (which may be counsel
for the Tenant or the Company), to grant a valid first lien in any additions
to or substitutions for the Mortgaged Property to the Mortgagee, which
opinion shall also cover the filing and/or recording of such supplement (or
a financing statement or similar notice thereof if and to the extent
permitted or required by applicable law) so as to perfect the lien and
security interest in such additions or substitutions, or in the alternative
an opinion that no such supplement is required for such purpose.
(b) Subject to Section 2.6(b) hereof with respect to adjustments of
losses, any appraisal or adjustment of such loss or any settlement or
payment of indemnity therefor which shall be agreed upon between the Company
and the relevant insurance company shall be accepted by the Mortgagee.
Section 4.2. Mortgage Title Insurance. Any moneys received by the Mortgagee
as payment for any loss under any policy of mortgage title insurance which
was delivered by the Company shall become part of the Mortgaged Property and
shall be paid and applied in the same manner contemplated by Section 5.3
hereof.
Section 4.3. Investment of Insurance Proceeds and Condemnation Awards or
Compensation. All insurance proceeds, con(lemnation awards or compensation
received by the Mortgagee as payment for any casualti@ occurrence or
condemnation relating to the Mortgaged Property under any policy of insurance
or as an award or compensation for the taking in condemnation or other
eminent domain proceedings relating to the Mortgaged Property or any part
thereof may be invested or reinvested by the Mortgagee in (a) direct
obligations of the United States of America maturing in not more than 90 days
from the date of such investment, (b) with the prior consent of the Company,
commercial paper maturing within 270 days from the date of acquisition and
rated in the highest rating classification by at least one national rating
agency, or (c) certificates of deposit of commercial banks in the United
States of America with capital and surplus of $100,000,000 or more maturing
in not more than five days from the date of such investment. Upon a written
request of the Company in accordance with the terms of this Mortgage, or at
any time when the Mortgagee shall determine that cash is required pursuant to
Section 4.1 hereof, the Mortgagee shall sell all or any designated part of
such investment,,; at the then market price therefor and shall pay and apply
the proceeds in accordance with the terms of Section 4.1.
Section 4.4. Application if Event oj' Default Exists. If an Event of
Default has occurred and is continuing to the knowledge of the Mortgagee,
all amounts received by the Mortgagee under this Mortgage shall be applied
in the manner provided for in Section 5 hereof in respect of proceeds and
avails of the Mortgaged Property.
SECTION 5. DEFAULTS AND REMIEDIES THERFOR.
Section 5. I. Events of Default. The Company acknowledges and agrees that
each and all of the terms and provisions of Sections 7.1 through 7.21, both
inclusive, of the Indenture have been and are incorporated into this
Mortgage by reference to the same extent as though fully set out herein and
that the@ term Event of Default wherever used in this Mortgage shall mean
either: (a) an Event of Default as defined in Section 7.1 of the Indenture;
or (b) the failure of the Company to comply with any covenant, agreement or
warranty contained in this Mortgage within 60 days after the earlier of (i)
the Mortgagee or any of the Holders shall have given notice thereof to the
Company, (ii) an officer of the Company shall have actual knowledge of the
failure of the Company to comply with such covenant, agreement or warranty
and shall willfully fail to advise the Holders of such failure or (iii) the
giving of notice by the Company to the Mortgagee of the failure of the
Company to comply with such covenant, agreement or warranty.
Section 5.2. Remedies. When any Event of Default has occurred and is
continuing, the Mortgagee may exercise any one or more or all, and in any
order, of the remedies hereinafter set forth, it being expressly understood
that no remedy herein, in the Indenture or in the Note Purchase Agreements
conferred is intended to be exclusive of any other remedy or remedies; but
each and every remedy shall be cumulative and shall be in addition to every
other remedy given herein or now or hereafter existing at law or in equity or
by statute:
(a) The Mortgagee may, by notice in writing to the Company declare the
entire unpaid balance of the Notes to be immediately due and payable; and
thereupon all such unpaid balance, together with all accrued interest thereon
and premium, if any, shall be and become immediately due and payable.
(b) Subject always to the there existing rights, if any, of the Tenant
under the Lease, the Mortgagee personally or by agents or attorneys may (i)
enter into and take possession of all or any part of the Mortgaged Property,
and may forthwith use, operate, manage, insure, repair and improve the
Mortgaged Property and take any other action which, in the Mortgagee's
judgment, is necessary or proper to conserve the value of the Mortgaged
Property, (ii) collect and receive all earnings, revenues, rents, issues,
profits and income from the Mortgaged Property or any part thereof (and for
such purpose the Company does hereby irrevocably constitute and appoint the
Mortgagee its true and lawful attorney--in-fact for it and in its name,
place and stead to receive, collect and receipt for all of the forgoing, the
Company irrevocably acknowledging that any payment made to the Mortgagee
hereunder shall be a good receipt and acquittance against the Company to the
extent so made), (iii) pay all principal charges including taxes and
assessments levied thereon and operating and maintenance expenses and all
disbursements and liabilities of the Company hereunder and (iv) apply the
net proceeds arising from any such operation of the Mortgaged Property as
provided in Section 5.3 hereof in respect of the proceeds of a sale of the
Mortgaged Property. The right to enter and take possession of the Mortgaged
Property and use any personal property therein, to manage, operate and
conserve the same, and to collect the rents, issues and profits thereof,
shall be in addition to all other rights or remedies of the Mortgigee
hereunder or afforded by law, and may be exercised concurrently therewith or
independently thereof. The expenses (including any reasonable receiver's
fees, counsel[ fees, costs and agent's compensation) incurred pursuant to
the powers herein contained shall be secured hereby which the Company
promises to pay upon demand together with interest at the rate of 9.00% per
annum. The Mortgagee shall not be liable to account to the Company for any
action taken pursuant hereto other than to account for any rents actually
received by the Mortgagee. Without taking possession of the Mortgaged
Property, the Mortgagee may, in the event the Mortgaged Property becomes
vacant or is abandoned, take such steps as it deems appropriate to protect
and secure the Mortgaged Property (including hiring watchmen therefor) and
all costs incurred in so doing shall constitute so much additional
indebtedness hereby secured payable upon demand with interest thereon at the
rate of 9.00% per annum.
(c) 'Me Mortgagee may, if at the time such action may be lawful and
always subject to compliance with any mandatory legal requirements, either
with or without taking possession and either before or after taking
possession, and without instituting any legal proceedings whatsoever, and
having first given notice of such sale to the Company at least 30 days prior
to the date of such sale and having given any other notice which may be
required by law, sell and dispose of said Mortgaged Property or any part
thereof at public auction or private sale to the highest bidder, which may
be the Company in one lot as an entirety or in separate lots (the Company
for itself and for all who may claim by, through or under it hereby
expressly waiving and releasing all rights to have the Mortgaged Property
marshalled to the extent permitted by law), and either for cash or on credit
and on such terms as the Mortgagee may determine and at any place (whether
or not it be the location of the Mortgaged Property or any part thereof)
designated in the notice above referred to. Any such sale or sales may be
adjourned from time to time by announcement at the time and place appointed
for such sale or sales or for any such adjourned sale or sales, without
further published notice.
(d) The Mortgagee may proceed to protect and enforce its rights by a
suit or suits in equity or at law, or for the specific performance of any
covenant or agreement contained herein or in the Notes, or in aid of the
execution of any power herein or therein granted, or for the foreclosure of
this Mortgage, or for the enforcement of any other appropriate legal or
equitable remedy. Upon the bringing of any suit to foreclose this Mortgage
or to enforce any other remedy available hereunder, the plaintiff shall be
entitled as a matter of right, without notice and without giving bond to the
Company or anyone claiming under, by or through it, and without regard to
the solvency or insolvency of the Company or the then value of the premises,
to apply to an appropriate court to have a receiver appointed of all the
Collateral and of the earnings, income, rents, issues, profits and proceeds
thereof, with such power as the court making such appointment shall confer,
and the Company does hereby irrevocably consent to such appointment.
(e) In case of any sale of the Mortgaged Property, or of any part
thereof, pursuant to any judgment or decree of any court or otherwise in
connection with the enforcement of any of the terms of this Mortgage, the
Mortgagee may bid and become the purchaser, and the purchaser or purchasers,
for the purpose of making settlement for or payment of the purchase price,
shall be entitled to turn in and use the Notes and any claims for interest
and premium matured and unpaid thereon, in order that there may be credited
as paid on the purchase price the sum apportionable and applicable to the
Notes, including principal and interest and premium thereof, out of the net
proceeds of such sale after allowing for the proportion of the total
purchase price required to be paid in actual cash. If at any foreclosure
proceeding the Mortgaged Property shall be sold for a sum less than the
total amount of indebtedness for which judgment is therein given, the
Mortgagee shall be entitled to the entry of a deficiency decree against the
Company and against the property of the Company for the amount of such
deficiency.
(f) The Mortgagee shall have any and all rights and remedies (including,
without limitation, extra judicial power of sale) provided to a secured
party by the Uniform Commercial Code with respect to any and all parts of
the Mortgaged Property which are and which are deemed to be governed by the
Uniform Commercial Code. Without limiting the generality of the foregoing,
the Mortgagee shall, with respect to any part of the Mortgaged Property
constituting property of the type in respect of which realization on a Lien
or security interest granted therein is governed by the Uniform Commercial
Code, have all the rights, options and remedies of a secured party under the
Uniform Commercial Code, including, without limitation, the right to the
possession of any such property, or any part thereof, and the right to enter
without legal process@ any premises where any such property may be found.
Any requirement of said Uniform Commercial Code for reasonable notification
shall be met by mailing written notice to the Company at its address set
forth in Section 6.3 at least 30 days prior to the sale or other event for
which such notice is required.
(g) The Mortgagee shall have the right to cause any or all of the
Mortgaged Property to be sold under the power of sale granted by this
Mortgage in any manner permitted by applicable law.
(h) The Mortgagee shall have any and all rights and remedies provided
for in the Note Purchase Agreements and in the Indenture.
Section 5.3. Application of Proceeds. The purchase money proceeds and/or
avails of any sale of the Mortgaged Property, or any I ' 3art thereof, and
the proceeds and the avails of any remedy hereunder shall be paid to and
applied as follows:
(a) first, to the payment of costs and expenses of foreclosure or suit,
if any, and of such sale, and to the extent permitted by applicable law, the
reasonable compensation of the Mortgagee, its agents, attorneys and counsel,
and of all proper expenses, liability and advances incurred or made hereunder
by the Mortgagee, and of all taxes, assessments or liens superior to the
lien of these presents, except any taxes, assessments or other superior lien
subject to which said sale may have been made; and (b) second, to the amount
then owing or unpaid on the Notes for principal, premium, if any, and
interest; and in case such proceeds shall be insufficient to pay in full the
whole amount so due, owing or unpaid upon the Notes, then ratably to each
holder of the Notes according to the aggregate of such principal and the
accrued and unpaid interest and premium, if any, with application on each
Note to be made, first, to unpaid premium, if any, second, to the unpaid
interest thereon, and third, to unpaid principal thereof, and
(c) third, to the payment of' any other sums required to be paid by the
Company pursuant to any provision of this Mortgage, the Indenture, the Lease
Assignment, the Notes or any other instrument given to secure the Notes; and
(d) fourth, to the payment of the surplus, if any, to the Company, its
successors and assigns, or to whomsoever may be lawfully entitled to receive
the same.
Section 5.4. Waiver of Extension, A.ppraisement and Stay Laws. The Company
covenants that, upon the occurrence of an Event of Default and the
acceleration of the Notes pursuant to Section 5.2(a) and to the extent that
such rights may then be lawfully waived, it will not at any time thereafter
insist upon or plead, or in any manner whatever claim or take any benefit or
advantage of, any stay or extension or moratorium law now or at any time
hereafter in force, or claim, take or insist upon any benefit or advantage
of or from any law now or hereafter in force providing for the valuation or
appraisement of the Mortgaged Property or any part thereof prior to any sale
or sales thereof to be made pursuant to any provision herein contained, or
to the decree, judgment or order of any court of competent jurisdiction or,
after confirmation of any such sale or sales claim or exercise any right
under any statute now or hereafter made or enacted by any state or otherwise
to redeem the property so sold or any part thereof, and hereby expressly
waives for itself and on behalf of each and
every person, all benefit and advantage of any such law or laws which would
otherwise be available to any such person in connection with the enforcement
of any of the Mortgagee's remedies hereunder; and covenants that it will not
in connection with any such enforcement proceedings invoke or utilize any
such law or laws or otherwise hinder, delay or impede the execution of any
power herein granted and delegated to the Mortgagee but will suffer and
permit the execution of every such power as though no such law or laws had
been made or enacted. The Company hereby waives any and all rights of
redemption from sale under any order or decree of foreclosure pursuant to
rights herein granted, on behalf of the Company, and each and every Person
acquiring any interest in, or title to the Mortgaged Property described
herein subsequent to the date of this Mortgage, and on behalf of all other
persons to the extent permitted by applicable law.
Any sale, whether under any power of sale hereby given or by virtue of
judicial proceedings, shall operate to divest all right,, title, interest,
claim and demand whatsoever, either at law or in equity, of the Company in
and to the property sold and shall be a perpetual bar, both at law and in
equity, against the Company, its successors and assigns, and against any and
all persons claiming the property sold or any part thereof under, by or
through the Company, its successors or assigns.
Section 5.5. Costs and Expenses of'Foreclosure. In any suit to foreclose
the lien hereon there shall be allowed and included as additional
Indebtedness Hereby Secured in the decree for sale all expenditures and
expenses which may be paid or incurred by or on behalf of the Mortgagee for
attorney's fees, appraiser's fees, outlays for documentary and expert
evidence, stenographic charges, publication costs and costs (which may be
estimated as the items to be expended after the entry of the decree) of
procuring all such abstracts of title, title searches and examination,
guarantee policies, and similar data and assurances with respect to title as
the Mortgagee may deem to be reasonably necessary either to prosecute any
foreclosure action or to evidence to the bidder at any sale pursuant thereto
the true condition of the title to or the value of the Mortgaged Property,
all of which expenditures shall become so much additional Indebtedness
Hereby Secured which the Company agrees to pay and all of such shall be
immediately due and payable with interest thereon from the date of
expenditure until paid at the rate of 9.00%, per annum.
Section 5.6. Delay or Omission Not,a Waiver. No delay, failure or omission
of the Mortgagee to exercise any right, power or remedy arising from any
default on the part of the Company shall exhaust or impair any such right or
power or prevent its exercise during the continuance of such default. No
waiver by the Mortgagee of any such default, whether such waiver be full or
partial, shall extend to or be taken to affect any subsequent default, or to
impair the rights resulting therefrom, except as may be otherwise provided
herein. No right, power or remedy hereunder is intended to be exclusive of
any other right, power or remedy but each and every right, power and remedy
shall be cumulative and in addition to any and every other right, power and
remedy given hereunder or otherwise existing. Nor shall the giving, taking
or enforcement of any other or additional security, collateral or guaranty
for the payment of the indebtedness secured under this Mortgage operate to
prejudice, waive or affect the security of this Mortgage or any rights,
powers or remedies hereunder; nor shall the Mortgagee be required to first
look to, enforce or exhaust such other or additional security, collateral or
guaranties.
Section 5.7. Restoration of Positions. If the Mortgagee or any Holder has
instituted any proceeding to enforce any right or remedy under this Mortgage
by foreclosure, entry or otherwise and such proceeding has been discontinued
or abandoned for any reason or has been determined adversely to the Mortgagee
or to such Holder, then and in every such case the Company, the Mortgagee and
the Holders shall, subject to any determination in such proceeding, be
restored to their former positions hereunder, and thereafter all rights and
remedies of the Mortgagee and the Holders shall continue as though no such
proceedings had been instituted.
Section 5.8. Notes to Become Due upon Sale by Mortgagee. Upon any sale under
or by virtue of this Mortgage, whether pursuant to foreclosure, power of
sale or otherwise, the entire unpaid principal amount of the Notes shall, if
not previously declared due and payable, immediately become due and payable,
together with interest accrued thereon and premium, if any, and all other
indebtedness which this Mortgage by its terms secures, anything contrary in
this Mortgage, the Indenture, the Notes or any other instrument serving the
Notes to the contrary notwithstanding.
SECTION 6. MISCELLANEOUS.
Section 6.1. Successors and Assigns. Whenever any of the parties hereto
is referred to, such reference shall be deemed to include the successors
and assigns of such party; and all the covenants, premises and agreements in
this Mortgage contained by or on behalf of the Company, or by or on behalf
of the Mortgagee, shall bind and inure to the benefit of the respective
successors and assigns of such parties whether so expressed or not.
Section 6.2. Severability. The uneriforceability or invalidity of any
provision or provisions of this Mortgage shall not render any other
provision or provisions herein contained unenforceable or invalid.
Section 6.3. Addresses for Notices and Demands. All communications provided
for herein shall be in writing and shall be deemed to have been given
(unless otherwise required by the specific provisions hereof in respect of
any matter) when delivered personally or when deposited in the United States
mail, registered or certified, postage prepaid, or by prepaid overnight air
courier, addressed as follows:
If to the Company: Unitil Realty Corp.
6 Liberty Lane West
Hampton, New Hampshire 03842
Attention: Treasurer
If to the Mortgagee: State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Attention: Corporate Trust Department
or as to either party at such other address as such party may designate by
notice duly given in accordance with this Section to the other party.
Section 6.4. Headings and Table of Contents. The headings of the sections
of this Mortgage and the table of contents are inserted for purposes of
convenience only and shall not be construed to affect the meaning or
construction of any of the provisions hereof.
Section 6.5. Release of Mortgage. The Mortgagee shall release this Mortgage
and the lien hereof by proper instrument or instruments upon presentation of
satisfactory evidence that all indebtedness secured hereby has been fully
paid or discharged.
Section 6.6. Counterparts. This Mortgage may be executed, acknowledged
and delivered in any number of counterparts, each of such counterparts
constituting an original but all together only one Mortgage.
Section 6.7. Successor Mortgagee. The Mortgagee may, at any time, by
instrument in writing, appoint a successor or successors to, or discharge
and appoint a new Mortgagee in the place of, any Mortgagee named herein or
acting hereunder, which instrument, executed and acknowledged by the
Mortgagee, and recorded in the office of the County Recorder of the county
wherein the Mortgaged Property is situated, shall be conclusive proof of the
proper substitution of such successor or successors or new Mortgagee, who
shall have all the estate powers, duties, rights and privileges of the
predecessor Mortgagee.
Section 6.8. Governing Law. This Mortgage should be construed in
accordance with and governed by the laws of the State of New Hampshire.
Section 6.9. Time. Time shall be of the essence for this Mortgage.
Section 6.10. Usury Savings Clause. All agreements in this Mortgage, the
Indenture,
the Notes, the Note Purchase Agreements and the Lease Assignment are
expressly limited so that in no contingency or event whatsoever, whether by
reason of advancement or acceleration of maturity of the Indebtedness Hereby
Secured, or otherwise, shall the amount paid or agreed to be paid hereunder
for the use, forbearance or detention of money exceed the highest lawful
rate permitted under applicable usury laws. If, from any circumstance
whatsoever, fulfillment of any provision of these documents, at the time
performance of such provision shall be due, shall involve transcending the
limit of validity prescribed by law which a court of competent jurisdiction
may deem applicable hereto, then, ipso facto, the obligation to be fulfilled
shall be reduced to the limit of such validity and if, from any circumstance
whatsoever, Mortgagee shall ever receive as interest an amount which would
exceed the highest lawful rate, the receipt of such excess shall be deemed a
mistake and shall be canceled automatically or, if theretofore paid, such
excess shall be credited against the principal amount of the Indebtedness
Hereby Secured to which the same may lawfully be credited, and any portion
of such excess not capable of being so credited shall be rebated to
Mortgagor.
IN WITNESS WHEREOF, the Company has caused this Mortgage to be executed in
its behalf and its corporate seal to be hereunto affixed and attested, all
as of the day and year first above written.
UNITIL REALTY CORP.
By: Mark H. Collin
Title: Treasurer
STATE OF NEW HAMPSHIRE
COUNTY OF ROCKINGHAM
I, CAROL R. JACQUES a Notary Public in and for the County and State
aforesaid, do hereby certify that Mark H. Collin , personally known to
me to be the same person whose name is, as Treasurer of
UNITIL REALTY CORP., a New Hampshirte corporation, subscribed to the
foregoing instrument, appeared before me this day in person and severally
acknowledged that he, being thereunto duly authorized, signed, sealed with
the seal of said corporation, and delivered the said instrument as the free
and voluntary act of said corporation and as his own free and voluntary act,
for the uses and purposes therein set forth.
Given under by hand and notarial seal this 22nd day of July, 1997.
Notary Public
Printed Name: Carol R. Jacques
(SEAL)
Conunission expires: July 15, 1999
DESCRIPTION OF REAL PROPERTY
Parcel 1:
A certain tract of land with all improvements thereon, located in Hampton,
Rockingham County, New Hampshire, shown as Parcel 2 on a certain plan
entitled 'Subdivision Plan for Asset T& Holding, Inc., Lbarty Lane West
County of Rockingham, Hampton, NH' by Richard P. Millefte and Associates,
dated November 11, 1994, last revised December 22, 1994, recorded in the
Rockingham County Registry of Deeds as Plan No. D-23674, and more
particularly bounded and described as follows:
Beginning at an iron rod in the southerly sideline of Tinber Swamp Road,
said rod being the northwesterly comer of the parcel herein conveyed; thence
proceeding along the SaW southerly sideline of Timber Swamp Road North 64
28' 10' East a distance of 52.71 feet to an iron rod; thence proceeding
North 67 02'20' East along the said southerly sideline of Tinber Swamp Road,
a distance of 139.81 feet to an iron rod; thence continuing along the
southerly sideline of Timber Swamp Road North 58 47' 30' East a distance of
500.53 feet to an iron pipe found at the northeasterly comer of the herein
described premises at land now or formerly of Asset TiUe Holding, Inc.;
thence turning and running along land of said Asset Tft Holding, Inc. South
260 49' 00' East a distance of 635.45 feet to an iron rod at other land of
said Asset rde Holding, Inc.; thence continuing along said other land of
Asset Title Holding, Inc. South 26 49' 00' East a distance of 29.19 feet
to an Iron rod at the southeasterly corner of thehereidescribed premises,
thence turning and running South 84 36' 16' West
still along other land of Asset Title Holding, Inc., a distance of 36.33 feet
to an iron rod; thence proceeding along a curve to the left which has a
radius of 770.00 feet an arc length of 615.06 feet along said other land of
Asset Trade Holding, Inc., to an iron rod; thence proceeding along a curve
to the right which has a radius of 305.00 feet an arc length of 146.18 feet
to an iron rod; thence proceeding South 660 17' 57' West a distance of 162.03
feet to an iron rod; thence proceeding along a curve to the right which has a
radius of 25.00 feet, an arc length of 39.27 feet to an iron rod; thence
proceeding North 23 42' 03' West a distance of 124.58 feet to an iron rod;
thence proceeding along a curve to the right which has a radius of 305.00
feet an arc length of 123.55 feet to an iron rod; thence proceeding North 00,
29' 28' West a distance of 190.96 feet to an iron rod; thence proceeding
along a curve to the right which has a radius of 55.00 feet an are length of
40.19 feet to an iron rod; thence proceeding along a curve to the left which
has a radius of 145.00 feet an arc length of 169.32 feet to an iron rod;
thence proceeding North 251 31' 50' West a distance of 33.75 feet to an iron
rod; thence proceeding along a curve to the right which has a radius of
25.00 feet an arc length of 39.27 feet to an iron rod at the southerly
sideline of said Timber Swamp Road at the point of beginning, the last ten
mentioned courses being along the lant,, of said Asset Title Holding, Inc.
Parcel II:
Together with a perpetual non-exclusive easement, in common with others to
(a) use, maintain, repair and replace the common access road serving the
premises granted and conveyed hereby, as currently located on Parcel I of
the Plan (such access road being shown on the Plan as 'Paved Drive' and
'Access Road Area') and, lb) install, use, maintain, repair, replace and add
utilities (including water, sewer, drainage, electricity, telephone, gas,
fire alarm and security systems) serving the promises granted and conveyed
hereby and located within or on either side of such common access road.
ANNEX A
(to Mortgage and security Agreement)
GUARANTY AGREEMENT
Dated as July 1, 1997
UNITIL CORPORATION
Re:
$7,500,000 8.00% Senior Secured Notes
Due August 1, 2017
of
Unitil Realty Corp.
GUARANTY AGREEMENT
This Guaranty Agreement (this "Guaranty") is dated as of July 1, 1997 and is
by Unitil Corporation, a New Hampshire corporation ("Guarantor").
RECITALS
A. Guarantor owns 100% of the outstanding shares of common stock of
Unitil Service Corp., a New Hampshire corporation (the "Tenant"), and Unitil
Realty Corp., a New Hampshire corporation (the "Company").
B. The Tenant and the Company have entered into the Lease dated June 15,
1997 (the "Lease"), pursuant to which the Tenant is leasing from the Company
the Property (as defined therein).
C. The Company has entered into the separate Note Purchase Agreements
dated as of July 1, 1997 (the "Note Purchase Agreem,entv ") with,
respectively, American United Life Insurance Company and The State Life
Insurance Company (collectively, the "Note Purchasers ") providing for the
sale by the Company of its $7,500,000 aggregate principal amount 8.00%
Senior Secured Notes due August 1, 2017 (the "Notes").
D. The Notes will be issued under and secured by a Trust Indenture dated as
of July 1, 1997 (the "Indenture ") between the Company and State Street Bank
and Trust Company, as Trustee for the holders of the Notes (the "Trustee").
E. The Notes will also be secured by (i) an Assignment of Lease dated as of
July 1, 1997 between the Company and the Trustee (the "Lease Assignment")
pursuant to which the Company has, among other things, assigned all of its
right, title and interest in and under the Lease to the Trustee, (ii) a
Mortgage and Security Agreement dated as of July 1, 1997 from the Company to
the Trustee (the "Mortgage") pursuant to which the Company has granted to
the Trustee a mortgage on the Property (referred to above) and (iii) this
Guaranty Agreement.
F. Capitalized terms used herein shall have the meanings assigned in the
Indenture or the Note Purchase Agreements, as the case may be.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained and to aid the sale of the Notes -and to induce the Note
Purchasers, and every future holder of the Notes, to purchase the Notes, it
is hereby agreed as follows:
1. Guarantor, intending to be legally bound, hereby guarantees to
Trustee for the benefit of the holders of the Notes, (a) the full prompt
payment of all principal of and interest and Make-Whole Amount, if any, on
the Notes from time to time outstanding, as and when such payments become
due and payable (including all interest on overdue payments of principal,
Make-Whole Amount, if any, and interest at the rate set forth in the Notes
and (b) the full and prompt performance by the Company of all its other
obligations under the provisions of the Note Purchase Agreements (the items
described in clauses (a) and (b) above are herein referred to collectively
as the "Obligations"); and Guarantor does hereby become surety to the
Trustee, and its successors and assigns, for and with respect to all of the
Obligations.
2. Guarantor hereby covenants and agrees to and with the Trustee, that
if default shall at any time be made by the Company, or any of its successors
and assigns, in the payment or performance of any such Obligations, Guarantor
will forthwith pay and faithfully perform and fulfill such Obligations, and
will forthwith pay to the Trustee all damages and all costs and expenses that
may arise in consequence of any default by the Company, or its successors and
assigns, under the Notes or the Note Purchase Agreements (including, without
limitation, all reasonable attorneys' fees incurred by the Trustee or any
holder of a Note or caused by any such default and/or by the enforcement of
this Guaranty).
3. This Guaranty is an absolute and ' unconditional guaranty of payment
(and not of collection) and of performance and is a surety agreement.
Guarantor's liability hereunder is direct and may be enforced without the
Trustee being required to resort to any other right, remedy or security and
this Guaranty shall be enforceable against Guarantor, and its successors and
assigns, without the necessity for any suit or proceedings on the Trustee's
part of any kind or nature whatsoever against the Company, or its successors
and assigns, and without the necessity of any notice of nonpayment,
non-performance or non-observance or the continuance of any such default or
of any notice of acceptance of this Guaranty or of the Trustee's intention
to act in reliance her(,-on or of any other notice or demand (except a
demand for payment from the Guarantor) to which Guarantor might otherwise be
entitled, all of which Guarantor hereby expressly waives.
4. This Guaranty shall be a continuing Guaranty and (whether or not
Guarantor shall have notice or knowledge of any of the following) the
liability and obligation of Guarantor hereunder shall be absolute,
irrevocable and unconditional and shall remain in full force and effect
without regard to, and @.,hall not be released, discharged or in any way
impaired by (a) any amendment or modification of, or supplement to, or
extension or renewal of, the Notes or the Note Purchase Agreements or any
assignment or transfer thereof; (b) any exercise or non-exercise of any
right, power, remedy or privilege under or in respect of the Notes or the
Note Purchase Agreements or this Guaranty or any waiver, consent or approval
by the Company with respect to any of the covenants, terms, conditions or
agreements contained in the Notes or the Note Purchase Agreements or any
indulgences, forbearances or extensions of time for performance or observance
allowed to the Company from time to time and for any length of time; (c) any
bankruptcy, insolvency, reorganization, arrangement, readjustment,
composition, liquidation or similar proceeding relating to the Company, its
successors and assigns or their properties; or (d) any limitation on the
liability or obligation of the Company under the Notes or the Note Purchase
Agreements or its estate in bankruptcy or of any remedy for the enforcement
thereof, resulting from the operation of any present or future provision of
the federal bankruptcy law or any other statute or from the decision of any
court.
5. All of the Trustee's rights and remedies under the Indenture and
under this Guaranty are intended to be distinct, separate and cumulative and
no such right and remedy therein or herein mentioned is intended to be in
exclusion of or a waiver of any of the others. No termination of the Note
Purchase Agreements shall deprive the Trustee of any of its rights and
remedies against Guarantor under this Guaranty. This Guaranty shall apply
to the Obligations pursuant to any extension, renewal, amendment,
modification and supplement of or to the Note Purchase Agreements as well as
to the Obligations thereunder in accordance with the original provisions
thereof.
6. Guarantor hereby waives any @requirement that the Trustee protect,
secure, perfect or insure any security interest or lien or any property
subject thereto or exhaust any right to take any action against any person
or any collateral (including any rights relating to marshaling of assets).
