Filed pursuant to Rule 424(b)(5)
Registration No. 333-27989
P R O S P E C T U S
5,110,410 Shares
TEXAS UTILITIES COMPANY
COMMON STOCK
Without Par Value
The Common Stock is listed on the New York, Chicago and Pacific
stock exchanges.
______________________
DIRECT STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN
The Direct Stock Purchase and Dividend Reinvestment Plan
(Plan) of Texas Utilities Company, formerly the Automatic
Dividend Reinvestment and Common Stock Purchase Plan (Original
Plan), provides a convenient and economical way for holders of
the Common Stock of Texas Utilities Company (Company) and for
persons who are not shareholders to purchase shares of Common
Stock, without par value, of the Company (Common Stock) and to
reinvest cash dividends paid on shares of Common Stock.
Reference is made to "The Plan" for definitions of certain
capitalized terms.
The Plan, which is set forth in this Prospectus, reflects
certain changes to the Original Plan. Among these changes are
the following: (a) non-shareholders may enroll in the Plan by
making initial cash investments of $500 or more; (b) the maximum
amount of permitted cash investments is increased from $4,000 per
month to $100,000 per calendar year (cash investments continue to
be permitted at not less than $25 per investment); (c) cash
investments in the Plan may be made by electronic funds transfer;
(d) participants may elect to reinvest cash dividends paid on all
of their shares of Common Stock, or they may designate a portion
of such shares on which dividends are paid in cash directly to
the participant with cash dividends on the remaining shares to be
reinvested in the Plan (partial reinvestment); (e) accumulated
optional cash investments received under the Plan will be
invested in shares of Common Stock on a weekly, instead of
monthly, basis beginning with the week of September 2, 1997; (f)
certificated shares may be deposited into the Plan for
safekeeping and credited to participants' accounts (Plan Shares),
and (g) a $10 fee will be deducted from the initial cash
investment made by a non-shareholder and a $10 fee, in addition
to the commission which is currently paid by participants, will
be deducted from the proceeds of Plan Shares sold by the Plan
after September 1, 1997, to cover the costs of such transactions
to the Plan. Brokerage fees in connection with purchases of Plan
Shares with reinvested dividends and optional cash investments by
Plan participants will continue to be paid by the Company. For
further information concerning the Plan, see "The Plan".
(cover continued on following page)
______________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR BY ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
AUGUST 13, 1997
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(cover continued)
At the date of the Mergers, as described under "The Company
and Its Subsidiaries", participants in the dividend reinvestment
plans of the predecessors to the Company were automatically
enrolled as participants in the Plan. No action is required of a
participant in the dividend reinvestment plan of a predecessor of
the Company to become a participant in the Plan.
Any non-shareholder, that is (i) a person of legal age and a
resident of any of the fifty states of the United States or the
District of Columbia or (ii) an entity organized in any such
jurisdiction, may enroll in the Plan by mailing a signed
Authorization Form along with an initial cash investment of $500
or more to Texas Utilities Shareholder Services, Direct Stock
Purchase Plan, P.O. Box 225249, Dallas, Texas 75222-5249. A
holder of record of shares of Common Stock of the Company who was
not a participant in the dividend reinvestment plan of a
predecessor to the Company also may enroll in the Plan by signing
and mailing an Authorization Form. An Authorization Form may be
obtained from Texas Utilities Shareholder Services (Toll-free
phone number 1-800-828-0812).
Shares of Common Stock purchased under the Plan will be
either issued and outstanding shares purchased in the open market
by an Independent Broker (Independent Broker) or original issue
shares acquired directly from the Company. For details about the
price of such shares purchased in the open market or acquired
directly from the Company, see "The Plan - Share Purchases and
Price".
This Prospectus relates to the offer and sale under the Plan
of 5,110,410 shares of Common Stock of the Company. Participants
are advised to retain this Prospectus for future reference.
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DOCUMENTS INCORPORATED BY REFERENCE
The following documents, which have been filed by the Company
or its predecessors with the Securities and Exchange Commission
(Commission) pursuant to the Securities Exchange Act of 1934, as
amended (1934 Act) are incorporated herein by reference:
(a) Annual Report of Texas Energy Industries, Inc.
(TEI), formerly known as Texas Utilities Company
(see The Company and Its Subsidiaries herein), on
Form 10-K for the year ended December 31, 1996,
File No. 1-3591 (1996 TEI 10-K).
(b) Quarterly Reports of TEI on Form 10-Q for the
Quarters ended March 31, 1997 and June 30, 1997,
File No. 1-3591 (TEI 10-Q).
(c) Annual Report of ENSERCH Corporation (ENSERCH) on
Form 10-K for the year ended December 31, 1996,
File No. 1-3183 (1996 ENSERCH 10-K).
(d) Quarterly Report of ENSERCH on Form 10-Q for the
Quarter ended March 31, 1997, File No. 1-3183
(ENSERCH 10-Q).
(e) Current Report of ENSERCH on Form 8-K dated
January 14, 1997, File No. 1-3183.
(f) Current Report of ENSERCH on Form 8-K dated March
12, 1997, File No. 1-3183.
(g) Current Report of ENSERCH on Form 8-K dated June
5, 1997, File No. 1-3183.
(h) Current Report of ENSERCH on Form 8-K dated July
3, 1997, File No. 1-3183.
(i) Current Report of ENSERCH on Form 8-K dated August
2, 1997, File No. 1-3183.
(j) Current Report of the Company on Form 8-K dated
August 5, 1997, File No. 1-12833.
