-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KrrLKXEn7lVnlYOXdWGgdySJQnLQoaXh7qzVGPmXBF+p1Ctb3xMO1xB6o6zpeP1Z v+4YtLhz8hyGB0CRBgWvSw== 0000950110-96-000989.txt : 19960830 0000950110-96-000989.hdr.sgml : 19960830 ACCESSION NUMBER: 0000950110-96-000989 CONFORMED SUBMISSION TYPE: SC 13E4 PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 19960829 SROS: NYSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ATLANTIC CITY ELECTRIC CO CENTRAL INDEX KEY: 0000008192 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 210398280 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13E4 SEC ACT: 1934 Act SEC FILE NUMBER: 005-46777 FILM NUMBER: 96623561 BUSINESS ADDRESS: STREET 1: 6801 BLACK HORSE PIKE CITY: PLEASANTVILLE STATE: NJ ZIP: 08232 BUSINESS PHONE: 6096454100 MAIL ADDRESS: STREET 1: PO BOX 1264 CITY: PLEASANTVILLE STATE: NJ ZIP: 08232 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ATLANTIC CITY ELECTRIC CO CENTRAL INDEX KEY: 0000008192 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 210398280 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13E4 BUSINESS ADDRESS: STREET 1: 6801 BLACK HORSE PIKE CITY: PLEASANTVILLE STATE: NJ ZIP: 08232 BUSINESS PHONE: 6096454100 MAIL ADDRESS: STREET 1: PO BOX 1264 CITY: PLEASANTVILLE STATE: NJ ZIP: 08232 SC 13E4 1 SCHEDULE 13E-4 ================================================================================ SECURITIES AND EXCHABGE COMMISSION Washington, D.C. 20549 SCHEDULE 13E-4 Issuer Tender Offer Statement (Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934) Atlantic City Electric Company (Name of the Issuer and Person(s) Filing Statement) $7.80 No Par Preferred Stock (Title of Class of Securities) 048303 86 1 ($7.80 No Par Preferred Stock) (CUSIP Number of Class of Securities) James E. Franklin II, Esq. Senior Vice President, Secretary and General Counsel Atlantic City Electric Company 6801 Black Horse Pike Egg Harbor Township New Jersey 08234-4130 (609) 645-4100 Copies to: Vincent Pagano, Jr., Esq. Simpson Thacher & Bartlett 425 Lexington Avenue New York, New York 10017 (212) 455-2000 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of the Person(s) Filing Statement) August 29, 1996 (Date Tender Offer First Published, Sent or Given to Security Holders) ================================================================================ 2 Calculation of Filing Fee ================================================================================ Transaction Value* Amount of filing fee: - -------------------------------------------------------------------------------- $77,700,000 $15,540 ================================================================================ * Pursuant to Section 13(e)(3) of the Securities Exchange Act of 1934, as amended, and Rule 0-11(b)(1) thereunder, the transaction value was calculated by multiplying 700,000 shares of $7.80 No Par Preferred Stock by $111.00, the per share purchase price. / / Check box if any part of the fee is offset as provided by rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the form or schedule, and the date of its filing. Amount Previously Paid: N/A Filing Parties: N/A Form or Registration Nos.: N/A Date Filed: N/A 3 EXPLANATORY NOTE Copies of the Offer to Purchase and the Letter of Transmittal, among other documents, have been filed by Atlantic City Electric Company, a New Jersey corporation (the "Company") as Exhibits to this Issuer Tender Offer Statement on Schedule 13E-4 (the "Statement"). Unless otherwise indicated, all material incorporated by reference in this Statement in response to items or sub-items of this Statement is incorporated by reference to the corresponding caption in the Offer to Purchase, including the information stated under such captions as being incorporated in response thereto. Item 1. Security and Issuer. (a) The name of the issuer is Atlantic City Electric Company, a New Jersey corporation, which has its principal executive offices at 6801 Black Horse Pike, Egg Harbor Township, New Jersey 08234-4130 (telephone number 609-645-4100). (b) The information set forth in the front cover page, "Introduction," Section 1 --"Purpose of the Offer; Certain Effects of the Offer; Plans of the Company After the Offer" and Section 12 --"Transactions and Agreements Concerning the Shares" of the Offer to Purchase is incorporated herein by reference. (c) The information set forth in Section 9 --"Price Ranges of Shares; Dividends" of the Offer to Purchase is incorporated herein by reference. (d) Not applicable. Item 2. Source and Amount of Funds. (a) The information set forth in Section 11 --"Source and Amount of Funds" in the Offer to Purchase is incorporated herein by reference. (b) Not applicable. Item 3. Purpose of the Tender Offer and Plans or Proposals of the Issuer or Affiliate. The information set forth in Section 1 --"Purpose of the Offer; Certain Effects of the Offer; Plans of the Company After the Offer" in the Offer to Purchase is incorporated herein by reference. Item 4. Interest in Securities of the Issuer. The information set forth in Section 12 --"Transactions and Agreements Concerning the Shares" in the Offer to Purchase is incorporated herein by reference. Item 5. Contracts, Arrangements, Understandings or Relationships with Respect to the Issuer's Securities. Not applicable. Item 6. Persons Retained, Employed or to be Compensated. 4 The information set forth in Section 14 --"Fees and Expenses" in the Offer to Purchase is incorporated herein by reference. Item 7. Financial Information. (a)-(b) The information set forth in Section 10 --"Certain Information Concerning the Company" in the Offer to Purchase and Exhibits (g)(1), (g)(2) and (g)(3) hereto is incorporated herein by reference. Item 8. Additional Information. (a) Not applicable. (b) There are no applicable regulatory requirements which must be complied with or approvals which must be obtained in connection with the Offer other than compliance with the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder including, without limitation, Rule 13e-3 and Rule 13e-4, the rules and regulations promulgated by the New Jersey Board of Public Utilities and the requirements of the state securities or "Blue Sky" laws. (c) Not applicable. (d) Not applicable. (e) Not applicable. Item 9. Material to be Filed as Exhibits. Exhibit No. Description - ----------- ----------- (a)(1) Offer to Purchase dated August 29, 1996. (a)(2) Letter of Transmittal. (a)(3) Notice of Guaranteed Delivery. (a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees dated August 29, 1996. (a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(6) Letter to Holders of Shares dated August 29, 1996. (a)(7) Press Release dated August 29, 1996. (a)(8) Summary Advertisement dated August 29, 1996. (a)(9) Guidelines of the Internal Revenue Service for Certification of Taxpayer Identification Number on Substitute Form W-9. (b) Not applicable. (c) Not applicable. (d) Not applicable. (e) Not applicable. (f) Not applicable. 5 Exhibit No. Description - ----------- ----------- (g)(1) The Company's Annual Report on Form 10-K for the year ended December 31, 1995 (incorporated by reference to Commission File No. 1-3559). (g)(2) The Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996 and June 30, 1996 (incorporated by reference to Commission File No. 1-3559). (g)(3) The Company's Current Reports on Form 8-K dated May 29, 1996, June 26, 1996, July 25, 1996 and August 13, 1996 (incorporated by reference to Commission File No. 1-3559). 6 SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. ATLANTIC CITY ELECTRIC COMPANY By: /s/ Louis M. Walters ---------------------------------------- Name: Louis M. Walters Title: Vice President, Treasurer and Assistant Secretary Dated: August 29, 1996 7 EXHIBIT INDEX Exhibit No. Description - ----------- ----------- (a)(1) Offer to Purchase dated August 29, 1996. (a)(2) Letter of Transmittal. (a)(3) Notice of Guaranteed Delivery. (a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees dated August 29, 1996. (a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(6) Letter to Holders of Shares dated August 29, 1996. (a)(7) Press Release dated August 29, 1996. (a)(8) Summary Advertisement dated August 29, 1996. (a)(9) Guidelines of the Internal Revenue Service for Certification of Taxpayer Identification Number on Substitute Form W-9. (b) Not applicable. (c) Not applicable. (d) Not applicable. (e) Not applicable. (f) Not applicable. (g)(1) The Company's Annual Report on Form 10-K for the year ended December 31, 1995 (incorporated by reference to Commission File No. 1-3559). (g)(2) The Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996 and June 30, 1996 (incorporated by reference to Commission File No. 1-3559). (g)(3) The Company's Current Reports on Form 8-K dated May 29, 1996, June 26, 1996, July 25, 1996 and August 13, 1996 (incorporated by reference to Commission File No. 1-3559). EX-99.(A)(1) 2 OFFER TO PURCHASE Offer to Purchase for Cash by Atlantic City Electric Company All Outstanding Shares of its $7.80 No Par Preferred Stock (cumulative) (CUSIP NO. 048303 86 1) at a Purchase Price of $111.00 Per Share - -------------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON MONDAY, OCTOBER 7, 1996 UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- Atlantic City Electric Company, a New Jersey corporation (the "Company"), invites the holders of its $7.80 No Par Preferred Stock (cumulative) (the "Preferred") to tender their shares of such stock (the "Shares") at a price of $111.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in this Offer to Purchase (the "Offer to Purchase") and in the Letter of Transmittal (the "Letter of Transmittal" and, together with the Offer to Purchase, the "Offer"). The Company will purchase all Shares validly tendered and not withdrawn, upon the terms and subject to the conditions of the Offer. -------------- THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 8--"CERTAIN CONDITIONS OF THE OFFER." -------------- The Shares are traded in the over-the-counter market and are not listed on any national securities exchange or quoted on the automated quotation system of a registered securities association. For information concerning the Shares, see Section 9--"Price Ranges of Shares; Dividends." STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. -------------- THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. -------------- THE COMPANY, ITS BOARD OF DIRECTORS AND ITS EXECUTIVE OFFICERS MAKE NO RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER ANY OR ALL SHARES PURSUANT TO THE OFFER. STOCKHOLDERS MUST MAKE THEIR OWN DECISION AS TO WHETHER TO TENDER SHARES PURSUANT TO THE OFFER AND, IF SO, HOW MANY SHARES TO TENDER. -------------- The Dealer Managers for the Offer are: Goldman, Sachs & Co. ----------- The date of this Offer to Purchase is August 29, 1996. IMPORTANT Any stockholder desiring to tender any or all of such stockholder's Shares should either (1) complete and sign the Letter of Transmittal, in accordance with the instructions in the Letter of Transmittal, mail it or deliver it by hand or facsimile transmission, and any other required documents to The Bank of New York, as Depositary (the "Depositary"), and either deliver the certificates for such Shares to the Depositary or deliver such Shares pursuant to the procedure for book-entry transfer set forth in Section 5--"Procedure for Tendering Shares" or (2) request such stockholder's broker, dealer, commercial bank, trust company or nominee to effect the transaction for such stockholder. Stockholders whose Shares are registered in the name of a broker, dealer, commercial bank, trust company or nominee must contact such broker, dealer, commercial bank, trust company or nominee if they desire to tender such Shares. Stockholders who desire to tender Shares and whose certificates for such Shares are not immediately available, or who cannot comply in a timely manner with the procedure for book-entry transfer, should tender such Shares by following the procedures for guaranteed delivery set forth in Section 5--"Procedure for Tendering Shares." Questions or requests for assistance or for additional copies of this Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery or other tender offer materials may be directed to Georgeson & Company Inc., as Information Agent, or the Dealer Managers at their respective addresses and telephone numbers set forth on the back cover of this Offer to Purchase. NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE COMPANY AS TO WHETHER STOCKHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING SHARES PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN OR IN THE LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH RECOMMENDATION, INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. TABLE OF CONTENTS SUMMARY ................................................................... iii INTRODUCTION .............................................................. 1 SPECIAL FACTORS ........................................................... 1 Section 1. Purpose of the Offer; Certain Effects of the Offer; Plans of the Company After the Offer................................... 1 Section 2. Certain Federal Income Tax Consequences....................... 3 Section 3. Certain Legal Matters; Regulatory and Foreign Approvals; No Appraisal Rights........................................... 5 THE OFFER.................................................................. 6 Section 4. Number of Shares; Purchase Price; Expiration Date; Receipt of Dividend; Extension of the Offer.............................. 6 Section 5. Procedure for Tendering Shares................................ 6 Section 6. Withdrawal Rights............................................. 8 Section 7. Acceptance for Payment of Shares and Payment of Purchase Price 9 Section 8. Certain Conditions of the Offer............................... 10 Section 9. Price Ranges of Shares; Dividends............................. 11 Section 10. Certain Information Concerning the Company.................... 12 Section 11. Source and Amount of Funds.................................... 14 Section 12. Transactions and Agreements Concerning the Shares............. 14 Section 13. Extension of Tender Period; Termination; Amendments........... 15 Section 14. Fees and Expenses............................................. 15 Section 15. Miscellaneous................................................. 16 ii SUMMARY This general summary is provided solely for the convenience of holders of Shares and is qualified in its entirety by reference to the full text and more specific details contained in this Offer to Purchase and the Letter of Transmittal and any amendments hereto and thereto. Each of the capitalized terms used in this Summary and not defined herein has the meaning set forth elsewhere in this Offer to Purchase. The Company.............................Atlantic City Electric Company. The Shares..............................Shares of $7.80 No Par Preferred Stock (cumulative). Number of Shares Sought.................All outstanding Shares. Purchase Price..........................$111.00 per Share, net to the seller in cash. See Section 9--"Price Ranges of Shares; Dividends." Conditions to the Offer.................The Offer is not conditioned upon any minimum number of Shares being tendered. The Offer is, however, subject to certain other conditions. Expiration Date of the Offer............The Offer expires on Monday, October 7, 1996 at 5:00 p.m., New York City time, unless extended. How to Tender Shares....................See Section 5--"Procedure for Tendering Shares." For further information, call the Information Agent or the Dealer Managers or consult your broker for assistance. Withdrawal Rights.......................Tendered Shares may be withdrawn at any time until the expiration of the Offer and, unless theretofore accepted for payment, may also be withdrawn after Friday, October 25, 1996. See Section 6--"Withdrawal Rights." Purpose of the Offer....................'The Company is making the Offer because it believes that the purchase of Shares is economically attractive to the Company. In addition, the Offer gives stockholders the opportunity to sell their Shares at a premium over market price and without the usual transaction costs associated with a market sale. See Section 1--"Purpose of the Offer; Certain Effects of the Offer; Plans of the Company After the Offer." Dividends...............................The Board of Directors of the Company will consider the declaration of dividends on the Company's capital stock at its meeting on September 12, 1996. The Regular Quarterly Dividend on the Preferred, if, when and as declared, will be paid on November 1, 1996 to holders of record as of the close of business on October 4, 1996. A holder of record of Shares on October 4, 1996 who tenders Shares will be entitled to the Regular Quarterly Dividend, regardless of when such tender is made. Holders of Shares purchased pursuant to the Offer will not be entitled to any dividends in respect of any later dividend periods. See Section 9--"Price Ranges of Shares; Dividends." Brokerage Commissions...................Not payable by stockholders. iii Stock Transfer Tax......................None, except as provided in Instruction 6 of the Letter of Transmittal. See Section 7--"Acceptance for Payment of Shares and Payment of Purchase Price." Payment Date............................Promptly after the applicable Expiration Date of the Offer. Further Information.....................Additional copies of this Offer to Purchase and the Letter of Transmittal may be obtained by contacting Georgeson & Company Inc., Wall Street Plaza, New York, New York 10005, telephone (800) 223-2064 (toll-free) and (212) 440-9800 (brokers and dealers). Questions about the Offer should be directed to Goldman, Sachs & Co. at (800) 828-3182. iv INTRODUCTION To the Holders of $7.80 No Par Preferred Stock: Atlantic City Electric Company, a New Jersey corporation (the "Company"), invites the holders of its $7.80 No Par Preferred Stock (cumulative) (the "Preferred") to tender their shares of such stock (the "Shares") at a price of $111.