7. The Obligations with respect to the Notes and the Note Purchase
Agreements will be paid strictly in accordance with the terms of the Notes
and the Note Purchase Agreements, regardless of the value, genuineness,
validity, regularity or enforceability of the Obligations, and of any law,
regulatioiri or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Company with respect
thereto. The liability of Guarantor to the extent herein set forth shall be
absolute, irrevocable and unconditional, not subject to any reduction,
limitation, impairment, termination, defense, offset, counterclaim or
recoupment whatsoever (all of which are hereby expressly waived by Guarantor)
whether by reason of any claim of any character whatsoever, including,
without limitation, any claim of waiver, release, surrender, alteration or
compromise, or by reason of any liability at any time to Guarantor or
otherwise, whether based upon any obligations or any other agreements or
otherwise, howsoever arising, whether out of action or inaction or otherwise
and
whether resulting from default, willful misconduct, negligence or otherwise,
and without limiting the foregoing irrespective of: (a) any lack of validity
or enforceability of the Notes or the Note Purchase Agreements or of any
agreement or instrument relating thereto; (b) any change in the time, manner
or place of payment of, or in any other term in respect of, all or any of
the Obligations, or any other amendment or waiver of or consent to the
Obligations, or any other amendment or waiver of or consent to any departure
from the Notes or the Note ]Purchase Agreements or any other agreement
relating to any Obligations; (c) any increase in, addition to, exchange or
release of, or nonperfection of any lien on or security interest in, any
collateral or any release or amendment or waiver of or consent to any
departure from or failure to enforce any other guarantee, for all or any of
the indebtedness; (d) any other circumstance which might otherwise constitute
a defense available to, or a discharge of, the Company in respect of the
obligations of Guarantor in respect hereof; (,--) the absence of any action
on the part of the Trustee or any holder of a Note to obtain payment for the
Obligations from the Company; (f) any insolvency, bankruptcy, reorganization
or dissolution, or any proceeding of the Company or Guarantor, including,
without limitation, rejection of the guaranteed Obligations in such
bankruptcy; or (g) the absence of notice or any delay in any action to
enforce any Obligations or to exercise any right or remedy against Guarantor
or the Company, whether hereunder, under any Obligations or under any
agreement or any indulgence, compromise or extension granted.
8. Guarantor further agrees that, to the extent that the Company or
Guarantor makes a payment or payments to the Trustee or the holders of the
Notes, which payment or payments or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to the Company or Guarantor or their respective
estate, trustee, receiver or any other party under any bankruptcy law, state
or federal law, common law or equitable cause, then to the extent of such
payment or repayment, this Guaranty and the advances or part thereof which
have been paid, reduced or satisfied by such amount shall be reinstated and
continued in full force and effect as of the date of such initial payment,
reduction or satisfaction occurred.
9. Guarantor shall have no rights (direct or indirect) of subrogation,
contribution, reimbursement, indemnification or other rights of payment or
recovery from any person or entity (including, without limitation, the
Company) for any payments made by Guarantor hereunder, and Guarantor hereby
waives and releases absolutely and unconditionally, any such rights of
subrogation, contribution, reimbursement, indemnification and other rights
or recovery which it may now or hereafter acquire.
10. Guarantor will keep, and will cause each of its Subsidiaries to keep,
proper books of record and account in which full and correct entries will be
made of all dealings or transactions of, or in relation to, the business and
affairs of Guarantor or such Subsidiaries, in accordance with GAAP
consistently applied (except for changes disclosed in the financial
statements furnished to the holders of the Notes pursuant to this paragraph
and concurred in by the independent public accountants referred to in clause
(b) below), and will furnish to each holder of the Notes (in duplicate if so
specified below or otherwise requested):
(a) Quarterly Statements. As soon as available and in any event within
90 days after the end of each quarterly fiscal period (except the last) of
each fiscal year, copies of:
(1) consolidated balance sheets of Guarantor and its Subsidiaries as of
the close of such quarterly fiscal period, setting forth in comparative form
the consolidated figures for the fiscal year then most recently ended,
(2) consolidated statements of income of Guarantor and its Subsidiaries
for such quarterly fiscal period and for the portion of the fiscal year
ending with such quarterly fiscal period, in each case setting forth in
comparative form the consolidated figures for the corresponding periods of
the preceding fiscal year, and
(3) consolidated statements of cash flows of Guarantor and its
Subsidiaries for the portion of the fiscal year ending with such quarterly
fiscal period, setting forth in comparative form the consolidated figures
for the corresponding period of the preceding fiscal year, all in reasonable
detail and certified as,complete and correct by an
authorized financial officer of Guarantor;
(b) Annual Statements. As soon as available and in any event within 120
days after the close of each fiscal year of Guarantor, copies of:
(1) consolidated balance sheets of Guarantor and its Subsidiaries as of
the close of such fiscal year, and
(2) consolidated statements of income and retained earnings and cash
flows of Guarantor and its Subsidiaries for such fiscal year,
in each case setting forth in comparative form the consolidated figures for
the preceding fiscal year, all in reasonable detail and accompanied by a
report thereon of a firm of independent public accountants of recognized
national standing selected by Guarantor to the effect that the consolidated
financial statements present fairly, in all material respects, the
consolidated financial position of Guarantor and its Subsidiaries as of the
end of the fiscal year being reported on and the consolidated results of the
operations and cash flows for said year in conformity with GAAP and that the
examination of such accountants in connection with such financial statements
has been conducted in accordance with generally accepted auditing standards
and included such tests of the accounting records and such other auditing
procedures as said accountants deemed necessary in the circumstances;
(c) SEC and Other Reports. Promptly upon their becoming available, one
copy of each financial statement, report, notice or proxy statement sent by
Guarantor to stockholders generally and of each regular or periodic report,
and any registration statement or prospectus filed by Guarantor or the
Company with any securities exchange or the Securities and Exchange
Commission or any successor agency;
(d) Requested Information. With reasonable promptness, such other data
and information as such holder of the Notes may reasonably request.
Without limiting the foregoing, Guarantor will permit each holder of the
Notes or such persons as such holder may designate, to visit and inspect,
under Guarantor's guidance, any of the properties of Guarantor or any
Subsidiary of Guarantor, to examine all of their books of account, records,
reports and other papers, to make copies and extracts therefrom and to
discuss their respective affairs, finances and accounts with their
respective officers, employees, and independent public accountants (and by
this provision Guarantor authorizes said accountants to discuss with any
holder the finances and affairs of Guarantor and its Subsidiaries) all at
such reasonable times and as often as may be reasonably requested.
Guarantor shall not be required to pay or reimburse any holder of Notes for
expenses which such holder may incur in connection with any such visitation
or inspection, except that if such visitation or inspection is made during
any period when a Default or an Event of Default shall have occurred and be
continuing, Guarantor agrees to reimburse such holder for all such expenses
promptly upon demand.
11. Guarantor will do all things necessary to preserve and keep in full
force and effect its corporate existence, rights and franchises; provided,
however, that nothing in this Section shall prevent the withdrawal by
Guarantor from any State or jurisdiction and its authorization to do
business in such State or jurisdiction or a consolidation or merger not
prohibited by the following paragraph.
12. Guarantor will not consolidate with, merge into, or sell, lease or
otherwise dispose of all or substantially all its property as an entirety
to, any other partnership or corporation unless the partnership or
corporation (if other than Guarantor) resulting from any such consolidation
or merger or to which such sale, lease or other disposition shall have been
made shall, immediately upon such consolidation, merger, sale, lease or
other disposition,
(i) expressly assume in wrilting the due and punctual performance and
observance of all the terms, covenants, agreements and conditions of this
Guaranty to be performed or observed by Guarantor to the same extent as if
such successor partnership or corporation instead of Guarantor had been the
original party hereto, and
(ii) furnish a true and complete copy of the assumption to each holder of
Notes, together with an opinion of.' counsel opining favorably as to the due
authorization, execution and enforceability of the assumption;
provided, however, that no such consolidation, merger, sale, lease or other
disposition shall release Guarantor from any of its obligations under this
Guaranty.
13. Guarantor represents and warrants that (a) the execution and
delivery of this Guaranty has been duly authorized by the Board of Directors
of Guarantor and this Guaranty is enforceable in accordance with its terms,
(b) the making of this Guaranty does not require any vote or consent of
shareholders of Guarantor and (c) the Company is a wholly owned Subsidiary
of Guarantor.
14. This Guaranty shall be legally binding upon Guarantor and its
successors and assigns and shall inure to the benefit of the Trustee and its
successors and assigns. The terms and provisions of this Guaranty shall be
governed by the laws of the State of New Hampshire.
15. Guarantor will not enter into any amendment to this Guaranty, and no
such amendment will be effective in any event, without the prior written
consent thereto by the Trustee. Guarantor will from time to time while the
Notes are outstanding, promptly following request of the Company or the
Trustee, confirm in writing to the Company and to the Trustee that this
Guaranty remains in full force and effect in accordance with its terms.
16. Guarantor hereby waives trial by 'ury in connection with any dispute
arising hereunder.
IN WITNESS WHEREOF, Guarantor, intending to be legally bound hereby, has
caused this Guaranty to be executed by its duly authorized officer and its
corporate seal to be hereunto duly affixed, as of the lst day of July , 1997.
UNITIL CORPORATION
By:
Its
IN WITNESS WHEREOF, Guarantor, intending to be -legally bound hereby, has
caused this Guaranty to be executed by its duly authorized officer and its
corporate seal to be hereunto duly affixed, as of the lst day of July, 1997.
UNITIL CORPORATION
By
Michael J. Dalton
Its President
UNITIL REALTY CORP.
NOTE PURCHASE AGREEMENT
Dated as of July 1, 1997
Re: $7,500,000 8.00% Senior Secured Notes
Due August 1, 2017
TABLE OF CONTENTS
Section Heading Page
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT 1
Section 1. 1. Description of Notes 1
Section 1.2. Security for the Notes 2
Section 1.3. Commitment, Closing Date 2
Section 1.4. Expenses and Taxes 3
SECTION 2. REPRESENTATIONS 3
Section 2. 1. Representations of the Company 3
Section 2.2. Representations of the Purchaser 4
SECTION 3. CLOSING CONDITIONS 4
Section 3. 1. Execution and Delivery of Indenture and Guaranty
Agreement 4
Section 3.2. Execution and Recordation of Documents 4
Section 3.3 Estoppel Certificate of the Tenant 4
Section 3.4. Mortgage Title Insurance 5
Section 3.5. Surveys 5
Section 3.6. Licenses, Approvals and Permits 5
Section 3.7. Company's Corporate Authority 5
Section 3.8. Insurance 5
Section 3.9. Appraisal 5
Section 3. 1 0. Environmental Assessrrtent 5
Section 3.1 1. Private Placement Number 6
Section 3.12. Closing Certificate 6
Section 3.13. Compliance with Agreements 6
Section 3.14. Legal Opinions 6
Section 3.15. Consent of Holders of Other Securities 6
Section 3.16. Proceedings Satisfactory 6
Section 3.17. Waiver of Conditions 6
Section 3.18. Legality 7
SECTION 4. INTERPRETATION OF AGREEMENT; DEFINITIONS 7
Section 4. 1. Definitions 7
SECTION 5. PURCHASER'S SPECIAL RIGHTS 9
Section 5. 1. Direct Payment 9
Section 5.2. Delivery Expenses 9
Section 5.3. Issue Taxes 9
SECTION 6. MISCELLANEOUS 9
Section 6. 1. Notices 9
Section 6.2. Reproduction of Documents 10
Section 6.3. Survival 10
Section 6.4. Successors and Assigns 10
Section 6.5. Duplicate Originals 10
Section 6.6. Severability 10
Section 6.7. Governing Law 11
Section 6.8. Captions 11
ATTACHMENTS To NOTE PURCHASE AGREEMENT:
Schedule I - Names and Addresses of purchasers
Schedule 11 - Legal Description of Mortgaged Property
Exhibit A - Trust Indenture
Exhibit B - Mortgage
Exhibit C - Lease Assignment
Exhibit D - Lease
Exhibit E - Guaranty Agreement
Exhibit F - SNDA Agreement
Exhibit G - Estoppel Certificate
Exhibit H - Closing Certificate
Exhibit I - Description of Special Coiinsel's Closing
Opinion
Exhibit J - Description of Closing Opinion of Counsel to
the Company
UNITIL REALTY CORP.
6 Liberty Lane West
Hampton, New Hampshire 03842
NOTE PURCHASE AGREEMENT
Re: $7,500,000 8.00% Senior Secured Notes Due August 1, 2017
Dated as of
July 1, 1997
To the Purchaser named in Schedule I
attached hereto which is a signatory
to this Agreement
Ladies and Gentlemen:
UNITIL REALTY CORP., a corporation organized and existing under the laws of
the State of New Hampshire (the "Company"), a!orrees with you as follows:
SECUON 1. DESCRIPTION OF NOTES AND COMMITMENT.
Section 1. 1. Description of Notes. The Company will authorize the issue
and sale of its 8.00% Senior Secured Notes due August 1, 2017 (the "Notes")
in an aggregate principal amount of $7,500,000. The Notes will be dated the
date of issue, will bear interest on the unpaid principal balance thereof
from the date of issue until maturity at the rate of 8.00% per annum and
will be expressed to be payable in the aggregate as follows:
(a) one installment of interest only for the period from and including
the date of issue to but not including August 1, 1997, payable on August 1,
1997;
(b) two hundred and thirty-nl'lne equal installments, including both
principal and interest, each in the aggregate amount of $62,733.00,
payable monthly on September 1, 1997 and on the first clay of each month
thereafter to and including July 1, 2017; and
(c) a final installment on August 1, 2017 in an amount equal to the
entire principal and interest remaining unpaid as of said date.
The Notes will be in the form attached as Exhibit A to the Indenture
hereinafter referred to. Interest on the Notes will be computed on the
basis of a 360-day year of twelve 30-day months. The term "Notes" as used
herein shall include each Note delivered pursuant to this Agreement and the
separate Agreement with the other purchaser named in Schedule I. You and the
other purchaser named in Schedule I are hereinafter sometimes referred to
as the "Purchasers ".
Section 1.2. Securityfor the Notes. The Notes will be issued under and
secured by a Trust Indenture dated as of July 1, 1997 (the "Indenture")
substantially in the form attached hereto as Exhibit A from the Company to
State Street Bank and Trust Company, as Trustee thereunder -(the "Trustee").
Pursuant to the Indenture the Company will execute, acknowledge and deliver
(a) the Mortgage and Security Agreement dated as of July 1, 1997 (the
"Mortgage") from the Company to the Trustee substantially in the form
attached hereto as Exhibit B, and (b) the Assignment of 'Lease dated as of
July 1, 1997 (the "Lease Assignment") substantially in the form attached
hereto as Exhibit C in which the Company assigns to the Trustee all of its
right, title and interest in and to the Lease dated as of June 15, 1997
(the "Lease") between the Company, as landlord, and Unitil Service Corp., a
New Hampshire corporation, as tenant (the "Tenant"). In addition, the
obligations of the Company under the Notes and the Agreements shall be
unconditionally guaranteed pursuant to the Guaranty Agreement dated as of
July 1, 1997 (the "Guaranty Agreement") from Unitil Corporation, a New
Hampshire corporation and the corporate parent of the Company (the
"Guarantor") to the Trustee, substantially in the form attached hereto as
Exhibit E. The Mortgage shall create a first mortgage I:'ten on the parcel
of land described in Schedule 11 hereto, which parcel together with the
buildings and improvements located thereon, constitutes the corporate
headquarters owned by the Company and leased to the Tenant under the Lease
(collectively, the "Mortgaged Property") the construction of which is being
financed with the proceeds from the sale of the Notes.
Section 1.3. Commitment, Closing Date. (a) Subject to the terms and
conditions herein contained and on the basis of the representations and
warranties hereinafter set forth, the Company agrees to issue and sell to
you and you agree to purchase from the Company on the Closing Date, as
hereinafter specified, the Notes at a price equal to 100% of the principal
amount thereof, as indicated opposite your name in Schedule I.
(b) Delivery of the Notes will be made at the offices of Chapman and
Cutler, 1 1 1 West Monroe Street, Chicago, Illinois 6060'3, against payment
therefor by wire in Federal or other funds current and immediately available
at BankBoston, 100 Federal Street, Boston, MA, ABA No. 01 1000390, for
credit to the account of Unitil Realty Corp., Account No. 500-74022, at
10:00 o'clock A.M. Chicago, Illinois time, on July 24, 1997 or such later
date (not later than July 31, 1997) as shall be mutually agreed upon by the
Company and the Purchasers (the "Closing Date").
(c) The Notes delivered to you on t@he Closing Date will be in the form
of a single registered Note, registered in your name or in the name of your
nominee, as specified in Schedule I attached hereto.
(d) Simultaneously with the execution and delivery of this Agreement,
the Company is entering into a similar agreement with the other Purchaser
under which such other Purchaser agrees to purchase from the Compiny the
aggregate principal amount of Notes set forth opposite such Purchaser's name
in Schedule I attached hereto. This Agreement and said similar agreement
with the other Purchaser are herein collectively referred to as the
"Agreements". Your obligation hereunder arid the obligation of the other
Purchaser shall be several and not joint and neither Purchaser shall be
liable for the acts or defaults of the other Purchaser. The obligation of
the Company to issue its Notes hereunder on the Closing Date shall be
contingent upon the purchase of the Notes by both Purchasers on the Closing
Date.
Section 1.4. Expenses and Taxes. )&'hether or not the Notes are sold, the
Company will pay all reasonable expenses relating to this Agreement, the
Indenture, the Mortgage, the Lease Assignment and the Guaranty Agreement,
including but not limited to:
(a) the cost of reproducing this Agreement, the Indenture, the Mortgage,
the Lease Assignment, the Guaranty Agreement and the Notes;
(b) the reasonable fees and the disbursements of Chapman and Cutler,
your special counsel;
(c) your reasonable out-of-pocket expenses relating to the issuance and
sale of the Notes;
(d) the cost of delivering to /our home office, insured to your
satisfaction, the Notes purchased by you on the Closing Date;
(e) all fees, costs and other expenses of the Trustee under the
Indenture;
(f) all recording and filing @fees and stamp taxes in connection with
the recordation or filing and rerecordatiort or re-filing of the Mortgage
and/or the Lease Assignment, financing statements, and other notices
thereof;
(g) all fees, costs and expenses incurred in connection with obtaining a
rating on the Notes from the National Association of Insurance
Commissioners;
(h) any and all reasonable brokerage fees and commissions payable or
claimed to be payable to any Person in connection with the sale of the
Notes; and
(i) all reasonable expenses (including reasonable attorneys fees)
relating to any amendments, waivers or consents pursuant to the provisions
of this Agreement, the Indenture, the Mortgage, the Lease Assignment and the
Guaranty Agreement.
The obligations of the Company under this 1.4 shall survive the payment or
prepayment of the Notes and the termination of this Agreement, the
Indenture, the Mortgage, the Lease Assignment and the Guaranty Agreement.
SECTION 2. REPRESENTATIONS.
Section 2. I. Representations of thi? Company. The Company represents
and warrants that all representations set forth in the form of Closing
Certificate attached hereto as Exhibit H are true and correct as of the date
hereof and are incorporated herein by reference with the same force and
effect as though herein set forth in full.
Section 2.2. Representations of the Purchaser. You represent that you are
purchasing the Notes for your own account, for the purpose of investment and
not with a view to the distribution thereof, and that you'have no present
intention of selling, negotiating or otherwise disposing of such Notes, it
being understood that the disposition of the Notes shall at all times be and
remain within your control. You represent that either: (a) you are
acquiring the Notes with assets from your "insurance company general
account" within the meaning of Department of Labor Prohibited Transaction
Exemption 95-60 (issued July 12, 1995) ("PTE 95-60") and the purchase of the
Notes by you is eligible for and satisfies the requirements of PTE 95-60; or
(b) all or a part of the funds to be used by you to purchase the Notes
constitute assets of one or more separate accounts maintained by you, and
you have disclosed to the Company the names of such employee benefit plans,
whose assets in such separate account or accounts exceed 10% of the total
assets or are expected to exceed 10% of the total assets of such account or
accounts as of the date of such purchase (for the purpose of this clause
(b), all employee benefit plans maintained by the same employer or employee
organization are deemed to be a single plan). As used in this Section, the
terms "separate account" and "employee benefit plan" shall have the
respective meanings assigned to them in ERISA.
SECTION 3. CLOSING CONDITIONS.
Your obligation to purchase and pay for the Notes on the Closing Date is
subject to the performance by the Company of its agreements hereunder which,
by the terms hereof, are to be performed at or prior to the time of the
delivery of such Notes and to the following conditions precedent:
Section 3. 1. Execution and Delivery of Indenture and Guaranty Agreement.
On or prior to the Closing Date, the Company and the Trustee shall have
executed, acknowledged and delivered the Indenture and the Guarantor shall
have executed and delivered the Guaranty Agreement.
Section 3.2. Execution and Recordation of Documents. On or prior to the
Closing Date, the Lease, the Lease Assignment, the ";NDA Agreement and the
Mortgage shall have been duly executed, acknowledged and delivered by all
parties thereto, and shall be in full force and effect, and each such
agreement (or a memorandum thereof in the case of the Lease) and all
necessary financing statements and similar notices, if and to the extent
permitted or required by applicable law, shall have been recorded or filed
for record in each public office wherein such recording or filing is deemed
necessary or appropriate by you or your special counsel to perfect the lien
thereof as against creditors of or purchasers from the Company and the
Tenant. Without limiting the foregoing, all taxes, fees and other charges
in connection with the execution, delivery, recording and filing of the
foregoing instruments shall have been paid or allowance therefor shall have
been made.
Section 3.3 Estoppel Certificate of the Tenant. On the Closing Date,
you shall have received from the Tenant an Estoppel Certificate, dated the
Closing Date, executed by an authorized officer of the Tenant, substantially
in the form attached hereto as Exhibit G.
Section 3.4. Mortgage Title Insurance. The Company, at its own expense,
shall have procured and delivered to the Trustee at the Closing a mortgage
title insurance policy on a standard ALTA Form Mortgage Title Insurance
Policy Loan Policy 1992 Form with certain endorsements required by you and
your special counsel, including without limitation, an ALTA 9 Comprehensive
Endorsement or a commitment to issue such policy in the aggregate principal
amount of $7,500,000 issued by a title insurance company in good standing
selected by the Company and satisfactory to you and your special counsel.
Such policy or commitment shall show good and marketable-. fee simple title
to the Mortgaged Property to be in the Company subject only to Permitted
Encumbrances, as defined in the Mortgage, and insuring the Trustee, as
mortgagee, against all loss or damage sustained by reason of the Mortgage
not being a first and paramount lien on the Mortgaged Property, subject only
to the aforesaid Permitted Encumbrances. The policy shall cover the date of
recording of the Mortgage, shall be dated not earlier than the Closing Date
and shall otherwise be in form and substance satisfactory to you and your
special counsel.
Section 3.5. Surveys. The Company shall provide the Purchasers with a
survey of the Mortgaged Property in a form satisfactory to you and your
special counsel.
Section 3.6. Licenses, Approvals and' Permits. On or prior to the Closing
Date, the Company shall furnish evidence satisfactory to you and your
special counsel of the issuance of all licenses, approvals and permits
necessary in connection with the lawful operation of the corporate
headquarters situated on the parcel of land described in Schedule 11.
Section 3.7. Company's Corporate Authority. You shall have received (a) a
copy of the Articles of Incorporation of the Company certified by the
Secretary of State of the State of New Hampshire, (b) a certificate of the
Secretary or an Assistant Secretary of the Company as to the By-Laws of the
Company and authorizing resolutions of the Company and (c) a good standing
certificate with respect to the Company.
Section 3.8. Insurance. On the Closing Date, you shall have received from
the Company a certificate dated such Closing Dal-.e executed by the
President or a Vice President of the Company certifying to the existence of
the insurance required by Section 2.6 of the Mortgage and Article 5 of the
Lease and the payment of all premiums due thereon. Certificates of
insurance evidencing such coverage shall also have been delivered to you.
Section 3.9. Appraisal. At least five days prior to the Closing Date, you
shall have received an appraisal of the Mortgaged ]Property prepared in
accordance with MAI standards by Fremeau Appraisal Inc., dated not more than
90 days prior to the Closing Date. Such appraisal shall be satisfactory to
:you in all respects and shall evidence a loan-tovalue ratio of not more
than 95%.
Section 3. 1 0. Environmental Assessmi?nt. On or prior to the Closing Date,
you shall have received an environmental site assessment prepared by Haley &
Aldrich, Inc. ("Environmental Assessment") for the Mortgaged Property, in
scope, form and substance satisfactory to you and your special counsel.
Section 3. 1 1.
Notes shall have duly made the appropriate filings with Standard & Poor's
CUSIP Service Bureau, as agent for the National Association of Insurance
Commissioners, in order to obtain a private placement number for the Notes.
Section 3.12. Closing Certificate. On the Closing Date, you shall have
received from the Company a certificate dated such Closing Date, executed by
the President or a Vice President of the Company and by the President or a
Vice President of the Guarantor substantially in the form attached hereto as
Exhibit H, the truth and accuracy of which on the Closing Date shall be a
condition to your obligation to accept and pay for the Notes.
Section 3.13. Compliance with Agreements. The Company shall have performed
and complied with all agreements and conditions contained herein, in the
Indenture and in the Mortgage which are required to be perforinied or
complied with by the Company on or prior to the Closing Date.
Section 3.14. Legal Opinions. On the Closing Date, you shall have received
(a) from Chapman and Cutler, who are acting as your special counsel in this
transaction, and from LeBoeuf, Lamb, Greene & MacRae, LLP, counsel for the
Company, the Tenant and the Guarantor, their respective opinions dated ZLS
of the Closing Date, in form and substance satisfactory to you, and covering
the matters set forth in Exhibits I and J, respectively, hereto and (b) from
Sanders & McDermott, P.L.L.C., special New Hampshire counsel for the
Company, an opinion regarding compliance with zoning requirements in scope,
form and substance satisfactory to you and your special counsel.
Section 3.15. Consent of Holders of Other Securities. On or prior to the
Closing Date, any consents or approvals required to be obtained from any
holder or holders of any outstanding Security of the Company and an,i
amendments of agreements pursuant to which any Securities may have been
issued which shall be necessary to permit the consummation of the
transactions contemplated hereby shall have been obtained and all such
consents or amendments shall be satisfactory in form and substance to you
and your special counsel.
Section 3.16. Proceedings Satisfactr-,ry. All proceedings taken or to be
taken in connection with all of the transactions described in and
contemplated by this Agreement, and all documents necessary to the
consummation thereof, shall be satisfactory to you and your special counsel
and you and your special counsel shall have received copies (executed or
certified as may be appropriate) of all legal documents or proceedings which
you and they may require in connection with said transactions.
Section 3.17. Waiver of Conditions. If on the Closing Date the Company
fails to tender to you the Notes or if the conditions specified in this
Section 3 have not been fulfilled, you may thereupon elect to be relieved of
all further obligations under this Agreement. Without limiting the
foregoing, if the conditions specified in this Section 3 have not been
fulfilled, you may waive compliance by the Company with any such condition
to such extent as you may in your sole discretion determine. Nothing in
this 3.17 shall operate to relieve the Company of any of its obligations
hereunder or to waive any of your rights or remedies against the
Company.
Section 3.18. Legality. The Notes shall, on the Closing Date, qualify as
a legal investment for insurance companies under such legal investment laws
to which you are subject and you shall have received evidence, reasonably
satisfactory to you as you may require to establish compliance with this
condition.
SECTION 4. INTERPRETATION OF AGREEMENT; DEFINITIONS.
Section 4. I. Definitions. Unless the context otherwise requires, the terms
hereinafter set forth when used herein shall have the following meanings and
the following definitions shall be equally applicable to both the singular
and plural forms of any of the terms herein defined:
"A.ffiliate " shall mean any Person (other than a Subsidiary) (i) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, the Guarantor, (ii) which
beneficially owns or holds 5% or more of any class of the Voting Stock of
the Guarantor or (iii) 5% or more of the Voting Stock (or in the case of a
Person which is not a corporation, 5% or more of the equity interest) of
which is beneficially owned or held by the Guarantor or a Subsidiary. The
term "control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of Voting Stock, by contract or otherwise.
"Default" shall mean any event or condition, the occurrence of which would,
with the lapse of time or the giving of notice, or both, constitute an Event
of Default as defined in Section 6.1 of the Indenture.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA shall be construed to also refer to any
successor sections.
"ERISA Affiliate" shall mean any corporation, trade or business that is,
along with the Guarantor, a member of a controlled group of corporations or
a controlled group of trades or businesses, as described in section 414('b)
and 414(c), respectively, of the Code or Section 4001 of ERISA.
"Event of Default" is defined in Section 6.1 of the Indenture.
"Guarantor" is defined in 1.2.
"Holder" shall mean any Person which is, at the time of reference, the
registered holder of any Note.
"Indenture" is defined in 1.2.
"Institutional Holder" shall mean any Holder which is a Purchaser or an
insurance company, bank, savings and loan association, trust company,
investment company, charitable foundation, employee benefit plan (as defined
in ERISA) or other institutional investor or financial institution and, for
purposes of the direct payment provisions of this Agreement, shall include
any nominee of any such Holder.
"Mortgage" is defined in 1.2.
"Mortgaged Property" is defined in 1.2.
"Multiemployer Plan" shall have the same meaning as in ERISA.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Person " shall mean an individual, partnership, corporation, limited
liability company, trust or unincorporated organization, and a government or
agency or political subdivision thereof.
"Plan " means a "pension plan," as such term is defined in ERISA,
established or maintained by the Guarantor or any ERISA Affiliate or as to
which the Guarantor or any ERISA Affiliate contributed or is a member or
otherwise may have any liability.
"Reportable Event" shall have the same meaning as in ERISA.
"Security" shall have the same meaning as in Section 2(l) of the Securities
Act of 1933, as amended.
"SNDA Agreement" shall mean the Subordination, Non-Disturbance and Attomment
Agreement dated as of July 1, 1997 among the Trustee, the Tenant and the
Company, substantially in the form attached hereto as Elxhibit F.
The term "subsidiary" shall mean, as to any particular parent corporation,
any corporation of which more than 50% (by number of votes) of the Voting
Stock shall be owned by such parent corporation and/or one or more
corporations which are themselves subsidiaries of such parent corporation.
The term "Subsidiary" shall mean a subsidiary of the Guarantor.
"Tenant" is defined in 1.2.
"Trustee" is defined in 1.2.
"Voting Stock" shall mean Securities of any class or classes, the holders of
which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing similar
functions).
SECTION 5. PURCHASER'S SPECIAL RIGHTS.