All documents filed by the Company and its predecessors
pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act
after the date of this Prospectus and prior to the termination of
the offering hereunder shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the
date of filing of such documents; provided, however, that the
documents enumerated above or subsequently filed by the Company
and its predecessors pursuant to Section 13 of the 1934 Act prior
to the filing with the Commission of the Company's most recent
Annual Report on Form 10-K shall not be incorporated by reference
in this Prospectus or be a part hereof from and after the filing
of such Annual Report on Form 10-K. The documents which are
incorporated by reference in this Prospectus are sometimes
hereinafter referred to as the "Incorporated Documents."
Any statement contained in an Incorporated Document shall be
deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in
any other subsequently filed document which 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 Prospectus.
THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO
EACH PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM A COPY OF
THIS PROSPECTUS HAS BEEN DELIVERED, ON THE WRITTEN OR ORAL
REQUEST OF ANY SUCH PERSON, A COPY OF ANY AND ALL OF THE
DOCUMENTS REFERRED TO ABOVE WHICH HAVE BEEN OR MAY BE
INCORPORATED IN THIS PROSPECTUS BY REFERENCE, OTHER THAN EXHIBITS
TO SUCH DOCUMENTS (UNLESS SUCH EXHIBITS ARE SPECIFICALLY
INCORPORATED BY REFERENCE INTO SUCH DOCUMENTS). REQUESTS FOR
SUCH COPIES SHOULD BE DIRECTED TO TEXAS UTILITIES SHAREHOLDER
SERVICES, DIRECT STOCK PURCHASE PLAN, P.O. BOX 225249, DALLAS,
TEXAS 75222-5249, TOLL-FREE TELEPHONE NUMBER (800) 828-0812.
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AVAILABLE INFORMATION
The Company is, and its predecessors have been, subject to
the informational requirements of the 1934 Act and in accordance
therewith the Company files, and its predecessors have filed,
reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information
filed by the Company and its predecessors can be inspected and
copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the following Regional Offices of the Commission:
Chicago Regional Office, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661; and New York Regional Office, 7 World
Trade Center, Suite 1300, New York, New York 10048. Copies of
such material can also be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549 at prescribed rates. In addition, the Commission
maintains a World Wide Web site (http://www.sec.gov) that
contains reports and other information filed by the Company. The
Common Stock of the Company is listed on the New York, Chicago
and Pacific stock exchanges, where reports, proxy statements and
other information concerning the Company may be inspected.
Reports, proxy statements and other information concerning the
Company's predecessors may be inspected at the New York and
Chicago stock exchanges and, in the case of TEI, formerly Texas
Utilities Company, also may be inspected at the Pacific Stock
Exchange.
THE COMPANY AND ITS SUBSIDIARIES
The Company is a Texas corporation organized in 1996 for the
purpose of becoming the holding company for TEI, formerly Texas
Utilities Company, and ENSERCH Corporation (ENSERCH) upon the
mergers of TEI and ENSERCH into wholly owned subsidiaries of the
Company (Mergers). At the effective time of the Mergers, (i) the
Company changed its name to Texas Utilities Company, (ii) TEI
changed its name from Texas Utilities Company to Texas Energy
Industries, Inc., (iii) the Company became the sponsor of the
Plan, (iv) all shares of common stock of TEI held by the Plan
were automatically converted into an equal number of shares of
Common Stock of the Company, and (v) common stock of ENSERCH held
under the ENSERCH dividend reinvestment plan was automatically
converted into shares of Common Stock of the Company on the basis
of 0.225 of a share of Common Stock of the Company for each share
of ENSERCH common stock. Since the Mergers, only shares of
Common Stock of the Company are sold under the Plan.
TEI, a Texas corporation, is a holding company whose
principal subsidiary, Texas Utilities Electric Company (TU
Electric), is an operating public utility company engaged in the
generation, purchase, transmission, distribution and sale of
electric energy in the north central, eastern and western
portions of Texas, an area with a population estimated at
5,890,000. Two other subsidiaries of TEI are engaged directly or
indirectly in public utility operations: (i) Southwestern
Electric Service Company, which is engaged in the purchase,
transmission, distribution and sale of electric energy in ten
counties in the eastern and central parts of Texas, with a
population estimated at 126,900 and (ii) Texas Utilities
Australia Pty. Ltd., which in 1995 acquired the common stock of
Eastern Energy Limited, a company engaged in the purchase,
distribution and sale of electric energy to approximately 481,000
customers in the Melbourne area of Australia. Neither
Southwestern Electric Service Company nor Eastern Energy Limited
generates any electricity. TEI also has other wholly owned
subsidiaries which perform specialized functions within the Texas
Utilities Company system.
ENSERCH, a Texas corporation, is an integrated company
focused on natural gas. Its major business segments are natural
gas pipeline, processing and marketing; natural gas distribution,
and power generation. Through these business segments, ENSERCH
is engaged in (i) owning and operating interconnected natural gas
transmission lines, underground storage reservoirs, compressor
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stations and related properties in Texas; gathering and
processing natural gas to remove impurities and extract liquid
hydrocarbons for sale, and the wholesale and retail marketing of
natural gas in several areas of the United States, (ii) owning
and operating approximately 550 local gas utility distribution
systems in Texas, and (iii) developing, financing and operating
electric power generating plants and cogeneration facilities
worldwide and operating thermal energy plants for large building
complexes, such as universities and medical centers, in Texas,
and developing gas distribution systems in Mexico and South
America.
Texas Utilities Services Inc. (TU Services) provides
financial, accounting, information technology, environmental
services, customer services, personnel, procurement and other
administrative services at cost to the Texas Utilities Company
system. TU Services, acting under the name of Texas Utilities
Shareholder Services, is transfer agent, registrar and dividend
paying agent with respect to the common stock of the Company and
the preferred stock and preferred securities of TU Electric and
is also agent for participants under the Plan.
The principal executive offices of the Company are located at
Energy Plaza 1601 Bryan Street, Dallas, Texas 75201-3411; the
telephone number is (214) 812-4600.
