<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 13, 1998
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
CONECTIV, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
------------------------
<TABLE>
<S> <C>
DELAWARE 51-0377417
(STATE OF INCORPORATION) (IRS EMPLOYER IDENTIFICATION NO.)
</TABLE>
800 KING STREET
WILMINGTON, DE 19899
ATTN: BARBARA S. GRAHAM
(302) 429-3448
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
<TABLE>
<S> <C>
BARBARA S. GRAHAM JAMES E. FRANKLIN II, ESQ.
PRESIDENT GENERAL COUNSEL AND SECRETARY
CONECTIV, INC. CONECTIV, INC.
800 KING STREET 6801 BLACK HORSE PIKE
WILMINGTON, DE 19899 EGG HARBOR TOWNSHIP, NJ 08234
(302) 429-3448 (609) 645-4420
</TABLE>
(NAMES, ADDRESSES AND TELEPHONE NUMBERS, INCLUDING
AREA CODES, OF AGENTS FOR SERVICE)
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act of 1993 registration number of the
earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=====================================================================================================
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
REGISTERED REGISTERED SHARE(1) PRICE(1) FEE(1)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock ($.01 par
value)................. 5,000,000 shares $22.125 $110,625,000 $32,634.38
=====================================================================================================
</TABLE>
(1) The proposed maximum offering price per share and in the aggregate have been
estimated solely for the purposes of computing the registration fee.
Pursuant to Rule 457(c), the registration fee has been calculated based on
the average of the high and low prices for the Common Stock of Delmarva
Power & Light Company (the higher priced stock of the two companies
combining to form Conectiv, Inc.) on January 8, 1998, as reported on the New
York Stock Exchange Composite Tape.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
PROSPECTUS
CONECTIV, INC.
CONECTIVDIRECT(TM)
ConectivDirect(TM) (the "Plan") provides a convenient and economical method
for the shareholders of Conectiv, Inc. (the "Company") holding the Company's
Common Stock, $.01 par value per share (the "Common Stock" or "Company Common
Stock"), and the Company's Class A Common Stock, $.01 par value per share
("Class A Stock" or "Class A Common Stock"), and for other investors to purchase
shares of the Company's Common Stock, and reinvest all or a portion of cash
dividends in additional shares of Common Stock. Key features of the Plan are as
follow:
- Persons who are not registered shareholders (as defined in this
Prospectus) may enroll in the Plan by making an initial investment of at
least $500 (maximum investment of $200,000 per year).
- Once enrolled, participants may make additional optional cash purchases
either by check or by using electronic funds transfer from their checking
or savings account. The minimum investment amount is $50 (maximum of
$200,000 per year).
- Participants may elect to reinvest dividends on all shares owned (full
reinvestment), reinvest dividends on a portion of all shares owned
(partial reinvestment), or receive all dividends in cash (no
reinvestment).
- Participants owning Common Stock may deposit their share certificates into
the Plan.
- Participants owning Common Stock may request the issuance of a certificate
or transfer shares to another participant at any time.
- Participants owning Common Stock may sell shares held in the Plan by
providing instructions to The Bank of New York, as Plan Administrator, or
by using the automated telephone sales feature.
- Participants will be charged modest fees and commissions for certain
transactions.
Common Stock will be purchased by the Plan Administrator directly from the
Company or in open market or privately negotiated transactions, as determined
from time to time by the Company, to fulfill requirements for the Plan.
Participation in the Plan is entirely voluntary. Any shareholder who does
not participate in the Plan will receive cash dividends in the usual manner.
The Plan does not include any feature to purchase, sell, transfer or
safekeep Class A Stock. Holders of Class A Stock may participate only in the
dividend reinvestment feature of the Plan.
This Prospectus relates to 5,000,000 shares of Company Common Stock
registered for sale under the Plan and should be retained for future reference.
THE PLAN SUPERSEDES THE DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN OF
ATLANTIC ENERGY, INC. ("ATLANTIC ENERGY") AND THE DIVIDEND REINVESTMENT AND
COMMON SHARE PURCHASE PLAN OF DELMARVA POWER & LIGHT COMPANY ("DELMARVA").
PARTICIPANTS IN THOSE PLANS AUTOMATICALLY CONTINUE IN THE PLAN UNLESS THEY ELECT
TO TERMINATE PARTICIPATION IN SUCH PLANS.
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.
The date of this Prospectus is , 1998.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
SUMMARY
The Company....................................................................... 2
Available Information............................................................. 2
Incorporation of Certain Documents by Reference................................... 2
Summary of Important Plan Features................................................ 4
The Plan.......................................................................... 5
Definitions....................................................................... 5
Purpose........................................................................... 6
Features and Considerations....................................................... 6
Administration.................................................................... 8
Participation..................................................................... 9
Dividend Reinvestment............................................................. 11
Optional Cash Purchases........................................................... 11
Purchases......................................................................... 13
Sales, Transfers and Termination from the Plan.................................... 14
Reports to Participants........................................................... 16
Certificates...................................................................... 16
Safekeeping Service for Common Stock.............................................. 17
Changing Investment Options....................................................... 18
Income Taxes...................................................................... 18
Other Information................................................................. 19
Description of Common Stock and Class A Stock..................................... 20
Use of Proceeds................................................................... 23
Experts........................................................................... 23
Legal Opinion..................................................................... 23
</TABLE>
<PAGE> 4
DELMARVA, A DELAWARE AND VIRGINIA CORPORATION, AND ATLANTIC ENERGY, A NEW
JERSEY CORPORATION, TWO PUBLIC UTILITY COMPANIES, ARE MERGING WITH EACH OTHER,
WITH CONECTIV, INC. THE SURVIVING CORPORATION AFTER A SERIES OF TRANSACTIONS.
DISCLOSURES REGARDING CONECTIV, INC. IN THIS REGISTRATION STATEMENT ARE
CONDITIONAL AND ARE DEPENDENT UPON THE CONSUMMATION OF THE PROPOSED MERGER.
AFTER THE CONCLUSION OF THE MERGER, THE NAME CONECTIV, INC. WILL BE CHANGED TO
CONECTIV.
THE COMPANY
The Company is a registered public utility holding company under the Public
Utility Holding Company Act of 1935, as amended. The Company owns all of the
outstanding shares of common stock of two public utility companies, Delmarva and
Atlantic City Electric Company ("Atlantic Electric"). The Company also owns
subsidiaries primarily engaged in providing energy-related products and services
and telecommunication services. The principal executive offices of the Company
are located at 800 King Street, Wilmington, DE 19899.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith, will
file with the Securities and Exchange Commission ("SEC" or "Commission")
reports, proxy statements, and other information, which are available for
inspection and copying at the public reference facilities maintained by the SEC
at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's Regional
Offices at 7 World Trade Center, Suite 1300, New York, New York 10048, and at
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. (The SEC maintains
a site on the World Wide Web containing reports, proxy materials, information
statements and other items. The address is http://www.sec.gov.) Copies of such
material can be obtained from the SEC's Public Reference Room, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. Copies of such material also
can be inspected at the office of the New York Stock Exchange, Inc. ("NYSE").
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, previously filed with the SEC pursuant to the
Exchange Act, are hereby incorporated by reference:
1. Delmarva Annual Report on Form 10-K for the year ended December 31,
1996 (File No. 1-1405);
2. Delmarva Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997, June 30, 1997 and September 30, 1997 (File No. 1-1405);
2
<PAGE> 5
3. Delmarva Current Reports on Form 8-K dated January 28, 1997,
January 31, 1997, July 2, 1997, and October 27, 1997 (File No. 1-1405);
4. Combined Atlantic Energy (File No. 1-9760) and Atlantic Electric
(File No. 1-3559) Annual Reports on Form 10-K for the year ended December
31, 1996;
5. Combined Atlantic Energy (File No. 1-9760) and Atlantic Electric
(File No. 1-3559) Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997, June 30, 1997 and September 30, 1997;
6. Combined Atlantic Energy (File No. 1-9760) and Atlantic Electric
(File No. 1-3559) Current Reports on Form 8-K dated January 6, 1997,
January 27, 1997, and January 31, 1997; and Atlantic Electric Current
Reports on Form 8-K dated March 24, 1997 and July 16, 1997 (File No.