Section 5. I. Direct Payment. Notwithstanding anything to the contrary
contained in this Agreement, the Indenture or the Notes, in the case of any
Note owned by any Holder that is a Purchaser or any other Institutional
Holder which has given written notice to the Company requesting that the
provisions of this 5.1 shall apply, the Company will punctually pay, or
cause to be paid, when due the principal thereof, interest thereon and
premium, if any, due with respect to said principal, without any presentment
thereof, directly to such Holder at its address set forth herein or such
other address as such Holder may from time to time designate in writing to
the Company or, if a bank account with a United States bank is so designated
for such'Holder, the Company will make such payments in immediately
available funds to such bank @iccount, marked for attention as indicated, or
in such other manner or to such other account in any United States bank as
such Holder may from time to time direct in writing.
Section 5.2. Delivery Expenses. If any Note or Notes are surrendered to the
Company or the Trustee pursuant to this Agreement or the Indenture, the
Company will pay the cost of delivering to or from your off ice from or to
the Company or the Trustee, insured to your satisfaction, the surrendered
Note or Notes and any Note or Notes issued in substitution or replacement
for the surrendered Note or Notes.
Section 5.3. Issue Taxes. The Company will pay all taxes in connection
with the issuance and sale by the Company of the Notes and in connection
with any modification of the Notes and will save you and any subsequent
Holder harmless without limitation as to time against any and all
liabilities with respect to ill such taxes. The obligations of the Company
under this 5.3 shall survive the payment or redemption of the Notes and the
termination of this Agreement.
SECTION 6. MISCELLANEOUS.
Section 6. I. Notices. (a) All comniunications under this
Agreement shall be in writing and shall be mailed by first class
mail, postage prepaid or comparable service in regular use,
(1) if to you, at your address for notices shown on Schedule I
attached hereto marked for attention as there indicated, or at such
other address as you may have furnished the Company in writing, or
(2) if to the Company, at Its address shown at the beginning of
this Agreement, or at such other address as it may have furnished in
writing to you and all other Holders at the time outstanding.
(b) Any communication so addressed and mailed by a method which results
in the sender's receiving written evidence of delivery shall be deemed to be
given when so mailed.
Section 6.2. Reproduction of Documents. This Agreement and all
documents relating thereto, including, without limitation (a) consents,
waivers and modifications which may hereafter be executed, (b) documents
received by you at the Closing (except the Notes) and (c) financial
statements, certificates and other information previously or hereafter
furnished to you, may be reproduced by you by any photographic, photostatic,
microfilm, micro-card, miniature photographic or other similar process and
you may destroy any original documents so reproduced. The Company agrees
and stipulates that any such reproduction shall be admissible in evidence
as the original itself in any judicial or administrative proceeding (whether
or not the original is in existence and whether or not such reproduction was
made by you in the regular course of business) and that any enlargement,
facsimile or further reproduction of such reproductions would likewise be
admissible in evidence.
Section 6.3. Survival. All warranties, representations, and covenants made
by the Company herein or in any certificate or other instrument delivered by
it or on its behalf under this Agreement shall be considered to have been
relied upon by you and shall survive the delivery to you of the Notes being
purchased by you (and any sale or other disposition of the Notes) regardless
of any investigation made by you or on your behalf All statements in any
such certificate or other instrument shall constitute warranties and
representations by the Company hereunder.
Section 6.4. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties. The provisions of this Agreement are intended to be for the
benefit of all Holders, and shall be enforceable by any such Holder, whether
or not an express assignment to such Holder of rights under this Agreement
has been made by you or your successors or assigns.
Section 6.5. Duplicate Originals. Two or more duplicate originals of this
Agreement may be signed by the parties, each of which shall be an original
but all of which together shall constitute one and the same instrument. If
this Agreement is satisfactory to you, please so indicate by signing the
acceptance at the foot of a counterpart of this Agreement and return such
counterpart to the Company, whereupon this Agreement will become binding
between us in accordance with its terms.
Section 6.6. Severability. Should any part of this Agreement for any reason
be declared invalid, such decision shall not affect the validity of any
remaining portion, which remaining portion shall remain in force and effect
as if this Agreement had been executed with the invalid portion thereof
eliminated and it is hereby declared the intention of the parties hereto
that they would have executed the remaining portion of this Agreement
without including therein any such part, parts, or portion which may, for
any reason, be hereafter declared invalid.
Section 6.7. Governing Law. This; Agreement and the Notes issued and sold
hereunder shall be governed by and construed in accordance with New
Hampshire law.
Section 6.8. Captions. The descriptive headings of the various Sections or
parts of this Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed
in any number of counterparts, each executed counterpart constituting an
original but all together only one agreement.
Very truly yours,
UNITIL REALTY CORP.
By /s/ Mark H Collin
Title: Treasurer
The foregoing is hereby confirmed and accepted.
AMERICAN UNITED LEFE INSURANCE
COMPANY
By /s/ Kent R Adams
Its Kent R. Adams, Vice President
PRINCIPAL AMOUNT
NAME AND ADDRESS OF NOTES TO BE
OF PURCHASER PURCHASED
AMERICAN UNITED LIFE INSURANCE COMPANY $7,000,000
One American Square
Post Office Box 368
Indianapolis, Indiana 46206
Attention: Securities Department
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Unitil Realty Corp. 8.00% Senior Secured Notes due August 1, 2017,
PPN 91326# AA 0" and identifying the breakdown of principal and interest and
the payment date) to:
Bank of New York (ABA #021000018)
One Wall Street, 3rd Floor
New York, New York 10286
Window A
for credit to: American United Life Insurance Company
Account Number 186683/AUL
Notices
All notices and communications, including notices with respect to payments
and written confirmation of each such payment, to be addressed as first
provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 35-0145825
SCHEDULE I
(to Senior Secured Note Agreement)
PRINCIPAL AMOUNT
NAME AND ADDRESS OF NOTES TO BE
OF PURCHASER PURCHASED
THE STATE LIFE INSURANCE COMPANY $500,000
One American Square
Post Office Box 368
Indianapolis, Indiana 46206
Attention: Securities Department
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Unitil Realty Corp. 8.00% Senior Secured Notes due August 1, 2017,
PPN 91326# AA 0" and identifying the breakdown of principal and interest and
the payment date) to:
Bank of New York (ABA #021000018)
One Wall Street, 3rd Floor
New York, New York 10286
Window A
for credit to: The State Life Insurance Company
Account Number 343761/State Life c/o AUL
Notices
All notices and communications, including notices with respect to payments
and written confirmation of each such payment, to be addressed as first
provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 35-0684263
SCHEDULE II
LEGAL DESCRIPTION OF MORTGAGED PROPERTY
Parcel 1:
A certain tract of land with all improvements thereon, located in Hampton,
Rockingham County, New Hampshire, shown as Parcel 2 on a certain plan
entitled "Subdivision Plan for Asset Title Holding, Inc., Liberty Lane West
County of Rockingham, Hampton, NH' by Richard P. Millefte and Associates,
dated November 11, 1994, last revised December 22, 1994, recorded in the
Rockingham County Registry of Deeds as Plan No. D-23(i74, and more
particularly bounded and described as follows:
Beginning at an iron rod in the southerly sideline of Timber Swamp Road,
said rod being the northwesterly comer of the parcel herein conveyed; thence
proceeding along the said southerly sideline of Timber Swamp Road North 64,
28' 10' East, a distance of 52.71 feet, to an iron rod; thence proceeding
North 671 02'20' East along the said southerly sideline of Timber Swamp
Road, a distance of 139.81 feet to an iron rod; thence continuing along the
southerly sideline of 'Timber Swamp Road North 580 47' 30" East, a distance
of 500.53 feet to an iron pipe found at the northeasterly comer of the
herein described premises at land now or formerly of Asset Title Holding,
Inc., thence turning and running along land of said Asset T'dle Holding,
Inc. South 26, 49' 00" East, a distance of 635.45 feet to an iron rod at
other land of said Asset Title Holding, Inc.; thence continuing along said
other land of Asset TiUe Holding, Inc. South 260 49' 00' East a,distance
of 29.19 feet to an iron rod at the southeasterly comerof the herein described
premises; thence turning and running South 841 36'
16' West still along other land of Asset Title Holding, Inc., a distance of
36.33 feet to an iron rod; thence proceeding along a curve to the left which
has a radius of 770.00 feet, an arc length of 615.06 feet along said other
land of Asset Title Holding, Inc., to an iron rod; thence proceeding along
a curve to the right which has a radius of 305.00 feet, an arc length of
146.18 feet to an iron rod; thence proceeding South 660 17' 57' West a
distance of 162.03 feet to an iron rod; thence proceeding along a curve to
the right which has a radius of 25.00 feet, an arc length of 39.27 feet to
an iron rod; thence proceeding North 231 42' 03' West, a distance of 124.58
feet to an iron rod; thence proceeding along a curve to the right which has
a radius of 305.00 feet an arc length of 123.55 feet to an iron rod; thence
proceeding North 001 29' 28" West a distance of 190.96 feet to an iron rod;
thence proceeding along a curve to the right which has a radius of 55.00
feet an arc length of 40.19 feet to an iron rod; thence proceeding along a
curve to the left which has a radius of 145.00 feet an arc length of 169.32
feet to an iron rod; thence proceeding North 251 31' 50' West a distance of
33.75 feet to an iron rod; thence proceeding along a curve to the right
which has a radius ol' 25.00 feet, an arc length of 39.27 feet to an iron
rod at the southerly sideline of said Timber Swamp Road at the point of
beginning, the last ten mentioned courses being along the lar-@ of said
Asset Title Holding, Inc.
Parcel II:
Together with a perpetual non-exclusive easement, in common with others to
(a) use, maintain, repair and replace the common access road serving the
premises granted and conveyed hereby, as currently located on Parcel 1 of
the Plan (such access ,oad being shown on the Plan as 'Paved Drive' and
'Access Road Area) and, (b) install, use, maintain, repair, replace and add
utilities (including water, sewer, drainage, electricity, telephone, gas,
fire alarm and security systems) serving the premises granted and conveyed
hereby and located within or on either side of such common access road.
EXHIBIT 10.1
AGREEMENT BETWEEN Unitil/CONCORD ELECTRIC COMPANY
AND
LOCAL UNION NO. 1837
INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS
JUNE 1, 1997 through MAY 31, 2000
INDEX
Article Section Subject Page Nos.
PREAMBLE 3
1 RECOGNITION OF UNION AND UNION SECURITY 4
1.1 Recognition of Union 4
1.2 Union Security 4
1.3 Payroll Deduction for Union Dues 4
2 CREDIT UNION AND THRIFT/SAVING PLAN 5
2.1 Credit Union 5
2.2 401K Plan 5
3 WAGES AND HOURS 6
3.1 Hours of Work and Premium Pay 6
3.2 Hourly Premium 8
3.3 Minimum Pay for Employees Called In 8
3.4 Holidays 9
3.5 Vacations 10
3.6 Assignment of Overtime Work 12
3.7 Temporary Up-Grading 12
3.8 Inclement Weather 12
3.9 Rubber Gloving 13
3.10 Employee Purchasing 13
3.11 Equipment Provided by Company 14
3.12 Rest Period 14
3.13 Military Leave 15
3.14 Stand-by 16
3.15 Pay When Away From Home Overnight 16
3.16 Leave of Absence
A. for Personal Reasons 16
B. for Union Officials 17
3.17 Absence Due to Death in the Family 18
3.18 Temporary Assignments Outside
of the Company's Service Area 18
3.19 Utility Lineworker I 19
4 ANSWERING SERVICE 19
5 RETIREMENT PLAN 19
6 GROUP INSURANCE 19
7 PROMOTIONS, DEMOTIONS, AND FURLOUGHS 20
7.1 Promotions 20
7.2 Temporary Assignment 21
7.3 Retrogression 21
7.4 Termination Pay 22
8 CONTRACTING CREWS 22
9 SUSPENSION AND DISCHARGES 23
Article Section Subject Page Nos.
10 NO STRIKES OR LOCKOUTS 23
11 ADJUSTMENTS OR DISPUTES AND
GRIEVANCES AND ARBITRATION 24
12 NOTICES AND REQUESTS 25
12.1 Mailing Requirements 25
12.2 Bulletin Boards 25
13 WAGE AND WORK AGREEMENT 25
14 DISABILITY BENEFITS AND SAFETY 26
14.1 Sick Pay 26
14.2 Worker's Compensation 26
14.3 Safety 26
15 CONSOLIDATION OR MERGER 27
16 NO DISCRIMINATION 27
17 DATE AND TERM -- TERMINATION-AMENDMENT 27
17.1 Effective Date and Term 27
17.2 Negotiations - Changes or Termination 28
17.3 Amending Agreement During Term 28
RETIREMENT PLAN 30
GROUP INSURANCE 36
SCHEDULE OF WAGES 40
DUES DEDUCTION 41
PREAMBLE
AGREEMENT made and entered into this 1st day of June, 1997 and
between Unitil/CONCORD ELECTRIC COMPANY, a New Hampshire corporation
hereinafter referred to as the "Company," and Local Union No. 1837
of INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS and the EMPLOYEES
OF THE COMPANY who have designated Local Union No. 1837 of the
International Brotherhood of Electrical Workers to act for them as their
collective bargaining agent, all hereinafter referred to as the "Union."
WHEREAS, the Union represents a majority of the employees of the
Company in the Line Department, Meter Department, Service Center (Station
Attendants, Maintenance Workers, Stock Clerks and Operation Office Clerk
only), and Meter Readers, and has been designated by said majority to be
the exclusive representative of all employees of the said departments for
the purpose of collective bargaining in respect to rates of pay, wages,
hours of work and other conditions of employment, and
WHEREAS, both the Company and the Union desire to promote harmony
and efficiency in the working forces so that the employees and the Company
may obtain mutual economic advantages consistent with the duty of the
Company, as a public utility, at all times to provide an adequate and
uninterrupted supply of electric service in the territory and communities
which it serves.
NOW THEREFORE, in consideration of the mutual covenants and
Agreements hereinafter set forth, it is agreed as follows:
ARTICLE 1
RECOGNITION OF UNION
AND UNION SECURITY
1.1 Recognition of Union
The Company recognizes the Union to be the exclusive rep-
resentative of all employees in the Line Department, Meter
Department, Service Center (Station Attendants, Maintenance
Workers, Stock Clerks, and Operation Office Clerk only) and
Meter Readers holding the positions set forth on the attached
"Schedule of Wages," for the purpose of collective bargaining.
1.2 Union Security
All employees who are at present members of the Union or may
hereinafter become members of the Union shall remain members of
the Union during the term of this agreement as a condition of
their employment by the Company. New employees covered by this
agreement shall be required to apply for membership in the Union
at the end of ninety (90) days of continuous employment and
remain members of the Union as a condition of their continued
employment during the term of this agreement, and the Union
agrees to accept such new employees into membership in the
Union in accordance with its By-Laws. The term "member" is
understood to be a Union member whose dues are paid in accordance
with the By-Laws and Constitution of the Union.
1.3 Payroll Deduction for Union Dues
The Company agrees to make weekly payroll deductions for Union
dues upon written authorization of employees who are Union members
with their signatures properly witnessed and to forward monthly
the amounts so deducted to the Union. (Exhibit B)
ARTICLE 2
CREDIT UNION & THRIFT/SAVING PLAN
2.1 Credit Union
The Company agrees to make payroll deductions for payments to
a duly-established Credit Union upon written authorization by
regular employees and to forward the amounts so deducted to the
Credit Union in accordance with such authority.
2.2 401K Plan
Employees may participate in the Company's 401K Plan in
accordance with the terms of Unitil Corporation Tax Deferred
Savings and Investment Plan as amended and restated from time-
to-time. The complete details relating to this plan are
contained in the Plan's Summary Description and in the Plan
Document, which are incorporated herein by reference.
The Company agrees to make payroll deductions for contributions
to the duly-established 401K Plan upon written authorization by
regular employees and to forward the amounts so deducted to the
401K Plan in accordance with such authority. Employees may elect
to contribute between 1% and 12% of either their base wages or
total wages to the plan, in increments of 1%. The Company matches
100% of the first 3% of base wages that the employees contribute
to the plan. Employees become partially vested in Company
matching contributions after one year of vesting service and
are fully vested in Company matching contributions after three
years of Vesting Service.
The Company reserves the right to make changes to the Plan
during the term of this Agreement with the understanding that
such changes will not decrease the amount of benefits provided
to Plan members. The Company agrees that no changes will be made
to the plan without prior notification to the Union.
ARTICLE 3
WAGES AND HOURS
3.1 Hours of Work and Premium Pay
(a) For all employees the normal work week shall consist
of forty (40) hours worked Monday through Friday, and the
normal workday shall consist of eight (8) hours worked
from 7 a.m. to 3 p.m. with a fifteen (15) minute lunch
period, except the workday for the meter order truck
operator (s) which shall be from 9 a.m. to 5 p.m. with
a fifteen (15) minute lunch period; the evening Station
Attendant which shall be from 3 p.m. to 11 p.m.; and
Meter Readers which shall be from 8 a.m. to 4 p.m. with
a fifteen (15) minute lunch period. (Meter Readers will
be allowed, by mutual agreement, to work summer hours of
7 a.m. to 3 p.m., during the months of June, July, and
August.); Utility Maintenance Worker which shall be from
1 p.m. to 9 p.m. with a fifteen (15) minute lunch period;
Operation Office Clerk which shall be from 8 a.m. to 5 p.m.
with one (1) hour for lunch; and Utility Lineworker I,
who will work one of two schedules. These schedules will
be called the "A/B" schedule and the "C" schedule. The
hours for the A/B schedule will be on a two week rotating
basis. Hours for week A will be Monday, Wednesday,
Thursday, and Friday 9 a.m. to 5 p.m. with a fifteen (15)
minute lunch period, and Tuesday 3 p.m. to 11 p.m. with
a fifteen (15) minute lunch period. Hours for week B will
be Tuesday thru Friday 9 a.m. to 5 p.m. and Saturday
7 a.m. to 3 p.m. The "C" schedule will be, Tuesday,
Wednesday, Thursday, and Friday 3 p.m. to 11 p.m., and
Saturday 7 a.m. to 3 p.m. All of these to include a
fifteen (15) minute lunch period. It will be management's
discretion as to which schedule will be used for the
Utility Lineworker, and it is understood that these
times may be changed by mutual agreement of the parties.
Time and one-half shall be paid to all employees for all
hours worked outside the normal workday except Sundays
and holidays which shall be double time.
(b) For Station Attendants, the normal work week shall
consist of forty (40) hours, Monday through Friday, and
the normal workday shall consist of (8) consecutive
hours worked in a twenty-four hour period commencing
with the beginning of the employee's regularly scheduled
hours. Station Attendants shall receive time and one-half
for all hours worked in excess of eight (8) in any
workday or forty (40) in any one week; provided, however,
that if a Station Attendant voluntarily works two work
schedules in a single workday or mutually agrees to work
two consecutive work schedules, straight time only shall
be paid for the second work schedule.
(c) A Station Attendant required to work on either the first
or second of his regularly scheduled consecutive days
off shall be paid at time and one-half his normal rate
of pay for work on the first day, and at two (2) times
his normal rate of pay for work on the second day.
Premium pay will not be paid to an employee who is absent
from work on the scheduled day for which such premium
would have been payable.
(d) The Union agrees that the Station Attendants may be
trained by the Company by the trading of work schedules
for short periods of time not to exceed one week of
duration. Upon mutual agreement between them and the
Company, Station Attendants who desire to trade work
schedules will be permitted to do so temporarily from
time to time, provided that such temporary interchange
is completed within a payroll week so that it does not
lead to or require the payment of overtime.
(e) Nothing in this provision shall be interpreted to
interfere with the Company's right to temporarily assign
work, including the right to temporarily assign employees
to perform work on an emergency basis outside their
normally scheduled hours. The Company shall provide as
much notice as possible in the event it implements this
section.
(f) The hours for the meter order truck operator(s) may be
changed to 7 a.m. to 3 p.m. for the days that the
Utility Lineworker I is working the "C" schedule. For
all other times, the meter order truck operator(s) hours
will be per 3.1(a).
(g) The hourly rate for the Utility Lineworkers I and for
Lineworkers I temporarily filling the position of
Utility Lineworker I is set by adding forty ($.40)
cents per hour to the Lineworkers I hourly rate.
3.2 Hourly Premium
The Station Attendant required to work the 3 p.m. to 11 p.m.
schedule shall receive a fifty ($.50) cent per hour premium.
This premium will only be paid for hours worked between 3 p.m.
and 11 p.m.
3.3 Minimum Pay for Employees Called In
When an employee is called in to work outside his regularly
scheduled work hours, he shall receive a minimum amount of pay
as provided in the two following paragraphs:
(a) All Workers: If a worker is called out to work outside
of his/her normal working hours, he/she will receive a
minimum of four (4) hours pay at straight time rates.
If he/she is called to work between the hours of 11 p.m.
and 6 a.m., he/she will receive a minimum of six (6)
hours pay at straight time rates. It is understood that
such minimums do not apply if the callout is within one
hour of the start of his/her regular period of work.
If he reports on a day during which he is not regularly
scheduled to work, he shall receive minimum pay in
accordance with the time periods in the preceding
sentence.
(b) An employee who is required to continue working after
his scheduled quitting time shall not receive minimum
pay under paragraph (a). An employee who reported during
the period of one hour immediately preceding his scheduled
starting time shall not receive minimum pay under
paragraph (a) if he remains on duty continuously until
his scheduled starting time, but shall receive time and
one-half for such period. In computing hours worked,
time shall begin immediately when he reports at his
station and shall end when relieved from duty upon
completion of emergency work.
3.4 Holidays
The following days shall be recognized as Holidays:
New Year's Day Columbus Day
Washington's Birthday Floating Holiday (See Sec. 3.4(h)
Civil Rights' Day & Sec. 3.5(f))
Veterans Day Memorial Day
Thanksgiving Day Independence Day
Day After Thanksgiving Floating Holiday (See Sec.3.5 (f))
Christmas Labor Day
(a) As used in this section, the word "Holiday" means the
above named holidays or the day upon which they are
celebrated. If a holiday falls on Sunday, but is
celebrated on Monday, Monday shall be deemed the holiday.
(b) As used in this section, "Holiday Pay" means eight hours
pay at the employee's regular straight-time rate of pay.
(c) If a holiday falls on a day on which an employee is
regularly scheduled to work and he does not work because
of the holiday, he shall receive the amount of pay he
would have received if he had worked his regular schedule
of hours on that day without its being a holiday.
(d) If a holiday falls on one of the first five days that an
employee is regularly scheduled to work during a payroll
week, he shall receive Holiday Pay plus double time for
each hour worked.
(e) If a holiday falls on a day on which an employee is not
regularly scheduled to work and he is called in to work
on such a day, he shall receive Holiday Pay plus two
times his straight-time rate for each of the first
eight hours worked and three times his straight time
rate for each hour worked beyond eight.
(f) If a holiday falls on a day on which an employee is not
regularly scheduled to work and he does not work on such
a holiday, he shall receive Holiday Pay or by mutual
agreement a day off in lieu of such Holiday Pay; provided,
however, that the Company shall have no obligation to
grant a particular day off if the granting of such day
off would require the Company to pay a premium rate of
pay to another employee to fill in for the employee
taking the day off.
(g) The above-described holiday allowances are available
only to employees who have worked their last-scheduled
workday before the holiday and the first-scheduled
workday after the holiday, unless the employee's absence
is for a justifiable reason as determined by the Company.
(h) A Floating Holiday will be given each even numbered year
to be taken between January 1 and June 1 of that year,
subject to the same provisions of this Agreement as any
other designated holiday, and subject to Section 3.5(f).
3.5 Vacations
(a) Employees shall be granted vacations with pay at the
employee's regular rate based upon their years of
continuous service. An employee who has completed at
least six months, but less than twelve months, of
continuous service in the calendar year of his employ-
ment shall be entitled to one week's vacation (5
working days) with pay, plus one additional day with
pay for each full month worked in excess of six months,
the total vacation not to exceed ten full days in that
calendar year. Employees who are active members of the
Union on May 31, 1994, and who have completed one year
or more of continuous service by said date, shall receive
vacation in accordance with the following schedule:
Years of
Continuous Service Amount of Vacation
1 year 2 weeks
5 years 3 weeks
10 years 4 weeks
15 years 5 weeks
20 years 5 weeks plus 1 day
21 years 5 weeks plus 2 days
22 years 5 weeks plus 3 days
23 years 5 weeks plus 4 days
24 years 6 weeks
Employees who join the Union after May 31, 1994, and
who have completed one year or more of continuous
service shall receive vacation in accordance with the
following schedule:
Years of
Continuous Service Amount of Vacation
1 year 2 weeks
5 years 3 weeks
10 years 4 weeks
18 years 5 weeks
(b) In order to be eligible for full vacation pay in the
next calendar year, an employee must have worked in
at least twenty-six (26) different work weeks in the
current calendar year. Employees who work in less than
twenty-six (26) different work-weeks shall have their
vacation prorated based on the following formula: (the
number of weeks worked divided by 26) times their full
annual vacation amount.
(c) Vacations shall be without duplication, shall not be
cumulative from year to year and shall be taken during
each calendar year at times or from time to time appointed
by the Company after consideration of the requirements
of the Company's business, employees' preferences, and
preferential rights of employees with the longest length
of service.
(d) If a holiday, as defined in Section 3.4 above, shall
fall within an employee's vacation period, the employee
shall be entitled to an extra day's vacation or the
normal day's pay he would have received were he not on
vacation at the election of the Company; if the Company
elects the extra day's vacation it shall be taken at a
time designated by the Company.
(e) Each employee shall have the right during the period
from January 1 through April 30 of each year to express
in writing his desire as to the scheduling of his
vacation. Length of continuous service shall govern
the order in which such preferences shall be considered.
(f) Unscheduled vacation days available to an employee and
an employee's floating holiday may only be taken upon
forty-eight (48) hours advance request, unless in the
judgment of the Company the work schedule will permit
lesser advance notice.
(g) A request for vacation in excess of two (2) weeks will
be considered on an individual basis; taking into
account the Company's operating requirements. An
employee will receive written confirmation of their
vacation approval or denial within a reasonable time
from request.
3.6 Assignment of Overtime Work
When practicable, overtime work will be distributed equally
among all employees of the department concerned. Those
assigned to work on planned weekend overtime will be notified
as soon as reasonably possible as to the hours to be worked.
Work schedule will be confirmed by the end of the work day on
the last scheduled work day of that week. In the event that
the planned overtime has been scheduled, but has to be canceled
because of bad weather or other causes, the Company will attempt
to give twenty four (24) hours notice. If the planned overtime
is called off before the employee reports to work, two (2)
hours of straight time will be paid. If the planned overtime
is called off after the employee reports to work, the employee
will be paid for a callout as described in article 3.3(a).
The Company may, at its discretion, assign alternate work in
place of the planned overtime. Stand-by men will not be
automatically excluded from participation in planned jobs,
but the determination to include or exclude a stand-by man
from a given planned job will be made by management in a
reasonable and consistent manner. It is understood and agreed
that the Union will cooperate fully in the implementation of
this Section.
3.7 Temporary Up-Grading
When an employee is temporarily assigned to a higher wage
classification for a period of two hours or more, he shall
receive the rate for such classification provided under
Schedule of Wages attached.
Whenever a Lineworker I is put in charge of a line crew of
one or more other employees for a period of two hours or more,
he shall receive the rate of pay of a Working Foreman and
shall be entitled to said rate of pay if the crew does not
do outdoor work due to inclement weather.
3.8 Inclement Weather
Except in cases of necessity or emergency, employees shall
not be required to do outdoor work when heat, cold, rain,
snow, wind, humidity or other inclement weather conditions
make such work unsafe.
The Operations Manager, or a representative designated by
him, will determine whether or not the weather conditions are
such that the crews will be sent into the field consistent
with safety. In the field, the Working Foreman (or Foreman)
of the crew shall make the decision as to whether or not his
crew shall stop work. Employees shall not lose any regular
pay because of failure to work outdoors due to inclement
weather. Meter Readers will not be required to read meters
during heavy snow or sleet or in any severe weather conditions
which would be considered detrimental to the safety of the
employee. The Company's decision shall, upon written
complaint filed with the Company within five days, be subject
to the grievance and arbitration provision of this Agreement.
3.9 Rubber Gloving
As of June 1, 1991, the Company may adopt the practice of
rubber gloving voltages up to and including 34.5 KV in line
work. Any employee classified as Lineworker I, II, or III as
of June 1, 1991, shall not be required to rubber glove voltages
in excess of 15 KV. To the extent the Company requires rubber
gloving of voltages between 15 KV and 34.5KV, the work shall
be carried out by volunteers within the Company who have
achieved Lineworker I status or by a Lineworker I who is hired
after June 1, 1991.
Lineworkers who were employees of the Company as of June 1,
1991 who volunteer for the 34.5 KV rubber gloving program
shall have the option of leaving the program within one year
from the day they volunteer, after the program goes online.
The Company upon receipt of written notice of that employee's
intent to leave the 34.5 KV rubber gloving program, will
reassign that Lineworker to the position held before entering
the 34.5 KV rubber gloving program within (30) days.
It has been further agreed that the Company will confer with
the Union with respect to appropriate safety rules for rubber
gloving voltages up to and including 34.5 KV in line work.
3.10 Employee Purchasing
The Company agrees to maintain uniform policy in relation
to purchase of merchandise by regular employees.
3.11 Equipment Provided by Company
The Company shall provide Linemen's equipment consisting
of climbing spurs, pads, and straps, body belts and safety
straps, pliers, connectors, skinning knives, leather gloves,
adjustable wrenches, rules and screwdrivers, and replacement
and renewals thereof. All linemen's equipment shall be and
remain the property of the Company. When renewals or
replacements are requested, the old equipment must be turned
in or its loss satisfactorily explained. All linemen's
equipment shall be left on the property of the Company when
not in use. The Company shall provide coveralls for use in
painting or other jobs requiring clothing protection, which
shall be kept at such places on the Company's property as the
Company decides.
3.12 Rest Period
If an employee is required to work sixteen (16) or more
consecutive hours, he will be allowed a period of eight (8)
hours off before returning to work unless an emergency arises
which makes it necessary for the Company to call him back to
work before the expiration of the eight (8) hour period. Any
part of the eight (8) hour period which extends into the
employee's normal work schedule will be paid for at normal
straight time rates.