USE OF PROCEEDS
If shares are purchased for the Plan in the open market, the
Company will not receive any proceeds therefrom. The proceeds to
be received by the Company from the sales of shares of original
issue Common Stock, together with funds from operations and other
sources, are expected to be used to make additional investments
in the common stocks of its subsidiary companies, in amounts and
at times presently not determined, to enable such subsidiaries to
fund construction programs, redeem their securities or retire
them as they mature and to repay short term borrowings incurred
for similar purposes. Proceeds may also be used by the Company
for other corporate purposes which may include acquisitions and
for the repayment of short-term borrowings incurred for such
purposes. Proceeds may be temporarily invested in short-term
instruments pending their application to the foregoing purposes.
The Company is unable to determine either the number of shares of
Common Stock that may be issued or purchased under the Plan or
the proceeds, if any, that may be received by the Company from
the sale of such shares.
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THE PLAN
The Direct Stock Purchase and Dividend Reinvestment Plan
(Plan) of Texas Utilities Company (Company), formerly the
Automatic Dividend Reinvestment and Common Stock Purchase Plan of
the Company, has been instituted for the benefit and convenience
of the holders of shares of the common stock of the Company
(Common Stock) and for others who want to invest in Common Stock
through the Plan. Participation in the Plan is entirely
optional.
PURPOSE AND ADVANTAGES
1. What is the purpose of the Plan?
The purpose of the Plan is to provide a convenient and
economical way for both shareholders and Eligible Non-
shareholders (as defined below) to purchase shares of Common
Stock. Once a participant is enrolled in the Plan, additional
shares of Common Stock may be purchased by reinvesting cash
dividends paid on all or a portion of the shares of the Common
Stock held by such participant and by making optional cash
investments. As determined by the Company, the shares may be
purchased in the open market by an independent broker
(Independent Broker) or acquired from the Company as original
issue shares of the Company's authorized Common Stock.
2. What are the advantages of the Plan?
The Plan allows for a participant to designate the portion
of shares held by such participant for which dividends shall be
reinvested and to make additional optional cash investments.
Full investment of funds is possible because the Plan permits the
purchase of fractions of shares, as well as whole shares, to be
credited to participants' accounts. Participants in the Plan do
not pay any commissions or service charges in connection with
purchases through the Plan. However, a fee of $10 will be
charged in connection with the initial purchase of shares by
Eligible Non-shareholders. Participants can avoid responsibility
for the safekeeping of certificates for shares of Common Stock
credited to their accounts under the Plan (Plan Shares) and are
furnished quarterly statements of account to provide simplified
record keeping. Plan Shares may be sold through the Plan.
Participants selling shares through the Plan will be charged a
fee of $10 to cover the costs to the Plan of each sales
transaction, plus any applicable brokerage commission and
transfer taxes in connection with such sales transaction.
ELIGIBILITY
3. Who is eligible to participate in the Plan?
Any holder of record of shares of the Common Stock and any
non-shareholder that is (i) a person of legal age and a resident
of one of the fifty states of the United States or the District
of Columbia or (ii) an entity organized in any such jurisdiction
(Eligible Non-shareholder), may become a participant in the Plan.
Shares of Common Stock for which dividends are reinvested by the
Plan must be registered in the name of the Plan participant. If
a beneficial owner of shares of the Common Stock registered in
another name wants the dividends on such shares to be reinvested
by the Plan, he or she must become a holder of record by having
such shares transferred into his or her name.
PARTICIPATION
4. What steps must be taken to participate in the Plan?
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The Company's predecessor companies, Texas Energy Industries,
Inc., formerly Texas Utilities Company, and ENSERCH Corporation
were merged into subsidiaries of the Company and participants in
the dividend reinvestment plans of such predecessor companies
were automatically enrolled as participants in the Plan. No
action is required of a participant in the dividend reinvestment
plan of a predecessor of the Company to become a participant in
the Plan.
Holders of shares of Common Stock may enroll in the Plan at
any time by filling out a Plan authorization form (Authorization
Form) and returning it to Texas Utilities Shareholder Services
(Shareholder Services). An Eligible Non-shareholder may enroll
in the Plan by completing and returning an Authorization Form,
together with a check or money order in an amount not less than
$500 nor more than $100,000, made payable to Texas Utilities
Shareholder Services. An Authorization Form may be obtained from
Shareholder Services (see Administration).
In completing the Authorization Form, the new participant must
make one of the following elections:
(a) FULL DIVIDEND REINVESTMENT: automatically reinvest
any cash dividends on Plan Shares and on shares of
the Common Stock registered in his or her name and
held by the participant in certificated form
(Registered Shares); or
(b) PARTIAL DIVIDEND REINVESTMENT: receive cash
payment of dividends on a portion of the
participant's Registered Shares and/or a portion
of the Plan Shares and automatically reinvest the
cash dividends on the remainder of such shares; or
(c) CASH DIVIDENDS ONLY: continue to receive cash
payment of dividends on all the participant's
Registered Shares and Plan Shares.
ALL PARTICIPANTS IN THE PLAN, WHETHER OR NOT THEY HAVE ELECTED
TO REINVEST DIVIDENDS, ARE ELIGIBLE TO MAKE OPTIONAL CASH
INVESTMENTS.
Initial cash investments by an Eligible Non-shareholder may
not be less than $500 nor more than $100,000. Otherwise,
optional cash investments by a participant may not be less than
$25 per investment nor aggregate more than $100,000 per calendar
year, including the initial cash investment by an Eligible Non-
shareholder. Participants are under no obligation to make any
optional cash
investments.
Transfer of Plan Shares to Start a New Account:
A participant in the Plan who is an individual may transfer
the ownership of some or all of his or her Plan Shares to start
an account for another individual by sending Shareholder Services
written, signed transfer instructions. Signatures must be
guaranteed by a financial institution participating in the
Medallion Guarantee program.