1-3559)
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date hereof and prior to the termination of
the offering of the securities offered hereby, shall be deemed to be
incorporated by reference herein and to be part hereof from the date of filing
of such documents. Any statement contained in a document incorporated or deemed
to be incorporated by reference herein 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 also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner of shares of the Company to whom a copy of this
Prospectus has been delivered, upon the written or oral request of such person,
a copy (without exhibits, except those specifically incorporated by reference)
of any and all of the documents referred to below which have been or may be
incorporated in this Prospectus by reference. Requests for such documents should
be directed to Corporate Secretary, Conectiv, 800 King Street, Wilmington, DE
19899, (Tel:) 302 429-3114.
3
<PAGE> 6
SUMMARY OF IMPORTANT PLAN FEATURES
The following summary description of the Plan is qualified by reference to
the full text of the Plan which is contained herein. Terms used in the summary
have the meanings attributed to them in the Plan.
- SIMPLE ENROLLMENT -- Any investor who wishes to make an initial purchase
of Conectiv Common Stock (but not Class A Stock) may do so by completing
an Authorization Card and sending a check or money order to the Plan
Administrator, The Bank of New York.
- OPEN TO NON-SHAREHOLDERS -- If you are not already a registered Conectiv
shareholder, the minimum initial investment is $500 (in U.S. dollars).
You will pay a small, one time set-up fee.
- OPTIONAL CASH INVESTMENTS -- You may purchase stock systematically by
authorizing the Plan Administrator to automatically deduct $50 or more
from your bank account each month or by mailing a check for as little as
$50 to the Plan Administrator. The maximum annual optional cash
investment is $200,000.
- AUTOMATIC REINVESTMENT OF DIVIDENDS -- Your dividends (or a portion you
choose) can be automatically reinvested in Conectiv Common Stock.
- ACCOUNT STATEMENTS -- Each time you invest you will receive a transaction
summary that will show you the purchase price and shares credited to your
account. Following each quarterly payment of dividends, a statement
showing all year-to-date transaction activity will be mailed to you. Each
statement includes a form that will help you make additional investments,
sales, transfers or withdrawals.
- SAFEKEEPING OF STOCK CERTIFICATES -- If you presently own shares of
Conectiv Common Stock and hold certificates for them, you may deposit the
certificates in the Plan for safekeeping.
- BROKERAGE COMMISSIONS -- You will pay modest service fees and brokerage
commissions when you sell Common Stock through the Plan as described in
this Prospectus.
4
<PAGE> 7
THE PLAN
The following, in question and answer form, sets forth the provisions of
the Plan as in effect beginning , 1998.
DEFINITIONS
ANNUAL LIMIT -- A Participant may make Optional Cash Purchases up to a
maximum of $200,000 per calendar year.
AUTHORIZATION CARD -- The form to be completed by (i) a non-shareholder in
order to enroll in the Plan, or (ii) existing holders of Registered Shares of
Common Stock and/or Class A Stock in order to enroll in the Plan.
AUTOMATIC ELECTRONIC INVESTMENT AUTHORIZATION CARD -- The form to be
completed by a Participant in order to set up automatic debits from banks and
other financial institutions for Optional Cash Purchases.
AUTOMATIC ELECTRONIC INVESTMENT -- Optional Cash Purchases by means of
electronic funds transfer.
BENEFICIAL HOLDER -- A holder of Common Stock whose shares are being held
by a bank or a brokerage firm in "street" name.
BUSINESS DAY -- Any day on which the NYSE is open for the business of
trading securities.
CASH DIVIDEND -- The cash dividend payable on shares of Common Stock and
Class A Stock.
CHANGE AUTHORIZATION CARD -- The form to be completed by a Participant to
make changes in reinvestment options or other account changes.
DIVIDEND PAYMENT DATE -- The date on which dividends declared by the
Company's board of directors are payable on the Company's Common Stock and Class
A Stock.
DIVIDEND RECORD DATE -- The date on which a person or entity must be a
registered shareholder of Common Stock or Class A Stock in order to receive a
given dividend.
INVESTMENT DATE -- The date on which purchases of shares of Common Stock
are made for the preceding Investment Period. Shares of Common Stock will be
purchased at least once every five Business Days. A Dividend Payment Date will
always be an Investment Date.
INVESTMENT PERIOD -- The period for Plan investments on behalf of
Participants, which commences on an Investment Date and continues through and
includes the date preceding the next succeeding Investment Date.
5
<PAGE> 8
OPTIONAL CASH PURCHASES -- Purchase of Common Stock through direct cash
payments or Automatic Electronic Investments submitted by Participants under the
Plan, as authorized in writing by a Participant.
PARTICIPANT -- A shareholder that has enrolled in the Plan according to the
Company's applicable procedures.
PLAN -- ConectivDirect(TM), as described in this Prospectus.
PLAN ADMINISTRATOR -- The Bank of New York.
REGISTERED SHARES -- The shares of Common Stock and/or Class A Stock for
which a Participant holds a stock certificate registered on the stock transfer
records of the Company in the name of the Participant.
SAFEKEEPING SERVICE -- The service allowing Plan Participants to deposit
Common Stock certificates with the Plan Administrator for credit to the
Participant's Plan account. Deposited shares will be held in book-entry form.
PURPOSE
1. What is the purpose of the Plan?
The Plan offers shareholders and non-shareholders a convenient and
economical way to purchase the Company's Common Stock. Once Participants are
enrolled in the Plan, Cash Dividends, as well as any Optional Cash Purchases,
may be used to purchase additional shares of Common Stock.
The Company cannot assure any Participant of a profit or protect any
Participant in the Plan against a loss on the shares of Common Stock purchased
under the Plan. The use of the term "Plan" does not indicate that the Plan
functions as a retirement plan, whether qualified or non-qualified. The Plan
does not enjoy any preferred tax status, and all Cash Dividends on Participant's
Common Stock are taxable. See Questions 34 and 35.
FEATURES AND CONSIDERATIONS
2. What are the main features of the Plan?
Participants may elect to have Cash Dividends on all or a portion of their
shares of Common Stock and/or Class A Stock automatically reinvested. Dividend
payments not reinvested will be paid to Participants by check or through
electronic direct deposit.
Participants may make Optional Cash Purchases in a minimum amount of $50
per transaction and up to a maximum of $200,000 per calendar year for the
purchase of Common Stock.
Non-shareholders may enroll in the Plan by completing an Authorization Card
and making a minimum initial cash investment of $500 to purchase Common Stock
under the terms of the Plan.
6
<PAGE> 9
Full investment of funds is possible under the Plan (subject to minimum and
maximum purchase requirements) because both full and fractional shares will be
credited to Participants' Plan accounts.
The Plan includes a Safekeeping Service which permits shareholders to
deposit certificates of Common Stock (not Class A Stock) with the Plan
Administrator, thereby reducing shareholders' risk of loss of physical
certificates and making it convenient for shareholders to hold all shares of
Common Stock in one account. Participants will receive credit to their Plan
accounts for such shares.
Participants will receive quarterly statements of account with a record of
their activity as soon as practicable following each Dividend Payment Date, and
confirmations of investments upon opening Plan accounts or making Optional Cash
Purchases of Common Stock. Statements of account are a Participant's continuing
record of transactions and should be retained for tax purposes.
Participants may elect to receive a check for Cash Dividends. If a
Participant is receiving a check for all Cash Dividends, the Participant will
receive a yearly statement of holdings in the Plan.
Through the Plan, Participants may sell shares of Common Stock held or
deposited in Plan accounts by providing instructions to the Plan Administrator
or by using the automated telephone sales feature. Participants selling Common
Stock will be charged fees and commissions which are lower than those typically
charged by a stockbroker. See Question 21 for a description of the automated
telephone sales feature and Question 19 for a list of applicable fees.
3. What should I know prior to participating in the Plan?
You should consider the following prior to participating in the Plan:
BROKERAGE COMMISSIONS -- Participants pay a brokerage commission as
described herein for each share of Common Stock sold for their Plan account
or Plan shares purchased in the open market.
SERVICE FEES -- Participants pay a service fee as described herein for
certain Plan transactions, including the establishment of a new account,
whether or not the transactions are effected in the open market.