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in this Offer to Purchase (the "Offer to Purchase") and in the Letter of Transmittal (which, together with the Offer to Purchase, constitutes the "Offer"). The Company will purchase all Shares validly tendered and not withdrawn, upon the terms and subject to the conditions of the Offer. THE COMPANY, ITS BOARD OF DIRECTORS AND ITS EXECUTIVE OFFICERS MAKE NO RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER ANY OR ALL SHARES PURSUANT TO THE OFFER. STOCKHOLDERS MUST MAKE THEIR OWN DECISION AS TO WHETHER TO TENDER SHARES PURSUANT TO THE OFFER AND, IF SO, HOW MANY SHARES TO TENDER. The Board of Directors of the Company (the "Board") will consider the declaration of dividends on the Company's capital stock at its September 12, 1996 meeting. The regular quarterly dividend on the Preferred (the "Regular Quarterly Dividend"), if, when and as declared, will be paid on November 1, 1996 to holders of record as of the close of business on October 4, 1996. A holder of record of Shares on October 4, 1996 who tenders Shares will be entitled to the Regular Quarterly Dividend, regardless of when such tender is made. Holders of Shares purchased pursuant to the Offer will not be entitled to any dividends in respect of any later dividend periods. THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 8--"CERTAIN CONDITIONS OF THE OFFER." Tendering stockholders will not be obligated to pay brokerage commissions, solicitation fees or, subject to the Instructions to the Letter of Transmittal, stock transfer taxes on the purchase of Shares by the Company. The Company will pay all charges and expenses of the Depositary, Information Agent and the Dealer Managers incurred in connection with the Offer. As of August 28, 1996, there were 700,000 Shares issued and outstanding. The Shares are traded in the over-the-counter market and are not listed on any national securities exchange or quoted on the automated quotation system of a registered securities association. Stockholders are urged to obtain current market quotations for the Shares. The information concerning recent quarterly trading history of the Shares is set forth in Section 9--"Price Ranges of Shares; Dividends." SPECIAL FACTORS Section 1. Purpose of the Offer; Certain Effects of the Offer; Plans of the Company After the Offer. The Company is making the Offer because it believes that, given the current market prices of the Shares and the opportunity for the Company to replace the Shares with other securities that in the aggregate have a lower after-tax cost, the purchase of the Shares pursuant to the Offer is economically attractive to the Company. See Section 10--"Certain Information Concerning the Company." The Board, including all non-employee directors of the Company, has authorized the Offer by a unanimous vote. The Company believes the Offer is fair to unaffiliated holders of Shares. In making this determination, the Company considered that (a) the Offer gives holders of Shares the opportunity to sell their Shares at a 1 premium over market price and (b) the Offer provides stockholders who are considering a sale of all or a portion of the Shares the opportunity to sell those Shares for cash without the usual transaction costs associated with open-market sales. See Section 9--"Price Ranges of Shares; Dividends." The Company did not find it practicable to, and did not, quantify or otherwise assign relative weights to these factors. Neither the Company nor the Board received any report, opinion or appraisal from an outside party which is materially related to the Offer, including, but not limited to, any report, opinion or appraisal relating to the consideration or the fairness of the consideration to be offered to the holders of the Shares or the fairness of such Offer to the Company or the unaffiliated holders of Shares. Neither the Board nor any director has retained an unaffiliated representative to act solely on behalf of unaffiliated holders of Shares for the purposes of negotiating the terms of the Offer or preparing a report concerning the fairness of the Offer. Except as set forth in Section 10--"Certain Information Concerning the Company" or in Section 12-- "Transactions and Agreements Concerning the Shares," (i) following the consummation of the Offer, the business and operations of the Company will be continued by the Company substantially as they are currently being conducted and (ii) neither the Company nor Atlantic Energy, Inc. ("Energy"), the holder of all issued and outstanding common stock of the Company, has any plans or proposals which relate to or would result in: (a) the acquisition by any Person of additional securities of the Company or Parent or the disposition of securities of the Company or Parent, other than in the ordinary course of business; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation involving the Company, its subsidiary or Parent; (c) a sale or transfer of a material amount of assets of the Company or its subsidiary; (d) any change in the present Board or management of the Company or Parent; (e) any material change in the present dividend rate or policy or indebtedness or capitalization of the Company; (f) any other material change in the Company's corporate structure or business; (g) a change in the Company's By-Laws or the Agreement of Merger, as amended, forming the Company; (h) a class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"); or (i) the suspension of the Company's obligation to file reports pursuant to Section 15(d) of the Exchange Act. Following the expiration of the Offer, the Company may, in its sole discretion, determine to redeem Shares then subject to redemption at the applicable redemption prices, or to purchase any outstanding Shares through privately negotiated transactions, open market purchases, another tender offer or otherwise, on such terms and at such prices as the Company may determine from time to time. The terms of subsequent purchases or offers could differ from those of the Offer, and may be at a higher price than the related price per Share offered hereby, except that the Company will not make any such purchases of Shares until the expiration of ten business days after the termination of the Offer. Any possible future purchases of Shares by the Company will depend on many factors, including the market prices of the Shares, the Company's business and financial position, alternative investment opportunities available to the Company, the results of the Offer and general economic and market conditions. See Section 12-- "Transactions and Agreements Concerning the Shares." As of June 30, 1996, the ratings of the Company's preferred stock by Standard & Poor's Ratings Group ("S&P") and Moody's Investors Service, Inc. ("Moody's") were BBB+ and Baa1, respectively. The purchase of Shares pursuant to the Offer will reduce the number of holders of Preferred and the number of such Shares that might otherwise trade publicly, and, depending upon the number of Shares so purchased, such reduction could adversely affect the liquidity and market value of the remaining Shares held by the public. The extent of the public market for the Preferred and the availability of price quotations would, however, depend upon such factors as the number of stockholders remaining at such time, the interest in maintaining a market in the Preferred on the part of securities firms and other factors. There are currently issued and outstanding 700,000 Shares of the Preferred that are traded only in the over-the-counter market. There is currently one holder of record of the Preferred. All Shares purchased by the Company pursuant to the Offer will be retired, cancelled and thereafter returned to the status of authorized but unissued shares of the Company's preferred stock. The Shares are subject to a sinking fund which requires that beginning May 1, 2001 and annually on May 1 through 2005, 115,000 2 Shares be redeemed at a redemption price of $100 per Share. The Company has the option to redeem through the operation of the sinking fund up to an additional 115,000 Shares at a redemption price of $100 per Share on each May 1 in each such year. On May 1, 2006, 125,000 Shares must be redeemed through the operation of the sinking fund at a redemption price of $100 per Share. In addition, the Shares are redeemable in whole or in part at the option of the Company at any time on or after May 1, 2006 at a redemption price of $100 per Share. Upon liquidation or dissolution of the Company, holders of the Preferred are entitled to receive a liquidation preference of $100 per Share, plus all accumulated and unpaid dividends thereon to the date of payment, prior to the payment of any amounts to holders of the Company's common stock. THE COMPANY, ITS BOARD AND ITS EXECUTIVE OFFICERS MAKE NO RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER ANY OR ALL SHARES PURSUANT TO THE OFFER. STOCKHOLDERS MUST MAKE THEIR OWN DECISION AS TO WHETHER TO TENDER SHARES PURSUANT TO THE OFFER AND, IF SO, HOW MANY SHARES TO TENDER. Section 2. Certain Federal Income Tax Consequences EACH HOLDER OF SHARES IS URGED TO CONSULT AND RELY ON SUCH HOLDER'S OWN TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES TO THE HOLDER OF TENDERING SHARES PURSUANT TO THE OFFER. In General. The following summary describes certain federal income tax consequences relating to the Offer. The summary deals only with Shares held as capital assets within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the "Code"), and does not address tax consequences that may be relevant to investors in special tax situations, such as certain financial institutions, tax-exempt organizations, life insurance companies, dealers in securities or currencies, or stockholders holding the Shares as part of a conversion transaction, as part of a hedge or hedging transaction, or as a position in a straddle for tax purposes. Each stockholder should consult its own tax advisor with regard to the Offer and the application of federal income tax laws, as well as the laws of any state, local or foreign taxing jurisdiction, to its particular situation. Characterization of the Sale. A sale of Shares by a stockholder of the Company pursuant to the Offer will be a taxable transaction for federal income tax purposes. Under Section 302 of the Code, a sale of Shares by a stockholder to the Company pursuant to the Offer will be treated as a "sale or exchange" of such Shares for federal income tax purposes (rather than as a distribution by the Company with respect to the Shares held by the tendering stockholder) if the receipt of cash upon such sale (a) results in a "complete redemption" (i.e., a complete termination of the stockholder's interest) of the Shares and any other stock in the Company owned by the stockholder, or (b) is "not essentially equivalent to a dividend" with respect to the stockholder (each as described below). If a stockholder is treated as recognizing gain or loss from the disposition of the Shares for cash, such gain or loss will be equal to the difference between the amount of cash received by the stockholder pursuant to the Offer and the stockholder's tax basis in the Shares sold pursuant to the Offer. Any such gain or loss will be capital gain or loss, and will be long-term capital gain or loss if the Shares have been held for more than one year. If a tendering stockholder does not own, either directly or indirectly under the attribution rules described below, any common stock of Parent, a sale of Shares by such stockholder to the Company pursuant to the Offer will be treated as a sale or exchange of such Shares for federal income tax purposes, provided that the Shares constitute a capital asset in such stockholder's hands. See "--Section 302 Tests" and "--Constructive Ownership" below. If a stockholder is not treated under the Section 302 tests as recognizing gain or loss on an exchange of Shares for cash, the entire amount of cash received pursuant to the exchange will be treated as a dividend to the extent of the stockholder's allocable portion of the Company's earnings and profits for federal income tax purposes. The cash amount of such dividend would be included in gross income as an ordinary item in its entirety (without reduction for the tax basis of the Shares sold pursuant to the Offer), no loss would be recognized, and 3 the tendering stockholder's basis in the Shares sold pursuant to the Offer would be added to such stockholder's basis in its remaining Shares or other stock that it owns in the Company, if any. To the extent the amount of cash received by the stockholder pursuant to the Offer exceeds such stockholder's allocable portion of the Company's earnings and profits, such stockholder's basis will be reduced by the amount of such excess. If the amount of cash received by such stockholder exceeds its basis in the Shares, the stockholder would be required to treat the excess as gain from the sale or exchange of property. If a sale of Shares by a corporate stockholder is treated as a dividend, the corporate stockholder should consult its own tax advisors about limitations affecting the availability of the dividends received deduction. Section 302 Tests. The receipt of cash by a stockholder will be a "complete redemption" if either (a) all of the Shares and any other stock of the Company actually and constructively owned by the stockholder are sold pursuant to the Offer, or (b) all of the Shares and any other stock of the Company actually owned by the stockholder are sold pursuant to the Offer and, with respect to Shares and other stock of the Company constructively owned by the stockholder which are not sold pursuant to the Offer, the stockholder waives constructive ownership of all such Shares under procedures described in Section 302(c) of the Code. However, Section 302(c) only permits the waiver of the constructive ownership rules in limited circumstances. Accordingly, stockholders expecting to waive constructive ownership should consult their own tax advisors regarding eligibility and procedural rules applicable to their particular situations. The receipt of cash by a stockholder will be "not essentially equivalent to a dividend" if the stockholder's sale of Shares pursuant to the Offer results in a "meaningful reduction" in the stockholder's interest in the Company. The sale of Shares to the Company by a tendering stockholder that does not own, either directly or indirectly under the attribution rules, any common stock of Parent, or that owns only a small amount of common stock of Parent, should qualify as "not essentially equivalent to a dividend". However, because what constitutes a "meaningful reduction" depends upon a variety of factors, stockholders expecting to rely upon the "not essentially equivalent to a dividend" test should consult their own tax advisors as to its application in their particular situations. Constructive Ownership. In determining whether any of the tests under Section 302 of the Code are satisfied, stockholders must take into account not only the Shares which are actually owned by the stockholder, but also Shares which are constructively owned by the stockholder under Section 318 of the Code. Under Section 318 of the Code, a stockholder may constructively own Shares actually owned, and in some cases constructively owned, by certain related individuals or entities and Shares which the stockholder has the right to acquire by exercise of an option or by conversion. Contemporaneous dispositions or acquisitions of Shares by a stockholder or related individuals or entities may be deemed to be part of a single integrated transaction which will be taken into account in determining whether any of the tests under Section 302 of the Code have been satisfied. Foreign Stockholders. The Company will withhold federal income tax at a rate of 30% from gross proceeds paid pursuant to the Offer to a foreign stockholder or his agent, unless the Company determines that a reduced rate of withholding is applicable pursuant to a tax treaty or that an exemption from withholding is applicable because such gross proceeds are effectively connected with the conduct of a trade or business by the foreign stockholder within the United States. For this purpose, a foreign stockholder is any stockholder that is not (a) a citizen or resident of the United States, (b) a corporation, partnership or other entity created or organized in or under the laws of the United States or any state within the United States, or (c) any estate or trust the income of which is subject to federal income taxation regardless of its source. Without definite knowledge to the contrary, the Company will determine whether a stockholder is a foreign stockholder by reference to the stockholder's address. A foreign stockholder may be eligible to file for a refund of such tax or a portion of such tax if such stockholder (a) meets the "complete redemption," or "not essentially equivalent to a dividend" tests described above, (b) is entitled to a reduced rate of withholding pursuant to a treaty and the Company withheld at a higher rate, or (c) is otherwise able to establish that no tax or a reduced amount of tax was due. In order to claim an exemption from withholding on the ground that gross proceeds paid pursuant to the Offer are effectively connected with the conduct of a trade or business by a foreign stockholder within the United States or that the foreign stockholder is entitled to the benefits of a tax treaty, the foreign stockholder must deliver to the 4 Depositary (or other person who is otherwise required to withhold federal income tax) a properly executed statement claiming such exemption or benefits on Treasury Form 4224 (Exemption from Withholding on Tax on Income Effectively Connected with the Conduct of a Trade or Business in the United States) or Treasury Form 1001 (Ownership, Exemption, or Reduced Rate Certificate), respectively. Such statements may be obtained from the Depositary. Foreign stockholders are urged to consult their own tax advisors regarding the application of federal income tax withholding, including eligibility for a withholding tax reduction or exemption and the refund procedures. Backup Withholding. ANY TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE AND SIGN THE SUBSTITUTE FORM W-9 THAT IS INCLUDED IN THE LETTER OF TRANSMITTAL (OR, IN THE CASE OF A FOREIGN STOCKHOLDER, FORM W-8 OBTAINABLE FROM THE DEPOSITARY) MAY BE SUBJECT TO A REQUIRED FEDERAL INCOME TAX BACKUP WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAYABLE TO SUCH STOCKHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER. See Section 7-- "Acceptance for Payment of Shares and Payment of Purchase Price" with respect to the application of the federal income tax backup withholding. THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY. THE TAX CONSEQUENCES OF A SALE PURSUANT TO THE OFFER MAY VARY DEPENDING UPON, AMONG OTHER THINGS, THE PARTICULAR CIRCUMSTANCES OF THE TENDERING STOCKHOLDER. NO INFORMATION IS PROVIDED HEREIN AS TO THE STATE, LOCAL OR FOREIGN TAX CONSEQUENCES OF THE TRANSACTION CONTEMPLATED BY THE OFFER. STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF SALES MADE BY THEM PURSUANT TO THE OFFER AND THE EFFECT OF THE STOCK OWNERSHIP ATTRIBUTION RULES MENTIONED ABOVE. Section 3. Certain Legal Matters; Regulatory and Foreign Approvals; No Appraisal Rights. The Company is not aware of any license or regulatory permit that appears to be material to its business that might be adversely affected by its acquisition of Shares as contemplated in the Offer or of any approval or other action by any government or governmental, administrative or regulatory authority or agency, domestic or foreign, that would be required for the Company's acquisition or ownership of Shares pursuant to the Offer, except for approval by the New Jersey Board of Public Utilities, which has previously been obtained, or as described under Section 10--"Certain Information Concerning the Company." Should any other approval or other action be required, the Company currently contemplates that it will seek such approval or other action. The Company cannot predict whether it may determine that it is required to delay the acceptance for payment of, or payment for, Shares tendered pursuant to the Offer pending the outcome of any such matter. There can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that the failure to obtain any such approval or other action might not result in adverse consequences to the Company's business. The Company intends to make all required filings under the Exchange Act. The Company's obligation under the Offer to accept for payment, or make payment for, Shares is subject to certain conditions. See Section 8--"Certain Conditions of the Offer." No approval of the holders of any Shares or the holders of any of the Company's other securities is required in connection with the Offer. No appraisal rights are available to holders of Shares in connection with the Offer. 