<PAGE> 1
As Filed with the Securities and
Exchange Commission on September 8, 1998.
File Number 70-9331
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-------------------------------------------------------------------------------
AMENDMENT NO.1 TO
APPLICATION/DECLARATION
ON FORM U-1
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
-------------------------------------------------------------------------------
Conectiv
800 King Street
Wilmington, DE 19899
Atlantic City Electric Company
6801 Black Horse Pike
Egg Harbor Township, NJ 08234
(Name of companies filing this statement and address of
principal executive office)
-------------------------------------------------------------------------------
Conectiv
(Name of top registered holding company parent)
- --------------------------------------------------------------------------------
Louis M. Walters
Treasurer
Conectiv
800 King Street
Wilmington, DE 19899
(Name and address of agents for service)
---------------------------------------------------------------
The Commission is requested to send copies of all notices, orders and
communications in connection with this Application/Declaration to:
Peter F. Clark, Esq. Joyce Koria Hayes, Esq.
Conectiv 7 Graham Court
800 King Street Newark, DE 19711
Wilmington, DE 19899
<PAGE> 2
Item 1 and Exhibit G-1 of the Application-Declaration previously filed are
hereby restated as follow:
Item 1. Description of Proposed Transactions:
Furnish a reasonably detailed and precise description of the proposed
transaction, including a Statement of the reasons why it is desired to
consummate the transaction and the anticipated effect thereof. If the
transaction is part of a general program, describe the program and its
relation to the proposed transaction.
Conectiv, a Delaware corporation, previously filed an
Application/Declaration on Form U-1 with the Securities and Exchange Commission
(the "Commission") requesting authorization under Section 9(a)(2) of the Public
Utility Holding Company Act of 1935, as amended (the "Act"), to consummate
certain transactions resulting in the acquisition by Conectiv of all of the
outstanding voting securities of Delmarva Power & Light Company, a Delaware and
Virginia corporation and an operating public utility company ("Delmarva"), and
Atlantic City Electric Company, a New Jersey corporation and an operating public
utility company ("ACE") (File No. 70-9069). The order approving the merger was
issued on February 25, 1998 (Release No. 26832).
The purpose of this filing is to request Commission authorization (1)
under Sections 6(a), 7, 12(c) and 12(d) of the Act and Rules 43, 44, 51
and 62 for Ace (a) to solicit proxies from the holders of its outstanding
shares of preferred stock for use at a special meeting of its stockholders (the
"Special Meeting") to be held on or about October 14, 1998 to consider a
proposed amendment to ACE's Agreement of Merger dated May 24, 1949 as amended
on April 8, 1952 (the "ACE Charter") and (b) to eliminate in its entirety
Paragraph 7(B)(c) of Article III of the ACE Charter, a provision restricting
the amount of securities representing unsecured indebtedness issuable by ACE
(hereinafter, the "Proposed Amendment"); (2) under Sections 9(a) and 10 and
Rule 51 for Conectiv to purchase pursuant to tender offer as described below,
shares of ACE preferred Stock and (3) under Section 12(c) and Rules 42 and 43
thereunder, for ACE to reacquire the shares from Conectiv. The Commission is
requested to issue a public notice of the proposed transactions and order
authorizing the proxy solicitation on or before September 4, 1998 to allow ACE
sufficient time to solicit proxies in advance of the Special Meeting and to
facilitate the tender offers which may be effected by means of a combined proxy
statement and issuer tender offer statement pursuant to the Securities Exchange
Act of 1934 (the "Exchange Act").
1. The ACE Charter Amendment and Solicitation of Proxies:
ACE has outstanding 18,320,937 shares of common stock, $3.00 par value,
all of which are held by Conectiv. ACE's outstanding preferred stock consists of
300,000 shares of Cumulative Preferred Stock, $100 Par Value issued in six
series and 239,500 shares of Preferred Stock Without Par Value issued in one
series for a total of 539,500 shares outstanding. Under ACE's charter, No Par
Preferred is entitled to the same voting rights and protections as the
Cumulative Preferred Stock. (Shares of Cumulative Preferred Stock $100 par value
and Preferred Stock Without Par Value shall hereinafter be referred to
collectively as "Preferred Stock".)
Article III(7)(B)(c) of the Agreement of Merger dated May 24, 1949 as
amended on April 8, 1952 (the "ACE Charter") provides that:
<PAGE> 3
"III(7)(B) So long as any shares of the Cumulative Preferred Stock are
outstanding, the Corporation shall not without the consent (given by
vote at a meeting called for that purpose) of the holders of a majority
of the total number of shares of the Cumulative Preferred Stock then
outstanding:
. . . .
. . . .
"(C) Issue any unsecured notes, debentures or other securities
representing unsecured indebtedness, or assume any such unsecured
securities, for purposes other than the refunding of outstanding
unsecured securities. . .if, . . .the total principal amount of all
unsecured notes, debentures or other securities representing unsecured
indebtedness issued or assumed by the Corporation and then outstanding.
. . would exceed 20% of the aggregate of (i) the total principal amount
of all bonds or other securities representing secured indebtedness
issued or assumed by the Corporation and then to be outstanding, and
(ii) the capital and surplus of the Corporation as then to be stated on
the books of account of the Corporation;"
As stated above, the Proposed Amendment would eliminate paragraph (c ) in its
entirety. Consent by two-thirds of the aggregate shares of Preferred Stock and
common stock outstanding and by two-thirds of the Preferred Stock outstanding is
required to adopt the Proposed Amendment. Conectiv intends to vote all shares of
common stock in favor of the Proposed Amendment.
If the Proposed Amendment is adopted, ACE proposes to make a special
cash payment of $1 per share to each holder of Preferred Stock who voted his or
her shares in favor of the Proposed Amendment, provided that such shares have
not been tendered pursuant to the concurrent cash tender offer described below.
In the case of the tender, redemption or consent fee, no shareholder will
receive payment if the Proposed Amendment does not receive the requisite
affirmative vote or remove the unsecured debt limitation.
ACE proposes to remove the unsecured debt restriction to enable the
company 1) to issue debt without using the overly restrictive and expensive
First Mortgage Bonds under which secured debt is currently issued, 2) to take
advantage of unsecured financial instruments which are designed to enhance a
company's overall credit structure and allow for better management of the
company's cost of capital and 3) to issue additional interim unsecured debt in
order to obtain the best terms available in the market for permanent capital
financing. Exhibit H compares the value of the existing Preferred Stock
outstanding against a new source of funds based on current market rates for a
15-year period, assuming a 75% success rate on the tenders.
ACE has engaged D.F. King & Co. to act as Information Agent in
connection with the solicitation of proxies for a fee of $12,500 plus unit fees
per preferred shareholder contacted plus reimbursement of reasonable
out-of-pocket expenses.
2. Conectiv Tender Offer.
Concurrently with the ACE proxy solicitation, Conectiv proposes to
undertake a program of acquisition of the Par Preferred through tender offers
(the "Offers") for cash at purchase prices established through market
conditions without premium or through a redemption at $100, the call price, or
par value (hereinafter referred to as the "Purchase Price") as follows:
<PAGE> 4
<TABLE>
<CAPTION>
SERIES SHARES PRINCIPAL AMOUNT SHARES AUTHORIZED
<S> <C> <C> <C>
To be tendered:
4% 77,000 $7,700,000 77,000
4.10% 72,000 7,200,000 72,000
4.35% 15,000 1,500,000 15,000
4.35% 36,000 3,600,000 36,000
4.75% 50,000 3,600,000 50,000
To be redeemed at the call price of $100 per share or tendered if less:
5% 50,000 5,000,000 50,000
(The foregoing series are hereinafter referred to as the "Tendered Series").
To be offered consent fee only:
7.80% 23,950 23,950,000 70,000
(Referred to as the "Nontendered Series").
</TABLE>
The Offers will be subject to terms and conditions set forth in the
Offer to Purchase and Proxy Statement and accompanying Letter of Transmittal
(the "Offer Documents") (See Exhibit B-1). Conectiv anticipates that the Offers
will expire at 5:00 p.m. (New York City time) on the date of the Special
Meeting, (currently anticipated to be October 14, 1998, unless extended as
described below (hereinafter the "Expiration Date")). The Conectiv Offers
consist of separate Offers for each tendered series, with the Offer for any one
series being independent of the Offer for any other series. The applicable
Purchase Price and the other terms and conditions of the Offers apply equally to
all holders of the tendered series. The Offers are not conditioned upon any
minimum number of shares being tendered, but are conditioned, among other
things, on tendering Preferred Shareholders (a) voting in favor of the Proposed
Amendment or (b) giving a proxy for the Proposed Amendment being adopted at the
Special Meeting. To tender shares in accordance with the terms of the Offer
Documents, the tendering Preferred stockholder must either (1) send to The Bank
of New York, in its capacity as depositary for the Offers, a properly completed
and duly executed Letter of Transmittal and Proxy, together with any required
signature guarantees and any other documents required by the Letter of
Transmittal and Proxy, together with any required signature guarantees and any
other documents required by the Letter of Transmittal and Proxy, and either (a)
certificates for the shares to be tendered must be received by the Depositary
at one of its addresses specified in the Offer Documents, or (b) such Shares
must be delivered pursuant to the procedures for book-entry transfer described
in the Offer Documents and a confirmation of such delivery must be received by
the Depositary, in each case by the Expiration Date; or (2) comply with a
guaranteed delivery procedure specified in the Offer Documents. Tenders of
Shares made pursuant to the Offers may be withdrawn at any time prior to the
Expiration Date. Thereafter such tenders are irrevocable, subject to certain
exceptions identified in the Offer Documents.
Conectiv's obligation to proceed with the Offer and to accept for
payment and to pay for any tendered shares is made in accordance with Rule 51
under the Act and is subject to various conditions enumerated in the Offer
Documents, including, among other conditions, that tendering Preferred
Shareholders vote in favor of the Proposed Amendments, that the Proposed
Amendments be adopted at the Special Meeting and that the Commission issue an
order under the Act authorizing the proposed transactions.
<PAGE> 5
At any time and from time to time, Conectiv may extend the Expiration
Date applicable to any series by giving notice of such extension to the
Depositary, without extending the Expiration Date for any other series. During
any such extension, all Shares of the applicable series previously tendered will
remain subject to the Offer, and may be withdrawn at any time prior to the
Expiration Date as extended.
Conversely, Conectiv may elect in its sole discretion to terminate one
or more Offers prior to the scheduled Expiration Date and not to accept for
payment and pay for any shares tendered, subject to the applicable provisions of
Rule 13e-4 under the Securities Exchange Act of 1934 requiring Conectiv either
to pay the consideration offered or to return the shares tendered promptly after
the termination or withdrawal of an Offer, upon the occurrence of any of the
conditions to closing enumerated in the Offer Documents, by giving notice of
such termination to the Depositary and making a public announcement thereof.
Subject to compliance with applicable law, Conectiv further reserves
the right in the Offer Documents, in its sole discretion, to amend one or more
Offers in any respect by making a public announcement thereof. If Conectiv
materially changes the terms of an Offer or the information concerning an Offer
or if Conectiv waives a material condition of an Offer (such as the condition
that the Proposed Amendment be adopted at the Special Meeting), Conectiv will
extend the Expiration Date to the extent required by law.
Shares validly tendered to the Depositary pursuant to an Offer and not
withdrawn in accordance with the procedures set forth in the Offer Documents
will be held by Conectiv until the Expiration Date (or returned in the event the
Offer is terminated). Subject to the terms and conditions of an Offer, as
promptly as practicable after the Expiration Date, Conectiv will accept for
payment (and thereby purchase) and pay for shares validly tendered and not
withdrawn by depositing the Purchase Price with the Depositary, which will act
as agent for tendering Preferred Stockholders for the purpose of receiving
payment from Conectiv and transmitting payment to tendering Preferred
Stockholders. Conectiv will pay all stock transfer taxes, if any, except in
certain limited circumstances as may be described in the Offer Documents.
The Board of Directors of ACE will consider the declaration of
dividends on ACE's capital stock at its meeting on September 24, 1998. The
regular quarterly dividend on the Preferred Stock, if, when and as declared will
be paid on November 2, 1998 to holders of record as of the close of business on
October 2, 1998. A holder of record of shares of Preferred Stock on October 2,
1998 who tenders such shares of Preferred Stock will be entitled to the regular
quarterly dividend, regardless of when such tender is made. Holders of shares of
Preferred Stock purchased pursuant to the Offer will not be entitled to any
dividends in respect of any later dividend periods.
Any holder of Tendered Shares will not be entitled to receive
additional consideration in the form of a Cash Payment. As stated above the
latter payment is payable only to Shares voted by Preferred Stockholders in
favor of the Proposed Amendment provided that such Shares have not been tendered
pursuant to an Offer and the Proposed Amendment is adopted. Preferred
Stockholders who wish to tender their Shares must vote in favor of or consent to
the Proposed Amendment. The Offer is conditioned upon, among other things, the
Proposed Amendment being adopted at the Special Meeting.
<PAGE> 6
If the Proposed Amendment is not adopted at the Special Meeting,
Conectiv may elect, but is not obligated, to waive such condition, subject to
applicable law. In such case, ACE may either adjourn the Special Meeting or call
another special meeting as promptly as practicable and solicit proxies for the
same purpose i.e., securing stockholder approval of the Proposed Amendment. At
such postponed or new meeting, Conectiv would vote any shares acquired by it
pursuant to the Offer or otherwise in favor of the Proposed Amendment.
Morgan Stanley Dean Witter will act as dealer manager ("Dealer
Manager") for Conectiv in connection with the Offers. The Dealer Manager fee is
$0.50 per share for each share of any Preferred stock which is tendered,
accepted for payment and paid for pursuant to the Offers. In addition, a
solicitation fee will be paid to retail brokers equal to $1.50 per share for
each share of Preferred Stock that is tendered, accepted for payment and paid
for pursuant to the Offers; provided, however, that with respect to transactions
for beneficial owners whose ownership equals or exceeds 2,500 shares of a
Tendered Series, Conectiv has agreed to pay a solicitation fee in the amount of
$1.00 per share for each share of tendered Preferred Stock. Any fee payable with
respect to transactions for beneficial owners whose ownership equals or exceeds
2,500 shares of Preferred Stock of any Tendered Series shall be paid in full to
the Dealer Manager unless a soliciting dealer is designated, in which case 80%
of the fee shall be paid to the Dealer Manager and 20% of the fee shall be paid
to the designated soliciting dealer.
The proposed acquisition by Conectiv of shares of Preferred Stock will
benefit Conectiv System utility customers, shareholders and Preferred
Stockholders. The Offers allow Preferred Stockholders who may not favor the
Proposed Amendments an option to sell their Preferred Stock at a price that
Conectiv anticipates will be at market price, but without the usual transaction
costs associated with a sale. As shown on Exhibit H, ACE utility customers and
indirectly Conectiv shareholders will benefit from, among other things, the
lower cost of capital and the tax deductibility of debt versus equity.
3. Reacquisition of Shares by ACE.
If the Proposed Amendment is adopted at the Special Meeting or in any
event no later than December 31, 2000 (1), Conectiv will sell all shares of
Preferred Stock acquired by the Tender Offer and ACE will repurchase the shares
for the applicable Purchase Price plus expenses of sale. ACE will thereupon
retire and cancel the shares. The funds to be used for purposes of the
repurchases and fees will be raised using securities approved for issuance by
the New Jersey Board of Public Utilities ("NJBPU") pursuant to Rule 52 and
perhaps using financing entities as authorized by the order of the NJBPU and
under the terms of the Order of this Commission dated February 26, 1998 (File
No. 70-9095) (HCAR No. 26833).
- --------
(1) If the requisite two-thirds shareholder approval for the charter amendment
is not obtained, Conectiv may nevertheless elect to proceed with the tender.
This permits ACE to postpone the meeting and re-solicit proxies to try to
achieve the requisite two-thirds vote. ACE is not requesting authority from the
Commission to engage in a subsequent solicitation of proxies. Upon any
purchase of Preferred Stock by Conectiv, Conectiv will not make any additional
purchases of Preferred Stock without Commission approval. So long as Conectiv
is the holder of the shares of Preferred Stock, Conectiv may vote the shares at
any adjourned or postponed meeting. In addition, should ACE solicit consents to
a waiver of the unsecured short-term debt restriction, as permitted by the ACE
Charter, Conectiv may issue a consent with respect to any shares of Preferred
Stock it holds. Only consent of a majority is required for a waiver of the
provision. Any such solicitation of a waiver would require pre-approval of the
Commission under the Act.
<PAGE> 7
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS
The following exhibits are made a part of this statement:
(a) Exhibits
B-1 Draft of Offer to Purchase and Proxy Statement for Tendered
Series
B-2 Draft of Proxy Statement for Nontendered shares
F-1 Opinion of Peter F. Clark, Esq.
F-2 Opinion of Pamela D. Joseph, Esq.
G. Form of notice pursuant to Rule 22(f) and order permitting
proxy solicitation
<PAGE> 8
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned companies have duly caused this Amendment No. 1 to be
signed on their behalf by the undersigned thereunto duly authorized.
CONECTIV
ATLANTIC CITY ELECTRIC COMPANY
By: /s/ Louis M. Walters
--------------------
Louis M. Walters
Treasurer
Dated: September 8, 1998
<PAGE> 9
EXHIBIT INDEX
-------------
B-1 Draft of Offer to Purchase and Proxy Statement for Tendered
Series
B-2 Draft of Proxy Statement for Nontendered shares
F-1 Opinion of Peter F. Clark, Esq.
F-2 Opinion of Pamela D. Joseph, Esq.
G. Form of notice pursuant to Rule 22(f) and order permitting
proxy solicitation
<PAGE> 1
Exhibit B-1
DRAFT
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(Pursuant to Section 13(e)(1) of the Securities
Exchange Act of 1934)
------------------------
ATLANTIC CITY ELECTRIC COMPANY
(Name of Issuer)
CONECTIV
(Name of Person(s) Filing Statement)
TITLE CUSIP NUMBER
Atlantic City Electric Company,
Cumulative Preferred Stock, Par Value $100
4% Series 048303200
4.10% Series 048303770
4.35% Series 048303762
4.35% 2nd Series 048303507
4.75% Series 048303309
5% Series 048303788
(Title of Class of Securities)
(CUSIP Number of Class of Securities)
Peter F. Clark, Esq., General Counsel
Conectiv
800 King Street
P.O. Box 231
Wilmington, Delaware 19899
(302) 429-3448
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Person(s) Filing Statement)
The Commission is requested to mail signed copies of all
orders, notices and communications to:
Stephanie M. Scola Vincent Pagano, Jr., Esq.
Manager of Capital Markets Simpson Thacher & Bartlett
Conectiv 425 Lexington Avenue
800 King Street New York, New York 10017
Wilmington, Delaware 19899
September 8, 1998
(Date Tender Offer First Published,
Sent or Given to Security Holders)
<PAGE> 2
CALCULATION OF FILING FEE
TRANSACTION VALUATION* AMOUNT OF FILING FEE
$ $
----------- ---------
* Solely for purposes of calculating the filing fee and computed pursuant to
Section 13(e)(3) of the Securities Exchange Act of 1934, as amended, and
Rule 0-11(b)(1) thereunder, the transaction value equals the total amount
of funds, excluding fees and other expenses, required to purchase all
outstanding shares of each series of securities listed above pursuant to
the Offer described in the Offer to Purchase and Proxy Statement filed as
an Exhibit hereto.
/ / Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was previously
paid. Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: Not applicable
Form or Registration No.: Not applicable
Filing Party: Not applicable
Date Filed: Not applicable
2
<PAGE> 3
ITEM 1. SECURITY AND ISSUER.
(a) Atlantic City Electric Company, a New Jersey corporation (the
"Company"), is the issuer. The Company's principal executive office is at 800
King Street, P.O. Box 231, Wilmington, Delaware 19899.
(b) Incorporated herein by reference to the information appearing on the
front cover of the Offer to Purchase and Proxy Statement, dated September 8,
1998, filed as Exhibit 99(a)(1) to this Issuer Tender Offer Statement on
Schedule 13E-4 (the "Offer to Purchase and Proxy Statement"), and to the
information appearing under the captions "Terms of the Offer -- Number of
Shares; Purchase Prices; Expiration Date" and "Transactions and Agreements
Concerning the Shares" in the Offer to Purchase and Proxy Statement.
(c) Incorporated herein by reference to the information appearing under the
caption "Price Range of Shares; Dividends" in the Offer to Purchase and Proxy
Statement.
(d) Conectiv, a Delaware corporation ("Conectiv"), is the person filing
this Statement and is the owner of 100% of the common stock of the Company.
Conectiv's principal office is at 800 King Street, P.O. Box 231, Wilmington,
Delaware 19899.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) Incorporated herein by reference to the information appearing under
the caption "Source and Amount of Funds" in the Offer to Purchase and Proxy
Statement.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
Incorporated herein by reference to the information appearing under the
caption "Purpose of the Offer; Certain Effects of the Offer" in the Offer to
Purchase and Proxy Statement.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
Incorporated herein by reference to the information appearing under the
caption "Transactions and Agreements Concerning the Shares" in the Offer to
Purchase and Proxy Statement.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE ISSUER'S SECURITIES.
Incorporated herein by reference to the information appearing under the
caption "Transactions and Agreements Concerning the Shares" in the Offer to
Purchase and Proxy Statement.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Incorporated herein by reference to the information appearing under the
caption "Fees and Expenses Paid to Dealers" in the Offer to Purchase and Proxy
Statement.
ITEM 7. FINANCIAL INFORMATION.
(a) Incorporated herein by reference to the financial statements included
in the Annual Report on Form 10-K for the year ended December 31, 1997 of the
Company, to the financial statements included in the Quarterly Reports on Form
10-Q for the quarters ended March 31, 1998 and June 30, 1998 of the Company and
the information appearing under the caption "Summary of Financial Information"
in the Offer to Purchase and Proxy Statement.
(b) Not applicable.
3
<PAGE> 4
ITEM 8. ADDITIONAL INFORMATION.
(a) Not applicable.
(b) Incorporated herein by reference to the information appearing under the
caption "Terms of the Offer - Certain Conditions of the Offer" in the Offer to
Purchase and Proxy Statement.
(c) Not applicable.
(d) Not applicable.
(e) See Exhibits 99(a)(1) and 99(a)(2).
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
<S> <C>
99(a)(1) Offer to Purchase and Proxy Statement, dated September 8. 1998.
99(a)(2) Letter of Transmittal and Proxy for each series of securities.
99(a)(3) Notice of Guaranteed Delivery and Proxy.
99(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees.
99(a)(5) Letter to Clients of Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees.
99(a)(6) Advertisement, dated September 8, 1998.
99(a)(7) Letter to Shareholders, dated September 8, 1998.
99(a)(8) Press Release, dated September 8, 1998.
99(a)(9) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
99(a)(10) Summary Simplified Instructions.
99(a)(11) Form of Follow-up Notice to Shareholders.
99(a)(12) Summary DTC Participant Proxy Form.
99(b) Not applicable.
99(c) Not applicable.
99(d) Tax Opinion of Simpson Thacher & Bartlett.
99(e) Not applicable.
99(f) No applicable.
</TABLE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: September 8, 1998
CONECTIV
By: Louis M. Walters
----------------------------
Louis M. Walters
Treasurer
4
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
<S> <C>
99(a)(1) Offer to Purchase and Proxy Statement, dated September 8, 1998.
99(a)(2) Letter of Transmittal and Proxy for each series of securities.
99(a)(3) Notice of Guaranteed Delivery and Proxy.
99(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees.
99(a)(5) Letter to Clients of Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees.
99(a)(6) Advertisement, dated September 8, 1998.
99(a)(7) Letter to Shareholders, dated September 8, 1998.
99(a)(8) Press Release, dated September 8, 1998.
99(a)(9) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
99(a)(10) Summary Simplified Instructions.
99(a)(11) Form of Follow-up Notice to Shareholders.
99(a)(12) Summary DTC Participant Proxy Form.
99(b) Not applicable.
99(c) Not applicable.
99(d) Tax Opinion of Simpson Thacher & Bartlett.
99(e) Not applicable.
99(f) Not applicable.
</TABLE>
5
<PAGE> 6
EXHIBIT 99(a)(1)
OFFER TO PURCHASE AND PROXY STATEMENT
CONECTIV
OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES OF THE FOLLOWING SERIES OF
CUMULATIVE PREFERRED STOCK OF
<TABLE>
<CAPTION>
<S> <C>
ATLANTIC CITY ELECTRIC COMPANY
77,000 SHARES, CUMULATIVE PREFERRED STOCK, PAR VALUE $100, 4% SERIES AT A PURCHASE
PRICE OF $___ PER SHARE, CUSIP NUMBER 048303200
72,000 SHARES, CUMULATIVE PREFERRED STOCK, PAR VALUE $100, 4.10% SERIES AT A PURCHASE
PRICE OF $____ PER SHARE, CUSIP NUMBER 048303770
15,000 SHARES, CUMULATIVE PREFERRED STOCK, PAR VALUE $100, 4.35% SERIES AT A PURCHASE
PRICE OF $____ PER SHARE, CUSIP NUMBER 048303762
36,000 SHARES, CUMULATIVE PREFERRED STOCK, PAR VALUE $100, 4.35% 2ND SERIES AT A PURCHASE
PRICE OF $____ PER SHARE, CUSIP NUMBER 048303507
50,000 SHARES, CUMULATIVE PREFERRED STOCK, PAR VALUE $100, 4.75% SERIES AT A PURCHASE
PRICE OF $____ PER SHARE, CUSIP NUMBER 048303309
50,000 SHARES, CUMULATIVE PREFERRED STOCK, $100 PAR VALUE, 5% SERIES
AT A PURCHASE PRICE OF $____ PER SHARE, CUSIP NUMBER 048303788
</TABLE>
ATLANTIC CITY ELECTRIC COMPANY
PROXY STATEMENT
WITH RESPECT TO ITS COMMON STOCK AND PREFERRED STOCK
---------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON OCTOBER 14, 1998, UNLESS THE OFFER IS EXTENDED.
---------------------
Conectiv, a Delaware corporation ("Conectiv"), invites the holders of the
4% Series, the 4.10% Series, the 4.35% Series, the 4.35% 2nd Series, the 4.75%
Series and the 5% Series of preferred stock listed above (each a "Series of
Preferred," and the holder thereof a "Preferred Shareholder") of Atlantic City
Electric Company, a New Jersey corporation and direct utility subsidiary of
Conectiv (the "Company"), to tender any and all of their shares of a Series of
Preferred ("Shares") for purchase at the purchase price per Share listed above,
net to the seller in cash, upon the terms and subject to the conditions set
forth in this Offer to Purchase and Proxy Statement and in the accompanying
Letter of Transmittal and Proxy (which together constitute the "Offer").
Conectiv will purchase any and all Shares validly tendered and not withdrawn,
upon the terms and subject to the conditions of the Offer. See "Terms of the
Offer -- Certain Conditions of the Offer" and "Terms of the Offer -- Extension
of Tender Period; Termination; Amendments."
THE OFFER FOR A SERIES OF PREFERRED IS NOT CONDITIONED UPON ANY MINIMUM
NUMBER OF SHARES OF SUCH SERIES OF PREFERRED BEING TENDERED AND IS INDEPENDENT
OF THE OFFER FOR ANY OTHER SERIES OF PREFERRED. PREFERRED SHAREHOLDERS
(INCLUDING PREFERRED SHAREHOLDERS WHO ACQUIRE SHARES SUBSEQUENT TO THE RECORD
DATE (AS HEREINAFTER DEFINED) AND WHO FOLLOW THE REQUIRED PROCEDURES APPLICABLE
TO SUCH SHARES) WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER MUST VOTE
IN FAVOR OF THE PROPOSED AMENDMENT, AS DESCRIBED BELOW. THE OFFER IS CONDITIONED
UPON THE APPROVAL OF THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION")
UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935, AS AMENDED (THE "HOLDING
COMPANY ACT"), AND UPON, AMONG OTHER THINGS, THE PROPOSED AMENDMENT, AS
DESCRIBED BELOW, BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED
BELOW) (UNLESS WAIVED BY CONECTIV). SEE "TERMS OF THE OFFER -- CERTAIN
CONDITIONS OF THE OFFER."
1
<PAGE> 7
IN ORDER TO VALIDLY TENDER SHARES PURSUANT TO THE OFFER, PREFERRED
SHAREHOLDERS WHO ACQUIRE SHARES DURING THE PERIOD BEGINNING TWO DAYS PRIOR TO
THE RECORD DATE AND UP TO AND INCLUDING THE EXPIRATION DATE (AS HEREINAFTER
DEFINED) MUST OBTAIN AN ASSIGNMENT OF PROXY FROM THE SELLER OF SUCH SHARES AND
VOTE SUCH PROXY IN FAVOR OF THE PROPOSED AMENDMENT. IN ORDER TO FACILITATE THE
TRANSFER OF SHARES DURING THE PERIOD DESCRIBED ABOVE, THE SHARES OF EACH SERIES
OF PREFERRED WILL TRADE "WITH PROXY" IN THE OVER-THE-COUNTER MARKET. SETTLEMENT
OF ALL TRADES DURING THE PERIOD DESCRIBED ABOVE SHOULD INCLUDE AN ASSIGNMENT OF
PROXY FROM THE SELLER. SEE "TERMS OF THE OFFER -- PROCEDURE FOR TENDERING
SHARES." FOR FURTHER INFORMATION, CALL THE INFORMATION AGENT (AS HEREINAFTER
DEFINED) OR THE DEALER MANAGER (AS HEREINAFTER DEFINED) OR CONSULT YOUR BROKER
FOR ASSISTANCE.
Concurrently with the Offer, the Board of Directors of the Company is
soliciting proxies from the holders of the Company's outstanding preferred stock
(which, in addition to each Series of Preferred included in this Offer, consists
of the Company's $7.80 No Par Preferred Stock) for use at the Special Meeting of
Shareholders of the Company to be held at Christiana Conference Center, 4100
South Wakefield Drive, Newark, Delaware, on October 14, 1998 at 4:00 p.m.,
Eastern time, or any adjournment or postponement of such meeting (the "Special
Meeting"). The Special Meeting, notice of which is hereby given, is being held
to consider an amendment (the "Proposed Amendment") to the Company's charter
(the "Charter") which would eliminate the provision in the Charter restricting
the ability of the Company to issue unsecured indebtedness. PREFERRED
SHAREHOLDERS (INCLUDING PREFERRED SHAREHOLDERS WHO ACQUIRE SHARES SUBSEQUENT TO
THE RECORD DATE AND WHO FOLLOW THE REQUIRED PROCEDURES APPLICABLE TO SUCH
SHARES) WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER MUST SUBMIT A DULY
COMPLETED, VALID AND UNREVOKED PROXY INDICATING THEIR VOTE IN FAVOR OF THE
PROPOSED AMENDMENT OR INDICATE IN THE ACCOMPANYING LETTER OF TRANSMITTAL AND
PROXY THEIR INTENTION TO VOTE FOR THE PROPOSED AMENDMENT AT THE SPECIAL MEETING.
HOWEVER, PREFERRED SHAREHOLDERS WHO POSSESS THE PROXY WITH RESPECT TO SUCH
SHARES HAVE THE RIGHT TO VOTE FOR THE PROPOSED AMENDMENT REGARDLESS OF WHETHER
THEY TENDER THEIR SHARES. IF THE PROPOSED AMENDMENT IS APPROVED AND ADOPTED BY
THE COMPANY'S SHAREHOLDERS, THE COMPANY WILL MAKE A SPECIAL CASH PAYMENT
("SPECIAL CASH PAYMENT") IN THE AMOUNT EQUAL TO $1.00 PER SHARE FOR EACH SHARE
PROPERLY VOTED IN FAVOR OF THE PROPOSED AMENDMENT, PROVIDED THAT SUCH SHARES
HAVE NOT BEEN TENDERED PURSUANT TO THE OFFER. THOSE PREFERRED SHAREHOLDERS WHO
VALIDLY TENDER THEIR SHARES WILL BE ENTITLED ONLY TO THE PURCHASE PRICE PER
SHARE LISTED ABOVE. TENDERING PREFERRED SHAREHOLDERS WILL NOT BE ENTITLED TO THE
SPECIAL CASH PAYMENT.
---------------------
The Company will pay a solicitation fee for Shares tendered, accepted for
payment and paid for pursuant to the Offer, subject to certain conditions. See
"Fees and Expenses Paid to Dealers."
---------------------
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF
THIS TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED
IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
---------------------
NEITHER CONECTIV, THE COMPANY, THEIR RESPECTIVE BOARDS OF DIRECTORS, NOR
ANY OF THEIR RESPECTIVE OFFICERS MAKES ANY RECOMMENDATION TO ANY PREFERRED
SHAREHOLDER AS TO WHETHER TO TENDER ANY OR ALL SHARES. EACH PREFERRED
SHAREHOLDER MUST MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES
AND, IF SO, HOW MANY SHARES TO TENDER.
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS VOTING FOR THE PROPOSED
AMENDMENT.
---------------------
2
<PAGE> 8
This Offer to Purchase and Proxy Statement is first being mailed on or
about September 8, 1998. The record date with respect to the Shares is September
4, 1998.
--------------------
Each Series of Preferred is traded in the over-the-counter market (the
"OTC") and is not listed on any national securities exchange. On ___________,
1998, the last reported sale price as reported by the National Quotation Bureau,
LLC was $___________ for the 4% Series (on ___________, 1998), $___________ for
the 4.10% Series (on ___________, 1998), $___________ for the 4.35% Series (on
___________, 1998), $___________ for the 4.35% 2nd Series (on ___________,
1998), $___________ for the 4.75% Series (on ___________, 1998) and $___________
for the 5% Series (on ___________, 1998). Preferred Shareholders are urged to
obtain a current market quotation for the Shares.
--------------------
The Dealer Manager for the Offer is:
MORGAN STANLEY DEAN WITTER
The date of this Offer to Purchase and Proxy Statement is September 8, 1998.
3
<PAGE> 9
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF
CONECTIV OR THE COMPANY AS TO WHETHER PREFERRED SHAREHOLDERS SHOULD TENDER OR
REFRAIN FROM TENDERING SHARES OF ANY SERIES OF PREFERRED PURSUANT TO THE OFFER.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN
OR IN THE RELATED LETTER OF TRANSMITTAL AND PROXY. IF GIVEN OR MADE, SUCH
RECOMMENDATION AND SUCH INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY CONECTIV OR THE COMPANY.
IMPORTANT
Any Preferred Shareholder desiring to accept the Offer and tender all or
any portion of his or her Shares should, in addition to voting in favor of the
Proposed Amendment either by executing and returning the enclosed Letter of
Transmittal and Proxy or by voting in person by ballot at the Special Meeting,
either (i) if not the record holder, request his or her broker, dealer,
commercial bank, trust company or nominee to effect the transaction for him or
her, or (ii) if the record holder, complete and sign the Letter of Transmittal
and Proxy, in accordance with the instructions in such Letter of Transmittal and
Proxy, mail or deliver the same and any other required documents to The Bank of
New York (the "Depositary"), and deliver the certificates for such Shares to the
Depositary, along with the Letter of Transmittal and Proxy, or tender such
Shares pursuant to the procedure for book-entry transfer set forth below under
"Terms of the Offer -- Procedure for Tendering Shares," on or prior to the
Expiration Date (as defined below). A Preferred Shareholder whose Shares are
registered in the name of a broker, dealer, commercial bank, trust company or
nominee must contact such broker, dealer, commercial bank, trust company or
nominee if he or she desires to tender such Shares. Any Preferred Shareholder
who desires to tender Shares and whose certificates for such Shares are not
immediately available, or who cannot comply in a timely manner with the
procedure for book-entry transfer, should tender such Shares by following the
procedures for guaranteed delivery set forth below under "Terms of the Offer --
Procedure for Tendering Shares."
EACH SERIES OF PREFERRED HAS ITS OWN LETTER OF TRANSMITTAL AND PROXY, AND
ONLY THE APPLICABLE LETTER OF TRANSMITTAL AND PROXY FOR SUCH TENDERED SERIES OF
PREFERRED OR A NOTICE OF GUARANTEED DELIVERY AND PROXY MAY BE USED TO TENDER
SHARES OF SUCH SERIES OF PREFERRED. A LETTER OF TRANSMITTAL AND PROXY MAY BE
USED TO VOTE IN FAVOR OF THE PROPOSED AMENDMENT EVEN IF NO SHARES ARE BEING
TENDERED.
Questions or requests for assistance may be directed to D.F. King & Co.,
Inc. (the "Information Agent") or to Morgan Stanley & Co. Incorporated ("Morgan
Stanley" or the "Dealer Manager") at their respective telephone numbers and
addresses set forth on the back cover of this Offer to Purchase and Proxy
Statement. Requests for additional copies of this Offer to Purchase and Proxy
Statement, the applicable Letter of Transmittal and Proxy or other tender offer
or proxy materials may be directed to the Information Agent, and such copies
will be furnished promptly at the Company's expense. Preferred Shareholders may
also contact their local broker, dealer, commercial bank or trust company for
assistance concerning the Offer.
2
<PAGE> 10
SUMMARY
The following summary is provided solely for the convenience of the
Preferred Shareholders. This summary is not intended to be complete and is
qualified in its entirety by reference to the full text and more specific
details contained in this Offer to Purchase and Proxy Statement and the Letter
of Transmittal and Proxy and any amendments or supplements hereto or thereto.