If an employee is required to work beyond sixteen (16)
consecutive hours, he will be paid at double his straight
time rate for those hours worked beyond sixteen (16),
including normal schedule hours worked. If the employee does
not receive eight (8) hours off after having worked sixteen
(16) or more hours, his/her hours worked will be paid at
double time rates until the employee receives eight (8) hours
off. The employee is expected to take the eight (8) hour
period off, unless he is specifically told to report back to
work by the Company.Time allowed off for meals will be counted
in determining sixteen (16) consecutive hours worked for the
purpose of this Section. If an employee is called and reports
for work within two (2) hours of the time he went off duty,
the time off will not prevent the hours worked thereafter from
being considered as consecutive with the previous hours worked.
Employees who are required to work during scheduled or
unscheduled hours starting at midnight and ending at 5 a.m.
will be entitled to one hour of rest time for each hour worked
starting at midnight and ending at 5 a.m.. If such rest time
extends into the employee's normal workday, no reduction in
pay will be made for the hours overlapping the normal work-day.
Rest time extending into normal work schedule and having a
duration of two (2) hours or less will be taken at the end of
the day unless otherwise established by mutual agreement.
Rest time extending into normal work schedule and having a
duration of four (4) hours or less but more than two (2)
hours may, by mutual agreement, be taken at the end rather
than the beginning of the normal workday.
3.13 Military Leave
(a) The Company will abide by the laws of the United States
with respect to the re-employment of those of its
employees who have left or will leave their employment
with the Company to enter upon service with the armed
forces of the United States. When such absence from
their duties is compulsory, or results from enlistment
in anticipation of compulsory service, the period of
absence from their duties with this Company of those
re-employed under this Article shall be computed as
part of their total term of service with the Company
in determining their seniority, vacation, sickness
disability benefits, termination pay, and the amount of
retirement pension. The parties interpret said laws as
applying with equal force to all members of said armed
forces, including the Merchant Marine regardless of the
manner by which they may have become members thereof.
(b) The Company agrees to pay to a regular employee, while
on National Guard or Reserve annual two-week tour of
duty, the difference between the pay from National
Guard or Reserves and the regular pay while at work for
the Company for two (2) weeks of the tour of duty.
3.14 Stand-By
One qualified Lineworker will be assigned to stand-by duty
each week during the year. A list of Lineworkers will be
submitted, by the Union, one year in advance. Any changes to
this schedule shall be submitted, in writing, no less than
one week prior to the Lineworker going on stand-by, unless an
emergency situation arises and the Lineworker is unable to
cover. Lineworker and schedule to be approved by the
Operations Manager.
Stand-by duty consists of a qualified Lineworker remaining
within reach of a telephone and/or paging device for a period
of one week so that an employee on stand-by duty may be
notified to report for work in cases of emergency. Stand-by
duty does not require any interruption of an employee's normal
life except to the extent of making arrangements so that he
can be reached by telephone and/or paging device and report
within a reasonable driving time from the place the employee
normally reports for work.
Employees who accept stand-by duty shall be paid fourteen
(14) hours of straight time pay plus three (3) hours pay for
a week which includes a holiday. The stand-by Lineworker
will be provided with a vehicle.
3.15 Pay When Away From Home Overnight
When working outside the Concord Electric service area,
employees shall receive one dollar ($1.00) per hour above
their regular hourly rate, or the prevailing rate for the
area, whichever is higher.
The premium shall apply to all hours worked away from the
normal work area during the day on which the employee is
unable to return home, provided, however, that the minimum
premium pay for such day shall be twelve dollars ($12.00).
The one dollar ($1.00) hourly premium shall be added to the
regular straight-time rate of pay for determining overtime
rates of pay, but for no other purpose. This premium shall
not apply when attending a Company sponsored training course.
3.16 Leave of Absence
(a) Leave of Absence for Personal Reasons
An employee after one (1) year of continuous service
may be granted a leave of absence, the employee must
make a request in writing to his/her immediate supervisor.
The request must show a reason and the length of time
that will be required.
Requests for leave of absence will be considered if
the employee has used all their vacation in that calendar
year. A request will be considered on an individual
basis; taking into account the reason, service record,
and the Company's operating requirements.
Leaves of absence are normally without pay, however,
insured benefits may be continued only through special
arrangement.
Time spent on leave of absence shall be included in
determining length of service for seniority purposes only.
(b) Leave of Absence for Union Officials
Time off without pay shall be granted, upon request
of the Union, to Union officials and/or duly elected
delegates to attend the International Convention, for
the purpose of attending Conventions of IBEW, or to
attend other conferences involving the Local Union,
provided that (a) the absence of the employee shall not,
in the opinion of the Company, interfere with the
Company's operations or cause undue hardships to other
employees, and (b) provided that the request for such
time off shall be made as far in advance as possible,
but in no case less than two (2) weeks in advance.
Maximum duration per occurrence to be one (1) week.
3.17 Absence Due to Death in the Family
In the event of death of a member of the immediate family
of an employee, the Company will grant reasonable time off
without loss of normal straight time compensation for all
scheduled work days, up to three (3) consecutive workdays,
falling within the period from the date of death through the
date of the funeral. The immediate family is defined as wife,
husband, children, step-children, sister, brother, parents,
step-parents, parents-in-law, grandparents, or in the immediate
household. For other members of the family, grandchildren,
aunts and uncles, one (1) day without loss of pay will be
granted if the funeral is held on a scheduled work day.
When there are unusual circumstances in individual cases,
time off without loss of pay may be granted subject to the
discretion of management.
3.18 Temporary Assignments Outside of the Company's Service Area
Work Assignments with utilities outside of the Company's
service area are voluntary except when the utility is an
affiliate of Unitil Corporation. If adequate volunteers
cannot be obtained for work assignments at Unitil affiliates,
personnel will be assigned with forty-eight (48) hours notice,
except in cases of emergency.
Employees will be paid for travel time external of the
eight hour day at the appropriate overtime rate for all planned
work. The "Minimum Pay for Employees Called In", Section 3.3
in the Contract, will not apply. Transportation will be
provided if requested. The rate of pay shall be in accordance
with this agreement or the prevailing wage where they are
assigned, which ever is higher.
If an employee works outside the service area and is required
to stay overnight, Section 3.15 "Pay When Away From Home
Overnight" will apply. The employee will be paid the same as
when working within the service area except that straight time
rates will be paid for rest time.
This provision does not apply to assignments classed as
nonworking (examples: training, schools, meetings, etc.).
3.19 Utility Lineworker I
As of June 1, 1994, the Company will create a Utility
Lineworker I position. Any employee classified as Lineworker
I, II or III as of June 1, 1994, shall not be required to
cover the position or hours of the Utility Lineworker I,
unless voluntary or unless an employee bids for the position.
ARTICLE 4
ANSWERING SERVICE
The Company reserves the right to provide an outside
telephone answering service for the hours of 11 p.m. to 7
a.m., Monday through Friday; and from 11 p.m. Friday to 7
a.m. Monday and on holidays observed by the Company.
ARTICLE 5
RETIREMENT PLAN
During the effective period of this Agreement, the Company
will pay retirement benefits in accordance with the Unitil
Corporation Retirement Plan, effective January 1, 1985, the
appropriate details of which are attached hereto and contained
in the Company publication Employee Benefit Book, a copy of
which will be provided to all employees covered by this
Agreement and to the Local Union, all of which are incorporated
herein by reference. An employee may retire at a reduced
Schedule of benefits prior to Normal Retirement Date of age
65, as will be stipulated in the aforementioned benefits
booklet. The Company agrees that no change in the retirement
plan will be made without prior notification to the Union.
ARTICLE 6
GROUP INSURANCE
During the effective period of this Agreement, the Company
will maintain group insurance coverages as follows:
(a) Life, (b) Accidental Death and Dismemberment, (c) Dental,
(d) Long Term Disability and, (e) Major Medical. The company
reserves the right to change insurance carriers at any time,
so long as the financial benefits provided by any new carrier
are at least equal to those currently provided, and agrees that
no change in the group insurance plan will be made without prior
notification to the Union. Appropriate details of the terms of
existing contracts are attached hereto and contained in the
Company publication Employee Benefit Book, a copy of which
will be provided to all employees covered by this Agreement
and to the Local Union, all of which are incorporated herein
by reference. The cost of the foresaid group insurance coverages
is to be paid by the Company.
ARTICLE 7
PROMOTIONS, DEMOTIONS AND FURLOUGHS
7.1 Promotions
Selection of regular employees for promotion or advancement
within the bargaining unit, for demotion for furloughing
because of a reduction in forces, shall be based upon
qualifications and seniority. If the employee is qualified
for the job in cases of promotion, advancement and demotion,
seniority shall govern. An employees un-bridged Union seniority
and qualifications shall govern in cases of furloughing and
bumping. The Union and the Company recognize that it may be
necessary to make exceptions in the application of the
foregoing seniority provisions by mutual agreement in order
to insure efficient operation of the Company's business.
The determination by the Company as to qualifications for
promotions to supervisory positions shall not be subject to
arbitration under Article 11.
If and when there is an addition in forces in any department
covered by this Agreement, employees who have been furloughed
from such department shall be given preference over other
persons, and employees who have been furloughed from any other
department covered by this Agreement shall be given preference
over persons not formerly in the employ of the Company, if in
either case they are qualified as provided in this Article.
When a vacancy or the creation of a new position necessitates
promotion of an employee or the hiring of a new employee, the
Company shall post notices at locations accessible to the
employees, such notices to remain posted for ten (10) calendar
days, within which time employees may apply in writing to the
supervisor or official of the Company designated in the notice.
If the Company decides not to fill a vacancy, it will so notify
the Union within two (2) weeks of the date of vacancy; if the
Company decides to fill a vacancy it will post notices within
two (2) weeks of the date the vacancy occurs. The notices
shall set forth the classification of the position to be
filled, an outline of the duties, the hours and days of work,
the ultimate wage rate, the date on which the notice is posted,
and the last day for filing applications. Applicants who have
special qualifications shall describe such qualifications
briefly in their application.
When an employee is promoted or transferred to another
position but fails to qualify, he shall be reassigned to the
class from which he was promoted or transferred. If the
Company determines that the employee is qualified to perform
the work in the class to which he was promoted or transferred,
but the employee desires to return to his previous class of
work, the Company shall not reassign him until there is a
vacancy in such previous class.
7.2 Temporary Assignment
The Company may assign anyone to fill a vacancy or new
position temporarily, pending the posting of notices and the
consideration of applications.
The Company may also assign anyone to perform temporary
work or to replace an absent employee without regard to the
foregoing provisions of this Article.
7.3 Retrogression
If a regular full-time employee becomes partially incapacitated
by reason of age or non-compensable disability and thus is
unable to perform fully the duties of his job classification,
the Company will endeavor to find him other work by placing
him in the highest classification in which he is able to
perform the work assigned and in which there is an available
opening. The employee shall be given a reasonable opportunity
for training to fill an available job which carries a rate of
pay more equal to his original rate, and if he becomes qualified
for such available job he shall be placed in that classification.
An assignment made under this paragraph shall continue until
the employee's normal retirement date, provided that he remains
qualified to perform the duties required of his job
classification. During the period of assignment under this
paragraph employees shall be paid at the maximum rate for the
classification to which they are assigned, except that
employees who have completed ten (10) or more years of
continuous service at the time of assignment shall be paid
not less than the percentage of their former rates indicated
below, such percentage to remain the same for the balance of
each employee's active employment. When the rates of pay are
adjusted by a general wage adjustment, employees so classified
will receive an adjustment in pay in the amount by which the
employees retrogressed classification is adjusted.
Years of Service
At Time of Assignment Percentage
25 or more 100%
20 - 24 95%
15 - 19 85%
10 - 14 75%
The provisions of the foregoing paragraph shall not impair
the right of the Company to require an employee to retire
under the Company's Retirement Plan.
7.4 Termination Pay
If an employee's employment with the Company is terminated
due to a reduction in work force resulting from automation or
the closing of an operation, he shall, unless he is retired
with pension benefits under the Retirement Plan, be entitled
to receive one week's pay for each six months (calculated to
the nearest six month period) of service with the Company,
provided, however, that an employee receiving termination pay
shall not be entitled to be rehired under the provisions of
the second paragraph of Section 7.1 of this Article. A Union
employee who is terminated will have the option to defer
Termination Pay for up to one (1) year.
ARTICLE 8
CONTRACTING CREWS
The Company shall not use outside contracting or affiliate
companies to perform work regularly done by its regular
employees if so doing would result in any regular employee
being laid off or transferred to another job. This provision
does not preclude contractor crews from performing work during
emergencies and during times when Company employees are not
immediately available.
ARTICLE 9
SUSPENSION AND DISCHARGES
Upon written request of the Union made within seven days
from the date upon which an employee has been suspended or
discharged, the Company shall grant a hearing to the employee
involved. Upon receipt of the foregoing request in writing,
the Company will inform the Union of the reason for the
suspension or discharge. The hearing will be conducted by
the department head or superior officer of the Company, and
if exonerated, the employee will be reinstated without
prejudice and compensated for loss in wages. The hearing
shall be conducted in accordance with the method of adjusting
grievances as provided in Article 11 herein.
ARTICLE 10
NO STRIKES OR LOCKOUTS
The Union agrees that it will not authorize a strike or work
stop-page, and the Company agrees that it will not engage in
a lockout, because of disputes over matters relating to this
Agreement. The Union further agrees that it will take every
reasonable means which are within its powers to induce
employees engaged in a strike or work stoppage in violation
of this Agreement to return to work. There shall be no
responsibility on the part of the Union, its officers,
representatives or affiliates, for any strike or other
interruption of work unless specifically provided in this
paragraph.
ARTICLE 11
ADJUSTMENTS OF DISPUTES AND GRIEVANCES AND ARBITRATION
Any dispute or grievance arising during the term of this
Agreement relating to the meaning, interpretation, construction
or application of this Agreement shall be settled in the
following manner:
STEP 1. The specific details of the dispute or grievance
shall be submitted to an authorized representative of the
other party promptly after the occurrence of the facts giving
rise to such dispute or grievance.
STEP 2. The dispute or grievance may be settled by agreement
between the authorized representatives of both parties. The
resultant agreement or failure to agree shall be stated in
writing by the party first notified to the party who submitted
the dispute or grievance within fifteen (15) working days of
the date of original submission.
STEP 3. If the grievance is not settled in Step 2, either
party may, within thirty (30) working days of the decision
rendered in Step 2, appeal in writing for a decision by the
Vice President and General Manager of the Company and the
Business Manager of the Union, or representatives designated
by them. An international representative of IBEW may be
present at this step of the grievance procedure only to assist
the local union. They shall render their agreement or failure
to agree in writing within fifteen (15) working days of the
date of the appeal to them. The time limits specified in the
first three steps hereof, may be extended by mutual agreement
of the parties involved.
STEP 4. ARBITRATION. If the Company and the Union are
unable to settle a dispute or grievance as above provided, the
dispute or grievance may be referred to arbitration by either
party as follows: The Union and the Company shall agree upon
an arbitrator within ten days, but if they are unable to agree
upon an arbitrator within ten days, the arbitrator shall be
appointed by the American Arbitration Association. The
decision of the Arbitrator shall be final and conclusively
binding upon the parties. The services and expenses of the
Arbitrator shall be shared equally by the Company and the
Union. It is agreed that there shall be no obligation to
arbitrate a renewal of this Agreement or a change in, or
supplement to, this Agreement or to arbitrate any matter not
covered by this Agreement or some provision thereof. No
arbitration decision shall be binding beyond the life of this
Agreement.
The Operations Manager and the Chief Steward of the said
Local Union shall meet from time to time at the request of
either party for the purpose of discussing any matter coming
within the scope of this Agreement.
All meetings between the Operations Manager and the Chief
Steward of the Union shall be held at the Company Office at
the convenience of both parties if possible.
ARTICLE 12
NOTICES AND REQUESTS
12.1 Mailing Requirements
Except where specifically provided otherwise herein, all
notices and requests shall be deemed to have been fully and
completely served or made by the Company when sent by certified
mail addressed to the Chief Steward at his current home address
with a copy to be sent to the office of the Local Union, and by
the Union when sent by certified mail to Unitil/Concord Electric
Company, at One McGuire Street, Concord, New Hampshire 03301,
unless either party hereto shall give notice of a different
address at least five (5) days before any such notice or
request is mailed.
12.2 Bulletin Boards
The Company shall permit reasonable use of bulletin boards
for posting officially signed Union bulletins.
ARTICLE 13
WAGE AND WORK AGREEMENT
The Union agrees that its members employed by the Company
will work for the Company upon the terms, conditions and
attached wage schedule set forth in this Agreement during its
life.
ARTICLE 14
DISABILITY BENEFITS AND SAFETY
14.1 Sick Pay
Employees covered by this Agreement shall be entitled to
two weeks sick pay during the first year of employment. After
one year of employment, employees will be entitled to up to
twenty-six (26) weeks of sick pay.
The Company shall have the right, in each instance in which
an employee claims sick pay under the provision of this Article,
to satisfy itself of the fact of sickness requiring absence by
the certificate of a competent physician, examination, or
otherwise. If a holiday occurs during the full-pay period,
while an employee is sick, extend the full-pay period eight (8)
hours or one (1) day, if the employee is still out sick.
14.2 Worker's Compensation
Time lost on account of industrial accident will not be
regarded as sickness. The Company agrees to pay, during
disability due to industrial accidents, the difference
between the amount of compensation from Worker's Compensation
and full pay for a period not to exceed twenty-six (26)
weeks. After the first twenty-six (26) weeks, the employee
will be eligible for long term disability benefits of between
10% and 60% of base pay. Said amount shall not exceed the
regular take home pay that would be received by an individual
without regard to the injury suffered.
14.3 Safety
The Company will continue to make reasonable regulations
for the safety and health of its employees during their hours
of employment. Representatives of the Company and the Union
shall meet from time to time at the request of either party to
discuss such regulations. The Company hereby retains the right
to require an employee to submit to a reasonable medical
examination by a physician, who shall be mutually agreed upon
between the Company and the Union, if the Company has a
reasonable belief that the employee's physical or mental
condition is placing himself or others in jeopardy.
The union shall receive copies of all accident reports
involving injury or incident to their members.
ARTICLE 15
CONSOLIDATION OR MERGER
In case of consolidation or merger of the Company with any
other company, or sale of all or a substantial part of its
properties, the provisions of the Agreement will continue to
apply to the extent legally permissible to the employees
covered by the terms of this Agreement, and the Company will
use its best efforts to require any other Company involved in
the consolidation or merger to assume this Agreement to the
extent legally possible.
ARTICLE 16
NO DISCRIMINATION
The Company and the Union agree that the operation or
application of various provisions of this Agreement shall in
no way serve to discriminate against any individual with
respect to his compensation, terms, conditions, or privileges
of employment or otherwise affect his status as an employee
because of such individual's age, race, color, creed, sex,
sexual orientation, veteran status, disability status as
defined in the Americans With Disabilities Act, national
origin or ancestry, unless based on a bona fide occupational
qualification.
When used in Agreement, the masculine pronoun shall be deemed
to include the feminine equivalent thereof.
ARTICLE 17
DATE AND TERM - TERMINATION - AMENDMENT
17.1 Effective Date and Term
This Agreement, when signed by the Company and the Local
Union or their authorized representatives and approved by the
International Office of the Union, shall take effect as of
June 1, 1997 with increased wages to take effect in accordance
with the Schedule of Wages appended hereto and made a part
hereof, and shall remain in effect through May 31, 2000. It
shall continue in effect from year to year thereafter, from
June 1 of each year through May 31 of the following year,
unless changed or terminated in the manner provided herein.
17.2 Negotiations - Changes or Termination
Either party desiring to change or terminate this Agreement
must notify the other in writing at least sixty (60) days
prior to June 1st of any year after 1998. When notice for
changes only is given, the nature of changes desired shall be
specified in the notice; however, the listing of changes shall
not preclude submission of other changes desired during
negotiation. If the parties cannot agree upon changes, either
party shall have a right to terminate the contract.
17.3 Amending Agreement During Term
This Agreement shall be subject to amendment at any time by
mutual consent of the parties hereto. Any such amendment
agreed upon shall be reduced to writing, signed by the parties
hereto and approved by the International Office of the Union.
IN TESTIMONY WHEREOF the parties hereto have executed this Agreement
this day and year first above written.
For CONCORD ELECTRIC COMPANY
By/s/ Richard M. Heath
Vice President and General Manager
For the employees of CONCORD ELECTRIC COMPANY covered by this
Agreement and INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS AND
LOCAL UNION NO. 1837.
By/s/ Joseph E. Landry
Chief Steward,
By/s/ Kerry R. Guptill
Assistant Business Manager
APPROVED International Office - I.B.E.W.
J.J. Barry, President ___________________. This approval does not
make the International a party to this agreement.
Unitil/CONCORD ELECTRIC COMPANY
RETIREMENT PLAN
A retirement plan is provided for employees and is briefly
outlined below. In the event there shall be enacted state or
federal legislation which conflict with the terms of the below
plan, state or federal legislation will govern.
The word "wages" as hereinafter used, shall mean straight-
time wages, and shall include no daily or weekly overtime.
Eligibility
Any employee of the Company shall or may retire on a
retirement benefit subject to the provisions and conditions
hereinafter set forth:
1. An employee who has attained the Normal Retirement Date
(first day of the month in which occurs an employee's 65th
birthday) and ceases active service with the Company shall
be entitled to a pension.
2. An employee shall be entitled to retire before attaining
the age of sixty-five (65) years if the employee becomes
unable to perform such employee's work for the Company
because of a permanent disability. In order to be eligible
for a disability pension the employee must:
a. Be totally disabled
b. The disability must continue for at least six (6)
months.
c. The employee must be at least thirty-eight (38) years of
age with twenty (20) years of Vested Service.
d. He must qualify for disability benefits under the Social
Security Act in effect at the time.
e. The disability must not have been incurred while the
employee was engaged in:
(1) criminal act
(2) service in the armed forces
(3) habitual drunkenness or addiction to a narcotic
(4) intentional self-inflicted injury
(5) act or disease resulting during the course of
employment with an employer other than the company
Further, that the disability pension may be discontinued
should the employee refuse to be examined by a physician
designated by the Plan. The pension would be computed on the
basis of the accrual to date of such retirement with no
actuarial reduction.
3. An employee with fifteen (15) years of Vested Service and
who has attained age fifty-five (55) may elect to retire
on an Early Retirement Date, which may be the first day
of any month thereafter prior to the employee's normal
Retirement Date. The Company requests that the employee
notify the Company in writing at least ninety (90) days
prior to such date of intention to retire early.
Determination of Amount of Normal Retirement Benefits
A. Basis
The basis for the computation of the amount of the retirement
benefit shall be the employee's average monthly wages for any
consecutive five-year period during the employee's last twenty
(20) years of Credited Service, whichever amount is larger.
B. Amount
Based upon average monthly wages determined as above stated,
the employee shall be eligible for a monthly retirement benefit
payable in advance, computed as follows:
1. For each of the first twenty full years of Credited
Service - 2% (two percent) of said average monthly wage.
2. For each full year of Credited Service in excess of
twenty full years and not in excess of thirty full
years: an additional 1% (one percent) of said average
monthly wages.
3. For each full year of Credited Service in excess of
thirty years: an additional 1/2 of 1% (one-half percent)
of said average monthly wages reduced by:
4. Fifty percent (50%) of such employee's Primary Social
Security Benefit Payable under the Federal Social
Security Act in effect on December 31, 1970: and
5. The amount of monthly retirement benefit, if any, to
which he is entitled under any retirement plan
maintained by a former employer for which credit is
given under the Plan. These former employers include
Exeter and Hampton Electric Company, Fitchburg Gas and
Electric Light Company, Unitil Service Corp., and may
also include any other companies that become part of
the Unitil System of companies in the future.
Determination of Amount of Early Retirement Benefits
The monthly amount of Early Retirement Benefit payable to
an employee retiring on his Early Retirement Date shall be
equal to the employee's Normal Retirement Benefit based on
Credited Service to his Early Retirement Date, reduced on the
basis of the following schedule:
Early Retirement
Early Percent Reduction of Expressed as % of
Retirement Normal Retirement Normal Retirement
Age Benefits Benefits
64 0% 100%
63 0% 100%
62 0% 100%
61 0% 100%
60 0% 100%
59 5% 95%
58 10% 90%
57 15% 85%
56 20% 80%
55 25% 75%
Normal Form of Benefits
A. Monthly Annuity for Life
An employee who is unmarried at retirement will receive
a retirement benefit as a monthly annuity for as long as
the employee lives. Upon death, no death benefits will
be payable to any beneficiary.
B. Joint and Survivor Annuity with Spouse
An employee who is married at retirement and who does
not elect to receive the retirement benefit as a monthly
annuity for life, or as one of the Optional Forms of
Benefits, will receive an actuarial reduced benefit for
as long as the employee lives with fifty percent (50%) of
such reduced benefit payable after death to the employee's
spouse for as long as such spouse lives. The reduction
is based upon the life expectancies of the employee and
spouse on the employee's retirement date.
Optional Form of Benefits
A. Contingent Annuitant Option
An employee may elect, instead of his retirement benefit
as heretofore provided, to have reduced retirement benefits
made commencing on the employee's retirement date and after
death such reduced payments, or any lesser amount selected
by the employee, will be continued to the designated
beneficiary, if living after the employee's death, for the
beneficiary's lifetime.
B. Ten (10) Year Certain and Life Annuity
An employee may elect that the retirement benefit,
payable on the retirement date, be reduced with the
guarantee that not less than one hundred and twenty (120)
monthly payments will be made either to the employee or the
named surviving beneficiary who survives him.
C. Five (5) Year Certain and Life Annuity
An employee may elect that the retirement benefit,
payable on the retirement date, be reduced with the
guarantee that not less than sixty (60) monthly payments
will be made either to the employee or the named surviving
beneficiary. If any of the above options are elected, the
provisions for a minimum annual retirement benefit shall
only apply prior to any reductions under the above
options.
Minimum Retirement Benefit
In no event will the Company pay any employee who retires
with fifteen (15) years of Vested Service an annual normal
retirement benefit of less than $1,200 in addition to such
sums, if any, as the employee may receive as "Primary
Insurance Benefits" under the Federal Social Security Act and
as unemployment compensation.
Spouse's Benefits
A spouse's Benefit shall be payable to an employee's
spouse in the event of the employee's death prior to the
Normal Retirement Date, provided at least fifteen (15) years
of Vested Service was completed and has been married to the
surviving spouse for at least one (1) year.
The monthly amount of the Spouse's Benefit shall be one-
half of the amount of Retirement Benefit which would have
been payable had the deceased employee retired, rather than
died, on the day before death, reduced, however, by one
percent (1%) for each full year in excess of two (2) by
which the deceased employee's age exceed his Spouse's age.
A minimum of fifty dollars ($50.00) per month shall be
payable. Spouse's Benefit payments shall terminate with
the last payment due preceding death.
Deferred Termination Benefit
An employee who terminates his employment after five (5)
or more years of Vested Service shall be entitled to a
Deferred Termination Benefit equal to that portion of his
Normal Retirement Benefit accrued to the date employment
terminates.
A Deferred Termination Benefit shall commence on an
employee's Normal Retirement Date. A reduced Deferred
Termination Benefit is available as early as age 55.
The specific details of the retirement plan will be as
described in the retirement plan documents. In the event
of any conflict between this summary and the Plan Document,
The Plan Document will govern. While the Company expects to
continue indefinitely the benefits provided for under the
retirement plan, it agrees to continue them only for the term
of the Contract with the employees of the Concord Electric
Company covered by the Agreement and the International
Brotherhood of Electrical Workers and Local Union No. 1837,
Unit #1, dated June 1, 1997.
In the event there shall be enacted after June 1, 1997,
state or federal legislation which conflicts with the Pension
Plan (Group Insurance) provisions, outlined above, the state
or federal legislation will govern.
Unitil/CONCORD ELECTRIC COMPANY
GROUP INSURANCE
There shall be maintained a Group Life Insurance and Group
Accident and Sickness program with the following benefits:
Term Life Insurance Plan
Employees are eligible for group life insurance coverage
equivalent to two times their basic annual wages (basic
hourly wage time 2080) reduced to the next lower full
thousand. Concord Electric Company pays insurance premium
cost.
Accidental Death And Dismemberment
Employees are eligible for accidental death and
dismemberment coverages up to a maximum of one times their
basic annual wages (as described above), reduced to the next
lower full thousand.
Concord Electric Company pays insurance premium cost.
Insurance After Retirement
Employees who retire from active service may continue
group life insurance of $7,500.00
Concord Electric Company pays insurance premium cost
Medical Insurance
Employees will have the choice of two medical plans -- a
Point of Service Plan and an Indemnity Plan:
Point of Service Plan:
Provides employees with a choice each time there is a
claim between receiving HMO style benefits or indemnity
style benefits.
HMO Style Benefits -- Benefits received from a Primary
Care Physician or as a result of a referral from the
Primary Care Physician are subject to a $5 copayment.
Indemnity Style Benefits -- Benefits that are received
without a referral from the employee's (or dependent's)
Primary Care Physician are subject to an annual $250/
person ($500/family) deductible, followed by 80%
coverage for the next $5,000 of covered expenses per
person ($1,000 per person in coinsurance payments).
Prescription drugs are subject to a $10 copayment per
30 day supply of brand name drug, a $5 copayment per
30 day supply of generic drug, or a $5 copayment per
90 day supply of drugs ordered via mail order
prescription service.
Indemnity Plan
Provides employees with comprehensive coverage for
medically necessary services and expenses received from
almost any doctor or hospital. Employees are responsible
for the first $100 of covered medical expenses per person
($300 per family) each calendar year. After the
deductible is met, the plan pays 80% of the next $2,000
of covered medical expenses per person ($400 per person
in coinsurance payments). Covered medical expenses in
excess of the deductible and coinsured amounts are paid-
in-full for the remainder of the calendar year.
Prescription drugs are subject to a $10 copayment per
30 day supply of brand name drug, a $5 copayment per 30
day supply of generic drug, or a $5 copayment per 90 day
supply of drugs ordered via mail order prescription
service.
Group Dental Plan
Group Dental Care Insurance is provided for employees
and their eligible dependents and is briefly outlined as
follows:
Deductible
There is one $25.00 deductible per person per
Calendar Year with a maximum of $75.00 per family
each Calendar Year. This deductible does not apply to
Coverage I and IV benefits, but does apply to Coverage
II and III benefits.
Coverage I - Diagnostic and Preventative, 100% Payment.
Diagnostic
Initial Examination;
Examinations to determine the required dental
treatment two times in a calendar year;
Full Mouth/Panorex X-Rays once in a three (3)
year period;
Bitewing X-Rays once in a calendar year;
X-Rays of individual teeth as necessary.