5 THE OFFER Section 4. Number of Shares; Purchase Price; Expiration Date; Receipt of Dividend; Extension of the Offer. Number of Shares; Purchase Price; Expiration Date. Upon the terms and subject to the conditions described in this Offer to Purchase and in the Letter of Transmittal, the Company will purchase all Shares validly tendered on or prior to the Expiration Date (and not withdrawn) at a price of $111.00 per Share. The later of 5:00 p.m., New York City time, on October 7, 1996, or the latest time and date to which the Offer is extended, is referred to herein as the "Expiration Date". The Offer is not conditioned on any minimum number of Shares being tendered. The Offer is, however, subject to certain other conditions. Section 8--"Certain Conditions of the Offer." Receipt of Dividend. The Board will consider the declaration of dividends on the Company's capital stock on September 12, 1996. The Regular Quarterly Dividend for the Preferred, if, when and as declared, will be paid on November 1, 1996 to holders of record as of the close of business on October 4, 1996. A holder of record of Shares on October 4, 1996 who tenders Shares will be entitled to the Regular Quarterly Dividend, regardless of when such tender is made. Holders of Shares purchased pursuant to the Offer will not be entitled to any dividends in respect of any later dividend periods. Extension of the Offer. The Company expressly reserves the right, in its sole discretion, at any time or from time to time, to extend the period of time during which the Offer is open by giving oral or written notice of such extension to the Depositary and making a public announcement thereof. See Section 13--"Extension of Tender Period; Termination; Amendments." There can be no assurance, however, that the Company will exercise its right to extend the Offer. If (a) the Company increases or decreases the price to be paid for the Shares hereunder, and (b) the Offer is scheduled to expire at any time earlier than the tenth business day from and including the date that notice of such increase or decrease is first published, sent or given in the manner specified in Section 13--"Extension of the Tender Period; Termination; Amendments," the Offer for such Shares will be extended until the expiration of such ten business day period. For purposes of the Offer, "business day" means any day other than a Saturday, Sunday or federal holiday and consists of the time period from 12:01 a.m. through 12:00 midnight, New York City time. Section 5. Procedure for Tendering Shares. Tender of Shares. To tender Shares validly pursuant to the Offer, each tendering holder of Shares must either: (a) send to the Depositary (at one of its addresses set forth on the back cover of this Offer to Purchase) a properly completed and duly executed Letter of Transmittal for the Shares being tendered, or facsimile thereof, together with any required signature guarantees and any other documents required by the Letter of Transmittal, and either (i) cause certificates for the Shares to be tendered to be received by the Depositary at one of such addresses or (ii) cause such Shares to be delivered pursuant to the procedures for book-entry transfer described below (and a confirmation of such delivery received by the Depositary), in each case on or prior to the Expiration Date; or (b) comply with the guaranteed delivery procedure described under "Guaranteed Delivery Procedure" below. A tender of Shares made pursuant to any method of delivery set forth herein or in the Letter of Transmittal will constitute a binding agreement between the tendering holder and the Company upon the terms and subject to the conditions of the Offer. 6 No alternative, conditional or contingent tenders of Shares will be accepted. It is a violation of Rule 14e-4 promulgated under the Exchange Act for persons to tender Shares for their own account unless the persons so tendering (a) have a net long position equal to or greater than the amount of Shares tendered or other securities immediately convertible into, or exercisable or exchangeable for, the amount of Shares tendered, and will acquire such Shares for tender by conversion, exercise or exchange of such other securities and (b) will cause such Shares to be delivered in accordance with the terms of the Offer. Rule 14e-4 provides a similar restriction applicable to the tender or guarantee of a tender on behalf of another person. The tender of Shares pursuant to any one of the procedures described herein will constitute the tendering stockholder's representation and warranty that (a) such stockholder has a net long position in the Shares being tendered within the meaning of Rule 14e-4, and (b) the tender of such Shares complies with Rule 14e-4. The Company's acceptance for payment of Shares tendered pursuant to the Offer will constitute a binding agreement between the tendering stockholder and the Company upon the terms and subject to the conditions of the Offer. All tendered Shares not purchased pursuant to the Offer will be returned to the tendering stockholders at the Company's expense promptly following the Expiration Date. Book-Entry Delivery. The Depositary will establish an account with respect to the Shares at The Depository Trust Company ("DTC") for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in DTC may make delivery of Shares by causing DTC to transfer such Shares into the Depositary's account in accordance with the procedures of DTC. Although delivery of Shares may be effected through book-entry transfer, a properly completed and duly executed Letter of Transmittal, or facsimile thereof, together with any required signature guarantees and any other required documents, must be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase on or prior to the applicable Expiration Date, or the tendering holder of Shares must comply with the guaranteed delivery procedure described below. DELIVERY OF SUCH LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS TO DTC OR THE COMPANY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. Signature Guarantees and Method of Delivery. Except as otherwise provided below, all signatures on a Letter of Transmittal must be guaranteed by a financial institution (including most banks, savings and loan associations and brokerage houses) that is a participant in the Security Transfer Agents Medallion Program or the Stock Exchange Medallion Program (each of the foregoing being referred to as an "Eligible Institution"). Signatures on a Letter of Transmittal need not be guaranteed if (a) such Letter of Transmittal is signed by the registered holder of the Shares tendered therewith and such holder has not completed the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" on the Letter of Transmittal or (b) such Shares are tendered for the account of an Eligible Institution. If Shares are registered in the name of a person other than the signatory on the Letter of Transmittal, or if unpurchased Shares are to be issued to a person other than the registered holder(s), the certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered holder(s) appear on the Shares with the signature(s) on the Shares or stock powers guaranteed as aforesaid. See Instructions 4, 6 and 7 to the Letter of Transmittal. THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. Guaranteed Delivery Procedure. If a stockholder desires to tender Shares pursuant to the Offer and cannot deliver certificates for such Shares and all other required documents to the Depositary on or prior to the Expiration Date, or the procedure for book-entry transfer cannot be complied with in a timely manner, such Shares may nevertheless be tendered if all of the following conditions are met: 7 (a) such tender is made by or through an Eligible Institution; (b) a properly completed and duly executed Notice of Guaranteed Delivery in the form provided by the Company is received by the Depositary as provided below on or prior to the Expiration Date; and (c) the certificates for such Shares (or a confirmation of a book-entry transfer of such Shares into the Depositary's account at DTC, together with a properly completed and duly executed Letter of Transmittal, or facsimile thereof, and any other documents required by the Letter of Transmittal, are received by the Depositary no later than 5:00 p.m., New York City time, on the third New York Stock Exchange trading day after the Expiration Date. The Notice of Guaranteed Delivery may be delivered by hand or transmitted by facsimile transmittal or mailed to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in such Notice. Determination of Validity; Rejection of Shares; Waiver of Defects; No Obligation to Give Notice of Defects. All questions as to the form of documents and the validity, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by the Company, in its sole discretion, and its determination shall be final and binding. The Company reserves the absolute right to reject any or all tenders of Shares that it determines are not in proper form or the acceptance for payment of or payment for which may, in the opinion of the Company's counsel, be unlawful. The Company also reserves the absolute right to waive any defect or irregularity in any tender of Shares. No tender of Shares will be deemed to be properly made until all defects or irregularities have been cured or waived. None of the Company, the Dealer Managers, the Depositary, the Information Agent or any other person will be under any duty to give notice of any defect or irregularity in tenders, nor shall any of them incur any liability for failure to give any such notice. Section 6. Withdrawal Rights. Tenders of Shares made pursuant to the Offer may be withdrawn at any time on or prior to the Expiration Date. Thereafter, such tenders are irrevocable, except that they may be withdrawn after 12:00 midnight, Friday, October 25, 1996 unless theretofore accepted for payment as provided in this Offer to Purchase. To be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses or facsimile numbers set forth on the back cover of this Offer to Purchase and must specify the name of the person who tendered the Shares to be withdrawn and the number of Shares to be withdrawn. If the Shares to be withdrawn have been delivered to the Depositary, a signed notice of withdrawal with signatures guaranteed by an Eligible Institution (except in the case of Shares tendered by an Eligible Institution) must be submitted prior to the release of such Shares. In addition, such notice must specify, in the case of Shares tendered by delivery of certificates, the name of the registered holder (if different from that of the tendering stockholder) and the serial numbers shown on the particular certificates evidencing the Shares to be withdrawn or, in the case of Shares tendered by book-entry transfer, the name and number of the account at DTC to be credited with the withdrawn Shares and the name of the registered holder (if different from the name on such account). Withdrawals may not be rescinded, and Shares withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. However, withdrawn Shares may be re-tendered by following one of the procedures described in Section 5--"Procedure for Tendering Shares" at any time on or prior to the applicable Expiration Date. All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by the Company in its sole discretion, and its determination shall be final and binding. None of the Company, the Dealer Managers, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defect or irregularity in any notice of withdrawal or incur any liability for failure to give any such notification. 8 Section 7. Acceptance for Payment of Shares and Payment of Purchase Price. Upon the terms and subject to the conditions of the Offer and promptly after the Expiration Date, the Company will accept for payment and pay for Shares validly tendered. See Section 4--"Number of Shares; Purchase Price; Expiration Date; Receipt of Dividend; Extension of the Offer" and Section 8--"Certain Conditions of the Offer." Thereafter, payment for all Shares validly tendered on or prior to the Expiration Date and accepted for payment pursuant to the Offer will be made by the Depositary by check promptly after the Expiration Date. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of certificates for such Shares (or of a confirmation of a book-entry transfer of such Shares into the Depositary's account at DTC), a properly completed and duly executed Letter of Transmittal, or facsimile thereof, and any other required documents. For purposes of the Offer, the Company will be deemed to have accepted for payment (and thereby purchased) Shares that are validly tendered and not withdrawn if and when it gives oral or written notice to the Depositary of its acceptance for payment of such Shares. The Company will pay for Shares that it has purchased pursuant to the Offer by depositing the purchase price therefor with the Depositary. The Depositary will act as agent for tendering stockholders for the purpose of receiving payment from the Company and transmitting payment to tendering stockholders. Under no circumstances will interest be paid on amounts to be paid to tendering stockholders, regardless of any delay in making such payment. Certificates for all Shares not purchased will be returned (or, in the case of Shares tendered by book-entry transfer, such Shares will be credited to an account maintained with DTC) promptly, without expense to the tendering stockholder. Payment for Shares may be delayed in the event of difficulty in determining the number of Shares properly tendered. In addition, if certain events occur, the Company may not be obligated to purchase Shares pursuant to the Offer. See Section 8--"Certain Conditions of the Offer." The Company will pay or cause to be paid any stock transfer taxes with respect to the sale and transfer of any Shares to the Company or its order pursuant to the Offer. However, if payment of the purchase price is to be made to, or Shares not tendered or not purchased are to be registered in the name of, any person other than the registered holder, or if tendered Shares are registered in the name of any person other than the person signing the Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder, such other person or otherwise) payable on account of the transfer to such person will be deducted from the purchase price, unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted. See Instruction 6 to the Letter of Transmittal. Backup Withholding. To prevent backup federal income tax withholding with respect to the purchase price of Shares purchased pursuant to the Offer, a holder of Shares (except as set forth herein) must provide the Depositary with the holder's correct taxpayer identification number and certify whether the holder is subject to backup withholding of federal income tax by completing the Substitute Form W-9 included in the Letter of Transmittal. Certain holders of Shares (including, among others, all corporations and certain foreign stockholders) are not subject to these backup withholding and reporting requirements (although foreign stockholders are subject to other withholding requirements. See Section 2--"Certain Federal Income Tax Consequences"). In order for a foreign stockholder to qualify as an exempt recipient, the holder must submit a Form W-8, Certificate of Foreign Status, signed under penalties of perjury, attesting to that stockholder's exempt status. Unless an exemption applies under the applicable law and regulations concerning "backup withholding" of federal income tax, the Depositary will be required to withhold, and will withhold, 31% of the gross proceeds otherwise payable to a holder of Shares or other payee unless the holder of such Shares or other payee certifies that such person is not otherwise subject to backup withholding, provides such person's tax identification number (social security number or employer identification number) and certifies that such number is correct. Each tendering holder of Shares should complete and sign the main signature form and, other than foreign stockholders, the Substitute Form W-9 included as part of the Letter of Transmittal, so as to provide the information and certification necessary to avoid backup withholding, unless an applicable exemption exists and is proved in a manner 9 satisfactory to the Company and the Depositary. Foreign stockholders should generally complete and sign a Form W-8, a copy of which may be obtained from the Depositary, in order to avoid backup withholding. ANY TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE AND SIGN THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL (OR, IN THE CASE OF A FOREIGN STOCKHOLDER, FORM W-8 OBTAINABLE FROM THE DEPOSITARY) MAY BE SUBJECT TO REQUIRED FEDERAL INCOME TAX WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAYABLE TO SUCH STOCKHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER. Section 8. Certain Conditions of the Offer. Notwithstanding any other provisions of the Offer, or any extension of the Offer, the Company will not be required to accept for payment and pay for any validly tendered Shares and may terminate the Offer (by oral