File Number 70-9005
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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PRE-EFFECTIVE AMENDMENT NO. 1
TO THE
FORM U-1 APPLICATION/DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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NEW CENTURY ENERGIES, INC.
1225 Seventeenth Street
Denver, Colorado 80202
(Name of company filing this statement and address of principal
executive office)
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New Century Energies, Inc.
(Name of top registered holding company parent)
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Richard C. Kelly Doyle R. Bunch II
President and Treasurer Chairman and Secretary
1225 Seventeenth Street Tyler at Sixth
Denver, Colorado 80202 Amarillo, Texas 79101
(Name and address of agents for service)
The Commission is requested to send copies of all notices, orders and
communications in connection with this Application/Declaration to:
Gary W. Wolf, Esq. William M. Dudley, Esq.
Cahill Gordon & Reindel Public Service Company
80 Pine Street of Colorado
New York, New York 10005 1225 Seventeenth Street
Denver, Colorado 80202
W. Wayne Brown James D. Steinhilper
Public Service Company of Southwestern Public Service
Colorado Company
1225 Seventeenth Street Tyler at Sixth
Denver, Colorado 80202 Amarillo, Texas 79101
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Item 1. Description of Proposed Transaction
(a) Furnish a reasonably detailed and precise description of the proposed
transaction, including a statement of the reason why it is desired to consummate
the transaction and the anticipated effect thereof. If the transaction is part
of a general program, describe the program and its relation to the proposed
transaction.
I. INTRODUCTION
A. General
New Century Energies, Inc. ("NCE" or the "Company"), a Delaware
corporation, has previously filed an Application/Declaration on Form U-1 with
the Securities and Exchange Commission (the "Commission") requesting
authorization under Section 9(a)(2) of the Public Utility Holding Company Act of
1935, as amended (the "Act"), to acquire all of the outstanding voting
securities of Public Service Company of Colorado, a Colorado corporation and an
operating public utility company ("PSCo"), Southwestern Public Service Company,
a New Mexico corporation and an operating public utility company ("SPS"), and
Cheyenne Light, Fuel and Power Company, a Wyoming corporation and an operating
public utility company ("Cheyenne"), and for other related transactions (File
No. 70-8787) (the "Merger U-1"). Following the consummation of the transactions
described in the Merger U-1, NCE will register as a holding company under the
Act.
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In order to ensure that NCE and its subsidiaries are able to meet their
capital requirements upon registration and plan their future financing
accurately, NCE and its subsidiaries have also filed an Application/Declaration
on Form U-1 with the Commission requesting authorization for financing
transactions for the period beginning with the effective date of an order issued
in such proceeding through December 31, 1999 (File No. 70-9007).
B. Description of the Parties to the Transaction
Following the consummation of the merger of PSCo and SPS (the "Merger"),
NCE will register as a holding company under the Act and will have three
operating utility subsidiaries (the "Utility Subsidiaries"): PSCo, an electric
and gas utility company providing service in an area having an estimated
population of 2.8 million in Colorado; SPS, an electric utility company
providing service to an area with a population of approximately one million in
the Panhandle and south plains of Texas, eastern and southeastern New Mexico,
the Oklahoma Panhandle and southwestern Kansas; and Cheyenne, an electric and
gas utility operating principally in Cheyenne, Wyoming. NCE will also have
several direct and indirect non-utility subsidiaries.
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Additional information about NCE and it subsidiaries and their businesses
is set forth in the Merger U-1 and the exhibits thereto.
II. BACKGROUND FOR PROPOSED RIGHTS DIVIDEND
Unsolicited attempts to acquire public companies have required boards of
directors and their stockholders to make difficult decisions affecting the
value, and on occasion the existence, of companies within extremely short time
periods. Such takeover attempts often occur when a company is particularly
vulnerable and when its board has determined that the company's inherent long
term values are inadequately recognized by the marketplace. Many of these
attempts have involved partial or two-tiered offers, the breakup of the
corporate structure and sale of assets, or have taken the form of creeping
acquisitions of stock that deprive stockholders of participation in a control
premium.
The changing regulatory environment (including the possible repeal or
amendment of the Act) suggests that public utility holding companies, which will
include NCE, and their stockholders are losing to some degree the regulatory
protection against hostile acquisitions that they formerly had. Recent
significant developments in the utility industry have also resulted in increased
takeover activity, including hostile or
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other unwanted takeover bids, further indicating that NCE's stockholders may be
at risk of losing the long-term value of NCE.