Preventative
Cleanings two (2) times in a calendar year;
Fluoride - once in a calendar year (age limit 19);
Space Maintainers.
Coverage II - Restorative, after deductible, 80% paid
by insurance, 20% paid by patient.
Amalgam, Silicate and Acrylic restorations;
Oral Surgery - Extractions;
Endodontics - Pupal therapy; root canal therapy;
Periodontics - Treatment of gum disease, includes
periodontal cleanings;
Denture Repair - Repair of removable denture to
its original condition;
Emergency Treatment - Palliative.
Coverage III - After deductible, 50% paid by insurance,
50% by patient.
Crowns and build-ups for crowns;
First placement of inlays and bridges;
First placement of partial or full dentures.
Coverage IV - Orthodontia, 50% paid by insurance,
50% paid by patient.
Maximum Contract Year Benefit -
The maximum amount which the plan will pay is $750
per person per Calendar Year. Orthodontia lifetime
maximum is $1,000 per person.
This benefit summary is for informational purposes
only. The benefits are described more fully in the
applicable master group insurance policy. The extent
of coverage for each individual is governed at all
times by that document. In the event of any conflict
between this summary and the plan documents, the plan
document will govern.
While the Company expects to continue indefinitely
the benefits provided under these plans, it agrees to
continue them only for the term of the Contract with
employees of Concord Electric Company covered by the
Agreement and International Brotherhood of Electrical
Workers and Local Union No. 1837, dated June 1, 1997.
Supplemental Group Term Life Insurance
Employees will have the option of purchasing
supplemental group term life insurance equal to 1x,
2x or 3x their base pay (hourly wage times 2080), and
pay the premiums through payroll deduction. The first
$100,000 coverage will be issued without any evidence
of insurability if the employee signs up for coverage
when initially eligible. Evidence of insurability may
be required by the insurance company: 1) If the
employee declines coverage and later decides to enroll
in the plan after the initial eligibility period,
2) if the employee decides to increase coverage as a
multiple of base pay, or 3) for any coverage exceeding
$100,000.
Supplemental Accidental Death and Dismemberment
Employees will have the option of purchasing
individual or family supplemental accidental death
and dismemberment insurance in increments of $10,000
and pay the premiums through payroll deduction.
Long Term Care Insurance
Employees will have the option of purchasing long
term care insurance for nursing home and home health
care benefits. Such policies can cover the employee,
the employee's spouse, parents or in-laws, and the
employee will receive the benefit of a group discount
and pay the premiums through payroll deduction.
Employees will have the opportunity to design individual
policies that meet their individual needs.
EXHIBIT A
Unitil/CONCORD ELECTRIC COMPANY
SCHEDULE OF WAGES
Pay Period June 1, 1997 through May 31, 2000
Contract Period June 1, 1997 through May 31, 2000
Rate Effective
6/01/97 5/31/98 5/30/99
Line Department
Lineworker I - RG 34.5 kV 21.97 22.63 23.25
Utility Lineworker I 21.71 22.35 22.95
Lineworker I 21.31 21.95 22.55
Lineworker II
Fourth 6 months 18.32 18.87 19.39
Third 6 months 17.54 18.07 18.57
Second 6 months 16.66 17.16 17.63
First 6 months 16.19 16.68 17.14
Lineworker III
Second 6 months 15.52 15.99 16.43
First 6 months 14.58 15.02 15.43
Lineworker Apprentice
Second 6 months 14.36 14.79 15.20
First 6 months 14.12 14.54 14.94
Meter Department
Meter Mechanic I 19.32 19.90 20.45
Meter Mechanic II
(Third 16 months) 16.64 17.14 17.61
Meter Mechanic III
(Second 16 months) 15.15 15.60 16.03
Meter Mechanic Apprentice
(First 12 months) 13.52 13.93 14.31
Operation Technician I 18.32 18.87 19.39
Operation Technician II
(Second 16 months) 16.42 16.91 17.38
Operation Apprentice
(First 12 months) 14.75 15.19 15.61
Meter Worker I 15.81 16.28 16.73
Meter Worker II
(First 12 months) 14.98 15.43 15.85
Meter Reader I 14.98 15.43 15.85
Meter Reader II
(First 12 months) 14.28 14.71 15.11
Station Attendant
Station Attendant I 17.57 18.10 18.60
Station Attendant II
(First 12 months) 16.86 17.37 17.85
Maintenance Department
Automobile Mechanic I 18.73 19.29 19.82
Maintenance Worker 15.92 16.40 16.85
Utility Maintenance Worker 15.34 15.80 16.23
Stockroom
Stockclerk I 14.98 15.43 15.85
Stockclerk II
(First 12 months) 13.27 13.67 14.05
OFFICE
Operation Office Clerk 11.01 11.34 11.65
EXHIBIT B
Page 1 of 2
DUES DEDUCTION
I hereby authorize and direct Unitil/Concord Electric Company
to deduct union membership dues from my pay on a weekly basis.
The amount of dues to be deducted will be determined by the
Chief Steward of the Union in accordance with the by-laws of
Local Union 1837 and the Constitution of the International
Brotherhood of Electrical Workers.
The Chief Steward will notify the Company in writing of the
specific amount to be deducted for each Union member.
The Company will notify the Chief Steward of the Local Union
prior to, or contemporaneously with, any permanent hourly rate
change of a Union member that occurs during the life of this
agreement.
The Chief Steward shall notify the Company in writing of any
change in the amount to be deducted for any Union member and
such change will become effective with such member's next pay
check.
EXHIBIT B
Page 2 of 2
IBEW L0CAL 1837 DUES AUTHORIZATION AND DEDUCTIONS
Weekly
Member Dues Member's Signature Date
I CERTIFY THESE AMOUNTS ARE CORRECT AND IN ACCORDANCE WITH THE BY-LAWS
OF LOCAL UNION 1837 AND THE CONSTITUTION OF IBEW.
_______________________________ Date ________________
Chief Steward
NOTES
Safe practices depend upon human action
and, therefore the responsibility for them
rest primarily with the individuals.
In recognition of this, it is Company policy
to ask no employee or group of employees to
engage in unsafe activity or practices
or knowingly permit any employee to do so.
EXHIBIT 10.3
AGREEMENT made and entered into by FITCHBURG GAS AND ELECTRIC LIGHT
COMPANY, a Massachusetts corporation hereinafter called the "Company" and
THE BROTHERHOOD OF UTILITY WORKERS OF NEW ENGLAND, INCORPORATED, LOCAL NO.
340, thereof, and the employees of the Company who are now or may hereafter
become members of said Local, hereinafter called the "Brotherhood".
WITNESSETH that:
WHEREAS, the Brotherhood represents a majority of all employees of
the Company at its Fitchburg, Massachusetts plant, excluding
confidential employees, executives, foreman, crew foreman, and
all other supervisory employees who have authority to hire, promote,
discipline, discharge or effectively make such recommendations, and
has been designated by said majority to be the exclusive
representative of all said employees for the purposes of collective
bargaining with respect to rate of pay, wages, hours of employment
and other conditions of employment; and
WHEREAS, both the Company and the Brotherhood desire to promote
harmony and efficiency in the working forces so that the employees
and the Company may obtain mutual economic advantages consistent
with the duty of the Company as a public utility to provide at all
times an adequate and uninterrupted supply of electric and gas
services in the territory and communities which it serves.
NOW, THEREFORE:
As to wages to be paid by the Company, as to working conditions
involved in the Company's operations, and as to the application
of the principle of seniority to changes in the Company's forces,
the parties hereto, each by its duly authorized representatives,
agree as follows:
ARTICLE I
DEFINITIONS
The Company and the Brotherhood mutually agree that for the purpose of
this agreement, the following definitions apply:
Regular Employee - one who, subject to a six (6) months' probationary period,
is hired on a regular basis.
Temporary Employee - one who is hired for a specific job and/or period
of time but who it is not intended to become a regular employee as defined
above and whose employment is not intended to last for more than (six) 6
months. If his or her employment continues for more than six (6) months,
he or she becomes a "regular" employee as defined above.
Part-time Employee - an employee who is hired to work less than the
regularly scheduled workweek.
ARTICLE II
RECOGNITION OF BROTHERHOOD
The Brotherhood is hereby recognized as the exclusive representative of
all employees of the Company at its Fitchburg, Massachusetts plant,
excluding confidential employees, executives, foremen, crew foremen and all
other supervisory employees who have authority to hire, promote, discipline,
discharge or effectively make such recommendation for the purposes of
collective bargaining with respect to wages, hours of employment and other
conditions of employment.
ARTICLE III
BROTHERHOOD MEMBERSHIP REQUIREMENTS
The Company agrees that until the termination of this agreement it will
require as a condition of employment that all employees subject to this
agreement shall become members of the Brotherhood.
The Company agrees that it shall require as a condition of employment
that all new employees hereafter employed by the Company in any class of
work to which this agreement applies shall become members of the Brotherhood
after the thirtieth day following the beginning of their employment and
shall continue as members thereafter while this agreement is in effect and
their classification is subject to the terms of this agreement. The Company
and the Brotherhood mutually agree that this provision in no way affects the
other terms and conditions of employment applicable to temporary and
probationary employees set forth in this agreement.
Any employee who has been exempted from the Brotherhood membership requirement
under the provisions of this article but who is transferred or demoted while
this agreement is in effect to a class of work which is subject to the
Brotherhood membership requirement shall become a member of the Brotherhood
within thirty (30) days after the effective date of such transfer or demotion.
The provisions of this article shall not apply to anyone exempted from the
provisions of this agreement, nor to student engineers who may be assigned
from time to time to any of the departments of the Company.
In no event will any employee be required, as a condition of employment,
to become a member of the Brotherhood until after the thirtieth day
following the beginning of his or her employment or the effective date
of this article, whichever is the later.
Any employee of the Company who at any time while this agreement is in
effect has been performing a class of work which is subject to the
Brotherhood membership requirements of this Agreement, but who is
subsequently transferred or promoted to a class of work which is not
subject to the Brotherhood membership requirements of this Agreement
shall have the privilege of withdrawing from Brotherhood membership.
ARTICLE IV
REGULAR WAGES
Section 1. Effective on the date indicated therein, employees who
are receiving the ultimate rate of the class to which they are permanently
assigned shall be paid wages in accordance with the Schedule of Wages
showing classifications and the rated wage of each class. Said Schedule
of Wages of footnotes and accompanying paragraphs are attached hereto and
made a part hereof, and are set forth at pages 55 to 60, inclusive, hereof.
Section 2. If, upon the effective date of said schedule, an employee
is not receiving the ultimate rate of the class to which he or she is
permanently assigned, then, the present wage of such employee shall be
increased in an amount equal to the difference between the ultimate rate
of the class in effect at the time of the last prior wage schedule and
the ultimate rate of the class of the wage schedule effective herein.
Section 3. The following conditions shall control, limit, restrict
and govern the application of said schedule.
An employee, if awarded the next higher-rated job in the same roster
will receive the higher rate from the date of the award. In other cases
where an employee is awarded a bargaining unit job, the employee's rate
of pay shall be as follows:
(a) Twenty-five cents ($.25) per hour more than the employee's present rate
of pay or the rate of the new job, whichever is less, no later than one
week after the date of the award.
(b) Twenty-five cents ($.25) per hour more than the rate arrived at in (a)
above or the rate of the new job, whichever is less, thirty days from
the date of the award.
(c) The ultimate rate of the new job ninety (90) days from the date of the
award.
Section 4. Clerical Progression and Pay Plan (See Page 59) is not
subject to Section 3 above.
Section 5. New employees hired during the term of this agreement
will receive a starting wage that shall not be less than eighty-five per
cent (85%) of the ultimate rate for the class of work to which they are
assigned. When an employee has completed his or her probationary period,
the employee's rate of pay shall be subject to the provisions of paragraphs
(a), (b), and (c) of Section 3 above, substituting "six months anniversary
date" for "date of the award" in that Section.
Section 6. In no event shall the resulting wage from time to time
exceed the rated wage for the applicable class established by the Schedules
of Wages, attached hereto and made a part hereof.
ARTICLE V
OVERTIME COMPENSATION
Section 1. Employees subject to this agreement shall be paid wages at
the rate of time and one-half for all work that does not occur within their
regularly scheduled work day or week.
(a) Employees normally scheduled to work more or less than eight (8) hours
within a day shall be paid overtime at one and one-half times their regular
rate for all work that does not occur within such scheduled hours provided
that no employee shall be paid both daily and weekly overtime on account of
the same hours of overtime worked.
(b) Employees, when required to work on their regularly scheduled days of
relief, shall be paid overtime at the rate of one and one-half times their
regular rate, subject to the provision for double time on the second day of
relief which is the seventh day of work, a provision set forth in the
paragraphs following the schedule of wages attached hereto. "Regular rate",
for the purpose of this section, shall mean the regular hourly rate of the
employees.
Section 2. Employees subject to this agreement shall be paid a minimum
of three (3) hours at the time and one-half or overtime for actual time
worked, whichever is greater, for each period of time worked during
unscheduled hours.
This minimum shall not apply:
(a) In any case where employees are assigned to work continuous overtime
from the end of their regular workday, but in that event, payment
shall be at the overtime rate for such continuous time, or
(b) In any case where employees are called out or assigned during the
lunch hour.
If an employee is scheduled in advance for overtime work on a day of relief,
he or she will be paid the minimum if the overtime work is canceled unless
he or she is notified of the cancellation prior to the close of the
preceding regularly scheduled workday. If no such notice is given,
the employee will report for work as scheduled, unless otherwise notified.
If such overtime is scheduled on a regular workday, the minimum will apply
unless the employee is notified of cancellation prior to the end of such
regular workday.
When planned overtime is scheduled for Saturday, or Sunday, the Company
will notify the employees involved at least forty-eight (48) hours prior
to Saturday, to the extent such notice is practicable and provided the
Company has knowledge of the need for scheduling such work sufficiently
in time to give such notice. If notice is given, but the planned overtime
is later canceled, the minimum penalty for cancellation of planned overtime
will not apply if notice of the cancellation is given prior to the end of
the regularly scheduled workday on Friday.
There will be a single overtime list for planned and unplanned overtime.
The overtime equalization schedules on the Bulletin Boards are regarded
as an equalization of overtime agreement.
If an employee is entitled to overtime under the equalization provisions
of the contract and is not requested to work such overtime, the employee
will be provided overtime work to be assigned by the supervisor within
seven days of acknowledgment by the supervisor that the employee was
entitled to the overtime. Refusal of the overtime work by the employee
will negate any further penalties by the Company.
In the event there is a call out while the employee is on this overtime
assignment, the employee will be assigned the call out even if he or she
is not entitled to the call out based on the equalization list. The
overtime assignment must be appropriate for the classification of the
employee.
The overtime assignment will be for a minimum of three hours or longer
if the call out extended for a longer period of time.
Section 3. If an officer, steward, or committee person of the
Brotherhood is unavailable for overtime work because of Brotherhood
business, such unavailability will not be charged against him or her for
purposes of determining whether there has been an equitable distribution
of overtime.
Section 4. Employees who are on vacation for five (5) consecutive
days or are sick are not considered available for overtime and such
unavailability will not be charged against them for purposes of determining
whether there has been an equitable distribution of overtime. Vacation
will commence at the end of the employee's shift and end at the start of
the employee's next scheduled shift.
Section 5. Emergency Storm Work Premium 5/1/87
It is sometimes necessary to assign outside physical workers for more than
24 hours because of severe storms causing extensive interruptions to service.
The senior staff member responsible for operations will determine when this
policy goes into effect.
When these employees are so assigned to work for a period of more than 24
hours under this policy, including travel time, the method of payment will
be as follows:
(a) The outside physical workers so assigned will be paid for working time
at the rate of one and one-half times their regular straight time rate
and for rest time at their regular straight time rate.
(b) The Rest Period Policy will not apply during this emergency work when
employees are being paid under (a), but every effort will be made to
give employees adequate rest time. It is intended that an employee
who has worked continuously for sixteen hours be given at least eight
hours rest and be paid for this rest time at the employee's regular
straight time rate, but if it is not given, the employee will be
entitled to compensating rest time at a later time for that portion
of the eight hours rest time which was not given.
(c) If a holiday occurs during this assignment, working time shall be
paid for at the rate of two and one-half times the regular straight
time rate and rest time at the regular straight time rate.
(d) When the 24-hour period has ended and the emergency is over, the normal
method of payment and rest time procedures will be in effect.
ARTICLE VI
APPLICATION OF RATED WAGE
Section 1. The application of a rate of pay shall be based on the
duties performed.
Section 2. If, during the course of the daily work schedule, an
employee is temporarily assigned (but not promoted) to a higher class
of work for a period of three (3) hours or more, such employee shall
receive the scheduled wage of such higher class for all hours worked
within the daily work schedule.
Note: This does not apply to employees in Clerical Wage Structure Pg. 59.
Section 3.
(a) Employees subject to the provisions of this agreement shall receive
normal straight-time compensation for eight (8) hours on eleven (11)
recognized holidays, as listed below:
New Year's Day January 1
Martin Luther King Third Monday in January
Patriot's Day Third Monday in April
Memorial Day Last Monday in May
Independence Day July 4
Labor Day First Monday in September
Columbus Day Second Monday in October
Veterans Day November 11
Thanksgiving Day Fourth Thursday in November
Day after Thanksgiving Fourth Friday in November
Christmas Day December 25
Employees who have completed six months of service are entitled to receive
a twelfth holiday, formerly the birthday holiday, to be observed as follows:
a) On the employee's birthday,
b) Any day within the calendar year.
Department head approval is required if taken under option b.
If the legal holiday occurs on Saturday, one of the following three options
may be made available to one or more employees not scheduled to work on that
day, in lieu of normal straight-time compensation, where the Department Head
determines that it is feasible to make the option available in thatDepartment:
a. A day off on Friday preceding the Saturday holiday.
b. A day off on Monday following the Saturday holiday; or
c. A day off on any date following the holiday.
(b) If employees are assigned to work on a holiday recognized hereunder
which occurs on a workday within their scheduled workweek, they shall
receive, in addition to the holiday pay described in [a] and [b] above,
time and one-half for all hours worked in their normal schedule and two
and one-half times their normal straight-time rate for hours worked outside
their normal schedule within the holiday period, or the minimum, whichever
is greater.
(c) If employees are assigned to work on a holiday recognized hereunder
which does not occur on a workday within their scheduled workweek, they
shall receive, in addition to the holiday pay described in (a) and (b)
above, twice their normal straight-time rate for the first (8) hours
worked and two and one-half times their normal straight-time rate for time
worked in excess of eight (8) hours within the holiday period, or the
minimum, whichever is greater.
(d) Existing Night Trouble Workers will work the Christmas and New Year
Schedule - Normally - one will work one Holiday - the other Trouble Worker
will work the other.
Section 4. Where an employee of ten (10) years or more of continuous
service, because of disability, is or becomes unable to continue to perform
assigned duties based on classification as of the date of disability, the
rights of such employee and the obligations of the Company under such
circumstances shall be determined in accordance with "Disability
Retrogression Pay Plan" included herein and made a part hereof under
Article XVI on pages 25 to 27, inclusive.
Section 5. Employees may be temporarily assigned to another class
of work in the same or a different roster for a temporary period of time
not to exceed fifteen (15) days per year.
Management shall determine the roster from which employees are assigned.
The selection will be according to the following criteria:
1. Voluntary by seniority
2. Junior qualified employee
Each temporary assignment shall be for a minimum of one (1) full day.
These assignments shall not be used to fill permanent vacancies.
ARTICLE VII
HOURS AND DAYS OF WORK
Section 1. Eight (8) consecutive hours shall constitute the regular
daily assignment and five (5) days of eight (8) consecutive hours shall
constitute the regular weekly assignment of all employees coming within
the scope of this agreement, insofar as such assignments do not interfere
with presently established practices.
Section 2. Hours for Customer Services
Employees assigned to the Customer Services section will have a regular
work schedule of 8:00 a.m. to 5:00 p.m., with a one-hour lunch period.
If workload requirements change, the supervisor will notify employees that
the work schedule has been changed to 8:00 a.m. to 5:00 p.m. with a
20-minute paid lunch.
Two (2) positions, one Customer Service and one Credit will be the hours
of 12 noon to 8:00 p.m.. These positions will be posted and if necessary
junior employees (new hires) will be assigned.
Section 3. Hours in Service Department
5/1/87
The second shift in the Service Department will be:
December 1st to March 31st - 4:00 p.m. to 12:00 Midnight
April 1st to November 30th - 1:00 p.m. to 9:00 p.m.
Effective May 1, 1987, the schedule for the Consumer Aide assigned to
Dispatch will be 8:00 a.m. to 5:00 p.m.
Section 4. Hours for Janitor
The hours of work of the Janitor will be Sunday 5:00 p.m. to 2:00 a.m.
Monday, and 2:00 p.m. to 10:00 p.m. Monday through Thursday.
Section 5. Production Department - Hours of Work
During the non-production season, LNG and Propane Plant inspections will
be performed on a mandatory planned overtime basis on Saturdays, Sundays
and holidays by Roster 19 personnel.
Section 6. Hours for Fleet Mechanic
The hours of work for the Fleet Mechanic will be as follows:
April 1 to November 30 - 7:30 a.m. - 3:30 p.m. Monday - Thursday
6:00 a.m. - 2:00 p.m. Friday
December 1 to March 31 - 7:30 a.m. - 3:30 p.m. Monday - Thursday
8:30 a.m. - 4:30 p.m. Friday
ARTICLE VIII
DAYS OF RELIEF
Section 1. Days of relief now established shall not be changed without
good and sufficient cause. When new positions are created, days of relief
shall be established for such new positions and shall not be changed
thereafter without good and sufficient cause.
Section 2. Whenever employees are replaced in any class of work where
continuous operation is necessary, the prevailing days of relief established
with each assignment within such class shall not be changed without good
and sufficient cause.
Section 3. In departments or groups where continuous operation is not
necessary, every effort will be exerted by the Company to establish the days
of relief in accordance with the desires of the employees.
Section 4. Employees will not be compelled to change their days of
relief with other employees.
ARTICLE IX
MEAL ALLOWANCE / PERIOD
Section 1. A meal period of not less than thirty (30) minutes nor more
than one (1) hour shall be arranged for employees unless otherwise mutually
agreed upon.
Section 2. The meal period shall be assigned between the end of the
third hour after reporting for duty and the beginning of the sixth hour
after reporting for duty.
Section 3. Where the nature of the service requires continuous
operation, eight (8) consecutive hours may be worked during which twenty
(20) minutes shall be allowed for lunch at reasonable and convenient times
without interruption of service and without deduction in pay.
Section 4.
(1) From January 1 through December 31, employees in the following
Rosters will bring their lunch and will work a straight eight (8) hours
(as specified below) with a twenty (20) minute lunch period provided,
(normal lunch period to start four (4) hours after starting time) and
with no deduction in pay for this twenty (20) minute period.
Roster #3 8:00 a.m. to 4:00 p.m.
Roster #5 8:00 a.m. to 4:00 p.m.
Roster #6 8:00 a.m. to 4:00 p.m.
or, 8:30 a.m. to 4:30 p.m.
Roster #9 8:00 a.m. to 4:00 p.m.
Roster #16 7:30 a.m. to 3:30 p.m.
(2) From April 1 through November 30, employees in the following
Rosters will bring their lunch and will work a straight eight (8)
hours (as specified below) with a twenty (20) minute lunch period
provided, (normal lunch period to start four (4) hours after starting
time) and with no deduction in pay for this twenty (20) minute period.
Roster #7 7:30 a.m. to 3:30 p.m.
Roster #8 7:30 a.m. to 3:30 p.m.
Roster #15 7:30 a.m. to 3:30 p.m.
(3) From December 1 through March 31 employees in the following
Rosters will bring their lunch and will work a straight eight (8)
hours (as specified below) with a thirty (30) minute lunch period
provided, (normal lunch period to start four (4) hours after starting
time) and with no deduction in pay for this thirty (30) minute period.
Roster #7 7:30 a.m. to 3:30 p.m.
Roster #8 7:30 a.m. to 3:30 p.m.
Roster #15 7:30 a.m. to 3:30 p.m.
(4) The following accommodations will be made for Company crew working
in Rosters 7 and 8 with respect to the requirement that they work a
straight eight (8) hours and bring their lunch, as set forth in this Article:
(A) Employees in these rosters will bring their lunches year round.
(B) During the winter months from December 1 through March 31,
these employees may supplement their lunches through the
purchase of hot foods, so long as the purchases meet the
following requirements:
1. The purchase is to be on a take-out basis only;
2. The purchase may be made when the crew is on route between
work assignments during the lunch breaks and it does not
take longer than five (5) minutes to complete. Employees
shall not drive away from their routes for purposes of
making such purchases;
3. If the crew is at a job site during the meal period, the
job site will not be broken down. Under such circumstances,
if one employee on the crew can be spared from the work
being performed, that employee may drive to a nearby
restaurant and purchase and bring back hot food for the crew,
provided that the total time during which the employee is
away from the job for this purpose does not exceed ten (10)
minutes. No member of the crew will leave any job site
where emergency or urgent work is being performed, or where
the employee cannot be spared; and,
4. There will not be multiple Company vehicles parked at any
location.
(5) From January 1 through December 31, the stock person and stock
clerk will establish a work schedule to ensure coverage of the
stockroom from 7:00 a.m. to 5:00 p.m. Meal schedules will normally
consist of one hour to be alternated between the two classifications.
During any absence, coverage will be provided by the remaining employee
on an overtime basis, working a straight eight (8) hours with a twenty
(20) minute lunch period.
Section 5. The Company will grant, reimburse or otherwise compensate
an employee for meals when an employee is required to work outside their
normal work hours. The Company encourages employees to take their meal,
if possible, without alteration in pay. If this is not possible, the
employee should take a meal at the end of the work period. The Company
also recognizes that when the nature of certain work requires continuous
operation, that a meal may not be taken at a reasonable and convenient time
without interruption to service.
(1) The meal allowance is:
Breakfast $ 7.50
Lunch $ 7.50
Supper $ 10.00
(2) Definitions:
(a) When a meal is not taken, the employee will be
entitled to a meal allowance and compensated for a
meal period.
(b) A meal allowance will be paid in accordance with
Article IX, Section 5 (1) of this agreement.
(c) A meal period will be paid at time and a half
(1-1/2) employee's base pay for thirty (30) minutes.
(d) Emergency overtime is defined as overtime work where
notice given the employee is twenty-four hours or
less.
(e) Establishing Meal Periods: Meal periods are
based on the employee's normal starting time and
shall not exceed thirty (30) minutes. Meal
periods shall be defined as follows:
i. Employee works through a meal period: Based
on employee's normal starting time.
a) Breakfast - One and a half (1-1/2)
hours prior to the employee's starting
time.
b) Lunch - Four (4) hours after the
employee's starting time.
c) Supper - Ten and one-half (10-1/2)
hours after employee's starting time.
d) Other - Six (6) hours after the start
of the supper meal period.
ii. Employee does not work through a meal period.
a) Other- When applying this provision of the
Agreement to establish a meal and meal period,
no other timing for a meal(s) will apply. When
an employee has not worked through a meal
period, the employee will be entitled to a meal
and a meal period six (6) hours after reporting
for duty and every six (6) hours thereafter.
(3) Callouts - The Company will pay a meal allowance to an
employee when their normal meal period is disrupted by
emergency overtime work and the period extends beyond three
(3) hours.
(5) Continuous Overtime - In the event an employee works two (2)
or more hours of continuous emergency overtime after an
eight (8) hour period, and such overtime extends beyond a
normal meal period, the Company will pay a meal allowance to
the employee.
If the overtime work ends simultaneously with the expiration
of two (2) hours after the end of an eight (8) hour period,
the Company will pay a meal allowance of $3.00 in lieu of
the meal and meal period.
(6) Scheduled/Planned Overtime - The Company will not pay a
meal allowance for a meal occurring during an eight (8)
hour period on an employee's day of relief.
(7) Extended Planned Overtime - Planned overtime that extends
beyond an eight (8) hour period; the employee will be paid
in accordance with Article IX, Section 5 (6) - continuous
emergency overtime.
(8) Meals are to be taken at the closest location within the
Company's service territory. Without exception, Employees
are required to call on the radio to report their location
when taking a meal on overtime. After the completion of
the meal, the employee will notify Dispatch that they are
back on the air and ready for assignment.
Section 6. Employees engaged in emergency overtime work will be paid an
allowance for the normal meal period that is disrupted and granted a meal
period of twenty (20) minutes without deduction in pay and will be granted
an allowance every six (6) hours later.
Section 7. When a regular meal period is established, it shall not be
changed without good and sufficient cause.
Section 8. The meal allowance will not apply during emergencies
involving employees working more than eight (8) hours beyond the normal
work day. During emergencies, the reasonableness of the cost of the meal
shall be subject to the approval of the department head.
ARTICLE X
VACATIONS
Section 1.
(a) Employees continuously employed prior to June 1 for less than
one (1) year, but more than six (6) full months, will be entitled
to a vacation with straight-time pay for two (2) normal working
days for each full month of employment in excess of six months prior
to such June 1st.
(b) Employees, after one (1) year of continuous service prior to
June 1 of the year in which their vacation occurs, will be entitled
to two (2) weeks' vacation with straight-time pay.
(c) Employees with five (5) full years of continuous service will
be entitled to three (3) weeks' vacation beginning in the year in
which such service is completed.
(d) Effective 5/1/89, employees with ten (10) full years of
continuous service shall be entitled to four (4) weeks' vacation
beginning in the year in which such service is completed.
(e) Employees with twenty (20) full years of continuous service
shall be entitled to five (5) weeks' vacation beginning in the year
in which such service is completed.
(f) Employees with over twenty-five (25) years of service shall
be entitled to one (1) day of vacation for each full year beginning
with the twenty-sixth (26) year and ending with the thirtieth (30)
year, vacations beginning in the year in which such service is
completed.
Section 2. Vacations will be granted according to a schedule approved
by the Company, and insofar as possible, seniority will govern. One (1) of
the three (3) weeks of vacation, two (2) of the four (4) weeks of vacation
and three (3) of the five (5) weeks of vacation for those employees who are
eligible may be scheduled by the Company at any time during the calendar year.
If an employee is unable to start his or her vacation as scheduled, such
vacation will be rescheduled by the Company at the earliest opportunity.
Section 3. Employee's vacation pay will be the greater of his or her
regular straight-time pay at the time of vacation or the average of the
employee's straight-time earnings in the previous calendar year.