Preferred Shareholders are urged to read this Offer to Purchase and Proxy
Statement and the Letter of Transmittal and Proxy in their entirety. Each of the
capitalized terms used in this summary and not defined herein has the meaning
set forth elsewhere in this Offer to Purchase and Proxy Statement.
<TABLE>
<CAPTION>
<S> <C>
Conectiv and the Company.................................... Conectiv, 800 King Street, Wilmington, Delaware 19899, is a
registered holding company under the Holding Company Act and
owns all of the outstanding common stock of its electric
utility subsidiaries, including the Company. The service
area of Conectiv's electric utility subsidiaries covers
portions of Delaware, Maryland, New Jersey and Virginia and,
on an unregulated basis, portions of Pennsylvania. The
Company, 800 King Street, Wilmington, Delaware 19899, is a
utility primarily engaged in the generation, transmission,
distribution and sale of electric power to approximately
480,000 customers in the southern part of New Jersey.
The Series of Preferred Stock............................... 4% Preferred Stock (par value $100 per share)
4.10% Preferred Stock (par value $100 per share)
4.35% Preferred Stock (par value $100 per share)
4.35% 2nd Series Preferred Stock (par value $100 per share)
4.75% Preferred Stock (par value $100 per share)
5% Preferred Stock (par value $100 per share)
The Offer and Purchase Price................................ Offer to purchase any or all Shares of each Series of Preferred
at the price set forth below.
$______ per 4% Share
$______ per 4.10% Share
$______ per 4.35% Share
$______ per 4.35% 2nd Series Share
$______ per 4.75% Share
$______ per 5% Share
Dividends................................................... The Board of Directors of the Company will consider the
declaration of dividends on the Company's capital stock at
its meeting on September 24, 1998. The Regular Quarterly
Dividend on the Company's preferred stock, if, when and as
declared, will be paid on November 2, 1998 to holders of
record as of the close of business on October 2, 1998. A
holder of record of Shares on October 2, 1998 who tenders
Shares will be entitled to the Regular Quarterly Dividend,
regardless of when such tender is made. Holders of Shares
purchased pursuant to the Offer will not be entitled to any
dividends in respect of any later dividend periods.
Independent Offer........................................... The Offer for one Series of Preferred is independent of the
Offer for any other Series of Preferred. The Offer is not
conditioned upon any minimum number of Shares of the
respective Series of Preferred being tendered. Preferred
Shareholders who wish to tender their Shares must vote in
favor of the Proposed Amendment. The Offer is subject to
shareholder approval of the Proposed Amendment and certain
other conditions.
Commission Approval......................................... The Offer is conditioned, among other things, upon the approval
of the Commission under the Holding Company Act.
Expiration Date of the Offer................................ The Offer expires at 5:00 p.m., New York City time, on
October 14, 1998, unless extended (the "Expiration Date").
</TABLE>
4
<PAGE> 11
<TABLE>
<CAPTION>
<S> <C>
How to Tender Shares........................................ Preferred Shareholders (including Preferred Shareholders who
acquire Shares subsequent to the Record Date) who wish to
tender their Shares must vote in favor of the Proposed
Amendment. Preferred Shareholders who purchase or whose
purchase is registered after the Record Date and who wish to
tender their Shares must arrange with their seller to
receive an assignment of proxy from the holder of record on
the Record Date. See "Terms of the Offer -- Procedure for
Tendering Shares." For further information, call the
Information Agent or the Dealer Manager or consult your
broker for assistance.
Withdrawal Rights........................................... Tendered Shares of any Series of Preferred may be withdrawn at
any time until the Expiration Date with respect to such
Series of Preferred and, unless previously accepted for
payment, may also be withdrawn after November 3, 1998. See
"Terms of the Offer -- Withdrawal Rights." The proxy
accompanying any tendered Shares that are withdrawn will not
be considered revoked unless the Preferred Shareholder
specifically revokes such proxy as described herein. See
"Proposed Amendment and Proxy Solicitation -- Proxies."
Purpose of the Offer........................................ Conectiv is making the Offer because Conectiv believes that the
purchase of Shares will provide financial flexibility
beneficial to the Company and indirectly to Conectiv and its
shareholders. In addition, the Offer gives Preferred
Shareholders the opportunity to sell their Shares at a price
which Conectiv believes to be a premium over the market
price and without the usual transaction costs associated
with a market sale. See "Purpose of the Offer; Certain
Effects of the Offer."
Brokerage Commissions....................................... Not payable by Preferred Shareholders.
Solicitation Fee............................................ Conectiv will pay a solicitation fee of an amount equal to
$1.50 per Share for Shares that are tendered, accepted for
payment and paid for pursuant to the Offer (except that for
transactions for beneficial owners whose ownership equals or
exceeds 2,500 Shares, Conectiv will pay a solicitation fee
of an amount equal to $1.00 per Share. A Soliciting Dealer
(as defined herein) will not be entitled to a solicitation
fee for Shares beneficially owned by such Soliciting Dealer.
See "Fees and Expenses Paid to Dealers."
Proposed Amendment.......................................... Concurrently with the Offer, the Board of Directors of the
Company is soliciting proxies from all holders of each
series of the Company's outstanding preferred stock for use
at the Special Meeting of Shareholders of the Company. The
Special Meeting is being held to consider an amendment to
the Company's Charter which would eliminate the provision
restricting the ability of the Company to issue unsecured
indebtedness. If the Proposed Amendment is approved by the
shareholders, such restriction contained in the Charter will
be eliminated with respect to any Shares that remain
outstanding after the consummation of the Offer. See
"Purpose of the Offer: Certain Effects of the Offer."
Record Date with respect to the Shares...................... September 4, 1998.
Special Cash Payment........................................ Preferred Shareholders who possess the proxy with respect to
Shares have the right to vote for the Proposed Amendment
regardless of whether they tender their Shares. If the
Proposed Amendment is approved and adopted by the Company's
shareholders, the Company will make a special cash payment
equal to $1.00 per Share for each Share properly voted in
favor of the Proposed Amendment but not tendered (the
"Special Cash
</TABLE>
5
<PAGE> 12
<TABLE>
<CAPTION>
<S> <C>
Payment"). Preferred Shareholders who validly tender their
Shares will not be entitled to the Special Cash Payment.
Rather, such tendering Preferred Shareholders will only be
entitled to the purchase price per Share listed on the front
cover of this Offer to Purchase and Proxy Statement.
Stock Transfer Tax.......................................... Except as described herein, Conectiv will pay or cause to be
paid any stock transfer taxes with respect to the sale and
transfer of any Shares to it or its order pursuant to the
Offer. See Instruction 6 of the applicable Letter of
Transmittal and Proxy. See "Terms of the Offer -- Acceptance
of Shares for Payment of Purchase Price and Dividends."
Payment Date................................................ Promptly after the Expiration Date or any extension thereof
(the "Payment Date").
Further Information......................................... Additional copies of this Offer to Purchase and Proxy Statement
and the applicable Letter of Transmittal and Proxy may be
obtained by contacting D.F. King & Co., Inc., the
Information Agent, at (800) 431-9629 (toll free) and (212)
269-5550 (banks and brokers). Questions about the Offer
should be directed to Morgan Stanley at (800) 624-1808 (toll
free).
</TABLE>
6
<PAGE> 13
TERMS OF THE OFFER
NUMBER OF SHARES, PURCHASE PRICES; EXPIRATION DATE; DIVIDENDS
Upon the terms and subject to the conditions described herein and in the
applicable Letter of Transmittal and Proxy, Conectiv will purchase any and all
Shares that are validly tendered on or prior to the applicable Expiration Date
(and not properly withdrawn in accordance with "Terms of the Offer -- Withdrawal
Rights") at the purchase price per Share listed on the front cover of this Offer
to Purchase and Proxy Statement for the Shares tendered, net to the seller in
cash. See "Terms of the Offer -- Certain Conditions of the Offer" and "Terms of
the Offer -- Extension of Tender Period; Termination." On September 4, 1998,
there were issued and outstanding 77,000 shares of the 4% Series; 72,000 shares
of the 4.10% Series; 15,000 shares of the 4.35% Series; 36,000 shares of the
4.35% 2nd Series; 50,000 shares of the 4.75% Series and 50,000 shares of the 5%
Series.
THE OFFER FOR A SERIES OF PREFERRED IS NOT CONDITIONED UPON ANY MINIMUM
NUMBER OF SHARES OF SUCH SERIES OF PREFERRED BEING TENDERED AND IS INDEPENDENT
OF THE OFFER FOR ANY OTHER SERIES OF PREFERRED. THE OFFER, HOWEVER, IS
CONDITIONED UPON, AMONG OTHER THINGS, THE PROPOSED AMENDMENT BEING APPROVED AND
ADOPTED AT THE SPECIAL MEETING (UNLESS WAIVED BY CONECTIV). PREFERRED
SHAREHOLDERS (INCLUDING PREFERRED SHAREHOLDERS WHO ACQUIRE SHARES SUBSEQUENT TO
THE RECORD DATE AND WHO FOLLOW THE REQUIRED PROCEDURES APPLICABLE TO SUCH
SHARES) WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER MUST VOTE IN FAVOR
OF THE PROPOSED AMENDMENT, AS DESCRIBED HEREIN. THE OFFER IS SUBJECT TO CERTAIN
OTHER CONDITIONS. SEE "TERMS OF THE OFFER -- CERTAIN CONDITIONS OF THE OFFER."
The Offer is being sent to all persons in whose names Shares are registered
on the books of the Company as of the close of business on September 4, 1998 and
transferees of such persons. Preferred Shareholders who purchase or whose
purchase is registered after the Record Date and who wish to tender in the Offer
must arrange with their seller to receive a proxy from the holder of record on
the Record Date. In order to facilitate receipt of proxies, Shares traded in the
over-the-counter market only shall, during the period which commences September
2, 1998 (two business days prior to the Record Date) and which will end at the
close of business on the Expiration Date, trade with a proxy providing the
transferee with the right to vote such acquired Shares in the proxy
solicitation. No record date is fixed for determining which persons are
permitted to tender Shares. However, only the holders of record, or holders who
acquire an assignment of proxy from such holders, are permitted to vote for the
Proposed Amendment and thereby validly tender Shares pursuant to the Offer. As
such, any person who is the beneficial owner but not the record holder of the
Shares must (i) arrange for the record transfer of Shares prior to tendering or
(ii) direct such record holder to tender the Shares and vote in favor of the
Proposed Amendment on behalf of such beneficial owner.
With respect to each Series of Preferred, the Expiration Date is the later
of 5:00 p.m., New York City time, on October 14, 1998 or the latest time and
date to which the Offer with respect to such Series of Preferred is extended.
Conectiv expressly reserves the right, in its sole discretion, and at any time
and/or from time to time, to extend the period of time during which the Offer
for any Series of Preferred is open, by giving oral or written notice of such
extension to the Depositary and making a public announcement thereof, without
extending the period of time during which the Offer for any other Series of
Preferred is open. There is no assurance whatsoever that Conectiv will exercise
its right to extend the Offer for any Series of Preferred. If Conectiv decides,
in its sole discretion, to (i) decrease the number of Shares of any Series of
Preferred being sought, (ii) increase or decrease the consideration offered in
the Offer to holders of any Series of Preferred or (iii) increase or decrease
the Soliciting Dealers' fees and, at the time that notice of such increase or
decrease is first published, sent or given to holders of such Series of
Preferred in the manner specified herein, the Offer for such Series of Preferred
is scheduled to expire at any time earlier than the tenth business day from the
date that such notice is first so published, sent or given, such Offer will be
extended until the expiration of such ten-business-day period. For purposes of
the Offer, a "business day" means any day other than a Saturday, Sunday or
federal holiday and consists of the time period from 12:00 midnight through
11:59 p.m., New York City time.
NO ALTERNATIVE, CONDITIONAL OR CONTINGENT TENDERS WILL BE ACCEPTED AND NO
TENDERS WILL BE ACCEPTED IN RESPECT OF SHARES FOR WHICH A VOTE IN FAVOR OF THE
PROPOSED AMENDMENT HAS NOT BEEN CAST AT THE SPECIAL MEETING. SUCH VOTE MAY BE
CAST BY PROPERLY COMPLETING THE FORM OF PROXY THAT IS A PART OF THE APPLICABLE
LETTER OF TRANSMITTAL AND PROXY OR BY VOTING IN PERSON BY BALLOT AT THE SPECIAL
MEETING.
7
<PAGE> 14
The Board of Directors of the Company (the "Board") will consider the
declaration of dividends on the Company's capital stock at its September 24,
1998 meeting. The regular quarterly dividend on the Company's preferred stock
(the "Regular Quarterly Dividend"), if, when and as declared, will be paid on
November 2, 1998 to holders of record as of the close of business on October 2,
1998. A holder of record of Shares on October 2, 1998 who tenders Shares will be
entitled to the Regular Quarterly Dividend, regardless of when such tender is
made. Holders of Shares purchased pursuant to the Offer will not be entitled to
any dividends in respect of any later dividend periods.
PROCEDURE FOR TENDERING SHARES
To tender Shares pursuant to the Offer, the tendering owner of Shares
must either:
(a) send to the Depositary (at one of its addresses set forth on the
back cover of this Offer to Purchase and Proxy Statement) a properly
completed and duly executed Letter of Transmittal and Proxy (which will
either deliver such owner's proxy or indicate such owner's intention to
vote at the Special Meeting in person by ballot), together with any
required signature guarantees and any other documents required by the
Letter of Transmittal and Proxy, and either (i) certificates for the Shares
to be tendered must be received by the Depositary at one of such addresses
or (ii) such Shares must be delivered pursuant to the procedures for
book-entry transfer described herein (and a confirmation of such delivery
must be received by the Depositary), in each case by the Expiration Date;
or
(b) comply with the guaranteed delivery procedure described under
"Guaranteed Delivery Procedure" below.
If any of your certificate(s) for Shares have been lost, stolen or
destroyed, please call the Company's shareholder service department ("ACE
Stockholder Services") at (800) 365-6495 (toll free). You may need to complete
an Affidavit of Loss with respect to the lost certificate(s) (which will be
provided by ACE Stockholder Services) and payment of an indemnity bond premium
fee may be required.
IN ORDER TO VALIDLY TENDER SHARES PURSUANT TO THE OFFER, PREFERRED
SHAREHOLDERS WHO ACQUIRE SHARES DURING THE PERIOD BEGINNING TWO DAYS PRIOR TO
THE RECORD DATE AND UP TO AND INCLUDING THE EXPIRATION DATE MUST OBTAIN AN
ASSIGNMENT OF PROXY FROM THE SELLER OF SUCH SHARES AND VOTE SUCH PROXY IN FAVOR
OF THE PROPOSED AMENDMENT. IN ORDER TO FACILITATE THE TRANSFER OF SHARES DURING
THE PERIOD DESCRIBED ABOVE, THE SHARES OF EACH SERIES OF PREFERRED WILL TRADE
"WITH PROXY" IN THE OVER-THE-COUNTER MARKET. SETTLEMENT OF ALL TRADES DURING THE
PERIOD DESCRIBED ABOVE SHOULD INCLUDE AN ASSIGNMENT OF PROXY FROM THE SELLER.
The Shares will trade, during the period which begins two days prior to the
Record Date and which will end at the close of business on the Expiration Date,
in the over-the-counter market under the symbols "____" for the 4% Series,
"____" for the 4.10% Series, "____" for the 4.35% Series, "____" for the 4.35%
2nd Series, "____" for the 4.75% Series and "____" for the 5% Series, indicating
that such shares are trading "with proxy." A Preferred Shareholder who acquires
Shares during this period must obtain, or have its authorized representative
obtain, an assignment of proxy (which is included in the applicable Letter of
Transmittal and Proxy) at settlement from the seller. The National Association
of Securities Dealers, Inc. (the "NASD") and The Depository Trust Company
"(DTC") have issued notices informing their members and participants that the
Shares will trade "with proxy" and that settlement of all trades during the
period described above should include an assignment of proxy from the seller.
FOR FURTHER INFORMATION, CALL THE INFORMATION AGENT OR THE DEALER MANAGER
OR CONSULT YOUR BROKER FOR ASSISTANCE.
A tender of Shares made pursuant to any method of delivery set forth herein
or in the Letter of Transmittal and Proxy will constitute a binding agreement
between the tendering holder and Conectiv upon the terms and subject to the
conditions of the Offer.
The Depositary will establish an account with respect to the Shares at DTC
(the "Book-Entry Transfer Facility") for purposes of the Offer within two
business days after the date of this Offer to Purchase and Proxy Statement, and
any financial institution that is a participant in the system of the Book-Entry
Transfer Facility may make delivery of Shares by causing the Book-Entry Transfer
Facility to transfer such Shares into the Depositary's account in accordance
with the procedures of the Book-Entry Transfer Facility. Although delivery of
Shares may be effected through book-entry transfer, such delivery must be
accompanied by either (i) a properly completed and duly executed Letter of
Transmittal and Proxy, together with any
8
<PAGE> 15
required signature guarantees and any other required documents, or (ii) an
Agent's Message (as hereinafter defined) and, in any case, must be received by
the Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase and Proxy Statement on or prior to 5:00 p.m., New York City time, on
the Expiration Date. DELIVERY OF SUCH LETTER OF TRANSMITTAL AND PROXY AND ANY
OTHER REQUIRED DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY OR TO CONECTIV OR
THE COMPANY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility, received by the Depositary and forming a part of the
book-entry transfer when a tender is initiated, which states that the Book-Entry
Transfer Facility has received an express acknowledgment from a participant
tendering Shares that such participant has received and agrees to be bound by
the terms of the Letter of Transmittal and Proxy and that Conectiv may enforce
such agreement against such participant.
If Shares are registered in the name of a person other than the signatory
on the Letter of Transmittal and Proxy, or if unpurchased Shares are to be
issued to a person other than the registered holder(s), the certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name or names of the registered holder(s) appear on the Shares
with the signature(s) on the Shares or stock powers guaranteed as stated above.
See Instructions 4, 6 and 7 to the Letter of Transmittal and Proxy. Except as
otherwise provided below, all signatures on a Letter of Transmittal and Proxy
must be guaranteed by a firm that is a member of a registered national
securities exchange or the NASD, or by a commercial bank or trust company having
an office or correspondent in the United States that is a participant in an
approved Signature Guarantee Medallion Program (each of the foregoing being
referred to as an "Eligible Institution"). Signatures on a Letter of Transmittal
and Proxy need not be guaranteed if (a) the Letter of Transmittal and Proxy is
signed by the registered owner of the Shares tendered therewith and such owner
has not completed the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" on the Letter of Transmittal and Proxy,
(b) such Shares are tendered for the account of an Eligible Institution or (c)
the Letter of Transmittal and Proxy is being used solely for the purpose of
voting Shares which are not being tendered pursuant to the Offer. See
Instructions 1 and 5 of the Letter of Transmittal and Proxy.
Guaranteed Delivery Procedure. If a Preferred Shareholder desires to tender
Shares pursuant to the Offer and such Preferred Shareholder's certificates are
not immediately available or the procedures for book-entry transfer cannot be
completed on a timely basis or time will not permit all required documents to
reach the Depositary prior to the Expiration Date, such Shares may nevertheless
be tendered if all of the following guaranteed delivery procedures are complied
with:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery and Proxy, substantially in the form provided by Conectiv and the
Company herewith, is received (with any required signatures or signature
guarantees) by the Depositary as provided below on or prior to the
Expiration Date; and
(iii) the certificates for all tendered Shares in proper form for
transfer or a Book-Entry Confirmation with respect to all tendered Shares,
together with a properly completed and duly executed Letter of Transmittal
and Proxy (or, if applicable, an Agent's Message) and any other documents
required by the Letter of Transmittal and Proxy, are received by the
Depositary no later than 5:00 p.m., New York City time, within three
business days after the date of execution of such Notice of Guaranteed
Delivery and Proxy.
THE NOTICE OF GUARANTEED DELIVERY AND PROXY MAY BE DELIVERED BY HAND OR
MAILED TO THE DEPOSITARY AND MUST INCLUDE AN ENDORSEMENT BY AN ELIGIBLE
INSTITUTION IN THE FORM SET FORTH IN SUCH NOTICE OF GUARANTEED DELIVERY AND
PROXY.
In all cases, Shares shall not be deemed validly tendered unless a properly
completed and duly executed Letter of Transmittal and Proxy or, if applicable,
an Agent's Message, is received by the Depositary within the applicable time
limits and vote in favor of the Proposed Amendment in respect of such Shares has
been cast at the Special Meeting either in person or by completion and execution
of the proxy (which proxy must be in the form of proxy that is a part of the
applicable Letter of Transmittal and Proxy).
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer in all cases will be made only after timely
receipt by the Depositary of certificates for (or an Agent's Message with
respect to) such Shares, a Letter of Transmittal and Proxy, properly completed
and duly executed, with any required signature guarantees and all other
documents required by the Letter of Transmittal and Proxy.
9
<PAGE> 16
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE
OPTION AND RISK OF THE PREFERRED SHAREHOLDER. IF DELIVERY IS BY MAIL, REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. BECAUSE IT
IS THE TIME OF RECEIPT, NOT THE TIME OF MAILING, WHICH DETERMINES WHETHER A
TENDER HAS BEEN MADE PRIOR TO THE EXPIRATION DATE, SUFFICIENT TIME SHOULD BE
ALLOWED TO ASSURE TIMELY DELIVERY.
TO AVOID FEDERAL INCOME TAX BACKUP WITHHOLDING EQUAL TO 31% OF THE GROSS
PAYMENTS MADE PURSUANT TO THE OFFER OR, ALTERNATIVELY, THE SPECIAL CASH PAYMENT,
EACH TENDERING PREFERRED SHAREHOLDER AND EACH NON-TENDERING PREFERRED
SHAREHOLDER WHO VOTES FOR THE PROPOSED AMENDMENT MUST NOTIFY THE DEPOSITARY OF
SUCH PREFERRED SHAREHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER AND PROVIDE
CERTAIN OTHER INFORMATION BY PROPERLY COMPLETING AND EXECUTING THE SUBSTITUTE
FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL AND PROXY (OR, IN THE CASE OF A
FOREIGN PREFERRED SHAREHOLDER, MUST COMPLETE AND EXECUTE FORM W-8 OBTAINABLE
FROM THE DEPOSITARY). SEE "CERTAIN FEDERAL INCOME TAX CONSEQUENCES -- BACKUP
WITHHOLDING."
EACH PREFERRED SHAREHOLDER IS URGED TO CONSULT WITH HIS OR HER OWN TAX
ADVISOR REGARDING THE TAX CONSEQUENCES OF THE OFFER.
All questions as to the form of documents and the validity, eligibility
(including the time of receipt) and acceptance for payment of any tender of
Shares will be determined by Conectiv, in its sole discretion, and its
determination will be final and binding. Conectiv reserves the absolute right to
reject any or all tenders of Shares that (i) it determines are not in proper
form or (ii) the acceptance for payment of or payment for which may, in the
opinion of Conectiv's counsel, be unlawful. Conectiv also reserves the absolute
right to waive any defect or irregularity in any tender of Shares. None of
Conectiv, the Company, the Dealer Manager, the Depositary, the Information Agent
or any other person will be under any duty to give notice of any defect or
irregularity in tenders, nor shall any of them incur any liability for failure
to give any such notice.
WITHDRAWAL RIGHTS
ANY SHARES FOR WHICH A VOTE IN FAVOR OF THE PROPOSED AMENDMENT WAS NOT
VALIDLY CAST AT THE SPECIAL MEETING WILL BE DEEMED WITHDRAWN AND NOT VALIDLY
TENDERED BY THE RESPECTIVE PREFERRED SHAREHOLDER.
Tenders of Shares made pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date. Thereafter, such tenders are irrevocable, except
that they may be withdrawn after November 3, 1998, unless previously accepted
for payment as provided in this Offer to Purchase and Proxy Statement.
The proxy accompanying any tendered Shares that are withdrawn will not be
considered revoked unless the Preferred Shareholder specifically revokes such
proxy as described herein. See "Proposed Amendment and Proxy Solicitation -
Proxies."
To be effective, a written notice of withdrawal must be timely received by
the Depositary, at one of its addresses set forth on the back cover of this
Offer to Purchase and Proxy Statement, and must specify the name of the person
who tendered the Shares to be withdrawn and the number of Shares to be
withdrawn. If the Shares to be withdrawn have been delivered to the Depositary,
a signed notice of withdrawal with signatures guaranteed by an Eligible
Institution (except in the case of Shares tendered by an Eligible Institution)
must be submitted prior to the release of such Shares. In addition, such notice
must specify, in the case of Shares tendered by delivery of certificates, the
name of the registered owner (if different from that of the Preferred
Shareholder who tenders) and the serial numbers shown on the particular
certificates evidencing the Shares to be withdrawn or, in the case of Shares
tendered by book-entry transfer, the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares and the
name of the registered holder (if different from the name of such account).
Withdrawals may not be rescinded, and Shares withdrawn will thereafter be deemed
not validly tendered for purposes of the Offer. However, withdrawn Shares may be
re-tendered by again following one of the procedures described in "Terms of the
Offer -- Procedure for Tendering Shares" at any time prior to the Expiration
Date.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by Conectiv, in its sole discretion,
and its determination will be final and binding. None of Conectiv, the Company,
the Dealer Manager, the Depositary, the Information Agent or any other person
will be under any duty to give notification of any defect or irregularity in any
notice of withdrawal or will incur any liability for failure to give any such
notification.
10
<PAGE> 17
ACCEPTANCE OF SHARES FOR PAYMENT AND PAYMENT OF PURCHASE PRICE AND DIVIDENDS
Upon the terms and subject to the conditions of the Offer, and as promptly
as practicable after the Expiration Date, Conectiv will accept for payment (and
thereby purchase) and pay for Shares validly tendered and not withdrawn as
permitted in "Terms of the Offer -- Withdrawal Rights." Thereafter, payment for
all Shares validly tendered on or prior to the Expiration Date and accepted
pursuant to the Offer will be made by the Depositary by check as promptly as
practicable after the Expiration Date. In all cases, payment for Shares accepted
for payment pursuant to the Offer will be made promptly but only after timely
receipt by the Depositary of certificates for such Shares (or of an Agent's
Message), a properly completed and duly executed Letter of Transmittal and Proxy
and any other required documents.
For purposes of the Offer, Conectiv will be deemed to have accepted for
payment (and thereby purchased) Shares that are validly tendered and not
withdrawn as, if and when it gives oral or written notice to the Depositary of
its acceptance for payment of such Shares. Conectiv will pay for Shares that it
has purchased pursuant to the Offer by depositing the purchase price therefor
with the Depositary, which will act as agent for Preferred Shareholders who
tender for the purpose of receiving payment from Conectiv and transmitting
payment to Preferred Shareholders who tender. The Depositary will act as agent
for Preferred Shareholders who tender for the purpose of receiving payment from
the Company and transmitting payment to Preferred Shareholders who tender. Under
no circumstances will interest be paid on amounts to be paid by either the
Company or Conectiv to tendering Preferred Shareholders who tender, regardless
of any delay in making such payment. Certificates for all Shares not validly
tendered will be returned or, in the case of Shares tendered by book-entry
transfer, such Shares will be credited to an account maintained with the
Book-Entry Transfer Facility, as promptly as practicable, without expense to the
Preferred Shareholder who tenders.
If certain events occur, Conectiv may not be obligated to purchase Shares
pursuant to the Offer. See "Terms of the Offer -- Certain Conditions of the
Offer."
Conectiv will pay or cause to be paid any stock transfer taxes with respect
to the sale and transfer of any Shares to it or its order pursuant to the Offer.
If, however, payment of the purchase price is to be made to, or Shares not
tendered or not purchased are to be registered in the name of, any person other
than the registered owner, or if tendered Shares are registered in the name of
any person other than the person signing the Letter of Transmittal and Proxy,
the amount of any stock transfer taxes (whether imposed on the registered owner,
such other person or otherwise) payable on account of the transfer to such
person will be deducted from the purchase price unless satisfactory evidence of
the payment of such taxes, or exemption therefrom, is submitted. See Instruction
6 of the accompanying Letter of Transmittal and Proxy.
CERTAIN CONDITIONS OF THE OFFER
CONECTIV WILL NOT BE REQUIRED TO ACCEPT FOR PAYMENT OR PAY FOR ANY SHARES
TENDERED IF THE PROPOSED AMENDMENT IS NOT APPROVED AND ADOPTED AT THE SPECIAL
MEETING.
IN ORDER TO TENDER THEIR SHARES, PREFERRED SHAREHOLDERS (INCLUDING
PREFERRED SHAREHOLDERS WHO ACQUIRE SHARES SUBSEQUENT TO THE RECORD DATE AND WHO
FOLLOW THE REQUIRED PROCEDURES APPLICABLE TO SUCH SHARES) MUST SUBMIT A DULY
COMPLETED, VALID AND UNREVOKED PROXY INDICATING THEIR VOTE IN FAVOR OF THE
PROPOSED AMENDMENT OR INDICATE IN THE ACCOMPANYING LETTER OF TRANSMITTAL AND
PROXY THEIR INTENTION TO VOTE FOR THE PROPOSED AMENDMENT AT THE SPECIAL MEETING.
PREFERRED SHAREHOLDERS WHO POSSESS THE PROXY WITH RESPECT TO SUCH SHARES HAVE
THE RIGHT TO VOTE FOR THE PROPOSED AMENDMENT REGARDLESS OF WHETHER THEY TENDER
THEIR SHARES. ANY SHARES FOR WHICH A VOTE IN FAVOR OF THE PROPOSED AMENDMENT WAS
NOT VALIDLY CAST AT THE SPECIAL MEETING WILL BE DEEMED WITHDRAWN AND NOT VALIDLY
TENDERED BY THE RESPECTIVE PREFERRED SHAREHOLDER. PREFERRED SHAREHOLDERS WHO
TENDER THEIR SHARES WILL NOT BE ENTITLED TO THE SPECIAL CASH PAYMENT. RATHER,
PREFERRED SHAREHOLDERS WHO TENDER THEIR SHARES WILL BE ENTITLED TO ONLY THE
PURCHASE PRICE PER SHARE LISTED ON THE FRONT COVER OF THIS OFFER TO PURCHASE AND
PROXY STATEMENT.
In addition, notwithstanding any other provision of the Offer, Conectiv
will not be required to accept for payment or pay for any Shares tendered, and
may terminate or amend the Offer (by oral or written notice to the Depositary
and timely public announcement) or may postpone (subject to the requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") for prompt
payment for or return of Shares) the acceptance for payment of, or payment for,
Shares tendered, if at any time on or after September 8, 1998, and at or before
the Expiration Date, the Commission shall have withheld
11
<PAGE> 18
approval, under the Holding Company Act, of the acquisition of the Shares by
Conectiv pursuant to the Offer or approval and adoption of the Proposed
Amendment at the Special Meeting or any of the following shall have occurred
(which shall not have been waived by Conectiv):
(a) there shall have been threatened, instituted or pending any action
or proceeding by any government or governmental, regulatory or
administrative agency, authority or tribunal or any other person, domestic
or foreign, or before any court, authority, agency or tribunal that (i)
challenges the acquisition of Shares pursuant to the Offer or otherwise in
any manner relates to or affects the Offer or (ii) in the reasonable
judgment of Conectiv, would or might materially and adversely affect the
business, condition (financial or otherwise), income, operations or
prospects of Conectiv and its subsidiaries takes as a whole, or otherwise
materially impair in any way the contemplated future conduct of the
business of Conectiv or any of its subsidiaries or materially impair the
Offer's contemplated benefits to Conectiv or the Company.
(b) there shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment, order or
injunction threatened, proposed, sought, promulgated, enacted, entered,
amended, enforced or deemed to be applicable to the Offer or Conectiv or
any of its subsidiaries, by any legislative body, court, authority, agency
or tribunal that, in Conectiv's reasonable judgment, would or might
directly or indirectly (i) make the acceptance for payment of, or payment
for, some or all of the Shares illegal or otherwise restrict or prohibit
consummation of the Offer; (ii) delay or restrict the ability of Conectiv,
or render Conectiv unable, to accept for payment or pay for some or all of
the Shares; (iii) materially impair the contemplated benefits of the Offer
to Conectiv or the Company (including materially increasing the effective
interest cost of certain types of unsecured debt); or (iv) materially
affect the business, condition (financial or otherwise), income, operations
or prospects of Conectiv and its subsidiaries taken as a whole, or
otherwise materially impair in any way the contemplated future conduct of
the business of Conectiv or any of its subsidiaries;
(c) there shall have occurred (i) any significant decrease in the
market price of the Shares; (ii) any change in the general political,
market, economic or financial conditions in the United States or abroad
that, in the reasonable judgment of Conectiv, would or might have a
material adverse effect on Conectiv's business, operations, prospects or
ability to obtain financing generally or the trading in the Shares or other
equity securities of the Company or Conectiv; (iii) the declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States or any limitation on, or any event that, in Conectiv's
reasonable judgment, would or might affect the extension of credit by
lending institutions in the United States; (iv) the commencement of war,
armed hostilities or other international or national calamity directly or
indirectly involving the United States; (v) any general suspension of
trading in, or limitation on prices for, securities on any national
securities exchange or in the over-the-counter market; (vi) in the case of
any of the foregoing existing at the time of the commencement of the Offer,
in Conectiv's reasonable judgment, a material acceleration or worsening
thereof; (vii) any decline in either the Dow Jones Industrial Average or
the Standard and Poor's Composite 500 Stock Index by an amount in excess of
15% measured from the close of business on September 4, 1998; or (viii) a
decline in the ratings accorded any of Conectiv's or the Company's
securities by Standard & Poor's Rating Services ("S&P"), Moody's Investors
Service, Inc. ("Moody's") or Duff & Phelps, Inc. ("D&P") or that S&P,
Moody's or D&P has announced that it has placed any such rating under
surveillance or review with negative implications;
(d) any tender or exchange offer with respect to some or all of the
outstanding preferred stock of the Company (other than the Offer) or other
equity securities of the Company or Conectiv, or a merger, acquisition or
other business combination proposal for Conectiv, shall have been proposed,
announced or made by any person or entity;
(e) there shall have occurred any event or events that have resulted,
or in Conectiv's reasonable judgment may result, in an actual or threatened
change in the business, condition (financial or otherwise), income,
operations, stock ownership or prospects of Conectiv and its subsidiaries;
or
(f) the Company elects not to proceed with the proposed offering of
the trust preferred securities by Atlantic Capital II, a special purpose
business trust controlled by the Company ("Atlantic Capital II"), or the
offering of the trust preferred securities, if commenced, is terminated on
or prior to the Expiration Date;
and, in the sole judgment of Conectiv, such event or events make it undesirable
or inadvisable to proceed with the Offer or with such acceptance for payment or
payment. With respect to the approval of the Commission referenced above, the
Commission must find that the acquisition of the Shares by Conectiv is not
detrimental to the public interest or the interests of investors or consumers,
and that the consideration paid in connection with the acquisition and the
adoption of the Proposed Amendment, including fees, commissions and other
remuneration, is reasonable.
12
<PAGE> 19
The foregoing conditions (including the condition that the Proposed
Amendment be approved and adopted at the Special Meeting) are for the sole
benefit of Conectiv and may be asserted by Conectiv regardless of the
circumstances (including any action or inaction by Conectiv) giving rise to any
such condition, and any such condition may be waived by Conectiv, in whole or in
part, at any time and from time to time in its sole discretion. A decision by
Conectiv to terminate or otherwise amend any Offer, following the occurrence of
any of the foregoing, with respect to one Series of Preferred will not create an
obligation on behalf of Conectiv to terminate or otherwise amend in a similar
manner the Offer with respect to any other Series of Preferred. The failure by
Conectiv at any time to exercise any of the foregoing rights shall not be deemed
a waiver of any such right and each such right shall be deemed an ongoing right
which may be asserted at any time and from time to time. Any determination by
Conectiv concerning the events described above will be final and binding on all
parties.
EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS
Conectiv expressly reserves the right, in its sole discretion, and at any
time and/or from time to time prior to the Expiration Date, to extend the period
of time during which the Offer for any Series of Preferred is open by giving
oral or written notice of such extension to the Depositary, without extending
the period of time during which the Offer for any other Series of Preferred is
open. There can be no assurance, however, that Conectiv will exercise its right
to extend the Offer for any Series of Preferred. During any such extension, all
Shares of the subject Series of Preferred previously tendered will remain
subject to the Offer, except to the extent that such Shares may be withdrawn as
set forth in "Terms of the Offer --Withdrawal Rights."
Conectiv also expressly reserves the right, in its sole discretion, to,
among other things, terminate the Offer and not accept for payment or pay for
any Shares tendered, subject to Rule 13e-4(i)(5) under the Exchange Act, which
requires Conectiv either to pay the consideration offered or to return the
Shares tendered promptly after the termination or withdrawal of the Offer upon
the occurrence of any of the conditions specified in "Terms of the Offer --
Certain Conditions of the Offer" by giving oral or written notice of such
termination to the Depositary, and making a public announcement thereof.