Shareholder rights plans have become widely accepted means to maximize
shareholder value by reducing the risk of nonrealization of shareholder value
due to opportunistic proposals. Adoption of such a plan by NCE would encourage
potential acquirors to negotiate with the Board of Directors of NCE ("Board")
and assist it in obtaining the highest value for NCE's shareholders, especially
in a hostile or unwanted takeover situation. The plan may in certain
circumstances permit the Board to thwart an inadequate offer. A shareholder
rights plan would also provide the Board with a role (supplemental to the role
of the Commission under the Act) in discouraging implicitly coercive takeover
tactics and would enable the Board to provide holders of NCE's common stock,
$1.00 par value per share (the "Common Stock"), adequate time to properly assess
a takeover bid without undue pressure. Moreover, a shareholder rights plan may
enhance the probability that a competing bid will emerge. Over 1,700 American
public companies have adopted rights plans, including more than half the Fortune
500, more than two-thirds of the Fortune 200, and at least 28 public utility
companies. Indeed, the Commission has approved the adoption of rights plans.
See, e.g., Consolidated Natural Gas
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Company, HCAR No. 26434 (December 19, 1995) and National Fuel Gas Company, HCAR
No. 26532 (June 12, 1996).
A shareholder rights plan, however, would not make NCE acquisition-proof
nor preclude a proxy contest. The fiduciary duties of the Board under Delaware
law would still require the Board to consider an offer that gives maximum
long-term value to all holders of Common Stock and could, under appropriate
conditions, require the Board to redeem the rights and allow the transaction to
proceed.
III. DESCRIPTION OF RIGHTS TO PURCHASE PREFERRED STOCK
General
The Board proposes to declare a dividend distribution of one Right for each
outstanding share of Common Stock. The distribution will be payable on a record
date (the "Record Date") yet to be established, but which will be the day
immediately preceding the date of consummation of the Merger described in the
Merger U-1. Each Right would entitle the registered holder to purchase from the
Company one one-hundredth of a share of Series A Junior Participating Preferred
Stock (the "Preferred Stock"), at a price per one one-hundredth share to be
determined by the Board (the "Purchase Price"), subject to adjustment. The
Purchase Price is expected to be set at an
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amount equal to approximately four to five times the market price of the Common
Stock, which premium is consistent with that used by other companies in setting
the purchase price for their rights. The description and terms of the Rights are
set forth in a Rights Agreement (the "Rights Agreement") between the Company and
The Bank of New York or its successors (the "Rights Agent"), a draft of which is
filed as Exhibit A-3. Distribution Date; Transfer of Rights
Until the earlier to occur of (i) ten calendar days following the date (the
"Shares Acquisition Date") of public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") acquired, or obtained
the right to acquire, beneficial ownership of Common Stock or other voting
securities ("Voting Stock") that have 10% or more of the voting power of the
outstanding shares of Voting Stock or (ii) ten calendar days (or such later date
as may be determined by action of the Board of Directors prior to the time any
person or group of affiliated persons becomes an Acquiring Person) following the
commencement or announcement of an intention to make a tender offer or exchange
offer the consummation of which would result in such person acquiring, or
obtaining the right to acquire, beneficial ownership of Voting Stock having 10%
or more of the voting power of the outstanding shares of Voting
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Stock (the earlier of such dates being called the "Distribution Date"), the
Rights will be evidenced, with respect to any of the Company's Common Stock
certificates outstanding as of the Record Date, by such Common Stock
certificates. The Rights Agreement provides that, until the Distribution Date,
the Rights will be transferred with and only with the Company's Common Stock.
Until the Distribution Date (or earlier redemption or expiration of the Rights),
new Common Stock certificates issued after the Record Date upon transfer or new
issuance of the Company's Common Stock will contain a notation incorporating the
Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of any of
the Company's Common Stock certificates outstanding as of the Record Date will
also constitute the transfer of the Rights associated with the Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Company's Common Stock
as of the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire at the close of business on the date that is the 10 year anniversary of
the Record Date, unless
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earlier redeemed or exchanged by the Company as described below.
Exercise of Rights for Common Stock of the Company
In the event that a Person becomes an Acquiring Person, each holder of a
Right will thereafter have the right to receive, upon exercise, Common Stock
(or, in certain circumstances, cash, property or other securities of the
Company) having a value equal to two times the Purchase Price of the Right.