A new Plan account may be opened with a transfer of 10 or more
Plan shares without paying a fee.
5. How do the "Full Dividend Reinvestment" feature and the
"Partial Dividend Reinvestment" feature of the Plan work?
An Authorization Form marked "Full Dividend Reinvestment"
directs Shareholder Services to apply to the purchase of
additional shares of Common Stock (i) all of the participant's
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cash dividends on such participant's Registered Shares and Plan
Shares and (ii) any optional cash investments received from the
participant.
An Authorization Form marked "Partial Dividend Reinvestment"
directs Shareholder Services to continue to make cash payments of
dividends on the portion of the participant's Registered Shares
and/or the portion of the Plan Shares indicated on the
Authorization Form and to apply to the purchase of additional
shares of Common Stock (i) all of the remaining cash dividends on
such participant's Registered Shares and Plan Shares and (ii) any
optional cash investments received from the participant.
Receipt of an Authorization Form by Shareholder Services on or
before the record date for a quarterly cash dividend entitles the
holder of shares of Common Stock electing dividend reinvestment
to have dividends on all or a portion of such shares registered
in such holder's name used to acquire additional shares of Common
Stock for such holder's account. If the Authorization Form is
received by Shareholder Services after such record date but
before the quarterly dividend payment date (Dividend Payment
Date), which is typically the first business day of January,
April, July and October, such dividends will be paid in cash to
such holder and reinvestment of cash dividends will not start
until the next Dividend Payment Date. The record date for cash
dividends on the Common Stock is approximately three to four
weeks prior to the Dividend Payment Date. For example: If the
record date for the July 1 dividend payment was June 6, an
Authorization Form would have to be received by Shareholder
Services on or before June 6, in order for the eligible holder of
shares to participate in dividend reinvestment on July 1. If the
Authorization Form was received after June 6, the July 1
dividend would be paid in cash and the participant's reinvestment
of cash dividends would commence with the next Dividend Payment
Date of October 1.
6. How does the Optional Cash Investment feature of the Plan
work?
Shareholder Services will credit to a participant's Plan
account the additional shares of Common Stock purchased during a
weekly Investment Period with the optional cash investments
received from the participant. The participant's Plan account
will be so credited on the last day (Investment Date) of the
weekly Investment Period. See Question 12 below.
Optional cash investments should be made by check or money
order payable to Texas Utilities Shareholder Services. Optional
cash investments also may be made on a regular basis by
electronic funds transfer pursuant to the Automatic Electronic
Investment feature described below. Each optional cash
investment must be in an amount not less than $25. The aggregate
of all optional cash investments made by each participant may not
exceed $100,000 in any calendar year, including the initial cash
investment made by an Eligible Non-shareholder. Except as
discussed below, optional cash investments received during a
calendar week will be invested during the period commencing on
Tuesday of such calendar week and ending on the first business
day of the following calendar week. Optional cash investments
received during the calendar week in which a Dividend Payment
occurs will be held until after the Dividend Payment Date and
invested for credit to the participant's account on the second
succeeding Investment Date following such Dividend Payment Date.
No interest will be paid on optional cash investments held by
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Shareholder Services for investment. The same amount of money
------------------------------------
need not be invested each week and there is no obligation to make
an optional cash investment each week. Cash dividends on shares
acquired with optional cash investments and held in the Plan, at
the election of the participant, are reinvested in additional
shares of the Common Stock or directly paid to the participant on
each Dividend Payment Date.
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7. How is an optional cash investment made?
An optional cash investment may be made by a participant when
joining the Plan by enclosing with the Authorization Form a check
or money order made payable to Texas Utilities Shareholder
Services. Thereafter payments for optional cash investments may
be made by the Automatic Electronic Investment feature or by
sending a check or money order, which should be accompanied
either by the form provided with the participant's statement of
account or the participant's account number or social security
number.
8. What is the Automatic Electronic Investment feature of the
Plan and how does it work?
An Automatic Electronic Investment feature is available to
make repetitive optional cash investments more convenient. A
participant may make optional cash investments aggregating not
more than $100,000 per year by means of monthly electronic funds
transfers (Automatic Electronic Investments) of not less than $25
from a predesignated U.S. account. Automatic Electronic
Investments may be made from accounts at any bank, savings
association or credit union that is a member of the National
Automated Clearing House Association (NACHA).
To initiate Automatic Electronic Investments, a participant
must complete and sign an Automatic Electronic Funds Transfer
Authorization Form (Electronic Investment Authorization Form)
designating, among other things, the amount to be withdrawn each
month and the account from which funds are to be drawn, and
return it to Shareholder Services. A voided blank check is also
requested. A participant's election to use the Automatic
Electronic Investment feature will become effective as promptly
as practicable after the Electronic Investment Authorization Form
is processed.
Once Automatic Electronic Investment is initiated, funds will
be withdrawn from the participant's designated account on the
20th day of each month (or, if the 20th day is not a business
day, the first business day thereafter), and will be invested in
Common Stock during the week beginning on the next Investment
Date following the date of such withdrawal.
Participants may change the amounts of their future Automatic
Electronic Investments by completing and submitting to
Shareholder Services a new Electronic Investment Authorization
Form. Participants may terminate their Automatic Electronic
Investment by notifying Shareholder Services in writing. Such
requests will be processed and the participant's election will
become effective as promptly as practicable.
Electronic direct deposit of cash dividends on Common Stock
that participants elect to receive is also available through
Shareholder Services.
9. How may a participant change his or her election option
under the Plan?
A participant may change election options by signing a new
Authorization Form and returning it to Shareholder Services, or
by written request. Any instruction from a participant directing
such a change must be received by Shareholder Services on or
before the record date in order to be effective on the next
Dividend Payment Date.