Subject to compliance with applicable law, Conectiv further reserves the
right, in its sole discretion, to amend the Offer in any respect. Amendments to
the Offer may be made at any time and/or from time to time effected by public
announcement thereof, such announcement, in the case of an extension, to be
issued no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled Expiration Date. Any public announcement made
pursuant to the Offer will be disseminated promptly to Preferred Shareholders
affected thereby in a manner reasonably designed to inform such Preferred
Shareholders of such change. Without limiting the manner in which Conectiv may
choose to make a public announcement, except as required by applicable law,
Conectiv shall have no obligation to publish, advertise or otherwise communicate
any such public announcement other than by making a release to the Dow Jones
News Service.
If Conectiv materially changes the terms of the Offer or the information
concerning the Offer, or if it waives a material condition of the Offer,
Conectiv will extend the Offer to the extent required by Rules 13e-4(d)(2) and
13e-4(e)(2) under the Exchange Act. Those rules require that the minimum period
during which the Offer must remain open following material changes in the terms
of the Offer or information concerning the Offer (other than a change in price,
a change in percentage of securities sought or a change in the dealer's
solicitation fee) will depend on the facts and circumstances, including the
relative materiality of such terms or information. The Commission has stated
that, in its view, an offer should remain open for a minimum of five business
days from the date that a notice of such a material change is first published,
sent or given. If the Offer is scheduled to expire at any time earlier than the
expiration of a period ending on the tenth business day from, and including, the
date that Conectiv publishes, sends or gives to Preferred Shareholders a notice
that it will (i) increase or decrease the price it will pay for Shares, (ii)
decrease the percentage of Shares it seeks, or (iii) increase or decrease the
soliciting dealers' fees, the Offer will be extended until the expiration of
such period of ten business days.
THE OFFER FOR EACH SERIES OF PREFERRED IS INDEPENDENT OF THE OFFER FOR ANY
OTHER SERIES OF PREFERRED. IF CONECTIV EXTENDS OR AMENDS ANY OFFER WITH RESPECT
TO ONE SERIES OF PREFERRED FOR ANY REASON, CONECTIV WILL HAVE NO OBLIGATION TO
EXTEND OR AMEND THE OFFER FOR ANY OTHER SERIES OF PREFERRED.
13
<PAGE> 20
PROPOSED AMENDMENT AND PROXY SOLICITATION
INTRODUCTION
This Offer to Purchase and Proxy Statement is first being mailed on or
about September 8, 1998 to the Preferred Shareholders of the Company in
connection with the solicitation of proxies by the Board of Directors of the
Company (the "Board") for use at the Special Meeting. A separate Proxy Statement
is being mailed to the holders of the Company's $7.80 No Par Preferred Stock
that is not included in the Offer.
Preferred Shareholders who wish to tender their Shares pursuant to the
Offer must vote in favor of the Proposed Amendment in person by ballot or by
proxy at the Special Meeting. Only holders of record of the Company's voting
securities at the close of business on the Record Date or persons obtaining a
proxy from the holders of record on the Record Date will be entitled to vote in
person or by proxy at the Special Meeting. If the Proposed Amendment is approved
and adopted by the Company's shareholders, the Company will make a special cash
payment in the amount equal to $1.00 per Share for each Share properly voted in
favor of the Proposed Amendment (the "Special Cash Payment"); provided that such
Shares have not been tendered pursuant to the Offer. If a Preferred Shareholder
votes against the Proposed Amendment or abstains, such Preferred Shareholder
shall not be entitled to the Special Cash Payment (regardless of whether the
Proposed Amendment is approved and adopted). Those Preferred Shareholders who
validly tender their Shares will be entitled to only the purchase price per
Share listed on the front cover of this Offer to Purchase and Proxy Statement.
Preferred Shareholders who validly tender their Shares will not be entitled to
the Special Cash Payment.
VOTING SHARES
With respect to the Company's Cumulative Preferred Stock, $100 par value
and the Company's $7.80 No Par Preferred Stock, September 4, 1998 (the "Record
Date") has been fixed as the record date for the determination of shareholders
entitled to notice of and to vote at the Special Meeting.
The Company's Charter authorizes the issuance of 25,000,000 shares of
common stock, $3 par value, of which 18,320,937 shares are outstanding. All of
such shares are owned by Conectiv.
The Company's Charter also authorizes the issuance of 799,979 shares of
Cumulative Preferred Stock, $100 par value, 2,000,000 shares of $100 No Par
Preferred Stock, and 3,000,000 shares of Preference Stock, without par value, of
which 300,000, 239,500 and 0 shares, respectively, are outstanding on the Record
Date. Such shares are publicly held and vary from each other with respect to
dividend rates, redemption prices and amounts payable on liquidation. All
outstanding shares of the Company's preferred stock are entitled to vote on the
Proposed Amendment as a single class.
VOTING REQUIREMENTS AND PROCEDURES
Adoption of the Proposed Amendment requires the affirmative vote of the
holders of (i) at least two-thirds of the shares of the Company then outstanding
and entitled to vote (i.e., the common stock and the preferred stock) and (ii)
at least two-thirds of the total number of shares of the Company's preferred
stock then outstanding. Abstentions and broker non-votes will have the same
effect as votes against the Proposed Amendment.
CONECTIV, THE OWNER OF ALL OF THE OUTSTANDING SHARES OF COMMON STOCK OF THE
COMPANY, HAS ADVISED THE COMPANY THAT IT INTENDS TO VOTE ALL OF THE OUTSTANDING
SHARES OF COMMON STOCK OF THE COMPANY IN FAVOR OF THE PROPOSED AMENDMENT.
Votes at the Special Meeting will be tabulated preliminarily by the
Depositary and the Information Agent. Inspectors of Election, duly appointed by
the presiding officer of the Special Meeting, will definitively count and
tabulate the votes and determine and announce the results at the Special
Meeting. The Company has no established procedure for confidential voting. There
are no rights of appraisal in connection with the Proposed Amendment.
PROXIES
THE ENCLOSED PROXY, WHICH IS CONTAINED WITHIN THE LETTER OF TRANSMITTAL AND
PROXY (AND THE NOTICE OF GUARANTEED DELIVERY AND PROXY), IS SOLICITED BY THE
COMPANY'S BOARD, WHICH RECOMMENDS VOTING FOR THE PROPOSED AMENDMENT. ALL SHARES
OF THE COMPANY'S COMMON STOCK WILL BE VOTED IN FAVOR OF THE PROPOSED AMENDMENT.
Preferred Shareholders tendering
14
<PAGE> 21
their Shares pursuant to the Offer and voting at the Special Meeting by proxy
must use the proxy that is a part of the applicable Letter of Transmittal and
Proxy. Shares of the Company's outstanding preferred stock represented by
properly executed proxies received at or prior to the Special Meeting will be
voted in accordance with the instructions thereon. If no instructions are
indicated, duly executed proxies will be voted in accordance with the
recommendation of the Board. It is not anticipated that any other matters will
be brought before the Special Meeting. However, the enclosed proxy gives
discretionary authority to the proxy holders named therein should any other
matters be presented at the Special Meeting, and it is the intention of the
proxy holders to act on any other matters in their discretion.
Execution of a proxy will not prevent a shareholder from attending the
Special Meeting and voting in person. Any shareholder giving a proxy may revoke
it at any time before it is voted by delivering to the Secretary of the Company
written notice of revocation bearing a later date than the proxy, by delivering
a duly executed proxy bearing a later date, or by voting in person by ballot at
the Special Meeting. Withdrawal of Shares tendered pursuant to the Offer will
not revoke a properly executed proxy.
The Company will bear the cost of the solicitation of proxies by the Board.
The Company has engaged D.F. King & Co., Inc. to act as Information Agent in
connection with the solicitation of proxies for a fee of $12,500, plus unit fees
per preferred shareholder contacted, plus reimbursement of reasonable
out-of-pocket expenses. Proxies will be solicited by mail or by telephone. In
addition, officers and employees of the Company and its affiliates may also
solicit proxies personally or by telephone; such persons will receiver no
additional compensation for these services. The Information Agent has not been
retained to make, and will not make, solicitations or recommendations, other
than conveying information related to the recommendations of the Board, in
connection with the Proposed Amendment.
The Company has requested that brokerage houses and other custodians,
nominees and fiduciaries forward solicitation materials to the beneficial owners
of shares of the Company's outstanding preferred stock held of record by such
persons and will reimburse such brokers and other fiduciaries for their
reasonable out-of-pocket expenses incurred in connection therewith.
The solicitation of proxies has been approved by the Commission under the
Holding Company Act. An application has been filed with the Commission under the
Holding Company Act requesting approval of the Proposed Amendment and the
acquisition of the Shares by Conectiv pursuant to the Offer.
SPECIAL CASH PAYMENTS
Subject to the terms and conditions set forth in this Offer to Purchase and
Proxy Statement, if (but only if) the Proposed Amendment is approved and adopted
by the shareholders of the Company, the Company will make a Special Cash Payment
to each Preferred Shareholder who voted in favor of the Proposed Amendment, in
person by ballot or by proxy, at the Special Meeting in the amount equal to
$1.00 per Share for each Share held by such Preferred Shareholder which is so
voted, provided that such Shares have not been tendered pursuant to the Offer.
The Company has been advised that there is no controlling precedent under state
law as to the permissibility of its making the Special Cash Payment. Although,
as a result, there can be no assurance as to how a court would rule on the
issue, the Company believes that the Offer is fair to Preferred Shareholders and
has determined to make the Special Cash Payment. SPECIAL CASH PAYMENTS WILL BE
MADE TO PREFERRED SHAREHOLDERS (IF SUCH SHARES HAVE NOT BEEN TENDERED PURSUANT
TO THE OFFER) ONLY IN RESPECT OF EACH SHARE WHICH IS VOTED FOR THE ADOPTION OF
THE PROPOSED AMENDMENT; PROVIDED, HOWEVER, THAT THOSE PREFERRED SHAREHOLDERS WHO
VALIDLY TENDER THEIR SHARES WILL NOT BE ENTITLED TO THE SPECIAL CASH PAYMENT.
RATHER, THOSE PREFERRED SHAREHOLDERS WHO VALIDLY TENDER THEIR SHARES WILL BE
ENTITLED TO ONLY THE PURCHASE PRICE PER SHARE LISTED ON THE FRONT COVER OF THIS
OFFER TO PURCHASE AND PROXY STATEMENT.
Only holders of record of the Company's voting securities at the close of
business on the Record Date or persons obtaining a proxy from the holders of
record on the Record Date will be entitled to vote in person or by proxy at the
Special Meeting. Any beneficial holder of Shares who is not the registered
holder of such Shares as of the Record Date (as would be the case for any
beneficial holder whose Shares are registered in the name of such holder's
broker, dealer, commercial bank, trust company or other nominee) must arrange
with the Preferred Shareholder to execute and deliver a proxy form on such
beneficial owner's behalf. If a beneficial holder of Shares intends to attend
the Special Meeting and vote in person, such beneficial holder must obtain a
legal proxy form from his or her broker, dealer, commercial bank, trust company
or other nominee.
15
<PAGE> 22
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As noted above, Conectiv owns all the outstanding common stock of the
Company.
Pursuant to Section 13(d) of the Exchange Act, a beneficial owner of a
security is any person who directly or indirectly has or shares voting or
investment power over such security. No person or group is known by management
of the Company to be the beneficial owner of more than 5% of the shares of the
Company's preferred stock as of September 4, 1998.
Officers and directors of the Company as a group owned, as of September 4,
1998, less than 1% of the total number of shares of the Company's preferred
stock and of the common stock of Conectiv.
BUSINESS TO COME BEFORE THE SPECIAL MEETING
The following Proposed Amendment to the Charter is the only item of
business expected to be presented at the Special Meeting:
To remove in its entirety Paragraph (7)(B)(c) of Article III of the
Charter, a provision restricting the amount of securities representing unsecured
indebtedness issuable by the Company.
THE FOLLOWING STATEMENTS ARE SUMMARIES OF THE SUBSTANCE OR GENERAL EFFECT
OF PROVISIONS OF THE CHARTER, AND ARE QUALIFIED IN THEIR ENTIRETY BY THE CHARTER
AND PARAGRAPH (7)(B)(c) OF ARTICLE III THEREIN (AS DESCRIBED BELOW). SEE
APPENDIX A HERETO FOR THE TEXT OF THE PROVISION TO BE DELETED.
EXPLANATION OF THE PROPOSED AMENDMENT
Paragraph (7)(B)(c) of Article III of the Charter currently provides that,
so long as any shares of the Company's preferred stock are outstanding, without
the affirmative vote of the holders of at least a majority of the total voting
power of its outstanding shares of preferred stock, the Company shall not issue
or assume any securities representing unsecured indebtedness (other than for the
purpose of refunding outstanding unsecured securities issued by the Company or
redeeming or otherwise retiring outstanding shares of its preferred stock) if,
immediately after such issue or assumption, the total outstanding principal
amount of all securities representing unsecured indebtedness of the Company
would exceed 20% of the aggregate of all existing secured indebtedness of the
Company and the capital and surplus of the Company as stated on the Company's
books (the "Debt Limitation Provision").
The Proposed Amendment, if adopted, would eliminate from the Charter in its
entirety the Debt Limitation Provision. Unless otherwise defined, capitalized
terms used herein are used as defined in the Charter.
Paragraph (7)(B)(c) of Article III of the Charter states:
"(B) So long as any shares of the Cumulative Preferred Stock of any series
are outstanding, the Corporation shall not, without the consent (given by vote
at a meeting called for that purpose) of the holders of a majority of the total
number of shares of the Cumulative Preferred Stock then outstanding:
(c) Issue any unsecured notes, debentures or other securities
representing unsecured indebtedness, or assume any such unsecured
securities, for purposes other than the refunding of outstanding unsecured
securities theretofore issued or assumed by the Corporation or the
redemption or other retirement of outstanding shares of one or more series
of the Cumulative Preferred Stock if, immediately after such issue or
assumption, the total principal amount of all unsecured notes, debentures
or other securities representing unsecured indebtedness issued or assumed
by the Corporation and then outstanding (including unsecured securities
then to be issued or assumed) would exceed twenty per centum (20%) of the
aggregate of (i) the total principal amount of all bonds or other
securities representing secured indebtedness issued or assumed by the
Corporation and then to be outstanding, and (ii) the capital and surplus of
the Corporation as then to be stated on the books of account of the
Corporation."
16
<PAGE> 23
REASONS FOR THE PROPOSED AMENDMENT
The electric utility industry has become, and will continue to be,
increasingly competitive as the result of various factors, including regulatory
and technological developments. Various federal and state regulatory initiatives
designed to promote wholesale and retail competition include, among other
things, proposals that would allow customers to choose their electricity
provider. As these competitive initiatives materialize, the structure of the
utility industry could radically change. The Company believes that having the
flexibility to respond to developments in the industry will be crucial to its
success in the new competitive marketplace.
The Company believes that adoption of the Proposed Amendment is important
to creating the necessary flexibility to respond to any industry developments.
The restriction that would be eliminated by the Proposed Amendment
generally does not burden the industry's new competitors (power marketers,
independent power producers, exempt wholesale generators and owners of
cogeneration facilities), nor even other public utility companies.
Management considers that elimination of the Debt Limitation Provision is
crucial to the Company's financial flexibility and its ability to effect future
capital cost reductions. The deletion of this provision from the Charter will
allow the Company to utilize more fully various unsecured debt alternatives and
thus improve its ability to take full advantage of changing conditions in the
capital markets. The additional flexibility will, for example, permit the
Company to issue long-term debt when, because of mortgage coverage restrictions
or other reasons, it may be unattractive or not possible to issue any additional
first mortgage bonds. In addition, elimination of the Debt Limitation Provision
will afford the Company greater flexibility in the issuance of short-term debt
to meet seasonal cash requirements with what is usually the least expensive form
of capital.
INDEPENDENT PUBLIC ACCOUNTANTS
No representative of PricewaterhouseCoopers, LLP, the Company's independent
public accountants, is expected to be present at the Special Meeting unless
prior to the day of the Special Meeting the Secretary of the Company has
received written notice from a Preferred Shareholder addressed to Moira K.
Donoghue, Secretary, 800 King Street, Wilmington, Delaware 19899, that such
Preferred Shareholder will attend the Special Meeting and wishes to ask
questions of a representative of PricewaterhouseCoopers, LLP.
PRICE RANGE OF SHARES; DIVIDENDS
The 4% Series, 4.10% Series, 4.35% Series, 4.35% 2nd Series, 4.75% Series
and 5% Series are traded in the over-the-counter market under the symbols
"ANTEN," "ANTEZ," "ANTEH," "ANTEO," "ANTEM" and "ANTEL," respectively. The last
reported sale price in the over-the-counter market, as of the close of business
on September 4, 1998, for each of the Series of Preferred is shown on the front
cover of this Offer to Purchase and Proxy Statement. However, Preferred
Shareholders should be aware that the Shares of each Series of Preferred trade
only sporadically and on a limited basis and, therefore, the last reported sales
price may not necessarily reflect the market value of the Shares.
PREFERRED SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS, IF
AVAILABLE, FOR THE SHARES.
The following table sets forth the high and low sales prices of each Series
of Preferred in the over-the-counter market, as reported by the National
Quotation Bureau, LLC, and the cash dividends paid thereon for the fiscal
quarters indicated.
17
<PAGE> 24
DIVIDENDS AND PRICE RANGES OF SERIES OF PREFERRED
BY QUARTERS (1996, 1997 AND 1998)
<TABLE>
<CAPTION>
1996-QUARTERS 1997-QUARTERS 1998-QUARTERS
-------------------- ----------------------------------------------- -------------------
3RD 4TH 1ST 2ND 3RD 4TH 1ST 2ND
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
4% SERIES
Dividends Per Share ....... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Market Price -- $ Per Share
--High ................... 52.375 54.25 55.00 56.50 60.25 62.875 65.125 67.00
--Low .................... 51.375 52.125 52.50 53.50 55.00 57.00 58.25 61.375
4.10% SERIES
Dividends Per Share ....... $ 1.025 $ 1.025 $ 1.025 $ 1.025 $ 1.025 $ 1.025 $ 1.025 $ 1.025
Market Price -- $ Per Share
--High ................... -- -- -- -- -- -- -- --
--Low .................... -- -- -- -- -- -- -- --
4.35% SERIES
Dividends Per Share ....... $1.0875 $1.0875 $1.0875 $1.0875 $1.0875 $1.0875 $1.0875 $1.0875
Market Price -- $ Per Share
--High ................... -- -- -- -- -- -- -- --
--Low .................... -- -- -- -- -- -- -- --
4.35% 2ND SERIES
Dividends Per Share ....... $1.0875 $1.0875 $1.0875 $1.0875 $1.0875 $1.0875 $1.0875 $1.0875
Market Price -- $ Per Share
--High ................... 58.125 -- -- -- -- -- 64.50 63.00
--Low .................... 54.375 -- -- -- -- -- 62.00 62.00
4.75% SERIES
Dividends Per Share ....... $1.1875 $1.1875 $1.1875 $1.1875 $1.1875 $1.1875 $1.1875 $1.1875
Market Price -- $ Per Share
--High ................... 62.00 67.00 70.00 66.875 70.75 75.25 78.25 --
--Low .................... 58.375 62.00 62.50 66.500 58.00 69.375 70.25 --
5% SERIES
Dividends Per Share ....... $ 1.25 $ 1.25 $ 1.25 $ 1.25 $ 1.25 $ 1.25 $ 1.25 $ 1.25
Market Price -- $ Per Share
--High ................... -- -- -- -- -- 64.00 -- 80.375
--Low .................... -- -- -- -- -- 64.00 -- 70.000
</TABLE>
- ------------------
Dash indicates no reported sales during the quarter.
The holders of the Company's preferred stock are entitled to receive, if,
when and as declared by the Board, cash dividends at the annual rate specified
for the preferred stock, and no more, cumulative and payable quarterly with
respect to each calendar quarterly period, on each February 1, May 1, August 1
and November 1. An indenture relating to the proposed issuance of trust
preferred securities by Atlantic Capital II may provide that dividends on the
Company's capital stock may not be paid as long as any payments on the Company's
Deferrable Interest Subordinated Debentures to be issued under such indenture
have been deferred or the Company is in default under such indenture or its
guarantee relating to such trust preferred securities. A similar provision
appears in the indenture relating to trust preferred securities issued by
Atlantic Capital I in October 1996.
To date, the Company has timely made all quarterly dividend payments on the
Company's preferred stock.
The Board of Directors of the Company will consider the declaration of
dividends on the Company's capital stock at its meeting on September 24, 1998.
The Regular Quarterly Dividend for the Company's preferred stock, if, when and
as declared, will be paid on November 2, 1998 to holders of record as of the
close of business on October 2, 1998. A holder of record of Shares on October 2,
1998 who tenders Shares will be entitled to the Regular Quarterly Dividend,
regardless of when such tender is made. Holders of Shares pursuant to the Offer
will not be entitled to any dividends in respect of any later dividend periods.
18
<PAGE> 25
PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER
Conectiv believes that the purchase of the Shares at this time will provide
financial flexibility beneficial to the Company and, indirectly, Conectiv and
its shareholders. In addition, the Offer gives Preferred Shareholders the
opportunity to sell their Shares at a price which Conectiv believes to be a
premium to the market price on the date of the announcement of the Offer and
without the usual transaction costs associated with a sale.
After the consummation of the Offer, Conectiv or the Company may purchase
additional Shares on the open market, in privately negotiated transactions,
through one or more tender offers or otherwise. Any such purchases may be on the
same terms as, or on terms which are more or less favorable to holders of Shares
than, the terms of the Offer. However, Rule 13e-4(f)(6) under the Exchange Act
prohibits Conectiv and its affiliates (including the Company) from purchasing
any Shares of a Series of Preferred, other than pursuant to the Offer, until at
least ten business days after the Expiration Date with respect to such Series of
Preferred. Any future purchases of Shares by Conectiv or the Company would
depend on many factors, including the market price of the Shares, Conectiv's
business and financial position, legal restrictions on Conectiv's ability to
purchase Shares as well as general economic and market conditions.
Preferred Shareholders are not under any obligation to tender Shares
pursuant to the Offer. The Offer does not constitute notice of redemption of any
Series of Preferred pursuant to the Company's Charter, nor does Conectiv or the
Company intend to effect any such redemption by making the Offer. Further, the
Offer does not constitute a waiver by the Company of any option it has to redeem
Shares. The 4% Series, the 4.10% Series, the 4.35% Series, the 4.35% 2nd Series,
the 4.75% Series and 5% Series are presently callable at $105.50 per Share,
$101.00 per Share, $101.00 per Share, $101.00 per Share, $101.00 per Share and
$101.00 per Share, respectively. The Shares of each Series of Preferred have no
preemptive or conversion rights.
Upon liquidation or dissolution of the Company, owners of the Shares would
be entitled to receive an amount equal to the liquidation preference per Share
($100) (except that the amount payable in the event of a voluntary liquidation
shall be equivalent to the then current redemption price per Share) plus all
accrued and unpaid dividends (whether or not earned or declared) thereon to the
date of payment, prior to the payment of any amounts to the holders of the
Company's common stock.
Shares validly tendered to the Depositary pursuant to the Offer and not
withdrawn in accordance with the procedures set forth herein shall be held until
the Expiration Date (or returned to the extent the Offer is terminated in
accordance herewith). To the extent that the Proposed Amendment is approved and
the Shares tendered are accepted for payment and paid for in accordance with the
terms hereof, Conectiv intends to sell its Shares to the Company and, at that
time, it is expected that the Company will retire and cancel the Shares.
However, in the event the Proposed Amendment is not adopted at the Special
Meeting, Conectiv may elect, but is not obligated to, waive such condition,
subject to applicable law. In that case, subsequent to Conectiv's waiver and
purchase of the Shares, the Company anticipates that, as promptly as practicable
thereafter, it would either adjourn the Special Meeting or call another special
meeting of its shareholders and solicit proxies therefrom for an amendment
substantially similar to the Proposed Amendment. At that meeting, Conectiv would
vote any Shares acquired by it pursuant to the Offer or otherwise (together with
its shares of common stock) in favor of such amendment, thereby maximizing the
prospects for the adoption of the amendment. In any case, Conectiv will sell its
Shares to the Company on or prior to December 31, 2000. Until such sale,
Conectiv may consent as a Preferred Shareholder to the issuance of unsecured
indebtedness pursuant to Paragraph (7)(B)(c) of Article III of the Charter in
excess of the limits set forth therein, which issuance requires the consent of
the holders of only a majority of the total number of shares of the Cumulative
Preferred Stock. Any purchase of Shares by Conectiv will reduce the number of
Shares of each of the Series of Preferred that might otherwise trade publicly or
become available for purchase and/or sale and likely will reduce the number of
owners of Shares of each of the Series of Preferred, which could adversely
affect the liquidity and sale value of the Shares not purchased in the Offer.
Liquidity of Trading Market. To the extent that Shares of any Series of
Preferred are tendered and accepted for payment in the Offer, the trading market
for Shares of such Series of Preferred that remain outstanding may be
significantly more limited, which might adversely affect the liquidity, market
value and price volatility of such Shares. Equity securities with a smaller
outstanding market value available for trading (the "float") may command a lower
price than would comparable equity securities with a greater float. Therefore,
the market price for Shares that are not tendered in the Offer may be affected
adversely to the extent that the amount of Shares purchased pursuant to the
Offer reduces the float. The reduced float may also make the trading price of
the Shares that are not tendered and accepted for payment more volatile.
Preferred Shareholders of the remaining Shares may attempt to obtain quotations
for the Shares from their brokers; however, there can be no assurance that any
trading market will exist for such Shares following consummation of the Offer.
To the extent a
19
<PAGE> 26
market continues to exist for the Shares after the offer, the Shares may trade
at a discount compared to present trading depending on the market for Shares
with similar features, the performance of the Company, and other factors. There
is no assurance that an active market in the Shares will exist following
consummation of the Offer and no assurance as to the prices at which the Shares
may then trade.
The purchase of Shares of the Series of Preferred Stock pursuant to the
Offer will reduce the number of holders of Shares of the Series of Preferred
Stock and the number of such Shares that might otherwise trade publicly, and,
depending upon the number of Shares so purchased, such reduction could adversely
affect the liquidity and market value of the remaining Shares of the Series of
Preferred Stock held by the public. The extent of the public market for the
Shares of the Series of Preferred Stock and the availability of price quotations
would, however, depend upon such factors as the number of shareholders remaining
at such time, the interest in maintaining a market in the Shares of the Series
of Preferred Stock on the part of securities firms and other factors. As of
September 4, 1998, there were ______ registered holders of the 4% Series, ______
registered holders of the 4.10% Series, ________ registered holders of the 4.35%
Series, ________ registered holders of the 4.35% 2nd Series, ________ registered
holders of the 4.75% and ________ registered holders of the 5% Series.
Other Potential Effects of the Proposed Amendment on Preferred Shareholders
who do not Tender. If the Proposed Amendment becomes effective, Shares that are
not tendered and purchased pursuant to the Offer will no longer be subject to
the Debt Limitation Provision, which will have been deleted by the Proposed
Amendment. As discussed above, the Debt Limitation Provision places restrictions
on the Company's ability to issue securities representing unsecured
indebtedness. Although the Company's debt instruments may contain certain
restrictions on the Company's ability to issue or assume debt, any such
restrictions may be waived and the increased flexibility afforded the Company by
the deletion of the Debt Limitation Provision may permit the Company to take
certain actions that may increase the credit risks with respect to the Company,
adversely affecting the market price and credit rating of the remaining Shares,
or otherwise be materially adverse to the interests of the remaining Preferred
Shareholders. In addition, to the extent that the Company elects to fund its
purchase of the Shares by issuing additional unsecured debt, the remaining
Preferred Shareholders' relative position in the Company's capital structure
could be perceived to decline, which in turn could adversely affect the market
price and credit rating of the remaining Shares. See, however, "Proposed
Amendment and Proxy Solicitation -- Reasons for the Proposed Amendment."
Following the consummation of the Offer, the business and operations of the
Company are currently expected to be continued substantially as they are
currently being conducted. Except as disclosed in this Offer to Purchase and
Proxy Statement, Conectiv and the Company currently have no plans or proposals
that relate to or would result in: (a) the acquisition by any person or entity
of additional securities of the Company or the disposition of securities of the
Company, other than in the ordinary course of business; (b) an extraordinary
corporate transaction, such as a merger, reorganization or liquidation,
involving the Company; (c) a sale or transfer of a material amount of assets of
the Company; (d) any change in the present Board or management of the Company;
(e) any material change in the present dividend rate or policy, or indebtedness
or capitalization of the Company; (f) any other material change in the Company's
corporate structure or business; (g) any change in the Company's Charter or
by-laws or any actions that may impede the acquisition of control of the Company
by any person; (h) a class of equity securities of the Company being delisted
from a national securities exchange or no longer authorized to be quoted on the
OTC; (i) a class of equity securities of the Company becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Exchange Act; or
(j) the suspension of the Company's obligation to file reports pursuant to
Section 15(d) of the Exchange Act.
However, in order to adapt to the increasingly competitive environment in
which they operate, Conectiv and its operating affiliates, including the
Company, will evaluate and consider a wide array of potential business
strategies. These may include business combinations or acquisitions involving
other utility or non-utility businesses or properties, internal restructurings
or reorganizations involving Conectiv, its operating affiliates or some
combination thereof or dispositions of currently owned properties or currently
operated business units. Furthermore, Conectiv and its operating affiliates,
including the Company, may engage in other new business ventures which arise
from competitive and regulatory changes in the utility industry. Pursuit of any
of the above strategies, or any combination thereof, may significantly affect
the business operations and financial condition of Conectiv and its operating
affiliates, including the Company.
NEITHER CONECTIV, THE COMPANY, THEIR RESPECTIVE BOARDS OF DIRECTORS, NOR
ANY OF THEIR RESPECTIVE OFFICERS MAKE ANY RECOMMENDATION TO ANY PREFERRED
SHAREHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. EACH PREFERRED
SHAREHOLDER MUST MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES
AND, IF SO, HOW MANY SHARES TO TENDER.
20
<PAGE> 27
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following summary describes certain United States federal income tax
considerations with respect to the sale of Shares pursuant to the Offer and the
receipt of Special Cash Payments in connection with the approval and adoption of
the Proposed Amendment. This summary is based on the Internal Revenue Code of
1986, as amended to the date hereof (the "Code"), administrative pronouncements,
judicial decisions and existing and proposed Treasury Regulations, changes to
any of which subsequent to the date of this Offer to Purchase and Proxy
Statement may adversely affect the tax consequences described herein, possibly
on a retroactive basis. This summary is addressed to Preferred Shareholders who
hold Shares as capital assets within the meaning of Section 1221 of the Code.
This summary does not discuss all of the tax consequences that may be relevant
to a Preferred Shareholder in light of such Preferred Shareholder's particular
circumstances or to Preferred Shareholders subject to special rules (including
certain financial institutions, tax-exempt organizations, insurance companies,
dealers in securities or currencies, Preferred Shareholders who acquired their
Shares pursuant to the exercise of stock options or other compensation
arrangements with the Company or Preferred Shareholders holding the Shares as
part of a conversion transaction, as part of a hedge or hedging transaction, or
as a position in a straddle for tax purposes). Preferred Shareholders should
consult their tax advisors with regard to the application of the United States
federal income tax laws to their particular situations as well as any tax
consequences arising under the laws of any state, local or foreign taxing
jurisdiction.
As used herein, the term "United States Preferred Shareholder" means an
owner of a Share that is (i) for United States federal income tax purposes a
citizen or resident of the United States; (ii) a corporation or partnership
created or organized in or under the laws of the United States or of any
political subdivision thereof; (iii) an estate the income of which is subject to
United States federal income taxation regardless of its source; or (iv) a trust
if a court within the United States is able to exercise primary supervision over
the administration of such trust and one or more United States persons have the
authority to control all substantial decisions of such trust. A "Non-United
States Preferred Shareholder" is a Preferred Shareholder that is not a United
States Preferred Shareholder.
Tax Considerations for Tendering Preferred Shareholders
United States Preferred Shareholders. A United States Preferred Shareholder
will recognize gain or loss equal to the difference between the tax basis of
such Preferred Shareholder's Shares and the amount of cash received in exchange
therefor. A United States Preferred Shareholder's gain or loss will be capital
gain or loss. Capital gains of individuals derived in respect of capital assets
held for more than one year are eligible for reduced rates of taxation. The
deductibility of capital losses is subject to limitations.
Non-United States Preferred Shareholders. Any capital gain realized upon
the sale of Shares by a Non-United States Preferred Shareholder pursuant to the
Offer generally will not be subject to United States federal income tax unless
(i) such gain is effectively connected with the conduct of a trade or business
in the United States of the Non-United States Preferred Shareholder or (ii) in
the case of a Non-United States Preferred Shareholder who is an individual, such
individual is present in the United States for 183 days or more in the taxable
year of such sale or exchange and certain other conditions are met. A Non-United
States Preferred Shareholder described in clause (i) above will be taxed on the
net capital gain derived from the sale at applicable graduated individual or
corporate rates. Any such effectively connected income received by a foreign
corporation may be subject to an additional "branch profits tax" at a 30% rate
(or such lower rate as may be specified by an applicable income tax treaty).
Unless an applicable tax treaty provides otherwise, an individual Non-United
States Preferred Shareholder described in clause (ii) above will be subject to a
flat 30% tax on the gain derived from the sale, which may be offset by United
States losses (notwithstanding the fact that the individual is not considered a
resident of the United States).
Tax Considerations for Non-Tendering Preferred Shareholders
United States Preferred Shareholders. There is no direct authority
concerning the federal income tax consequences of the receipt of Special Cash
Payments. The Company will, for information reporting purposes, treat Special
Cash Payments as ordinary non-dividend income to recipient United States
Preferred Shareholders.
Non-United States Preferred Shareholders. The Company will treat Special
Cash Payments paid to a Non-United States Preferred Shareholder as subject to
withholding of United States federal income tax at a 30% rate. However, Special
Cash Payments that are effectively connected with the conduct of a trade or
business by the Non-United States Preferred Shareholder within the United States
are not subject to the withholding tax (provided such Non-United States
Preferred Shareholder provides two originals of IRS Form 4224 stating that such
Special Cash Payments are so effectively connected), but instead are subject to
United States federal income tax on a net income basis at applicable graduated
individual or
21
<PAGE> 28
corporate rates. Any such effectively connected Special Cash Payments received
by a foreign corporation may be subject to an additional "branch profits tax" at
a 30% rate (or such lower rate as may be specified by an applicable income tax
treaty).
A Non-United States Preferred Shareholder eligible for a reduced rate of
United States withholding tax pursuant to an income tax treaty may obtain a
refund of any excess amounts withheld by filing an appropriate claim for refund
with the IRS.
Backup Withholding
ANY UNITED STATES PREFERRED SHAREHOLDER WHO FAILS TO COMPLETE AND SIGN THE
SUBSTITUTE FORM W-9 THAT IS INCLUDED IN THE APPLICABLE LETTER OF TRANSMITTAL
(OR, IN THE CASE OF A NON-UNITED STATES PREFERRED SHAREHOLDER, FORM W-8
OBTAINABLE FROM THE DEPOSITARY) MAY BE SUBJECT TO REQUIRED FEDERAL INCOME TAX
BACKUP WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAYABLE TO SUCH PREFERRED
SHAREHOLDER PURSUANT TO THE OFFER OR, ALTERNATIVELY, THE SPECIAL CASH PAYMENT.
To prevent backup withholding, a United States Preferred Shareholder must
provide the Depositary with the Preferred Shareholder's correct taxpayer
identification number and certify that the Preferred Shareholder is not subject
to backup withholding of federal income tax by completing the Substitute Form
W-9 included in the applicable Letter of Transmittal. Certain Preferred
Shareholders (including, among others, all corporations and certain foreign
shareholders) are exempt from backup withholding. For a corporate United States
Preferred Shareholder to quality for such exemption, such Preferred Shareholder
must provide the Depositary with a properly completed and executed Substitute
Form W-9 attesting to its exempt status. In order for a Non-United States
Preferred Shareholder to quality as an exempt recipient, the Non-United States
Preferred Shareholder must submit a Form W-8, Certificate of Foreign Status,
signed under penalties of perjury, attesting to that Preferred Shareholder's
exempt status. A copy of Form W-8 may be obtained from the Depositary. Any
amounts paid to Non-United States Preferred Shareholders that are subject to the
31% backup withholding, will not be subject to the 30% withholding tax discussed
above under "Tax Considerations for Non-Tendering Preferred Shareholders --
Non-United States Preferred Shareholders."
The amount of any backup withholding from a payment to a Preferred
Shareholder will be allowed as a credit against such Preferred Shareholder's
United States federal income tax liability and may entitle such Preferred
Shareholder to a refund, provided that the required information is furnished to
the IRS.
SOURCE AND AMOUNT OF FUNDS
Assuming that Conectiv purchases all outstanding Shares pursuant to the
Offer, the total amount required by Conectiv to purchase such Shares will be
approximately $____ million, including fees and other expenses. Conectiv intends
to fund the Offer through the use of its general funds (which, in the ordinary
course, include ordinary dividends from the Company) and funds borrowed pursuant
to Conectiv's credit facility.