Notwithstanding any of the foregoing, following the occurrence of any of the
events set forth in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person will be null and void.
Exercise of Rights for Shares of the Acquiring Company
In the event that, at any time following the Shares Acquisition Date, (i)
the Company is acquired in a merger or other business combination transaction,
or (ii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights which previously have been
voided as set forth above) shall thereafter have the right to receive, upon
exercise, common stock of the acquiring company having a value equal to two
times the Purchase Price of
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the Right. The events set forth in this paragraph and in the preceding paragraph
are referred to as the "Triggering Events."
Adjustments to Purchase Price
The Purchase Price payable, and the number of shares of Preferred Stock (or
Common Stock or other securities, as the case may be) issuable, upon exercise of
the Rights are subject to adjustment from time to time to prevent dilution (i)
in the event of a stock dividend on, or a subdivision, combination or
reclassification of the Preferred Stock, (ii) upon the grant to holders of the
Preferred Stock of certain rights or warrants to subscribe for shares of the
Preferred Stock or convertible securities at less than the current market price
of the Preferred Stock, or (iii) upon the distribution to holders of the
Preferred Stock of evidences of indebtedness or assets (excluding regular
periodic cash dividends out of earnings or retained earnings or dividends
payable in the Preferred Stock) or of subscription rights or warrants (other
than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares will be issued (other than fractional
shares which are integral multiples of one one-hundredth of a share of
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Preferred Stock) and, in lieu thereof, an adjustment in cash will be made based
on the market price of the Preferred Stock on the last trading date prior to the
date of exercise.
Redemption and Exchange of Rights
At any time after the occurrence of the event set forth under the heading
"Exercise of Rights for Common Stock of the Company" above, the Board of
Directors (with the concurrence of a majority of the Independent Directors) may
exchange the Rights (other than Rights owned by the Acquiring Person which shall
have become void), in whole or in part, at an exchange ratio of one share of
Common Stock (or a fraction of a share of Preferred Stock having the same market
value) per Right (subject to adjustment).
At any time prior to 5:00 P.M. New York City time on the tenth calendar day
following the Shares Acquisition Date, the Company may redeem the Rights in
whole, but not in part, at a price of $.001 per Right (the "Redemption Price").
Under certain circumstances set forth in the Rights Agreement, the decision to
redeem shall require that there be Independent Directors in office and that a
majority of the Independent Directors concur in such decision. Immediately upon
the action of the Board of Directors of the Company electing to redeem the
Rights with, if required, the concurrence of the Independent
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Directors, the Company shall make announcement thereof, and upon such action,
the right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
Until a Right is exercised or exchanged, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
Terms of the Preferred Stock
The Preferred Stock will rank junior to all other series of NCE's preferred
stock with respect to payment of dividends and as to distribution of assets in
liquidation. Each share of Preferred Stock will have a quarterly dividend rate
per share equal to the greater of $1.00 or 100 times the per share amount of any
dividend (other than a dividend payable in shares of Common Stock or a
subdivision of the Common Stock) declared from time to time on the Common Stock,
subject to certain adjustments. The Preferred Stock will not be redeemable. In
the event of liquidation, the holders of the Preferred Stock will be entitled to
receive a preferred liquidation payment per share of an amount equal to 100
times the Purchase Price (plus accrued and unpaid dividends) or, if greater, an
amount equal to 100 times the payment to be made per share of Common Stock,
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subject to certain adjustments. Generally, each share of Preferred Stock will
vote together with the Common Stock and any other series of cumulative preferred
stock entitled to vote in such manner and will be entitled to 100 votes, subject
to certain adjustments. In the event of any merger, consolidation, combination
or other transaction in which shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or other property, each share
of Preferred Stock will be entitled to receive 100 times the aggregate amount of
stock, securities, cash and/or other property, into which or for which each
share of Common Stock is changed or exchanged, subject to certain adjustments.
The foregoing dividend, voting and liquidation rights of the Preferred Stock are
protected against dilution in the event that additional shares of Common Stock
are issued pursuant to a stock split or stock dividend or distribution. Because
of the nature of the Preferred Stock's dividend, voting, liquidation and other
rights, the value of the one one-hundredth of a share of Preferred Stock
purchasable with each Right is intended to approximate the value of one share of
Common Stock.