SHARE PURCHASES AND PRICE
10. What is the source of shares acquired under the Plan?
Shares of Common Stock acquired under the Plan are either
purchased in the open market by an Independent Broker on behalf
of the Plan or acquired from the Company as original issue
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shares, as determined by the Company. The shares are registered
with the Securities and Exchange Commission prior to offer and
sale.
11. How many shares are purchased under the Plan?
The number of shares to be purchased for each participant
depends upon the amount of cash dividends reinvested and/or
optional cash investments made and the purchase price of the
Common Stock. (See Foreign Holders of Shares for certain
restrictions on reinvestment of cash dividends applicable to
residents of a foreign country.) Each participant's account is
credited with that number of shares, including fractional shares
computed to three decimal places, equal to the total cash amount
to be invested or reinvested divided by the purchase price per
share.
12. What will be the price of shares of Common Stock
purchased under the Plan?
(a) Open Market Purchases. Shares of the Common Stock
purchased in the open market will be acquired for the Plan by an
Independent Broker. The price of such shares will be the
weighted average price (excluding any related brokerage fees,
commissions or other service charges) paid for all shares
acquired by the Independent Broker during the "Investment Period"
in which the open market purchases are made. For optional cash
investments, each weekly Investment Period commences on Tuesday
of such week and continues through and includes the first
business day in the following calendar week, and for each
reinvestment of dividends, the Investment Period shall be the
four business days ending on a Dividend Payment Date.
With respect to any open market purchases made under the Plan,
subject to any limitations imposed by federal or state securities
laws, the Independent Broker will have full discretion as to all
matters relating to purchases, including determination of the
number of shares, if any, to be purchased on any day in an
Investment Period, the time of day, the price paid for such
shares, the markets in which such shares are to be purchased
(including on any securities exchange or in the over-the-counter
market) and the persons (including brokers or dealers) from or
through whom such purchases are made.
(b) Original Issue Shares Acquired from the Company. The
price of shares to be acquired from the Company is the average of
the daily averages of the high and low sales prices for the
Common Stock as reported on the consolidated tape for New York
Stock Exchange listed securities administered by the Consolidated
Tape Association for the applicable Investment Period.
SAFEKEEPING
13. What is the Plan Safekeeping Service?
At the time of enrollment, or at any later time, participants
may take advantage of the Plan's cost-free safekeeping services.
Registered Shares held in certificated form by a participant may
be deposited into the Plan, to be held by Shareholder Services or
its nominee, by delivering a completed Authorization Form and
such certificates to Shareholder Services. Such certificates
should not be endorsed. The shares of Common Stock so deposited
will be transferred into the name of Shareholder Services or its
nominee, as custodian, and credited to the participant's account
as Plan Shares. Thereafter, such Plan Shares will be treated in
the same manner as Plan Shares purchased under the Plan.
References herein to Plan Shares include shares of Common Stock
deposited into the Plan for safekeeping unless otherwise
indicated. Cash dividends paid on Plan Shares that were
deposited into the Plan for safekeeping will be distributed or
reinvested in shares of Common Stock in accordance with the
Participant's election designated on his or her Authorization
Form.
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SALES OF PLAN SHARES
14. How can a participant sell Plan Shares?
A participant may request Shareholder Services at any time to
sell all or a portion of his or her Plan Shares by delivering to
Shareholder Services a written request. Shareholder Services
will instruct an Independent Broker to sell such shares as soon
as practicable after processing the request and will transmit to
the participant the proceeds of the sale (less transaction fees,
brokerage fees and commissions and any transfer taxes). Unless
otherwise specified by the participant, if fewer than all of a
participant's Plan Shares are to be sold, sale instructions will
be applied first to Plan Shares on which cash dividends are being
reinvested.
Sale of Plan Shares between Record Date and Dividend Payment
Date:
If instructions for the sale of Plan Shares for which cash
dividends are not being reinvested are received by Shareholder
Services on or after the record date for a Dividend Payment Date
but before the Dividend Payment Date, the sale of such Plan
Shares will be accomplished as described above in the first
paragraph of this section and the cash dividends on such shares
will be paid on the Dividend Payment Date in the usual manner.
If instructions for the sale of a portion of Plan Shares for
which cash dividends are being reinvested are received by
Shareholder Services on or after the record date for a Dividend
Payment Date but before the Dividend Payment Date, the sale of
such Plan Shares will be accomplished as described above in the
first paragraph of this section and the dividends on such shares
will be credited to the participant's account under the Plan and
reinvested in shares of Common Stock in accordance with the terms
of the Plan.
If instructions for the sale of all Plan Shares for which cash
dividends are being reinvested are received on or after the
record date for a Dividend Payment Date but before the fifth
business day preceding the Dividend Payment Date, the sale of
such Plan Shares will be accomplished as described above in the
first paragraph of this section and the dividend will be paid in
cash on the Dividend Payment Date. However, if sale instructions
are received after the fifth business day preceding the Dividend
Payment Date, the dividends on such shares paid on the Dividend
Payment Date will be credited to the participant's account under
the Plan and reinvested in shares of Common Stock in accordance
with the terms of the Plan. The sale instructions will be
implemented after the applicable Dividend Payment Date at which
time all of the participant's Plan Shares, including the shares
purchased with the most recently paid dividends, will be sold and
the proceeds transmitted to the Participant.
Sales of Less than 10 Shares, including Fractional Shares,
without Fees:
Participants who have in their Plan accounts fewer than 10
Plan Shares may sell all, but not less than all of those shares,
including fractional shares, through the Plan without paying a
transaction fee or any brokerage commission. The Company may
modify, suspend or terminate this feature at any time after 30
days' prior notice to participants in the Plan.