As described under "Certain Information Regarding Conectiv and the
Company," a Registration Statement has been filed with the Commission with
respect to the offering of trust preferred securities by Atlantic Capital II,
the proceeds of which will be invested in the Junior Subordinated Deferrable
Interest Debentures to be issued by the Company. The Company intends to finance
the purchase of Shares from Conectiv with the proceeds from the sale of the
trust preferred securities, which will be loaned by Atlantic Capital II to the
Company. To the extent that the proceeds of the proposed sale of the trust
preferred securities, if any, are not sufficient, the Company may issue
commercial paper or other debt to finance the purchase of Shares from Conectiv.
TRANSACTIONS AND AGREEMENTS CONCERNING THE SHARES
Based upon Conectiv's and the Company's records and upon information
provided to each of Conectiv and the Company by its directors and executive
officers, neither Conectiv, the Company nor, to the knowledge of either, any of
their subsidiaries, affiliates, directors or executive officers, or associates
of the foregoing, has engaged in any transactions involving Shares during the 40
business days preceding the date hereof. Neither the Company nor, to the
knowledge of either, any of its directors or executive officers or an associate
of the foregoing, is a party to any contract, arrangement, understanding or
relationship relating directly or indirectly to the Offer with any other person
or entity with respect to any securities of the Company.
22
<PAGE> 29
FEES AND EXPENSES PAID TO DEALERS
Dealer Manager Fees. Morgan Stanley will act as Dealer Manager for Conectiv
in connection with the Offer. Conectiv has agreed to pay the Dealer Manager a
fee of an amount equal to $0.50 per Share for any Shares tendered, accepted for
payment and paid for pursuant to the Offer. The Dealer Manager will also be
reimbursed by Conectiv for certain reasonable out-of-pocket expenses and will be
indemnified against certain liabilities, including certain liabilities under the
federal securities laws, in connection with the Offer. The Dealer Manager has
rendered, is currently rendering and is expected to continue to render various
investment banking and other advisory services to Conectiv, the Company and
certain of its affiliates. The Dealer Manager has received, and will continue to
receive, customary compensation from Conectiv, the Company and its affiliates
for such services. Conectiv has retained The Bank of New York as Depositary and
D.F. King & Co., Inc. as Information Agent in connection with the Offer. The
Depositary and Information Agent will receive reasonable and customary
compensation for their services and will also be reimbursed for reasonable
out-of-pocket expenses, including attorney fees. Neither the Depositary nor the
Information Agent has been retained to make solicitation or recommendations in
connection with the Offer.
Solicited Tender Fees. Conectiv will pay a solicitation fee of an amount
equal to $1.50 per Share for Shares that are tendered, accepted for payment and
paid for pursuant to the Offer (except that for transactions for beneficial
owners whose ownership equals or exceeds 2,500 Shares, Conectiv will pay a
solicitation fee of an amount equal to $1.00 per Share). With respect to fees
payable pursuant to this paragraph involving transactions for beneficial owners
whose ownership is less than 2,500 Shares, any fees payable hereunder shall be
paid in full to the Dealer Manager unless a Soliciting Dealer is designated (as
herein described), in which case such fee shall be payable in full to such
designated Soliciting Dealer (which designated Soliciting Dealer may be the
Dealer Manager). With respect to fees payable pursuant to this paragraph
involving transactions for beneficial owners whose ownership equals or exceeds
2,500 Shares, any fees payable hereunder shall be paid in full to the Dealer
Manager unless a Soliciting Dealer is designated, in which case 80% of such fee
shall be paid to the Dealer Manager and 20% of such fee shall be paid to the
designated Soliciting Dealer (which designated Soliciting Dealer may be the
Dealer Manager). A designated Soliciting Dealer is an entity obtaining the
tender, if the Letter of Transmittal and Proxy shall include its name and it is
(a) any broker or dealer in securities, including the Dealer Manager in its
capacity as a dealer or broker, which is a member of any national securities
exchange or of the NASD, (b) any foreign broker or dealer not eligible for
membership in the NASD which agrees to conform to the NASD's Rules of Fair
Practice in soliciting tenders outside the United States to the same extent as
though it were an NASD member, or (c) any bank or trust company.
No such solicitation fee shall be payable to a Soliciting Dealer with
respect to the tender of Shares by a holder unless the Letter of Transmittal and
Proxy accompanying such tender designates such Soliciting Dealer. No such fee
shall be payable to a Soliciting Dealer in respect of Shares registered in the
name of such Soliciting Dealer unless such Shares are held by such Soliciting
Dealer as nominee and such Shares are being tendered for the benefit of one or
more beneficial owners identified on the Letter of Transmittal and Proxy or on
the Notice of Solicited Tenders (included in the materials provided to brokers
and dealers). No such fee shall be payable to a Soliciting Dealer with respect
to the tender of Shares by the holder of record, for the benefit of the
beneficial owner, unless the beneficial owner has designated such Soliciting
Dealer. Beneficial owners should review Instruction 10 and complete the
"Solicited Tenders" box in the accompanying Letter of Transmittal and Proxy to
designate a Soliciting Dealer. If tendered Shares are being delivered by
book-entry transfer, the Soliciting Dealer must return a Notice of Solicited
Tenders to the Depositary within three business days after expiration of the
Offer to receive a solicitation fee. No such fee shall be payable to a
Soliciting Dealer if such Soliciting Dealer is required for any reason to
transfer the amount of such fee to a depositing holder (other than itself). No
such fee shall be paid to a Soliciting Dealer with respect to Shares tendered
for such Soliciting Dealer's own account. No broker, dealer, bank, trust company
or fiduciary shall be deemed to be the agent of Conectiv, the Company, the
Depositary, the Information Agent or the Dealer Manager for purposes of the
Offer.
Soliciting Dealers will include any of the organizations described in
clauses (a), (b) and (c) above even when the activities of such organizations in
connection with the Offer consist solely of forwarding to clients materials
relating to the Offer, including the Letter of Transmittal and Proxy, and
tendering Shares as directed by beneficial owners thereof. No Soliciting Dealer
is required to make any recommendation to holders of Shares as to whether to
tender or refrain from tendering in the Offer. No assumption is made, in making
payment to any Soliciting Dealer, that its activities in connection with the
Offer included any activities other than those described above, and for all
purposes noted in all materials relating to the Offer, the term "solicit" shall
be deemed to mean no more than "processing shares tendered" or "forwarding to
customers materials regarding the Offer."
23
<PAGE> 30
Stock Transfer Taxes. Conectiv will pay all stock transfer taxes, if any,
payable on account of the acquisition of Shares by Conectiv pursuant to the
Offer, except in certain circumstances where special payment or delivery
procedures are utilized pursuant to Instruction 6 of the accompanying Letter of
Transmittal and Proxy.
CERTAIN INFORMATION REGARDING CONECTIV AND THE COMPANY
The Company is an operating utility primarily engaged in the generation,
transmission, distribution and sale of electric power to approximately 480,000
customers in the southern part of New Jersey. All of the common stock of the
Company is owned by Conectiv, a registered holding company under the Holding
Company Act. Conectiv also owns all of the outstanding common stock of Delmarva
Power & Light Company which is an operating public utility company and other
non-regulated energy-related businesses.
Conectiv and the Company are subject to the informational requirements of
the Exchange Act and in accordance therewith file reports and other information
with the Commission. Such reports and other information may be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549; 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511; and Seven World Trade Center, Suite 1300, New
York, New York 10048. Copies of such material can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Commission maintains a Web site at
http://www.sec.gov containing reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission, including Conectiv and the Company. Reports, proxy materials and
other information about Conectiv and the Company are also available at the
offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005. In connection with the Offer Conectiv has filed an Issuer Tender Offer
Statement on Schedule 13E-4 with the Commission that includes certain additional
information relating to the Offer. Conectiv's Schedule 13E-4 will not be
available at the Commission's regional offices.
The Company and Atlantic Capital II have filed a registration statement
(the "Registration Statement") with the Commission with respect to the proposed
offering of up to $50,000,000 aggregate liquidation amount of trust preferred
securities, guaranteed by the Company to the extent set forth in the
Registration Statement. Following the commencement of the Offer, and subject to
market and other conditions, the Company intends that Atlantic Capital II will
effect a public offering of trust preferred securities. As set forth in "Source
and Amount of Funds," the Company intends to finance the purchase of Shares from
Conectiv with the proceeds from the sale of the trust preferred securities,
which will be loaned by Atlantic Capital II to the Company. To the extent that
the proceeds of the proposed sale of the trust preferred securities, if any, are
not sufficient, the Company may issue commercial paper or other debt to finance
the purchase of Shares from Conectiv.
SUMMARY OF FINANCIAL INFORMATION
Set forth below is certain historical financial information of the Company.
The historical financial information (other than the ratios of earnings to fixed
charges) was derived from the audited financial statements included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1997 and
from the unaudited financial statements included in the Company's Quarterly
Report on Form 10-Q for the period ended June 30, 1998.
24
<PAGE> 31
CONDENSED INCOME STATEMENT DATA
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
----------------------- --------------------------
1997 1996 1998 1997
---------- -------- --------- --------
(THOUSANDS OF DOLLARS, EXCEPT RATIOS)
(UNAUDITED)
<S> <C> <C> <C> <C>
Operating Revenues ............................. $1,084,890 $989,647 $479,831 $485,896
Operating Income ............................... 190,052 165,120 28,204 92,389
Net Income ..................................... 85,747 75,017 (1,424) 39,047
Dividends on Preferred Stock ................... 4,821 9,904 2,000 2,820
Net Income after Dividends on Preferred Stock... 80,926 65,113 (3,424) 36,227
Ratio of Earnings to Fixed Charges ............. 2.83 2.58 2.00(1) 2.83(1)
</TABLE>
- ------------------
(1) Ratio for the twelve months ended June 30.
CONDENSED BALANCE SHEET DATA
<TABLE>
<CAPTION>
AT DECEMBER 31, AT JUNE 30,
------------------------- -------------------------
1997 1996 1998 1997
---------- ---------- ---------- ----------
(THOUSANDS OF DOLLARS)
(UNAUDITED)
<S> <C> <C> <C> <C>
ASSETS:
Net Utility Plant In Service ...................... $1,651,051 $1,636,689 $1,602,210 $1,645,904
Construction Work in Progress ..................... 95,120 117,188 118,647 106,806
Cash and Cash Equivalents ......................... 5,640 7,927 21,095 20,765
Other Current Assets .............................. 234,111 235,575 260,767 211,377
Other Assets ...................................... 450,833 463,362 427,307 451,903
---------- ---------- ---------- ----------
2,436,755 2,460,741 2,430,026 2,436,755
========== ========== ========== ==========
LIABILITIES:
Common Equity ..................................... $ 783,033 $ 778,425 $ 738,513 $ 783,033
Cumulative Preferred Stock (less amounts due within
one year) ........................................ 133,950 143,950 123,950 133,950
Long-Term Debt (less amounts due within one year) . 833,744 802,245 819,327 833,744
Current Liabilities ............................... 181,880 231,010 278,017 206,854
Other Liabilities ................................. 504,148 505,111 470,219 479,174
---------- ---------- ---------- ----------
2,436,755 2,460,741 2,430,026 2,436,755
========== ========== ========== ==========
</TABLE>
The financial statements of Conectiv and related information included
in its Annual Report on Form 10-K for the year ended December 31, 1997, its
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998 and June
30, 1998 and its Current Reports on Form 8-K dated March 6, 1998, March 9, 1998,
April 23, 1998 and August 3, 1998, each as filed with the Commission, are hereby
incorporated by reference. The financial statements of the Company and related
information included in its Annual Report on Form 10-K for the year ended
December 31, 1997, its Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1998 and June 30, 1998 and its Current Reports on Form 8-K dated
January 6, 1998, February 27, 1998, March 3, 1998 and March 5, 1998, each as
filed with the Commission, are hereby incorporated by reference. All documents
subsequently filed by Conectiv and the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Offer to Purchase and
Proxy Statement and prior to the Expiration Date (or any extension thereof)
shall be deemed to be incorporated by reference in this Offer to Purchase and
Proxy Statement and to be a 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 Offer to Purchase and Proxy Statement to the extent that a
statement contained herein or in any other subsequently filed document which is
deemed to be incorporated by reference herein modified or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Offer to
Purchase and Proxy Statement.
Conectiv and the Company each will provide without charge to each
person to whom a copy of this Offer to Purchase and Proxy Statement has been
delivered, on the written or oral request of any such person, a copy of any or
all of its documents described above which have been incorporated by reference
in this Offer to Purchase and Proxy Statement, other
25
<PAGE> 32
than exhibits to such documents. Such requests should be directed to Stephanie
M. Scola, Manager of Capital Markets, Conectiv, 800 King Street, P.O. Box 321,
Wilmington, Delaware 19899, telephone: (302) 429-3931. The information relating
to Conectiv and the Company contained in this Offer to Purchase and Proxy
Statement does not purport to be comprehensive and should be read together with
the information contained in the documents incorporated by reference.
MISCELLANEOUS
The Offer is not being made to, nor will Conectiv accept tenders from,
owners of Shares in any jurisdiction in which the Offer or its acceptance would
not be in compliance with the laws of such jurisdiction. Conectiv is not aware
of any jurisdiction where the making of the Offer or the tender of Shares would
not be in compliance with applicable law. If Conectiv becomes aware of any
jurisdiction where the making of the Offer or the tender of Shares is not in
compliance with any applicable law, Conectiv will make a good faith effort to
comply with such law. If, after such good faith effort, Conectiv cannot comply
with such law, the Offer will not be made to (nor will tenders be accepted from
or on behalf of) the owners of Shares residing in such jurisdiction. In any
jurisdiction in which the securities, blue sky or other laws require the Offer
to be made by a licensed broker or dealer, the Offer will be deemed to be made
on Conectiv's behalf by one or more registered brokers or dealers licensed under
the laws of such jurisdiction.
CONECTIV
ATLANTIC CITY ELECTRIC COMPANY
26
<PAGE> 33
Exhibit 99(a)(2)
4%
LETTER OF TRANSMITTAL AND PROXY
TO ACCOMPANY
SHARES OF 4% SERIES PREFERRED STOCK
CUSIP NUMBER 048303200
OF
ATLANTIC CITY ELECTRIC COMPANY
---------------------------
TENDERED PURSUANT TO THE OFFER TO PURCHASE FOR CASH
BY
CONECTIV
DATED SEPTEMBER 8, 1998, FOR PURCHASE AT A
PURCHASE PRICE OF $____ PER SHARE
AND/OR
VOTED PURSUANT TO THE PROXY STATEMENT OF
ATLANTIC CITY ELECTRIC COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON OCTOBER 14, 1998, UNLESS THE OFFER IS EXTENDED
THE PROXY CONTAINED IN THIS DOCUMENT IS IN
RESPECT OF THE SPECIAL MEETING OF SHAREHOLDERS TO
BE HELD ON OCTOBER 14, 1998, OR ON SUCH DATE TO
WHICH THE MEETING IS ADJOURNED OR POSTPONED.
TO: THE BANK OF NEW YORK, DEPOSITARY
BY MAIL: BY HAND OR OVERNIGHT COURIER:
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN EXACTLY AS NAME(S) AND ADDRESS(ES) APPEAR(S) ON CERTIFICATE(S))
IF YOU HAVE ANY QUESTIONS, HAVE NOT RECEIVED THE OFFER TO PURCHASE AND
PROXY STATEMENT OR OTHER DOCUMENTS PERTAINING TO THE OFFER OR NEED ASSISTANCE IN
COMPLETING THIS LETTER OF TRANSMITTAL AND PROXY, PLEASE CONTACT D.F. KING & CO.,
INC., THE INFORMATION AGENT, AT TELEPHONE (800) 431-9629 (TOLL FREE).
<PAGE> 34
Facsimile copies of the Letter of Transmittal and Proxy will not be
accepted. The Letter of Transmittal and Proxy and, if applicable, certificates
for Shares should be sent or delivered by each tendering or voting Preferred
Shareholder of the Company or his or her broker, dealer, bank or trust company
to the Depositary at one of its addresses set forth below.
THE DEPOSITARY:
THE BANK OF NEW YORK
By Mail: By Hand or Overnight Courier:
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
Any questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective telephone numbers and addresses
listed below. Requests for additional copies of this Offer to Purchase and Proxy
Statement, the Letter of Transmittal and Proxy or other tender offer or proxy
materials may be directed to the Information Agent, and such copies will be
furnished promptly at the Company's expense. Preferred Shareholders may also
contact their local broker, dealer, commercial bank or trust company for
assistance concerning the Offer.
THE INFORMATION AGENT:
D.F. KING & CO., INC.
77 Water Street, 20th Floor
New York, New York 10005
(800) 431-9629 (toll free)
or
Banks and Brokers call
(212) 269-5550
THE DEALER MANAGER:
MORGAN STANLEY DEAN WITTER
Liability Management Group
1585 Broadway, 2nd Floor
New York, New York 10036
Call Toll Free:
(800) 624-1808
ATTENTION
SHAREHOLDERS WHO HAVE LOST CERTIFICATES:
Call ACE Stockholder Services
at (800) 365-6495 (toll free) for assistance
<PAGE> 35
PREFERRED SHAREHOLDERS (INCLUDING PREFERRED SHAREHOLDERS WHO ACQUIRE SHARES
SUBSEQUENT TO THE RECORD DATE) WILL NOT BE ABLE TO VALIDLY TENDER THEIR SHARES
UNLESS THEY HAVE SUBMITTED A DULY COMPLETED, VALID AND UNREVOKED PROXY
INDICATING THEIR VOTE FOR THE PROPOSED AMENDMENT OR INDICATE IN THE ACCOMPANYING
PROXY THEIR INTENTION TO VOTE FOR THE PROPOSED AMENDMENT AT THE SPECIAL MEETING.
CONECTIV ("CONECTIV") WILL NOT BE REQUIRED TO ACCEPT FOR PAYMENT OR PAY FOR ANY
SHARES TENDERED IF THE PROPOSED AMENDMENT IS NOT APPROVED AND ADOPTED AT THE
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON OCTOBER 14, 1998, OR ON SUCH DATE
TO WHICH THE MEETING IS ADJOURNED OR POSTPONED (THE "SPECIAL MEETING").
PREFERRED SHAREHOLDERS HAVE THE RIGHT TO VOTE FOR THE PROPOSED AMENDMENT
REGARDLESS OF WHETHER THEY TENDER THEIR SHARES BY CASTING THEIR VOTE AND SIGNING
THE PROXY CONTAINED WITHIN THIS LETTER OF TRANSMITTAL AND PROXY OR BY VOTING IN
PERSON AT THE SPECIAL MEETING. IF THE PROPOSED AMENDMENT IS APPROVED AND
ADOPTED, ATLANTIC CITY ELECTRIC COMPANY (THE "COMPANY") WILL MAKE A SPECIAL CASH
PAYMENT TO EACH PREFERRED SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED
AMENDMENT, PROVIDED THAT SUCH HOLDER'S SHARES ARE NOT TENDERED PURSUANT TO THE
OFFER.
HOLDERS WHO PURCHASE OR WHOSE PURCHASE SETTLES OR IS REGISTERED AFTER THE
CLOSE OF BUSINESS ON SEPTEMBER 4, 1998 (THE "RECORD DATE") AND WHO WISH TO
TENDER IN THE OFFER MUST ARRANGE WITH THEIR SELLER TO RECEIVE A DULY COMPLETED,
VALID AND UNREVOKED PROXY (WHICH MAY BE IN THE FORM OF AN IRREVOCABLE ASSIGNMENT
OF PROXY AS SET FORTH IN THIS LETTER OF TRANSMITTAL AND PROXY) FROM THE HOLDER
OF RECORD OF SUCH SHARES ON THE RECORD DATE. IN ORDER TO FACILITATE RECEIPT OF
PROXIES, SHARES SHALL, DURING THE PERIOD WHICH COMMENCES SEPTEMBER 2, 1998 (TWO
BUSINESS DAYS PRIOR TO THE RECORD DATE) AND WHICH WILL END AT THE CLOSE OF
BUSINESS ON THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY
STATEMENT), TRADE IN THE OVER-THE-COUNTER MARKET WITH A PROXY PROVIDING THE
TRANSFEREE WITH THE RIGHT TO VOTE SUCH ACQUIRED SHARES IN THE PROXY
SOLICITATION.
NOTE: SIGNATURES MUST BE PROVIDED HEREIN. PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY.
The undersigned hereby appoints Howard E. Cosgrove, Barbara S. Graham and
Louis M. Walters, or any of them, as proxies, each with the power to appoint his
or her substitute, and hereby authorizes them to represent and to vote as
designated hereunder and in their discretion with respect to any other business
properly brought before the Special Meeting all the shares of preferred stock of
the Company which the undersigned is entitled to vote at the Special Meeting or
any adjournment(s) or postponement(s) thereof.
NOTE: IF YOU ARE VOTING BUT NOT TENDERING SHARES, DO NOT SEND ANY SHARE
CERTIFICATES WITH THIS LETTER OF TRANSMITTAL AND PROXY.
THIS LETTER OF TRANSMITTAL AND PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF THE COMPANY. The proxy contained herein, when properly executed,
will be voted in the manner described herein by the undersigned shareholder(s).
If no direction is made, the proxy will be voted FOR Item 1. An abstention is
the equivalent of a vote AGAINST the Proposed Amendment.
PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES MUST VOTE FOR
ITEM 1.
Indicate your vote by an (X). The Board of Directors recommends voting FOR
Item 1.
ITEM 1.
HOLDERS OF SHARES WHO WISH TO TENDER THEIR SHARES MUST VOTE FOR THE
PROPOSED AMENDMENT EITHER BY SUBMITTING THIS PROXY OR BY VOTING AT THE SPECIAL
MEETING.
To remove from the Company's charter Paragraph (7)(B)(c) of Article III, a
provision restricting the amount of securities representing unsecured
indebtedness issuable by the Company.
{ } FOR { } AGAINST { } ABSTAIN
2
<PAGE> 36
SHARES REPRESENTED BY ALL PROPERLY EXECUTED PROXIES WILL BE VOTED IN
ACCORDANCE WITH INSTRUCTIONS APPEARING ON THIS PROXY. IN THE ABSENCE OF SPECIFIC
INSTRUCTIONS, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF
THE BOARD OF DIRECTORS, AND IN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE SPECIAL MEETING.
Any holder of Shares held of record on the Record Date in the name of
another holder must establish to the satisfaction of the Company its entitlement
to exercise or transfer this Proxy. This will ordinarily require an assignment
by such record holders in blank or, if not in blank, to and from each successive
transferee, including the holder, with each signature guaranteed by an Eligible
Institution. A form of irrevocable assignment of proxy has been provided herein.
Please check box if you plan to attend the Special Meeting. { }
SIGNATURE(S) OF OWNER(S)
X _____________________________________________________________________________
X _____________________________________________________________________________
Dated: _________________________________________________________________ , 1998
Name(s): ______________________________________________________________________
(PLEASE PRINT)
Capacity (full title): ________________________________________________________
Address: ______________________________________________________________________
(INCLUDE ZIP CODE)
DAYTIME Area Code and Telephone No.: __________________________________________
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
stock certificates or on a security position listing or by person(s) authorized
to become registered holder(s) by certificates and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, please set forth full title and see Instruction 5.)
3
<PAGE> 37
PLEASE COMPLETE:
DESCRIPTION OF SHARES TENDERED
(IF TENDERING SHARES, PLEASE FILL IN EXACTLY AS INFORMATION
APPEARS ON CERTIFICATE(S))
(ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
<TABLE>
<CAPTION>
NUMBER OF SHARES NOT
TOTAL NUMBER OF SHARES TENDERED BUT AS TO
REPRESENTED BY NUMBER OF SHARES WHICH PROXIES GIVEN
CERTIFICATE NUMBER(S)* CERTIFICATE(S)* TENDERED** ONLY
<S> <C> <C> <C>
</TABLE>
* Need not be completed by shareholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented
by any certificates delivered to the Depositary are being tendered. See
Instruction 4. You must vote for the Proposed Amendment with respect to any
Shares tendered.
If any of your certificate(s) for Shares have been lost, stolen or
destroyed, please call the Company's shareholder services department ("ACE
Stockholder Services") at 800-365-6495 (toll free). You may need to complete an
Affidavit of Loss with respect to the lost certificate(s) (which will be
provided by ACE Stockholder Services) and payment of an indemnity bond premium
fee may be required.
PLEASE COMPLETE IF APPLICABLE:
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature: _________________________________________________________
Name: _________________________________________________________________________
Name of Firm: _________________________________________________________________
Address of Firm: ______________________________________________________________
Area Code and Telephone No.: __________________________________________________
Dated: _________________________________________________________________ , 1998
4
<PAGE> 38
IF SELLING SHARES SUBSEQUENT TO SEPTEMBER 4, 1998, A RECORD HOLDER MUST
COMPLETE THE FOLLOWING IRREVOCABLE PROXY
PLEASE SIGN THIS TO IRREVOCABLY TRANSFER A PREFERRED STOCK
PROXY TO A SUBSEQUENT HOLDER OF PREFERRED STOCK WHO
WAS NOT A HOLDER OF RECORD ON SEPTEMBER 4, 1998
IRREVOCABLE PROXY
with respect to shares of the
4% Series Cumulative Preferred Stock
of
ATLANTIC CITY ELECTRIC COMPANY
the undersigned hereby irrevocably appoints
--------------------------------------------
Type or Print Name of Transferee
as attorney and proxy, with full power of substitution, to vote and otherwise
act for and in the name(s) of the undersigned with respect to the Shares
indicated below which were held of record by the undersigned on September 4,
1998, in the manner in which the undersigned would be entitled to vote and
otherwise act in respect of such Shares on any and all matters.
This proxy shall be effective whether or not the Shares indicated below
are tendered in the Offer.
This instrument supersedes and revokes any and all previous
appointments of proxies heretofore made by the undersigned with respect to the
Shares indicated below as to any and all matters. THIS PROXY IS IRREVOCABLE AND
IS COUPLED WITH AN INTEREST.
All authority conferred or agreed to be conferred herein shall survive
the death or incapacity of the undersigned, and any obligation of the
undersigned hereunder shall be binding upon the heirs, executors,
administrators, legal and personal representatives, successors in interest and
assigns of the undersigned. The undersigned understands that tenders of Shares
pursuant to any of the procedures described in the Offer to Purchase and Proxy
Statement and in this Letter of Transmittal and Proxy will constitute a binding
agreement between the undersigned and the Company upon the terms and subject to
the conditions of the Offer.
- --------------------------------------------------------------------------------
DESCRIPTION OF PREFERRED STOCK
- --------------------------------------------------------------------------------
CERTIFICATE NUMBER(S) AGGREGATE NUMBER
(ATTACH LIST IF NECESSARY) OF SHARES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL:
- --------------------------------------------------------------------------------
- ---------------------------------- ------------------------------------
Signature of Record Holder or Signature of Record Holder of
Authorized Signatory Authorized Signatory
- ---------------------------------- ------------------------------------
Type or Print Name Type or Print Name
Date: _____________________, 1998 Date: _______________________, 1998
Tax Identification or Social Security No(s). __________________________________
5
<PAGE> 39
Must be signed by holder(s) exactly as name(s) appear(s) on the Record Date on
certificate(s) for the Shares or on a security position listing or by person(s)
authorized to become holder(s) by certificates and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation, agent or other person acting in a
fiduciary or representative capacity, please provide the following information
and see Instruction 5.
Name:___________________________________________________________________________
(PLEASE PRINT)
Capacity:_______________________________________________________________________
(FULL TITLE)
Address:________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Tel. No.__________________________________________________________
PLEASE COMPLETE IF APPLICABLE:
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
Name of Firm:___________________________________________________________________
Authorized Signature:___________________________________________________________
Title:__________________________________________________________________________
Dated:____________________________________________________________________, 1998
DELIVERY OF THIS LETTER OF TRANSMITTAL AND PROXY TO AN ADDRESS OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS
LETTER OF TRANSMITTAL AND PROXY IN THE APPROPRIATE SPACE THEREFOR PROVIDED AND,
IF YOU ARE TENDERING ANY SHARES OR VOTING IN FAVOR OF THE PROPOSED AMENDMENT,
COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW OR A FORM W-8, AS APPLICABLE.
SEE INSTRUCTION 8 AND "IMPORTANT TAX INFORMATION" BELOW.
DO NOT SEND ANY CERTIFICATES TO MORGAN STANLEY DEAN WITTER, D. F. KING
& CO., INC., CONECTIV, ACE STOCKHOLDER SERVICES OR ATLANTIC CITY ELECTRIC
COMPANY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL AND PROXY
SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL AND PROXY IS
COMPLETED. QUESTIONS REGARDING AND REQUESTS FOR COPIES OF THE OFFER TO PURCHASE
AND PROXY STATEMENT OR THIS LETTER OF TRANSMITTAL AND PROXY MAY BE DIRECTED TO
D.F. KING & CO., INC., THE INFORMATION AGENT, AT (800) 431-9629 (TOLL FREE) OR
BANKS AND BROKERS CALL (212) 269-5550.
This Letter of Transmittal and Proxy is to be used (a) if Shares are to
be voted but not tendered, or (b) if certificates for Shares are to be forwarded
to The Bank of New York ("Depositary") or (c) if delivery of tendered Shares (as
defined below) is to be made by book-entry transfer to the Depositary's account
at The Depository Trust Company ("DTC" or the "Book-Entry Transfer Facility")
pursuant to the procedures set forth under the heading "Terms of the Offer --
Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement (as
defined below) and an Agent's Message (as defined below) is not delivered.
Preferred Shareholders who wish to tender Shares but who cannot deliver
their Shares and all other documents required hereby to the Depositary by the
Expiration Date must tender their Shares pursuant to the guaranteed delivery
procedure set forth under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement. See Instruction
2. DELIVERY OF DOCUMENTS TO CONECTIV, THE COMPANY OR THE BOOK-ENTRY TRANSFER
FACILITY DOES NOT CONSTITUTE A VALID DELIVERY.
6
<PAGE> 40
{ } CHECK HERE IF TENDERED SHARES ARE ENCLOSED HEREWITH.
A Holder tendering Shares pursuant to this Letter of Transmittal and Proxy
must check one of the following boxes:
{ } A duly completed, valid and unrevoked proxy indicating a vote FOR the
Proposed Amendment is included herein.
{ } A vote FOR the Proposed Amendment will be cast at the Special Meeting.
ELIGIBLE INSTITUTIONS OR BROKERS TO COMPLETE ONLY IF APPLICABLE:
{ } CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING:
Name of tendering institution_______________________________________________
Account No. at DTC__________________________________________________________
Transaction Code No.________________________________________________________
{ } CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY AND PROXY PREVIOUSLY SENT TO THE DEPOSITARY AND
COMPLETE THE FOLLOWING:
Name(s) of tendering shareholder(s)
Date of execution of Notice of Guaranteed Delivery and Proxy
Name of institution that guaranteed delivery
If delivery is by book-entry transfer:
Name of tendering institution
Account No. at DTC
Transaction Code No.
A holder electing to tender Shares pursuant to a Notice of Guaranteed
Delivery and Proxy must check one of the following boxes:
{ } A duly completed, valid and unrevoked proxy indicating a vote FOR the
Proposed Amendment was included with the Notice of Guaranteed
Delivery and Proxy previously sent to the Depositary.
{ } A duly completed, valid and unrevoked proxy indicating a vote FOR the
Proposed Amendment is being delivered pursuant to a Notice of
Guaranteed Delivery and Proxy previously sent to the Depositary.
{ } A valid vote FOR the Proposed Amendment will be cast at the Special
Meeting.
NOTE: SIGNATURES MUST BE PROVIDED ABOVE.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
7
<PAGE> 41
Ladies and Gentlemen:
The abovesigned hereby tenders to Conectiv, a Delaware corporation
("Conectiv"), the shares in the amount set forth in the box above designated
"Description of Shares Tendered" pursuant to Conectiv's offer to purchase any
and all of the outstanding shares (the "Shares") of the series of preferred
stock of Atlantic City Electric Company, a New Jersey corporation, and direct
utility subsidiary of Conectiv (the "Company"), shown on the first page hereof
as to which this Letter of Transmittal and Proxy is applicable (the "Shares") at
the purchase price per Share shown on the first page hereof, net to the seller
in cash, upon the terms and subject to the conditions set forth in the Offer to
Purchase and Proxy Statement, dated September 8, 1998 (the "Offer to Purchase
and Proxy Statement"), receipt of which is hereby acknowledged, and in this
Letter of Transmittal and Proxy (which as to the Shares, together with the Offer
to Purchase and Proxy Statement, constitutes the "Offer"). PREFERRED
SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER MUST VOTE IN
FAVOR OF THE PROPOSED AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION,
AS AMENDED, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE
"PROPOSED AMENDMENT"). THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT
BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON
OCTOBER 14, 1998, OR ON SUCH DATE TO WHICH THE MEETING IS ADJOURNED OR POSTPONED
(THE "SPECIAL MEETING"). See "Proposed Amendment and Proxy Solicitation," "Terms
of the Offer -- Extension of Tender Period; Termination; Amendments" and "Terms
of the Offer -- Certain Conditions of the Offer" in the Offer to Purchase and
Proxy Statement.
Subject to, and effective upon, acceptance for payment of and payment
for the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the abovesigned hereby
sells, assigns and transfers to, or upon the order of, Conectiv all right, title
and interest in and to all the Shares that are being tendered hereby and hereby
constitutes and appoints The Bank of New York (the "Depositary") the true and
lawful agent and attorney-in-fact of the abovesigned with respect to such
Shares, with full power of substitution (such power of attorney being an
irrevocable power coupled with an interest), to (a) deliver certificates for
such Shares, or transfer ownership of such Shares on the account books
maintained by the Book-Entry Transfer Facility, together, in any such case, with
all accompanying evidences of transfer and authenticity, to or upon the order of
Conectiv, (b) present such Shares for registration and transfer on the books of
the Company and (c) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares, all in accordance with the terms of the
Offer. The Depositary will act as agent for tendering shareholders for the
purpose of receiving payment from Conectiv and transmitting payment to tendering
shareholders.
The abovesigned hereby represents and warrants that the abovesigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and that, when and to the extent the same are accepted for
payment by Conectiv, Conectiv will acquire good, marketable and unencumbered
title thereto, free and clear of all liens, restrictions, charges, encumbrances,
conditional sales agreements or other obligations relating to the sale or
transfer thereof, and the same will not be subject to any adverse claims. The
abovesigned will, upon request, execute and deliver any additional documents
deemed by the Depositary or Conectiv to be necessary or desirable to complete
the sale, assignment and transfer of the Shares tendered hereby.
All authority herein conferred or agreed to be conferred shall not be
affected by and shall survive the death, bankruptcy or incapacity of the
abovesigned, and any obligations of the abovesigned hereunder shall be binding
upon the heirs, legal representatives, successors, assigns, executors and
administrators of the abovesigned. Except as stated in the Offer, this tender is
irrevocable.
The abovesigned understands that tenders of Shares pursuant to any one
of the procedures described under the heading "Terms of the Offer -- Procedure
for Tendering Shares" in the Offer to Purchase and Proxy Statement and in the
instructions hereto will constitute the abovesigned's acceptance of the terms
and conditions of the Offer, including the abovesigned's representation and
warranty that (a) the abovesigned has a net long position in the Shares being
tendered within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended, and (b) the tender of such Shares complies
with such Rule 14e-4. Conectiv's acceptance for payment of Shares tendered
pursuant to the Offer will constitute a binding agreement between the
abovesigned and Conectiv upon the terms and subject to the conditions of the
Offer.
The abovesigned recognizes that, under certain circumstances set forth
in the Offer to Purchase and Proxy Statement, Conectiv may terminate or amend
the Offer or may not be required to purchase any of the Shares tendered hereby.
In either event, the abovesigned understands that certificate(s) for any Shares
not tendered or not purchased will be returned to the abovesigned.
8
<PAGE> 42
Unless otherwise indicated in the box below under the heading "Special
Payment Instructions," please issue the check for the purchase price of any
Shares purchased, and/or return any Shares not tendered or not purchased, in the
name(s) of the abovesigned (and, in the case of Shares tendered by book-entry
transfer, by credit to the account of the abovesigned at the Book-Entry Transfer
Facility). Similarly, unless otherwise indicated in the box below under the
heading "Special Delivery Instructions," please mail the check for the purchase
price of any Shares purchased and/or any certificate for Shares not tendered or
not purchased (and accompanying documents, as appropriate) to the abovesigned at
the address shown below the abovesigned's signature(s). In the event that both
"Special Payment Instructions" and "Special Delivery Instructions" are
completed, please issue the check for the purchase price of any Shares purchased
and/or return any Shares not tendered or not purchased in the name(s) of, and
mail said check and/or any certificates to, the person(s) so indicated. The
abovesigned recognizes that Conectiv has no obligation, pursuant to the "Special
Payment Instructions," to transfer any Shares from the name of the registered
holder(s) thereof if Conectiv does not accept for purchase any of the Shares so
tendered.
COMPLETE ONLY IF APPLICABLE:
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased, the certificates for Shares not tendered or not purchased or the
check for the Special Cash Payment are to be issued in the name of someone other
than the abovesigned.