Amendments to Terms of the Rights
Any of the provisions of the Rights Agreement may be amended by the Board
of Directors of the Company prior to the
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Distribution Date. After the Distribution Date, the provisions of the Rights
Agreement may be amended by the Board (in certain circumstances, with the
concurrence of the Independent Directors) in order to cure any ambiguity, defect
or inconsistency, to make changes which do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person); provided,
however, that no supplement or amendment may be made after the Distribution Date
which changes those provisions relating to the principal economic terms of the
Rights. The Board of Directors may also, with the concurrence of a majority of
the Independent Directors, extend the redemption period for up to an additional
20 days.
The term "Independent Directors" means any member of the Board of Directors
of the Company who either (i) was a member of the Board on the date of the
Rights Agreement, or (ii) any person who is subsequently elected to the Board
(x) in accordance with Article V(B)(1) of the Company's Restated Certificate of
Incorporation, (y) if such person was nominated pursuant to the method described
in Article V(E) of the Company's Restated Certificate of Incorporation or (z) if
such person is recommended or approved by a majority of the Independent
Directors, but shall not include an Acquiring Person, or an affiliate or
associate of an Acquiring Person, or any representative of the foregoing
entities.
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IV. AUTHORIZATIONS SOUGHT
NCE herein seeks authorization to implement the shareholder rights plan as
described in this application-declaration and embodied in the Agreement. This
would include, among other actions permitted by the Agreement, the following
transactions:
The dividend distribution of the Rights
The making of adjustments to the Purchase Price
The sale and issuance of Preferred Stock, Common Stock or other NCE
securities, or the transfer of other assets, upon exercise of the Rights
The redemption of Rights and the issuance of Common Stock in connection
therewith, and the issuance of Common Stock or other NCE securities, or the
transfer of other assets, in exchange for Rights
Amending of the Agreement as permitted by the terms thereof.
(b) Describe briefly, and where practicable state the approximate amount
of, any material interest in the proposed transaction, direct or indirect, of
any associate company or affiliate of the applicant or any affiliate of any such
associate company.
None.
(c) If the proposed transaction involves the acquisition of securities not
issued by a registered holding company or a subsidiary thereof, describe briefly
the business and property, present or proposed, of the issuer of such
securities.
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Not applicable.
(d) If the proposed transaction involves the acquisition or disposition of
assets, describe briefly such assets, setting forth original cost, vendor's book
cost (including the basis of determination) and applicable valuation and
qualifying reserves.
Not applicable.
Rule 54 promulgated under the Act states that in determining whether to
approve the issue or sale of a security by a registered holding company for
purposes other than the acquisition of an exempt wholesale generator ("EWG") or
a foreign utility company ("FUCO"), or other transactions by such registered
holding company or its subsidiaries other than with respect to EWGs or FUCOs,
the Commission shall not consider the effect of the capitalization or earnings
of any subsidiary which is an EWG or a FUCO upon the registered holding company
system if Rules 53(a), (b) or (c) are satisfied.
Rule 53 requires that the aggregate investment in EWGs and FUCOs not exceed
50% of a system's consolidated retained earnings. NCE's present investments in
EWGs and FUCOs, pro forma to include PSCo's investment in Yorkshire Electricity
Group plc (as described in the Merger U-1), satisfies the 50% limitation, and
the NCE system will not make any addi-
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tional investments in EWGs and FUCOs that cause it to exceed that limitation,
unless the Commission otherwise authorizes.
NCE and its Subsidiaries will maintain books and records to identify the
investments in and earnings from EWGs and FUCOs in which they directly or
indirectly hold an interest, thereby satisfying Rule 53(a)(2). In addition, the
books and records of each such entity are and will be kept in conformity with
United States generally accepted accounting principles ("GAAP"), the financial
statements are and will be prepared according to GAAP, and NCE undertakes to
provide the Commission access to such books and records and financial statements
as it may request.
Employees of NCE's domestic public-utility companies will not render
services, directly or indirectly, to the EWGs or FUCOs in the NCE System,
thereby satisfying Rule 53(a)(3).
NCE, in connection with any Form U-1 seeking approval of EWG or FUCO
financing, will submit copies of the documents described in Rule 53(a)(4) with
every federal, state or local regulation having jurisdiction over the retail
rates of the public-utility companies in the NCE System. Rule 53(a)(4) will be
correspondingly satisfied.