MARKET RISK -- By opting to reinvest Cash Dividends in Company Common
Stock, Participants bear the market risk associated with the purchase of
Common Stock. Also, Participants have no control over the price of Common
Stock with regard to Optional Cash Purchases or the sale of Common Stock.
NO INTEREST PENDING INVESTMENT -- No interest is paid on funds held
for Optional Cash Purchases pending investment in Common Stock.
7
<PAGE> 10
ADMINISTRATION
4. Who administers the Plan?
By participating in the Plan, each Participant designates The Bank of New
York (or a successor thereto) as agent under the Plan. The Bank of New York will
administer the Plan, purchase shares of Common Stock for Participants in the
Plan, serve as custodian for shares of Common Stock on deposit in the Plan, keep
records, send statements of account to Participants and perform other duties
relating to the Plan. Shares of Common Stock purchased under the Plan will be
registered in the name of the Plan Administrator (or its nominee) and held by
the Plan Administrator for each Participant in the Plan, unless and until a
Participant requests that a stock certificate for all or part of such shares be
issued.
The Plan Administrator is responsible for any open market purchases and
sales on behalf of the Participants and such purchases and sales shall be made
through BNY Brokerage, Inc. ("BNYB"), a full-service brokerage firm and
wholly-owned subsidiary of The Bank of New York Company, Inc. BNYB will receive
any brokerage commissions. The Company has no control over the times or prices
at which the Plan Administrator effects transactions or the selection of the
broker executing such transactions on the open market.
The Company reserves the right to interpret and regulate the Plan as deemed
necessary or desirable. Neither the Company nor the Plan Administrator will be
liable for any act done in good faith or for any omission to act in good faith,
including, without limitation, any claim of liability arising with regard to any
sale or purchase or out of failure to terminate a Participant's account upon the
Participant's death prior to receipt of written notice of such death.
5. Whom should I contact with questions concerning the Plan and its
administration?
Participants may contact the Plan Administrator by telephone, toll free, at
1-800-365-6495 between the hours of 8:00 a.m. and 6:00 p.m., Eastern time, on
Business Days or by writing to one of the following addresses. Please mention
Conectiv in all correspondence.
Payments for Optional Cash Purchases and requests for sales, liquidations,
transfers and withdrawals should be mailed to (please use the bottom portion of
the transaction advice or statement):
The Bank of New York
Dividend Reinvestment Department
P.O. Box 1958
Newark, NJ 07101-9774
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<PAGE> 11
All inquiries regarding your account should be mailed to:
The Bank of New York
Investor Relations Department -- 11G
Church Street Station
P.O. Box 11258
New York, NY 10286-1258
GENERAL INFORMATION CONCERNING THE PLAN MAY BE OBTAINED FROM THE PLAN
ADMINISTRATOR'S WEBSITE AT HTTP://STOCK.BANKOFNY.COM
6. May the Plan be modified or discontinued?
The Company reserves the right to suspend, modify or discontinue the Plan
at any time including but not limited to, the right to modify the fees and
commissions charged to Participants. Any suspension, major modification or
discontinuance of the Plan will be announced by the Company to all Participants.
PARTICIPATION
7. Who is eligible to participate in the Plan?
All registered holders of the Company's Common Stock are eligible to
participate in the Plan. Holders of Class A Stock may only participate in the
dividend reinvestment features of the Plan.
EXISTING PARTICIPANTS IN EITHER ATLANTIC ENERGY'S DIVIDEND REINVESTMENT AND
STOCK PURCHASE PLAN OR DELMARVA'S DIVIDEND REINVESTMENT AND COMMON SHARE
PURCHASE PLAN ARE AUTOMATICALLY ENROLLED IN THE PLAN.
A Plan Prospectus and enrollment information will be furnished at any time
upon request to the Plan Administrator.
8. How does a holder of Registered Shares of either Common Stock or Class A
Stock participate?
Individuals who hold Registered Shares may join the Plan at any time by
completing the Authorization Card and returning it to the Plan Administrator at
the address indicated in the response to Question 5. If shares are registered in
more than one name, all Registered Holders of such shares must sign the
Authorization Card exactly as their names appear on the account registration.
The Authorization Card allows a Participant to choose a reinvestment option
for participation in the Plan. By checking the appropriate box a Participant may
select:
FULL DIVIDEND REINVESTMENT -- Automatic reinvestment of Cash Dividends
on all Registered Shares held by the Participant and on all shares of
Common Stock credited to the Participant's account.
9
<PAGE> 12
PARTIAL DIVIDEND REINVESTMENT -- Receipt of Cash Dividends on a
portion of the Registered Shares held by the Participant and/or a portion
of the Common Stock credited to the Participant's account, and automatic
reinvestment of the Cash Dividends on the remainder of the Participant's
Common Stock and Class A Stock.
OPTIONAL CASH PAYMENTS ONLY -- Cash Dividends on shares registered in
a Participant's name will be paid by check or electronic transfer and will
not be reinvested. A Participant may make optional cash payments (in an
amount not less than $50) at any time by personal check, money order or
electronic funds transfer from a designated U.S. bank and payable in U.S.
dollars. Funds denominated in currencies other than U.S. dollars and
third-party checks will not be accepted and will be returned to the
Participant. Optional Cash Purchases by a Participant may not exceed a
cumulative $200,000 in any calendar year. Dividends on all shares purchased
with Optional Cash Payments and credited to a Participant's account will be
reinvested in additional shares unless, and until, a Participant requests
that the purchased shares be registered in the Participant's name through
the issuance of certificates. (See Questions 26 and 27 for information
concerning the issuance of certificates and Question 13 with regard to
electronic funds transfers.)
Shareholders who do not participate in the Plan will receive Cash
Dividends, as declared, in the usual manner.
9. How does a non-shareholder participate?
After being furnished with the Plan Prospectus, a non-shareholder may apply
for enrollment in the Plan by completing and returning the Authorization Card,
together with a check in an amount not less than $500, or more than the Annual
Limit ($200,000), made payable to the Plan Administrator. A one time set-up fee
will be charged. See Question 19 for the schedule of fees.
The Authorization Card allows applicants to decide the amount of their
initial investment and to choose a reinvestment option for participation in the
Plan. See Questions 8, 32 and 33.
Beneficial Holders of the Company's Common Stock may participate in the
reinvestment of Cash Dividends (no other Plan transactions are permitted) but
need to contact their broker or nominee to arrange individual terms and
conditions, including any fees the broker may charge, for executing reinvestment
transactions. Such participation is outside the terms and conditions of the Plan
and the investor continues to be a non-registered shareholder. Beneficial
Holders may become Participants in the Plan either by having shares of Common
Stock transferred to their names and completing and returning an Authorization
Card or by completing and returning an Authorization Card along with an initial
investment of $500 or more. BENEFICIAL HOLDERS OF CLASS A STOCK ARE NOT ELIGIBLE
TO PARTICIPATE IN THE PLAN.
10
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DIVIDEND REINVESTMENT
10. How and when will Cash Dividends be reinvested?
If a Participant has elected full or partial reinvestment of Cash
Dividends, the Plan Administrator will reinvest those dividends in additional
shares of Common Stock. Reinvested Cash Dividends will be used to purchase
either authorized but unissued shares from the Company, including treasury
stock, or shares that are purchased on the open market by the Plan
Administrator.
Cash Dividends payable on any Dividend Payment Date which are to be
reinvested will be reinvested commencing on the applicable Dividend Payment
Date. If the Company is then meeting the requirements of the Plan with Common
Stock purchased in the open market, the Plan Administrator will determine the
exact timing of such purchases and the number of shares to be purchased,
depending on the amount of reinvested dividends, market conditions and the
requirements of federal securities laws. If the Company elects to issue
authorized but unissued shares of its Common Stock, these shares will be issued
and credited to a Participant's Plan account by the Company as of the Investment
Date. The determination of price for purchases of Common Stock is explained in
Question 17.
If a Participant's Authorization Card is received by the Plan Administrator
on or before the Dividend Record Date for the next dividend payment, the next
dividend payable will be used to purchase additional shares of Common Stock on
the Investment Date immediately following the applicable Dividend Date.
If the Authorization Card is received after the Dividend Record Date for
the next dividend payment, the reinvestment of dividends will start with the
next succeeding dividend payment.