15. How can a participant sell Registered Shares through
the Plan?
Registered Shares may be converted to Plan Shares and either
held in safekeeping for the participant or sold by the Plan for
the participant according to the procedures described above.
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TERMINATION OF PARTICIPATION
16. When and how may a participant terminate participation
in the Plan?
A participant may at any time terminate his or her
participation in the Plan by delivering to Shareholder Services a
written request at the address set forth herein under
Administration.
When a participant terminates participation in the Plan, or
the Company terminates the Plan, certificates for whole shares of
the Common Stock credited to the participant's account under the
Plan are issued and a cash payment is made for any fraction of a
share. If the request to terminate is received by Shareholder
Services prior to the fifth day preceding a Dividend Payment Date,
dividends which would have been reinvested under the Plan in the
absence of such termination request will be paid to the
terminating participant in cash.
If the request to terminate is received by Shareholder
Services on or after the fifth day preceding a Dividend Payment
Date, the dividends paid on such Dividend Payment Date and
designated for reinvestment under the Plan will be invested in
shares of Common Stock through the Plan in accordance with the
terms of the Plan. The termination will take place after such
Dividend Payment Date, at which time certificates for whole
shares of Common Stock, including the newly purchased shares,
will be issued and a cash payment made for any fraction of a
share.
All subsequent cash dividends on shares of Common Stock, if
any, will be paid directly to the former participant. A former
participant may enroll in the Plan as a new participant by
sending a completed Authorization Form and, in the case of an
Eligible Non-shareholder, an initial investment of $500 to
Shareholder Services (see Participation and Expenses).
EXPENSES
17. What fees and charges are made to a participant in
connection with purchases or sales under the Plan?
Participants in the Plan do not pay any commissions or service
charges for purchases of Common Stock through the Plan. A
transaction fee of $10 will be charged to the account of an
Eligible Non-shareholder making an initial investment at
enrollment. A transaction fee of $10 per transaction will be
charged to the account of a participant selling Plan Shares. A
participant also pays any applicable brokerage commissions and
transfer taxes in connection with sales of such participant's
Plan Shares after September 1, 1997. All other costs of
administering the Plan will be paid by the Company. There is no
charge for safekeeping of Plan Shares. Participants pay any
applicable transfer taxes on sales of their Plan Shares.
ADMINISTRATION
18. Who administers the Plan?
Shareholder Services administers the Plan, keeps records,
sends quarterly statements of account to participants and
performs other duties relating to the Plan.
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NEITHER TEXAS UTILITIES COMPANY NOR TEXAS UTILITIES
SHAREHOLDER SERVICES CAN ASSURE A PARTICIPANT OF A PROFIT OR
PROTECT A PARTICIPANT AGAINST A LOSS ON THE SHARES PURCHASED
UNDER THE PLAN.
--------------------------------------------------------------
All notices, inquiries and requests concerning the Plan,
INCLUDING initial optional cash investments from Eligible Non-
shareholders, should be mailed to:
TEXAS UTILITIES SHAREHOLDER SERVICES
P. O. BOX 225249
DALLAS, TX 75222-5249
All other optional cash investments, other than by automatic
electronic investment, should be mailed to:
TEXAS UTILITIES SHAREHOLDER SERVICES
P. O. BOX 650459
DALLAS, TX 75265-0459
Please include your shareholder account number, social
security number and daytime telephone number on all
correspondence, checks or money orders. Persons who wish to
communicate by telephone with Shareholder Services concerning the
Plan may do so by calling either of the following numbers:
TOLL-FREE (800) 828-0812
LOCAL (214) 812-8100
THE FOLLOWING INFORMATION IS AVAILABLE THROUGH THE AUTOMATED
TELEPHONE SYSTEM:
General transfer instructions as well as information
regarding lost certificates
Information about the Plan, which includes:
o How the Plan works
o Optional cash investment acceptance periods
o Information regarding withdrawals from the
Plan as well as requests for duplicate Plan
statements
Information about an individual account, which
includes:
o Account balance information including the
number of shares of the Common Stock held in
the account and the aggregate of optional
cash investments not yet invested.
o Year-to-date reportable income amounts
o Requests for duplicate 1099DIV's
Dividend payment and record date information
The option of speaking to a Shareholder Account
Representative
----------------------------------------------------------------
REPORTS TO PARTICIPANTS
19. What kind of reports will be sent to the participants
in the Plan?
Each participant in the Plan will receive a quarterly
statement of account. Quarterly statements are the participant's
record of the cost of such participant's Plan purchases,
withdrawals, and shares certificated during the calendar year and
should be retained for tax purposes. In addition, participants
receive a prospectus relating to the Plan as well as copies of
all reports sent to the holders of shares of the Common Stock.
(See Federal Income Tax Matters.)
CERTIFICATES FOR SHARES
20. Will certificates be issued to participants for shares
of Common Stock under the Plan?
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Certificates for shares of the Common Stock purchased on
behalf of participants in the Plan and credited to their accounts
under the Plan as Plan Shares are issued in the name of
Shareholder Services, or its nominee, and are held by Shareholder
Services for the benefit of the participants. The number of Plan
Shares is shown on the participant's quarterly statement of
account.
Certificates for any number of whole Plan Shares will be
issued upon the written request of a participant, and the related
Plan Shares shall be withdrawn from the participant's account.
The request should be mailed to Shareholder Services at the
address set forth herein under Administration. Any remaining
whole shares, and any fraction of a share, will continue to be
held in the participant's account as Plan Shares (see Termination
of Participation). Certificates for fractions of shares will not
be issued under any circumstances. Unless otherwise requested by
the participant, future cash dividends on the shares for which
certificates are issued will continue to be distributed or
reinvested in accordance with the participant's election.
Plan Shares may not be pledged. A participant who wishes to
pledge such shares must request that certificates for the shares
be issued in such participant's name.