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None of the conditions described in Rule 53(b) exist with respect to NCE,
thereby satisfying Rule 53(b) and making Rule 53(c) inapplicable.
Item 2. Fees, Commissions and Expenses
(a) State (1) the fees, commissions and expenses paid or incurred, or to be
paid or incurred, directly or indirectly, in connection with the proposed
transaction by the applicant or declarant or any associate company thereof, and
(2) if the proposed transaction involves the sale of securities at competitive
bidding, the fees and expenses to be paid to counsel selected by applicant or
declarant to act for the successful bidder.
It is estimated that the fees, commissions and expenses ascertainable at
this time to be incurred by NCE in connection with the proposed transactions
will not exceed $140,000. $10,000 for the Agent's fees, $100,000 for outside
counsel's fees, $25,000 for printing and mailing costs and $5,000 for
miscellaneous other expenses.
(b) If any person to whom fees or commissions have been or are to be paid
in connection with the proposed transaction is an associate Company or an
affiliate of the applicant or declarant, or is an affiliate of an associate
company, set forth the facts with respect thereto.
None.
Item 3. Applicable Statutory Provisions
(a) State the sections of the Act and the rules thereunder believed to be
applicable to the proposed transaction. If any section or rule would be
applicable in the absence of a specific exemption, state the basis of exemption.
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Sections 6(a), 7, 9(a), 10 and 12(c) of the Act and Rule 42 under the Act
are deemed to be applicable to the proposed dividend distribution of Rights, and
any subsequent exercise or redemption of the Rights.
While the Rights are technically a dividend on the Common Stock for
corporate law purposes, in and of themselves they have no economic value and,
therefore, are not a "dividend" out of capital or capital surplus for the
purpose of Section 12(c) of the Act.
Because there is no intent that the Rights ever become exercisable, they
are regarded more appropriate as being in the nature of an addition to the
rights of shareholders under Sections 6(a)(2) and 7(e) rather than as an
issuance of securities under Section 6(a)(1) and 7(c) and (d). However, if such
latter sections were to be regarded as applicable, then any issuance of shares
of Preferred Stock or Common Stock pursuant to the Rights are deemed to meet the
requirements of Section 7(c)(2)(D) and none of the negative findings required
under Section 7(d) can be made.
To the extent that the proposed transactions are considered by the
Commission to require authorization, approval or exemption under any section of
the Act or provision of the rules or regulations other than those specifically
referred to
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herein, request for such authorization, approval or exemption is hereby made.
(b) If an applicant is not a registered holding company or a subsidiary
thereof, state the name of each public utility company of which it is an
affiliate, or of which it will become an affiliate as a result of the proposed
transactions, and the reasons why it is or will become such an affiliate.
Not applicable.
Item 4. Regulatory Approval
(a) State the nature and extent of the jurisdiction of any State commission
or any Federal commission (other than the Securities and Exchange Commission)
over the proposed transaction.
No State commission and no other Federal commission has jurisdiction over
the proposed transactions.
(b) Describe the action taken or proposed to be taken before any commission
named in answer to paragraph (a) of this item in connection with the proposed
transaction.
None.
Item 5. Procedure
(a) State the date when Commission action is requested. If the date is less
than 40 days from the date of the original filing, set forth the reasons for
acceleration.
NCE requests that the Commission issue its order with respect to the
proposed transaction as soon as practicable af-
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ter the filing hereof to enable the Rights to be issued at the time of the
Merger. The Commission is respectfully requested to issue and publish the
requisite notice under Rule 23 with respect to the filing of this Application
not later than March 28, 1997, such notice to specify a date not later than
April 21, 1997, by which comments may be entered and a date not later than the
date of the order for the Merger U-1 as the date which an order of the
Commission granting and permitting the Application to become effective may be
entered by the Commission.
(b) State (i) whether there should be a recommended decision by a hearing
officer, (ii) whether there should be a recommended decision by any other
responsible officer of the Commission, (iii) whether the Division of Corporate
Regulation may assist in the preparation of the Commission's decision, and (iv)
whether there should be a 30-day waiting period between the issuance of the
Commission's order and the date on which it is to become effective.
It is submitted that a recommended decision by a hearing or other
responsible officer of the Commission is not needed with respect to the proposed
transactions. The Office of Public Utility Regulation of the Division of
Investment Management may assist in the preparation of the Commission's
decision. There should be no waiting period between the issuance of the
Commission's order and the date on which it is to become effective.