Section 4. If, during an employee's vacation period, a holiday,
recognized under this contract, falls on a normal workday of the employee,
the employee shall receive an additional day off at a time to be designated
by the Company, or in lieu thereof, normal vacation pay, provided, however,
in no event, will any employee receive pay or time off for holidays
in excess of that described in Article VI, Section 3 on page 6.
Section 5. All departments within the Company will distribute vacation
selection forms to be completed by December 31 for scheduling vacations in
January, February and March of the following year. Vacation schedule forms
will be issued, and are to be completed by April 30, for employees to select
their remaining vacations.
All months of the year will be used by all departments for vacation
scheduling. Department Managers will exercise discretion as to the number
of employees on vacation at any one time.
Section 6. For purposes of vacation scheduling in the Street Department
and Line Department (exclusive of underground personnel) the following
provisions shall apply:
The year will be divided into the following three periods for taking vacation.
Period I: The prime period consisting of June, July, August and
September. During this period, employees may take up to
two weeks of vacation.
Period II: The months of April, May, October, November and December.
During these months, an employee may take two weeks of
vacation.
Period III: The months of January, February, and March. During these
months, an employee will take any remaining vacation not
taken in Periods I and II.
Not more than four (4) lineworkers may be on vacation at the same time
during Period I and Period II, December only. Not more than two (2)
lineworkers may be on vacation at the same time during Period II, except
December. Department Head approval is required for more than four (4)
lineworkers to be on vacation at the same time in December. Single days
of vacation may be taken in Periods I and II, on the same basis as at
present; namely, one (1) day for each week of vacation taken in the period,
but they may be taken out of any of the scheduled vacation weeks in either
Periods I and II instead of the scheduled vacation in the Period in which
the single day is taken.
Section 7. It is recognized that it is generally desirable for vacations
to be taken not less than a full week at a time. However, for good reasons
and where it can be done without cost or inconvenience to the Company, an
employee will be permitted to take vacations less than a week at a time
where sufficient notice is given and the Department Head approves.
Section 8. An employee who is separated from the payroll, whether by
means of resignation, retirement or pension, discharge or layoff, shall be
paid such vacation pay as he or she is entitled to receive in that calendar
year and which that employee has not already received.
Section 9. Where an employee becomes ill, or a member of the employee's
immediate family dies just prior to his or her scheduled vacation, the
vacation will be rescheduled upon the employee's request; scheduled vacation
will not be rescheduled if the illness commences after the beginning of the
scheduled vacation.
However, if the death of an immediate member of the family (as defined in
Article XX, Pg. 31) occurs after the beginning of the scheduled vacation,
and the time lost, for the purpose intended, would have been in their normal
work schedule, such time will be rescheduled, at a mutually agreed upon
later date.
Section 10. For purposes of vacation scheduling in Roster 9 (Meter
Reading), the following shall apply: During the period of June, July and
August, employees may take up to two (2) weeks of vacation but not more
than two (2) employees may be on vacation at the same time during this
period. During the remainder of the year only one (1) meter reader may
be on vacation at any time.
Section 11. Vacation Entitlement - Personal or Medical Leave
When an employee is on personal or medical leave (Policy A, Pg. 67) for
more than twenty-five (25) days in a calendar year, the employee's vacation
entitlement for the following year will be prorated based on the number of
days the employee is paid wages vs. the number of days of personal or medical
leave taken during the year.
Example: Employee is out for 26 weeks (26 x 5 = 130 days) on medical leave.
Employee will have 5 years of seniority in March, 1992. Employee would have
3 weeks (15 days) of vacation entitlement. Because the employee was out for
130 days in 1991, employee would be credited with 130/260 = .5 x 15 = 7.5
days.
ARTICLE XI
SENIORITY
Section 1. Seniority progression charts showing all classes of employees
subject to this agreement and the seniority movement of such employees
between classes hereinafter provided for have been prepared jointly by the
Company and the Brotherhood. Roster sheets showing the names, classifications,
Company seniority, and class seniority ratings of all employees subject to
each seniority progression chart have been prepared and posted. The Company
shall prepare and post quarterly, revised roster sheets showing any changes
affecting the employees on such sheets.
Any employee subject to this agreement who is aggrieved by any change in
seniority rating may, within thirty (30) days after such change is posted,
and not thereafter, request the Company to correct such rating, and upon
adequate proof of error, it shall be corrected in accordance with the facts.
Section 2. It is agreed, that when an employee is assigned to a
position, which is not subject to the rules of the Agreement, on a
temporary basis, the employee's seniority status will continue in the
class which he or she held at the time of the assignment.
An employee promoted, on a regular basis, to a position in which he or she
is not subject to the rules of the Agreement, and subsequently returns to a
classification which is subject to the rules of the Agreement, shall have
his or her seniority status, for unit seniority purposes, reflect only that
time served in the Bargaining Unit; i.e., the employee would return to the
bottom of the classification from which he or she came with the seniority
that employee had at the time of his or her promotion. This period of time
will not exceed ninety (90) days.
Section 3. Seniority shall begin when an employee was or shall be first
hired by the Company, except that where an employee has been dismissed and
rehired or has voluntarily left the employ of the Company and has been
rehired, seniority shall begin when such employee was last hired. The
seniority rating of employees shall be as follows:
(a) Any present employee of the Company who was in the employ of
the Company when seniority was first adopted (June 2, 1946) shall
receive credit (in the class of work in which he is then employed)
for all prior employment with the Company.
(b) Any present employee of the Company who was hired subsequent
to June 2, 1946, shall receive credit beginning with his or her last
hiring date and continuing during the term hereof in each class of
work in which he has been or is hereafter regularly assigned.
(c) The foregoing provisions of this section shall not apply to
new employees until they have been continuously employed for a
period of six (6) months, but thereafter these provisions shall
apply to such employees.
If because of a reduction-in-forces an employee is demoted from a class of
work to which he was assigned on the date when seniority first became
effective as aforesaid, such employee shall be assigned to the head of the
list in the class to which he or she is demoted, but an employee promoted
after said date and subsequently demoted because of a reduction in forces
shall revert to that place on the list in the lower class which he or she
held before his promotion; provided, however, that when forces are reduced
in the lowest class, necessitating the furloughing of employees, the
employee in such class having the shortest total period of service with
the Company shall be furloughed first, and so on up through the class.
Employees assigned to any class of work in one department of the Company,
if furloughed out of their class of work because of a reduction-in-forces,
shall be re-assigned by the Company to the same class of work in the same
or some other department of the Company if there is another such class,
and, if there is not another such class, then to some other class, provided
such furloughed employees are qualified by fitness and ability to perform
the work in the new class. When so reassigned, such employees shall have
the same seniority rating in the new class which they had in the class from
which they were furloughed and they shall displace juniors in the new class.
New employees shall be deemed to be on trial for a period of six months
from the date of hiring and within such period the Company shall have the
right to discharge any new employee whenever in the opinion of the Company
he has not qualified for the work for which he or she was hired or for other
work to which he or she may be assigned.
The Company shall have the right in its discretion to employ temporary
forces for emergencies, vacation relief, or in other unusual situations,
and seniority shall not apply to employees in such forces.
The Company may employ student engineers in any class, the total number of
student engineers so employed not to exceed three percent (3%) of the number
of employees of the Company, and the Company in its discretion and without
regard to seniority may assign the work of student engineers in any class or
may transfer them from class to class, but in the event that student
engineers are assigned to positions permanently such assignments shall be
subject to the seniority rights of regular employees affected thereby.
Section 4. If there is seniority movement between the classes involved,
when a vacancy occurs in any class, the employee senior in the next lower
class shall be entitled to promotion to the vacancy if his or her fitness
and ability qualify him for the position, and when forces are reduced, the
last person the class affected shall be furloughed first, and so on up
through the class, employees so furloughed having the rights to displace
juniors in a lower class if qualified by fitness and ability.
An employee accepting promotion or transfer to a new class after June 2,
1948, shall have seniority in the new class beginning with the date of such
acceptance, and he will retain unimpaired his or her seniority in the former
class without the right, however, to displace juniors in the former class as
long as he or she may have employment in the new class in any position for
which he is qualified by fitness and ability.
Section 5. If there is no seniority movement between the classes
involved and forces are reduced in a class, an employee who was transferred
to such class from another class shall return to his or her former class
without loss of seniority in that class if then qualified by fitness and
ability to perform the work in the employee's former class.
Section 6. In the event of a vacancy in an existing position or in a
newly created position within each class in any department, notice of the
vacancy will be posted at places accessible to employees affected in that
department and, Company-wide in all other departments, and shall remain
posted for a period of seven (7) days, within which time applicants eligible
and desiring to fill such vacancy shall apply in writing to the official of
the Company designated in the notice. Such notice shall also set forth the
title of the position to be filled, hours of work, days of relief, rate of
pay and outline of duties. The bidders will be considered in the following
order and the senior qualified bidder will be awarded the job:
(1) Employees with seniority who have previous time in the class where the
vacancy exists, in the order of their seniority in that classification.
(2) Employees with seniority in the next lower class in the same roster, in
the order of their classification seniority in that classification.
(3) Employees with seniority in each lower class, in order, in the same
roster, in the order of classification seniority within each such
class.
(4) Employees with seniority in a class, if any, above the vacancy and in
the same roster, in the order of seniority in such higher
classification.
(5) Employees with seniority from other rosters, considered in the order of
their Company seniority.
Within one (1) week after expiration of the posting period the Company shall
assign the accepted applicant to such vacancy or newly created position.
If the Company anticipates a problem will arise in making the assignment
within one (1) week, the Company agrees to discuss this with the Union in
advance. When such vacancies occur in positions that are to be refilled,
the Company will post notice within one (1) week.
Any employee assigned to a new position shall have thirty (30) days in which
to qualify. If he or she is unable to qualify, the employee may return to
the class from which he or she came without loss of seniority rating therein.
If in the opinion of the Company the employee is competent, he or she shall
not return to the class from which he came until a vacancy occurs in that
class.
Section 7. The seniority status of an employee transferred to a new
position or vacancy in another department in accordance with the preceding
Section shall begin on the date of his or her assignment to the new class
and the employee will retain unimpaired his or her seniority in the former
class without the right, however, to displace juniors in the former class
as long as he or she may have employment in the new class in any position
for which that employee is qualified by fitness and ability.
Section 8. When forces are increased in any class, furloughed employees
shall be given preference over applicants not previously employed by the
Company if they are qualified by fitness and ability to perform the work
in the class of service affected.
When employees are furloughed from several classes and a vacancy later
occurs in a particular class, furloughed employees from the class where
the vacancy occurs shall have preference.
Furloughed employees shall notify the Company in writing on or about the
first day of each calendar month that they are available for re-employment,
and if offered work by the Company for which they are qualified, they must
accept it in writing and report for work within seven (7) days, and
furloughed employees failing so to notify the Company of their availability
for a period of six (6) months or to accept as aforesaid work so offered
shall forfeit all seniority rating.
Section 9. 6/1/67
In reducing and increasing forces, in making promotions, and in
making appointments to fill vacancies occurring in any class with
employees in the same class in which the vacancies occur, or from
other classes, all as provided in the foregoing sections, the
Company shall determine the fitness and ability of all applicants
for new or different positions. In determining fitness and ability
of any applicant from another roster, the desire and ability of such
applicant to advance to higher classifications in the roster to
which the bid is made will be contributing factors.
Should reduction of forces become necessary for any reason, the Brotherhood
will be consulted and every attempt made to achieve the reduction by
attrition. In the event that employees are displaced from their
classification by reason of a reduction in forces, the following will apply:
1. The Company will discuss the matter with the Local Union.
2. Such employee may displace other employees of the Company pursuant to
the Seniority provisions of the agreement.
3. The wage rate of employees upon such transfer to lower rated jobs
will be as follows:
Continuing Service at Date of Reduction Total Reduction
Employees with ten (10) or more years of No reduction
continuous service.
Employees with nine (9) but less than ten (10) $1 per week after 6 months
years of continuous service.
Employees with eight (8) but less than nine (9) $2 per week after 6 months
years of continuous service.
Employees with seven (7) but less than eight $2 per week after 6 months
(8) years of continuous service. $1 per week after 12 months
Employees with six (6) but less than seven (7) $2 per week after 6 months
years of continuous service. $2 per week after 12 months
Employees with five (5) but less than six (6) $2 per week after 6 months
years of continuous service. $2 per week after 12 months
$1 per week after 18 months
Employees with less than five (5) years of No reduction for first 6
continuous service. months: a reduction of $2 per
week at the beginning of the
second and successive periods
of 6 months until the rate
wage equals the ultimate of
the lower classification
4. Employees reduced to a lower-rated job classification are required to
bid vacancies they are qualified to perform as they may occur in the former
classification or in other higher rated jobs unless the Company and the
Brotherhood feel there are extenuating circumstances. Employees failing to
bid, or accept assignments, may have their wages reduced. All assignments
will be made in accordance with the seniority provisions of the contract.
5. If an employee is transferred to a lower-rated job under the above and
bids for and is awarded a job with a lower ultimate, the difference in
ultimates will be deducted from his rate unless the Company and the
Brotherhood feel there are extenuating circumstances.
6. If, after such transfer, a general wage increase is made on a percentage
basis, the employee shall receive eighty percent (80%) of said general
increase, the percentage to be figured on the adjusted rate prior to applying
the eighty percent (80%).
FITCHBURG GAS AND ELECTRIC LIGHT COMPANY
By (s) F. Manley
President
Section 10. Any employee who, subsequent to the enactment of the
Selective Training and Service Act of 1940, left the employ of the Company
to enter any of the armed forces of the United States of America, will
retain the same seniority status that he or she would have had if the
employee had remained in the employ of the Company during the period of his
or her absence, provided that his or her military service is terminated by
an honorable discharge and that within ninety (90) days thereafter he or she
shall apply in writing to the Company for re-employment. The Company shall
assign such an employee according to his or her seniority status provided
the employee is then qualified by fitness and ability to perform the work
in his or her class, but, if the employee is mentally or physically unfit
to perform the work in his or her class, the Company shall endeavor to
provide him or her with employment in any class of work in any department
of the Company for which the Company deems the employee to be mentally,
physically and otherwise qualified, and provided also that his or
her total length of service with the Company, including the aforesaid
military service, shall be greater than that of the employee to be displaced.
Section 11 The Company agrees to grant to regular employees of the
Company such reasonable leaves of absence, without pay for transacting
official union business of the Brotherhood, in such numbers and for such
length of time as the Company shall determine. Any such employee who
returns to the employ of the Company at the expiration of his or her leave
of absence will be credited with the seniority that such employee would
have had if he or she had remained in active service with the Company
during the leave of absence and shall be assigned to the classification
in his or her roster to which such seniority entitles the employee, provided
such employee is then qualified by fitness and ability to perform the work
of such classification.
ARTICLE XII
DISCIPLINE, SUSPENSION AND DISCHARGE
Section 1. If any employee is disciplined, suspended or discharged,
a meeting will be held between the Company and the Union Grievance
Committee within a reasonable time. The Brotherhood may in its discretion
within seven (7) days from the date upon which such employee is disciplined,
suspended or discharged request the Company to grant a hearing to such an
employee, such request to be in writing, registered and mailed to the
President of the Company.
Hearings will be held by the President of the Company or by a department
head or other officer of the Company designated by the President within
one (1) week after receipt of such written request.
Section 2. If an employee is charged with the violation of Company rules
or any other offense, and a hearing is requested under Section 1, the
Brotherhood shall be furnished with a statement of the charge in writing.
At the hearing, the Brotherhood shall represent the employee disciplined,
suspended or discharged and may present witnesses.
Section 3. If the employee is exonerated, he or she will be restored to
service without prejudice and shall be compensated for any loss in wages
caused by such discipline, suspension or discharge.
ARTICLE XIII
GRIEVANCE
Section 1. Any dispute arising during the term hereof shall be treated
as a grievance and every reasonable endeavor shall be made to settle such
dispute by agreement between the Grievance Committee of the Brotherhood and
the President of the Company or his or her representatives. Within ten (10)
working days, any grievance shall be presented in writing to the employee's
immediate supervisor.
Section 2. If the employee's immediate supervisor cannot satisfactorily
resolve the grievance as stated in Section 1, it shall be referred to the
Department Head.
Section 3. Within ten (10) working days of such submission as stated
in Section 2, a meeting shall be arranged between the grievant, the Union
Steward, the Supervisor and the Department Head.
Section 4. Within ten (10) days, if the grievance is not satisfactorily
resolved by the meeting as stated in Section 3, the grievance may be
submitted to the President of the Company, or his or her designees.
Within five (5) working days of such submission, a meeting shall be
arranged between the Union Grievance Committee and the President or his or
her designees. The Company shall reply in writing to the grievant within
five (5) working days after the meeting.
Section 5. If the response given pursuant to Section 4 above does not
satisfactorily adjust a grievance, the grievance may be submitted in writing
to arbitration within sixty (60) working days of the date of the written
response pursuant to Section 4 above.
Section 6. The party requesting arbitration shall do so by delivering
to the other party a notice in writing setting forth its statement of the
matter in dispute. If a party requests arbitration and so notifies the
other in writing and thereafter either party fails or neglects to name its
arbiter within ten (10) days after receipt of such request, it shall be
construed that the party failing or neglecting to name its arbiter as
aforesaid has waived its right to arbitration of the particular dispute,
and in that event the demands of the other party shall be conceded unless
it so happens that both parties fail or neglect to name arbiters within the
time provided.
Section 7. Any grievance not presented in accordance with applicable
time limits or other requirements in the steps listed above shall be
automatically foreclosed and considered settled and shall constitute a
denial of the grievance. By mutual agreement the parties may extend the
time limits in any of the steps listed above.
Section 8. Arbitration shall be conducted through a Board of Arbitration
consisting of one (1) representative selected by the Union, one (1)
representative selected by the Company and an impartial Chairman mutually
chosen by the parties. The procedure for Arbitration shall be as follows;
A. The Union representative and Company representative shall meet forthwith
to choose an impartial Chairman, but no later than fifteen (15) calendar
days from the date of the demand of arbitration. If no selection can be
made within such fifteen (15) day period, then either party may request
lists from the American Arbitration Association and selection shall be
made in accordance with the rules of the service.
B. Hearings and post hearing activities shall be conducted in accordance
with the voluntary labor arbitration rules of service.
C. The decision of a majority of the Board shall be the decision of the
Board of Arbitration. The Board shall have no power to change, amend,
modify, or otherwise alter the provisions of this Agreement. The
decision of the Board, which shall contain a full written statement
of the grounds upon which the issue or issues are decided, shall be
final and binding on the Union and the Company.
D. Each party shall bear the expense of preparing and presenting its own
case. The compensation and expense of the impartial Chairman and any
other expenses of such Board shall be borne equally by the parties.
E. At the meeting with the impartial Chairman it will be discussed and
agreed to that the impartial Chairman is required to return a decision
within sixty (60) days of the hearing.
Section 9. The Company shall have the right to grieve and arbitrate any
dispute which arises concerning the terms and conditions of this Agreement.
Section 10. While this agreement is in effect, there shall be no
authorized or sanctioned cessation, retarding or stoppage of work because
of any dispute which may result from any interpretation of this agreement
or for any cause whatsoever. If an employee represented by the Brotherhood
and subject to the terms and conditions of this agreement who, without the
authority and sanction of the Brotherhood, voluntarily absents them self
from work because of any dispute or demand, the employee may be denied
further employment or suspended at the option of the Company.
ARTICLE XIV
PAYROLL DEDUCTIONS
The Company agrees to deduct weekly from earned wages and remit to the
Brotherhood, the dues of those employees who are members of the Brotherhood
and not exempt from the provisions of this agreement, in an amount
individually authorized in a manner and on a form approved by the Union
and the Company.
ARTICLE XV
PENSION PLAN
A pension plan is provided for employees and is briefly outlined below.
In the event there shall be enacted state or federal legislation which
conflict with the terms of the below plan, state or federal legislation
will govern.
Eligibility
Any employee of the Company who has completed at least ten (10) years of
continuous service in the employ of the Company may retire on a pension
upon the terms and subject to the provisions and conditions hereinafter
set forth:
(1) An employee shall be entitled to retire upon or after attaining the age
of 65 years but may continue in the active employ of the Company after
reaching the age of 65 so long as, in the judgment of the Company, he or
she is qualified to perform the services required of him or her.
(2) An employee who has completed fifteen (15) years of credited service
shall be entitled to retire before attaining the age of 65 years if
he or she becomes unable to perform his or her work for the Company
because of a permanent disability, and if such disability is evidenced
by a certificate from a doctor chosen by the employee, concurred in by
a doctor selected by the Company.
(3) An employee who has completed ten (10) years of credited service
shall have the option to retire at age 60 with a pension calculated
on the basis of his or her then attained age and years of service
with the Company with a deduction of three-tenths of one percent
(0.3%) multiplied by the number of months between the employee's
attained age at the time of retirement and sixty-fifth (65th) birthday.
Determination of Amount of Normal Retirement Benefits
The basis for the computation of the amount of pension shall be the
employee's average straight-time annual wage for the last five (5) years
of service or the employee's average straight-time wage for any consecutive
five (5) year period during the employee's last fifteen (15) years of
service, whichever amount is the larger. The word "wage" as herein used
shall mean straight-time wages, exclusive of overtime, bonuses, supplementary
incentive compensation, or other forms of nonrecurring compensation.
Based upon an average straight-time annual wage determined as above stated,
the employee shall be eligible for an annual pension payable monthly in
advance, computed as follows:
a. 2% of your average annual earnings for each of the first
twenty (20) years of credited service:
PLUS
b. 1% of your average annual earnings for the next ten (10)
years of credited service:
PLUS
c. .5% of your average annual earnings for each year of
credited service in excess of thirty (30) years.
MINUS
d. 25% of your primary Social Security Benefit (according to
the law as in effect on December 31 of the year proceeding
your retirement).
Notwithstanding anything herein before contained, the minimum annual
pension from the Company shall, irrespective of whether the employee
concerned is entitled to any benefits under said Social Security Act,
be eight hundred (800) dollars.
Form of Benefits
Normal Form of Benefits
A. Monthly Annuity for Life:
An employee who is unmarried at retirement will receive a retirement
benefit as a monthly annuity for as long as the employee lives. Upon
death, no death benefits will be payable to any beneficiary.
B. Joint and Survivor Annuity:
An employee who is married on the date his or her retirement benefit
commences will receive a retirement benefit in the form of a "qualified
joint and survivor annuity" unless both the employee and the employee's
spouse elect to waive this form of benefit. A qualified joint and
survivor annuity is an actuarially reduced annuity payable for the life
of the employee with a survivor annuity for the life of the employee's
spouse equal to one-half of the amount payable during the joint lives
of the employee and spouse. The actuarial reduction is based upon the
life expectancies of the employee and spouse on the employee's
retirement date.
Optional Form of Benefits
A. Contingent Annuitant Option:
An employee may elect, instead of the retirement benefit as heretofore
provided, to have reduced retirement benefits made commencing on the
employee's retirement date, and after death such reduced payments, or any
lesser amount selected by the employee, will be continued to the designated
beneficiary, if living after the employee's death, for the beneficiary's
lifetime.
B. Ten (10) Year Certain and Life Annuity:
An employee may elect that the retirement benefit payable on his or her
retirement date be reduced with the guarantee that not less than one
hundred and twenty (120) monthly payments will be made either to the
employee or the named beneficiary who survives the employee.
C. Five (5) Year Certain and Life Annuity:
An employee may elect that the retirement benefit payable on his or her
retirement date be reduced with the guarantee that not less than sixty (60)
monthly payments will be made either to the employee or the named
beneficiary who survives the employee.
D. Election of an option in A, B, or C above must be made in writing within
the period commencing ninety (90) days prior to the date the benefit is to
commence and ending on such commencement date.
Spouse's Benefits
A. The Surviving Spouse Benefit will be payable under the following
conditions:
1. The employee dies prior to retirement and is vested as of the date of
death.
2. On the date of death, the employee is married and has been married
for at least one (1) year prior to his or her date of death.
B. The Surviving Spouse Benefit will be as follows:
1. The benefit will be computed at fifty percent (50%) of the employee's
retirement benefit, computed as of the employee's then attained age
and years of service, and a three-tenths of one percent (0.3%)
deduction multiplied by the number of months between the employee's
attained age at the time of death and the date he or she would have
reached age sixty-five (65); provided, however, that if such
computation results in a figure which is less than four hundred
(400) dollars per year, the figure will be increased to four hundred
(400) dollars per year.
2. The benefit will be paid monthly in advance as a monthly annuity for
life commencing on the first day of the month next following the date
of the employee's death.
Vesting
An employee's pension benefit will become vested (a right to a deferred
benefit at age 65) after completing at least five (5) years of credited
service following his 18th birthday.
Funding
The pension plan will continue to be funded, with all contributions from the
Company. It is understood that the retirement plan will meet the requirements
for approval by the Internal Revenue Service and will be actuarially sound.
The specific details of the pension plan will be as described in the
retirement plan documents. In the event of any conflict between this
summary and the Plan Document, the Plan Document will govern. While the
Company expects to continue indefinitely the benefits provided for under
this pension plan, it agrees to continue them only for the term of the
agreement with The Brotherhood of Utility Workers of New England,
Incorporated, Local No. 340, effective May 1, 1994.
ARTICLE XVI
DISABILITY RETROGRESSION PAY PLAN
I. Non-Compensable Disability
In the event an employee with ten (10) full years of continuous service or
more becomes unable to perform his normal duties because of a disability for
which he is not receiving Workmen's Compensation Benefits, the Company shall
provide him with work, provided he is able to perform such work. If such
employee refuses to accept such work, the obligation of the Company hereunder
shall be discharged. In the event an employee with less than ten (10) full
years of service becomes unable to perform his normal duties because of a
disability for which he is not receiving Workmen's Compensation Benefits and
if the Company is able to provide him with work which he is capable of
performing, he shall be assigned to such work. The adjusted pay rate in
either case shall be determined by the following PLAN shown below.
A. FUTURE RETROGRESSION
1. Less than ten (10) full years of continuous service at time of
retrogression.
a. An employee with less than ten (10) full years of continuous
service with the Company at time of retrogression shall receive
the ultimate base rate of his new job classification.
b. The new rate shall become effective at the time of such
retrogression.
2. Ten (10) full years and less than twenty-five (25) full years of
continuous service at time of retrogression.
a. An employee with ten (10) full years or more of continuous
service with the Company at the time of retrogression shall receive
an ADJUSTED pay rate equal to the ultimate base rate of his new
job classification.
PLUS
for each full year of continuous service an additional four percent (4%) of
the differential between the pay rate of his new job classification and the
employee's AVERAGE pay rate, except that in no case shall the ADJUSTED rate
be greater than the AVERAGE rate, or less than the ultimate base rate of his
new job classification. The AVERAGE pay rate shall be determined by finding
the weighted average of the pay rates for all job classifications the
employee has held for the five (5) year period immediately preceding his
date of retrogression. In making this computation, ultimate base rates in
effect at the time of retrogression shall be used.
b. The employee's pay rate shall be reduced to the ADJUSTED pay
rate in steps of ten cents ($.10) per hour or four dollars
($4.00) per week every six (6) months, except that the last
reduction step may be ten cents ($.10) per hour or four dollars
($4.00) per week or less as necessary to reach the ADJUSTED
pay rate exactly. The first reduction step shall occur six (6)
months from the effective date of retrogression.
3. Twenty-five (25) full years or more of continuous service at time
of retrogression.
a. An employee with twenty-five (25) full years or more of
continuous service with the Company at the time of retrogression
shall retain the ultimate pay rate of the classification from
which he is retrogressed.
II. Compensable Disability
In the event an employee with ten (10) full years of continuous service or
more becomes unable to perform his normal duties because of a disability for
which he is receiving Workmen's Compensation Benefits, the Company shall
provide him with work, provided he is able to perform such work. If such
employee refuses to accept such work, the obligation of the Company hereunder
shall be discharged. In the event an employee with less than ten (10) full
years of service becomes unable to perform his normal duties because of a
disability for which he is receiving Workmen's Compensation benefits and if
the Company is able to provide him with work which he is capable of performing,
he shall be assigned to such work. His ADJUSTED pay rate in either case
shall be determined as set forth under 1 (A) of this PLAN except that the
following shall apply:
A. If, at the time of retrogression, the employee is receiving
compensation for partial disability, the Company will pay such
amounts so that the employee's total compensation from the Company
and from such Disability Benefits will equal the adjusted pay rate.
B. The date the employee commences work at his lower classification
shall be considered as the date of retrogression.
III. General Provisions Applicable to I and II of the PLAN
A. In all computations, only FULL YEARS of service shall be used.
B. ADJUSTED pay rates established under the PLAN shall be figured to
the nearest cent except where the rate figures exactly to a half-cent.
C. An employee with ten (10) or more full years of continuous service
receiving an ADJUSTED pay rate under the PLAN shall hold the title of
his new job classification with the word "SPECIAL" appended thereto.
D. A physician appointed by the Company in all cases shall consult
with such employee's family physician and in the event of
disagreement as to the employee's condition and/or ability to
perform the work of any particular class, the case shall be
referred to a recognized specialist or clinic in the field of
medicine involved, whose opinion will be final and binding upon
all parties.
E. No change in GROUP INSURANCE classification shall result from
such retrogression.
F. General increases will be figured on the adjusted pay rate of a
retrogressed employee.
G. An employee transferred to a lower classification under the PLAN
shall be assigned without posting the job.
H. References to continuous service in the Company shall include
service with affiliated companies.
I. If an employee who is being compensated under the provision of
this PLAN is again transferred to one or more lower or higher
rated classifications, his new ADJUSTED rate upon each such
transfer shall be computed as if the employee had been transferred
to such lower or higher classification initially, using all
factors applicable at the time of the first retrogression. The
resultant rate shall be corrected to reflect all wage adjustments
which were made in such classification since the date of the
initial retrogression.
J. The Company may, in its discretion, withhold the provisions of
this PLAN from employees who also engage in work for other than
the Company or its affiliates.
ARTICLE XVII
DISABILITY PAYMENT PLAN
The following Disability Payment Plan relates to payment of wages for time
not worked on account of sickness or injury.
Workmen's Compensation Benefits, as referred to below, are benefits payable
under Workmen's Compensation Laws for disability caused by occupational
injury of disease.
1. PERMISSIBLE BENEFITS FOR ELIGIBLE EMPLOYEES
A regular Employee is eligible for disability pay due to sickness or
accident. A regular Part-Time Employee is eligible for pro rata
disability pay on the basis of his scheduled weekly hours as a percentage
of forty (40) hours. A temporary Employee is eligible for Workmen's
Compensation benefits only. New employees will become entitled to
disability pay due to sickness or accident upon attaining the status
of a Regular Employee, six (6) months after date of hire.
