-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, b6aBZ8CpVtqeZbLRvwXlyp33kvdjOwlTJ6G5SodJz1KRIEkV1rOwKXUUEVsVih6I wog8ZbmHLbEh6FO1eSjpmA== 0000071297-95-000032.txt : 19950501 0000071297-95-000032.hdr.sgml : 19950501 ACCESSION NUMBER: 0000071297-95-000032 CONFORMED SUBMISSION TYPE: POS AMC PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19950428 SROS: BSE SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW ENGLAND ELECTRIC SYSTEM CENTRAL INDEX KEY: 0000071297 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 041663060 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: POS AMC SEC ACT: 1935 Act SEC FILE NUMBER: 070-07732 FILM NUMBER: 95532641 BUSINESS ADDRESS: STREET 1: 25 RESEARCH DR CITY: WESTBOROUGH STATE: MA ZIP: 01581 BUSINESS PHONE: 5083669011 POS AMC 1 File No. 70-7732 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 POST-EFFECTIVE AMENDMENT NO. 2 TO FORM U-1 APPLICATION/DECLARATION UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 NEW ENGLAND ELECTRIC SYSTEM (Name of company filing this statement) 25 Research Drive, Westborough, Massachusetts 01582 (Address of principal executive offices) NEW ENGLAND ELECTRIC SYSTEM (Name of top registered holding company parent in system) Michael E. Jesanis Robert King Wulff Treasurer Corporation Counsel 25 Research Drive 25 Research Drive Westborough, MA 01582 Westborough, MA 01582 (Names and addresses of agents for service) Item I. Description of Proposed Transaction Background ---------- By orders dated March 8, 1990 (HCAR No. 25051) and January 25, 1991 (HCAR No. 25247), (File No. 70-7732), the Commission permitted to become effective an Application/ Declaration, as amended, under which New England Electric System (NEES or the Company) proposed to issue and sell from time to time through May 1, 1995, an aggregate of up to 500,000 shares of its authorized but unissued common shares, $1 par value, pursuant to the New England Electric System Companies' Incentive Share Plan (the Plan). Through March 31, 1995, NEES issued 41,363 shares pursuant to the Plan leaving a balance of 458,637 authorized but unissued shares. The Company now proposes to further extend the period for issuing common shares under the Plan to December 31, 1997. Participation ------------- Management employees who are participants in New England Electric Companies' Senior Incentive Compensation Plan (SICP), Incentive Compensation Plan (ICP), Incentive Compensation Plan II (ICPII), and Performance Based Bonus Plan (PBBP) participate in the Plan. Share Award ----------- Each participant's award under the Plan is determined by multiplying the cash award, if any, received under the SICP, ICP, ICPII, or PBBP, by a fixed percentage. The fixed percentage varies depending upon the cash award plan in which the participant participates. Cash awards under SICP, ICP, ICPII, and PBBP are contingent upon NEES achieving certain minimum fiscal and/or operating goals and upon the individual achieving specified performance goals. Restrictions on Shares ---------------------- Participants who are awarded Shares under the Plan hold all voting, tender offer, exchange offer, and dividend rights to such Shares. However, the Plan prohibits the sale, assignment, transfer, or conveyance of Shares awarded under the Plan for a period of five years from the date of issuance. Under certain circumstances the restriction on Shares lapse or may be removed. If a participant dies or becomes disabled, the restrictions on all Shares issued to the participant under the Plan lapse. If a participant experiences a serious financial emergency resulting from circumstances beyond his or her control the Benefits Committee of the NEES Companies' Final Average Pay Pension Plan may authorize a removal of restrictions on the number of restricted Shares necessary to alleviate the hardship. In addition, in the event of a "change in control", as defined by the Plan, the restriction on all Shares issued to all participants under the Plan lapse. In short, a "change in control" is defined as an occurrence of certain events which either evidence a merger or acquisition of NEES or cause a significant change in the makeup of the NEES board of directors over a short period of time. Issue of Shares to the Plan --------------------------- Shares awarded to participants under the Plan come from authorized but unissued common shares or from purchases in the open market. Since May, 1991, all purchases have been made in the open market. The decision whether to purchase in the open market or from NEES takes into account NEES' need for common equity, general market conditions, and the relationship between the purchase price and the book value per Share. The price of Shares purchased from NEES is based upon the average of the high and low prices of Shares on the New York Stock Exchange - Composite Transactions as reported in The Wall Street Journal for five consecutive trading days ending on the last trading day prior to the fifteenth day of January following the year for which the award applies. The price of Shares purchased in the open market is the price paid therefrom, exclusive of commissions. The proceeds from the continued sale of the Shares by NEES will be added to the general funds of NEES and be used for any or all of the following purposes: (i) investment in NEES's subsidiaries, through loans or advances to such subsidiaries, purchases of additional shares of their capital stock, or capital contributions, (ii) payment of indebtedness of NEES, or (iii) general purposes of NEES. Neither NEES nor any subsidiary has an ownership interest in an exempt wholesale generator ("EWG") or foreign utility company ("FUCO") as defined in Sections 32 and 33 of the Act nor will NEES or any susidiary acquire such an interest as a result of the transactions proposed herein. Additionally, neither NEES nor any subsidiary is a