Issue { } Check and/or { } Certificate(s) to:
Name____________________________________________________________________________
(PLEASE PRINT)
Address_________________________________________________________________________
________________________________________________________________________________
(INCLUDE ZIP CODE)
________________________________________________________________________________
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased, the certificates for Shares not tendered or not purchased or the
check for the Special Cash Payment are to be mailed to someone other than the
abovesigned or to the abovesigned at an address other than that shown below the
abovesigned's signature(s).
Mail { } Check and/or { } Certificate(s) to:
Name____________________________________________________________________________
(PLEASE PRINT)
Address_________________________________________________________________________
________________________________________________________________________________
(INCLUDE ZIP CODE)
COMPLETE ONLY IF YOUR SHARES ARE LOST:
LOST CERTIFICATES BOX
{ } CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN
AND WISH TO TENDER HAVE BEEN LOST, DESTROYED OR STOLEN. (SEE
INSTRUCTION 12.)
9
<PAGE> 43
Number of Shares represented by lost, destroyed or stolen certificates:
________________________
COMPLETE ONLY IF APPLICABLE:
SOLICITED TENDERS AND PROXIES
(SEE INSTRUCTION 10)
As provided in Instruction 10, Conectiv will pay a solicitation fee of
an amount equal to $1.50 per Share for any Shares tendered, accepted for payment
and paid for pursuant to the Offer (except that for transactions for beneficial
owners whose ownership equals or exceeds 2,500 Shares, Conectiv will pay a
solicitation fee of an amount equal to $1.00 per Share). With respect to fees
payable pursuant to this paragraph involving transactions for beneficial owners
whose ownership is less than 2,500 Shares, any fees payable hereunder shall be
paid in full to the Dealer Manager unless a Soliciting Dealer is designated (as
herein described), in which case such fee shall be payable in full to such
designated Soliciting Dealer (which designated Soliciting Dealer may be the
Dealer Manager). With respect to fees payable pursuant to this paragraph
involving transactions for beneficial owners whose ownership equals or exceeds
2,500 Shares, any fees payable hereunder shall be paid in full to the Dealer
Manager unless a Soliciting Dealer is designated, in which case 80% of such fee
shall be paid to the Dealer manager and 20% of such fee shall be paid to the
designated Soliciting Dealer (which designated Soliciting Dealer may be the
Dealer Manager). However, Soliciting Dealers will not be entitled to a
solicitation fee for Shares beneficially owned by such Soliciting Dealer.
The undersigned represents that the Soliciting Dealer which solicited
and obtained this tender is:
Name of Firm:___________________________________________________________________
(PLEASE PRINT)
Name of Individual Broker
or Financial Consultant:________________________________________________________
Telephone Number of Broker
or Financial Consultant:________________________________________________________
Identification Number (if known):_______________________________________________
Address:________________________________________________________________________
(INCLUDE ZIP CODE)
COMPLETE ONLY IF CUSTOMER'S SHARES HELD IN NOMINEE NAME ARE TENDERED:
NAME OF BENEFICIAL OWNER NUMBER OF SHARES TENDERED
(ATTACH ADDITIONAL LIST IF NECESSARY)
_____________________________________ __________________________________
_____________________________________ __________________________________
_____________________________________ __________________________________
The acceptance of compensation by such Soliciting Dealer will
constitute a representation by it that (a) it has complied with the applicable
requirements of the Securities Exchange Act of 1934, as amended, and the
applicable rules and regulations thereunder, in connection with such
solicitation; (b) it is entitled to such compensation for such solicitation
under the terms and conditions of the Offer to Purchase and Proxy Statement; (c)
in soliciting tenders of Shares, it has used no solicitation materials other
than those furnished by Conectiv or the Company; and (d) if it is a foreign
broker or dealer not eligible for
10
<PAGE> 44
membership in the National Association of Securities Dealers, Inc. (the "NASD"),
it has agreed to conform to the NASD's Rules of Fair Practice in making
solicitations.
The payment of compensation to any Soliciting Dealer is dependent on
such Soliciting Dealer returning a Notice of Solicited Tenders to the
Depositary.
THIS LETTER OF TRANSMITTAL AND PROXY IS TO BE USED FOR THE TENDER OF
SHARES OF THE 4% SERIES (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY
STATEMENT) ONLY. ANY PERSON DESIRING TO TENDER OR VOTE SHARES OF ANY OTHER
SERIES OF PREFERRED STOCK FOR WHICH CONECTIV IS MAKING A TENDER OFFER AND/OR
SOLICITING A PROXY MUST SUBMIT A LETTER OF TRANSMITTAL AND PROXY RELATING TO
THAT SPECIFIC SERIES.
11
<PAGE> 45
PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW OR A FORM W-8, AS APPLICABLE.
SIGN HERE:______________________________________________________________________
SIGNATURE OF OWNER(S)
______________________________________________________________________
SIGNATURE OF OWNER(S)
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal and Proxy must be guaranteed by a firm
that is a member of a registered national securities exchange or the NASD, or by
a commercial bank or trust company having an office or correspondent in the
United States which is a participant in an approved Medallion Signature
Guarantee Program (each of the foregoing being referred to as an "Eligible
Institution"). Signatures on this Letter of Transmittal and Proxy need not be
guaranteed (a) if this Letter of Transmittal and Proxy is signed by the
registered holder(s) of the Shares (which term, for purposes of this document,
shall include any participant in the Book-Entry Transfer Facility whose name
appears on a security position listing as the owner of Shares) tendered herewith
and such holder(s) has not completed the box above under the heading "Special
Payment Instructions" or the box above under the heading "Special Delivery
Instructions" on this Letter of Transmittal and Proxy, (b) if such Shares are
tendered for the account of an Eligible Institution or (c) if this Letter of
Transmittal and Proxy is being used solely for the purpose of voting Shares
which are not being tendered pursuant to the Offer. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND PROXY AND SHARES. This Letter
of Transmittal and Proxy is to be used if (a) certificates are to be forwarded
herewith, (b) delivery of Shares to be made by book-entry transfer pursuant to
the procedures set forth under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement and as Agent's
Message (as defined below) is not delivered or (c) Shares are being voted in
connection with the Offer. Certificates for all physically delivered Shares, or
a confirmation of a book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility of all Shares delivered electronically, as well as
a properly completed and duly executed Letter of Transmittal and Proxy, and any
other documents required by this Letter of Transmittal and Proxy, must be
received by the Depositary at one of its addresses set forth on the front page
of this Letter of Transmittal and Proxy on or prior to the Expiration Date (as
defined in the Offer to Purchase and Proxy Statement) with respect to all
Shares. Preferred Shareholders who wish to tender their Shares yet who cannot
deliver their Shares and all other required documents to the Depositary on or
prior to the Expiration Date must tender their Shares pursuant to the guaranteed
delivery procedure set forth under the heading "Terms of the Offer -- Procedure
for Tendering Shares" in the Offer to Purchase and Proxy Statement. Pursuant to
such procedure: (a) such tender must be made by or through an Eligible
Institution, (b) a properly completed and duly executed Notice of Guaranteed
Delivery and Proxy in the form provided by Conectiv (with any required signature
guarantees) must be received by the Depositary on or prior to the Expiration
Date and (c) the certificates for all physically delivered Shares, or a
confirmation of a book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility of all Shares delivered electronically, together
with a properly completed and duly executed Letter of Transmittal and Proxy, and
any other documents required by this Letter of Transmittal and Proxy, must be
received by the Depositary by 5:00 p.m. (New York City time) within three New
York Stock Exchange trading days after the date of execution of such Notice of
Guaranteed Delivery and Proxy, all as provided under the heading "Terms of the
Offer --Procedure for Tendering Shares" in the Offer to Purchase and Proxy
Statement. Tenders by book-entry transfer may also be made by delivering an
Agent's Message in lieu of this Letter of Transmittal and Proxy. The term
"Agent's Message" means a message, transmitted by the Book-Entry Transfer
Facility, received by the Depositary and forming a part of the book-entry
transfer when a tender is initiated, which states that the Book-Entry Transfer
Facility has received an express acknowledgment from a participant tendering
Shares that such participant has received and agrees to be bound by the terms of
this Letter of Transmittal and Proxy and that Conectiv may enforce such
agreement against such participant.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT
THE OPTION AND RISK OF THE TENDERING PREFERRED SHAREHOLDER. IF CERTIFICATES FOR
SHARES ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED.
No alternative, conditional or contingent tenders will be accepted. See
"Terms of the Offer -- Number of Shares; Purchase Prices; Expiration Date;
Dividends" in the Offer to Purchase and Proxy Statement. By executing this
Letter of
12
<PAGE> 46
Transmittal and Proxy, the tendering shareholder waives any right to receive any
notice of the acceptance for payment of the Shares.
3. VOTING. PREFERRED SHAREHOLDERS (INCLUDING PREFERRED SHAREHOLDERS WHO
ACQUIRE SHARES SUBSEQUENT TO THE RECORD DATE) WHO WISH TO TENDER THEIR SHARES
PURSUANT TO THE OFFER MUST VOTE IN FAVOR OF THE PROPOSED AMENDMENT. THE OFFER IS
CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE
SPECIAL MEETING. In addition, Preferred Shareholders have the right to vote for
the Proposed Amendment regardless of whether they tender their Shares by casting
their vote and duly executing this Letter of Transmittal and Proxy or by voting
in person at the Special Meeting. By executing a Notice of Guaranteed Delivery
and Proxy, a Preferred Shareholder is deemed to have tendered the Shares
described in such Notice of Guaranteed Delivery and Proxy and to have voted such
Shares in accordance with the proxy contained therein. If no vote is indicated
on an otherwise properly executed proxy contained with this Letter of
Transmittal and Proxy (or within a Notice of Guaranteed Delivery and Proxy),
then all Shares in respect of such proxy will be voted in favor of the Proposed
Amendment. See "Proposed Amendment and Proxy Solicitation" in the Offer to
Purchase and Proxy Statement. The Offer is being sent to all persons in whose
names Shares are registered on the books of the Company on the Record Date and
transferees thereof. Preferred Shareholders who purchase or whose purchase is
registered after the Record Date and who wish to tender in the Offer must
arrange with their seller to receive a proxy from the holder of record of such
Shares on the Record Date. Any holder of Shares held of record on the Record
Date in the name of another must establish to the satisfaction of the Company
his entitlement to exercise or transfer such Proxy. This will ordinarily require
an assignment by such record holder in blank or, if not in blank, to and from
each successive transferee, including the holder, with each signature guaranteed
by an Eligible Institution. See Instruction 5. In order to facilitate receipt of
proxies, Shares shall, during the period which commences on September 2, 1998
(two business days prior to the Record Date) and which will end at the close of
business on the Expiration Date, trade in the over-the-counter market with a
proxy providing the transferee with the right to vote such acquired Shares in
the Proxy Solicitation. No record date is fixed for determining which persons
are permitted to tender Shares. However, only the holders of record, or holders
who acquire an assignment of proxy from such holders, are permitted to vote for
the Proposed Amendment and thereby validly tender Shares pursuant to the Offer.
Any person who is the beneficial owner but not the record holder of Shares must
arrange for the record transfer of such Shares prior to tendering or direct the
record holder to tender on behalf of the beneficial owner.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY
BOOK-ENTRY TRANSFER). If fewer than all the Shares represented by any
certificate delivered to the Depositary are to be tendered, fill in the number
of Shares that are to be tendered in the box above under the heading
"Description of Shares Tendered." In such case, a new certificate for the
remainder of the Shares represented by the old certificate will be sent to the
person(s) signing this Letter of Transmittal and Proxy, unless otherwise
provided in the box above under the heading "Special Payment Instructions" or
"Special Delivery Instructions," as promptly as practicable following the
expiration or termination of the Offer. All Shares represented by certificates
delivered to the Depositary will be deemed to have been tendered unless
otherwise indicated.
5. SIGNATURES ON THIS LETTER OF TRANSMITTAL AND PROXY AND/OR NOTICE OF
GUARANTEED DELIVERY AND PROXY; STOCK POWERS AND ENDORSEMENTS. If either this
Letter of Transmittal and Proxy or the Notice of Guaranteed Delivery and Proxy
(together, the "Tender and Proxy Documents") is signed by the registered
holder(s) of the Shares tendered hereby, the signature(s) must correspond with
the name(s) as written one the face of the certificates without alteration,
enlargement or any change whatsoever.
If any of the Shares tendered or voted under either Tender and Proxy
Document are held of record by two or more persons, all such persons must sign
such Tender and Proxy Document.
If any of the Shares tendered or voted under either Tender and Proxy
Document are registered in different names or different certificates, it will be
necessary to complete, sign and submit as many separate applicable Tender and
Proxy Documents as there are different registrations or certificates.
If either Tender and Proxy Document is signed by the registered
holder(s) of the Shares tendered hereby, no endorsements of certificates or
separate stock powers are required unless payment of the purchase price is to be
made to, or Shares not tendered or not purchased are to be registered in the
name of, any person other than the registered holder(s). Signatures on any such
certificates or stock powers must be guaranteed by an Eligible Institution. See
Instruction 1.
If this Letter of Transmittal and Proxy is signed by a person other
than the registered holder(s) of the Shares tendered hereby, certificates must
be endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the
13
<PAGE> 47
name(s) of the registered holder(s) appear(s) on the certificates for such
Shares. Signature(s) on any such certificates or stock powers must be guaranteed
by an Eligible Institution. See Instruction 1.
If either Tender and Proxy Document or any certificate or stock power
is signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Conectiv of the authority of such person so to act must be
submitted.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6,
Conectiv will pay or cause to be paid any stock transfer taxes with respect to
the sale and transfer of any Shares to it or its order pursuant to the Offer.
If, however, payment of the purchase price is to be made to, or Shares not
tendered or not purchased are to be registered in the name of, any person other
than the registered holder(s), or if tendered Shares are registered in the name
of any person other than the person(s) signing this Letter of Transmittal and
Proxy, the amount of any stock transfer taxes (whether imposed on the registered
holder(s), such other person or otherwise) payable on account of the transfer to
such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes, or exemption therefrom, is submitted. See
"Terms of the Offer -- Acceptance of Shares for Payment and Payment of Purchase
Price and Dividends" in the Offer to Purchase and Proxy Statement. EXCEPT AS
PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY TO AFFIX TRANSFER TAX
STAMPS TO THE CERTIFICATES REPRESENTING SHARES TENDERED HEREBY.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the
purchase price of any Shares purchased is to be issued in the name of, any
Shares not tendered or not purchased are to be returned to or the check for the
Special Cash Payment is to be issued in the name of, a person other than the
person(s) signing this Letter of Transmittal and Proxy or if the check and/or
any certificate for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal and Proxy or
to an address other than that shown in the box above under the heading "Name(s)
and Address(es) of Registered Holder(s)," then the "Special Payment
Instructions" and/or "Special Delivery Instructions" on this Letter of
Transmittal and Proxy should be completed. Preferred Shareholders tendering
Shares by book-entry transfer will have any Shares not accepted for payment
returned by crediting the account maintained by such Preferred Shareholder at
the Book-Entry Transfer Facility.
8. SUBSTITUTE FORM W-9 and FORM W-8. A tendering Preferred Shareholder
and a Preferred Shareholder voting in favor of the Proposed Amendment (but not
tendering) is required to provide the Depositary with (i) in the case of a
Untied States Preferred Shareholder, a correct Taxpayer Identification Number
("TIN") and a certification that the IRS has not notified such shareholder that
he is subject to backup withholding on Substitute Form W-9, or (ii) in the case
of a foreign Preferred Shareholder, a properly completed Form W-8, as discussed
below under "Important Tax Information." Failure to provide the information on
either Substitute Form W-9 or Form W-8 may subject the Preferred Shareholder to
a $50 penalty imposed by the Internal Revenue Service and to 31% federal income
tax backup withholding on gross amount payable. The box in Part 2 of Substitute
Form W-9 may be checked if the Preferred Shareholder has not been issued a TIN
and has applied for a number or intends to apply for a number in the near
future. If the box in Part 2 is checked and the Depositary is not provided with
a TIN by the time of payment, the Depositary will withhold 31% of the gross
amount otherwise payable thereafter until a TIN is provided to the Depositary.
9. REQUESTS FOR ASSISTANCE OF ADDITIONAL COPIES. Any questions or
requests for assistance may be directed to the Information Agent or the Dealer
Manager at their respective telephone numbers and addresses listed below.
Requests for additional copies of the Offer to Purchase and Proxy Statement,
this Letter of Transmittal and Proxy or other tender offer materials may be
directed to the Information Agent or the Dealer Manager and such copies will be
furnished promptly at Conectiv's expense. Preferred Shareholders may also
contact their local broker, dealer, commercial bank or trust company for
assistance concerning the Offer.
10. SOLICITED TENDERS. Conectiv will pay a solicitation fee of an
amount equal to $1.50 per Share for Shares that are tendered, accepted for
payment and paid for pursuant to the Offer (except that for transactions for
beneficial owners whose ownership equals or exceeds 2,500 Shares, Conectiv will
pay a solicitation fee of an amount equal to $1.00 per Share). With respect to
fees payable pursuant to this paragraph involving transactions for beneficial
owners whose ownership is less than 2,500 Shares, any fees payable hereunder
shall be paid in full to the Dealer Manager unless a Soliciting Dealer is
designated (as herein described), in which case such fee shall be payable in
full to such designated Soliciting Dealer (which designated Soliciting Dealer
may be the Dealer Manager). With respect to fees payable pursuant to this
paragraph involving transactions for beneficial owners whose ownership equals or
exceeds 2,500 Shares, any fees payable hereunder shall be paid in full to the
Dealer Manager unless a Soliciting Dealer is designated, in which case 80% of
such fee shall be paid to the Dealer Manager and 20% of such fee shall be paid
to the designated Soliciting Dealer (which designated Soliciting Dealer
14
<PAGE> 48
may be the Dealer Manager). A designated Soliciting Dealer shall be named
hereunder under the heading "Solicited Tenders," and shall have solicited and
obtained the tender, and shall also be (a) any broker or dealer in securities
including the Dealer Manager in its capacity as a dealer or broker, which is a
member of any national securities exchange or of the NASD, (b) any foreign
broker or dealer not eligible for membership in the NASD which agrees to conform
to the NASD's Rules of Fair Practice in soliciting tenders outside the United
States to the same extent as though it were an NASD member, or (c) any bank or
trust company (each of which is referred to herein as a "Soliciting Dealer"). No
such fee shall be payable to a Soliciting Dealer with respect to the tender of
Shares by a holder unless the Letter of Transmittal and Proxy accompanying such
tender designates such Soliciting Dealer. No such fee shall be payable to a
Soliciting Dealer in respect of Shares registered in the name of such Soliciting
Dealer unless such Shares are held by such Soliciting Dealer as nominee and such
Shares are being tendered for the benefit of one or more beneficial owners
identified on the Letter of Transmittal and Proxy or on the Notice of Solicited
Tenders (included in the materials provided to brokers and dealers). No such fee
shall be payable to a Soliciting Dealer with respect to the tender of Shares by
the holder of record, for the benefit of the beneficial owner, unless the
beneficial owner has designated such Soliciting Dealer. If tendered Shares are
being delivered by book-entry transfer, the Soliciting Dealer must return a
Notice of Solicited Tenders to the Depositary within three business days after
expiration of the Offer to receive a solicitation fee. No such fee shall be
payable to a Soliciting Dealer if such Soliciting Dealer is required for any
reason to transfer the amount of such fee to a depositing holder (other than
itself). No such fee shall be paid to a Soliciting Dealer with respect to Shares
tendered for such Soliciting Dealer's own account. No broker, dealer, bank,
trust company or fiduciary shall be deemed to be the agent of Conectiv, the
Company, the Depositary, the Information Agent or the Dealer Manager for
purposes of the Offer.
Soliciting Dealers will include any organizations described in clauses
(a), (b) or (c) above even when the activities of such organization in
connection with the Offer consist solely of forwarding to clients materials
relating to the Offer, including this Letter of Transmittal and Proxy, and
tendering Shares as directed by beneficial owners thereof. No Soliciting Dealer
is required to make any recommendation to holders of Shares as to whether to
tender or refrain from tendering in the Offer. No assumption is made, in making
payment to any Soliciting Dealer, that its activities in connection with the
Offer included any activities other than those described above, and for all
purposes noted in all materials relating to the Offer, the term "solicit" shall
be deemed to mean no more than "processing shares tendered" or "forwarding to
customers materials regarding the Offer."
11. IRREGULARITIES. All questions as to the form of documents and the
validity, eligibility (including time of receipt) and acceptance of any tender
of Shares will be determined by Conectiv, in its sole discretion, and its
determination shall be final and binding. Conectiv reserves the absolute right
to reject any and all tenders of Shares that it determines are not in proper
form or the acceptance for payment of or payment for Shares that may, in the
opinion of Conectiv's counsel, be unlawful. Conectiv also reserves the absolute
right to waive any of the conditions to the Offer or any defect or irregularity
in any tender of Shares and Conectiv's interpretation of the terms and
conditions of the Offer (including these instructions) shall be final and
binding. Unless waived, any defects or irregularities in connection with tenders
must be cured within such time as Conectiv shall determine. None of Conectiv,
the Company, the Dealer Manager, the Depositary, the Information Agent or any
other person shall be under any duty to give notice of any defect or
irregularity in tenders, nor shall any of them incur any liability for failure
to give any such notice. Tenders will not be deemed to have been made until all
defects and irregularities have been cured or waived.
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any of your
certificate(s) for Shares have been lost, stolen or destroyed, please call ACE
Stockholder Services at (800) 365-6495 (toll free). You may need to complete and
Affidavit of Loss with respect to the lost certificate(s) (which will be
provided by ACE Stockholder Services) and payment of an indemnity bond premium
fee may be required. The tender of Shares pursuant to this Letter of Transmittal
and Proxy will not be valid unless prior to the Expiration Date: (a) such
procedures have been completed and a replacement certificate for the Shares has
been delivered to the Depositary or (b) a Notice of Guaranteed Delivery and
Proxy has been delivered to the Depositary. See Instruction 2.
IMPORTANT: THIS LETTER OF TRANSMITTAL AND PROXY, DULY EXECUTED,
TOGETHER WITH, IF APPLICABLE, CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY
TRANSFER, AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY,
OR, IF APPLICABLE, THE NOTICE OF GUARANTEED DELIVERY AND PROXY MUST BE RECEIVED
BY THE DEPOSITARY, ON OR PRIOR TO THE EXPIRATION DATE.
15
<PAGE> 49
IMPORTANT TAX INFORMATION
Under federal income tax law, a Preferred Shareholder whose tendered
Shares are accepted for payment or who will receive a Special Cash Payment as a
result of voting in favor of the Proposed Amendment is required to provide the
Depositary (as payer) with either such Preferred Shareholder's correct TIN on
Substitute Form W-9 below or a properly completed Form W-8. If such Preferred
Shareholder is an individual, the TIN is his or her social security number. For
businesses and other entities, the number is the federal employer identification
number. If the Depositary is not provided with the correct TIN or properly
completed Form W-8, the Preferred Shareholder may be subject to a $50 penalty
imposed by the Internal Revenue Code. In addition, payments that are made to
such Preferred Shareholder with respect to Shares purchased pursuant to the
Offer may be subject to 31% backup withholding.
Certain Preferred Shareholders (including, among others, all
corporations and certain foreign individuals) are exempt from backup
withholding. For a corporate United States Preferred Shareholder to qualify for
such exemption, such Preferred Shareholder must provide the Depositary with a
properly completed and executed Substitute Form W-9 attesting to its exempt
status. In order for a foreign Preferred Shareholder to qualify as an exempt
recipient, such Preferred Shareholder must submit to the Depositary a properly
completed Internal Revenue Service Form W-8 (a "Form W-8"), signed under
penalties of perjury, attesting to that Preferred Shareholder's exempt status. A
Form W-8 can be obtained from the Depositary. See the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If federal income tax backup withholding applies, the Depositary is
required to withhold 31% of any payments made to the Preferred Shareholder.
Backup withholding is not an additional tax. Rather, the federal income tax
liability of persons subject to backup withholding will be reduced by the amount
of the tax withheld. If withholding results in an overpayment of taxes, a refund
may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8
To avoid backup withholding on a Special Cash Payment or payments that
are made to a Preferred Shareholder with respect to Shares purchased pursuant to
the Offer, the Preferred Shareholder is required to notify the Depositary of his
or her correct TIN by completing the Substitute Form W-9 attached hereto
certifying that the TIN provided on Substitute Form W-9 is correct and that (a)
the Preferred Shareholder has not been notified by the Internal Revenue Service
that he or she is subject to federal income tax backup withholding as a result
of failure to report all interest or dividends or (b) the Internal Revenue
Service has notified the Preferred Shareholder that he or she is no longer
subject to federal income tax backup withholding. Foreign Preferred Shareholders
must submit a properly completed Form W-8 in order to avoid the applicable
backup withholding; provided, however, that backup withholding will not apply to
foreign Preferred Shareholders subject to withholding under other provisions of
the Code or the Special Cash Payment or on gross payments received pursuant to
the Offer. Foreign Preferred Shareholders that submit a properly completed Form
W-8 may nevertheless be subject to withholding under other provisions of the
Code on the payments received by them.
WHAT NUMBER TO GIVE THE DEPOSITARY
The Preferred Shareholder is required to give the Depositary the social
security number or employer identification number of the registered owner of the
Shares. If the Shares are in more than one name or are not in the name of the
actual owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report.
PAYER'S NAME
<TABLE>
<S> <C> <C>
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT _______________________________
FORM W-9 RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. SOCIAL SECURITY NUMBER
OR
_______________________________
EMPLOYER IDENTIFICATION TIN
NAME (PLEASE PRINT)____________________________ PART 2 --
ADDRESS________________________________________ AWAITING TIN { }
CITY_______________________STATE_______________
ZIP CODE_______________________________________
</TABLE>
16
<PAGE> 50
<TABLE>
<S> <C>
DEPARTMENT OF THE TREASURY PART 3 -- CERTIFICATION -- UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
INTERNAL REVENUE SERVICE
(1) THE NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER IDENTIFICATION NUMBER (OR A
TIN HAS NOT BEEN ISSUED TO ME BUT I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE
A TIN OR INTEND TO DO SO IN THE NEAR FUTURE), (2) I AM NOT SUBJECT TO BACKUP
WITHHOLDING EITHER BECAUSE I HAVE NOT BEEN NOTIFIED BY THE INTERNAL REVENUE SERVICE
(THE "IRS") THAT I AM SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF A FAILURE TO REPORT
ALL INTEREST OR DIVIDENDS OR THE IRS HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT TO
BACKUP WITHHOLDING AND (3) ALL OTHER INFORMATION PROVIDED ON THIS FORM IS TRUE,
CORRECT AND COMPLETE.
SIGNATURE____________________________________________________________________________
DATE _____________________________, 1998
YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE
CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING INTEREST OR
DIVIDENDS ON YOUR TAX RETURN.
PAYER'S REQUEST FOR NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
TAXPAYER IDENTIFICATION WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER OR PROXY
NUMBER ("TIN") AND SOLICITATION. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
CERTIFICATION TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 2 OF
SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER:
I CERTIFY UNDER PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER HAS NOT
BEEN ISSUED TO ME AND EITHER (1) I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE
A TAXPAYER IDENTIFICATION NUMBER TO THE APPROPRIATE INTERNAL REVENUE SERVICE CENTER OR
SOCIAL SECURITY ADMINISTRATION OFFICE OR (2) I INTEND TO DO SO IN THE NEAR FUTURE. I
UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER BY THE TIME OF
PAYMENT, 31% OF ALL PAYMENTS MADE TO ME WILL BE WITHHELD UNTIL I PROVIDE A NUMBER.
SIGNATURE ____________________________________ DATE________________________, 1998
</TABLE>
THE INFORMATION AGENT:
D.F. KING & CO., INC.
77 Water Street, 20th Floor
New York, New York 10005
(800) 431-9629 (toll free)
or
Banks and Brokers call
(212) 269-5550
17
<PAGE> 51
4.10%
LETTER OF TRANSMITTAL AND PROXY
TO ACCOMPANY
SHARES OF 4.10% SERIES PREFERRED STOCK
CUSIP NUMBER 048303770
OF
ATLANTIC CITY ELECTRIC COMPANY
---------------------------
TENDERED PURSUANT TO THE OFFER TO PURCHASE FOR CASH
BY
CONECTIV
DATED SEPTEMBER 8, 1998, FOR PURCHASE AT A
PURCHASE PRICE OF $____ PER SHARE
AND/OR
VOTED PURSUANT TO THE PROXY STATEMENT OF
ATLANTIC CITY ELECTRIC COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON OCTOBER 14, 1998, UNLESS THE OFFER IS EXTENDED
THE PROXY CONTAINED IN THIS DOCUMENT IS IN
RESPECT OF THE SPECIAL MEETING OF SHAREHOLDERS TO
BE HELD ON OCTOBER 14, 1998, OR ON SUCH DATE TO
WHICH THE MEETING IS ADJOURNED OR POSTPONED.
TO: THE BANK OF NEW YORK, DEPOSITARY
BY MAIL: BY HAND OR OVERNIGHT COURIER:
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN EXACTLY AS NAME(S) AND ADDRESS(ES) APPEAR(S) ON CERTIFICATE(S))
IF YOU HAVE ANY QUESTIONS, HAVE NOT RECEIVED THE OFFER TO PURCHASE AND
PROXY STATEMENT OR OTHER DOCUMENTS PERTAINING TO THE OFFER OR NEED ASSISTANCE IN
COMPLETING THIS LETTER OF TRANSMITTAL AND PROXY, PLEASE CONTACT D.F. KING & CO.,
INC., THE INFORMATION AGENT, AT TELEPHONE (800) 431-9629 (TOLL FREE).
<PAGE> 52
PREFERRED SHAREHOLDERS (INCLUDING PREFERRED SHAREHOLDERS WHO ACQUIRE
SHARES SUBSEQUENT TO THE RECORD DATE) WILL NOT BE ABLE TO VALIDLY TENDER THEIR
SHARES UNLESS THEY HAVE SUBMITTED A DULY COMPLETED, VALID AND UNREVOKED PROXY
INDICATING THEIR VOTE FOR THE PROPOSED AMENDMENT OR INDICATE IN THE ACCOMPANYING
PROXY THEIR INTENTION TO VOTE FOR THE PROPOSED AMENDMENT AT THE SPECIAL MEETING.
CONECTIV ("CONECTIV") WILL NOT BE REQUIRED TO ACCEPT FOR PAYMENT OR PAY FOR ANY
SHARES TENDERED IF THE PROPOSED AMENDMENT IS NOT APPROVED AND ADOPTED AT THE
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON OCTOBER 14, 1998, OR ON SUCH DATE
TO WHICH THE MEETING IS ADJOURNED OR POSTPONED (THE "SPECIAL MEETING").
PREFERRED SHAREHOLDERS HAVE THE RIGHT TO VOTE FOR THE PROPOSED AMENDMENT
REGARDLESS OF WHETHER THEY TENDER THEIR SHARES BY CASTING THEIR VOTE AND SIGNING
THE PROXY CONTAINED WITHIN THIS LETTER OF TRANSMITTAL AND PROXY OR BY VOTING IN
PERSON AT THE SPECIAL MEETING. IF THE PROPOSED AMENDMENT IS APPROVED AND
ADOPTED, ATLANTIC CITY ELECTRIC COMPANY (THE "COMPANY") WILL MAKE A SPECIAL CASH
PAYMENT TO EACH PREFERRED SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED
AMENDMENT, PROVIDED THAT SUCH HOLDER'S SHARES ARE NOT TENDERED PURSUANT TO THE
OFFER.
HOLDERS WHO PURCHASE OR WHOSE PURCHASE SETTLES OR IS REGISTERED AFTER
THE CLOSE OF BUSINESS ON SEPTEMBER 4, 1998 (THE "RECORD DATE") AND WHO WISH TO
TENDER IN THE OFFER MUST ARRANGE WITH THEIR SELLER TO RECEIVE A DULY COMPLETED,
VALID AND UNREVOKED PROXY (WHICH MAY BE IN THE FORM OF AN IRREVOCABLE ASSIGNMENT
OF PROXY AS SET FORTH IN THIS LETTER OF TRANSMITTAL AND PROXY) FROM THE HOLDER
OF RECORD OF SUCH SHARES ON THE RECORD DATE. IN ORDER TO FACILITATE RECEIPT OF
PROXIES, SHARES SHALL, DURING THE PERIOD WHICH COMMENCES SEPTEMBER 2, 1998 (TWO
BUSINESS DAYS PRIOR TO THE RECORD DATE) AND WHICH WILL END AT THE CLOSE OF
BUSINESS ON THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY
STATEMENT), TRADE IN THE OVER-THE-COUNTER MARKET WITH A PROXY PROVIDING THE
TRANSFEREE WITH THE RIGHT TO VOTE SUCH ACQUIRED SHARES IN THE PROXY
SOLICITATION.
NOTE: SIGNATURES MUST BE PROVIDED HEREIN. PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY.
The undersigned hereby appoints Howard E. Cosgrove, Barbara S. Graham
and Louis M. Walters, or any of them, as proxies, each with the power to appoint
his or her substitute, and hereby authorizes them to represent and to vote as
designated hereunder and in their discretion with respect to any other business
properly brought before the Special Meeting all the shares of preferred stock of
the Company which the undersigned is entitled to vote at the Special Meeting or
any adjournment(s) or postponement(s) thereof.
NOTE: IF YOU ARE VOTING BUT NOT TENDERING SHARES, DO NOT SEND ANY SHARE
CERTIFICATES WITH THIS LETTER OF TRANSMITTAL AND PROXY.
THIS LETTER OF TRANSMITTAL AND PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF THE COMPANY. The proxy contained herein, when properly
executed, will be voted in the manner described herein by the undersigned
shareholder(s). If no direction is made, the proxy will be voted FOR Item 1. An
abstention is the equivalent of a vote AGAINST the Proposed Amendment.
PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES MUST VOTE FOR
ITEM 1.
Indicate your vote by an (X). The Board of Directors recommends voting
FOR Item 1.
ITEM 1.
HOLDERS OF SHARES WHO WISH TO TENDER THEIR SHARES MUST VOTE FOR THE
PROPOSED AMENDMENT EITHER BY SUBMITTING THIS PROXY OR BY VOTING AT THE SPECIAL
MEETING.
To remove from the Company's charter Paragraph (7)(B)(c) of Article
III, a provision restricting the amount of securities representing unsecured
indebtedness issuable by the Company.
{ } FOR { } AGAINST { } ABSTAIN
2
<PAGE> 53
SHARES REPRESENTED BY ALL PROPERLY EXECUTED PROXIES WILL BE VOTED IN
ACCORDANCE WITH INSTRUCTIONS APPEARING ON THIS PROXY. IN THE ABSENCE OF SPECIFIC
INSTRUCTIONS, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF
THE BOARD OF DIRECTORS, AND IN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE SPECIAL MEETING.
Any holder of Shares held of record on the Record Date in the name of
another holder must establish to the satisfaction of the Company its entitlement
to exercise or transfer this Proxy. This will ordinarily require an assignment
by such record holders in blank or, if not in blank, to and from each successive
transferee, including the holder, with each signature guaranteed by an Eligible
Institution. A form of irrevocable assignment of proxy has been provided herein.
Please check box if you plan to attend the Special Meeting. { }
SIGNATURE(S) OF OWNER(S)
X_______________________________________________________________________________
X_______________________________________________________________________________
Dated:____________________________________________________________________, 1998
Name(s):________________________________________________________________________
(PLEASE PRINT)
Capacity (full title):__________________________________________________________
Address:________________________________________________________________________
(INCLUDE ZIP CODE)
DAYTIME Area Code and Telephone No.:____________________________________________
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
stock certificates or on a security position listing or by person(s) authorized
to become registered holder(s) by certificates and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, please set forth full title and see Instruction 5.)
3
<PAGE> 54
PLEASE COMPLETE:
DESCRIPTION OF SHARES TENDERED
(IF TENDERING SHARES, PLEASE FILL IN EXACTLY AS INFORMATION
APPEARS ON CERTIFICATE(S))
(ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
<TABLE>
<CAPTION>
NUMBER OF SHARES NOT
TOTAL NUMBER OF SHARES TENDERED BUT AS TO
REPRESENTED BY NUMBER OF SHARES WHICH PROXIES GIVEN
CERTIFICATE NUMBER(S)* CERTIFICATE(S)* TENDERED** ONLY
<S> <C> <C> <C>
</TABLE>
* Need not be completed by shareholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented
by any certificates delivered to the Depositary are being tendered. See
Instruction 4. You must vote for the Proposed Amendment with respect to
any Shares tendered.
If any of your certificate(s) for Shares have been lost, stolen or
destroyed, please call the Company's shareholder services department ("ACE
Stockholder Services") at 800-365-6495 (toll free). You may need to complete an
Affidavit of Loss with respect to the lost certificate(s) (which will be
provided by ACE Stockholder Services) and payment of an indemnity bond premium
fee may be required.