OPTIONAL CASH PURCHASES
11. Who is eligible to make Optional Cash Purchases?
All Plan Participants, whether or not they have authorized the reinvestment
of dividends, are eligible to make Optional Cash Purchases.
12. How are Optional Cash Purchases made?
An applicant may make an initial cash investment when enrolling by
enclosing a check with the Authorization Card. Checks should be made payable to
the Plan Administrator, and returned in the envelope provided with the
Authorization Card. Thereafter, Optional Cash Purchases may be made by using the
cash payment form attached to the transaction advice or the statement of
account, which will be sent to each Participant by the Plan Administrator. A
Participant may also send in a check without this form; however, your Plan
account number must be included on your check. Checks must be drawn
11
<PAGE> 14
on a U.S. bank and be payable in U.S. dollars. Funds denominated in currencies
other than U.S. dollars and third-party checks will not be accepted and will be
returned to the Participant.
In the case of a returned unpaid check, the Plan Administrator reserves the
right to liquidate Common Stock in an amount sufficient to satisfy the unpaid
check amount.
If a Participant chooses to participate by Optional Cash Purchases only,
the Company will pay Cash Dividends by check or electronic direct deposit on the
Participant's Common Stock.
13. What is the Automatic Electronic Investment feature of the Plan and how does
it work?
Participants may make Optional Cash Purchases by means of Automatic
Electronic Investments of not less than $50 nor more than the Annual Limit by
monthly electronic funds transfers from a pre-designated U.S. account. Automatic
Electronic Investments may be made from accounts at any of the banks, savings
associations and credit unions that are members of the National Automated
Clearing House Association.
To initiate Automatic Electronic Investments, the Participant must complete
and sign an Automatic Electronic Investment Authorization Card and return it to
the Plan Administrator together with a voided blank check or deposit slip for
the account from which funds are to be drawn. Forms will be processed and will
become effective as promptly as practicable.
Once Automatic Electronic Investment is initiated, funds will be drawn from
the Participant's designated account on the 25th day of each month (or, if the
25th day is not a Business Day, the first Business Day thereafter), and will be
invested in Common Stock beginning on the next Investment Date following the
date of such electronic funds transfer.
Participants may change the amounts of their future Automatic Electronic
Investments by completing and submitting to the Plan Administrator a new
Automatic Electronic Investment Authorization Card. To be effective with respect
to a particular Investment Date, however, the new Automatic Electronic
Investment Authorization Card must be received by the Plan Administrator by the
5th day of the applicable month. Participants may terminate their Automatic
Electronic Investment by notifying the Plan Administrator in writing.
Electronic direct deposit of dividends that Participants elect to receive
is also available through the Plan Administrator.
14. What are the limitations on making Optional Cash Purchases?
The option to make cash purchases is available to you at any time. Optional
Cash Purchases, other than initial investments, cannot be less than $50 per
payment. The maximum invested in any form in Common Stock by any Participant
cannot exceed the Annual Limit for any calendar year. The minimum initial
investment for persons enrolling as nonshareholders is $500. The same amount of
money need not be sent in for each Investment Date and there is no obligation to
make an investment on any Investment Date.
12
<PAGE> 15
Optional Cash Purchases of less than the allowable minimum amount and the
portion of any Optional Cash Purchase that exceeds the Annual Limit will be
returned to the Participant without interest.
15. When will Optional Cash Purchases be invested?
The Plan's "Investment Dates" occur at least once every five business days.
A Participant's cash investment will generally be invested within five business
days of receipt.
In order to receive Cash Dividends on shares of Common Stock acquired via
an Optional Cash Purchase, a Participant's cash must be invested prior to the
next Dividend Record Date.
PURCHASES
16. How many shares of Common Stock will be purchased?
Participant's Plan account will be credited with the number of shares,
including fractions computed to four decimal places, equal to the total amount
invested on their behalf divided by the purchase price. The purchase price of
the shares Participants purchase under the Plan will be as described in Question
17.
17. What is the price of shares purchased for the Plan?
If the Company is then satisfying the requirements of the Plan with shares
of Common Stock purchased on the open market, the price of such shares will be
the weighted average price at which the Plan Administrator acquires the shares
plus applicable brokerage commissions and other fees.
If the Company is then satisfying the requirements of the Plan with
newly-issued shares of Common Stock, the price of such shares will be 100% of
the average of the high and low sales prices of the Company's Common Stock,
based on the NYSE Composite Transactions on the applicable Investment Date. No
brokerage commission will be charged on shares of Common Stock acquired directly
from the Company.
18. Who purchases the shares for the Plan?
The Company, in its sole discretion, may elect to satisfy the requirements
of the Plan with either newly-issued shares of Common Stock, including treasury
stock, or shares of Common Stock purchased on the open market. If the Company
elects to purchase shares of Common Stock on the open market, the Plan
Administrator will make all such purchases necessary to meet the requirements of
the Plan. Other than establishing the length of the Investment Period
incorporated into the Plan, the Company does not exercise any direct or indirect
control over the timing or prices of purchases made by the Plan Administrator on
the open market. If open market purchases are not made, the shares issued under
the Plan will be issued directly from the authorized but unissued shares of
Common Stock of the Company.
13
<PAGE> 16
19. Are any fees or expenses incurred by Participants?
Below is listed a schedule of fees related to transactions under the Plan:
<TABLE>
<S> <C>
Account Set-up (one time charge for
non-stockholders)................................. $7.50 per account enrollment
Brokerage Commissions*.............................. $.03 per share
Sale of Common Stock (partial or full).............. $5.00
Reinvestment of Dividends........................... No Charge
Optional Cash Investments via check or automatic
investment........................................ No Charge
Gift or Transfer of Plan Shares..................... No Charge
Safekeeping of Stock Certificates................... No Charge
Certificate Issuance................................ No Charge
Duplicate Statements
Current year................................... No Charge
Prior Years(s)................................. $25.00 per each year
requested
</TABLE>
- ---------------
* Brokerage commissions apply to all shares purchased on the open market and to
any shares sold.
The service fees and brokerage commissions listed above are subject to
change without further notice to Participants. With the exception of the fee for
prior years' statements, each transaction will be processed net of the
transaction costs applicable to that transaction. The Participant must include a
check or money order payable to the Plan Administrator when requesting prior
years' statements. Per-share charges listed above are for each whole or
fractional share.
SALES, TRANSFERS AND TERMINATION FROM THE PLAN
20. May Participants sell or withdraw all or a portion of their Common Stock
from the Plan?
Yes. Participation in the Plan is entirely voluntary and Participants may
sell or withdraw all or a portion of their Common Stock at any time. Any
Participant may request that a certificate be issued or Common Stock be sold.
The cash proceeds, less any brokerage commission and any other fees, will be
forwarded to the Participant.
Participants selling or withdrawing all shares from the Plan automatically
terminate participation in the Plan. However, withdrawing Participants may elect
to re-enroll at any time. See Question 7.
21. How do Participants sell or withdraw all or a portion of their Common Stock
from the Plan?
You may instruct the Plan Administrator to sell any or all shares held in
your account. Simply complete and sign the tear-off portion of your account
statement and mail the instructions to the Plan Administrator in the envelope
provided. Be certain that all listed Participants sign the instruction form.
14
<PAGE> 17
The Participant can also call the Plan Administrator's toll free number
(1-800-365-6495) to obtain a "PIN" number which will allow the Participant to
make sales by phone.
The Plan Administrator will aggregate all requests to sell shares and then
place a market order with BNYB to sell such shares. The Participant will receive
the proceeds of the sale less any brokerage commission and any other fees as
soon as practicable after the settlement date for the applicable sale.
If a Participant requests a withdrawal, the Participant must specify that
the Plan Administrator issue a certificate for any number of whole shares up to
the full number of shares credited to the Participant's Plan account. See
Question 20.
22. May Participants transfer ownership of shares in the Plan to another person?
Participants may transfer or give as gifts shares in their Plan account at
any time. Transfers can be made in book-entry or certificated form. Simply
contact the Plan Administrator to make your request.
Book-to-book transfers, which involve transferring Common Stock from an
existing Participant account in the Plan to a new Participant account should
follow the steps listed below. There is no service fee for transferring Common
Stock to another Participant.