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Item 6. Exhibits and Financial Statements
The following exhibits are made a part of this statement:
(a) Exhibits
A-1 Restated Certificate of Incorporation of NCE filed as Annex VIII
to the Registration Statement on Form S-4 on December 13, 1995
(Registration No. 33-64951) and incorporated herein by
reference.
A-2 Restated Bylaws of NCE filed as Annex IX to the Registration
Statement on Form S-4 on December 13, 1995 (Registration No.
33-64951), and incorporated herein by reference.
A-3 Draft of Rights Agreement, including exhibits. (Previously
filed)
F-1 Opinion of counsel. (Filed herewith)
G-1 Proposed notice pursuant to Rule 22(f). (Previously filed)
G-2 Financial Data Schedule (incorporated by reference to the Annual
Report of NCE for the fiscal year ended December 31, 1996).
(b) Financial Statements
1.1 Pro-Forma Balance Sheet of NCE and subsidiaries, consolidated,
as of December 31, 1996 (incorporated by reference to the Annual
Report on Form 10-K of PSCo for the fiscal year ended December
31, 1996 (File No. 1-3280)).
1.2 Pro-Forma Statement of Income of NCE and subsidiaries, for the
12 months ended December 31, 1996 (incorporated by reference to
the Annual Report on Form 10-K of PSCo for the fiscal year ended
December 31, 1996 (File No. 1-3280)).
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2.1 Balance Sheet of PSCo as of December 31, 1996 (incorporated by
reference to the Annual Report on Form 10-K of PSCo for the
fiscal year ended December 31, 1996 (File No. 1-3280)).
2.2 Statement of Income and Retained Earnings of PSCo for the fiscal
year ended December 31, 1996 (incorporated by reference to the
Annual Report on Form 10-K of PSCo for the fiscal year ended
December 31, 1996 (File No. 1-3280)).
3.1 Balance Sheet of SPS as of February 28, 1997 (incorporated by
reference to the Quarterly Report on Form 10-Q of SPS for the
quarter ended February 28, 1997 (File No. 1-3789)).
3.2 Statement of Earnings for the six months ended February 28, 1997
(incorporated by reference to the Quarterly Report on Form 10-Q
of SPS for the quarter ended February 28, 1997 (File No.
1-3789)).
Item 7. Information as to Environmental Effects
(a) Describe briefly the environmental effects of the proposed transaction
in terms of the standards set forth in Section 102(2)(C) of the National
Environmental Policy Act (42 U.S.C. 4312(2)(C)). If the response to this item is
a negative statement as to the applicability of Section 102(2)(C) in connection
with the proposed transaction, also briefly state the reasons for that response.
As more fully described in Item 1(a), the proposed transactions subject to
the jurisdiction of this Commission relate only to the dividend of the Rights
and any subsequent exercise, redemption or exchange of the Rights and involve no
major federal action significantly affecting the human environment.
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(b) State whether any other federal agency has prepared or is preparing an
environmental impact statement ("EIS") with respect to the proposed transaction.
If any other Federal agency has prepared or is preparing an EIS, state which
agency or agencies and indicate the status of that EIS preparation.
None.
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SIGNATURES
Pursuant to the requirements of the Public Utility Holding Company Act of
1935, the undersigned company has duly caused this statement to be signed on its
behalf by the undersigned thereunto duly authorized.
NEW CENTURY ENERGIES, INC.
By:/s/ Doyle R. Bunch
------------------------------
Name: Doyle R. Bunch II
Title: Chairman and Secretary
Date: April 29, 1997
April 29, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: New Century Energies, Inc.
SEC File Number 70-9005
Dear Sirs:
We have acted as counsel for New Century Energies, Inc., a Delaware
corporation ("NCE"), in connection with its Form U-1 Application/Declaration
(File No. 70-9005), as amended ("Declaration"), filed with the Securities and
Exchange Commission ("SEC") with respect to the proposed transactions described
therein ("Proposed Transactions"). In the Declaration authority is requested for
NCE to implement a stockholder rights plan ("Plan") and to enter a related
Rights Agreement ("Agreement") with The Bank of New York, as agent.