or written notice to the Depositary and timely public announcement) or may modify or otherwise amend the Offer if any of the following conditions are not waived or satisfied on or prior to the Expiration Date: (a) there shall have been threatened, instituted or pending any action or proceeding by any government or governmental, regulatory or administrative agency, authority or tribunal or any other person, domestic or foreign, or before any court, authority, agency or tribunal that (i) challenges the acquisition of Shares pursuant to the Offer or otherwise in any manner, directly or indirectly, relates to or affects the Offer or (ii) in the reasonable judgment of the Company, would or might materially and adversely affect the business, condition (financial or other), income, operations or prospects of the Company and its subsidiary taken as a whole, or otherwise materially impair in any way the contemplated future conduct of the business of the Company or its subsidiary or materially impair the Offer's contemplated benefits to the Company; (b) there shall have been any action threatened, pending or taken, or approval withheld, or any statute, rule, regulation, judgment, order or injunction threatened, proposed, sought, promulgated, enacted, entered, amended, enforced or deemed to be applicable to the Offer or the Company or its subsidiary, by any legislative body, court, authority, agency or tribunal which, in the Company's reasonable judgment, would or might directly or indirectly (i) make the acceptance for payment of, or payment for, some or all of the Shares illegal or otherwise restricts or prohibits consummation of the Offer, (ii) delay or restrict the ability of the Company, or render the Company unable, to accept for payment or pay for some or all of the Shares, (iii) materially impair the contemplated benefits of the Offer to the Company or (iv) materially affect the business, condition (financial or other), income, operations or prospects of the Company and its subsidiary taken as a whole, or otherwise materially impair in any way the contemplated future conduct of the business of the Company or its subsidiary; (c) there shall have occurred (i) any general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter market, (ii) any significant decline in the market price of the Shares, (iii) any change in the general political, market, economic or financial condition in the United States or abroad that, in the reasonable judgment of the Company, would or might have a material adverse effect on the Company's business, operations, prospects or ability to obtain financing generally or the trading in the Shares or other equity securities of the Company, (iv) the declaration of a banking moratorium or any suspension of payments in respect of banks in the United States or any limitation on, or any event which, in the Company's reasonable judgment, might affect the extension of credit by lending institutions in the United States, (v) the commencement of a war, armed hostilities or other international or national calamity directly or indirectly involving the United States; (vi) in the case of any of the foregoing existing at the time of the commencement of the Offer, in the Company's reasonable judgment, a material acceleration or worsening thereof; or (vii) there shall have been any decrease in the ratings accorded any of the Company's securities by S&P or Moody's or that S&P or Moody's has announced that it has placed any such rating under surveillance or review with possible negative implications; 10 (d) a tender or exchange offer with respect to some or all of the Shares or other equity securities of the Company or Parent, or a merger, acquisition or other business combination for the Company or Parent, shall have been proposed, announced or made by another person; (e) there shall have occurred any event or events that have resulted, or may in the reasonable judgment of the Company result, in an actual or threatened change in the business, condition (financial or other), income, operations, stock ownership or prospects of the Company and its subsidiary; (f) there shall have occurred any decline in the S&P's Composite 500 Stock Index (664.81 at the close of business on August 28, 1996) by an amount in excess of 15% measured from the close of business on August 28, 1996; or (g) the Company elects not to proceed with the proposed offering of the Cumulative Quarterly Income Preferred Securities ("QUIPS") by Atlantic Capital I, a special purpose business trust controlled by the Company ("Atlantic Capital I"), or the offering of the QUIPS, if commenced, is terminated on or prior to the Expiration Date; and, in the reasonable judgment of the Company, such event or events make it undesirable or inadvisable to proceed with the Offer or with such payment or acceptance for payment. The foregoing conditions are for the sole benefit of the Company and may be asserted by the Company regardless of the circumstances (including any action or inaction by the Company) giving rise to any such condition, and any such condition may be waived by the Company at any time and from time to time in its sole discretion. The failure by the Company at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time. Any determination by the Company concerning the events described above will be final and binding on all parties. Section 9. Price Ranges of Shares; Dividends. The Preferred trade in the over-the-counter market to the extent trading occurs. Trading of the Preferred has been limited and sporadic, and information concerning trading prices and volumes is difficult to obtain. Depending on the amount of the Preferred outstanding after the Offer, the liquidity of the Preferred may be adversely affected. Stockholders are urged to obtain current market quotations for the Shares. Dividends. The holders of the Preferred are entitled to receive, when and as declared by the Board, cash dividends at the annual rate specified for the Preferred, and no more, cumulative and payable quarterly with respect to each calendar quarterly period, on each February 1, May 1, August 1 and November 1. An indenture relating to the proposed issuance of QUIPS by Atlantic Capital I may provide that dividends on the Company's capital stock may not be paid as long as any payments on the Company's Deferrable Interest Subordinated Debentures to be issued under such indenture have been deferred or the Company is in default under such indenture or its guarantee relating to such QUIPS. To date, the Company has timely made all quarterly dividend payments on the Preferred. The Board of Directors of the Company will consider the declaration of dividends on the Company's capital stock at its meeting on September 12, 1996. The Regular Quarterly Dividend for the Preferred, if, when and as declared, will be paid on November 1, 1996 to holders of record as of the close of business on October 4, 1996. A holder of record of Shares on October 4, 1996 who tenders Shares will be entitled to the Regular Quarterly Dividend, regardless of when such tender is made. Holders of Shares purchased pursuant to the Offer will not be entitled to any dividends in respect of any later dividend periods. 11 Section 10. Certain Information Concerning the Company. The Company was formed under the laws of New Jersey on April 28, 1924 by merger and consolidation of several utility companies. The Company is engaged in the generation, transmission, distribution, and sale of electric energy in the southern part of New Jersey. The Company, which has a wholly owned subsidiary, Deepwater Operating Company, is the principal subsidiary of Energy, which is a public utility holding company as defined in the Public Utility Holding Company Act of 1935 and which has claimed exemption from substantially all of the provisions of such Act. The other subsidiary of Energy is Atlantic Energy Enterprises, Inc. On August 9, 1996, Energy and Delmarva Power & Light Company ("DP&L") entered into a merger agreement pursuant to which Energy will merge into a yet-to-be-named new company that will become the parent company of the Company and DP&L. The merger is expected to be a tax-free, stock-for-stock transaction accounted for as a purchase. Under the terms of the merger agreement, DP&L shareholders will receive one share of the new company's common stock for each share of DP&L common stock. Energy shareholders will receive 0.75 shares of the new company's common stock and 0.125 shares of the new company's Class A common stock for each share of Energy common stock. All of the debt and preferred stock obligations of the Company will continue to be outstanding obligations of the Company. In order for the merger to be effective, approvals are needed by the shareholders of both Energy and DP&L and a number of federal and state regulators. Securing the necessary approvals may take from 12 to 18 months. There can be no assurance when and if such approvals will be obtained. The Company's principal office is located at 6801 Black Horse Pike, Egg Harbor Township, New Jersey, 08232-4130, telephone 609-645-4100. The Company is subject to regulation by the New Jersey Board of Public Utilities and the Federal Energy Regulatory Commission. At December 31, 1995, the Company had over 473,000 customers and employed 1,455 persons, of which 622 were affiliated with a national labor organization. With the exception of a municipal electric system providing electric service within the municipal boundaries of the City of Vineland, New Jersey, the Company supplies electric service to the southern one-third of the State of New Jersey. The Company has qualified to do business as a foreign corporation in the Commonwealth of Pennsylvania to enable it to participate in the ownership and operation of generation and transmission facilities located therein. The Company has called for redemption on September 16, 1996 all outstanding shares of its $8.25 No Par Preferred Stock and its 7.52% Cumulative Preferred Stock. Registration Statement. The Company and Atlantic Capital I have filed a registration statement (the "Registration Statement") with the Commission with respect to the proposed offering of up to $70,000,000 aggregate liquidation amount of QUIPS, guaranteed by the Company to the extent set forth in the Registration Statement. Following the commencement of the Offer, and subject to market and other conditions, the Company intends that Atlantic Capital I will effect a public offering of QUIPS. As set forth in Section 11--"Source and Amount of Funds," the Company intends to finance the Offer with the proceeds from the sale of the QUIPS, which will be loaned by Atlantic Capital I to the Company. To the extent that the proceeds of the proposed sale of the QUIPS, if any, are not sufficient, the Company may issue commercial paper or other debt to finance the Offer. Selected Financial Data of the Company. The following information is qualified by the detailed information and financial statements included elsewhere in this Offer to Purchase, including documents incorporated herein by reference. 12 Selected Financial Data
Year Ended December 31, ----------------------------------------------------------------------------Twelve Months Ended 1991 1992 1993 1994 1995 June 30, 1996 -------- -------- -------- -------- -------- ------------- Operating Revenues (000)......... $808,482 $816,931 $865,799 $913,226 $953,779 $1,000,374 Net Income (000)................. $107,428 $107,446 $109,026 $93,174 $98,752 $100,642 Ratio of Earnings to Fixed Charges 3.41 3.55 3.37 3.05 3.16 3.18 Ratio of Earnings to Combined Fixed Charges and Preferred Dividends. 2.48 2.49 2.44 2.22 2.39 2.47
As of June 30, 1996 ---------------------------------------------- Amount Percentage (in thousands) (%) ----------------------- --------------------- Long Term Debt*............................................................ $ 802,378 45.72% Cumulative Preferred Stock:................................................ Subject to Mandatory Redemption*.......................................... 125,000 7.12 Not Subject to Mandatory Redemption....................................... 40,000 2.28 Common Equity.............................................................. 787,471 44.88 ---------- ------ Total Capitalization...................................................... 1,754,849 100.00 ========== ======
- ---------- * Includes current portion. Additional Information. The Company is subject to the informational requirements of the Exchange Act, and, in accordance therewith, files reports and other information with the Commission. The Company has also filed an Issuer Tender Offer Statement on Schedule 13E-4 with the Commission which includes certain additional information relating to the Offer. Reports, proxy statements and other information filed by the Company with the Commission pursuant to the informational requirements of the Exchange Act may be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at the following Regional Offices of the Commission: Chicago Regional Office, Suite 1400, Citicorp Center, 14th Floor, 500 West Madison Street, Chicago, Illinois 60661; and New York Regional Office, 7 World Trade Center, 13th Floor, Suite 1300, New York, New York 10048. Copies of such material can be obtained at prescribed rates from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549. The Commission also maintains a Web site (http://www.sec.gov) that contains reports, proxy statements and other information regarding the Company. The Company's Schedule 13E-4 will not be available at the Commission's Regional Offices. The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1995 (the "Annual Report"), the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996 and June 30, 1996 (the "Quarterly Reports"), and the Company's Current Reports on Form 8-K dated May 29, 1996, June 26, 1996, July 25, 1996 and August 13, 1996 (the "Current Reports") previously filed by the Company with the Commission, are incorporated by reference in this Offer to Purchase and shall be deemed to be a part hereof. Each document filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Offer to Purchase and prior to the termination of the Offer shall be deemed to be incorporated herein by reference and to be a part hereof from the date of filing such document. Any statement contained herein, or in a document all or a portion of which is incorporated or deemed to be incorporated by reference herein, shall be deemed to be modified or superseded for purposes of this Offer to Purchase to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Offer to Purchase. 13 The Company undertakes to provide without charge to each person, including any beneficial owner, to whom this Offer to Purchase is delivered, upon written or oral request of such person, a copy of the Annual Report, the Quarterly Reports and the Current Reports, other than exhibits to such documents. Such requests should be directed to Robert K. Marshall, Manager, Finance & Treasury Operations, Atlantic City Electric Company, 6801 Black Horse Pike, Egg Harbor Township, New Jersey 08234-4130, telephone (609) 645-4655). Section 11. Source and Amount of Funds. Assuming that all outstanding Shares are validly tendered, the total amount required by the Company to purchase all Shares subject to the Offer will be $77,700,000, exclusive of fees and other expenses. As described under Section 10--"Certain Information Concerning the Company," a Registration Statement has been filed with the Commission with respect to the offering of QUIPS by Atlantic Capital I, the proceeds of which will be invested in the Junior Subordinated Deferrable Interest Debentures to be issued by the Company. The Company intends to finance the Offer with the proceeds from the sale of the QUIPS, which will be loaned by Atlantic Capital I to the Company. To the extent that the proceeds of the proposed sale of the QUIPS, if any, are not sufficient, the Company may issue commercial paper or other debt to finance the Offer. Section 12. Transactions and Agreements Concerning the Shares. The Shares were issued by the Company in an underwritten public offering for cash which was registered under the Securities Act of 1933, as amended. Such offering, which was consummated on May 9, 1991, was for 700,000 Shares at a price to the public of $100 per Share, and the Company received aggregate proceeds of $69,720,000 before deducting expenses payable by the Company. Based upon the Company's records and upon information provided to the Company by its directors and executive officers and those of Parent, neither the Company nor, to the Company's knowledge, Parent or any director or executive officer of the Company or Parent, or associate of the foregoing, or any subsidiary or affiliate of the Company or Parent has engaged in any transactions involving Shares during the 60 days preceding the date hereof. Neither the Company nor, to the best of the Company's knowledge, Parent or any director or executive officer of Company or Parent, or associate of the foregoing, or, any subsidiary or affiliate of the Company or Parent is a party to any contract, arrangement, understanding or relationship relating directly or indirectly to the Offer with any other person with respect to any securities of the Company. As of August 28, 1996, none of the Company or, to the best of the Company's knowledge, Parent or any director or executive officer of Company or Parent, or associate of the foregoing, or any subsidiary or affiliate of the Company or Parent, or any pension, profit sharing or similar plan of the Company or its affiliates, owns any Shares, and therefore such persons do not intend to tender or sell any Shares pursuant to the Offer. Except as set forth in this Offer to Purchase, neither the Company nor, to the best of the Company's knowledge, Parent or any director or executive officer of the Company or Parent, or any associate of the foregoing, or any subsidiary or affiliate of the Company or Parent, is a party to any contract, understanding or relationship with any other person relating, directly or indirectly, to, or in connection with, the Offer with respect to any securities of the Company (including, but not limited to, any contract, arrangement, understanding or relationship concerning the transfer or the voting of any of such securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or the giving or withholding of proxies, consents or authorizations). Certain of the Shares are held by Chase Manhattan Bank as Custodian for related Money Market Preferred Stock Custodial Receipts, Series A and Variable Inverse Preferred Stock Custodial Receipts, Series A. The Company has entered in an agreement with Lehman Brothers Inc. ("Lehman") pursuant to which the Company will (i) pay a fee to Lehman