2. AMOUNT AND PERIOD OF DISABILITY BENEFITS
A. Non-Occupational Disabilities
1. For the first week of temporary disability, except as otherwise
provided in succeeding paragraphs, and subject to such evidence
as may be required, wages or salary for a normal workweek will be
paid.
2. After the first week of a temporary disability, subject to the
limits outlined below and with the approval of the President of
the Company or his designee, full normal wages or salary will be
paid for not longer than one (1) week for each completed year of
continuous service.
B. Occupational Disabilities
1. For the first two (2) weeks of temporary disability except as
otherwise provided in succeeding paragraphs, and subject to such
evidence as may be required, wages or salary for two (2) normal
workweeks will be paid.
2. After the first two (2) weeks of temporary disability, subject
to the limits outlined below and with the approval of the
President of the Company or his designee, full normal wages or
salary will be paid for not longer than two (2) weeks for each
completed year of continuous service.
C. Continuous service shall be defined as that service dating
from the employee's last employment by the Company, subject, however,
to the conditions established under the Break-in Service Credit Policy.
D. Limit on Benefits Beyond First Week
1. Non-Occupational Disabilities
The determination of the number of weeks during which salary or
wages will be paid beyond the first week of a temporary disability
shall be computed at the beginning of each week as follows: From
the total number of weeks of pay to which the employee is entitled,
based on his completed years of service to that date, deduct the
total number of weeks and fractional parts thereof, of disability
for which the employee received wages or salary during the
preceding fifty-two (52) consecutive weeks, except that there
shall not be any deduction for the first week of any previous
temporary disability.
2. Occupational Disabilities
Same provisions as under 2.D.1., except for the substitution of
the words "two (2) weeks" for the word "week". However, in
determining the number of weeks during which salary or wages may
be paid as in D.1.2. above, the foregoing limit shall be applied
separately to:
1. Disabilities caused by sickness or non-occupational accident.
2. Disabilities of an occupational nature.
E. 1. Overpayment of disability benefits-wages or salary will not be
payable whenever the disability of the employee is the result of
an occupational or non-occupational accident which permits the
employee to recover damages from a third party. Pending the
outcome of settlement of his claim, subject to the limitations
set forth in Par. D., appropriate wages or salary will be paid
on condition that the employee agrees in writing on the form
provided for this purpose (FF160B or FF160C) to reimburse the
Company for such wages or salary if there is recovery from the
party causing the injury.
2. In the event an employee is paid any wages or salary for a period
of disability arising from an industrial accident for which he
subsequently receives Workmen's Compensation weekly payments, he
shall be required to agree in writing on Form FF160A that, if the
wage or salary payments together with the Workmen's Compensation
payments aggregate (for the period of disability for which both
payments are made to him) more than the normal weekly wage or
salary payments he would have received if working, he shall
reimburse the Company for the excess.
F. Lump sum insurance settlements
If an employee injured in an occupational accident makes a lump sum
settlement with the insurance company in lieu of his receiving weekly
Workmen's Compensation benefits, the benefits to which he will be
entitled from the Company shall be computed for the period of his
disability as though he were receiving weekly compensation benefits.
In any case of a disability resulting from aggravation or relapse of
a previous disability for which the employee has made a lump sum
compensation insurance settlement and as the result thereof is
ineligible for further Workmen's Compensation benefits, the salary
or wages payable by the Company shall be computed as though the
injured employee was receiving such compensation benefits.
G. Disabilities for which benefits are not payable. No wage or salary
payments by the Company will be made beyond the first week for
periods of disability during which the employee is not under
treatment by a recognized physician or practitioner. Wage or salary
payments will not be made beyond the first week for periods of
disability caused by excessive use of alcohol or narcotics unless
the disabled employee is receiving approved treatment for such
disability. No wage or salary payments will be made beyond the
first week by the Company for disability resulting directly from
the deliberate neglect or refusal of the employee to observe the
Company's established safety rules or regulations if such employee
has previously been warned.
H. The Company may, in its discretion, withhold payment of disability
benefits to employees who engage in other work.
I. Nothing herein contained will be construed to prevent the Company
from placing employees on a pay-as-you-work basis if such employee's
absenteeism record justifies such action. An employee placed on a
pay-as-you-work basis will be returned to a sick-pay eligibility
status, when his absenteeism record over a reasonable period of time
subsequent to being placed on a pay-as-you-work basis, justifies
such action. Employee on pay-as-you-work basis to be reviewed at
least three (3) months after being placed on it. Beginning with
the second week of hospitalization the pay-when-work status will
be suspended for the full period of disability.
3. COMPUTATION OF WAGES PAID FOR PERIODS OF DISABILITY
In computing wages or salary, there shall not be included (1) overtime
wages (2) bonuses (3) shift differentials or (4) other forms of similar
extra compensation.
4. Employee's "years of continuous service" used for computing payment of
time not worked on account of sickness or injury in accordance with the
Disability Payment Plan and vacations shall include those years of service
to a break in the continuity of service, provided -
(a) the employee had at least three (3) years of continuous service
prior to the break, and
(b) the break did not exceed three (3) years duration, and
(c) the employee has remained in the service of this Company for at
least five (5) years after the break in service.
If years of service do not comply with the foregoing provisions, then total
years of continuous service shall be computed from the date last employed.
"Years of continuous service" for the Retirement Allowance policy shall be
the full years of service from the last date of employment with this
Company.
5. The Company has given its Department Heads discretion to grant limited
time off without loss of pay for urgent personal reasons including a
serious emergency at home, such time to be no more than that required
for the purpose, usually a few hours and, in no event, more than one day.
Department Heads also have discretion to grant time off without pay for
personal reasons if there is good cause and no abuse of the privilege.
ARTICLE XVIII
GROUP INSURANCE
During the effective period of this Agreement, the Company will maintain
Group Insurance as follows: Life, Accidental Death and Dismemberment, and
Comprehensive Health and Dental Plan in accordance with the Group Insurance
Summary dated May 1, 1994, and attached hereto. During the period of this
Agreement the Company will make available to employees Health Maintenance
Organization (HMO) coverage in lieu of Comprehensive Health Insurance. In
the event that there shall be enacted after May1,1994, state or federal
legislation in addition to that now enacted which provides benefits in the
field of health, medical, hospitalization and nursing care, the parties agree
that there shall be no duplication or overlapping of such benefits and the
benefits provided by the Company. In the event that the Company determines
that such duplication or overlapping of benefits occurs, it may revise the
benefits under the Company's Group Insurance Plans to minimize the same. In
so doing, there will be no reduction in the benefits provided to employees as
set forth in the attached Group Insurance Summary. The Union shall be given
reasonable advance notice of any changes made pursuant to this provision
and upon the request of the Union, it shall have an opportunity to discuss
them with the Company prior to their being made. There will be no changes
in insurance carrier during the term of the contract unless by mutual
agreement.
The annual expense associated with providing group medical insurance benefits
will be capped at $340,000, $360,000, and $380,000 for calendar years 1994,
1995, and 1996, respectively. The Company will pay 80% of the cost above
this cap and employees will pay 20% of the cost above cap. There will be
no employee contributions during the term of the contract. The Company will
establish a Section 125 plan if there are any required contributions.
ARTICLE XIX
401(k) PLAN
Employees may participate in the Company's 401(k) Plan (Plan). The Company
agrees to make payroll deductions for payments to the duly-established 401(k)
Plan upon written authorization by regular employees and to forward the
amounts so deducted to the 401(k) Plan in accordance with such authority.
The Company reserves the right to make administrative changes to the 401(k)
Plan during the term of this Agreement with the understanding that such
changes will not decrease the amount of benefits provided to Plan members.
These administrative changes may include the merger of 401(k) Plans.
The Company will amend the 401(k) Plan to permit the election of gross wages
with or without overtime for maximum contributions on an annual basis if
regulations permit. The employee can save on gross wages and the Company
will match on base wages. The Company's matching contribution to the 401(k)
saving Plan will be as follows:
1994 - one percent (1%) match
1995 - an additional one percent (1%) match for a total of two percent (2 %)
1996 - an additional one percent (1%) match for a total of three percent (3 %)
ARTICLE XX
LEAVES OF ABSENCE
Section 1. Death in The Family
In the event of the death of a member of the immediate family of an employee,
the Company will grant reasonable time off without loss of pay, up to three
(3) workdays, for scheduled straight-time workdays falling within the period
from the date of death through the date of the funeral. The immediate family
is defined as wife, husband, children, parents, sister, brother, father-in-
law and mother-in-law. For stepparents the Company will allow up to two (2)
workdays, for scheduled straight-time workdays falling within the period from
the date of death through the date of the funeral. For other members of the
family (grandparents, grandchildren, aunts and uncles), one (1) day without
loss of pay will be granted if the funeral is held on a scheduled straight-
time workday. It is understood that this paragraph applies only when the
time off is used for the purpose intended.
Where there are unusual circumstances in individual cases, time off without
loss of pay in excess of the three (3) workdays, or the two (2) workdays, or
the one (1) workday, or for persons other than those listed above, may be
granted in the discretion of management.
Section 2. Jury Duty
A regular employee, called for jury duty, will be paid for the time lost
from his regularly scheduled straight-time work day for not more than eight
(8) hours in any one (1) day, nor more than forty (40) hours in any one (1)
week, and for not more than six (6) weeks in any twelve (12) consecutive
months, provided that the employee will report for work during regularly
scheduled hours whenever he is excused from jury duty.
Section 3. Military Training Leave
Regular employees who are members of the reserve components of the Armed
Services of the United States or the National Guard and who are required to
report for their annual tour of military training duty shall be granted a
leave of absence for such purpose, not to exceed two (2) weeks in any
calendar year. Such employees shall be paid for any loss in pay during
such time, computed on the basis of the difference between his straight
time rate of pay for forty (40) hours and one (1) week's military base pay
exclusive of allowances, for each week of such absence. Such payment shall
be made upon the employee's return to work and upon receipt of a certificate
from the proper military officer showing the amount received while engaged
in such military training duty.
ARTICLE XXI
SEVERANCE PAY PLAN
Except as provided below, the Company will pay severance pay to eligible
employees as follows:
A. Regular employees who have completed four (4) years or more of
continuous service and who are permanently released from employment
because of the elimination of a job through automation or the changing
or discontinuing of operations, shall be given an allowance of one (1)
full week's base pay at the rate of pay at the time of release for each
full year of continuous service.
B. Severance pay benefits shall not apply to employees:
1. Discharged for just cause
2. Voluntarily quitting for personal reasons or any reason other than
receipt of notice of layoff
3. Retiring from the Company (including early medical retirement)
4. Leaving on leave of absence or sick leave
5. In event of death
C. Severance benefits shall be in addition to any earned vacation benefits
for which the separated employee is eligible.
D. An employee who desires severance pay, must, within ten (10) days
after receiving notice of layoff, notify the Company in writing of his
desire to terminate employment and receive Severance Pay under this
plan. Upon such termination and receipt of Severance Pay, the employee
will lose all seniority and recall rights under the contract.
E. If an employee does not desire to terminate his employment in these
circumstances, he will retain his recall and seniority rights, to
which entitled under the contract, if any, but shall not be entitled
to any Severance Pay hereunder.
ARTICLE XXII
BULLETIN BOARDS
The Company will provide space on the Company Bulletin Boards for official
Union notices. Notices of Union meetings, elections, and appointments may
be posted by the Union without prior approval. Any other material which the
Union desires to post shall first be submitted to management for approval
before posting. There shall be no posting of advertising or political
matter or material which is objectionable or controversial.
ARTICLE XXIII
EFFECT OF AGREEMENT
Section 1. This agreement is the entire agreement between the parties
except such amendments or supplementary agreements as are in writing and
signed by the parties.
Section 2. During the term of this agreement, should any provisions or
part thereof become illegal, the rest of the agreement will continue in full
force and effect.
ARTICLE XXIV
CONTRACTORS
The Union will have the right to call to Management's attention any condition
that they may consider detrimental to the employees of the Company relative
to work proposed, or being performed by outside contractors, and Management
agrees to discuss this condition with the Union, and to take whatever
remedial action may be agreed to in these discussions. Outside contractors
will be required to adhere to OSHA requirements.
The Company recognizes that its use of outside contractors may, at times,
cause some concern to employees and the Union. Accordingly, upon request
of the Union Committee, the Company representatives will discuss any problems
arising over the use of contractors. If such discussion does not satisfy
the Union, it may make a written request to the President of the Company for
a meeting with him, in which event, the President will sit down with the
representatives of the Union for a thorough review and discussion of the
problem.
Addendum (May 1, 1973) - The question of Pre-notification of Contractors to
be handled as a matter of common sense and good labor relations, with no
legal commitment. Except when emergencies exist, the Company will before
the letting of a contract discuss with the Brotherhood the reasons, economics
and any other matters pertinent to the situation.
There is no intent to displace regular employees by these outside forces.
Whenever sufficient work exists in any area to justify additional regular
employees on a full-time basis, such employees will be added.
Note: The foregoing paragraph would not preclude the Company from hiring
temporary forces.
ARTICLE XXV
WORKING CONDITIONS
Section 1. Alternate Emergency Trouble Worker - Line Department
It is agreed that the following supplementary practices affecting working
conditions will be continued during the term of the current Collective
Bargaining Agreement:
The conditions for Alternate Emergency Night Trouble Worker classification
and posting thereof are as follows:
(a) Duties and qualifications would be the same as for the Emergency Night
Trouble Worker and would be posted as such.
(b) Only Lineworkers-1st Class will be eligible to fill the job.
(c) One or more Lineworkers-1st Class with "alternate" listing will be
listed according to seniority on summation sheet, but will retain
present place in roster.
(d) Senior "Alternate" person would be assigned to fill in on a temporary
basis when the regular Emergency Night Trouble Worker is not available
for work. In the event the senior "Alternate" person is not
available due to sickness, vacation, etc., the second "Alternate"
person would be assigned. Any "Alternate" so assigned would
accumulate seniority for time actually worked in the Emergency Night
Trouble Worker's classification.
(e) Planned absences: Example - vacation, sickness other than first day -
(1) Senior person from "Alternate" list will not work 7:30 a.m. -
3:30 p.m. as Lineworker-1stClass.
(2) Will be notified and assigned in advance to fill in on the
Emergency Night Trouble Worker's job.
(3) Will receive credit in the classification as Emergency Night
Trouble Worker. Will also receive pay of classification at
straight time.
(4) If there is overtime involved while the "Alternate" is working
as the Emergency Night Trouble Worker, overtime will be at the
Emergency Night Trouble Worker rate.
(f) Absences other than planned: Example - sickness first day -
(1) If "Alternate" man has reported for work for normal 7:30 a.m. -
3:30 p.m. hours, then "Alternate" will work 7:30 a.m. - 3:30 p.m.
at straight time as Lineworker-1stClass. and then 3:30 p.m. -
12 midnight at time and one-half at the Emergency Night Trouble
Worker's rate.
(g) When the Emergency Night Trouble Worker returns to work, "Alternate"
will be notified not later than 4:00 p.m.. on the last working day
prior to the Emergency Night Trouble Worker's return. "Alternate"
will report on next working day at normal hours. If the Company is
not able to meet this time factor, the "Alternate" and the regular
Emergency Night Trouble Worker will work together for the first night
after the regular Emergency Night Trouble Worker returns to work.
(h) An "Alternate" can be removed from the "Alternate" list by request.
When an "Alternate" is so removed, the "Alternate" job will be posted
to obtain a replacement.
Section 2 Assignment - Heavy Duty Bucket Trucks and Corner Mount Digger 5/1/89
1. In the digger truck, two men will normally be assigned. Three men will
be used on the following job assignments
(a) replacement of three (3) phase junction poles,
(b) poles over fifty (50) feet on existing three phase construction.
On other job assignments the Union may request additional men, and
the crew supervisor may, at his discretion, grant the request.
2. As to the two new heavy-duty bucket trucks, in respect to which there
exists continued disagreement concerning the number of men which should
be assigned, the position of the parties is as follows:
(a) The Company is of the view that it is a part of its management
responsibility to determine the number of men needed on work
assignments; that various relevant conditions affect a judgment
whether two (2) men or three (3) men are needed on particular job
assignments; and that supervision should make particular job
assignments on the basis of the number of men needed - whether this
is two (2) men, three (3) men or more.
(b) The Union is of the view that a minimum of three (3) men should be
assigned to all job assignments except for two (2) men assignments
on those specific assignments on a list furnished by the Union to
the Company during the negotiations. The Union has cited work load
and safety factors as the basis of its position.
The application of the respective positions of the parties would
mean that on some job assignments the Company's position would call
for two (2) men and the Union's position would result in three (3)
men being assigned.
3. Since the parties have been unable to resolve their differences as set
forth in paragraph 2 of the foregoing, the following interim arrangement
and procedures for ultimate disposition of disputes will apply:
(a) Subject to the provisions below, three (3) men will be assigned to
one (1) of the new heavy-duty bucket trucks and two (2) men to the
other new heavy-duty bucket truck.
(b) It is the Company's policy to observe high standards of safety and
in no event will it assign two (2) men if, in its judgment, three
(3) men are required for a particular job by reason of safety
considerations.
(c) It is the intention of the foregoing to have each truck change
transformers and compare the efficiency, safety, work load and
other relevant factors as between two (2) man and three (3) man
operations. An evaluation of the two (2) man and three (3) man
operations will be made from time-to-time by a joint committee
composed of two (2) employees designated by the Union and two (2)
representatives of the Company.
(d) If, on a two (2) man operation (other than on jobs involving
secondary construction), the job requires two (2) men to be in the
air at the same time, the Company will see that a Safety Observer,
qualified to climb and render emergency assistance, is present
during the time the two (2) men are in the air. Such Safety
Observer may be a non-bargaining-unit employee, or a non-employee,
or a bargaining-unit employee, but whether a bargaining-unit
employee or not, he will not perform any work other than safety
functions while present at the job as Safety Observer.
(e) The arrangement set forth in paragraphs (a), (b), (c), and (d)
above will continue until May 1, 1965 and thereafter, subject to
the following paragraphs.
(f) If, after May 1, 1965, either party wishes to change the above
arrangement and procedures, it will give written notice to the
other party, and if any dispute then arises as to the number of
men assigned to particular bucket truck jobs, the issue of the
reasonableness of the Company's assignment of men to any such job
will be subject to arbitration under the arbitration provisions of
the Agreement, subject to the following:
1. The status quo will be retained pending the arbitration decision.
2. The parties agree that if either party requests arbitration it
will be expedited. The party requesting arbitration will
notify the other party of the name of its arbitrator and if
within ten (10) days of the notice the other party fails to
name its arbitrator, or if the arbitrator is named and a third
arbitrator is not selected, the party giving the notice may
request the American Arbitration Association to select the
arbitrator who may proceed ex parte under the rules of the
American Arbitration Association if the other party fails to
participate in the hearing.
(g) It is recognized that as provided in Section 502 of the Labor-
Management Relations Act of 1947, an employee may decline to work
in good faith because of abnormally dangerous conditions for work"
and nothing in this memorandum can affect such right of the
employees as set forth in the Federal Statute.
THE BROTHERHOOD OF UTILITY WORKERS
OF NEW ENGLAND, INC., LOCAL NO. 340
By (s) George McSheehy
President
FITCHBURG GAS AND ELECTRIC LIGHT COMPANY
By (s) R. A. Ferreira
Vice President
Section 3. Driver's License (Loss of) 5/1/89
If an employee loses his or her driver's license for any reason, and the
holding of such a license is a requirement of his/her job, the employee
will be required to meet all the requirements of the job without special
accommodations, including the ability to respond to call outs and work
continuous overtime. If the employee is unable to meet the job requirements,
the employee will be suspended without pay until the license is reinstated.
Benefits will be continued for six (6) months.
In the event the Company and the Union are able to agree that a special
position can be established that would be treated differently than cross
rostering or hours of employment and would not create problems for other
employees, the parties may agree to the establishment of that special
position for all or a part of the license suspension. If the parties are
not able to agree, the suspension will apply.
Section 4. Gas Distribution Crew Complement
Two (2) qualified persons will be used when working on live gas lines.
Section 5. Hot Stick 6/1/67
To date, we have not had experience with Hot Stick work in inclement
weather. On the basis of present knowledge, existing equipment and current
methods and conditions, it will be our intent not to require employees to
perform Hot Stick work in inclement weather, whether such work is an
emergency or otherwise, subject to the following paragraphs:
If a major interruption of service could be avoided, under appropriate
conditions, we could see where it would be feasible and safe to do a
brief, occasional task with Hot Stick in poor weather (including light
rain but not medium heavy rain), such as
(a) Disconnecting a tap in order to de-energize a segment of the system
so that it can be worked on dead, or
(b) Covering an arcing conductor with an insulated fiberglass orange
hood, or otherwise insulating it, working from a bucket.
We have had very limited experience doing Hot Stick work at night. When
such assignments do occur, we will provide adequate artificial lighting.
The Union has suggested that there may be need for assigning more employees
to certain Hot Stick jobs at night than would be assigned to the same job in
daylight hours. The Company doubts this. The Union does not suggest
additional personnel when the Company assigns five (5) Lineworkers to a Hot
Stick job at night. (See Par. C of June1, 1967, letter on Hot Stick work.)
In the interest of cooperation, the Company will do the following:
On the first three (3) Hot Stick assignments at night hereafter made
by the Company, pursuant to Paragraph 2 of the Hot Stick letter, to
which less than five (5) Lineworkers are assigned, the Company will
assign one more man than it would otherwise assign. After such third
assignment, the Company will advise the Union in writing whether it
will continue such a temporary arrangement for either a further
definite period, or indefinitely, or discontinue it. If the Company
discontinues this arrangement at that time, or later, and there is a
subsequent Hot Stick assignment at night to which less than five (5)
men are assigned, the Union may raise the question of additional
manpower on such subsequent assignment in the same manner as presently
provided in Paragraph 3 of the Hot Stick letter regarding requests for
additional manpower.
We reiterate our intention that all work must be done safely. We also
recognize the desirability of education, experience and discussion on these
subjects. Furthermore, we assure the employees concerned that there will be
no arbitrary orders or directions in connection with Hot Stick work
assignments; and that if there are any complaints, suggestions or questions,
we will be pleased to sit down and discuss them.
Finally, if any changes in the above should be warranted, they will not be
made without prior notice and discussion, such notice to be given in writing
to the President of the Local Union.
FITCHBURG GAS AND ELECTRIC LIGHT COMPANY
By (s) Howard W. Evirs, Jr.
Vice President
Accepted:
THE BROTHERHOOD OF UTILITY WORKERS
OF NEW ENGLAND, INC. LOCAL NO. 340
By (s) Peter J. Starr
President
Section 6. Inclement Weather Clause 5/1/89
The following provisions will apply to employees in Rosters 7 and 8 with
respect to inclement weather:
During rainy or stormy weather or extreme cold, employees in these rosters
will not be required to perform outside work, except in emergencies.
Extreme cold shall be considered fifteen degrees (15) Fahrenheit and will
be determined by the digital recording thermometer in the Transmission and
Distribution office.
Light Precipitation: Fog, mist and light precipitation are not considered
rainy or stormy weather. It is not the Company's intent to compromise its
safety standards nor is it the intent of the Company to require employees
to work for prolonged periods in light precipitation.
Light precipitation assignments shall include, but not be limited to the
following:
Electric
1. Maintenance of street/floodlights.
2. Switching and grounding.
3. Cable splicing (with protective equipment).
4. Pulling cable.
5. Motorized patrol.
6. Substation work on de-energized or isolated equipment (including
grounds maintenance).
7. Dead line work.
8. Pole placements without displacement or covering of energized
conductors.
9. Manhole/vault inspection and maintenance.
10. Material handling, delivering and unloading.
11. Snow removal is snow shoveling
Employees will not be required to work on energized primaries or secondaries
(Item 1 exception), except in emergencies.
Gas
* 1. Check and set system pressures.
2. Building inspections. *(inside only)
3. Repair gas leaks (other than Class 3).
4. Monitor gas leaks and leak surveys.
5. Critical valve maintenance and testing.
6. Material handling, delivering and unloading.
7. Trenching and installing gas pipes other than road crossing.
8. Patching and repairing of street openings.
9. Pump pits.
*10. Changing charts.
*11. Tees and cocks in emergencies.
12. Regular station maintenance inside buildings.
* These items will be performed irrespective of the temperature restrictions
stated in this memo.
In the event there is a reduction in Roster 7, identification of underground
facilities and gas leak surveys using the flame ionization unit would be
assigned exclusively to Union employees.
Should precipitation begin during the normal work day, Gas and Electric
crews will not absent the job site without first checking with a
Distribution Supervisor. Supervisor will make determination whether
to return to headquarters or go on to light precipitation assignments.
Suitable Inside Work: In the event that weather conditions warrant
cessation of normal work , employees will be required to do assigned
work related to their classifications in protected areas. If there
is not sufficient work related to their classifications, employees
shall be given other inside assignments of a reasonable nature.
When it is indicated that light precipitation will end and/or
temperature is rising sufficiently to reach fifteen degrees (15o)
within a reasonable time, employees will drive their respective trucks
to their scheduled work site in preparation for work.
When Gas and Electric Distribution crews are in the field and the
temperature is dropping, they will be advised by radio when the
temperature reaches the 15 degree mark and will be recalled to the
Plant.
Section 7. Medical Matters 8/14/84
The Company and the Union agree to the following in respect to medical
matters involving employees.
1. Employees who desire to consult the Company Doctor should make an
appointment through their supervisor.
2. When the Company Doctor, in accordance with the Disability
Retrogression Pay Plan, decides that an employee should be retrogressed
for physical disability, the Local Officers of the Union will be
notified before the employee is told.
3. When an employee is denied a job because of physical reasons, the
Union will be notified and the reason given before the employee is
notified.
4. When an employee is out sick or out as a result of injury and the
Company Doctor says he cannot return to work, the Union will be
notified.
5. If there is disagreement between the employee's physician and the
Company Doctor, arrangements will be made for the Union Representatives
to talk with the Company Doctor as soon as possible.
6. If there is still disagreement, the matter may, upon request of
either party, be referred to a third doctor, whose decision will be
final and binding upon all parties. The third doctor will be selected
by the Company Doctor and the employee's doctor. If they are unable
to agree upon the third doctor, a joint request will be made to the
Dean of the Harvard Medical School for choice of a third doctor in
the special field involved. In the event a third doctor is appointed,
the Company Doctor and the employee's doctor will have the right to
submit the medical history of the employee and all other relevant
information in their possession.
7. If an employee who has been absent from work because of disability is
advised by his doctor to return to work but is prohibited from doing
so until approved by the Company Doctor, the time required for the
Company Doctor to make a decision whether or not the employee may
return to work will be paid time and not subject to the provisions of
the plan for payment of disability benefits.
8. The Company Doctor is responsible for determining when an ill employee
is well enough to return to work and what type of work he should be
returning to.
9. All employees who have been out for a serious illness such as
Heart Condition
High Blood Pressure
Cerebral Hemorrhage
Diabetes
Tuberculosis
Serious Surgery
Back Condition
Broken or Fractured Bones - any type
Joint Condition
Mental Disease
Any type of paralyzing Disease
will have their condition checked by the Company Doctor before
returning to any type of work. Any case where there has been a
serious illness not mentioned, and there is any doubt as to the
employee's ability to fulfill his regular job, it should be brought
to the attention of the Company Doctor before the employee returns to
work.
10. The Company Doctor will contact the family doctor, see the patient, if
necessary, and make whatever tests are necessary to determine whether
or not the employee can safely return to work; and also determine the
type of work, or what limitations there should be on the work that the
employee performs.
11. In any case where the Company Doctor feels that the employee is not
ready to return to work or that the work should be changed, he will
consult with the management giving the reasons and the limitations.
12. All employees wearing casts, splints, braces, using crutches, or canes
must be cleared by the Company Doctor before returning to work. There
are certain conditions which must be clarified before the Company
Doctor will give his approval.
13. The following conditions must be met before the Company Doctor is
contacted for approval:
There must be a job that the employee can perform.
The employee must be willing to do the work.
The employee's attending physician must give permission to return to work.
FITCHBURG GAS AND ELECTRIC LIGHT COMPANY
By (s) R. A. Ferreira
Vice President
THE BROTHERHOOD OF UTILITY WORKERS
OF NEW ENGLAND, INC., LOCAL NO. 340
Section 8. Snow Plowing 5/1/91
For the Liquefied Natural Gas Plant (LNG), the Liquefied Petroleum Gas
Plant (LPG), the Gas Turbine and the Tennessee Gas Pipeline Metering (TGP),
the plowing services will be provided by the members for Roster #19 and the
equipment used for those services will normally be that which is assigned to
the Department.
For all other locations, the plowing services will be provided by Roster #7
and the equipment used for those services will be those that are normally
assigned to that Department. As such, the reference in the Inclement
Weather, Memo #10 Item #9 under the "Gas" section will be eliminated, and
it is expected that snow plowing will be conducted irrespective of the
temperature restrictions stated in this memo.
The Snow Plowing Equalization List will be discontinued and all hours
plowing will be recorded on the Emergency Overtime Equalization List.
The janitor will continue to use the snow blower and shovel and sand the
sidewalks and entryways at the John Fitch Highway facility. He may be
assisted by employees from other rosters.
Qualified licensed backhoe operator will be from Roster 7.
Employees in Roster 7 prior to 5/1/79 will not be required to provide
service for snow plowing / removal and sanding.
Selection of personnel for these assignments during normal working hours
will be by seniority. Employees in the various rosters, including Roster #8,
will perform normal snow removal activities associated with their roster.
Section 9. Tools and Equipment
The Company will furnish to employees such tools and equipment as in its
judgment are required for the class of work involved for use on Company work
only. Employees may furnish personal tools and equipment for use on the
Company work subject to the approval of the Company, except that rubber
gloves, cover gloves, and liners and safety belts will always be furnished
by the Company. Tools and equipment damaged or lost by misuse or neglect
shall be replaced by the employee. Ownership of all tools and equipment
furnished by Company shall remain with the Company and subject to its rules
as to storage, inspection and turning in to the Department Head on the
completion of the work requiring them. Upon termination of employment by
the employees, all Company tools and equipment, or their replacement cost,
shall be turned into the Company.
Section 10. Wash-up Time
On jobs requiring it, the Company allows wash-up time to the extent
necessary and agrees to continue such allowance, and any complaints by an
employee in this respect may be processed as a grievance. In most
situations, a fifteen minute period at the end of the shift is sufficient.