Accounts under the Plan are maintained in the names in which
certificates of the participants were registered at the time they
entered the Plan. Consequently, certificates for whole shares
are similarly registered when issued to participants.
OTHER STOCK TRANSACTIONS
21. If the Company issues a stock dividend or declares a
stock split, how is the Common Stock held under the
Plan affected?
Any stock dividends or split shares distributed on Plan Shares
will be added to such participant's account. Stock dividends or
split shares distributed on a participant's Registered Shares
will be mailed directly to the participant in the same manner as
to holders of shares who are not participating in the Plan.
22. If the Company sells additional shares of Common Stock
through a rights offering, how will the participant's
entitlement be computed?
In a rights offering, warrants representing rights on all of a
participant's Registered Shares and also whole Plan Shares will
be mailed directly to the participant in the same manner as to
holders of shares who are not participating in the Plan.
VOTING OF SHARES
23. How will a participant's shares of Common Stock be
voted at meetings of shareholders of the Company?
Each participant in the Plan receives a proxy form indicating
the total number of whole shares of the Common Stock held by the
participant, including Registered Shares and whole Plan Shares,
and the participant is entitled to vote all such shares at any
meeting of the shareholders of the Company.
RESPONSIBILITY OF COMPANY, THE INDEPENDENT BROKER AND SHAREHOLDER
SERVICES
24. What are the limitations of liability of the Company,
the Independent Broker and Shareholder Services for
their acts or omissions under the Plan?
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<PAGE>
In administering the Plan, none of the Company, the
Independent Broker or Shareholder Services will be liable for any
act done in good faith, or for any good faith omission to act,
including, without limitation, any claims of liability arising
out of failure to terminate a participant's account upon the
participant's death, prior to receipt of notice in writing of
such death. Participants should recognize that none of the
Company, the Independent Broker or Shareholder Services can
assure a participant of a profit, or protect a participant
against a loss, on the shares of the Common Stock of the Company
purchased under the Plan. Participation in the Plan is at the
sole discretion, risk and responsibility of each participant.
FOREIGN HOLDERS OF SHARES
25. What provisions are made for foreign shareholders?
In the case of a foreign holder of shares who is participating
in the Plan and whose dividends are subject to United States
income tax withholding, Shareholder Services applies to the
purchase of the shares of the Common Stock an amount equal to the
net cash dividend after the deduction of taxes withheld.
Optional cash investments received from foreign holders of shares
of the Common Stock must be in United States dollars.
MODIFICATION OR TERMINATION
26. To what extent may the Plan be modified, suspended or
terminated by the Company?
The Company, by a majority vote of its Board of Directors at a
duly held meeting, reserves the right to suspend, modify, amend
or terminate the Plan at any time. Notice of any such
suspension, modification, amendment or termination will be mailed
to all participants.
The Company may elect not to offer or sell its Common Stock
under the Plan to participants residing in any jurisdiction or
foreign country where, in the judgment of the Company, the burden
or expense of compliance with applicable blue sky or securities
laws make such offer or sale there impracticable or inadvisable.
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FEDERAL INCOME TAX MATTERS
FEDERAL INCOME TAX CONSEQUENCES
The Federal income tax consequences to a participant are
currently as follows:
With respect to reinvested cash dividends used to purchase
shares in the open market, a participant will be treated for
Federal income tax purposes as having received on the Dividend
Payment Date a distribution in an amount equal to the cash
reinvested plus brokerage fees, commissions or other service
charges paid by the Company to obtain the shares. Such
distribution will be treated as dividend income to the
participant to the extent of the current and accumulated earnings
and profits of the Company, as determined for Federal income tax
purposes. The tax basis of the shares so purchased will be equal
to the amount of such distribution, including those charges paid
by the Company.
With respect to reinvested cash dividends used to purchase
original issue shares of Common Stock directly from the Company,
a participant will be treated for Federal income tax purposes as
having received on the Dividend Payment Date a distribution in an
amount equal to the fair market value on such date of the full
number of shares and any fractional share purchased with
reinvested dividends. The fair market value of such shares on
the Dividend Payment Date will be treated as dividend income to
the participant to the extent of the current and accumulated
earnings and profits of the Company, as determined for Federal
income tax purposes. The tax basis of the shares so purchased
will be equal to the fair market value of such shares on the
Dividend Payment Date.
A participant who purchases shares with optional cash
payments will recognize no taxable income upon such purchases
except to the extent of brokerage fees, commissions or other
service charges paid by the Company to obtain the shares. The
tax basis of shares purchased in this manner will be the amount
of the optional cash investment plus those charges paid by the
Company.
A participant does not realize any taxable income when such
participant receives certificates for whole shares of the Common
Stock credited to such participant's account under the Plan,
either upon request for certificates for certain of these shares,
or upon termination of such participant's participation or
termination of the Plan by the Company. However, gain or loss
will be realized by the participant when whole shares are sold,
either pursuant to the participant's request to sell shares held
in the Plan when such participant terminates participation in the
Plan or by such participant after such termination. In addition,
a participant who receives, upon termination of participation or
termination of the Plan by the Company, a cash adjustment for a
fraction of a share credited to such participant's account will
realize a gain or loss with respect to such fraction. The amount
of any such gain or loss would be the difference between the
amount which the participant receives for such participant's
shares or fraction of a share and the tax basis therefor.
For other tax consequences of participation in the Plan,
including state and local income taxation, participants should
consult their tax advisor.
The above Federal income tax discussion is based on Federal
income tax law as in effect as of the date hereof. Participants
should consult their tax advisors with respect to the impact of
any future legislative proposals or legislation enacted after the
date of this Prospectus.