PLEASE COMPLETE IF APPLICABLE:
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature:___________________________________________________________
Name:___________________________________________________________________________
Name of Firm:___________________________________________________________________
Address of Firm:________________________________________________________________
Area Code and Telephone No.:____________________________________________________
Dated:____________________________________________________________________, 1998
4
<PAGE> 55
IF SELLING SHARES SUBSEQUENT TO SEPTEMBER 4, 1998, A RECORD HOLDER MUST
COMPLETE THE FOLLOWING IRREVOCABLE PROXY
PLEASE SIGN THIS TO IRREVOCABLY TRANSFER A PREFERRED STOCK
PROXY TO A SUBSEQUENT HOLDER OF PREFERRED STOCK WHO
WAS NOT A HOLDER OF RECORD ON SEPTEMBER 4, 1998
IRREVOCABLE PROXY
with respect to shares of the
4.10% Series Cumulative Preferred Stock
of
ATLANTIC CITY ELECTRIC COMPANY
the undersigned hereby irrevocably appoints
--------------------------------------------
Type or Print Name of Transferee
as attorney and proxy, with full power of substitution, to vote and otherwise
act for and in the name(s) of the undersigned with respect to the Shares
indicated below which were held of record by the undersigned on September 4,
1998, in the manner in which the undersigned would be entitled to vote and
otherwise act in respect of such Shares on any and all matters.
This proxy shall be effective whether or not the Shares indicated below
are tendered in the Offer.
This instrument supersedes and revokes any and all previous
appointments of proxies heretofore made by the undersigned with respect to the
Shares indicated below as to any and all matters. THIS PROXY IS IRREVOCABLE AND
IS COUPLED WITH AN INTEREST.
All authority conferred or agreed to be conferred herein shall survive
the death or incapacity of the undersigned, and any obligation of the
undersigned hereunder shall be binding upon the heirs, executors,
administrators, legal and personal representatives, successors in interest and
assigns of the undersigned. The undersigned understands that tenders of Shares
pursuant to any of the procedures described in the Offer to Purchase and Proxy
Statement and in this Letter of Transmittal and Proxy will constitute a binding
agreement between the undersigned and the Company upon the terms and subject to
the conditions of the Offer.
- --------------------------------------------------------------------------------
DESCRIPTION OF PREFERRED STOCK
- --------------------------------------------------------------------------------
CERTIFICATE NUMBER(S) AGGREGATE NUMBER
(ATTACH LIST IF NECESSARY) OF SHARES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL:
- --------------------------------------------------------------------------------
- ---------------------------------- ------------------------------------
Signature of Record Holder or Signature of Record Holder of
Authorized Signatory Authorized Signatory
- ---------------------------------- ------------------------------------
Type or Print Name Type or Print Name
Date: _____________________, 1998 Date: _______________________, 1998
Tax Identification or Social Security No(s). __________________________________
5
<PAGE> 56
Must be signed by holder(s) exactly as name(s) appear(s) on the Record Date on
certificate(s) for the Shares or on a security position listing or by person(s)
authorized to become holder(s) by certificates and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation, agent or other person acting in a
fiduciary or representative capacity, please provide the following information
and see Instruction 5.
Name:___________________________________________________________________________
(PLEASE PRINT)
Capacity:_______________________________________________________________________
(FULL TITLE)
Address:________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Tel. No.__________________________________________________________
PLEASE COMPLETE IF APPLICABLE:
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
Name of Firm:___________________________________________________________________
Authorized Signature:___________________________________________________________
Title:__________________________________________________________________________
Dated:____________________________________________________________________, 1998
DELIVERY OF THIS LETTER OF TRANSMITTAL AND PROXY TO AN ADDRESS OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS
LETTER OF TRANSMITTAL AND PROXY IN THE APPROPRIATE SPACE THEREFOR PROVIDED AND,
IF YOU ARE TENDERING ANY SHARES OR VOTING IN FAVOR OF THE PROPOSED AMENDMENT,
COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW OR A FORM W-8, AS APPLICABLE.
SEE INSTRUCTION 8 AND "IMPORTANT TAX INFORMATION" BELOW.
DO NOT SEND ANY CERTIFICATES TO MORGAN STANLEY DEAN WITTER, D. F. KING
& CO., INC., CONECTIV, ACE STOCKHOLDER SERVICES OR ATLANTIC CITY ELECTRIC
COMPANY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL AND PROXY
SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL AND PROXY IS
COMPLETED. QUESTIONS REGARDING AND REQUESTS FOR COPIES OF THE OFFER TO PURCHASE
AND PROXY STATEMENT OR THIS LETTER OF TRANSMITTAL AND PROXY MAY BE DIRECTED TO
D.F. KING & CO., INC., THE INFORMATION AGENT, AT (800) 431-9629 (TOLL FREE) OR
BANKS AND BROKERS CALL (212) 269-5550.
This Letter of Transmittal and Proxy is to be used (a) if Shares are to
be voted but not tendered, or (b) if certificates for Shares are to be forwarded
to The Bank of New York ("Depositary") or (c) if delivery of tendered Shares (as
defined below) is to be made by book-entry transfer to the Depositary's account
at The Depository Trust Company ("DTC" or the "Book-Entry Transfer Facility")
pursuant to the procedures set forth under the heading "Terms of the Offer --
Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement (as
defined below) and an Agent's Message (as defined below) is not delivered.
Preferred Shareholders who wish to tender Shares but who cannot deliver
their Shares and all other documents required hereby to the Depositary by the
Expiration Date must tender their Shares pursuant to the guaranteed delivery
procedure set forth under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement. See Instruction
2. DELIVERY OF DOCUMENTS TO CONECTIV, THE COMPANY OR THE BOOK-ENTRY TRANSFER
FACILITY DOES NOT CONSTITUTE A VALID DELIVERY.
6
<PAGE> 57
{ } CHECK HERE IF TENDERED SHARES ARE ENCLOSED HEREWITH.
A Holder tendering Shares pursuant to this Letter of Transmittal and Proxy
must check one of the following boxes:
{ } A duly completed, valid and unrevoked proxy indicating a vote FOR the
Proposed Amendment is included herein.
{ } A vote FOR the Proposed Amendment will be cast at the Special Meeting.
ELIGIBLE INSTITUTIONS OR BROKERS TO COMPLETE ONLY IF APPLICABLE:
{ } CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING:
Name of tendering institution_______________________________________________
Account No. at DTC__________________________________________________________
Transaction Code No.________________________________________________________
{ } CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY AND PROXY PREVIOUSLY SENT TO THE DEPOSITARY AND
COMPLETE THE FOLLOWING:
Name(s) of tendering shareholder(s)
Date of execution of Notice of Guaranteed Delivery and Proxy
Name of institution that guaranteed delivery
If delivery is by book-entry transfer:
Name of tendering institution
Account No. at DTC
Transaction Code No.
A holder electing to tender Shares pursuant to a Notice of Guaranteed
Delivery and Proxy must check one of the following boxes:
{ } A duly completed, valid and unrevoked proxy indicating a vote FOR the
Proposed Amendment was included with the Notice of Guaranteed Delivery
and Proxy previously sent to the Depositary.
{ } A duly completed, valid and unrevoked proxy indicating a vote FOR the
Proposed Amendment is being delivered pursuant to a Notice of
Guaranteed Delivery and Proxy previously sent to the Depositary.
{ } A valid vote FOR the Proposed Amendment will be cast at the Special
Meeting.
NOTE: SIGNATURES MUST BE PROVIDED ABOVE.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
7
<PAGE> 58
Ladies and Gentlemen:
The abovesigned hereby tenders to Conectiv, a Delaware corporation
("Conectiv"), the shares in the amount set forth in the box above designated
"Description of Shares Tendered" pursuant to Conectiv's offer to purchase any
and all of the outstanding shares (the "Shares") of the series of preferred
stock of Atlantic City Electric Company, a New Jersey corporation, and direct
utility subsidiary of Conectiv (the "Company"), shown on the first page hereof
as to which this Letter of Transmittal and Proxy is applicable (the "Shares") at
the purchase price per Share shown on the first page hereof, net to the seller
in cash, upon the terms and subject to the conditions set forth in the Offer to
Purchase and Proxy Statement, dated September 8, 1998 (the "Offer to Purchase
and Proxy Statement"), receipt of which is hereby acknowledged, and in this
Letter of Transmittal and Proxy (which as to the Shares, together with the Offer
to Purchase and Proxy Statement, constitutes the "Offer"). PREFERRED
SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER MUST VOTE IN
FAVOR OF THE PROPOSED AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION,
AS AMENDED, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE
"PROPOSED AMENDMENT"). THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT
BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON
OCTOBER 14, 1998, OR ON SUCH DATE TO WHICH THE MEETING IS ADJOURNED OR POSTPONED
(THE "SPECIAL MEETING"). See "Proposed Amendment and Proxy Solicitation," "Terms
of the Offer -- Extension of Tender Period; Termination; Amendments" and "Terms
of the Offer -- Certain Conditions of the Offer" in the Offer to Purchase and
Proxy Statement.
Subject to, and effective upon, acceptance for payment of and payment
for the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the abovesigned hereby
sells, assigns and transfers to, or upon the order of, Conectiv all right, title
and interest in and to all the Shares that are being tendered hereby and hereby
constitutes and appoints The Bank of New York (the "Depositary") the true and
lawful agent and attorney-in-fact of the abovesigned with respect to such
Shares, with full power of substitution (such power of attorney being an
irrevocable power coupled with an interest), to (a) deliver certificates for
such Shares, or transfer ownership of such Shares on the account books
maintained by the Book-Entry Transfer Facility, together, in any such case, with
all accompanying evidences of transfer and authenticity, to or upon the order of
Conectiv, (b) present such Shares for registration and transfer on the books of
the Company and (c) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares, all in accordance with the terms of the
Offer. The Depositary will act as agent for tendering shareholders for the
purpose of receiving payment from Conectiv and transmitting payment to tendering
shareholders.
The abovesigned hereby represents and warrants that the abovesigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and that, when and to the extent the same are accepted for
payment by Conectiv, Conectiv will acquire good, marketable and unencumbered
title thereto, free and clear of all liens, restrictions, charges, encumbrances,
conditional sales agreements or other obligations relating to the sale or
transfer thereof, and the same will not be subject to any adverse claims. The
abovesigned will, upon request, execute and deliver any additional documents
deemed by the Depositary or Conectiv to be necessary or desirable to complete
the sale, assignment and transfer of the Shares tendered hereby.
All authority herein conferred or agreed to be conferred shall not be
affected by and shall survive the death, bankruptcy or incapacity of the
abovesigned, and any obligations of the abovesigned hereunder shall be binding
upon the heirs, legal representatives, successors, assigns, executors and
administrators of the abovesigned. Except as stated in the Offer, this tender is
irrevocable.
The abovesigned understands that tenders of Shares pursuant to any one
of the procedures described under the heading "Terms of the Offer -- Procedure
for Tendering Shares" in the Offer to Purchase and Proxy Statement and in the
instructions hereto will constitute the abovesigned's acceptance of the terms
and conditions of the Offer, including the abovesigned's representation and
warranty that (a) the abovesigned has a net long position in the Shares being
tendered within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended, and (b) the tender of such Shares complies
with such Rule 14e-4. Conectiv's acceptance for payment of Shares tendered
pursuant to the Offer will constitute a binding agreement between the
abovesigned and Conectiv upon the terms and subject to the conditions of the
Offer.
The abovesigned recognizes that, under certain circumstances set forth
in the Offer to Purchase and Proxy Statement, Conectiv may terminate or amend
the Offer or may not be required to purchase any of the Shares tendered hereby.
In either event, the abovesigned understands that certificate(s) for any Shares
not tendered or not purchased will be returned to the abovesigned.
8
<PAGE> 59
Unless otherwise indicated in the box below under the heading "Special
Payment Instructions," please issue the check for the purchase price of any
Shares purchased, and/or return any Shares not tendered or not purchased, in the
name(s) of the abovesigned (and, in the case of Shares tendered by book-entry
transfer, by credit to the account of the abovesigned at the Book-Entry Transfer
Facility). Similarly, unless otherwise indicated in the box below under the
heading "Special Delivery Instructions," please mail the check for the purchase
price of any Shares purchased and/or any certificate for Shares not tendered or
not purchased (and accompanying documents, as appropriate) to the abovesigned at
the address shown below the abovesigned's signature(s). In the event that both
"Special Payment Instructions" and "Special Delivery Instructions" are
completed, please issue the check for the purchase price of any Shares purchased
and/or return any Shares not tendered or not purchased in the name(s) of, and
mail said check and/or any certificates to, the person(s) so indicated. The
abovesigned recognizes that Conectiv has no obligation, pursuant to the "Special
Payment Instructions," to transfer any Shares from the name of the registered
holder(s) thereof if Conectiv does not accept for purchase any of the Shares so
tendered.
COMPLETE ONLY IF APPLICABLE:
SPECIAL PAYMENT INSTRUCTIONS (SEE
INSTRUCTIONS 1, 4, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased, the certificates for Shares not tendered or not purchased or the
check for the Special Cash Payment are to be issued in the name of someone other
than the abovesigned.
Issue { } Check and/or { } Certificate(s) to:
Name____________________________________________________________________________
(PLEASE PRINT)
Address_________________________________________________________________________
________________________________________________________________________________
(INCLUDE ZIP CODE)
________________________________________________________________________________
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased, the certificates for Shares not tendered or not purchased or the
check for the Special Cash Payment are to be mailed to someone other than the
abovesigned or to the abovesigned at an address other than that shown below the
abovesigned's signature(s).
Mail { } Check and/or { } Certificate(s) to:
Name____________________________________________________________________________
(PLEASE PRINT)
Address_________________________________________________________________________
________________________________________________________________________________
(INCLUDE ZIP CODE)
COMPLETE ONLY IF YOUR SHARES ARE LOST:
LOST CERTIFICATES BOX
{ } CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN
AND WISH TO TENDER HAVE BEEN LOST, DESTROYED OR STOLEN.
(SEE INSTRUCTION 12.)
9
<PAGE> 60
Number of Shares represented by lost, destroyed or stolen certificates:
________________________
COMPLETE ONLY IF APPLICABLE:
SOLICITED TENDERS AND PROXIES
(SEE INSTRUCTION 10)
As provided in Instruction 10, Conectiv will pay a solicitation fee of
an amount equal to $1.50 per Share for any Shares tendered, accepted for payment
and paid for pursuant to the Offer (except that for transactions for beneficial
owners whose ownership equals or exceeds 2,500 Shares, Conectiv will pay a
solicitation fee of an amount equal to $1.00 per Share). With respect to fees
payable pursuant to this paragraph involving transactions for beneficial owners
whose ownership is less than 2,500 Shares, any fees payable hereunder shall be
paid in full to the Dealer Manager unless a Soliciting Dealer is designated (as
herein described), in which case such fee shall be payable in full to such
designated Soliciting Dealer (which designated Soliciting Dealer may be the
Dealer Manager). With respect to fees payable pursuant to this paragraph
involving transactions for beneficial owners whose ownership equals or exceeds
2,500 Shares, any fees payable hereunder shall be paid in full to the Dealer
Manager unless a Soliciting Dealer is designated, in which case 80% of such fee
shall be paid to the Dealer manager and 20% of such fee shall be paid to the
designated Soliciting Dealer (which designated Soliciting Dealer may be the
Dealer Manager). However, Soliciting Dealers will not be entitled to a
solicitation fee for Shares beneficially owned by such Soliciting Dealer.
The undersigned represents that the Soliciting Dealer which solicited
and obtained this tender is:
Name of Firm:___________________________________________________________________
(PLEASE PRINT)
Name of Individual Broker
or Financial Consultant:________________________________________________________
Telephone Number of Broker
or Financial Consultant:________________________________________________________
Identification Number (if known):_______________________________________________
Address:________________________________________________________________________
(INCLUDE ZIP CODE)
COMPLETE ONLY IF CUSTOMER'S SHARES HELD IN NOMINEE NAME ARE TENDERED:
NAME OF BENEFICIAL OWNER NUMBER OF SHARES TENDERED
(ATTACH ADDITIONAL LIST IF NECESSARY)
_______________________________________ ____________________________________
_______________________________________ ____________________________________
_______________________________________ ____________________________________
The acceptance of compensation by such Soliciting Dealer will
constitute a representation by it that (a) it has complied with the applicable
requirements of the Securities Exchange Act of 1934, as amended, and the
applicable rules and regulations thereunder, in connection with such
solicitation; (b) it is entitled to such compensation for such solicitation
under the terms and conditions of the Offer to Purchase and Proxy Statement; (c)
in soliciting tenders of Shares, it has used no solicitation materials other
than those furnished by Conectiv or the Company; and (d) if it is a foreign
broker or dealer not eligible for
10
<PAGE> 61
membership in the National Association of Securities Dealers, Inc. (the "NASD"),
it has agreed to conform to the NASD's Rules of Fair Practice in making
solicitations.
The payment of compensation to any Soliciting Dealer is dependent on
such Soliciting Dealer returning a Notice of Solicited Tenders to the
Depositary.
THIS LETTER OF TRANSMITTAL AND PROXY IS TO BE USED FOR THE TENDER OF
SHARES OF THE 4.10% SERIES (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY
STATEMENT) ONLY. ANY PERSON DESIRING TO TENDER OR VOTE SHARES OF ANY OTHER
SERIES OF PREFERRED STOCK FOR WHICH CONECTIV IS MAKING A TENDER OFFER AND/OR
SOLICITING A PROXY MUST SUBMIT A LETTER OF TRANSMITTAL AND PROXY RELATING TO
THAT SPECIFIC SERIES.
11
<PAGE> 62
PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW OR A FORM W-8, AS APPLICABLE.
SIGN HERE:______________________________________________________________________
SIGNATURE OF OWNER(S)
______________________________________________________________________
SIGNATURE OF OWNER(S)
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal and Proxy must be guaranteed by a firm
that is a member of a registered national securities exchange or the NASD, or by
a commercial bank or trust company having an office or correspondent in the
United States which is a participant in an approved Medallion Signature
Guarantee Program (each of the foregoing being referred to as an "Eligible
Institution"). Signatures on this Letter of Transmittal and Proxy need not be
guaranteed (a) if this Letter of Transmittal and Proxy is signed by the
registered holder(s) of the Shares (which term, for purposes of this document,
shall include any participant in the Book-Entry Transfer Facility whose name
appears on a security position listing as the owner of Shares) tendered herewith
and such holder(s) has not completed the box above under the heading "Special
Payment Instructions" or the box above under the heading "Special Delivery
Instructions" on this Letter of Transmittal and Proxy, (b) if such Shares are
tendered for the account of an Eligible Institution or (c) if this Letter of
Transmittal and Proxy is being used solely for the purpose of voting Shares
which are not being tendered pursuant to the Offer. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND PROXY AND SHARES. This Letter
of Transmittal and Proxy is to be used if (a) certificates are to be forwarded
herewith, (b) delivery of Shares to be made by book-entry transfer pursuant to
the procedures set forth under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement and as Agent's
Message (as defined below) is not delivered or (c) Shares are being voted in
connection with the Offer. Certificates for all physically delivered Shares, or
a confirmation of a book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility of all Shares delivered electronically, as well as
a properly completed and duly executed Letter of Transmittal and Proxy, and any
other documents required by this Letter of Transmittal and Proxy, must be
received by the Depositary at one of its addresses set forth on the front page
of this Letter of Transmittal and Proxy on or prior to the Expiration Date (as
defined in the Offer to Purchase and Proxy Statement) with respect to all
Shares. Preferred Shareholders who wish to tender their Shares yet who cannot
deliver their Shares and all other required documents to the Depositary on or
prior to the Expiration Date must tender their Shares pursuant to the guaranteed
delivery procedure set forth under the heading "Terms of the Offer -- Procedure
for Tendering Shares" in the Offer to Purchase and Proxy Statement. Pursuant to
such procedure: (a) such tender must be made by or through an Eligible
Institution, (b) a properly completed and duly executed Notice of Guaranteed
Delivery and Proxy in the form provided by Conectiv (with any required signature
guarantees) must be received by the Depositary on or prior to the Expiration
Date and (c) the certificates for all physically delivered Shares, or a
confirmation of a book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility of all Shares delivered electronically, together
with a properly completed and duly executed Letter of Transmittal and Proxy, and
any other documents required by this Letter of Transmittal and Proxy, must be
received by the Depositary by 5:00 p.m. (New York City time) within three New
York Stock Exchange trading days after the date of execution of such Notice of
Guaranteed Delivery and Proxy, all as provided under the heading "Terms of the
Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy
Statement. Tenders by book-entry transfer may also be made by delivering an
Agent's Message in lieu of this Letter of Transmittal and Proxy. The term
"Agent's Message" means a message, transmitted by the Book-Entry Transfer
Facility, received by the Depositary and forming a part of the book-entry
transfer when a tender is initiated, which states that the Book-Entry Transfer
Facility has received an express acknowledgment from a participant tendering
Shares that such participant has received and agrees to be bound by the terms of
this Letter of Transmittal and Proxy and that Conectiv may enforce such
agreement against such participant.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT
THE OPTION AND RISK OF THE TENDERING PREFERRED SHAREHOLDER. IF CERTIFICATES FOR
SHARES ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED.
No alternative, conditional or contingent tenders will be accepted. See
"Terms of the Offer -- Number of Shares; Purchase Prices; Expiration Date;
Dividends" in the Offer to Purchase and Proxy Statement. By executing this
Letter of
12
<PAGE> 63
Transmittal and Proxy, the tendering shareholder waives any right to receive any
notice of the acceptance for payment of the Shares.
3. VOTING. PREFERRED SHAREHOLDERS (INCLUDING PREFERRED SHAREHOLDERS WHO
ACQUIRE SHARES SUBSEQUENT TO THE RECORD DATE) WHO WISH TO TENDER THEIR SHARES
PURSUANT TO THE OFFER MUST VOTE IN FAVOR OF THE PROPOSED AMENDMENT. THE OFFER IS
CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE
SPECIAL MEETING. In addition, Preferred Shareholders have the right to vote for
the Proposed Amendment regardless of whether they tender their Shares by casting
their vote and duly executing this Letter of Transmittal and Proxy or by voting
in person at the Special Meeting. By executing a Notice of Guaranteed Delivery
and Proxy, a Preferred Shareholder is deemed to have tendered the Shares
described in such Notice of Guaranteed Delivery and Proxy and to have voted such
Shares in accordance with the proxy contained therein. If no vote is indicated
on an otherwise properly executed proxy contained with this Letter of
Transmittal and Proxy (or within a Notice of Guaranteed Delivery and Proxy),
then all Shares in respect of such proxy will be voted in favor of the Proposed
Amendment. See "Proposed Amendment and Proxy Solicitation" in the Offer to
Purchase and Proxy Statement. The Offer is being sent to all persons in whose
names Shares are registered on the books of the Company on the Record Date and
transferees thereof. Preferred Shareholders who purchase or whose purchase is
registered after the Record Date and who wish to tender in the Offer must
arrange with their seller to receive a proxy from the holder of record of such
Shares on the Record Date. Any holder of Shares held of record on the Record
Date in the name of another must establish to the satisfaction of the Company
his entitlement to exercise or transfer such Proxy. This will ordinarily require
an assignment by such record holder in blank or, if not in blank, to and from
each successive transferee, including the holder, with each signature guaranteed
by an Eligible Institution. See Instruction 5. In order to facilitate receipt of
proxies, Shares shall, during the period which commences on September 2, 1998
(two business days prior to the Record Date) and which will end at the close of
business on the Expiration Date, trade in the over-the-counter market with a
proxy providing the transferee with the right to vote such acquired Shares in
the Proxy Solicitation. No record date is fixed for determining which persons
are permitted to tender Shares. However, only the holders of record, or holders
who acquire an assignment of proxy from such holders, are permitted to vote for
the Proposed Amendment and thereby validly tender Shares pursuant to the Offer.
Any person who is the beneficial owner but not the record holder of Shares must
arrange for the record transfer of such Shares prior to tendering or direct the
record holder to tender on behalf of the beneficial owner.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY
BOOK-ENTRY TRANSFER). If fewer than all the Shares represented by any
certificate delivered to the Depositary are to be tendered, fill in the number
of Shares that are to be tendered in the box above under the heading
"Description of Shares Tendered." In such case, a new certificate for the
remainder of the Shares represented by the old certificate will be sent to the
person(s) signing this Letter of Transmittal and Proxy, unless otherwise
provided in the box above under the heading "Special Payment Instructions" or
"Special Delivery Instructions," as promptly as practicable following the
expiration or termination of the Offer. All Shares represented by certificates
delivered to the Depositary will be deemed to have been tendered unless
otherwise indicated.
5. SIGNATURES ON THIS LETTER OF TRANSMITTAL AND PROXY AND/OR NOTICE OF
GUARANTEED DELIVERY AND PROXY; STOCK POWERS AND ENDORSEMENTS. If either this
Letter of Transmittal and Proxy or the Notice of Guaranteed Delivery and Proxy
(together, the "Tender and Proxy Documents") is signed by the registered
holder(s) of the Shares tendered hereby, the signature(s) must correspond with
the name(s) as written one the face of the certificates without alteration,
enlargement or any change whatsoever.
If any of the Shares tendered or voted under either Tender and Proxy
Document are held of record by two or more persons, all such persons must sign
such Tender and Proxy Document.
If any of the Shares tendered or voted under either Tender and Proxy
Document are registered in different names or different certificates, it will be
necessary to complete, sign and submit as many separate applicable Tender and
Proxy Documents as there are different registrations or certificates.
If either Tender and Proxy Document is signed by the registered
holder(s) of the Shares tendered hereby, no endorsements of certificates or
separate stock powers are required unless payment of the purchase price is to be
made to, or Shares not tendered or not purchased are to be registered in the
name of, any person other than the registered holder(s). Signatures on any such
certificates or stock powers must be guaranteed by an Eligible Institution. See
Instruction 1.
If this Letter of Transmittal and Proxy is signed by a person other
than the registered holder(s) of the Shares tendered hereby, certificates must
be endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the
13
<PAGE> 64
name(s) of the registered holder(s) appear(s) on the certificates for such
Shares. Signature(s) on any such certificates or stock powers must be guaranteed
by an Eligible Institution. See Instruction 1.
If either Tender and Proxy Document or any certificate or stock power
is signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Conectiv of the authority of such person so to act must be
submitted.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6,
Conectiv will pay or cause to be paid any stock transfer taxes with respect to
the sale and transfer of any Shares to it or its order pursuant to the Offer.
If, however, payment of the purchase price is to be made to, or Shares not
tendered or not purchased are to be registered in the name of, any person other
than the registered holder(s), or if tendered Shares are registered in the name
of any person other than the person(s) signing this Letter of Transmittal and
Proxy, the amount of any stock transfer taxes (whether imposed on the registered
holder(s), such other person or otherwise) payable on account of the transfer to
such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes, or exemption therefrom, is submitted. See
"Terms of the Offer -- Acceptance of Shares for Payment and Payment of Purchase
Price and Dividends" in the Offer to Purchase and Proxy Statement. EXCEPT AS
PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY TO AFFIX TRANSFER TAX
STAMPS TO THE CERTIFICATES REPRESENTING SHARES TENDERED HEREBY.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the
purchase price of any Shares purchased is to be issued in the name of, any
Shares not tendered or not purchased are to be returned to or the check for the
Special Cash Payment is to be issued in the name of, a person other than the
person(s) signing this Letter of Transmittal and Proxy or if the check and/or
any certificate for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal and Proxy or
to an address other than that shown in the box above under the heading "Name(s)
and Address(es) of Registered Holder(s)," then the "Special Payment
Instructions" and/or "Special Delivery Instructions" on this Letter of
Transmittal and Proxy should be completed. Preferred Shareholders tendering
Shares by book-entry transfer will have any Shares not accepted for payment
returned by crediting the account maintained by such Preferred Shareholder at
the Book-Entry Transfer Facility.
8. SUBSTITUTE FORM W-9 and FORM W-8. A tendering Preferred Shareholder
and a Preferred Shareholder voting in favor of the Proposed Amendment (but not
tendering) is required to provide the Depositary with (i) in the case of a
Untied States Preferred Shareholder, a correct Taxpayer Identification Number
("TIN") and a certification that the IRS has not notified such shareholder that
he is subject to backup withholding on Substitute Form W-9, or (ii) in the case
of a foreign Preferred Shareholder, a properly completed Form W-8, as discussed
below under "Important Tax Information." Failure to provide the information on
either Substitute Form W-9 or Form W-8 may subject the Preferred Shareholder to
a $50 penalty imposed by the Internal Revenue Service and to 31% federal income
tax backup withholding on gross amount payable. The box in Part 2 of Substitute
Form W-9 may be checked if the Preferred Shareholder has not been issued a TIN
and has applied for a number or intends to apply for a number in the near
future. If the box in Part 2 is checked and the Depositary is not provided with
a TIN by the time of payment, the Depositary will withhold 31% of the gross
amount otherwise payable thereafter until a TIN is provided to the Depositary.
9. REQUESTS FOR ASSISTANCE OF ADDITIONAL COPIES. Any questions or
requests for assistance may be directed to the Information Agent or the Dealer
Manager at their respective telephone numbers and addresses listed below.
Requests for additional copies of the Offer to Purchase and Proxy Statement,
this Letter of Transmittal and Proxy or other tender offer materials may be
directed to the Information Agent or the Dealer Manager and such copies will be
furnished promptly at Conectiv's expense. Preferred Shareholders may also
contact their local broker, dealer, commercial bank or trust company for
assistance concerning the Offer.
10. SOLICITED TENDERS. Conectiv will pay a solicitation fee of an
amount equal to $1.50 per Share for Shares that are tendered, accepted for
payment and paid for pursuant to the Offer (except that for transactions for
beneficial owners whose ownership equals or exceeds 2,500 Shares, Conectiv will
pay a solicitation fee of an amount equal to $1.00 per Share). With respect to
fees payable pursuant to this paragraph involving transactions for beneficial
owners whose ownership is less than 2,500 Shares, any fees payable hereunder
shall be paid in full to the Dealer Manager unless a Soliciting Dealer is
designated (as herein described), in which case such fee shall be payable in
full to such designated Soliciting Dealer (which designated Soliciting Dealer
may be the Dealer Manager). With respect to fees payable pursuant to this
paragraph involving transactions for beneficial owners whose ownership equals or
exceeds 2,500 Shares, any fees payable hereunder shall be paid in full to the
Dealer Manager unless a Soliciting Dealer is designated, in which case 80% of
such fee shall be paid to the Dealer Manager and 20% of such fee shall be paid
to the designated Soliciting Dealer (which designated Soliciting Dealer
14
<PAGE> 65
may be the Dealer Manager). A designated Soliciting Dealer shall be named
hereunder under the heading "Solicited Tenders," and shall have solicited and
obtained the tender, and shall also be (a) any broker or dealer in securities
including the Dealer Manager in its capacity as a dealer or broker, which is a
member of any national securities exchange or of the NASD, (b) any foreign
broker or dealer not eligible for membership in the NASD which agrees to conform
to the NASD's Rules of Fair Practice in soliciting tenders outside the United
States to the same extent as though it were an NASD member, or (c) any bank or
trust company (each of which is referred to herein as a "Soliciting Dealer"). No
such fee shall be payable to a Soliciting Dealer with respect to the tender of
Shares by a holder unless the Letter of Transmittal and Proxy accompanying such
tender designates such Soliciting Dealer. No such fee shall be payable to a
Soliciting Dealer in respect of Shares registered in the name of such Soliciting
Dealer unless such Shares are held by such Soliciting Dealer as nominee and such
Shares are being tendered for the benefit of one or more beneficial owners
identified on the Letter of Transmittal and Proxy or on the Notice of Solicited
Tenders (included in the materials provided to brokers and dealers). No such fee
shall be payable to a Soliciting Dealer with respect to the tender of Shares by
the holder of record, for the benefit of the beneficial owner, unless the
beneficial owner has designated such Soliciting Dealer. If tendered Shares are
being delivered by book-entry transfer, the Soliciting Dealer must return a
Notice of Solicited Tenders to the Depositary within three business days after
expiration of the Offer to receive a solicitation fee. No such fee shall be
payable to a Soliciting Dealer if such Soliciting Dealer is required for any
reason to transfer the amount of such fee to a depositing holder (other than
itself). No such fee shall be paid to a Soliciting Dealer with respect to Shares
tendered for such Soliciting Dealer's own account. No broker, dealer, bank,
trust company or fiduciary shall be deemed to be the agent of Conectiv, the
Company, the Depositary, the Information Agent or the Dealer Manager for
purposes of the Offer.
Soliciting Dealers will include any organizations described in clauses
(a), (b) or (c) above even when the activities of such organization in
connection with the Offer consist solely of forwarding to clients materials
relating to the Offer, including this Letter of Transmittal and Proxy, and
tendering Shares as directed by beneficial owners thereof. No Soliciting Dealer
is required to make any recommendation to holders of Shares as to whether to
tender or refrain from tendering in the Offer. No assumption is made, in making
payment to any Soliciting Dealer, that its activities in connection with the
Offer included any activities other than those described above, and for all
purposes noted in all materials relating to the Offer, the term "solicit" shall
be deemed to mean no more than "processing shares tendered" or "forwarding to
customers materials regarding the Offer."
11. IRREGULARITIES. All questions as to the form of documents and the
validity, eligibility (including time of receipt) and acceptance of any tender
of Shares will be determined by Conectiv, in its sole discretion, and its
determination shall be final and binding. Conectiv reserves the absolute right
to reject any and all tenders of Shares that it determines are not in proper
form or the acceptance for payment of or payment for Shares that may, in the
opinion of Conectiv's counsel, be unlawful. Conectiv also reserves the absolute
right to waive any of the conditions to the Offer or any defect or irregularity
in any tender of Shares and Conectiv's interpretation of the terms and
conditions of the Offer (including these instructions) shall be final and
binding. Unless waived, any defects or irregularities in connection with tenders
must be cured within such time as Conectiv shall determine. None of Conectiv,
the Company, the Dealer Manager, the Depositary, the Information Agent or any
other person shall be under any duty to give notice of any defect or
irregularity in tenders, nor shall any of them incur any liability for failure
to give any such notice. Tenders will not be deemed to have been made until all
defects and irregularities have been cured or waived.
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any of your
certificate(s) for Shares have been lost, stolen or destroyed, please call ACE
Stockholder Services at (800) 365-6495 (toll free). You may need to complete and
Affidavit of Loss with respect to the lost certificate(s) (which will be
provided by ACE Stockholder Services) and payment of an indemnity bond premium
fee may be required. The tender of Shares pursuant to this Letter of Transmittal
and Proxy will not be valid unless prior to the Expiration Date: (a) such
procedures have been completed and a replacement certificate for the Shares has
been delivered to the Depositary or (b) a Notice of Guaranteed Delivery and
Proxy has been delivered to the Depositary. See Instruction 2.
IMPORTANT: THIS LETTER OF TRANSMITTAL AND PROXY, DULY EXECUTED,
TOGETHER WITH, IF APPLICABLE, CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY
TRANSFER, AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY,
OR, IF APPLICABLE, THE NOTICE OF GUARANTEED DELIVERY AND PROXY MUST BE RECEIVED
BY THE DEPOSITARY, ON OR PRIOR TO THE EXPIRATION DATE.
15
<PAGE> 66
IMPORTANT TAX INFORMATION
Under federal income tax law, a Preferred Shareholder whose tendered
Shares are accepted for payment or who will receive a Special Cash Payment as a
result of voting in favor of the Proposed Amendment is required to provide the
Depositary (as payer) with either such Preferred Shareholder's correct TIN on
Substitute Form W-9 below or a properly completed Form W-8. If such Preferred
Shareholder is an individual, the TIN is his or her social security number. For
businesses and other entities, the number is the federal employer identification
number. If the Depositary is not provided with the correct TIN or properly
completed Form W-8, the Preferred Shareholder may be subject to a $50 penalty
imposed by the Internal Revenue Code. In addition, payments that are made to
such Preferred Shareholder with respect to Shares purchased pursuant to the
Offer may be subject to 31% backup withholding.
Certain Preferred Shareholders (including, among others, all
corporations and certain foreign individuals) are exempt from backup
withholding. For a corporate United States Preferred Shareholder to qualify for
such exemption, such Preferred Shareholder must provide the Depositary with a
properly completed and executed Substitute Form W-9 attesting to its exempt
status. In order for a foreign Preferred Shareholder to qualify as an exempt
recipient, such Preferred Shareholder must submit to the Depositary a properly
completed Internal Revenue Service Form W-8 (a "Form W-8"), signed under
penalties of perjury, attesting to that Preferred Shareholder's exempt status. A
Form W-8 can be obtained from the Depositary. See the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If federal income tax backup withholding applies, the Depositary is
required to withhold 31% of any payments made to the Preferred Shareholder.
Backup withholding is not an additional tax. Rather, the federal income tax
liability of persons subject to backup withholding will be reduced by the amount
of the tax withheld. If withholding results in an overpayment of taxes, a refund
may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8
To avoid backup withholding on a Special Cash Payment or payments that
are made to a Preferred Shareholder with respect to Shares purchased pursuant to
the Offer, the Preferred Shareholder is required to notify the Depositary of his
or her correct TIN by completing the Substitute Form W-9 attached hereto
certifying that the TIN provided on Substitute Form W-9 is correct and that (a)
the Preferred Shareholder has not been notified by the Internal Revenue Service
that he or she is subject to federal income tax backup withholding as a result
of failure to report all interest or dividends or (b) the Internal Revenue
Service has notified the Preferred Shareholder that he or she is no longer
subject to federal income tax backup withholding. Foreign Preferred Shareholders
must submit a properly completed Form W-8 in order to avoid the applicable
backup withholding; provided, however, that backup withholding will not apply to
foreign Preferred Shareholders subject to withholding under other provisions of
the Code or the Special Cash Payment or on gross payments received pursuant to
the Offer. Foreign Preferred Shareholders that submit a properly completed Form
W-8 may nevertheless be subject to withholding under other provisions of the
Code on the payments received by them.