for each such Share purchased pursuant to the Offer or otherwise after expiration of the Offer equal to the fee which would otherwise be payable to the Dealer Managers (and the 14 Dealer Managers shall not be entitled to a fee with respect to such Shares) and/or (ii) purchase from Lehman after the expiration of the Offer any such Shares which are not so purchased. Section 13. Extension of Tender Period; Termination; Amendments. The Company expressly reserves the right, in its sole discretion and at any time or from time to time, to extend the period of time during which the Offer is open by giving oral or written notice of such extension to the Depositary. There can be no assurance, however, that the Company will exercise such right to extend the Offer. The Company may, in its sole discretion, at any time or from time to time amend the Offer in any respect. If the Company makes a material change in the terms of the Offer (including an increase or decrease in the consideration offered), the Company will extend the Offer. The minimum period for which the Offer will be extended following a material change or waiver, other than an increase or decrease in the consideration offered, will depend upon the facts and circumstances, including the relative materiality of the change or waiver. With respect to an increase or decrease in the consideration offered, the Offer may be extended such that the Offer remains open for a minimum of ten business days following the public announcement of such change. During any such extension, all Shares previously tendered will remain subject to the Offer, except to the extent that such Shares may be withdrawn as set forth in Section 6--"Withdrawal Rights." If the Company extends the period of time during which the Offer is open, is delayed in accepting for payment or paying for Shares or is unable to accept for payment or pay for Shares pursuant to the Offer for any reason, then, without prejudice to the Company's rights under the Offer, the Depositary may, on behalf of the Company, retain all Shares tendered, and such Shares may not be withdrawn except as otherwise provided in this Section 13, subject to Rule 13e-4(f)(5) under the Exchange Act, which provides that an issuer making a tender offer shall either pay the consideration offered or return the tendered securities promptly after the termination or withdrawal of the tender offer. The Company also expressly reserves the right in its sole discretion, to, among other things, terminate the Offer and not accept for payment or pay for any Shares tendered or, subject to Rule 13e-4(f)(5) under the Exchange Act, which requires the Company either to pay the consideration offered or to return the Shares tendered promptly after the termination or withdrawal of the Offer, to postpone acceptance for payment of or payment for Shares upon the occurrence of any of the conditions specified in Section 8--"Certain Conditions of the Offer" by, in the case of any termination, giving oral or written notice of such termination to the Depositary and making a public announcement thereof. Extensions and termination of and amendments to the Offer may be effected by public announcement. Without limiting the manner in which the Company may choose to make public announcement of any extension, termination or amendment, the Company shall have no obligation (except as otherwise required by applicable law) to publish, advertise or otherwise communicate any such public announcement, other than by making a release to the Dow Jones News Service, except in the case of an announcement of an extension of the Offer, in which case the Company shall have no obligation to publish, advertise or otherwise communicate such announcement other than by issuing a notice of such extension by press release or other public announcement, which notice shall be issued no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. Material changes to information previously provided to holders of the Shares in this Offer to Purchase or in documents furnished subsequent thereto will be disseminated to holders of Shares in compliance with Rule 13e-4(e)(2) promulgated by the Commission under the Exchange Act. Section 14. Fees and Expenses. The Company has retained The Bank of New York, as Depositary, Georgeson & Company Inc., as Information Agent, and Goldman, Sachs & Co., as Dealer Managers, in connection with the Offer. The Information Agent and Dealer Managers will assist stockholders who request assistance in connection with the Offer and may request brokers, dealers and other nominee stockholders to forward materials relating to the Offer to beneficial owners. Except as set forth in Section 12--"Transactions and Agreements Concerning the Shares," the Company has agreed to pay the Dealer Managers, upon acceptance for payment of Shares pursuant to the 15 Offer, a fee of $0.50 per Share so paid for in the Offer. The Dealer Managers will also be reimbursed by the Company for their reasonable out-of-pocket expenses, including attorneys' fees. The Dealer Managers have rendered, are currently rendering and are expected to continue to render various investment banking and other advisory services to the Company. They have received, and will continue to receive, customary compensation from the Company for such services. The Depositary and the Information Agent will receive reasonable and customary compensation for their services in connection with the Offer and will also be reimbursed for reasonable out-of-pocket expenses, including attorneys' fees. The Company has agreed to indemnify the Depositary, the Information Agent and the Dealer Managers against certain liabilities in connection with the Offer, including certain liabilities under the federal securities laws. Neither the Depositary nor the Information Agent has been retained to make solicitations, and none of the Depositary, the Information Agent or the Dealer Managers have been retained to make recommendations with respect to the Offer, in their respective roles as Depositary, Information Agent and Dealer Managers. The Company will pay (or cause to be paid) any stock transfer taxes on its purchase of Shares, except as otherwise provided in Instruction 6 of the Letter of Transmittal. It is estimated that the expenses incurred by the Company in connection with the Offer will be approximately as set forth below. The Company will be responsible for paying all such expenses. Dealer Managers' fees ............................................. $350,000 Printing and mailing fees ......................................... 7,000 Filing fees ....................................................... 15,540 Legal and miscellaneous ........................................... 42,500 -------- Total .......................................................... $415,040 Section 15. Miscellaneous. The Offer is not being made to, nor will the Company accept tenders from, owners of Shares in any jurisdiction in which the Offer or its acceptance would not be in compliance with the laws of such jurisdiction. The Company is not aware of any jurisdiction where the making of the Offer or the tender of Shares would not be in compliance with applicable law. If the Company becomes aware of any jurisdiction where the making of the Offer or the tender of Shares is not in compliance with any applicable law, the Company will make a good faith effort to comply with such law. If, after such good faith effort, the Company cannot comply with such law, the Offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of Shares residing in such jurisdiction. In any jurisdiction in which the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed to be made on the Company's behalf by one or more registered brokers or dealers licensed under the laws of such jurisdiction. 16 The Depositary for the Offer is: The Bank of New York By Mail: Facsimile By Hand or: Transmission: By Overnight Courier (for Eligible Institutions Only) Tender & Exchange Department (212) 815-6213 Tender & Exchange Department P.O. Box 11248 101 Barclay Street Church Street Station Receive and Deliver Window New York, N. Y. 10286-1248 New York, New York 10286 For Information Telephone: 800-507-9357 Any questions or requests for assistance may be directed to the Information Agent or the Dealer Managers at the respective telephone numbers and addresses listed below. Requests for additional copies of this Offer to Purchase, the Letter of Transmittal or other tender offer materials may be directed to the Information Agent or the Dealer Managers, and such copies will be furnished promptly at the Company's expense. Stockholders may also contact their local broker, dealer, commercial bank or trust company for assistance concerning the Offer. The Information Agent for the Offer is: Georgeson & Company Inc. Wall Street Plaza New York, New York 10005 Banks and Brokers Call Collect: (212) 440-9800 All Others Call Toll-Free: (800)223-2064 The Dealer Managers for the Offer are: Goldman, Sachs & Co. 85 Broad Street New York, New York 10004 (800) 828-3182 17 EX-99.(A)(2) 3 LETTER OF TRANSMITTAL LETTER OF TRANSMITTAL To Accompany Shares of $7.80 No Par Preferred Stock (cumulative) CUSIP NO. 048303 86 1 OF Atlantic City Electric Company Tendered Pursuant to the Offer to Purchase Dated August 29, 1996 - -------------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON MONDAY, OCTOBER 7, 1996, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- To: The Bank of New York, Depositary By Mail: Facsimile By Hand or: Transmission: By Overnight Courier (for Eligible Institutions Only) Tender & Exchange Department (212) 815-6213 Tender & Exchange Department P.O. Box 11248 101 Barclay Street Church Street Station Receive and Deliver Window New York, N. Y. 10286-1248 New York, New York 10286 For Information Telephone: 800-507-9357 - -------------------------------------------------------------------------------- DESCRIPTION OF SHARES OF $7.80 NO PAR PREFERRED STOCK (CUMULATIVE) TENDERED
- ------------------------------------------------------------------------------------------------------------------------------------ Name(s) and Address(es) of Registered Holder(s) (If blank, please fill in exactly as name(s) Shares Tendered appear(s) on certificate(s)) (Attach additional list if necessary) - ------------------------------------------------------------------------------------------------------------------------------------ Total Number of Shares Number of Certificate Represented by Shares Number(s)* Certificate(s)* Tendered** --------------------------------------------------------------- --------------------------------------------------------------- --------------------------------------------------------------- --------------------------------------------------------------- --------------------------------------------------------------- TOTAL - ------------------------------------------------------------------------------------------------------------------------------------
* Need not be completed by stockholders tendering by book-entry transfer. ** Unless otherwise indicated, the holder will be deemed to have tendered the full number of Shares represented by the tendered certificate(s). See Instruction 4. - -------------------------------------------------------------------------------- Delivery of this instrument to an address other than as set forth above or transmission of instructions via a facsimile number other than one listed above will not constitute a valid delivery. Do not send any certificates to the Dealer Managers, the Information Agent or Atlantic City Electric Company. 2 The instructions accompanying this Letter of Transmittal should be read carefully before the Letter of Transmittal is completed. Questions and requests for assistance or for additional copies of the Offer to Purchase or this Letter of Transmittal may be directed to Georgeson & Company Inc., the Information Agent, at Wall Street Plaza, New York, NY 10005 or telephone (800) 223-2064 (toll free). This Letter of Transmittal is to be used if certificates are to be forwarded herewith or if delivery of Shares (as defined below) is to be made by book-entry transfer to the Depositary's account at The Depository Trust Company ("DTC") pursuant to the procedures set forth under Section 5--"Procedure for Tendering Shares" in the Offer to Purchase (as defined below). Stockholders who cannot deliver their Shares and all other documents required hereby to the Depositary by the Expiration Date (as defined in the Offer to Purchase) must tender their Shares pursuant to the guaranteed delivery procedure set forth under Section 5--"Procedure for Tendering Shares" in the Offer to Purchase. See Instruction 2. Delivery of documents to the Company or to DTC does not constitute a valid delivery. 3 - -------------------------------------------------------------------------------- / / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT DTC AND COMPLETE THE FOLLOWING: Name of tendering institution ----------------------------------------- Account No. at DTC ---------------------------------------------------- Transaction Code No. -------------------------------------------------- / / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of tendering stockholder(s) ------------------------------------ Date of execution of Notice of Guaranteed Delivery -------------------- Name of institution that guaranteed delivery --------------------------- If delivery is by book-entry transfer: Name of tendering institution ------------------------------------------ Account No. at DTC ----------------------------------------------------- Transaction Code No. --------------------------------------------------- - -------------------------------------------------------------------------------- NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY. Ladies and Gentlemen: The undersigned hereby tenders to Atlantic City Electric Company, a New Jersey corporation (the "Company"), the above-described shares (together, the "Shares") pursuant to the Company's offer to purchase up to 700,000 shares (the "Shares") of the $7.80 No Par Preferred Stock (cumulative) (the "Preferred") at a price of $111.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated August 29, 1996 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which together with the Offer to Purchase constitutes the "Offer"). Subject to, and effective upon, acceptance for payment of and payment for the Shares tendered herewith in accordance with the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended with respect to the Preferred, the terms and conditions of any such extension or amendment), the undersigned hereby sells, assigns and transfers to, or upon the order of, the Company all right, title and interest in and to all the Shares that are being tendered hereby and constitutes and appoints The Bank of New York, as "Depositary," the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares, with full power of substitution (such power of attorney, being deemed to be an irrevocable power coupled with an interest), to (a) deliver certificates for such Shares and to accept such Shares or assign or transfer ownership of such Shares on the account books maintained by DTC together, in any such case, with all accompanying evidences of transfer and authenticity, for deposit with the Depositary, (b) present such Shares for transfer on the books of the Company, (c) issue payment for such Shares and/or certificates for unpurchased Shares or deliver unpurchased Shares to the account of the undersigned, and (d) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares, all in accordance with the terms of the Offer. The Depositary will act as agent for tendering stockholders for the purpose of receiving payment from the Company and transmitting payment to tendering stockholders. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby and that, when and to the extent the same are accepted for payment by the Company, the Company 4 will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or the Company to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby or transfer ownership of such Shares. All authority herein conferred or agreed to be conferred shall survive the death, bankruptcy or incapacity of the undersigned, and every obligation of the undersigned hereunder shall be binding upon the heirs, legal representatives, successors, assigns, executors and administrators of the undersigned. Except as stated in the Offer, this tender is irrevocable. The undersigned understands that tenders of Shares pursuant to any one of the procedures described under Section 5--"Procedure for Tendering Shares" in the Offer to Purchase and in the instructions hereto will constitute the undersigned's acceptance of the terms and conditions of the Offer. Unless otherwise indicated under "Special Payment Instructions," the check for the purchase price of any Shares purchased, and/or the return of any Shares not tendered or not purchased, will be issued in the name(s) of the undersigned (and, in the case of Shares tendered by book-entry transfer, by credit to the account at DTC designated above). Similarly, unless otherwise indicated under "Special Delivery Instructions," the check for the purchase price of any Shares purchased and/or the return of any certificates for Shares not tendered or not purchased (and accompanying documents, as appropriate) will be mailed to the undersigned at the address shown below the undersigned signature(s). In the event that both "Special Payment Instructions" and "Special Delivery Instructions" are completed, the check for the purchase price of any Shares purchased and/or the return of any Shares not tendered or not purchased will be issued in the name(s) of, and such check and/or any certificates will be mailed to, the person(s) so indicated. The undersigned recognizes that the Company has no obligation, pursuant to the "Special Payment Instructions," to transfer any Shares from the name of the registered holder(s) thereof if the Company does not accept for payment any of the Shares so tendered. - ------------------------------------------ SPECIAL PAYMENT INSTRUCTIONS (See Instructions 4, 6 and 7) To be completed ONLY if the check for the purchase price of Shares purchased and/or certificates for Shares not tendered or not purchased are to be issued in the name of someone other than the undersigned. Issue / /check and/or / /certificate(s) to: Name ___________________________________ (Please Print) Address _________________________________ ________________________________________ (include Zip Code) ________________________________________ (Taxpayer Identification or Social Security No.) - ------------------------------------------ - ------------------------------------------ SPECIAL DELIVERY INSTRUCTIONS (See Instructions 4, 6 and 7) To be completed ONLY if the check for the purchase price of Shares purchased and/or certificates for Shares not tendered or not purchased are to be mailed to someone other than the undersigned or to the undersigned at an address other than that shown below the undersigned's signature(s). Mail / /check and/or / /certificate(s) to: (Please complete Substitute Form W-9 below) Name ___________________________________ (Please Print) Address ________________________________ (Include Zip Code) ---------------------------------------- 5 - -------------------------------------------------------------------------------- SIGN HERE (Please Complete Substitute Form W-9 Below.) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Signature(s) of Owners(s) Dated , 1996 --------------------------------------------------------------------- Name(s) ------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Please Print) Capacity (full title) ----------------------------------------------------------- Address ------------------------------------------------------------------------- Area Code and Telephone No. ----------------------------------------------------- (Must be signed by the registered holder(s) exactly as name(s) appear(s) on the stock certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5.) GUARANTEE OF SIGNATURE(S) (See Instructions 1 and 5) Name of Firm -------------------------------------------------------------------- Authorized Signature ------------------------------------------------------------ Name --------------------------------------------------------------------------- Title --------------------------------------------------------------------------- Address ------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Area Code and Telephone No. ----------------------------------------------------- Dated , 1996 --------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The Letter of Transmittal is to be used for the tender of Shares of the Preferred only. INSTRUCTIONS Forming Part of the Terms and Conditions of the Offer 1. Guarantee of Signatures. Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by a financial institution (including most banks, savings and loan associations and brokerage houses) that is a participant 6 in the Security Transfer Agents Medallion Program or the Stock Exchange Medallion Program (any of the foregoing, an "Eligible Institution"). Signatures on this Letter of Transmittal need not be guaranteed (a) if this Letter of Transmittal is signed by the registered holder(s) of the Shares (which term, for purposes of this document, shall include any participant in DTC whose name appears on a security position listing as the owner of Shares) tendered herewith and such holder(s) has not completed the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" on this Letter of Transmittal or (b) if such Shares are tendered for the account of an Eligible Institution. See Instruction 5. 2. Delivery of Letter of Transmittal and Shares. This Letter of Transmittal is to be used either if certificates are to be forwarded herewith or if delivery of Shares is to be made by book-entry transfer pursuant to the procedures set forth under Section 5--"Procedure for Tendering Shares" in the Offer to Purchase. Certificates for all physically delivered Shares, or a confirmation of a book-entry transfer into the Depositary's account at DTC of all Shares delivered electronically, as well as a properly completed and duly executed Letter of Transmittal (or facsimile thereof) and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth on the front page of this Letter of Transmittal on or prior to the Expiration Date (as defined in the Offer to Purchase). Stockholders who cannot deliver their Shares and all other required documents to the Depositary on or prior to the Expiration Date must tender their Shares pursuant to the guaranteed delivery procedure set forth under Section 5--"Procedure for Tendering Shares" in the Offer to Purchase. Pursuant to such procedure: (a) such tender is made by or through an Eligible Institution, (b) a properly completed and duly executed Notice of Guaranteed Delivery in the form provided by the Company is received by the Depositary on or prior to the applicable Expiration Date and (c) the certificates for such Shares (or a confirmation of a book-entry transfer of such Shares into the Depositary's account at DTC), together with a properly completed and duly executed Letter of Transmittal, or facsimile thereof, and any other documents required by such Letter of Transmittal, are received by the Depositary no later than 5:00 p.m. New York City time on the third New York Stock Exchange trading day after the Expiration Date, all as provided under Section 5--"Procedure for Tendering Shares" in the Offer to Purchase. The method of delivery of Shares and all other required documents is at the option and risk of the tendering stockholder. If certificates for Shares are sent by mail, registered mail with return receipt requested, properly insured, is recommended. No alternative, conditional or contingent tenders will be accepted. See Section 4--"Number of Shares; Purchase Price; Expiration Date; Receipt of Dividend; Extension of the Offer" in the Offer to Purchase. By executing this Letter of Transmittal (or facsimile thereof), the tendering stockholder waives any right to receive any notice of the acceptance for payment of the Shares. 3. Inadequate Space. If the space provided herein is inadequate, the certificate numbers and/or the number of Shares should be listed on a separate schedule attached hereto. 4. Partial Tenders (not applicable to stockholders who tender by book-entry transfer). If fewer than all the Shares represented by any certificate delivered to the Depositary are to be tendered, fill in the number of Shares that are to be tendered in the box entitled "Number of Shares Tendered." In such case, a new certificate for the remainder of the Shares represented by the old certificate will be sent in the name of and to the person(s) signing this Letter of Transmittal, unless otherwise provided in the "Special Payment Instructions" or "Special Delivery Instructions" boxes on this Letter of Transmittal, as promptly as practicable following the expiration or termination of the Offer. All Shares represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the certificates without alteration, enlargement or any change whatsoever. If any of the Shares tendered hereby are held of record by two or more persons, all such persons must sign this Letter of Transmittal. If any of the Shares tendered hereby are registered in different names on different certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of certificates. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, no endorsements of certificates or separate stock powers are required unless payment of the purchase price is to be made to, or Shares not tendered or not purchased 7 are to be registered in the name of, any person other than the registered holder(s). Signatures on any such certificates or stock powers must be guaranteed by an Eligible Institution. See Instruction 1. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Shares tendered hereby, certificates must be endorsed or accompanied by appropriate stock powers, in either case, signed exactly as the name(s) of the registered holder(s) appear(s) on the certificates for such Shares. Signature(s) on any such certificates or stock powers must be guaranteed by an Eligible Institution. See Instruction 1. If this Letter of Transmittal or any certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to the Company of the authority of such person so to act must be submitted. 6. Stock Transfer Taxes. The Company will pay or cause to be paid any stock transfer taxes with respect to the sale and transfer of any Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or Shares not tendered or not purchased are to be registered in the name of, any person other than the registered holder(s), or if tendered Shares are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder(s), such other person or otherwise) payable on account of the transfer to such person will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted. See Section 7--"Acceptance for Payment of Shares and Payment of Purchase Price" in the Offer to Purchase. Except as provided in this Instruction 6, it will not be necessary to affix transfer tax stamps to the certificates representing Shares tendered hereby. 7. Special Payment and Delivery Instructions. If the check for the purchase price of any Shares purchased is to be issued in the name of, and/or any Shares not tendered or not purchased are to be returned to, a person other than the person(s) signing this Letter of Transmittal or if the check and/or any certificate for Shares not tendered or not purchased are to be mailed to someone other than the person(s) signing this Letter of Transmittal or to an address other than that shown above in the box captioned "Description of Shares Tendered," then the boxes captioned "Special Payment Instructions" and/or "Special Delivery Instructions" on this Letter of Transmittal should be completed. Stockholders tendering Shares by book-entry transfer will have any Shares not accepted for payment returned by crediting the account maintained by such stockholder at DTC from which such transfer was made. 8. Substitute Form W-9 and Form W-8. The tendering stockholder is required to provide the Depositary with either a correct Taxpayer Identification Number ("TIN") on Substitute Form W-9, which is provided under "Important Tax Information" below, or a properly completed Form W-8. Failure to provide the information on either Substitute Form W-9 or Form W-8 may subject the tendering stockholder to 31% Federal income tax backup withholding on the payment of the purchase price. The box in Part 2 of Substitute Form W-9 may be checked if the tendering stockholder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future. If the box in Part 2 is checked and the Depositary is not provided with a TIN by the time of payment, the Depositary will withhold 31% on all payments of the purchase price thereafter until a TIN is provided to the Depositary. 9. Requests for Assistance or Additional Copies. Any questions or requests for assistance may be directed to Georgeson & Company Inc., as "Information Agent," or Goldman, Sachs & Co., as "Dealer Managers," at their respective telephone numbers and addresses listed below. Requests for additional copies of the Offer to Purchase, this Letter of Transmittal or other tender offer materials may be directed to the Information Agent or the Dealer Managers and such copies will be furnished promptly at the Company's expense. Stockholders may also contact their local broker, dealer, commercial bank or trust company for assistance concerning the Offer. 10. Irregularities. All questions as to the form of documents and the validity, eligibility (including time of receipt) and acceptance of any tender of Shares will be determined by the Company, in its sole discretion, and its determination shall be final and binding. The Company reserves the absolute right to reject any and all tenders of Shares that it determines are not in proper form or the acceptance for payment of or payment for Shares that may, in the opinion of the Company's counsel, be unlawful. The Company also reserves the absolute right to waive any of the conditions to the Offer or any defect or irregularity in any tender of Shares and the Company's interpretation of the terms and conditions of the Offer (including these instructions) shall be final and binding. Unless waived, any defects or irregularities in connection with tenders must be cured within such time as the Company shall determine. None of the Company, the Dealer Managers, the Depositary, the Information Agent or any other person shall be under any duty to give 8 notice of any defect or irregularity in tenders, nor shall any of them incur any liability for failure to give any such notice. Tenders will not be deemed to have been made until all defects and irregularities have been cured or waived. IMPORTANT: This Letter of Transmittal (or a facsimile copy thereof), duly executed, together with certificates or confirmation of book-entry transfer and all other required documents must be received by the Depositary, or the Notice of Guaranteed Delivery must be received by the Depositary, on or prior to the Expiration Date (as defined in the Offer to Purchase). IMPORTANT TAX INFORMATION Under Federal income tax law, a stockholder whose tendered Shares are accepted for payment is required to provide the Depositary (as payer) with either such stockholder's correct TIN on Substitute Form W-9 below or a properly completed Form W-8. If such stockholder is an individual, the TIN is his or her social security number. For businesses and other entities, the TIN is the employer identification number. If the Depositary is not provided with the correct TIN or properly completed Form W-8, the stockholder may be subject to a $50 penalty imposed by the Internal Revenue Service. In addition, payments that are made to such stockholder with respect to Shares purchased pursuant to the Offer may be subject to backup withholding. The Form W-8 can be obtained from the Depositary. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional instructions. If Federal income tax backup withholding applies, the Depositary is required to withhold 31% of any payments made to the stockholder. Backup withholding is not an additional tax. Rather, the Federal income tax liability of persons subject to backup withholding will be reduced by the amount of the tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained. Purpose of Substitute Form W-9 and Form W-8 To avoid backup withholding on payments that are made to a stockholder with respect to Shares purchased pursuant to the Offer, the stockholder is required to notify the Depositary of his or her correct TIN by completing the Substitute Form W-9 attached hereto certifying that the TIN provided on Substitute Form W-9 is correct and that (a) the stockholder has not been notified by the Internal Revenue Service that he or she is subject to Federal income tax backup withholding as a result of failure to report all interest or dividends or (b) the Internal Revenue Service has notified the stockholder that he or she is no longer subject to Federal income tax backup withholding. Foreign stockholders must submit a properly completed Form W-8 in order to avoid the applicable backup withholding; provided, however, that backup withholding will not apply to foreign stockholders subject to 30% (or lower treaty rate) withholding on gross payments received pursuant to the Offer. What Number to Give the Depositary The stockholder is required to give the Depositary the social security number or employer identification number of the registered owner of the Shares. If the Shares are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidance on which number to report. 9 Payer's Name: the Bank of New York - ----------------------------------------------------------------------------------------------------------------------------------- SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN IN Social security number OR THE BOX AT RIGHT AND CERTIFY BY Employee Identification Number Form W-9 SIGNING AND DATING BELOW: TIN ______________________________ -------------------------------------------------------------------------------------------------------- Name (Please Print) PART 2 ---------------------------------------------------------------- Address Awaiting TIN / / ---------------------------------------------------------------------------- City State Zip ------------------------- ------------------ --------------------------- -------------------------------------------------------------------------------------------------------- Department of the PART 3--CERTIFICATION--UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT: Treasury Internal Revenue (1) The number shown on this form is my correct taxpayer identification number (or a TIN has Service not been issued to me but I have mailed or delivered an application to receive a TIN or Payer's Request for intend to do so in the near future). Taxpayer Identification (2) I am not subject to backup withholding either because I have not been notified by the Number (TIN) and Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a Certification failure to report all interest or dividends or the IRS has notified me that I am no longer subject to backup withholding. (3) All other information provided on this form is true, correct and complete. - ----------------------------------------------------------------------------------------------------------------------------------- SIGNATURE: DATE: ------------------------------------- -------------------------- You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of underreporting interest or dividends on your tax return. - -----------------------------------------------------------------------------------------------------------------------------------