- Call the Plan Administrator's toll free number 1-800-365-6495 and request
an Authorization Card. Complete the Authorization Card providing the full
registration name, address and social security number of the new
Participant.
- The completed Authorization Card should be sent along with a request
indicating the number of shares (full and fractional) to be transferred
to the new Participant. All Participants in the current account should
sign the instructions and their signatures should be medallion guaranteed
by a bank, broker or financial institution. See Question 27 for a
description of authorized guarantors.
- Unless otherwise directed by receipt of an Authorization Card, the
credited account will automatically be enrolled in the Plan with all
dividends reinvested.
23. What happens to fractional shares when Participants terminate their Plan
accounts?
When Participants terminate their Plan accounts, cash payments representing
any fractional share they hold will be mailed directly to them as soon as
practicable after the settlement for the applicable sale. For Participants
selling whole shares and fractional shares, the price of the fractional share
(per share) will be the price received for the whole shares.
24. Can my participation in the Program be automatically terminated?
If a Plan Participant's account consists of only a fractional share, the
Plan Administrator may close such account by sending the Participant a check for
the value of the fractional share less any brokerage commissions and/or service
fees.
15
<PAGE> 18
REPORTS TO PARTICIPANTS
25. How will Participants be advised of their purchases of shares of Common
Stock and other activity in their Plan accounts?
The Plan Administrator will provide each Participant with a quarterly
statement as soon as practicable following a Dividend Payment Date. PARTICIPANTS
SHOULD RETAIN STATEMENTS AND CONFIRMATIONS IN THEIR PERMANENT RECORDS TO
ESTABLISH THE COST BASIS OF SHARES PURCHASED UNDER THE PLAN FOR INCOME TAX AND
OTHER PURPOSES. In addition, the Company will send Participants written
confirmation of each of their cash investments.
Participants will receive copies of the same communications sent to other
registered shareholders of Common Stock, including the Company's annual report,
notice of annual meeting and proxy statement, and certain income tax
information. All communications will be sent to the Participant's address on the
Plan Administrator's records; therefore, it is imperative that Participants
promptly notify the Plan Administrator of any change of address.
CERTIFICATES
26. Will stock certificates be issued for shares of Common Stock acquired under
the Plan?
Certificates for shares of Common Stock acquired under the Plan will not be
issued. Shares of Common Stock will be registered in the name of a nominee as
agent for the Participant. The number of shares credited to your Plan account
will be shown on your statement of account. This service protects against loss,
theft or destruction of stock certificates.
A certificate for any number of whole shares up to the full number of
shares credited to your Plan account will be issued to you if so requested. See
Question 21. Such request should be mailed to the Plan Administrator at the
address shown in Question 5.
Shares credited to your Plan account may not be pledged. If you wish to
pledge your Common Stock, you must request that a certificate be issued in your
name. A certificate for fractional shares will not be issued under any
circumstances.
27. In whose name will the Plan account be maintained and certificates
registered when issued?
A Plan account for a Participant that enrolls in the Plan will be
maintained in the shareholder's name(s) as shown on the Authorization Card. Upon
request, Common Stock can be transferred and issued in names other than the
account name, subject to compliance with any applicable laws and the payment by
the Participant of any applicable taxes, provided that the request is
accompanied by a duly executed stock power that bears the signature(s) of the
Participant(s) and the signature(s) is/are medallion guaranteed by a commercial
bank or member firm of the NYSE or Chicago Stock Exchange that is a member of
either the STAMP, SEMP or MSP Medallion guarantee programs. The Plan
Administrator recommends that any such request and stock power be sent by
registered or certified mail.
16
<PAGE> 19
SAFEKEEPING SERVICE FOR COMMON STOCK CERTIFICATES
28. What is the purpose of the Plan's free Safekeeping Service for certificates
and how does it work?
The purpose of the Plan's Safekeeping Service is to permit Participants to
deposit Common Stock certificates in their possession with the Plan
Administrator for safekeeping. This service is available, whether or not the
shares were acquired under the Plan, at no cost to Participants. Participants
who want to take advantage of this service should send their certificate(s)
representing registered shares of Common Stock to the Plan Administrator as
described in Question 30. Thereafter, the shares will be held by the Plan
Administrator (or its nominee), and accounted for and reflected on Plan account
statements and otherwise treated in the same manner as shares purchased through
the Plan. Participants are responsible for maintaining their own records of the
cost basis of certificated shares deposited with the Plan Administrator.
Beneficial Holders of Common Stock registered in street or other nominee name
may, in certain cases, be able to electronically transfer their shares from
their existing account to a Plan account. Beneficial Holders who want to take
advantage of this service should contact the Plan Administrator to obtain
transfer instructions.
HOLDERS OF CLASS A STOCK ARE NOT ELIGIBLE TO PARTICIPATE IN THE PLAN'S
SAFEKEEPING SERVICE.
29. What are the advantages of the Plan's Safekeeping Service?
The Plan's Safekeeping Service for stock certificates offers two
significant advantages to Participants. First, the risk associated with the loss
of Participants' stock certificates is eliminated. Second, because shares for
safekeeping are treated in the same manner as shares purchased through the Plan,
they may be sold through the Plan in a convenient and efficient manner. A
quarterly statement will verify the deposit of a Participant's shares.
30. What is the procedure to have Common Stock certificates deposited with the
Plan Administrator?
Participants who wish to deposit Common Stock certificates for safekeeping
should send them, unsigned, to the Plan Administrator with instructions to
deposit them to their Plan accounts. The instructions should include such
Participant's Plan account number and should be signed by the registered
shareholder(s) of the shares being deposited. The signature on the instructions
and the name of the stock certificate must be identical to that on the Plan
account to which such shares are to be credited. The Company and the Plan
Administrator recommend that securities be sent via registered or certified mail
insuring the stock certificates for 2% of the current market value of the shares
represented. In any case, the Participant bears the full risk of the loss in the
event the certificates are lost.
31. May shares remain on deposit if participation in the Plan is discontinued?
Yes. Participants may elect to have their shares of Common Stock held in
the Plan and receive a dividend check on their Common Stock. A yearly statement
detailing Plan holdings will be mailed.
17
<PAGE> 20
CHANGING INVESTMENT OPTIONS
32. May Participants' dividend reinvestment options be changed?
Yes. Participants may make changes to their reinvestment options at any
time. For a description of the options, see Question 8.
Even if a Participant stops reinvesting Cash Dividends on all Common Stock
and/or Class A Stock, the Participant may continue to make Optional Cash
Purchases of Common Stock.
33. How do Participants change their reinvestment options?
Participants may change their reinvestment options at any time by
completing a Change Authorization Card or by submitting a request to the Plan
Administrator. Changes will become effective as soon as practicable after they
are received.
INCOME TAXES
34. What are the federal income tax consequences of participation in the Plan?
In general, Participants in the Plan have the same federal income tax
obligations with respect to their dividends as do shareholders who are not Plan
Participants. This means that dividends reinvested under the Plan are taxable as
having been received even though the Participants did not actually receive them
in cash but, instead, used them to purchase additional shares under the Plan.
The selling of shares by a Participant under the Plan will give rise to
capital gain or loss, provided such shares are held as a capital asset by the
Participant. Any such gain or loss will be measured by the difference between
the proceeds received by the Participant (net of commissions and fees) and the
Participant's tax basis in the shares sold.
The tax basis of shares acquired in the open market is equal to their
purchase price per share (including brokerage commission and other fees). The
purchase price of shares acquired in the open market is determined by
calculating the weighted average price at which the Plan Administrator acquires
the shares, and the purchase price of newly-issued shares acquired through the
Plan is equal to 100% of the average of the high and low sales prices on the
NYSE Composite Transactions on the purchase date.
The foregoing does not purport to be a comprehensive summary of all of the
tax considerations that may be relevant to a Participant in the Plan and does
not constitute tax advice. The summary does not reflect every possible outcome
that could result from participation in the Plan, and does not consider any
possible tax consequences under various state, local, foreign or other tax laws.
Each Participant is urged to consult his or her own tax advisor regarding the
tax consequences applicable to his or her particular situation before
participating in the Plan or disposing of shares purchased under the Plan.