WHAT NUMBER TO GIVE THE DEPOSITARY
The Preferred Shareholder is required to give the Depositary the social
security number or employer identification number of the registered owner of the
Shares. If the Shares are in more than one name or are not in the name of the
actual owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report.
PAYER'S NAME
<TABLE>
<S> <C> <C>
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT _______________________________
FORM W-9 RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. SOCIAL SECURITY NUMBER
OR
_______________________________
EMPLOYER IDENTIFICATION TIN
NAME (PLEASE PRINT)____________________________ PART 2 --
ADDRESS________________________________________ AWAITING TIN { }
CITY_______________________STATE_______________
ZIP CODE_______________________________________
</TABLE>
16
<PAGE> 67
<TABLE>
<S> <C>
DEPARTMENT OF THE TREASURY PART 3 -- CERTIFICATION -- UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
INTERNAL REVENUE SERVICE
(1) THE NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER IDENTIFICATION NUMBER (OR A
TIN HAS NOT BEEN ISSUED TO ME BUT I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE
A TIN OR INTEND TO DO SO IN THE NEAR FUTURE), (2) I AM NOT SUBJECT TO BACKUP
WITHHOLDING EITHER BECAUSE I HAVE NOT BEEN NOTIFIED BY THE INTERNAL REVENUE SERVICE
(THE "IRS") THAT I AM SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF A FAILURE TO REPORT
ALL INTEREST OR DIVIDENDS OR THE IRS HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT TO
BACKUP WITHHOLDING AND (3) ALL OTHER INFORMATION PROVIDED ON THIS FORM IS TRUE,
CORRECT AND COMPLETE.
SIGNATURE____________________________________________________________________________
DATE _____________________________, 1998
YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE
CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING INTEREST OR
DIVIDENDS ON YOUR TAX RETURN.
PAYER'S REQUEST FOR NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
TAXPAYER IDENTIFICATION WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER OR PROXY
NUMBER ("TIN") AND SOLICITATION. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
CERTIFICATION TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 2 OF
SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER:
I CERTIFY UNDER PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER HAS NOT
BEEN ISSUED TO ME AND EITHER (1) I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE
A TAXPAYER IDENTIFICATION NUMBER TO THE APPROPRIATE INTERNAL REVENUE SERVICE CENTER OR
SOCIAL SECURITY ADMINISTRATION OFFICE OR (2) I INTEND TO DO SO IN THE NEAR FUTURE. I
UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER BY THE TIME OF
PAYMENT, 31% OF ALL PAYMENTS MADE TO ME WILL BE WITHHELD UNTIL I PROVIDE A NUMBER.
SIGNATURE ____________________________________ DATE________________________, 1998
</TABLE>
THE INFORMATION AGENT:
D.F. KING & CO., INC.
77 Water Street, 20th Floor
New York, New York 10005
(800) 431-9629 (toll free)
or
Banks and Brokers call
(212) 269-5550
17
<PAGE> 68
4.35%
LETTER OF TRANSMITTAL AND PROXY
TO ACCOMPANY
SHARES OF 4.35% SERIES PREFERRED STOCK
CUSIP NUMBER 048303762
OF
ATLANTIC CITY ELECTRIC COMPANY
---------------------------
TENDERED PURSUANT TO THE OFFER TO PURCHASE FOR CASH
BY
CONECTIV
DATED SEPTEMBER 8, 1998, FOR PURCHASE AT A
PURCHASE PRICE OF $____ PER SHARE
AND/OR
VOTED PURSUANT TO THE PROXY STATEMENT OF
ATLANTIC CITY ELECTRIC COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON OCTOBER 14, 1998, UNLESS THE OFFER IS EXTENDED
THE PROXY CONTAINED IN THIS DOCUMENT IS IN
RESPECT OF THE SPECIAL MEETING OF SHAREHOLDERS TO
BE HELD ON OCTOBER 14, 1998, OR ON SUCH DATE TO
WHICH THE MEETING IS ADJOURNED OR POSTPONED.
TO: THE BANK OF NEW YORK, DEPOSITARY
BY MAIL: BY HAND OR OVERNIGHT COURIER:
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN EXACTLY AS NAME(S) AND ADDRESS(ES) APPEAR(S) ON CERTIFICATE(S))
IF YOU HAVE ANY QUESTIONS, HAVE NOT RECEIVED THE OFFER TO PURCHASE AND
PROXY STATEMENT OR OTHER DOCUMENTS PERTAINING TO THE OFFER OR NEED ASSISTANCE IN
COMPLETING THIS LETTER OF TRANSMITTAL AND PROXY, PLEASE CONTACT D.F. KING & CO.,
INC., THE INFORMATION AGENT, AT TELEPHONE (800) 431-9629 (TOLL FREE).
<PAGE> 69
PREFERRED SHAREHOLDERS (INCLUDING PREFERRED SHAREHOLDERS WHO ACQUIRE
SHARES SUBSEQUENT TO THE RECORD DATE) WILL NOT BE ABLE TO VALIDLY TENDER THEIR
SHARES UNLESS THEY HAVE SUBMITTED A DULY COMPLETED, VALID AND UNREVOKED PROXY
INDICATING THEIR VOTE FOR THE PROPOSED AMENDMENT OR INDICATE IN THE ACCOMPANYING
PROXY THEIR INTENTION TO VOTE FOR THE PROPOSED AMENDMENT AT THE SPECIAL MEETING.
CONECTIV ("CONECTIV") WILL NOT BE REQUIRED TO ACCEPT FOR PAYMENT OR PAY FOR ANY
SHARES TENDERED IF THE PROPOSED AMENDMENT IS NOT APPROVED AND ADOPTED AT THE
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON OCTOBER 14, 1998, OR ON SUCH DATE
TO WHICH THE MEETING IS ADJOURNED OR POSTPONED (THE "SPECIAL MEETING").
PREFERRED SHAREHOLDERS HAVE THE RIGHT TO VOTE FOR THE PROPOSED AMENDMENT
REGARDLESS OF WHETHER THEY TENDER THEIR SHARES BY CASTING THEIR VOTE AND SIGNING
THE PROXY CONTAINED WITHIN THIS LETTER OF TRANSMITTAL AND PROXY OR BY VOTING IN
PERSON AT THE SPECIAL MEETING. IF THE PROPOSED AMENDMENT IS APPROVED AND
ADOPTED, ATLANTIC CITY ELECTRIC COMPANY (THE "COMPANY") WILL MAKE A SPECIAL CASH
PAYMENT TO EACH PREFERRED SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED
AMENDMENT, PROVIDED THAT SUCH HOLDER'S SHARES ARE NOT TENDERED PURSUANT TO THE
OFFER.
HOLDERS WHO PURCHASE OR WHOSE PURCHASE SETTLES OR IS REGISTERED AFTER
THE CLOSE OF BUSINESS ON SEPTEMBER 4, 1998 (THE "RECORD DATE") AND WHO WISH TO
TENDER IN THE OFFER MUST ARRANGE WITH THEIR SELLER TO RECEIVE A DULY COMPLETED,
VALID AND UNREVOKED PROXY (WHICH MAY BE IN THE FORM OF AN IRREVOCABLE ASSIGNMENT
OF PROXY AS SET FORTH IN THIS LETTER OF TRANSMITTAL AND PROXY) FROM THE HOLDER
OF RECORD OF SUCH SHARES ON THE RECORD DATE. IN ORDER TO FACILITATE RECEIPT OF
PROXIES, SHARES SHALL, DURING THE PERIOD WHICH COMMENCES SEPTEMBER 2, 1998 (TWO
BUSINESS DAYS PRIOR TO THE RECORD DATE) AND WHICH WILL END AT THE CLOSE OF
BUSINESS ON THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY
STATEMENT), TRADE IN THE OVER-THE-COUNTER MARKET WITH A PROXY PROVIDING THE
TRANSFEREE WITH THE RIGHT TO VOTE SUCH ACQUIRED SHARES IN THE PROXY
SOLICITATION.
NOTE: SIGNATURES MUST BE PROVIDED HEREIN. PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY.
The undersigned hereby appoints Howard E. Cosgrove, Barbara S. Graham
and Louis M. Walters, or any of them, as proxies, each with the power to appoint
his or her substitute, and hereby authorizes them to represent and to vote as
designated hereunder and in their discretion with respect to any other business
properly brought before the Special Meeting all the shares of preferred stock of
the Company which the undersigned is entitled to vote at the Special Meeting or
any adjournment(s) or postponement(s) thereof.
NOTE: IF YOU ARE VOTING BUT NOT TENDERING SHARES, DO NOT SEND ANY SHARE
CERTIFICATES WITH THIS LETTER OF TRANSMITTAL AND PROXY.
THIS LETTER OF TRANSMITTAL AND PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF THE COMPANY. The proxy contained herein, when properly
executed, will be voted in the manner described herein by the undersigned
shareholder(s). If no direction is made, the proxy will be voted FOR Item 1. An
abstention is the equivalent of a vote AGAINST the Proposed Amendment.
PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES MUST VOTE FOR
ITEM 1.
Indicate your vote by an (X). The Board of Directors recommends voting
FOR Item 1.
ITEM 1.
HOLDERS OF SHARES WHO WISH TO TENDER THEIR SHARES MUST VOTE FOR THE
PROPOSED AMENDMENT EITHER BY SUBMITTING THIS PROXY OR BY VOTING AT THE SPECIAL
MEETING.
To remove from the Company's charter Paragraph (7)(B)(c) of Article
III, a provision restricting the amount of securities representing unsecured
indebtedness issuable by the Company.
{ } FOR { } AGAINST { } ABSTAIN
2
<PAGE> 70
SHARES REPRESENTED BY ALL PROPERLY EXECUTED PROXIES WILL BE VOTED IN
ACCORDANCE WITH INSTRUCTIONS APPEARING ON THIS PROXY. IN THE ABSENCE OF SPECIFIC
INSTRUCTIONS, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF
THE BOARD OF DIRECTORS, AND IN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE SPECIAL MEETING.
Any holder of Shares held of record on the Record Date in the name of
another holder must establish to the satisfaction of the Company its entitlement
to exercise or transfer this Proxy. This will ordinarily require an assignment
by such record holders in blank or, if not in blank, to and from each successive
transferee, including the holder, with each signature guaranteed by an Eligible
Institution. A form of irrevocable assignment of proxy has been provided herein.
Please check box if you plan to attend the Special Meeting. { }
SIGNATURE(S) OF OWNER(S)
X_______________________________________________________________________________
X_______________________________________________________________________________
Dated:____________________________________________________________________, 1998
Name(s):________________________________________________________________________
(PLEASE PRINT)
Capacity (full title):__________________________________________________________
Address:________________________________________________________________________
(INCLUDE ZIP CODE)
DAYTIME Area Code and Telephone No.:____________________________________________
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
stock certificates or on a security position listing or by person(s) authorized
to become registered holder(s) by certificates and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, please set forth full title and see Instruction 5.)
3
<PAGE> 71
PLEASE COMPLETE:
DESCRIPTION OF SHARES TENDERED
(IF TENDERING SHARES, PLEASE FILL IN EXACTLY AS INFORMATION
APPEARS ON CERTIFICATE(S))
(ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
<TABLE>
<CAPTION>
NUMBER OF SHARES NOT
TOTAL NUMBER OF SHARES TENDERED BUT AS TO
REPRESENTED BY NUMBER OF SHARES WHICH PROXIES GIVEN
CERTIFICATE NUMBER(S)* CERTIFICATE(S)* TENDERED** ONLY
<S> <C> <C> <C>
</TABLE>
* Need not be completed by shareholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented
by any certificates delivered to the Depositary are being tendered. See
Instruction 4. You must vote for the Proposed Amendment with respect to
any Shares tendered.
If any of your certificate(s) for Shares have been lost, stolen or
destroyed, please call the Company's shareholder services department ("ACE
Stockholder Services") at 800-365-6495 (toll free). You may need to complete an
Affidavit of Loss with respect to the lost certificate(s) (which will be
provided by ACE Stockholder Services) and payment of an indemnity bond premium
fee may be required.
PLEASE COMPLETE IF APPLICABLE:
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature:___________________________________________________________
Name:___________________________________________________________________________
Name of Firm:___________________________________________________________________
Address of Firm:________________________________________________________________
Area Code and Telephone No.:____________________________________________________
Dated:____________________________________________________________________, 1998
4
<PAGE> 72
IF SELLING SHARES SUBSEQUENT TO SEPTEMBER 4, 1998, A RECORD HOLDER MUST
COMPLETE THE FOLLOWING IRREVOCABLE PROXY
PLEASE SIGN THIS TO IRREVOCABLY TRANSFER A PREFERRED STOCK
PROXY TO A SUBSEQUENT HOLDER OF PREFERRED STOCK WHO
WAS NOT A HOLDER OF RECORD ON SEPTEMBER 4, 1998
IRREVOCABLE PROXY
with respect to shares of the
4.35% Series Cumulative Preferred Stock
of
ATLANTIC CITY ELECTRIC COMPANY
the undersigned hereby irrevocably appoints
--------------------------------------------
Type or Print Name of Transferee
as attorney and proxy, with full power of substitution, to vote and otherwise
act for and in the name(s) of the undersigned with respect to the Shares
indicated below which were held of record by the undersigned on September 4,
1998, in the manner in which the undersigned would be entitled to vote and
otherwise act in respect of such Shares on any and all matters.
This proxy shall be effective whether or not the Shares indicated below
are tendered in the Offer.
This instrument supersedes and revokes any and all previous
appointments of proxies heretofore made by the undersigned with respect to the
Shares indicated below as to any and all matters. THIS PROXY IS IRREVOCABLE AND
IS COUPLED WITH AN INTEREST.
All authority conferred or agreed to be conferred herein shall survive
the death or incapacity of the undersigned, and any obligation of the
undersigned hereunder shall be binding upon the heirs, executors,
administrators, legal and personal representatives, successors in interest and
assigns of the undersigned. The undersigned understands that tenders of Shares
pursuant to any of the procedures described in the Offer to Purchase and Proxy
Statement and in this Letter of Transmittal and Proxy will constitute a binding
agreement between the undersigned and the Company upon the terms and subject to
the conditions of the Offer.
- --------------------------------------------------------------------------------
DESCRIPTION OF PREFERRED STOCK
- --------------------------------------------------------------------------------
CERTIFICATE NUMBER(S) AGGREGATE NUMBER
(ATTACH LIST IF NECESSARY) OF SHARES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL:
- --------------------------------------------------------------------------------
- ---------------------------------- ------------------------------------
Signature of Record Holder or Signature of Record Holder of
Authorized Signatory Authorized Signatory
- ---------------------------------- ------------------------------------
Type or Print Name Type or Print Name
Date: _____________________, 1998 Date: _______________________, 1998
Tax Identification or Social Security No(s). __________________________________
5
<PAGE> 73
Must be signed by holder(s) exactly as name(s) appear(s) on the Record Date on
certificate(s) for the Shares or on a security position listing or by person(s)
authorized to become holder(s) by certificates and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation, agent or other person acting in a
fiduciary or representative capacity, please provide the following information
and see Instruction 5.
Name:___________________________________________________________________________
(PLEASE PRINT)
Capacity:_______________________________________________________________________
(FULL TITLE)
Address:________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Tel. No.__________________________________________________________
PLEASE COMPLETE IF APPLICABLE:
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
Name of Firm:___________________________________________________________________
Authorized Signature:___________________________________________________________
Title:__________________________________________________________________________
Dated:____________________________________________________________________, 1998
DELIVERY OF THIS LETTER OF TRANSMITTAL AND PROXY TO AN ADDRESS OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS
LETTER OF TRANSMITTAL AND PROXY IN THE APPROPRIATE SPACE THEREFOR PROVIDED AND,
IF YOU ARE TENDERING ANY SHARES OR VOTING IN FAVOR OF THE PROPOSED AMENDMENT,
COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW OR A FORM W-8, AS APPLICABLE.
SEE INSTRUCTION 8 AND "IMPORTANT TAX INFORMATION" BELOW.
DO NOT SEND ANY CERTIFICATES TO MORGAN STANLEY DEAN WITTER, D. F. KING
& CO., INC., CONECTIV, ACE STOCKHOLDER SERVICES OR ATLANTIC CITY ELECTRIC
COMPANY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL AND PROXY
SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL AND PROXY IS
COMPLETED. QUESTIONS REGARDING AND REQUESTS FOR COPIES OF THE OFFER TO PURCHASE
AND PROXY STATEMENT OR THIS LETTER OF TRANSMITTAL AND PROXY MAY BE DIRECTED TO
D.F. KING & CO., INC., THE INFORMATION AGENT, AT (800) 431-9629 (TOLL FREE) OR
BANKS AND BROKERS CALL (212) 269-5550.
This Letter of Transmittal and Proxy is to be used (a) if Shares are to
be voted but not tendered, or (b) if certificates for Shares are to be forwarded
to The Bank of New York ("Depositary") or (c) if delivery of tendered Shares (as
defined below) is to be made by book-entry transfer to the Depositary's account
at The Depository Trust Company ("DTC" or the "Book-Entry Transfer Facility")
pursuant to the procedures set forth under the heading "Terms of the Offer --
Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement (as
defined below) and an Agent's Message (as defined below) is not delivered.
Preferred Shareholders who wish to tender Shares but who cannot deliver
their Shares and all other documents required hereby to the Depositary by the
Expiration Date must tender their Shares pursuant to the guaranteed delivery
procedure set forth under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement. See Instruction
2. DELIVERY OF DOCUMENTS TO CONECTIV, THE COMPANY OR THE BOOK-ENTRY TRANSFER
FACILITY DOES NOT CONSTITUTE A VALID DELIVERY.
6
<PAGE> 74
{ } CHECK HERE IF TENDERED SHARES ARE ENCLOSED HEREWITH.
A Holder tendering Shares pursuant to this Letter of Transmittal and Proxy
must check one of the following boxes:
{ } A duly completed, valid and unrevoked proxy indicating a vote FOR the
Proposed Amendment is included herein.
{ } A vote FOR the Proposed Amendment will be cast at the Special Meeting.
ELIGIBLE INSTITUTIONS OR BROKERS TO COMPLETE ONLY IF APPLICABLE:
{ } CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING:
Name of tendering institution_______________________________________________
Account No. at DTC__________________________________________________________
Transaction Code No.________________________________________________________
{ } CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY AND PROXY PREVIOUSLY SENT TO THE DEPOSITARY AND
COMPLETE THE FOLLOWING:
Name(s) of tendering shareholder(s)
Date of execution of Notice of Guaranteed Delivery and Proxy
Name of institution that guaranteed delivery
If delivery is by book-entry transfer:
Name of tendering institution
Account No. at DTC
Transaction Code No.
A holder electing to tender Shares pursuant to a Notice of Guaranteed
Delivery and Proxy must check one of the following boxes:
{ } A duly completed, valid and unrevoked proxy indicating a vote FOR the
Proposed Amendment was included with the Notice of Guaranteed Delivery
and Proxy previously sent to the Depositary.
{ } A duly completed, valid and unrevoked proxy indicating a vote FOR the
Proposed Amendment is being delivered pursuant to a Notice of
Guaranteed Delivery and Proxy previously sent to the Depositary.
{ } A valid vote FOR the Proposed Amendment will be cast at the Special
Meeting.
NOTE: SIGNATURES MUST BE PROVIDED ABOVE.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
7
<PAGE> 75
Ladies and Gentlemen:
The abovesigned hereby tenders to Conectiv, a Delaware corporation
("Conectiv"), the shares in the amount set forth in the box above designated
"Description of Shares Tendered" pursuant to Conectiv's offer to purchase any
and all of the outstanding shares (the "Shares") of the series of preferred
stock of Atlantic City Electric Company, a New Jersey corporation, and direct
utility subsidiary of Conectiv (the "Company"), shown on the first page hereof
as to which this Letter of Transmittal and Proxy is applicable (the "Shares") at
the purchase price per Share shown on the first page hereof, net to the seller
in cash, upon the terms and subject to the conditions set forth in the Offer to
Purchase and Proxy Statement, dated September 8, 1998 (the "Offer to Purchase
and Proxy Statement"), receipt of which is hereby acknowledged, and in this
Letter of Transmittal and Proxy (which as to the Shares, together with the Offer
to Purchase and Proxy Statement, constitutes the "Offer"). PREFERRED
SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER MUST VOTE IN
FAVOR OF THE PROPOSED AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION,
AS AMENDED, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE
"PROPOSED AMENDMENT"). THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT
BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON
OCTOBER 14, 1998, OR ON SUCH DATE TO WHICH THE MEETING IS ADJOURNED OR POSTPONED
(THE "SPECIAL MEETING"). See "Proposed Amendment and Proxy Solicitation," "Terms
of the Offer -- Extension of Tender Period; Termination; Amendments" and "Terms
of the Offer -- Certain Conditions of the Offer" in the Offer to Purchase and
Proxy Statement.
Subject to, and effective upon, acceptance for payment of and payment
for the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the abovesigned hereby
sells, assigns and transfers to, or upon the order of, Conectiv all right, title
and interest in and to all the Shares that are being tendered hereby and hereby
constitutes and appoints The Bank of New York (the "Depositary") the true and
lawful agent and attorney-in-fact of the abovesigned with respect to such
Shares, with full power of substitution (such power of attorney being an
irrevocable power coupled with an interest), to (a) deliver certificates for
such Shares, or transfer ownership of such Shares on the account books
maintained by the Book-Entry Transfer Facility, together, in any such case, with
all accompanying evidences of transfer and authenticity, to or upon the order of
Conectiv, (b) present such Shares for registration and transfer on the books of
the Company and (c) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares, all in accordance with the terms of the
Offer. The Depositary will act as agent for tendering shareholders for the
purpose of receiving payment from Conectiv and transmitting payment to tendering
shareholders.
The abovesigned hereby represents and warrants that the abovesigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and that, when and to the extent the same are accepted for
payment by Conectiv, Conectiv will acquire good, marketable and unencumbered
title thereto, free and clear of all liens, restrictions, charges, encumbrances,
conditional sales agreements or other obligations relating to the sale or
transfer thereof, and the same will not be subject to any adverse claims. The
abovesigned will, upon request, execute and deliver any additional documents
deemed by the Depositary or Conectiv to be necessary or desirable to complete
the sale, assignment and transfer of the Shares tendered hereby.
All authority herein conferred or agreed to be conferred shall not be
affected by and shall survive the death, bankruptcy or incapacity of the
abovesigned, and any obligations of the abovesigned hereunder shall be binding
upon the heirs, legal representatives, successors, assigns, executors and
administrators of the abovesigned. Except as stated in the Offer, this tender is
irrevocable.
The abovesigned understands that tenders of Shares pursuant to any one
of the procedures described under the heading "Terms of the Offer -- Procedure
for Tendering Shares" in the Offer to Purchase and Proxy Statement and in the
instructions hereto will constitute the abovesigned's acceptance of the terms
and conditions of the Offer, including the abovesigned's representation and
warranty that (a) the abovesigned has a net long position in the Shares being
tendered within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended, and (b) the tender of such Shares complies
with such Rule 14e-4. Conectiv's acceptance for payment of Shares tendered
pursuant to the Offer will constitute a binding agreement between the
abovesigned and Conectiv upon the terms and subject to the conditions of the
Offer.
The abovesigned recognizes that, under certain circumstances set forth
in the Offer to Purchase and Proxy Statement, Conectiv may terminate or amend
the Offer or may not be required to purchase any of the Shares tendered hereby.
In either event, the abovesigned understands that certificate(s) for any Shares
not tendered or not purchased will be returned to the abovesigned.
8
<PAGE> 76
Unless otherwise indicated in the box below under the heading "Special
Payment Instructions," please issue the check for the purchase price of any
Shares purchased, and/or return any Shares not tendered or not purchased, in the
name(s) of the abovesigned (and, in the case of Shares tendered by book-entry
transfer, by credit to the account of the abovesigned at the Book-Entry Transfer
Facility). Similarly, unless otherwise indicated in the box below under the
heading "Special Delivery Instructions," please mail the check for the purchase
price of any Shares purchased and/or any certificate for Shares not tendered or
not purchased (and accompanying documents, as appropriate) to the abovesigned at
the address shown below the abovesigned's signature(s). In the event that both
"Special Payment Instructions" and "Special Delivery Instructions" are
completed, please issue the check for the purchase price of any Shares purchased
and/or return any Shares not tendered or not purchased in the name(s) of, and
mail said check and/or any certificates to, the person(s) so indicated. The
abovesigned recognizes that Conectiv has no obligation, pursuant to the "Special
Payment Instructions," to transfer any Shares from the name of the registered
holder(s) thereof if Conectiv does not accept for purchase any of the Shares so
tendered.
COMPLETE ONLY IF APPLICABLE:
SPECIAL PAYMENT INSTRUCTIONS (SEE
INSTRUCTIONS 1, 4, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased, the certificates for Shares not tendered or not purchased or the
check for the Special Cash Payment are to be issued in the name of someone other
than the abovesigned.
Issue { } Check and/or { } Certificate(s) to:
Name____________________________________________________________________________
(PLEASE PRINT)
Address_________________________________________________________________________
________________________________________________________________________________
(INCLUDE ZIP CODE)
________________________________________________________________________________
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased, the certificates for Shares not tendered or not purchased or the
check for the Special Cash Payment are to be mailed to someone other than the
abovesigned or to the abovesigned at an address other than that shown below the
abovesigned's signature(s).
Mail { } Check and/or { } Certificate(s) to:
Name____________________________________________________________________________
(PLEASE PRINT)
Address_________________________________________________________________________
________________________________________________________________________________
(INCLUDE ZIP CODE)
COMPLETE ONLY IF YOUR SHARES ARE LOST:
LOST CERTIFICATES BOX
{ } CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN
AND WISH TO TENDER HAVE BEEN LOST, DESTROYED OR STOLEN. (SEE
INSTRUCTION 12.)
9
<PAGE> 77
Number of Shares represented by lost, destroyed or stolen certificates:
_____________________
COMPLETE ONLY IF APPLICABLE:
SOLICITED TENDERS AND PROXIES
(SEE INSTRUCTION 10)
As provided in Instruction 10, Conectiv will pay a solicitation fee of
an amount equal to $1.50 per Share for any Shares tendered, accepted for payment
and paid for pursuant to the Offer (except that for transactions for beneficial
owners whose ownership equals or exceeds 2,500 Shares, Conectiv will pay a
solicitation fee of an amount equal to $1.00 per Share). With respect to fees
payable pursuant to this paragraph involving transactions for beneficial owners
whose ownership is less than 2,500 Shares, any fees payable hereunder shall be
paid in full to the Dealer Manager unless a Soliciting Dealer is designated (as
herein described), in which case such fee shall be payable in full to such
designated Soliciting Dealer (which designated Soliciting Dealer may be the
Dealer Manager). With respect to fees payable pursuant to this paragraph
involving transactions for beneficial owners whose ownership equals or exceeds
2,500 Shares, any fees payable hereunder shall be paid in full to the Dealer
Manager unless a Soliciting Dealer is designated, in which case 80% of such fee
shall be paid to the Dealer manager and 20% of such fee shall be paid to the
designated Soliciting Dealer (which designated Soliciting Dealer may be the
Dealer Manager). However, Soliciting Dealers will not be entitled to a
solicitation fee for Shares beneficially owned by such Soliciting Dealer.
The undersigned represents that the Soliciting Dealer which solicited
and obtained this tender is:
Name of Firm:___________________________________________________________________
(PLEASE PRINT)
Name of Individual Broker
or Financial Consultant:________________________________________________________
Telephone Number of Broker
or Financial Consultant:________________________________________________________
Identification Number (if known):_______________________________________________
Address:________________________________________________________________________
(INCLUDE ZIP CODE)
COMPLETE ONLY IF CUSTOMER'S SHARES HELD IN NOMINEE NAME ARE TENDERED:
NAME OF BENEFICIAL OWNER NUMBER OF SHARES TENDERED
(ATTACH ADDITIONAL LIST IF NECESSARY)
_______________________________________ ____________________________________
_______________________________________ ____________________________________
_______________________________________ ____________________________________
The acceptance of compensation by such Soliciting Dealer will
constitute a representation by it that (a) it has complied with the applicable
requirements of the Securities Exchange Act of 1934, as amended, and the
applicable rules and regulations thereunder, in connection with such
solicitation; (b) it is entitled to such compensation for such solicitation
under the terms and conditions of the Offer to Purchase and Proxy Statement; (c)
in soliciting tenders of Shares, it has used no solicitation materials other
than those furnished by Conectiv or the Company; and (d) if it is a foreign
broker or dealer not eligible for
10
<PAGE> 78
membership in the National Association of Securities Dealers, Inc. (the "NASD"),
it has agreed to conform to the NASD's Rules of Fair Practice in making
solicitations.
The payment of compensation to any Soliciting Dealer is dependent on
such Soliciting Dealer returning a Notice of Solicited Tenders to the
Depositary.
THIS LETTER OF TRANSMITTAL AND PROXY IS TO BE USED FOR THE TENDER OF
SHARES OF THE 4.35% SERIES (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY
STATEMENT) ONLY. ANY PERSON DESIRING TO TENDER OR VOTE SHARES OF ANY OTHER
SERIES OF PREFERRED STOCK FOR WHICH CONECTIV IS MAKING A TENDER OFFER AND/OR
SOLICITING A PROXY MUST SUBMIT A LETTER OF TRANSMITTAL AND PROXY RELATING TO
THAT SPECIFIC SERIES.
11
<PAGE> 79
PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW OR A FORM W-8, AS APPLICABLE.
SIGN HERE:______________________________________________________________________
SIGNATURE OF OWNER(S)
______________________________________________________________________
SIGNATURE OF OWNER(S)
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal and Proxy must be guaranteed by a firm
that is a member of a registered national securities exchange or the NASD, or by
a commercial bank or trust company having an office or correspondent in the
United States which is a participant in an approved Medallion Signature
Guarantee Program (each of the foregoing being referred to as an "Eligible
Institution"). Signatures on this Letter of Transmittal and Proxy need not be
guaranteed (a) if this Letter of Transmittal and Proxy is signed by the
registered holder(s) of the Shares (which term, for purposes of this document,
shall include any participant in the Book-Entry Transfer Facility whose name
appears on a security position listing as the owner of Shares) tendered herewith
and such holder(s) has not completed the box above under the heading "Special
Payment Instructions" or the box above under the heading "Special Delivery
Instructions" on this Letter of Transmittal and Proxy, (b) if such Shares are
tendered for the account of an Eligible Institution or (c) if this Letter of
Transmittal and Proxy is being used solely for the purpose of voting Shares
which are not being tendered pursuant to the Offer. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND PROXY AND SHARES. This Letter
of Transmittal and Proxy is to be used if (a) certificates are to be forwarded
herewith, (b) delivery of Shares to be made by book-entry transfer pursuant to
the procedures set forth under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement and as Agent's
Message (as defined below) is not delivered or (c) Shares are being voted in
connection with the Offer. Certificates for all physically delivered Shares, or
a confirmation of a book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility of all Shares delivered electronically, as well as
a properly completed and duly executed Letter of Transmittal and Proxy, and any
other documents required by this Letter of Transmittal and Proxy, must be
received by the Depositary at one of its addresses set forth on the front page
of this Letter of Transmittal and Proxy on or prior to the Expiration Date (as
defined in the Offer to Purchase and Proxy Statement) with respect to all
Shares. Preferred Shareholders who wish to tender their Shares yet who cannot
deliver their Shares and all other required documents to the Depositary on or
prior to the Expiration Date must tender their Shares pursuant to the guaranteed
delivery procedure set forth under the heading "Terms of the Offer -- Procedure
for Tendering Shares" in the Offer to Purchase and Proxy Statement. Pursuant to
such procedure: (a) such tender must be made by or through an Eligible
Institution, (b) a properly completed and duly executed Notice of Guaranteed
Delivery and Proxy in the form provided by Conectiv (with any required signature
guarantees) must be received by the Depositary on or prior to the Expiration
Date and (c) the certificates for all physically delivered Shares, or a
confirmation of a book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility of all Shares delivered electronically, together
with a properly completed and duly executed Letter of Transmittal and Proxy, and
any other documents required by this Letter of Transmittal and Proxy, must be
received by the Depositary by 5:00 p.m. (New York City time) within three New
York Stock Exchange trading days after the date of execution of such Notice of
Guaranteed Delivery and Proxy, all as provided under the heading "Terms of the
Offer --Procedure for Tendering Shares" in the Offer to Purchase and Proxy
Statement. Tenders by book-entry transfer may also be made by delivering an
Agent's Message in lieu of this Letter of Transmittal and Proxy. The term
"Agent's Message" means a message, transmitted by the Book-Entry Transfer
Facility, received by the Depositary and forming a part of the book-entry
transfer when a tender is initiated, which states that the Book-Entry Transfer
Facility has received an express acknowledgment from a participant tendering
Shares that such participant has received and agrees to be bound by the terms of
this Letter of Transmittal and Proxy and that Conectiv may enforce such
agreement against such participant.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT
THE OPTION AND RISK OF THE TENDERING PREFERRED SHAREHOLDER. IF CERTIFICATES FOR
SHARES ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED.
No alternative, conditional or contingent tenders will be accepted. See
"Terms of the Offer -- Number of Shares; Purchase Prices; Expiration Date;
Dividends" in the Offer to Purchase and Proxy Statement. By executing this
Letter of
12
<PAGE> 80
Transmittal and Proxy, the tendering shareholder waives any right to receive any
notice of the acceptance for payment of the Shares.
3. VOTING. PREFERRED SHAREHOLDERS (INCLUDING PREFERRED SHAREHOLDERS WHO
ACQUIRE SHARES SUBSEQUENT TO THE RECORD DATE) WHO WISH TO TENDER THEIR SHARES
PURSUANT TO THE OFFER MUST VOTE IN FAVOR OF THE PROPOSED AMENDMENT. THE OFFER IS
CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE
SPECIAL MEETING. In addition, Preferred Shareholders have the right to vote for
the Proposed Amendment regardless of whether they tender their Shares by casting
their vote and duly executing this Letter of Transmittal and Proxy or by voting
in person at the Special Meeting. By executing a Notice of Guaranteed Delivery
and Proxy, a Preferred Shareholder is deemed to have tendered the Shares
described in such Notice of Guaranteed Delivery and Proxy and to have voted such
Shares in accordance with the proxy contained therein. If no vote is indicated
on an otherwise properly executed proxy contained with this Letter of
Transmittal and Proxy (or within a Notice of Guaranteed Delivery and Proxy),
then all Shares in respect of such proxy will be voted in favor of the Proposed
Amendment. See "Proposed Amendment and Proxy Solicitation" in the Offer to
Purchase and Proxy Statement. The Offer is being sent to all persons in whose
names Shares are registered on the books of the Company on the Record Date and
transferees thereof. Preferred Shareholders who purchase or whose purchase is
registered after the Record Date and who wish to tender in the Offer must
arrange with their seller to receive a proxy from the holder of record of such
Shares on the Record Date. Any holder of Shares held of record on the Record
Date in the name of another must establish to the satisfaction of the Company
his entitlement to exercise or transfer such Proxy. This will ordinarily require
an assignment by such record holder in blank or, if not in blank, to and from
each successive transferee, including the holder, with each signature guaranteed
by an Eligible Institution. See Instruction 5. In order to facilitate receipt of
proxies, Shares shall, during the period which commences on September 2, 1998
(two business days prior to the Record Date) and which will end at the close of
business on the Expiration Date, trade in the over-the-counter market with a
proxy providing the transferee with the right to vote such acquired Shares in
the Proxy Solicitation. No record date is fixed for determining which persons
are permitted to tender Shares. However, only the holders of record, or holders
who acquire an assignment of proxy from such holders, are permitted to vote for
the Proposed Amendment and thereby validly tender Shares pursuant to the Offer.
Any person who is the beneficial owner but not the record holder of Shares must
arrange for the record transfer of such Shares prior to tendering or direct the
record holder to tender on behalf of the beneficial owner.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY
BOOK-ENTRY TRANSFER). If fewer than all the Shares represented by any
certificate delivered to the Depositary are to be tendered, fill in the number
of Shares that are to be tendered in the box above under the heading
"Description of Shares Tendered." In such case, a new certificate for the
remainder of the Shares represented by the old certificate will be sent to the
person(s) signing this Letter of Transmittal and Proxy, unless otherwise
provided in the box above under the heading "Special Payment Instructions" or
"Special Delivery Instructions," as promptly as practicable following the
expiration or termination of the Offer. All Shares represented by certificates
delivered to the Depositary will be deemed to have been tendered unless
otherwise indicated.