TAX REPORTS
A quarterly statement of account will be furnished to each
participant which shows the price per share to be used in
determining the tax basis of the shares purchased with reinvested
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<PAGE>
dividends and/or optional cash investments. Such statement will
also show all transactions in the participant's account during
the year. The Form 1099-DIV mailed to each participant at year-
end will report the dividend income realized by the participant
during the year, including brokerage fees, commissions or other
service charges paid by the Company in respect of reinvested
dividends or optional cash investments. Such income may differ
from the total of the reinvested dividends. (See The Plan
Share Purchases and Price). A Form 1099-B will be furnished to
the Participant for any shares sold through the Plan.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of
Common Stock, without par value, of which 240,510,829 shares were
outstanding at the effective time of the Mergers, and serial
preference stock, par value $25 per share, none of which has been
issued. The following statements with respect to such capital
stock of the Company are a summary of certain rights and
privileges attaching to the stock under the laws of the State of
Texas and the Restated Articles of Incorporation and the Bylaws
of the Company, as amended. This summary does not purport to be
complete and is qualified in its entirety by reference to such
laws, the Restated Articles of Incorporation and the Bylaws of
the Company, as amended, for complete statements.
Each holder of shares of the Common Stock is entitled to one
vote for each share of Common Stock held on all questions
submitted to holders of shares and to cumulative voting at all
elections of directors. The Common Stock has no preemptive or
conversion rights. Upon issuance and sale of the shares offered
hereby, such shares will be fully paid and nonassessable.
The holders of the shares of the preference stock are not
accorded voting rights, except that, when dividends thereon are
in default in an amount equivalent to four full quarterly
dividends, the holders of shares of the preference stock are
entitled to vote for the election of one-third of the Board of
Directors or two directors, whichever is greater, and, when
dividends are in default in an amount equivalent to eight full
quarterly dividends, for the election of the smallest number of
directors necessary so that a majority of the full Board of
Directors shall have been elected by the holders of the shares of
the preference stock. The Company must also secure the approval
of the holders of two-thirds of the outstanding shares of the
preference stock prior to effecting various changes in its
capital structure.
After the payment of full preferential dividends on the
shares of any outstanding preference stock, holders of shares of
the Common Stock are entitled to dividends when and as declared
by the Board of Directors. After payment to the holders of
shares of any outstanding preference stock of the preferential
amounts to which they are entitled, the remaining assets to be
distributed, if any, upon any dissolution or liquidation shall be
distributed to the holders of shares of the Common Stock. Each
share of the Common Stock is equal to every other share of the
Common Stock with respect to dividends and also with respect to
distributions upon any dissolution or liquidation. (Reference is
made to Notes 4 and 5 to Consolidated Financial Statements of TEI
contained in the 1996 TEI 10-K.)
The Common Stock of the Company is listed on the New York,
Chicago and Pacific stock exchanges. Application will be made
for the listing on such exchanges of any additional shares
offered hereby.
The transfer agent for the Common Stock is TU Services,
Dallas, Texas.
EXPERTS AND LEGALITY
The consolidated financial statements included in the 1996
TEI 10-K, incorporated herein by reference, have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their
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<PAGE>
report included in the 1996 TEI 10-K, and have been incorporated
by reference herein in reliance upon such report given upon the
authority of that firm as experts in accounting and auditing.
With respect to the unaudited condensed consolidated interim
financial information included in each TEI 10-Q that is
incorporated herein by reference, Deloitte & Touche LLP has
applied limited procedures in accordance with professional
standards for reviews of such information. As stated in their
report included in each TEI 10-Q, they did not audit and they did
not express an opinion on such interim financial information.
Deloitte & Touche LLP are not subject to the liability provisions
of Section 11 of the Securities Act of 1933, as amended (Act),
for their reports on such unaudited interim financial information
because such reports are not "reports" or a "part" of the
Registration Statement filed under the Act with respect to the
Common Stock offered hereby (Registration Statement), that were
prepared or certified by an accountant within the meaning of
Sections 7 and 11 of such Act.
The consolidated financial statements included in the 1996
ENSERCH 10-K, incorporated herein by reference, have been audited
by Deloitte & Touche LLP, independent auditors, as stated in
their report included in such 1996 ENSERCH 10-K, and have been
incorporated by reference herein in reliance upon such report
given upon the authority of that firm as experts in accounting
and auditing.
With respect to the unaudited condensed consolidated interim
financial information included in the ENSERCH 10-Q incorporated
herein by reference, Deloitte & Touche LLP has applied limited
procedures in accordance with professional standards for a review
of such information. As stated in their report included in the
ENSERCH 10-Q, they did not audit and they do not express an
opinion on such interim financial information. Deloitte &
Touche LLP is not subject to the liability provisions of Section
11 of the Act for their reports on such unaudited interim
financial information because such reports are not "reports" or a
"part" of the Registration Statement prepared or certified by an
accountant within the meaning of Sections 7 and 11 of the Act.
The statements made as to matters of law and legal
conclusions in this Prospectus under Description of Capital Stock
and in the 1996 TEI 10-K under Part I, Item 1 Business-
Regulation and Rates, and Environmental Matters, incorporated
herein by reference, have been reviewed by Worsham, Forsythe &
Wooldridge, L.L.P., Dallas, Texas, General Counsel for the
Company. All of such statements are set forth, or have been
incorporated by reference, herein in reliance upon the opinion of
that firm given upon their authority as experts. At May 31,
1997, members of the firm of Worsham, Forsythe & Wooldridge,
L.L.P., owned approximately 46,200 shares of the Common Stock of
the Company.
The statements of law and legal conclusions under the caption
Federal Income Tax Matters have been reviewed by Reid & Priest
LLP, New York, New York, of counsel to the Company, and such
statements are made upon their authority as experts.
17
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_________________
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER
CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, ANY SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES
OR ANY OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