party to, or has any rights under, a service, sales or construction agreement with an EWG or FUCO. Administration, Amendment and Termination ----------------------------------------- The Plan is administered by the Management Committee, which consists of the Chairman and the President of NEES. The Compensation Committee of the NEES board of directors has sole authority to amend or terminate the Plan. Item 2. Fees, Commissions and Expenses - --------------------------------------- Costs of administering the program are de minimus, with the exception of brokerage fees related to the purchase of Shares on the open market, which have been 3 cents a share for purchases of 37,967 and 49,856 shares for years 1993 and 1994, respectively. Further, there is a $2,000 filing fee associated with the Company's request for an extension to the period for issuing NEES common shares pursuant to the Plan. None of such fees, commissions, or expenses are to be paid to any associate company or affiliate of NEES except for financial, legal and other services to be performed, at cost, by New England Power Service Company. New England Power Service Company is an affiliated service company operating pursuant to Section 13 of the Public Utility Holding Company Act of 1935 (the Act) and the Commission's rules thereunder. Item 3. Applicable Statutory Provisions - ---------------------------------------- The proposed transactions are believed to require approval of the Commission under sections 6, 7, 9, 10 and 12 of the Act. Item 6. Exhibits and Financial Statements - ------------------------------------------ F Opinion of Counsel H-1 Proposed Form of Notice SIGNATURE Pursuant to the requirements of the Public Utility Holding Company Act of 1935, the undersigned Company has duly caused this Post-Effective Amendment No. 2 to be signed on its behalf, as indicated, by the undersigned officer thereunto duly authorized. NEW ENGLAND ELECTRIC SYSTEM s/Michael E. Jesanis Michael E. Jesanis Treasurer Date: April 28, 1995 The name "New England Electric System" means the trustee or trustees for the time being (as trustee or trustees but not personally) under an agreement and declaration of trust dated January 2, 1926, as amended, which is hereby referred to, and a copy of which as amended has been filed with the Secretary of the Commonwealth of Massachusetts. Any agreement, obligation or liability made, entered into or incurred by or on behalf of New England Electric System binds only its trust estate, and no shareholder, director, trustee, officer or agent thereof assumes or shall be held to any liability therefor. EX-99 2 EXHIBIT INDEX Exhibit No. Description Page - ----------- ----------- ---- F Opinion of Counsel Filed herewith H-1 Proposed Form of Notice Filed herewith EX-5 3 EXHIBIT F Exhibit F 25 RESEARCH DRIVE, WESTBOROUGH, MASSACHUSETTS 01582 =================================================== April 28, 1995 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Re: New England Electric System Issue and Sale of Common Shares Pursuant to New England Electric System Companies' Incentive Share Plan File No. 70-7732 ------------------------------------------------------- Dear Commissioners: The undersigned, Corporation Counsel and Assistant General Counsel for New England Electric System (the Company), have been of counsel for the Company in connection with its proposed issue of up to 500,000 common shares in accordance with and pursuant to the Company's Incentive Share Plan (the Plan) through December 31, 1997. As such counsel, we have reviewed the various documents and proceedings relating to said issue, including, without limiting the foregoing and the corporate and regulatory authority with reference to said issue. Accordingly, we are familiar with the proceedings taken in connection with such issue. The proposed transaction is subject to (1) compliance with the applicable provisions of the Public Utility Holding Company Act of 1935, the Securities Act of 1933, the Securities Exchange Act of 1934, and the rules and regulations under each, and (2) due issuance of the shares and receipt of full payment therefor. Subject to the foregoing, it is our opinion that in the event that the proposed transaction is consummated in accordance with the statement on Form U-1 as amended: 1. All state laws applicable to the proposed transaction will have been complied with. 2. The Company is a duly created and existing voluntary association in The Commonwealth of Massachusetts. The authorized shares of the Company consists of 150,000,000 shares of the par value of $1 each. -2- 3. When duly issued and paid for, the authorized common shares will be, validly issued, full-paid and non-assessable, and the holders thereof will be entitled to the rights and privileges appertaining thereto set forth in the Agreement and Declaration of Trust dated January 2, 1926, as amended (the Agreement). Article 9 of the Agreement provides in substance that no shareholder, director, officer, or agent shall be held to any liability in contract, tort or otherwise; that every person shall look only to the trust estate for payment or damages or otherwise, and that in every written agreement or obligation reference shall be made to the Agreement and to the substance of such part of the above provisions of Article 9 as are applicable, and that neither the Board of Directors nor the Trustee nor any officer, agent or representative shall have any power or authority to enter into any agreement or obligation on behalf of the Company except in accordance with the provisions of said Article 9. Article 10 of the Agreement provides that no trustee, director, officer, or agent of the Company shall be entitled to look to the shareholders personally for indemnity against liability incurred by them or to call upon the shareholders for the payment of any assessment except only in the