NOTE:FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 2 OF THE SUBSTITUTE FORM W-9. - -------------------------------------------------------------------------------- CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 31% of all payments of the purchase price made to me will be withheld until I provide a number. - -------------------------------------------------------------------------------- The information Agent for the Offer is: Georgeson & Company Inc. Wall Street Plaza New York, New York 10005 Banks and Brokers Call Collect: (212) 440-9800 All Others Call Toll-Free: (800) 223-2064 The Dealer Managers for the Offer are: Goldman, Sachs & Co. 85 Broad Street New York, New York 10004 (800) 828-3182 EX-99.(A)(3) 4 NOTICE OF GUARANTEED DELIVERY Atlantic City Electric Company Notice of Guaranteed Delivery of Shares of $7.80 No Par Preferred Stock (cumulative) This form, or a form substantially equivalent to this form, must be used to accept the Offer (as defined below) if certificates for the shares of $7.80 No Par Preferred Stock (cumulative) (the "Shares") are not immediately available, if the procedure for book-entry transfer cannot be completed on a timely basis, or if time will not permit all other documents required by the Letter of Transmittal to be delivered to The Bank of New York, as Depositary on or prior to the expiration of the Offer. Such form may be delivered by hand or transmitted by mail, or by facsimile transmission, to the Depositary. See Section 5--"Procedure for Tendering Shares" in the Offer to Purchase. The Eligible Institution (as defined herein) which completes this form must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal and certificates for Shares to the Depositary within three New York Stock Exchange trading days after the Expiration Date. Failure to do so could result in a financial loss to such Eligible Institution. To: The Bank of New York, Depositary By Mail: Facsimile By Hand or: Transmission: By Overnight Courier (for Eligible Institutions Only) Tender & Exchange Department (212) 815-6213 Tender & Exchange Department P.O. Box 11248 101 Barclay Street Church Street Station Receive and Deliver Window New York, N. Y. 10286-1248 New York, New York 10286 For Information Telephone: 800-507-9357 Delivery of this instrument to an address other than as set forth above or transmission of instructions via a facsimile number other than one listed above will not constitute a valid delivery. This form is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an Eligible Institution under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal. Ladies and Gentlemen: The undersigned hereby tenders to Atlantic City Electric Company, a New Jersey corporation (the "Company"), upon the terms and subject to the conditions set forth in the Offer to Purchase dated August 29, 1996 (the "Offer to Purchase"), and the Letter of Transmittal (which, together with the Offer to Purchase, constitutes the "Offer"), receipt of which is hereby acknowledged, the number of shares of the $7.80 No Par Preferred Stock of the Company listed below, pursuant to the guaranteed delivery procedure set forth in Section 5--"Procedure for Tendering Shares" in the Offer to Purchase. - ----------------------------------------------------------- Number of Shares: - ----------------------------------------------------------- Certificate Nos. (if available): - ----------------------------------------------------------- If Shares will be tendered by book-entry transfer: Name of Tendering Institution: =========================================================== Account No. at The Depository Trust Company: =========================================================== - ------------------------------------------------------------ Signature - ------------------------------------------------------------ Name(s) of Record Holder(s) (Please Print) - ------------------------------------------------------------ Address ============================================================ Area Code and Telephone Number ============================================================ - -------------------------------------------------------------------------------- GUARANTEE (Not to be used for signature guarantee) The undersigned financial institution (including most banks, savings and loan associations and brokerage houses) that is a participant in the Security Transfer Agents Medallion Program or the Stock Exchange Medallion Program (each, an "Eligible Institution") guarantees (a) that the above-named person(s) has a net long position in the Shares being tendered within the meaning of Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as amended, (b) that such tender of Shares complies with Rule 14e-4 and (c) to deliver to the Depositary at one of its addresses set forth above certificate(s) for the Shares tendered hereby, in proper form for transfer, or a confirmation of the book-entry transfer of the Shares tendered hereby into the Depositary's account at The Depository Trust Company, together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantee(s) and any other required documents, all within three New York Stock Exchange trading days after the Expiration Date. - ------------------------------------ ---------------------------------------- Name of Firm Authorized Signature - ------------------------------------ ---------------------------------------- Address Name - ------------------------------------ ---------------------------------------- City, State, Zip Code Title - ------------------------------------ ---------------------------------------- Area Code and Telephone Number Dated: , 1996 ------------------------ DO NOT SEND CERTIFICATES WITH THIS FORM. YOUR CERTIFICATES MUST BE SENT WITH THE LETTER OF TRANSMITTAL. - -------------------------------------------------------------------------------- 2 EX-99.(A)(4) 5 LETTER TO BROKERS, DEALERS Goldman, Sachs & Co. 85 Broad Street New York, New York 10004 Atlantic City Electric Company Offer to Purchase for Cash All Outstanding Shares of $7.80 No Par Preferred Stock (cumulative) CUSIP No. 048303 86 1 - -------------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON MONDAY, OCTOBER 7, 1996 UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- August 29, 1996 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: We have been appointed by Atlantic City Electric Company, a New Jersey corporation (the "Company"), to act as Dealer Managers in connection with the offer to purchase all outstanding shares of its $7.80 No Par Preferred Stock (cumulative) (the "Shares") at a price of $111.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase dated August 29, 1996 (the "Offer to Purchase"), and in the Letter of Transmittal (which, together with the Offer to Purchase, constitutes the "Offer"). The Company will purchase all Shares validly tendered and not withdrawn, upon the terms and subject to the conditions of the Offer (as described in the Offer to Purchase). THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. The Offer is, however, subject to certain other conditions. See Section 8 -- "Certain Conditions of the Offer" in the Offer to Purchase. We are asking you to contact your clients for whom you hold Shares registered in your name (or in the name of your nominee) or who hold Shares registered in their own names. Please bring the Offer to their attention as promptly as possible. The Company will, upon request, reimburse Soliciting Dealers for reasonable and customary handling and mailing expenses incurred by them in forwarding materials relating to the Offer to their customers. For purposes of this letter, Soliciting Dealer includes (i) any broker or dealer in securities, including Goldman, Sachs & Co., as "Dealer Managers," in its capacity as a broker or dealer, which is a member of any national securities exchange or of the National Association of Securities Dealers, Inc. (the "NASD"), (ii) any foreign broker or dealer not eligible for membership in the NASD which agrees to conform to the NASD's Rules of Fair Practice in soliciting tenders outside the United States to the same extent as if it were an NASD member, or (iii) any bank or trust company. The Company will pay all stock transfer taxes applicable to its purchase of Shares pursuant to the Offer, subject to Instruction 6 of the Letter of Transmittal. No broker, dealer, bank, trust company or fiduciary shall be deemed to be the agent of the Company, The Bank of New York, as "Depositary," the Dealer Managers or Georgeson & Company Inc., as "Information Agent," for purposes of the Offer. For your information and for forwarding to your clients, we are enclosing the following documents: 1. The Offer to Purchase; 2. A Letter of Transmittal for your use and for the information of your clients; 3. A letter to holders of the Shares from the Vice President, Treasurer and Assistant Secretary of the Company; 4. A Notice of Guaranteed Delivery to be used to accept the Offer if the Shares or any other required documents cannot be delivered to the Depositary by the expiration of the Offer; 5. A letter which may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee, with space for obtaining such clients' instructions with regard to the Offer; 6. Guidelines of the Internal Revenue Service for Certification of Taxpayer Identification Number on Substitute Form W-9, providing information relating to backup federal income tax withholding; and 7. A return envelope addressed to The Bank of New York, as Depositary. We urge you to contact your clients as promptly as possible. Please note that the Offer and withdrawal rights expire at 5:00 p.m., New York City time, on Monday, October 7, 1996, unless the Offer is extended. THE COMPANY, ITS BOARD OF DIRECTORS AND ITS EXECUTIVE OFFICERS MAKE NO RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER ANY OR ALL SHARES PURSUANT TO THE OFFER. STOCKHOLDERS MUST MAKE THEIR OWN DECISION AS TO WHETHER TO TENDER SHARES PURSUANT TO THE OFFER AND, IF SO, HOW MANY SHARES TO TENDER. Any questions or requests for assistance or additional copies of the enclosed materials may be directed to the Information Agent, or to us, as Dealer Managers, at the respective addresses and telephone numbers set forth on the back cover of the enclosed Offer to Purchase. Very truly yours, Goldman, Sachs & Co. NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU THE AGENT OF THE COMPANY, THE DEALER MANAGERS, THE INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN. 2 EX-99.(A)(5) 6 LETTER TO CLIENTS Atlantic City Electric Company Offer to Purchase for Cash Shares of its $7.80 No Par Preferred Stock (cumulative) - -------------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON MONDAY, OCTOBER 7, 1996 UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- To Our Clients: Enclosed for your consideration are the Offer to Purchase dated August 29, 1996 (the "Offer to Purchase"), and the Letter of Transmittal (which together constitute the "Offer") setting forth an offer by Atlantic City Electric Company, a New Jersey corporation (the "Company"), to purchase all outstanding shares of its $7.80 No Par Preferred Stock (cumulative) (the "Shares") at a price of $111.00 per Share, net to the seller in cash, upon the terms and subject to the conditions of the Offer. The Company will purchase all Shares validly tendered and not withdrawn, upon the terms and subject to the conditions of the Offer (as described in the Offer to Purchase). We are the holder of record of Shares held for your account. A tender of such Shares can be made only by us as the holder of record and pursuant to your instructions. The Letter of Transmittal is furnished to you for your information only and cannot be used by you to tender Shares held by us for your account. We request instructions as to whether you wish us to tender any or all of the Shares held by us for your account, upon the terms and subject to the conditions set forth in the Offer to Purchase and the Letter of Transmittal. Your attention is invited to the following: (1) The Offer is for all outstanding Shares. The Offer is not conditioned upon any minimum number of Shares of Preferred being tendered, but the Offer is subject to certain other conditions. (2) The Offer and withdrawal rights will expire at 5:00 p.m., New York City time, on Monday, October 7, 1996, unless the Offer is extended. Your instructions to us should be forwarded to us in ample time to permit us to submit a tender on your behalf. If you would like to withdraw your Shares that we have tendered, you can withdraw them so long as the Offer remains open or at any time after the expiration of 40 business days from the commencement of the Offer if such Shares have not been accepted for payment. (3) Any stock transfer taxes applicable to the sale of Shares to the Company pursuant to the Offer will be paid by the Company, except as otherwise provided in Instruction 6 of the Letter of Transmittal. The Company, its Board of Directors and its Executive Officers make no recommendation to any stockholder as to whether to tender any or all Shares pursuant to the Offer. Stockholders must make their own decision as to whether to tender Shares pursuant to the Offer and, if so, how many Shares to tender. If you wish to have us tender any or all of your Shares held by us for your account upon the terms and subject to the conditions set forth in the Offer, please so instruct us by completing, executing, detaching and returning to us the instruction form on the detachable part hereof. An envelope to return your instructions to us is enclosed. If you authorize tender of your Shares, all such Shares will be tendered unless otherwise specified on the detachable part hereof. Your instructions should be forwarded to us in ample time to permit us to submit a tender on your behalf by the expiration of the Offer. The Offer is being made to all holders of Shares. The Company is not aware of any state where the making of the Offer is prohibited by administrative or judicial action pursuant to a valid state statute. If the Company becomes aware of any valid state statute prohibiting the making of the Offer, the Company will make a good faith effort to comply with such statute. If, after such good faith effort, the Company cannot comply with such statute, the Offer will not be made to, nor will tenders be accepted from or on behalf of, holders of Shares in such state. In those jurisdictions where securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Company by Goldman, Sachs & Co., as Dealer Managers, or one or more registered brokers or dealers licensed under the laws of such jurisdictions. 2 Instructions With Respect to Offer to Purchase for Cash of All Outstanding Shares of $7.80 No Par Preferred Stock (cumulative) of Atlantic City Electric Company The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated August 29, 1996, and the Letter of Transmittal (which together constitute the "Offer") in connection with the Offer by Atlantic City Electric Company (the "Company") to purchase all outstanding shares of $7.80 No Par Preferred Stock (cumulative) (the "Shares") at a price of $111.00 per Share, net to the undersigned in cash. This will instruct you to tender to the Company the number of Shares indicated below (or, if no number is indicated below, all Shares) which are held by you for the account of the undersigned, upon the terms and subject to the conditions of the Offer. - -------------------------------------------------------------------------------- Number of Shares to be Tendered: Shares* Dated: , 1996 - -------------------------------------------------------------------------------- SIGN HERE Signature(s): ------------------------------------------------------------------- Name(s): ------------------------------------------------------------------------ Address: ------------------------------------------------------------------------ Social Security or Taxpayer ID No.: --------------------------------------------- - -------------------------------------------------------------------------------- - ------------------ * Unless otherwise indicated, it will be assumed that all Shares held by us for your account are to be tendered. 3 EX-99.(A)(6) 7 LETTER TO HOLDERS OF SHARES August 29, 1996 Dear Stockholder: Atlantic City Electric Company (the "Company") is offering to purchase (the "Offer") all outstanding shares of its $7.80 No Par Preferred Stock (cumulative) (the "Shares") at a price of $111.00 per Share. All of the Shares that are properly tendered (and not withdrawn) will, subject to the terms and conditions set forth in the enclosed Offer to Purchase and the Letter of Transmittal be purchased at the price therefor, net to the selling stockholder in cash. If you do not wish to participate in the Offer, you do not need to take any action. The Offer is explained in detail in the enclosed Offer to Purchase and the Letter of Transmittal. If you want to tender your Shares, the instructions on how to tender Shares are in the enclosed materials. I encourage you to read carefully these materials before making any decision with respect to the Offer. The Offer gives stockholders the opportunity to sell their Shares at a premium over the market price and without the usual transaction costs associated with a market sale. The Company, its Board of Directors and its executive officers make no recommendation to any stockholder as to whether to tender any or all Shares pursuant to the Offer. Stockholders must make their own decision as to whether to tender Shares pursuant to the Offer and, if so, how many Shares to tender. Sincerely, LOUIS M. WALTERS Vice President, Treasurer and Assistant Secretary EX-99.(A)(7) 8 PRESS RELEASE DATED 8/29/96 August 29, 1996 ATLANTIC CITY ELECTRIC COMPANY ANNOUNCES THE TENDER FOR $7.80 NO PAR PREFERRED STOCK Atlantic City Electric Company ("ACE") announced today (August 29, 1996) that its Board of Directors has authorized a cash tender offer for all outstanding shares of its $7.80 No Par Preferred Stock (cumulative). ACE is offering to purchase all outstanding shares of the $7.80 No Par Preferred Stock at a per share purchase price of $111.00. The $7.80 series is traded in the over-the-counter market and is not listed on any national securities exchange or quoted on the automated quotation system of a registered securities association. The offer and withdrawal rights will expire at 5:00 p.m., New York City time, on Monday, October 7, 1996. The tender offer is not conditioned upon any minimum number of shares being tendered, but is subject to certain other conditions. The dealer managers for the offer are Goldman, Sachs & Co. and the depositary for the tendered shares will be The Bank of New York. Questions or requests for assistance may be directed to Georgeson & Company Inc., the information agent, at Wall Street Plaza, New York, New York 10005 (telephone 1-800-223-2064) or Goldman, Sachs & Co. at 1-800-828-3182. # # # EX-99.