18
<PAGE> 21
35. What provisions are made for foreign shareholders?
In the case of foreign shareholders who have elected to reinvest Cash
Dividends and whose Cash Dividends are subject to United States income tax
withholding, an amount equal to the Cash Dividends less the amount of tax
required to be withheld will be applied to the purchase of shares of Common
Stock.
Optional Cash Purchases received from foreign shareholders must be in U.S.
dollars and will be invested in the same manner as investments from other
Participants.
OTHER INFORMATION
36. What happens when Participants sell or transfer all of the shares of Common
Stock and/or Class A Stock registered in their names but do not withdraw or
sell their Common Stock held in the Plan?
If Participants dispose of all shares of Common Stock registered in their
names, the Plan Administrator will continue to maintain the shares in their Plan
accounts unless otherwise instructed.
37. What happens if the Company issues a stock dividend, declares a stock split,
or has a rights offering?
Any shares of Common Stock distributed by the Company as a stock dividend
on shares credited to Participants' Plan accounts, or on any split of these
shares, will be credited to Participants' Plan accounts. In a rights offering,
Participants' entitlements will be based on their holdings, including those
credited to their Plan accounts. Rights from a rights offering applicable to
shares credited to Participants' Plan accounts, however, will be sold by the
Plan Administrator. The proceeds will be credited to Participants' Plan accounts
and applied as cash investments to purchase shares of Common Stock on the next
Investment Date.
Participants wishing to be in a position to exercise such rights may
withdraw shares credited to their Plan accounts as described under Question 21.
Transaction processing may be curtailed or suspended until the completion
of any stock dividend, stock split or rights offering.
38. How will shares held under the Plan be voted at meetings of shareholders?
For each meeting of shareholders, Participants will receive proxy cards
which will enable them to vote both shares registered in their names and shares
credited to their Plan accounts. All shares credited to an account under the
Plan will be voted by the Plan Administrator as directed. Participants may vote
all such shares in person at the shareholders' meeting.
39. Which state law is applicable to the operation of the Plan?
The Plan is governed by the laws of the State of Delaware.
19
<PAGE> 22
DESCRIPTION OF COMMON STOCK AND CLASS A STOCK
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
DESCRIPTION OF THE COMPANY'S COMMON STOCK AND CLASS A COMMON STOCK CONTAINED IN
PAGES 75-97 OF THE JOINT PROXY STATEMENT OF DELMARVA AND ATLANTIC
ENERGY/PROSPECTUS OF CONECTIV, INC. DATED DECEMBER 26, 1996 AND ANNEXES IV AND V
THERETO (THE "JOINT PROXY"). THE JOINT PROXY IS FILED AS AN EXHIBIT TO THE
REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS IS A PART. CAPITALIZED TERMS IN
THIS SUMMARY ARE DEFINED IN THE JOINT PROXY UNLESS OTHERWISE DEFINED IN THIS
SUMMARY OR IN THIS PROSPECTUS.
The authorized capital stock of the Company which shall be authorized for
issuance is 180 million shares and will consist of (i) 160 million shares of
common stock, of which 150 million shares will be designated as Company Common
Stock having a par value of $0.01 per share, and 10 million shares will be
designated as Class A Common Stock having a par value $0.01 per share, and (ii)
20 million shares of preferred stock, par value $.01 per share ("Preferred
Stock").
Although the Company Charter authorizes the issuance of Preferred Stock,
the Company has no present intention to issue any Preferred Stock.
The authorized and unissued shares of Common Stock and Class A Common Stock
will be available for issuance by the Company from time to time, as determined
by the Board of Directors of the Company (the "Company Board"), for any proper
corporate purpose, which could include raising capital, acquiring other
companies or making investments and providing compensation or benefits to
employees. The issuance of such shares would not be subject to the approval of
the shareholders of the Company unless deemed advisable by the Company Board or
required by applicable law, regulation or stock exchange requirements.
The Class A Common Stock is intended to reflect the performance of Atlantic
Electric and certain of its businesses (as more fully described in the Joint
Proxy and Annexes thereto) (the "Atlantic Utility Group") above certain
financial obligations (as more fully described in the Joint Proxy and Annexes
thereto) since it is the intention of the Company to base the dividends on the
Class A Common Stock on such factor as well as all other relevant considerations
(subject to, and taking into consideration, the provisions relating to dividend
policy set forth in the Merger Agreement). However, holders of the Class A
Common Stock, like the holders of Company Common Stock, will be common
stockholders of the company, will not have any specific rights or claims against
the businesses, assets and liabilities of the Atlantic Utility Group, including
upon liquidation of the Company, other than as common stockholders of the
Company and will be subject to risks associated with an investment in the
Company and all of its businesses, assets and liabilities.
The Company Common Stock will represent the equity value of the Company
that is not represented by the Class A Common Stock.
20
<PAGE> 23
The holders of Common Stock and Class A Common Stock will be entitled to
receive such dividends as the Company Board may from time to time declare,
subject to the rights and preferences of holders of Preferred Stock, if any.
The Company's ability to pay dividends will depend upon the ability of its
subsidiaries (including Atlantic Electric and Delmarva) to pay dividends or
otherwise transfer funds to it. Financing arrangements, charter provisions and
regulatory requirements may impose restrictions on the ability of such
subsidiaries to transfer funds to the Company in the form of cash dividends,
loans, or advances. Such charter provisions include the provisions in the
Restated Certificate and Articles of Incorporation, as amended, of Delmarva (the
"Delmarva Charter") and in the Certificate of Incorporation, as amended, of
Atlantic Electric (the "Atlantic Electric Charter") that, respectively, preclude
the payment of dividends on Delmarva common stock and on Atlantic Electric
common stock if there are any arrearages in payment of dividends on any Delmarva
preferred stock ("Delmarva Preferred Stock") or on any Atlantic Electric
preferred stock ("Atlantic Preferred Stock"), respectively. Under the 1935 Act,
the SEC has the power to preclude the payment of dividends by Delmarva and
Atlantic Electric to the Company or to preclude the payment of dividends by the
Company under certain circumstances.
Pursuant to the Atlantic Electric Charter, Atlantic Electric is subject to
certain limitations on the payment of dividends unless whenever full dividends
have been paid on all Atlantic Preferred Stock for all past quarter-yearly
dividend periods, dividends may be declared and paid by Atlantic Electric on its
common stock as determined by its Board of Directors, but only out of funds
legally available for the payment of dividends. Until cumulative dividends have
been paid on all series of Atlantic Preferred Stock (and until certain required
sinking fund redemptions have been made), no dividend or other distribution may
be paid or declared on the common stock of Atlantic Electric. So long as
Atlantic Preferred Stock is outstanding, Atlantic Electric may not pay dividends
or make any other distributions to the holders of its common stock if after
giving effect to such payments or distributions, the capital of Atlantic
Electric represented by its common stock, together with the its surplus as then
stated on its books of account shall, in the aggregate, be less than the
involuntary liquidation value of the then outstanding shares of Atlantic
Preferred Stock.
The Company shall be entitled to receive such dividends as may be declared
by the Delmarva Board of Directors except that the holders of Delmarva Preferred
Stock have a right to receive cumulative quarterly dividends at the rates set
forth in the title of each series thereof before any dividends are paid to the
holders of Delmarva common stock. In addition, the Delmarva Charter and the
Mortgage and Deed of Trust securing Delmarva's outstanding bonds contain
restrictions on the payment of cash dividends on Delmarva common stock,
including restrictions that would become applicable if Delmarva common stock
equity was less than 25% of Delmarva's total capitalization.
Upon default in the payment of dividends on the Delmarva Preferred Stock in
an amount equivalent to or exceeding one year's dividends, and until all
dividends in default shall have been paid or declared and set apart for payment,
the holders of the Delmarva Preferred Stock are entitled as a class to elect a
majority of the Delmarva Board of Directors and the holders of Delmarva common
stock are
21
<PAGE> 24
entitled as a class to elect the remaining directors. The consent of certain
proportions of the Delmarva Preferred Stock is required to effect a merger,
consolidation or sale or other disposition of all of Delmarva's assets, to
amend, alter, change or repeal any of the express terms of the Delmarva
Preferred Stock in a manner prejudicial to its holders, to increase the
authorized number of shares of, or to create or authorize any kind of stock
ranking prior to or on parity with, or any security convertible into, the
Delmarva Preferred Stock and to issue unsecured debt or additional shares of the
Delmarva Preferred Stock unless certain capitalization and coverage test are
met. In some cases, the right to vote only applies in certain circumstances.