case of shares which by their express terms are issued part-paid and assessable and then only as therein provided. In Article 27 of the Agreement it is further provided that all shares issued and to be issued shall be full-paid and non-assessable except to the extent otherwise specifically provided in the certificates representing such shares. The Agreement expressly declares in Article 39 that a trust and not a partnership is deemed to be created and that the shareholders shall be deemed to hold only the relationship of cestuis que trustent to the Trustee. Despite these provisions, the shareholders of a voluntary association such as the Company might, with respect to the liability of shareholders under Massachusetts law, be treated in legal contemplation as partners and as such under some circumstances might be held personally liable for certain obligations or liabilities of the Company. We consider the possibility of any such liability remote because, in our opinion, shareholders are protected under the laws of Massachusetts from personal liability on contract obligations arising from instruments containing the substance of such said provisions of Article 9 as are applicable (it being the practice of the Company to insert such in all contract obligations, including all debt securities), and because the Company is a holding company so that the possibility of substantial liabilities arising from torts or statutory liabilities or penalties, other than tax liabilities, is not as great as in the case of companies operating physical properties. Notwithstanding the fact that the Company is a holding company, in suits and claims against its subsidiaries, including environmental claims, courts and agencies might disregard corporate formalities and assign liability to the Company despite traditional principles of corporate law. Further, we understand that unincorporated -3- voluntary associations have been treated as general partnerships under the laws of a few states, including Texas in which the Company's oil and gas subsidiary has qualified to do business as a foreign corporation. Even so, for the reasons cited above and because of the substantial capitalization of the Company and its subsidiaries, we consider the possibility of personal liability of the shareholders of the Company to be remote. 4. Consummation of the proposed transaction will not violate the legal rights of the holders of any securities issued by the Company or any associate company thereof. 5. The sale of the authorized shares of the Company pursuant to the Plan is exempt from registration under the Securities Act of 1933 because the Plan is an involuntary, noncontributory bonus plan as provided in Release No. 33-6188. This opinion does not relate to qualification or registration of shares under securities or "blue sky" laws of the several states, or to the Federal income tax consequences of participation in the Plan. We hereby give our consent to the use of this opinion as a part of the statement on Form U-1, as amended, filed by the Company with the Securities and Exchange Commission. Very truly yours, s/Kirk L. Ramsauer Kirk L. Ramsauer Assistant General Counsel s/Robert King Wulff Robert King Wulff Corporation Counsel EX-99 4 EXHIBIT H-1 Exhibit H-1 Proposed Form of Notice ----------------------- NOTICE OF PROPOSED EXTENSION OF AUTHORIZATION TO ISSUE ADDITIONAL COMMON SHARES PURSUANT TO INCENTIVE SHARE PLAN New England Electric System (NEES or the Company), 25 Research Drive, Westborough, Massachusetts 01582, a registered holding company, has filed Post-Effective Amendment No. 2 to its Application/Declaration with this Commission pursuant to Sections 6 and 7 of the Public Utility Holding Company Act of 1935 and Rule 50(a)(5) thereunder. By orders dated March 8, 1990 (HCAR No. 25051) and January 25, 1991 (HCAR No. 25247), the Commission permitted to become effective an Application/Declaration, as amended, under which New England Electric System (NEES or the Company) proposed to issue and sell from time to time through May 1, 1995, up to 500,000 shares of its authorized by unissued common shares, $1 par value, pursuant to the New England Electric System Companies Incentive Share Plan (the Plan). The Plan is sponsored by certain NEES subsidiaries. Through March 31, 1995, NEES issued 41,363 shares pursuant to the Plan leaving a balance of 458,637 authorized but unissued shares. The Company now proposes to further extend the period for issuing common shares under the Plan to December 31, 1997. The proceeds from the sale of any common shares will be added to the general funds of the Company and be used for any or all of the following purposes: (i) investment in the Company's subsidiaries, through loans or advances to such subsidiaries, purchases of additional shares of their capital stocks, or capital contributions, (ii) payment of indebtedness of the Company, or (iii) general purposes of the Company. The proposal and any amendments thereto are available for public inspection through the Commission's Office of Public Reference. Interested persons wishing to comment or request a hearing should submit their views in writing by to the Secretary, Securities and Exchange Commission, Washington D.C. 20549, and serve a copy on the applicant at the address specified above. Proof of service (by affidavit or, in the case of an attorney at law by certificate) should be filed with the request. Any request for a hearing shall identify specifically the issues of fact or law that are disputed. A person who so requests will be notified of any hearing, if ordered, and will receive a copy of any notice or order issued in this matter. After said date, the proposal, as filed or as it may be amended, may be authorized. For the Commission, by the Office of Public Utility Regulation, pursuant to delegated authority. -----END PRIVACY-ENHANCED MESSAGE-----