Section 11. Work Gloves
Work gloves shall be furnished by the Company at no cost to the employee, of
a grade deemed by the Company suitable for the work involved. If the
employee desires a better grade of glove, the Company will furnish that
grade at half cost to the employee. Rubber hats, rubber coats, and rubber
boots, or their equivalent, shall be furnished by the Company for those
classes of work which require such equipment. Gloves and other equipment,
above referred to, shall continue to remain the property of the Company,
shall be replaced by the employee if damaged or lost through misuse or
neglect, shall be turned in to the Company in order to obtain replacements,
and, upon termination of employment, they shall be turned in to the Company
by the employee, or their replacement cost paid for if such equipment has
been lost or damaged through misuse or neglect and, provided further, that
only one-half such replacement cost will be payable if the employee paid
one-half the cost under the foregoing provisions.
Section 12. Gas Production
Employees in Roster 7 who entered the Roster after 5/1/82 may be assigned to
the LNG and Propane Plants during the operating season. Assigned employees
will not receive operating premium if their rates exceed Utility Worker-1
rate, plus operating premium.
The number of assigned employees will be determined by Management and
selection will be according to the following criteria:
1. Voluntary by seniority.
2. Assignment on the basis of less senior employees.
Utilitymen will report to assigned plant at start of shift.
During the production season, Utilitymen will be paid a car allowance of
$3.75/day when using own vehicles. A Company vehicle will be made available
for travel to and from the LNG plant.
Operators will receive one-half hour (one way) travel allowance to the
LNG plant only.
A reduction in forces in Roster 19 and/or the remote operation of the
Propane Plant would not affect the continuing application of this agreement.
The Company will provide LNG and Propane Plant operators training to new
employees entering Roster #7. Employees who initially fail Utility Worker 1,
2 and 3 examinations will be able to retake the examination every ninety (90)
days.
Section 13. Gassing Vehicles 5/18/85
Employees will fuel vehicles assigned to them by the Company.
Section 14. Upgrading - Line and Street Departments 5/1/87
Effective May 1, 1987, employees in Rosters 7 and 8, who are scheduled to be
upgraded but due to inclement weather or other reasons do not work in that
capacity, will be paid at their regular rate of pay. The provisions of
Article VI, Section 2 on page 6 will apply in this situation.
Section 15. Off Season Assignments of Production Workers 5/1/87
Personnel in Roster 19 will be assigned to perform the following list of
duties at any time throughout the year when not operating the gas plants:
a. Maintenance of Propane and LNG Plants.
b. Maintenance of 285 John Fitch facility and
miscellaneous buildings and grounds.
c. Delivery of material to job site.
d. Cleanup of any substation, regulator station
or right-of-way; including road patching
(not on public ways), lawn cleanup, hanging
"Danger" signs, repair of fencing and buildings, etc.
e. Maintenance of structures and accessories
related to the operation of the gas turbine.
Section 16. Use of Company Backhoe 5/1/91
This will confirm our discussion during the negotiations in 1985 that under
normal operations, the Company will ensure that our backhoe is being
operated prior to the use of a contractor's backhoe.
The Company will make every effort to use the Company backhoe in jobs
involving Roster 8 when it is not disruptive to its other operations.
Section 17. Assignment of Rental Service Work
Effective 5/1/85, employees in Roster 6, in the classifications of
Gas/Electric Tester/Installer - 3rd Class and Meterman-Helper (Special)
may be assigned service work on rentals for gas and electric hot water
heaters and gas and electric dryers as part of the duties of the
classifications. This does not affect the duties of employees in Roster 3
to also perform this function.
Section 18. Response to Overtime 5/1/87
Because of the nature of our business, and our need to provide 24-hour a
day service to our customers, it is necessary that employees work a
reasonable amount of overtime - planned and unplanned.
In departments where management determines there is no problem with response
to overtime, local practices will continue. Where management determines
there is an overtime response problem, a meeting between management and the
union will be held.
Following this meeting, department practices may be replaced by the following
policy:
1. The company will establish a call list that will record each instance when
an employee does not respond to the call out. The concept of equalization
of overtime may apply.
2. Employees shall furnish an acceptable means of off-hour contact by
telephone.
3. Employees who do not respond to a call will be charged with an instance
for lack of response (exception - employees who are out on authorized
absences). Employees shall not be charged with more than one instance
in a twenty-four hour period or on two consecutive days of relief.
4. The lack of response records of employees will be reviewed on at least
a quarterly basis. Consideration will be given to the number of
instances, the reasons for lack of response and the average response
record of the employee in the department. If, as a result of this
review, management considers that an employee's lack of response record
is excessive, a formal meeting will be held with the employee (with
Union representation) and the employee will receive formal warning.
A continued unsatisfactory response record, reviewed on a monthly basis,
will result in more severe disciplinary action.
Section 19. Overtime 5/1/87
The Company and the Union recognize that overtime is an inherent part of the
business and employees are expected to work unless an exception is granted
by the department manager.
In the event an employee is unable to work overtime, the employee must
receive a waiver from the department manager or his designee. An employee
will be required to work continuous overtime on jobs he was working during
his regular work hours.
The employee working second shift will be required to continue working if
overtime is required rather than the calling in of additional personnel.
If an employee refuses to work overtime, the employee will be subject to
normal disciplinary action.
An employee scheduled to work overtime and who does not report, or leaves
early, will be subject to disciplinary action.
Section 20. Attendance at Training Sessions 5/1/91
I. When training sessions are designated by the Company that require a
temporary change in working hours, the following will prevail:
A. The Company will provide seventy-two (72) hour advance notice of
the training session to the employee(s) involved.
B. The provisions of Articles V, Pg. 4 and VII, Pg. 7 will not apply.
C. The employee will be provided a noontime meal or reimbursement for
a noon meal at the option of the Company.
D. The Company will provide a vehicle for transportation to and from
the training site if held outside the service territory.
E. Compensation will be at a straight time rate of pay for eight (8)
hours, including travel time and time and one-half for all other
hours. The provisions of Article IX, Section 5 on page 10 will
apply.
II. If training sessions are conducted that require the trainee to stay
overnight, the following will prevail:
A. The Company will provide seven (7) days advance notice to the
employee.
B. The provisions of Articles V on page 4 and VII on page 7 will not
apply.
C. The Company will provide for reimbursement of meals and arrange for
lodging.
D. The Company will arrange for transportation of the employee to and
from the training site.
E. The employee will be compensated at the straight-time rate of pay
for eight (8) hours for each day of training. There will be no
additional compensation for travel time over and above the straight
eight (8) hours.
Section 21. Meter Reader - Car Washing 5/1/87
Effective 5/1/87, Meter Readers may wash their personal vehicles that are
used for company business. They will be able to wash their vehicles between
the hours of 7:30 a.m. and 5:00 p.m., but not during paid time.
Section 22. Training and Qualification 5/1/87
In Rosters 7 and 8, employees who wish to advance to a higher classification
within the roster will be required to demonstrate their qualifications
before advancement.
A Joint Subcommittee will be formed to review training needs and
qualifications procedures.
Section 23. Meter Reading Department
The following practices shall apply to the Meter Reading Department:
1. Routes will be assigned by the Supervisor and will be rotated on a
regular basis.
2. Employees will be entitled to a meal allowance when working overtime
in accordance with Article IX, Section 5, Pg.10.
3. All training assignments for new meter readers will be made by the
supervisor.
4. Meter Readers starting time will be changed to 7:30 a.m.
5. All routes should normally be completed by the Meter Reader before
returning to the office. If the route requires overtime to read all
meters, the Meter Reader must complete the assigned work before
returning to the Company. Under unusual circumstances the matter of
completing the route can be discussed by the employee with the
Supervisor prior to the assignment.
6. Overtime for "mark sensing" will no longer apply. A joint committee
of union and management will review all routes regarding this issue.
Section 24. Electric Night Trouble Worker - Electric Turn-on's 5/1/89
The Night Trouble Worker in the Electric Transmission & Distribution
Department will not be required to turn on more than two (2) electric
turn-ons per night.
Section 25. Records and Billing Vacancy 5/1/89
In the event an opening occurs in the Records & Billing section, the Company
will post a Consumer Aide position with the ultimate rate of Step 7.
Section 26. Returning to Roster - With or Without Automatic Progression 5/1/91
The parties agree the Company will follow this agreement when awarding a job
to an employee who is returning to a roster previously occupied by the
employee.
Roster with Automatic Progression
In any roster that has automatic progression, if the senior eligible employee
has previous time in the roster, the employee will be awarded the entry level
position and the previously held classification on the same date. Exception:
If in the opinion of the department manager and training committee, the
employee was not qualified to perform the higher class work, the employee
would be awarded the higher class when the manager and training committee
felt the employee was qualified to perform the work. Seniority would be on
the basis of the job award.
Roster without Automatic Progression
In any roster that does not have automatic progression, if the senior
eligible employee has previous time in the roster, the employee will be
awarded the entry level position. The employee would be evaluated by the
training committees established in the labor agreement or be tested in
accordance with the provisions of the labor agreement before being awarded
a higher classification in the roster. The employee could request being
tested or evaluated at any of the classifications he or she previously held
in the roster. Seniority would be on the basis of the job award.
Section 27. Service Department Alternate Trouble Worker 5/1/91
The Alternate Night Trouble Worker would be assigned to fill in on a
temporary basis when the other Night Trouble Worker is not available for
work on the 1-9 p.m., 4 p.m.- 12 midnight or Tuesday - Saturday shift due to
sickness, accident, vacation, etc.
Examples:
1. If one Trouble Worker takes a week's vacation on Tuesday-Saturday
schedule, the other man will cover his normal 4 p.m.- 12 midnight,
Monday-Friday shift plus work Saturday.
2. If one Trouble Worker takes a week's vacation on Monday-Friday, 4 p.m.-
12 midnight schedule, the other Trouble Worker will work Monday-Friday
4 p.m.- 12 midnight at regular time and Saturday at time and one-half.
3. If the Trouble Worker on the 4 p.m.- 12 midnight shift calls in sick,
the 8 a.m.- 4 p.m. Trouble Worker will stay on and work 4 p.m.- 12
midnight on overtime. He would then be assigned to cover the 4 p.m.-
12 midnight shift only until the other Night Trouble Worker returns.
4. Coverage on Thanksgiving, Christmas and New Years will be alternated
between each man yearly.
5. The Alternate Night Trouble Worker will be given first refusal for all
overtime that is required by vacation, sickness or accident of the
other Trouble Worker.
6. When the Night Trouble Worker returns to work, "Alternate" will be
notified not later than 4:00 p.m. on the last day prior to the Night
Trouble Worker's return. "Alternate" will report on the next working
day at normal hours. If the Company is not able to meet this time
factor, the "Alternate" and the regular Night Trouble Worker will
work together for the first night after the regular Night Trouble
Worker returns to work.
Example: Regular night Trouble Worker calls in sick on Tuesday and
informs the Company that he or she will not report to work until
Friday. The Alternate is notified and continues working until the
end of the regular Trouble Worker's shift. The alternate then
reports on Wednesday and Thursday at the start of the regular
trouble worker's shift. If the regular Trouble Worker reports in
on Thursday for his or her regular shift and the alternate was not
notified by 4:00 p.m. on Wednesday to change back to his or her
normal schedule, the alternate and regular Trouble Worker would work
together on that shift.
Section 28. Progression - Roster 7 and Roster 8 (Underground)
Applies to all future and current employees in these rosters.
Roster 7 Street Department
Progression from Street Worker to Utility Worker A
Street Worker to Utility Worker C 6 months
Utility Worker C to Utility Worker B 12 months
Utility Worker B to Utility Worker A 15 months
Roster 8 Underground Progression
Progression from Cable Splicer Helper to Cable Splicer 1st Class
Cable Splicer Helper to Cable Splicer 3rd Class 6 months
Cable Splicer 3rd Class to Cable Splicer 2nd Class 12 months
Cable Splicer 2nd Class to Cable Splicer 1st Class 15 months
1. If employee is qualified, may progress more quickly
2. All incumbents start with effective date of agreement
3. If any employee does not qualify, he or she will be returned
to classification previously held outside roster.
Section 29. Temporary Assignments Outside the Company's Service Area
Work assignments outside the Company's service areas with utilities or an
affiliate of Unitil Corporation will be on a voluntary basis.
The employee will be paid in accordance with the contract except when an
emergency situation exist. Under emergency conditions, the employee will
be paid in accordance with the Emergency Storm Premium.
The provision does not apply to assignments classed as non-working; for
example, training, schools, meetings, etc.
ARTICLE XXVI
BENEFITS
Section 1. Coffee Breaks
Coffee breaks will be limited to fifteen (15) minutes, one in the morning
and one in the afternoon.
The following mutually agreed upon interpretation will govern the
application of the Coffee Breaks provision as it applies to Roster 7 and 8.
(1) The morning coffee break may be taken by employees on a take
out basis on their way to their first work assignment of the day,
so long as the total amount of time taken for the break, including
the purchase and drinking of the coffee, does not exceed a total
of fifteen (15) minutes. This shall not apply when the employee's
first work assignment of the day is an emergency or urgent in
nature, nor shall employees drive away from their route for
purposes of purchasing coffee.
(2) The afternoon coffee break may be taken by employees on their route
between jobs subject to the same limitations as set forth in
Article IX, Section 4 (4) (B) 2 and Section 4 (4) (B) 4.
(3) When employees are working on a job site during coffee break period,
the following rules shall govern the taking of the break:
(a) On emergency or urgent jobs on which an employee cannot be
spared to leave, the employees may take their break on the job
site without purchasing any coffee or the break may be
deferred to allow for the purchase of coffee on a take out
basis on route to the next job or on the way back to the
Company at the end of the workday, subject to the same
limitations as set forth I Article IX, Section 4 (4) (B) 2,
and Section 4 (4) (B) 4.
(b) If an employee can be spared from the job site, the employee
will be allowed to drive to a nearby restaurant or store for
purposes of purchasing coffee and bringing it back to the job
site, subject to the same limitations as set forth in
Article IX, Section 4 (4) (B) 3.
(4) If during break time, employees are working at the Company facility
where coffee is provided or can be made, employees will take their
break at the facility.
Section 2. Thermos Bottles
Thermos bottles of coffee are available for line and street department
employees to take with them in the morning.
Section 3. Damaged Clothing
The Company will repair or replace clothing damaged by acid, chemicals, or
fire because of employment or by accidents involving the use of hydraulic
equipment on the line trucks, or, at its discretion, reimburse the employee
for the cost if it does not decide to repair or replace the damaged clothing.
Holes caused by heat or delayed chemical reaction will be considered as
included within the meaning of damaged clothing.
Section 4. Treatment of Meal Allowances 5/1/87
This is to confirm discussions during the negotiations in 1985 that all meal
fees that are submitted by employees without a receipt from the restaurant
will be treated as an allowance and so reflected in the employees' wages.
Meal allowances will be processed through the payroll system and reflected
in the employees' paychecks. Under no circumstances will meal allowances be
processed through petty cash.
Section 5. Motor Vehicle Insurance 5/1/87
Employees who use their own motor vehicles on company business will be
covered for the insurance deductibles in the event of an automobile accident
as long as they are not cited for a serious motor vehicle violation.
Section 6. Reimbursement for Safety Shoes
The Company, with appropriate documentation, will reimburse employees the
full cost up to $85.00 for the first pair, and one-half the cost, up to
$42.50 for the second pair of safety shoes, up to two (2) pair per calendar
year or the Company will reimburse the employee up to $127.50 for a single
pair of safety shoes per calendar year.
Meter Readers will be reimbursed the full cost, up to $85.00 each, for
two (2) pair of safety shoes per year and may use safety sneakers during
regular business hours.
Section 7. License Reimbursement
The Company will reimburse the cost of a valid motor vehicle and hoist
engineer's license to those employees who are required to have such licenses
as part of their job posting.
Employees will be required to submit a photostat copy of their license in
order to receive reimbursement.
It will be the employee's responsibility to meet all requirements to
maintain and retain their license or licenses.
The Company will provide training so that employees will be able to obtain
a Class No. 2 license for vehicle operation, and employees in Roster 7, 8
and 15 will be able to obtain a Class No. 1 license, and thus, be able to
qualify on this score where possession of such a license is a job requirement.
ARTICLE XXVII
BARGAINING UNIT WORK
Supervisors who are not covered by the Collective Bargaining Agreement will
not normally perform bargaining unit work which employees, subject to such
Agreement, are normally required to perform, except in the following
circumstances: emergencies, training, demonstrations, testing, or trying
out new equipment or methods; work incidental to supervisory duties;
helpful or relieving a bargaining unit employee for short periods in cases
of fatigue, strain, unusual condition or the like; occasions when
non-performance of the bargaining unit work by the supervisor would result
in hardship, inefficiency or unjustifiable cost to the Company; and
occasional instances when a bargaining unit employee is not readily
available. Nothing in the foregoing shall be interpreted to mean that
a supervisor, other than in emergencies, may perform bargaining unit work
outside of an employee's regularly scheduled hours which the employee would
normally be called in to perform, such as 13 KV switching on Saturday or
Sunday.
ARTICLE XXVIII
UNION BUSINESS
The Company will grant the employee who is the Union's Council
Representative one (1) day off without pay to attend the monthly Council
meeting.
Days off on union business will be considered a workday without pay for
the following people:
a.) President
b.) Vice President
c.) Secretary
d.) National Representative
e.) Grievance Committee Representative
ARTICLE XXIX
Unitil RETIREE TRUST
Employees are eligible to join the Unitil Retiree Trust upon retirement
from the Company.
ARTICLE XXX
SAFETY 5/1/87
1. The Company and the Union agree that safety is a matter of highest
importance and will cooperate in an effort to enforce the safety rules
contained in the safety manual.
2. The Union will select five (5) representatives, one (1) each from the
following areas: (Electric Overhead; Street; Production; Meter &
Service and Office) to serve on the Safety Committee for a minimum
of one (1) year. The membership will be rotated to ensure that all
employees have the opportunity to participate on the committee.
3. The Company will provide a safety manual to each employee. The manual
will be reviewed with the employee and any questions clarified. The
employee will be expected to comply with the safety manual and
violations will be enforced through the disciplinary process, up to
and including termination.
4. All revisions to the Safety Manual will be sent to the Local President
prior to implementation for review and discussion.
ARTICLE XXXI
NO DISCRIMINATION
There will be no unlawful discrimination by the Company or the Union on
account of race, color, religion, sex, age or national origin.
Whenever used in this Contract, a masculine pronoun shall be deemed to
include the masculine and feminine gender.
ARTICLE XXXII
DURATION AND TERMINATION
This agreement shall be effective as of May 1, 1997 except where the
effective date of any provision thereof is otherwise specifically provided
and shall be binding upon the parties hereto and upon all employees who
are subject to its provisions, and it shall remain in full force and effect
through April 30, 1998.
ARTICLE XXXIII
SUCCESSORS
This agreement shall bind and inure to the benefit of the parties hereto
and their respective successors and assigns; and the words "Company" and
"Brotherhood", respectively, shall be construed to include their respective
successors and assigns.
IN TESTIMONY WHEREOF the parties hereto have caused these presents
to be executed by their respective officers, thereunto duly authorized, this
3rd day of June 1997
FITCHBURG GAS AND ELECTRIC LIGHT COMPANY
By __________________________________________________________
M. Mitchell Bodnarchuk, Vice President and General Manager
THE BROTHERHOOD UTILITY WORKERS OF
NEW ENGLAND, INCORPORATED, LOCAL NO. 340
By _________________________________________________
President, Local 340
_________________________________________________
Secretary, Local 340
THE BROTHERHOOD OF UTILITY WORKERS OF
NEW ENGLAND, INCORPORATED
By _____________________________________________
George P. Fogarty, National Representative
1997 Agreement
All the terms and provisions of the existing collective bargaining agreement
will remain in effect for the term of the contract.
1. Term of the contract will be one year from May 1, 1997 to April 30, 1998.
2. During the one year term of the contract, the Union will not arbitrate
issues relating to the Penny Neault letter dated May 1, 1994, or the
outside contractor language, Article 24.
3. In the event of a system emergency, every effort will be made to use
Local 340 members.
4. If positions in the Company become vacant as a result of attrition,
the Company may fill the positions.
5. The Company may fill vacancies in the Line and Street Departments.
6. A 3% Wage Increase, effective April 20, 1997 and paid retroactively
upon ratification of this agreement by the Brotherhood of Utility
Workers of New England, Local 340.
7. The April 15, 1992 Agreement relating to Meter Reading is no longer
in effect, however, the Company and Union agree to negotiate a new
agreement.
8. The Company reiterates its position that we have no current plans to
furlough any regular employee during the term of the present contract.
The above is agreed to and subject to ratification by the Brotherhood of
Utility Workers of New England, Local 340.
______________________________________ _________
Union Date
______________________________________ ___________________
Company Date
INDEX
A
Allowance
Meal, 10, 12, 51
Meal Periods, 9
Meter Reader Car, 58
Meter Reader Meal, 47, 58
Travel-Gas Production, 44
Arbitration, 21
Assignment
Alternate Emergency Nightman, 34
Bucket Trucks, 35
Hot Stick, 38
Inclement Weather, 39
Outside Service Area, 49
Rental Service Work, 45
Rotation, 65
Supervisors, 66
Temporary, 6, 7, 15
Attendance
Training Sessions, 46
B
Backhoe
Use of, 44
Bargaining Unit Work
Supervisors, 51
Benefits
401(k) Plan, 31
Group Insurance, 30
Birthday Holiday, 6
Breaks
Coffee, 49
Bulletin Boards, 33
C
Call In
Vacation, 73
Call Out
Emergency, 64
Car Insurance, 51
Car Washing
Meter Readers, 46
Clerical Pay Plan, 59
Adjustment, 59
Clothing, Damaged, 50
Coffee Breaks, 49
Company Policies, 65, 66
Contractors, 33, 34
Corner-mount, Digger, 35
Council Union Leave, 52
Cross-rostering, 7
Customer Service
Hours of Work, 8
Supervisory Assignment, 66
Uniforms, 68
D
Damage to Clothing, 50
Days of Relief
Consecutive, 72
Double Time - Second Day, 62
Definition
Employees, 1
Dental Insurance, 70
Digger-Corner Mount, 35
Disability Payment Plan, 27, 28, 29, 30
Amount, 28
Eligibility, 28
Lump Sum Settlement, 29
Pay-When-Work, 30
Disability Retrogression, 25, 26, 27
Adjusted Pay Rate, 25, 26, 27
Discharge, 20
Discipline, 20
Discrimination, 53
Distribution, Gas, 37
Driver's License
Class 1, 51
Loss, 37
Reimbursement, 51
Duration
Labor Agreement, 53
E
Educational Assistance, 65
Electric Distribution
Electric Turn-ons, 47
Inclement Weather, 39, 40
Emergency
Call Out, 64
Storm Premium, 5, 6
Emergency Nightman, 34
Christmas, 7
Electric Turn-ons, 47
Employee
Part-time - Definition of, 1
Regular - Definition of, 1
Temporary - Definition of, 1
Equipment
Furnished, 43
Exams
Medical, 40, 41, 42
Roster 7, 44
F
Furlough Employees, 73
G
Gas Distribution
Crew Complement, 37
Inclement Weather, 40
Gas Production
Assignment, 43
Off Season Assignments, 44
Progression, 44
Travel Allowance, 44
Gassing Vehicles, 44
Gloves, Work, 43
Grievances, 20, 21, 22
Group Insurance, 30, 31
H
Health Insurance, 30, 31, 69
Cost, 31
Retirees, 70
Surviving Spouse, 69
Holidays, 6
Birthday, 6
During Vacation Period, 13
Listing of, 6
Saturday, 6
Work on, 7
Hot Stick, 37, 38
Hours of Work, 7
Customer Service, 8
Janitor, 8
Service Department, 8
I
Illness
Disability Payment, 27
Disability Retrogression, 25
Sickness & Accident, Policy, 67
Inclement Weather, 39
Insurance
Dental, 70
Health, 69
Life, 69
Lump Sum Settlement, 29
Motor Vehicle, 51
J
Janitor
Hours of Work, 8
Jury Duty, 32
L
Leaves of Absence
Death in Family, 31
Jury Duty, 32
Military Training, 32
Life Insurance, 69
Loss of Driver's License, 37
M
Meal
Allowance, 10, 51
Period, 9
Medical
Exams, 40, 42
Insurance, 69
Membership
Union, 2
Meter Readers
Car Washing, 46
Safety Sneakers, 51
Uniforms, 68
Work Practices, 47
Military Leave, 19
Reserve Duty, 32
Motor Vehicles
Insurance, 51
O
Off-Hour Coverage, 63
Overtime, 4
Equalization Schedule, 5
Minimum, 4
Planned, 4
Policy, 45, 46
Response to, 45
P
Pay-As-You-Work, 30
Pay Day, 65
Payroll Deductions
Sickness & Accident, 67
Union Dues, 22
Pension, 22, 23, 24, 25
Posting
Bulletin Boards, 33
Vacancies, 17
Premium
Emergency Storm, 5, 6
Gas Plants, 59
Jackhammer, 58
Splicing in Air, 58
Sunday, 62
Probationary, 16
Progression
Chart, 74
Returning to Rosters, 47
Roster 1, 55
Roster 2 and 10, 59
Roster 3, 56
Roster 5, 56
Roster 7, 49
Roster 8, 49
Q
Qualification
Rosters 7 and 8, 47, 49
R
Reduction in Forces, 16, 18, 19
Reimbursement
Driver's License, 51
Hoist Engineer's License, 51
Safety Shoes, 51
Reserve Duty, 32
Rest Period, 61, 62
Retiree Trust, 52
Retirement
Health Insurance, 70
Life Insurance, 69
Pension, 22, 23, 24, 25
Retrogression, 25
S
Safety, 52
Safety Shoes, 51
Company Reimbursement, 51
Employee Purchases, 51
Sneakers, 51
Saturday
Holiday, 6
Schedule of Wages
Roster 1, 55
Roster 2, 55, 59
Roster 3, 55, 56
Roster 5, 56
Roster 6, 56
Roster 7, 56, 57
Roster 8, 57
Roster 9, 58
Roster 10, 58, 59
Roster 11, 58
Roster 12, 58
Roster 13, 58
Roster 15, 58
Roster 16, 59
Roster 19, 59
Roster 20, 59
Scheduling
Vacations, 13
Second Day of Relief, 62, 63
Seniority
Definition, 15
Department Transfers, 17
Furloughed Employees, 17
Leave of Absence, 19
Posting, 17
Probationary, 16
Reduction in Forces, 15
Vacancies, 16
Shift Differential, 62
Sickness and Accident Policy, 67
Snow Plowing, 42
Storm Premium, Emergency, 5, 62
Successors Clause, 53
Sunday Premiums, 62
Supervisory Assignment, 66
Surviving Spouse
Health Insurance, 69
Pension, 24
Suspension, 20
T
Telephone Reimbursement, 65
Temporary Assignment, 7
Thermos Bottles, 50
Time Off, 30
Tools and Equipment, 43
Training
Attendance at Sessions, 46
Rosters 7 and 8, 47
Tuition Refund, 65
Turn Ons
Electric, 47
U
Uniforms
Customer Services, 68
Electric Distribution, 68
Gas Distribution, 68
Meter Readers, 68
Union Dues
Payroll Deduction, 22
Upgrading
Line and Street Departments, 44
To Supervisor, 66
V
Vacancies, 17
Vacations, 12, 13, 14
Entitlement, Follow Pers. or Med. Lv, 14
Holiday, 13
Illness, 14
Scheduling, 12, 14
Vehicles
Fueling, 44
W
Wages. See (see Schedule of Wages)
Job Award Increases, 3
New Employees, 3
Reduction in Forces, 18
Wash-up Time, 43
Work Gloves, 43
Work Practices
Meter Readers, 47
Exhibit 11.1
UNITIL CORPORATION
Computation in Support of Earnings per Share
Year Ended December 31,
1997 1996 1995
(000's Omitted)
BASIC EARNINGS PER SHARE
Net Income $8,235 $8,729 $8,369
Less: Dividend Requirements
on Preferred Stock 276 278 284
Net Income Applicable to Common Stock $7,959 $8,451 $8,085
Average Number of Common Shares
Outstanding 4,413 4,354 4,299
Basic Earnings per Average
Common Share Outstanding $1.80 $1.94 $1.88
DILUTED EARNINGS PER SHARE
Net Income $8,235 $8,729 $8,369
Less: Dividend Requirements
on Preferred Stock 276 278 284
Net Income Applicable to Common Stock $7,959 $8,451 $8,085
Average Number of Common Shares
Outstanding plus
Assumed Options converted* 4,520 4,461 4,371
Diluted Earnings per Average
Common Share Outstanding $1.76 $1.89 $1.85
* Assumes all options were converted to common shares per SFAS 128.
Exhibit 12.1
UNITIL CORPORATION
Computation in Support of Ratio of Earnings to Fixed Charges
Year Ended December 31,
1997 1996 1995 1994 1993
(000's Omitted Except Ratio)
Earnings:
Net Income, per Consolidated
Statements of Earnings $8,235 $8,729 $8,369 $8,038 $7,600
Federal Income Tax 3,025 3,699 3,924 3,480 3,627
Deferred Federal Income Tax 573 321 (298) (186) (179)
State Income Tax 682 688 690 610 610
Deferred State Income Tax 87 137 (16) 72 (154)
Amortization of Tax Credit (172) (194) (202) (211) (217)
Interest on Long-term Debt 5,242 5,142 5,193 4,825 5,692
Amortization of Debt
Discount and Expense 60 57 72 64 119
Rents (annual interest
component) 667 595 572 561 592
Other Interest 1,889 1,049 799 909 713
Total $20,288 $20,223 $19,103 $18,162 $18,403
Fixed Charges:
Interest on Long-term Debt $5,242 $5,142 $5,193 $4,825 $5,692
Amortization of Debt
Discount and Expense 60 57 72 64 119
Rents (annual interest
component) 595 595 572 561 592
Other Interest 1,889 1,049 799 909 713
Total $7,786 $6,843 $6,636 $6,359 $7,116
Ratio of Earnings to
Fixed Charges 2.61 2.96 2.88 2.86 2.59
Exhibit 21.1
Subsidiaries of Registrant
The Company or the registrant has seven wholly-owned subsidiaries,
six of which are corporations organized under the laws of The State of New
Hampshire: Concord Electric Company, Exeter & Hampton Electric Company,
Unitil Power Corp., Unitil Realty Corp., Unitil Resources, Inc., and Unitil
Service Corp. The seventh, Fitchburg Gas and Electric Light Company, is
organized under the laws of The State of Massachusetts.
March 19, 1998
Exhibit 27