Dividends on Common Stock and Class A Common Stock will be limited to funds
of the Company legally available under Delaware corporate law. The funds of the
Company legally available for dividends on both the Company Common Stock and the
Class A Common Stock will be determined on the basis of the entire Company.
The Company Charter has certain other limitations on the payment of
dividends, as well as provisions concerning share distributions, as more fully
described in the Joint Proxy and the Annexes thereto.
The Company may at any time convert each share of Class A Common Stock into
Company Common Stock equal to the applicable percentage specified in the Company
Charter, at the date of such conversion, of the Market Value Ratio (as defined
in the Company Charter) of the Class A Common Stock to the Company Common Stock
as of the fifth trading day prior to the date of the notice of such conversion.
Any such conversion would dilute the interest of holders of Common Stock.
Holders of Company Common Stock and Class A Common Stock will each be
entitled to one vote per share on all matters submitted to a vote at a meeting
of stockholders, subject to the rights, if any, of holders of Preferred Stock to
vote on a matter as a class or series. The holders of Common Stock and the
holders of Class A Common Stock will not be entitled to cumulative votes for the
election of directors. Except as may be otherwise required by the laws of the
State of Delaware, the holders of Company Common Stock and the holders of Class
A Common Stock will vote as one class for all purposes. Generally, majority of
the aggregate vote of the holders of the Company's capital stock entitled to
vote is required to approve an amendment to the Company Charter. However, a vote
of at least 80% of the aggregate vote of the holders of the Company's capital
stock entitled to vote is required to approve certain Company Charter
amendments, as more fully described in the Joint Proxy and Annexes thereto.
The Company Charter provides for a board of not fewer than nine and not
more than 18 directors, as determined from time to time by resolution of the
Company Board. The Company Charter provides that the directors shall be divided
into three classes (designated Class I, Class II, and Class III) to provide for
staggered terms, with each class consisting, as nearly as possible, of one-third
of the total number of directors.
In the event of liquidation, dissolution or winding up of the Company, and
subject to the prior payment in full of the preferential amounts to which the
Preferred Stock, if any, the holders
22
<PAGE> 25
of the outstanding shares of Common Stock and Class A Common Stock, as if all
such shares were of a single class, will be entitled to receive all the
remaining assets of the Company, divided among the holders of such shares in
accordance with the per share "Liquidation Units" attributable to each class of
such shares.
The holders of Common Stock and/or Class A Common Stock will not have any
preemptive rights to subscribe for any additional shares of Common Stock and/or
Class A Common Stock.
The Company Charter and the Company By-Laws contain provisions that may
have the effect of discouraging persons from acquiring large blocks of capital
stock of the Company or delaying or preventing a change in control of the
Company (as more fully described in the Joint Proxy and Annexes thereto).
USE OF PROCEEDS
The Company has no basis for estimating the number of shares of Common
Stock that ultimately will be purchased from the Company pursuant to the Plan or
the prices at which such shares will be sold. The net proceeds from the sale of
any shares of authorized and unissued stock or treasury stock sold pursuant to
the Plan will be added to the general funds of the Company and used for general
corporate purposes. The Company will receive no proceeds from shares purchased
on the open market pursuant to the Plan.
EXPERTS
The consolidated balance sheets of Delmarva and its subsidiaries as of
December 31, 1996 and 1995, and the related consolidated statements of income,
changes in common stockholders' equity and cash flows for each of the three
years in the period ended December 31, 1996, incorporated by reference in this
Registration Statement, have been incorporated herein in reliance on the report
of Coopers & Lybrand L.L.P., independent accountants, as given on the authority
of that firm as experts in accounting and auditing.
The consolidated financial statements of Atlantic Energy and Atlantic
Electric incorporated herein by reference from their respective Annual Reports
on Form 10-K for the year ended December 31, 1996 have been audited by Deloitte
& Touche LLP, independent auditors, as stated in their reports, which are
incorporated herein by reference, and have been so incorporated in reliance upon
the reports of such firm given upon their authority as experts in accounting and
auditing.
LEGAL OPINION
The legality of the shares of Common Stock offered hereby has been passed
upon for the Company by Peter F. Clark, Associate General Counsel of the
Company.
23
<PAGE> 26
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in connection with
the offering described in this Registration Statement:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee........................ $33,000
Printing Registration Statement, Prospectus and Other Documents............ 17,000
Legal Fees and Expenses, Blue Sky Fees and Expenses, and Services of
Independent Auditors..................................................... 10,000
Stock Exchange Listing Fees................................................ 17,500
Miscellaneous Expenses..................................................... 2,000
-------
Total...................................................................... $79,500
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law permits corporations
organized thereunder to indemnify directors, officers, employees and agents
against liability under certain circumstances. The Company's Restated
Certificate of Incorporation provides that the Company shall indemnify, to the
full extent that it shall have power to do so under applicable law, each
director and officer against all costs and liabilities reasonably incurred by or
imposed on such persons in connection with any litigation in which such director
or officer may be involved by reason of being or having been a director or
officer of the Company. This provision is not exclusive of other rights to which
any director or officer may otherwise be entitled. Under applicable corporate
law, the Company may, upon a determination that such persons have met the
applicable statutory standard of conduct, indemnify directors, officers,
employees and agents against expenses, judgments, fines and settlement payments
reasonably incurred.
Subject to certain exceptions, the directors and all corporate officers of
the Company are insured for not less than $50,000,000 because of any claim or
claims made against them, including claims arising under the Securities Act of
1933 (the "Securities Act") and caused by any negligent act, any error, any
omission or any breach of duty while acting in their capacities as such
directors or officers, and the Company is insured to the extent that it shall
have indemnified the directors and officers for such loss. The premiums for such
insurance are paid by the Company.
ITEM 16. EXHIBITS.
Reference is made to the Exhibit Index filed as a part of this Registration
Statement.
ITEM 17. UNDERTAKINGS
1. The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement; (i) to
include any Prospectus required by Section 10(a)(3) of the Securities Act;
(ii) to reflect in the Prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum range may be
reflected in the form of Prospectus filed with the Commission pursuant to
Rule 424 (b) if, in the aggregate, the change in volume and price represent
no more than a 20% change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement; (iii) to include any material information with
respect to the
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<PAGE> 27
plan of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration Statement;
provided, however, that the undertakings set forth in paragraphs (i) and
(ii) above do not apply if the Registration Statement is on Form S-3 and
the information required to be included in a post-effective amendment by
those clauses is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement.
(b) That, for the purpose of determining liability under the
Securities Act, each post-effective amendment that contains a form of
Prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
2. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new Registration Statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described in Item 15 above, or otherwise,
the Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted against
the Registrant by such director, officer or controlling person in connection
with the securities being registered, the Registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
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<PAGE> 28
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wilmington, State of Delaware, on January 13, 1998.
CONECTIV, Inc.
By: /s/ BARBARA S. GRAHAM
------------------------------------
Name: Barbara S. Graham
Title: President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------- ------------------------------- -----------------
<C> <S> <C>
/s/ BARBARA S. GRAHAM Director and President January 13, 1998
- ------------------------------------- (Principal Executive Officer
(Barbara S. Graham) and Principal Financial
Officer)
Director
- -------------------------------------
(Michael J. Barron)
By: /s/ BARBARA S. GRAHAM
- -------------------------------------
Attorney-in-Fact
January 13, 1998
/s/ JAMES P. LAVIN Vice President January 13, 1998
- ------------------------------------- (Principal Accounting Officer)
(James P. Lavin)
</TABLE>
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<PAGE> 29
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ -----------------------------------------------------------------------------------
<C> <S> <C>
4(a) -- Form of Restated Certificate of Incorporation of Conectiv, Inc. (Incorporated by
reference to the filing on Form S-4 (File No. 333-18843) dated December 26, 1996).
4(b) -- Form of By-Laws to Conectiv, Inc. (Incorporated by reference to the filing on Form
S-4 (File No. 333-18843)dated December 26, 1996).