Pursuant to the Plan, the board of directors of NCE would declare a
dividend distribution of one right ("Right") for each outstanding share of
common stock, $1.00 par value per share, of NCE ("Common Stock") to stockholders
of record at the close of business on a specified record date. In addition, each
holder of a share of Common Stock issued after the record date would similarly
be entitled to receive one Right for each such share. Each Right would initially
(i) entitle the holder to purchase from NCE one one-hundredth of a share of
Series A Junior Participating Preferred Stock (the "Preferred Stock") at a price
per share to be determined by the NCE board, subject to adjustment, (ii) be
evidenced by the certificates for shares of Common Stock and (iii) only be
transferable with
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the Common Stock. A certificate of designation setting forth the voting power,
designation, preferences, rights and qualifications of the Preferred Stock
("Certificate of Designation") would be filed in Delaware.
Separate certificates evidencing the Rights would be issued to such holders
of Common Stock a specified time after (i) a person or affiliated group acquires
the ownership of 10% or more of the voting power of the outstanding voting
securities of NCE or (ii) the announcement of a tender offer or exchange offer
(incipient or already begun) which would result in a person owning 10% or more
of such voting power. Once a person obtains beneficial ownership of 10% or more
of the voting power of the outstanding voting securities of NCE, the holder of a
Right (except such 10% or more holder or its successors and assigns) would be
able to receive, upon exercise, Common Stock or other assets having a value
equal to two times the purchase price of the Right then in effect.
Alternatively, the NCE board has the option to exchange the outstanding Rights
for shares of Common Stock at an exchange ratio of one share of Common Stock per
Right. The terms and conditions of the Plan are as described in more detail in
the Declaration.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of such records of NCE
and such other documents, certificates and corporate or other records as we have
deemed necessary or appropriate as a basis for the opinions set forth herein. In
our examination, we have assumed the genuineness of all signatures, the legal
capacity of all persons, the authenticity of all documents submitted to us as
originals, the conformity to original documents of documents submitted to us as
certified or photostatic copies and the authenticity of the originals of such
copies.
The opinions expressed below in respect of the Proposed Transactions are
subject to the following assumptions and conditions:
(a) The Rights Agreement, the dividend distribution of the Rights, the
issuance of Preferred Stock or Common Stock, as the case may be, and the other
aspects of the Proposed Transactions shall have been duly authorized and
approved by the Board of Directors of NCE.
(b) The Rights Agreement shall have been duly executed and delivered by the
parties thereto.
(c) The Board of Directors of NCE shall have adopted appropriate
resolutions approving the terms of the Preferred Stock and the required filing
of the Certificate of Designation with the Secretary of State of the State of
Delaware shall have been made.
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(d) The Commission shall have duly entered an appropriate order or orders
with respect to the Proposed Transactions as described in the Declaration
granting and permitting the Declaration to become effective under the Act and
the rules and regulations thereunder.
(e) The consummation of the Proposed Transactions shall be conducted with
our involvement and all legal matters incident thereto shall be satisfactory to
us.
Based on the foregoing, and subject to the assumptions and conditions set
forth herein, and having regard to legal considerations which we deem relevant,
we are of the opinion that, in the event the Proposed Transactions are
consummated in accordance with the Declaration:
1. No state commission has jurisdiction over the Proposed
Transactions;
2. NCE is validly organized and duly existing;
3. Upon issuance on the effective date of the Rights dividend, the
Rights will have been validly issued and the holders of the Rights will be
entitled to the rights and privileges appertaining thereto set forth in the
Rights Agreement;
4. The shares of Preferred Stock when issued pursuant to the Plan
will be validly issued, fully paid and nonassessable, and the holders of
such shares will be entitled to the rights and privileges appertaining
thereto set forth in the certificate of incorporation of NCE, as amended by
the Certificate of Designation;
5. The shares of Common Stock, when issued pursuant to the Plan will
be validly issued, fully paid and nonassessable, and the holders of such
shares will be entitled to the rights and privileges appertaining thereto
set forth in the certificate of incorporation of NCE;
6. All state laws applicable to the Proposed Transactions will have
been complied with; however, we express no opinion as to need to comply
with state blue sky laws;
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7. The consummation of the Proposed Transactions will not violate the
legal rights of the holders of any securities issued by NCE or any
associate company thereof.
We hereby consent to the use of this opinion in connection with the
Declaration.
Very truly yours,
/s/ CAHILL GORDON & REINDEL