(A)(8) 9 SUMMARY ADVERTISEMENT This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares. The Offer is made solely by the Offer to Purchase dated August 29, 1996 and the Letter of Transmittal. The Offer is being made to all holders of Shares; provided, that the Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Shares in any jurisdiction in which making or accepting the Offer would violate that jurisdiction's laws. In those jurisdictions whose securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Company by Goldman, Sachs & Co. or one or more registered brokers or dealers licensed under the laws of such jurisdictions. $70,000,000 Notice of Offer to Purchase for Cash by Atlantic City Electric Company All Outstanding Shares of its $7.80 No Par Preferred Stock (Cumulative) at a Purchase Price of $111.00 Per Share CUSIP No. 048303 86 1 Atlantic City Electric Company, a New Jersey corporation (the "Company"), invites the holders of the above-referenced $7.80 No Par Preferred Stock (cumulative) (the "Preferred") to tender their shares of such stock (the "Shares"), subject to the conditions set forth in the Offer to Purchase dated August 29, 1996 (the "Offer to Purchase") and in the Letter of Transmittal (which, together with the Offer to Purchase, constitutes the "Offer"). The Company will purchase all Shares validly tendered and not withdrawn upon the terms and subject to the conditions of the Offer. On September 12, 1996, the Board of Directors of the Company will consider the declaration of dividends on the Company's capital stock. The Regular Quarterly Dividend (as defined in the Offer to Purchase) for the Preferred, if, when and as declared, will be paid on November 1, 1996 to holders of record as of the close of business on October 4, 1996. A holder of record of Shares on October 4, 1996 who tenders Shares pursuant to the Offer will be entitled to the Regular Quarterly Dividend payable November 1, 1996, regardless of when such tender is made. THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 8--"CERTAIN CONDITIONS OF THE OFFER" IN THE OFFER TO PURCHASE. - -------------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON MONDAY, OCTOBER 7, 1996, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- Upon the terms and subject to the conditions described in the Offer to Purchase and in the Letter of Transmittal, the Company will purchase all Shares validly tendered and not withdrawn on or prior to the Expiration Date (as defined in the Offer to Purchase). The Company is making the Offer because it believes that the purchase of Shares is economically attractive to the Company. In addition, the Offer gives stockholders the opportunity to sell their Shares at a premium over market price and without the usual transaction costs associated with a market sale. The Company, its Board of Directors and its executive officers make no recommendation to any stockholder as to whether to tender any or all Shares pursuant to the Offer. Stockholders must make their own decision as to whether to tender Shares pursuant to the Offer and, if so, how many Shares to tender. The Company reserves the right, at any time or from time to time, to extend the period of time during which the Offer is open by giving oral or written notice of such extension to The Bank of New York, as depositary (the "Depositary"), and making a public announcement thereof. Tenders of Shares made pursuant to the Offer may be withdrawn at any time on or prior to the Expiration Date. Thereafter, such tenders are irrevocable, except that they may be withdrawn after 12:00 midnight, Friday, October 25, 1996 unless theretofore accepted for payment by the Company as provided in the Offer to Purchase. For a withdrawal to be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of the addresses or facsimile numbers set forth on the back cover of the Offer to Purchase and must specify the name of the person who tendered the Shares to be withdrawn and the number of Shares to be withdrawn. If the Shares to be withdrawn have been delivered to the Depositary, a signed notice of withdrawal with signatures guaranteed by an Eligible Institution (as defined in the Offer to Purchase) (except in the case of Shares tendered by an Eligible Institution) must be submitted prior to the release of such Shares. In addition, such notice must specify, in the case of Shares tendered by delivery of certificates, the name of the registered holder (if different from that of the tendering stockholder) and the serial numbers shown on the particular certificates evidencing the Shares to be withdrawn or, in the case of Shares tendered by book-entry transfer, the name and number of the account at The Depository Trust Company ("DTC") to be credited with the withdrawn Shares and the name of the registered holder (if different from the name of such account). Withdrawals may not be rescinded, and Shares withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. However, withdrawn Shares may be re-tendered by again following one of the procedures described in Section 5--"Procedure for Tendering Shares" in the Offer to Purchase at any time prior to the Expiration Date. The Company will be deemed to have purchased tendered Shares validly tendered and not withdrawn if and when it gives oral or written notice to the Depositary of its acceptance for payment of Shares. The information required to be disclosed by Rule 13e-4(d)(1) of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is incorporated herein by reference. Copies of the Offer to Purchase and the Letter of Transmittal are being mailed to registered holders of Shares and will be furnished to brokers, banks and similar persons whose names, or the names of whose nominees, appear on the Company's stockholder list or, if applicable, who are listed as participants in DTC's security position listing for subsequent transmittal to beneficial owners of Shares. The Offer to Purchase and the Letter of Transmittal contain important information that should be read carefully before any decision is made with respect to the Offer. Any questions or requests for assistance may be directed to the Information Agent or the Dealer Managers at their respective telephone numbers and addresses listed below. Requests for additional copies of the Offer to Purchase, the Letter of Transmittal or other tender offer materials may be directed to the Information Agent or the Dealer Managers, and such copies will be furnished promptly at the Company's expense. Holders of Shares may also contact their local broker, dealer, commercial bank or trust company for assistance concerning the Offer. Information on the Offer is available from "MCM Corporate Watch Services" on Telerate page 42,000. The Information Agent for the Offer is: GEORGESON & COMPANY INC. Wall Street Plaza New York, New York 10005 Banks and Brokers Call Collect: (212) 440-9800 All Others Call Toll Free: (800) 223-2064 The Dealer Managers for the Offer are: Goldman, Sachs & Co. 85 Broad Street New York, New York 10004 (800) 828-3182 August 29, 1996 EX-99.(A)(9) 10 FORM W-9 GUIDELINES GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER OF SUBSTITUTE FORM W-9 Section references are to the Internal Revenue Code. Purpose of Form.--A person who is required to file an information return with the IRS must obtain your correct TIN to report income paid to you, real estate transactions, mortgage interest you paid, the acquisition or abandonment of secured property or contributions you made to an IRA. Use Form W-9 to furnish your correct TIN to the requester (the person asking you to furnish your TIN) and, when applicable, (1) to certify that the TIN you are furnishing is correct (or that you are waiting for a number to be issued), (2) to certify that you are not subject to backup withholding, and (3) to claim exemption from backup withholding if you are an exempt payee. Furnishing your correct TIN and making the appropriate certifications will prevent certain payments from being subject to backup withholding. Note: If a requester gives you a form other than a W-9 to request your TIN, you must use the requester's form. How to Obtain a TIN.--If you do not have a TIN, apply for one immediately. To apply, get Form SS-5, Application for a Social Security Card (for individuals), from your local office of the Social Security Administration, or Form SS-4, Application for Employer Identification Number (for businesses and all other entities), from your local IRS office. To complete Form W-9 if you do not have a TIN, write "Applied for" in the space for the TIN in Part I (or check box 2 of Substitute Form W-9), sign and date the form, and give it to the requester. Generally, you must obtain a TIN and furnish it to the requester by the time of payment. If the requester does not receive your TIN by the time of payment, backup withholding, if applicable, will begin and continue until you furnish your TIN to the requester. Note: Writing "Applied for" (or checking box 2 of the Substitute Form W-9) on the form means that you have already applied for a TIN or that you intend to apply for one in the near future. As soon as you receive your TIN, complete another Form W-9, include your TIN, sign and date the form, and give it to the requester. What is Backup Withholding?--Persons making certain payments to you after 1992 are required to withhold and pay to the IRS 31% of such payments under certain conditions. This is called "backup withholding". Payments that could be subject to backup withholding include interest, dividends, broker and barter exchange transactions, rents, royalties, nonemployee compensation and certain payments from fishing boat operators, but do not include real estate transactions. If you give the requester your correct TIN, make the appropriate certifications, and report all your taxable interest and dividends on your tax return, your payments will not be subject to backup withholding. Payments you receive will be subject to backup withholding if: 1. You do not furnish your TIN to the requester, or 2. The IRS notifies the requester that you furnished an incorrect TIN, or 3. You are notified by the IRS that you are subject to backup withholding because you failed to report all your interest and dividends on your tax return (for reportable interest and dividends only), or 4. You do not certify to the requester that you are not subject to backup withholding under 3 above (for reportable interest and dividend accounts opened after 1983 only), or 5. You do not certify your TIN. This applies only to reportable interest, dividend, broker or barter exchange accounts opened after 1983, or broker accounts considered inactive in 1983. Except as explained in 5 above, other reportable payments are subject to backup withholding only if 1 or 2 above applies. Certain payees and payments are exempt from backup withholding and information reporting. See Payees and Payments Exempt From Backup Withholding, below, and Example Payees and Payments under Specific Instructions, below, if you are an exempt payee. Payees and Payments Exempt From Backup Withholding.--The following is a list of payees exempt from backup withholding and for which no information reporting is required. For interest and dividends, all listed payees are exempt except item (9). For broker transactions, payees listed in (1) through (13) and a person registered under the Investment Advisers Act of 1940 who regularly acts as a broker are exempt. Payments subject to reporting under sections 6041 and 6041A are generally exempt from backup withholding only if made to payees described in items (1) through (7), except a corporation that provides medical and health care services or bills and collects payments for such services is not exempt from backup withholding or information reporting. Only payees described in items (2) through (6) are exempt from backup withholding for barter exchange transactions, patronage dividends and payments by certain fishing boat operations. (1) A corporation. (2) An organization exempt from tax under section 501(a), or an IRA, or a custodial account under section 403(b)(7). (3) The United States or any of its agencies or instrumentalities. (4) A state, the District of Columbia, a possession of the United States or any of their political subdivisions or instrumentalities. (5) A foreign government or any of its political subdivisions, agencies, or instrumentalities. (6) An international organization or any of its agencies or instrumentalities. (7) A foreign central bank of issue. (8) A dealer in securities or commodities required to register in the United States or a possession of the United States. (9) A futures commission merchant registered with the Commodity Futures Trading Commission. (10) A real estate investment trust. (11) An entity registered at all times during the tax year under the Investment Company Act of 1940. (12) A common trust fund operated by a bank under section 584(a). (13) A financial institution. (14) A middleman known in the investment community as a nominee or listed in the most recent publication of the American Society of Corporate Secretaries, Inc., Nominee List. (15) A trust exempt from tax under section 664 or described in section 4947. Payments of dividend and patronage dividends generally not subject to backup withholding include the following: o Payments to nonresident aliens subject to withholding under section 1441. o Payments to partnerships not engaged in a trade or business in the United States and that have at least one nonresident partner. o Payments of patronage dividends not paid in money. o Payments made by certain foreign organizations. Payments of interest generally not subject to backup withholding include the following: o Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct TIN to the payer. o Payments of tax-exempt interest (including exempt-interest dividends under section 852). o Payments described in section 6049(b)(5) to nonresident aliens. o Payment on tax-free covenant bonds under section 1451. o Payments made by certain foreign organizations. o Mortgage interest paid by you. Payments that are not subject to information reporting are also not subject to backup withholding. For details, see sections 6041, 6041A(a), 6042, 6044, 6045, 6049, 6050A and 6050N, and their regulations. Penalties Failure to Furnish TIN.--If you fail to furnish your correct TIN to a requester, you will be subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. Civil Penalty for False Information With Respect to Withholding.--If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty. Criminal Penalty for Falsifying Information.--Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. Misuse of TINs.--If the requester discloses or uses TINs in violation of Federal law, the requester may be subject to civil and criminal penalties. Special Instructions Name.--If you are an individual, you must generally provide the name shown on your Social Security card. However, if you have changed your last name, for instance, due to marriage, without informing the Social Security Administration of the name change, please enter your first name, the last name shown on your Social Security card, and your new last name. If you are a sole proprietor, you must furnish your individual name and either the SSN or EIN. You may also enter your business name or "doing business as" name on the business name line. Enter your name(s) as shown on your Social Security card and/or as it was used to apply for your EIN on Form SS-4. Signing the Certification. 1. Interest, Dividend, Broker and Barter Exchange Accounts Opened Before 1984 and Broker Accounts Considered Active During 1983. You are required to furnish your correct TIN, but you are not required to sign the certification. 2. Interest, Dividend, Broker and Barter Exchange Accounts Opened After 1983 And Broker Accounts Considered Inactive During 1983. You must sign the certification or backup withholding will apply. If you are subject to backup withholding and you are merely providing your correct TIN to the requester, you must cross out item 2 in the certification before signing the form. 3. Real Estate Transactions. You must sign the certification. You may cross out item 2 of the certification. 4. Other Payments. You are required to furnish your correct TIN, but you are not required to sign the certification unless you have been notified of an incorrect TIN. Other payments include payments made in the course of the requester's trade or business for rents, royalties, goods (other than bills for merchandise), medical and health care services, payments to a nonemployee for services (including attorney and accounting fees) and payments to certain fishing boat crew members. 5. Mortgage Interest Paid by You, Acquisition or Abandonment of Secured Property or IRA Contributions. You are required to furnish your correct TIN, but you are not required to sign the certification. 6. Exempt Payees and Payments. If you are exempt from backup withholding, you should complete this form to avoid possible erroneous backup withholding. Enter your correct TIN in Part 1, write "EXEMPT" in the block in Part II, and sign and date the form. If you are a nonresident alien or foreign entity not subject to backup withholding, give the requester a complete Form W-8, Certificate of Foreign Status. 7. Tin "Applied For." Follow the instructions under How To Obtain a TIN on page 1, and sign and date this form. Signature.--For a joint account, only the person whose TIN is shown in Part I should sign. Privacy Act Notice.--Section 6109 requires you to furnish your correct TIN to persons who must file information returns with the IRS to report interest, dividends, certain other income paid to you, mortgage interest you paid, the acquisition or abandonment of secured property or contributions you made to an IRA. The IRS uses the numbers for identification purposes and to help verify the accuracy of your tax return. You must provide your TIN whether or not you are required to file a tax return. Payers must generally withhold 31% of taxable interest, dividend and certain other payments to a payee who does not furnish a TIN to a payer. Certain penalties may also apply. GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER OF SUBSTITUTE FORM W-9 What Name and Number To Give the Requester ================================================================================ For this type of account: Give name and SSN of: 1. Individual The individual 2. Two or more individuals (joint The actual owner of the account or, Account) if combined funds, the first individual on the account(1) 3. Custodian account of a minor The minor(2) (Uniform Gift to Minors Act) 4. a. The usual revocable savings The grantor-trustee(1) trust (grantor is also trustee) b. So-called trust account that The actual owner(1) is not a legal or valid trust under state law. 5. Sole proprietorship The owner(3) ================================================================================ ================================================================================ For this type of account: Give name and EIN of: 6. Sole proprietorship: The owner(3) 7. A valid trust, estate or pension Legal entity(4) trust 8. Corporate The corporation 9. Association, club, religious, The organization charitable,educational or other tax-exempt organization 10. Partnership The partnerhip 11. A broker or registered nominee The broker or nominee 12. Account with the Department The public entity of Agriculture in the name of a public entity (such as a state or local government, school district or prison) that receives agriculture program payments. ================================================================================ (1) List first and circle the name of the person whose number you furnish. (2) Circle the minor's name and furnish the minor's SSN. (3) Show your individual name. You may also enter your business name. You may use your SSN or EIN. (4) List first and circle the name of the legal trust, estate or pension trust. (Do not furnish the TIN of the personal representative or trustee unless the legal entity itself is not designated in the account title). NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. -----END PRIVACY-ENHANCED MESSAGE-----