5 -- Opinion of Peter F. Clark, Esq., with respect to the securities being registered
hereunder.
23(a) -- Consent of Peter F. Clark, Esq. (included in Exhibit 5).
23(b) -- Consent of Coopers & Lybrand, L.L.P., independent accountants.
23(c) -- Consent of Deloitte & Touche LLP, independent auditors.
24 -- Powers of Attorney.
99 -- Joint Proxy Statement of Delmarva Power & Light Company and Atlantic Energy,
Inc./Prospectus of Conectiv, Inc. (Incorporated by reference to the filing on Form
S-4 (File No. 333-18843) dated December 26, 1996).
</TABLE>
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<PAGE> 1
EXHIBIT 5
January 13, 1998
Conectiv, Inc.
800 King Street -- P. O. Box 231
Wilmington, Delaware 19899
Registration Statement on Form S-3 for ConectivDirect(TM)
Ladies and Gentlemen:
I have acted as counsel to Conectiv, Inc. a Delaware corporation (the
"Company"), in connection with its Registration Statement on Form S-3 being
filed with the Securities and Exchange Commission under the Securities Act of
1933, as amended (together with any amendments thereto, the "Registration
Statement"), with respect to 5,000,000 shares of the Common Stock, $.01 par
value per share, of the Company (the "Common Stock"), to be issuable under
ConectivDirect(TM). ConectivDirect(TM) (the "Plan") is a program by which
holders of the Common Stock, holders of the Class A Common Stock, $.01 par value
per share of the Company (the "Class A Common Stock"), and other investors may
purchase shares of the Common Stock and reinvest all or a portion of the cash
dividends paid on the Common Stock and the Class A Common Stock in the Common
Stock.
I have examined the originals or copies of such corporate records,
certificates, and other documents as I have deemed necessary in rendering this
opinion. In my examination of these records, certificates, and documents, I have
assumed the genuineness of all signatures, the legal capacity of all persons,
the authenticity of all original documents, and the conformity of all copies to
the originals of such documents. As to any facts material to this opinion, I
have relied upon the aforesaid records and documents when relevant facts were
not independently established by me.
Based on the foregoing, I am of the opinion that, when (i) the Registration
Statement with respect to 5,000,000 shares of the Common Stock (the "Shares"),
and amendments to such Registration Statement, if any, have become effective,
(ii) the Securities and Exchange Commission has approved the transactions by
which Delmarva Power & Light Company and Atlantic City Electric Company will
become wholly-owned subsidiaries of the Company (the "Merger") under the Public
Utility Holding Company Act of 1935, as amended, (iii) all other federal and
state approvals for the Merger have been received and all federal, state, and
other filings related to the consummation thereof have been made and any
necessary approvals received, and (iv) the Merger has otherwise been
consummated, then:
(1) The Shares may be issued for the purposes and upon the terms and
conditions set forth in the Registration Statement for the Shares and the Plan;
and
(2) When so issued and paid for, the Shares will be validly issued,
fully-paid, and non-assessable capital stock of the Company.
I hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement for the Shares.
Very truly yours,
/s/ PETER F. CLARK
Associate General Counsel for
Conectiv, Inc.
<PAGE> 1
EXHIBIT 23(b)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement
on Form S-3 of our report dated February 7, 1997, on our audits of the
consolidated financial statements of Delmarva Power & Light Company and
Subsidiary companies as of December 31, 1996 and 1995 and for each of the three
years in the period ended December 31, 1996, as listed in Item 14(a) of the 1996
Annual Report of Delmarva Power & Light Company on form 10-K. We also consent to
the reference to our firm under the caption "Experts".
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pa 19103
January 8, 1998
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<PAGE> 1
EXHIBIT 23(c)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Conectiv on Form S-3 of our reports dated February 7, 1997, appearing in the
Annual Reports on Form 10-K of Atlantic Energy, Inc. and Atlantic City Electric
Company for the year ended December 31, 1996, and to the reference to us under
the heading "Experts" in this Registration Statement.
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
January 8, 1998
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<PAGE> 1
EXHIBIT 24
CONECTIV, INC.
POWER OF ATTORNEY
KNOW ALL YEA BY THESE PRESENTS:
WHEREAS, Conectiv, Inc., a Delaware corporation (the "Company"), proposes
to file with the Securities and Exchange Commission, under the Securities Act of
1933, as amended, a registration statement (the "Registration Statement") to
register the issuance of up to five million shares of its common stock, $.01 par
value per share, with regard to ConectivDirect (TM), the Company's dividend
reinvestment and direct stock purchase plan.
NOW, THEREFORE, the undersigned hereby constitutes and appoints L.M.
Walters, J.P. Lavin and J.E. Franklin II and each of them, as attorneys for him
or her in his or her name, place and stead to execute and file the Registration
Statement, including the related prospectus, with respect to the Securities and
thereafter to execute and file an amended registration statement or statements,
prospectus or prospectuses or amendments or supplements thereto, to deregister
securities, to withdraw the Registration Statement or otherwise, hereby giving
and granting to said attorneys full power and authority (including substitution
and revocation) to do and perform all and every act and thing whatsoever
requisite and necessary to be done in and about the premises as fully, to all
intents and purposes, as he or she might or could do if personally present at
the doing thereof, hereby ratifying and confirming all that said attorneys may
or shall lawfully do, or cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand on the
date indicated.
/s/ B.S. GRAHAM
--------------------------------------
Dated: January 8, 1998
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<PAGE> 2
CONECTIV, INC.
POWER OF ATTORNEY
KNOW ALL YEA BY THESE PRESENTS:
WHEREAS, Conectiv, Inc., a Delaware corporation (the "Company"), proposes
to file with the Securities and Exchange Commission, under the Securities Act of
1933, as amended, a registration statement (the "Registration Statement") to
register the issuance of up to five million shares of its common stock, $.01 par
value per share, with regard to ConectivDirect(TM), the Company's dividend
reinvestment and direct stock purchase plan.
NOW, THEREFORE, the undersigned hereby constitutes and appoints B.S.
Graham, L.M. Walters, J.P. Lavin, and J.E. Franklin II and each of them, as
attorneys for him or her in his or her name, place and stead to execute and file
the Registration Statement, including the related prospectus, with respect to
the Securities and thereafter to execute and file an amended registration
statement or statements, prospectus or prospectuses or amendments or supplements
thereto, to deregister securities, to withdraw the Registration Statement or
otherwise, hereby giving and granting to said attorneys full power and authority
(including substitution and revocation) to do and perform all and every act and
thing whatsoever requisite and necessary to be done in and about the premises as
fully, to all intents and purposes, as he or she might or could do if personally
present at the doing thereof, hereby ratifying and confirming all that said
attorneys may or shall lawfully do, or cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand on the
date indicated.
/s/ M.J. BARRON
--------------------------------------
Dated: January 8, 1998
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<PAGE> 3
CONECTIV, INC.
POWER OF ATTORNEY
KNOW ALL YEA BY THESE PRESENTS:
WHEREAS, Conectiv, Inc., a Delaware corporation (the "Company"), proposes
to file with the Securities and Exchange Commission, under the Securities Act of
1933, as amended, a registration statement (the "Registration Statement") to
register the issuance of up to five million shares of its common stock, $.01 par
value per share, with regard to ConectivDirect(TM), the Company's dividend
reinvestment and direct stock purchase plan.
NOW, THEREFORE, the undersigned hereby constitutes and appoints B.S.
Graham, L.M. Walters, and J.E. Franklin II and each of them, as attorneys for
him or her in his or her name, place and stead to execute and file the
Registration Statement, including the related prospectus, with respect to the
Securities and thereafter to execute and file an amended registration statement
or statements, prospectus or prospectuses or amendments or supplements thereto,
to deregister securities, to withdraw the Registration Statement or otherwise,
hereby giving and granting to said attorneys full power and authority (including
substitution and revocation) to do and perform all and every act and thing
whatsoever requisite and necessary to be done in and about the premises as
fully, to all intents and purposes, as he or she might or could do if personally
present at the doing thereof, hereby ratifying and confirming all that said
attorneys may or shall lawfully do, or cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand on the
date indicated.
/s/ J.P. LAVIN
--------------------------------------
Dated: January 8, 1998
II-9