5. SIGNATURES ON THIS LETTER OF TRANSMITTAL AND PROXY AND/OR NOTICE OF
GUARANTEED DELIVERY AND PROXY; STOCK POWERS AND ENDORSEMENTS. If either this
Letter of Transmittal and Proxy or the Notice of Guaranteed Delivery and Proxy
(together, the "Tender and Proxy Documents") is signed by the registered
holder(s) of the Shares tendered hereby, the signature(s) must correspond with
the name(s) as written one the face of the certificates without alteration,
enlargement or any change whatsoever.
If any of the Shares tendered or voted under either Tender and Proxy
Document are held of record by two or more persons, all such persons must sign
such Tender and Proxy Document.
If any of the Shares tendered or voted under either Tender and Proxy
Document are registered in different names or different certificates, it will be
necessary to complete, sign and submit as many separate applicable Tender and
Proxy Documents as there are different registrations or certificates.
If either Tender and Proxy Document is signed by the registered
holder(s) of the Shares tendered hereby, no endorsements of certificates or
separate stock powers are required unless payment of the purchase price is to be
made to, or Shares not tendered or not purchased are to be registered in the
name of, any person other than the registered holder(s). Signatures on any such
certificates or stock powers must be guaranteed by an Eligible Institution. See
Instruction 1.
If this Letter of Transmittal and Proxy is signed by a person other
than the registered holder(s) of the Shares tendered hereby, certificates must
be endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the
13
<PAGE> 81
name(s) of the registered holder(s) appear(s) on the certificates for such
Shares. Signature(s) on any such certificates or stock powers must be guaranteed
by an Eligible Institution. See Instruction 1.
If either Tender and Proxy Document or any certificate or stock power
is signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Conectiv of the authority of such person so to act must be
submitted.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6,
Conectiv will pay or cause to be paid any stock transfer taxes with respect to
the sale and transfer of any Shares to it or its order pursuant to the Offer.
If, however, payment of the purchase price is to be made to, or Shares not
tendered or not purchased are to be registered in the name of, any person other
than the registered holder(s), or if tendered Shares are registered in the name
of any person other than the person(s) signing this Letter of Transmittal and
Proxy, the amount of any stock transfer taxes (whether imposed on the registered
holder(s), such other person or otherwise) payable on account of the transfer to
such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes, or exemption therefrom, is submitted. See
"Terms of the Offer -- Acceptance of Shares for Payment and Payment of Purchase
Price and Dividends" in the Offer to Purchase and Proxy Statement. EXCEPT AS
PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY TO AFFIX TRANSFER TAX
STAMPS TO THE CERTIFICATES REPRESENTING SHARES TENDERED HEREBY.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the
purchase price of any Shares purchased is to be issued in the name of, any
Shares not tendered or not purchased are to be returned to or the check for the
Special Cash Payment is to be issued in the name of, a person other than the
person(s) signing this Letter of Transmittal and Proxy or if the check and/or
any certificate for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal and Proxy or
to an address other than that shown in the box above under the heading "Name(s)
and Address(es) of Registered Holder(s)," then the "Special Payment
Instructions" and/or "Special Delivery Instructions" on this Letter of
Transmittal and Proxy should be completed. Preferred Shareholders tendering
Shares by book-entry transfer will have any Shares not accepted for payment
returned by crediting the account maintained by such Preferred Shareholder at
the Book-Entry Transfer Facility.
8. SUBSTITUTE FORM W-9 and FORM W-8. A tendering Preferred Shareholder
and a Preferred Shareholder voting in favor of the Proposed Amendment (but not
tendering) is required to provide the Depositary with (i) in the case of a
Untied States Preferred Shareholder, a correct Taxpayer Identification Number
("TIN") and a certification that the IRS has not notified such shareholder that
he is subject to backup withholding on Substitute Form W-9, or (ii) in the case
of a foreign Preferred Shareholder, a properly completed Form W-8, as discussed
below under "Important Tax Information." Failure to provide the information on
either Substitute Form W-9 or Form W-8 may subject the Preferred Shareholder to
a $50 penalty imposed by the Internal Revenue Service and to 31% federal income
tax backup withholding on gross amount payable. The box in Part 2 of Substitute
Form W-9 may be checked if the Preferred Shareholder has not been issued a TIN
and has applied for a number or intends to apply for a number in the near
future. If the box in Part 2 is checked and the Depositary is not provided with
a TIN by the time of payment, the Depositary will withhold 31% of the gross
amount otherwise payable thereafter until a TIN is provided to the Depositary.
9. REQUESTS FOR ASSISTANCE OF ADDITIONAL COPIES. Any questions or
requests for assistance may be directed to the Information Agent or the Dealer
Manager at their respective telephone numbers and addresses listed below.
Requests for additional copies of the Offer to Purchase and Proxy Statement,
this Letter of Transmittal and Proxy or other tender offer materials may be
directed to the Information Agent or the Dealer Manager and such copies will be
furnished promptly at Conectiv's expense. Preferred Shareholders may also
contact their local broker, dealer, commercial bank or trust company for
assistance concerning the Offer.
10. SOLICITED TENDERS. Conectiv will pay a solicitation fee of an
amount equal to $1.50 per Share for Shares that are tendered, accepted for
payment and paid for pursuant to the Offer (except that for transactions for
beneficial owners whose ownership equals or exceeds 2,500 Shares, Conectiv will
pay a solicitation fee of an amount equal to $1.00 per Share). With respect to
fees payable pursuant to this paragraph involving transactions for beneficial
owners whose ownership is less than 2,500 Shares, any fees payable hereunder
shall be paid in full to the Dealer Manager unless a Soliciting Dealer is
designated (as herein described), in which case such fee shall be payable in
full to such designated Soliciting Dealer (which designated Soliciting Dealer
may be the Dealer Manager). With respect to fees payable pursuant to this
paragraph involving transactions for beneficial owners whose ownership equals or
exceeds 2,500 Shares, any fees payable hereunder shall be paid in full to the
Dealer Manager unless a Soliciting Dealer is designated, in which case 80% of
such fee shall be paid to the Dealer Manager and 20% of such fee shall be paid
to the designated Soliciting Dealer (which designated Soliciting Dealer
14
<PAGE> 82
may be the Dealer Manager). A designated Soliciting Dealer shall be named
hereunder under the heading "Solicited Tenders," and shall have solicited and
obtained the tender, and shall also be (a) any broker or dealer in securities
including the Dealer Manager in its capacity as a dealer or broker, which is a
member of any national securities exchange or of the NASD, (b) any foreign
broker or dealer not eligible for membership in the NASD which agrees to conform
to the NASD's Rules of Fair Practice in soliciting tenders outside the United
States to the same extent as though it were an NASD member, or (c) any bank or
trust company (each of which is referred to herein as a "Soliciting Dealer"). No
such fee shall be payable to a Soliciting Dealer with respect to the tender of
Shares by a holder unless the Letter of Transmittal and Proxy accompanying such
tender designates such Soliciting Dealer. No such fee shall be payable to a
Soliciting Dealer in respect of Shares registered in the name of such Soliciting
Dealer unless such Shares are held by such Soliciting Dealer as nominee and such
Shares are being tendered for the benefit of one or more beneficial owners
identified on the Letter of Transmittal and Proxy or on the Notice of Solicited
Tenders (included in the materials provided to brokers and dealers). No such fee
shall be payable to a Soliciting Dealer with respect to the tender of Shares by
the holder of record, for the benefit of the beneficial owner, unless the
beneficial owner has designated such Soliciting Dealer. If tendered Shares are
being delivered by book-entry transfer, the Soliciting Dealer must return a
Notice of Solicited Tenders to the Depositary within three business days after
expiration of the Offer to receive a solicitation fee. No such fee shall be
payable to a Soliciting Dealer if such Soliciting Dealer is required for any
reason to transfer the amount of such fee to a depositing holder (other than
itself). No such fee shall be paid to a Soliciting Dealer with respect to Shares
tendered for such Soliciting Dealer's own account. No broker, dealer, bank,
trust company or fiduciary shall be deemed to be the agent of Conectiv, the
Company, the Depositary, the Information Agent or the Dealer Manager for
purposes of the Offer.
Soliciting Dealers will include any organizations described in clauses
(a), (b) or (c) above even when the activities of such organization in
connection with the Offer consist solely of forwarding to clients materials
relating to the Offer, including this Letter of Transmittal and Proxy, and
tendering Shares as directed by beneficial owners thereof. No Soliciting Dealer
is required to make any recommendation to holders of Shares as to whether to
tender or refrain from tendering in the Offer. No assumption is made, in making
payment to any Soliciting Dealer, that its activities in connection with the
Offer included any activities other than those described above, and for all
purposes noted in all materials relating to the Offer, the term "solicit" shall
be deemed to mean no more than "processing shares tendered" or "forwarding to
customers materials regarding the Offer."
11. IRREGULARITIES. All questions as to the form of documents and the
validity, eligibility (including time of receipt) and acceptance of any tender
of Shares will be determined by Conectiv, in its sole discretion, and its
determination shall be final and binding. Conectiv reserves the absolute right
to reject any and all tenders of Shares that it determines are not in proper
form or the acceptance for payment of or payment for Shares that may, in the
opinion of Conectiv's counsel, be unlawful. Conectiv also reserves the absolute
right to waive any of the conditions to the Offer or any defect or irregularity
in any tender of Shares and Conectiv's interpretation of the terms and
conditions of the Offer (including these instructions) shall be final and
binding. Unless waived, any defects or irregularities in connection with tenders
must be cured within such time as Conectiv shall determine. None of Conectiv,
the Company, the Dealer Manager, the Depositary, the Information Agent or any
other person shall be under any duty to give notice of any defect or
irregularity in tenders, nor shall any of them incur any liability for failure
to give any such notice. Tenders will not be deemed to have been made until all
defects and irregularities have been cured or waived.
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any of your
certificate(s) for Shares have been lost, stolen or destroyed, please call ACE
Stockholder Services at (800) 365-6495 (toll free). You may need to complete and
Affidavit of Loss with respect to the lost certificate(s) (which will be
provided by ACE Stockholder Services) and payment of an indemnity bond premium
fee may be required. The tender of Shares pursuant to this Letter of Transmittal
and Proxy will not be valid unless prior to the Expiration Date: (a) such
procedures have been completed and a replacement certificate for the Shares has
been delivered to the Depositary or (b) a Notice of Guaranteed Delivery and
Proxy has been delivered to the Depositary. See Instruction 2.
IMPORTANT: THIS LETTER OF TRANSMITTAL AND PROXY, DULY EXECUTED,
TOGETHER WITH, IF APPLICABLE, CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY
TRANSFER, AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY,
OR, IF APPLICABLE, THE NOTICE OF GUARANTEED DELIVERY AND PROXY MUST BE RECEIVED
BY THE DEPOSITARY, ON OR PRIOR TO THE EXPIRATION DATE.
15
<PAGE> 83
IMPORTANT TAX INFORMATION
Under federal income tax law, a Preferred Shareholder whose tendered
Shares are accepted for payment or who will receive a Special Cash Payment as a
result of voting in favor of the Proposed Amendment is required to provide the
Depositary (as payer) with either such Preferred Shareholder's correct TIN on
Substitute Form W-9 below or a properly completed Form W-8. If such Preferred
Shareholder is an individual, the TIN is his or her social security number. For
businesses and other entities, the number is the federal employer identification
number. If the Depositary is not provided with the correct TIN or properly
completed Form W-8, the Preferred Shareholder may be subject to a $50 penalty
imposed by the Internal Revenue Code. In addition, payments that are made to
such Preferred Shareholder with respect to Shares purchased pursuant to the
Offer may be subject to 31% backup withholding.
Certain Preferred Shareholders (including, among others, all
corporations and certain foreign individuals) are exempt from backup
withholding. For a corporate United States Preferred Shareholder to qualify for
such exemption, such Preferred Shareholder must provide the Depositary with a
properly completed and executed Substitute Form W-9 attesting to its exempt
status. In order for a foreign Preferred Shareholder to qualify as an exempt
recipient, such Preferred Shareholder must submit to the Depositary a properly
completed Internal Revenue Service Form W-8 (a "Form W-8"), signed under
penalties of perjury, attesting to that Preferred Shareholder's exempt status. A
Form W-8 can be obtained from the Depositary. See the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If federal income tax backup withholding applies, the Depositary is
required to withhold 31% of any payments made to the Preferred Shareholder.
Backup withholding is not an additional tax. Rather, the federal income tax
liability of persons subject to backup withholding will be reduced by the amount
of the tax withheld. If withholding results in an overpayment of taxes, a refund
may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8
To avoid backup withholding on a Special Cash Payment or payments that
are made to a Preferred Shareholder with respect to Shares purchased pursuant to
the Offer, the Preferred Shareholder is required to notify the Depositary of his
or her correct TIN by completing the Substitute Form W-9 attached hereto
certifying that the TIN provided on Substitute Form W-9 is correct and that (a)
the Preferred Shareholder has not been notified by the Internal Revenue Service
that he or she is subject to federal income tax backup withholding as a result
of failure to report all interest or dividends or (b) the Internal Revenue
Service has notified the Preferred Shareholder that he or she is no longer
subject to federal income tax backup withholding. Foreign Preferred Shareholders
must submit a properly completed Form W-8 in order to avoid the applicable
backup withholding; provided, however, that backup withholding will not apply to
foreign Preferred Shareholders subject to withholding under other provisions of
the Code or the Special Cash Payment or on gross payments received pursuant to
the Offer. Foreign Preferred Shareholders that submit a properly completed Form
W-8 may nevertheless be subject to withholding under other provisions of the
Code on the payments received by them.
WHAT NUMBER TO GIVE THE DEPOSITARY
The Preferred Shareholder is required to give the Depositary the social
security number or employer identification number of the registered owner of the
Shares. If the Shares are in more than one name or are not in the name of the
actual owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report.
PAYER'S NAME
<TABLE>
<S> <C> <C>
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT _______________________________
FORM W-9 RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. SOCIAL SECURITY NUMBER
OR
_______________________________
EMPLOYER IDENTIFICATION TIN
NAME (PLEASE PRINT)____________________________ PART 2 --
ADDRESS________________________________________ AWAITING TIN { }
CITY_______________________STATE_______________
ZIP CODE_______________________________________
</TABLE>
16
<PAGE> 84
<TABLE>
<S> <C>
DEPARTMENT OF THE TREASURY PART 3 -- CERTIFICATION -- UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
INTERNAL REVENUE SERVICE
(1) THE NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER IDENTIFICATION NUMBER (OR A
TIN HAS NOT BEEN ISSUED TO ME BUT I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE
A TIN OR INTEND TO DO SO IN THE NEAR FUTURE), (2) I AM NOT SUBJECT TO BACKUP
WITHHOLDING EITHER BECAUSE I HAVE NOT BEEN NOTIFIED BY THE INTERNAL REVENUE SERVICE
(THE "IRS") THAT I AM SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF A FAILURE TO REPORT
ALL INTEREST OR DIVIDENDS OR THE IRS HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT TO
BACKUP WITHHOLDING AND (3) ALL OTHER INFORMATION PROVIDED ON THIS FORM IS TRUE,
CORRECT AND COMPLETE.
SIGNATURE____________________________________________________________________________
DATE _____________________________, 1998
YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE
CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING INTEREST OR
DIVIDENDS ON YOUR TAX RETURN.
PAYER'S REQUEST FOR NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
TAXPAYER IDENTIFICATION WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER OR PROXY
NUMBER ("TIN") AND SOLICITATION. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
CERTIFICATION TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 2 OF
SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER:
I CERTIFY UNDER PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER HAS NOT
BEEN ISSUED TO ME AND EITHER (1) I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE
A TAXPAYER IDENTIFICATION NUMBER TO THE APPROPRIATE INTERNAL REVENUE SERVICE CENTER OR
SOCIAL SECURITY ADMINISTRATION OFFICE OR (2) I INTEND TO DO SO IN THE NEAR FUTURE. I
UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER BY THE TIME OF
PAYMENT, 31% OF ALL PAYMENTS MADE TO ME WILL BE WITHHELD UNTIL I PROVIDE A NUMBER.
SIGNATURE ____________________________________ DATE________________________, 1998
</TABLE>
THE INFORMATION AGENT:
D.F. KING & CO., INC.
77 Water Street, 20th Floor
New York, New York 10005
(800) 431-9629 (toll free)
or
Banks and Brokers call
(212) 269-5550
17
<PAGE> 85
4.35% 2nd Series
LETTER OF TRANSMITTAL AND PROXY
TO ACCOMPANY
SHARES OF 4.35% 2ND SERIES PREFERRED STOCK
CUSIP NUMBER 048303507
OF
ATLANTIC CITY ELECTRIC COMPANY
---------------------------
TENDERED PURSUANT TO THE OFFER TO PURCHASE FOR CASH
BY
CONECTIV
DATED SEPTEMBER 8, 1998, FOR PURCHASE AT A
PURCHASE PRICE OF $____ PER SHARE
AND/OR
VOTED PURSUANT TO THE PROXY STATEMENT OF
ATLANTIC CITY ELECTRIC COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON OCTOBER 14, 1998, UNLESS THE OFFER IS EXTENDED
THE PROXY CONTAINED IN THIS DOCUMENT IS IN
RESPECT OF THE SPECIAL MEETING OF SHAREHOLDERS TO
BE HELD ON OCTOBER 14, 1998, OR ON SUCH DATE TO
WHICH THE MEETING IS ADJOURNED OR POSTPONED.
TO: THE BANK OF NEW YORK, DEPOSITARY
BY MAIL: BY HAND OR OVERNIGHT COURIER:
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN EXACTLY AS NAME(S) AND ADDRESS(ES) APPEAR(S) ON CERTIFICATE(S))
IF YOU HAVE ANY QUESTIONS, HAVE NOT RECEIVED THE OFFER TO PURCHASE AND
PROXY STATEMENT OR OTHER DOCUMENTS PERTAINING TO THE OFFER OR NEED ASSISTANCE IN
COMPLETING THIS LETTER OF TRANSMITTAL AND PROXY, PLEASE CONTACT D.F. KING & CO.,
INC., THE INFORMATION AGENT, AT TELEPHONE (800) 431-9629 (TOLL FREE).
<PAGE> 86
PREFERRED SHAREHOLDERS (INCLUDING PREFERRED SHAREHOLDERS WHO ACQUIRE
SHARES SUBSEQUENT TO THE RECORD DATE) WILL NOT BE ABLE TO VALIDLY TENDER THEIR
SHARES UNLESS THEY HAVE SUBMITTED A DULY COMPLETED, VALID AND UNREVOKED PROXY
INDICATING THEIR VOTE FOR THE PROPOSED AMENDMENT OR INDICATE IN THE ACCOMPANYING
PROXY THEIR INTENTION TO VOTE FOR THE PROPOSED AMENDMENT AT THE SPECIAL MEETING.
CONECTIV ("CONECTIV") WILL NOT BE REQUIRED TO ACCEPT FOR PAYMENT OR PAY FOR ANY
SHARES TENDERED IF THE PROPOSED AMENDMENT IS NOT APPROVED AND ADOPTED AT THE
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON OCTOBER 14, 1998, OR ON SUCH DATE
TO WHICH THE MEETING IS ADJOURNED OR POSTPONED (THE "SPECIAL MEETING").
PREFERRED SHAREHOLDERS HAVE THE RIGHT TO VOTE FOR THE PROPOSED AMENDMENT
REGARDLESS OF WHETHER THEY TENDER THEIR SHARES BY CASTING THEIR VOTE AND SIGNING
THE PROXY CONTAINED WITHIN THIS LETTER OF TRANSMITTAL AND PROXY OR BY VOTING IN
PERSON AT THE SPECIAL MEETING. IF THE PROPOSED AMENDMENT IS APPROVED AND
ADOPTED, ATLANTIC CITY ELECTRIC COMPANY (THE "COMPANY") WILL MAKE A SPECIAL CASH
PAYMENT TO EACH PREFERRED SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED
AMENDMENT, PROVIDED THAT SUCH HOLDER'S SHARES ARE NOT TENDERED PURSUANT TO THE
OFFER.
HOLDERS WHO PURCHASE OR WHOSE PURCHASE SETTLES OR IS REGISTERED AFTER
THE CLOSE OF BUSINESS ON SEPTEMBER 4, 1998 (THE "RECORD DATE") AND WHO WISH TO
TENDER IN THE OFFER MUST ARRANGE WITH THEIR SELLER TO RECEIVE A DULY COMPLETED,
VALID AND UNREVOKED PROXY (WHICH MAY BE IN THE FORM OF AN IRREVOCABLE ASSIGNMENT
OF PROXY AS SET FORTH IN THIS LETTER OF TRANSMITTAL AND PROXY) FROM THE HOLDER
OF RECORD OF SUCH SHARES ON THE RECORD DATE. IN ORDER TO FACILITATE RECEIPT OF
PROXIES, SHARES SHALL, DURING THE PERIOD WHICH COMMENCES SEPTEMBER 2, 1998 (TWO
BUSINESS DAYS PRIOR TO THE RECORD DATE) AND WHICH WILL END AT THE CLOSE OF
BUSINESS ON THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY
STATEMENT), TRADE IN THE OVER-THE-COUNTER MARKET WITH A PROXY PROVIDING THE
TRANSFEREE WITH THE RIGHT TO VOTE SUCH ACQUIRED SHARES IN THE PROXY
SOLICITATION.
NOTE: SIGNATURES MUST BE PROVIDED HEREIN. PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY.
The undersigned hereby appoints Howard E. Cosgrove, Barbara S. Graham
and Louis M. Walters, or any of them, as proxies, each with the power to appoint
his or her substitute, and hereby authorizes them to represent and to vote as
designated hereunder and in their discretion with respect to any other business
properly brought before the Special Meeting all the shares of preferred stock of
the Company which the undersigned is entitled to vote at the Special Meeting or
any adjournment(s) or postponement(s) thereof.
NOTE: IF YOU ARE VOTING BUT NOT TENDERING SHARES, DO NOT SEND ANY SHARE
CERTIFICATES WITH THIS LETTER OF TRANSMITTAL AND PROXY.
THIS LETTER OF TRANSMITTAL AND PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF THE COMPANY. The proxy contained herein, when properly
executed, will be voted in the manner described herein by the undersigned
shareholder(s). If no direction is made, the proxy will be voted FOR Item 1. An
abstention is the equivalent of a vote AGAINST the Proposed Amendment.
PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES MUST VOTE FOR
ITEM 1.
Indicate your vote by an (X). The Board of Directors recommends voting
FOR Item 1.
ITEM 1.
HOLDERS OF SHARES WHO WISH TO TENDER THEIR SHARES MUST VOTE FOR THE
PROPOSED AMENDMENT EITHER BY SUBMITTING THIS PROXY OR BY VOTING AT THE SPECIAL
MEETING.
To remove from the Company's charter Paragraph (7)(B)(c) of Article
III, a provision restricting the amount of securities representing unsecured
indebtedness issuable by the Company.
{ } FOR { } AGAINST { } ABSTAIN
2
<PAGE> 87
SHARES REPRESENTED BY ALL PROPERLY EXECUTED PROXIES WILL BE VOTED IN
ACCORDANCE WITH INSTRUCTIONS APPEARING ON THIS PROXY. IN THE ABSENCE OF SPECIFIC
INSTRUCTIONS, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF
THE BOARD OF DIRECTORS, AND IN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE SPECIAL MEETING.
Any holder of Shares held of record on the Record Date in the name of
another holder must establish to the satisfaction of the Company its entitlement
to exercise or transfer this Proxy. This will ordinarily require an assignment
by such record holders in blank or, if not in blank, to and from each successive
transferee, including the holder, with each signature guaranteed by an Eligible
Institution. A form of irrevocable assignment of proxy has been provided herein.
Please check box if you plan to attend the Special Meeting. { }
SIGNATURE(S) OF OWNER(S)
X _____________________________________________________________________________
X _____________________________________________________________________________
Dated: _________________________________________________________________ , 1998
Name(s): ______________________________________________________________________
(PLEASE PRINT)
Capacity (full title): ________________________________________________________
Address: ______________________________________________________________________
(INCLUDE ZIP CODE)
DAYTIME Area Code and Telephone No.: __________________________________________
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
stock certificates or on a security position listing or by person(s) authorized
to become registered holder(s) by certificates and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, please set forth full title and see Instruction 5.)
3
<PAGE> 88
PLEASE COMPLETE:
DESCRIPTION OF SHARES TENDERED
(IF TENDERING SHARES, PLEASE FILL IN EXACTLY AS INFORMATION
APPEARS ON CERTIFICATE(S))
(ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
<TABLE>
<CAPTION>
NUMBER OF SHARES NOT
TOTAL NUMBER OF SHARES TENDERED BUT AS TO
REPRESENTED BY NUMBER OF SHARES WHICH PROXIES GIVEN
CERTIFICATE NUMBER(S)* CERTIFICATE(S)* TENDERED** ONLY
<S> <C> <C> <C>
</TABLE>
* Need not be completed by shareholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented
by any certificates delivered to the Depositary are being tendered. See
Instruction 4. You must vote for the Proposed Amendment with respect to any
Shares tendered.
If any of your certificate(s) for Shares have been lost, stolen or
destroyed, please call the Company's shareholder services department ("ACE
Stockholder Services") at 800-365-6495 (toll free). You may need to complete an
Affidavit of Loss with respect to the lost certificate(s) (which will be
provided by ACE Stockholder Services) and payment of an indemnity bond premium
fee may be required.
PLEASE COMPLETE IF APPLICABLE:
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature: _________________________________________________________
Name: _________________________________________________________________________
Name of Firm: _________________________________________________________________
Address of Firm: ______________________________________________________________
Area Code and Telephone No.: __________________________________________________
Dated: _________________________________________________________________ , 1998
4
<PAGE> 89
IF SELLING SHARES SUBSEQUENT TO SEPTEMBER 4, 1998, A RECORD HOLDER MUST
COMPLETE THE FOLLOWING IRREVOCABLE PROXY
PLEASE SIGN THIS TO IRREVOCABLY TRANSFER A PREFERRED STOCK
PROXY TO A SUBSEQUENT HOLDER OF PREFERRED STOCK WHO
WAS NOT A HOLDER OF RECORD ON SEPTEMBER 4, 1998
IRREVOCABLE PROXY
with respect to shares of the
4.35% 2nd Series Cumulative Preferred Stock
of
ATLANTIC CITY ELECTRIC COMPANY
the undersigned hereby irrevocably appoints
--------------------------------------------
Type or Print Name of Transferee
as attorney and proxy, with full power of substitution, to vote and otherwise
act for and in the name(s) of the undersigned with respect to the Shares
indicated below which were held of record by the undersigned on September 4,
1998, in the manner in which the undersigned would be entitled to vote and
otherwise act in respect of such Shares on any and all matters.
This proxy shall be effective whether or not the Shares indicated below
are tendered in the Offer.
This instrument supersedes and revokes any and all previous
appointments of proxies heretofore made by the undersigned with respect to the
Shares indicated below as to any and all matters. THIS PROXY IS IRREVOCABLE AND
IS COUPLED WITH AN INTEREST.
All authority conferred or agreed to be conferred herein shall survive
the death or incapacity of the undersigned, and any obligation of the
undersigned hereunder shall be binding upon the heirs, executors,
administrators, legal and personal representatives, successors in interest and
assigns of the undersigned. The undersigned understands that tenders of Shares
pursuant to any of the procedures described in the Offer to Purchase and Proxy
Statement and in this Letter of Transmittal and Proxy will constitute a binding
agreement between the undersigned and the Company upon the terms and subject to
the conditions of the Offer.
- --------------------------------------------------------------------------------
DESCRIPTION OF PREFERRED STOCK
- --------------------------------------------------------------------------------
CERTIFICATE NUMBER(S) AGGREGATE NUMBER
(ATTACH LIST IF NECESSARY) OF SHARES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL:
- --------------------------------------------------------------------------------
- ---------------------------------- ------------------------------------
Signature of Record Holder or Signature of Record Holder of
Authorized Signatory Authorized Signatory
- ---------------------------------- ------------------------------------
Type or Print Name Type or Print Name
Date: _____________________, 1998 Date: _______________________, 1998
Tax Identification or Social Security No(s). __________________________________
5
<PAGE> 90
Must be signed by holder(s) exactly as name(s) appear(s) on the Record Date on
certificate(s) for the Shares or on a security position listing or by person(s)
authorized to become holder(s) by certificates and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation, agent or other person acting in a
fiduciary or representative capacity, please provide the following information
and see Instruction 5.
Name: ________________________________________________________________________
(PLEASE PRINT)
Capacity: ____________________________________________________________________
(FULL TITLE)
Address: _____________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Tel. No. _______________________________________________________
PLEASE COMPLETE IF APPLICABLE:
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
Name of Firm: ________________________________________________________________
Authorized Signature: ________________________________________________________
Title: _______________________________________________________________________
Dated: ________________________________________________________________ , 1998
DELIVERY OF THIS LETTER OF TRANSMITTAL AND PROXY TO AN ADDRESS OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS
LETTER OF TRANSMITTAL AND PROXY IN THE APPROPRIATE SPACE THEREFOR PROVIDED AND,
IF YOU ARE TENDERING ANY SHARES OR VOTING IN FAVOR OF THE PROPOSED AMENDMENT,
COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW OR A FORM W-8, AS APPLICABLE.
SEE INSTRUCTION 8 AND "IMPORTANT TAX INFORMATION" BELOW.
DO NOT SEND ANY CERTIFICATES TO MORGAN STANLEY DEAN WITTER, D. F. KING
& CO., INC., CONECTIV, ACE STOCKHOLDER SERVICES OR ATLANTIC CITY ELECTRIC
COMPANY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL AND PROXY
SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL AND PROXY IS
COMPLETED. QUESTIONS REGARDING AND REQUESTS FOR COPIES OF THE OFFER TO PURCHASE
AND PROXY STATEMENT OR THIS LETTER OF TRANSMITTAL AND PROXY MAY BE DIRECTED TO
D.F. KING & CO., INC., THE INFORMATION AGENT, AT (800) 431-9629 (TOLL FREE) OR
BANKS AND BROKERS CALL (212) 269-5550.
This Letter of Transmittal and Proxy is to be used (a) if Shares are to
be voted but not tendered, or (b) if certificates for Shares are to be forwarded
to The Bank of New York ("Depositary") or (c) if delivery of tendered Shares (as
defined below) is to be made by book-entry transfer to the Depositary's account
at The Depository Trust Company ("DTC" or the "Book-Entry Transfer Facility")
pursuant to the procedures set forth under the heading "Terms of the Offer --
Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement (as
defined below) and an Agent's Message (as defined below) is not delivered.
Preferred Shareholders who wish to tender Shares but who cannot deliver
their Shares and all other documents required hereby to the Depositary by the
Expiration Date must tender their Shares pursuant to the guaranteed delivery
procedure set forth under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement. See Instruction
2. DELIVERY OF DOCUMENTS TO CONECTIV, THE COMPANY OR THE BOOK-ENTRY TRANSFER
FACILITY DOES NOT CONSTITUTE A VALID DELIVERY.
6
<PAGE> 91
{ } CHECK HERE IF TENDERED SHARES ARE ENCLOSED HEREWITH.
A Holder tendering Shares pursuant to this Letter of Transmittal and Proxy
must check one of the following boxes:
{ } A duly completed, valid and unrevoked proxy indicating a vote FOR the
Proposed Amendment is included herein.
{ } A vote FOR the Proposed Amendment will be cast at the Special Meeting.
ELIGIBLE INSTITUTIONS OR BROKERS TO COMPLETE ONLY IF APPLICABLE:
{ } CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING:
Name of tendering institution ____________________________________________
Account No. at DTC _______________________________________________________
Transaction Code No. _____________________________________________________
{ } CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY AND PROXY PREVIOUSLY SENT TO THE DEPOSITARY AND
COMPLETE THE FOLLOWING:
Name(s) of tendering shareholder(s)
Date of execution of Notice of Guaranteed Delivery and Proxy
Name of institution that guaranteed delivery
If delivery is by book-entry transfer:
Name of tendering institution
Account No. at DTC
Transaction Code No.
A holder electing to tender Shares pursuant to a Notice of Guaranteed
Delivery and Proxy must check one of the following boxes:
{ } A duly completed, valid and unrevoked proxy indicating a vote FOR the
Proposed Amendment was included with the Notice of Guaranteed Delivery
and Proxy previously sent to the Depositary.
{ } A duly completed, valid and unrevoked proxy indicating a vote FOR the
Proposed Amendment is being delivered pursuant to a Notice of
Guaranteed Delivery and Proxy previously sent to the Depositary.
{ } A valid vote FOR the Proposed Amendment will be cast at the Special
Meeting.
NOTE: SIGNATURES MUST BE PROVIDED ABOVE.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
7
<PAGE> 92
Ladies and Gentlemen:
The abovesigned hereby tenders to Conectiv, a Delaware corporation
("Conectiv"), the shares in the amount set forth in the box above designated
"Description of Shares Tendered" pursuant to Conectiv's offer to purchase any
and all of the outstanding shares (the "Shares") of the series of preferred
stock of Atlantic City Electric Company, a New Jersey corporation, and direct
utility subsidiary of Conectiv (the "Company"), shown on the first page hereof
as to which this Letter of Transmittal and Proxy is applicable (the "Shares") at
the purchase price per Share shown on the first page hereof, net to the seller
in cash, upon the terms and subject to the conditions set forth in the Offer to
Purchase and Proxy Statement, dated September 8, 1998 (the "Offer to Purchase
and Proxy Statement"), receipt of which is hereby acknowledged, and in this
Letter of Transmittal and Proxy (which as to the Shares, together with the Offer
to Purchase and Proxy Statement, constitutes the "Offer"). PREFERRED
SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER MUST VOTE IN
FAVOR OF THE PROPOSED AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION,
AS AMENDED, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE
"PROPOSED AMENDMENT"). THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT
BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON
OCTOBER 14, 1998, OR ON SUCH DATE TO WHICH THE MEETING IS ADJOURNED OR POSTPONED
(THE "SPECIAL MEETING"). See "Proposed Amendment and Proxy Solicitation," "Terms
of the Offer -- Extension of Tender Period; Termination; Amendments" and "Terms
of the Offer -- Certain Conditions of the Offer" in the Offer to Purchase and
Proxy Statement.
Subject to, and effective upon, acceptance for payment of and payment
for the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the abovesigned hereby
sells, assigns and transfers to, or upon the order of, Conectiv all right, title
and interest in and to all the Shares that are being tendered hereby and hereby
constitutes and appoints The Bank of New York (the "Depositary") the true and
lawful agent and attorney-in-fact of the abovesigned with respect to such
Shares, with full power of substitution (such power of attorney being an
irrevocable power coupled with an interest), to (a) deliver certificates for
such Shares, or transfer ownership of such Shares on the account books
maintained by the Book-Entry Transfer Facility, together, in any such case, with
all accompanying evidences of transfer and authenticity, to or upon the order of
Conectiv, (b) present such Shares for registration and transfer on the books of
the Company and (c) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares, all in accordance with the terms of the
Offer. The Depositary will act as agent for tendering shareholders for the
purpose of receiving payment from Conectiv and transmitting payment to tendering
shareholders.
The abovesigned hereby represents and warrants that the abovesigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and that, when and to the extent the same are accepted for
payment by Conectiv, Conectiv will acquire good, marketable and unencumbered
title thereto, free and clear of all liens, restrictions, charges, encumbrances,
conditional sales agreements or other obligations relating to the sale or
transfer thereof, and the same will not be subject to any adverse claims. The
abovesigned will, upon request, execute and deliver any additional documents
deemed by the Depositary or Conectiv to be necessary or desirable to complete
the sale, assignment and transfer of the Shares tendered hereby.
All authority herein conferred or agreed to be conferred shall not be
affected by and shall survive the death, bankruptcy or incapacity of the
abovesigned, and any obligations of the abovesigned hereunder shall be binding
upon the heirs, legal representatives, successors, assigns, executors and
administrators of the abovesigned. Except as stated in the Offer, this tender is
irrevocable.
The abovesigned understands that tenders of Shares pursuant to any one
of the procedures described under the heading "Terms of the Offer -- Procedure
for Tendering Shares" in the Offer to Purchase and Proxy Statement and in the
instructions hereto will constitute the abovesigned's acceptance of the terms
and conditions of the Offer, including the abovesigned's representation and
warranty that (a) the abovesigned has a net long position in the Shares being
tendered within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended, and (b) the tender of such Shares complies
with such Rule 14e-4. Conectiv's acceptance for payment of Shares tendered
pursuant to the Offer will constitute a binding agreement between the
abovesigned and Conectiv upon the terms and subject to the conditions of the
Offer.
The abovesigned recognizes that, under certain circumstances set forth
in the Offer to Purchase and Proxy Statement, Conectiv may terminate or amend
the Offer or may not be required to purchase any of the Shares tendered hereby.
In either event, the abovesigned understands that certificate(s) for any Shares
not tendered or not purchased will be returned to the abovesigned.
8
<PAGE> 93
Unless otherwise indicated in the box below under the heading "Special
Payment Instructions," please issue the check for the purchase price of any
Shares purchased, and/or return any Shares not tendered or not purchased, in the
name(s) of the abovesigned (and, in the case of Shares tendered by book-entry
transfer, by credit to the account of the abovesigned at the Book-Entry Transfer
Facility). Similarly, unless otherwise indicated in the box below under the
heading "Special Delivery Instructions," please mail the check for the purchase
price of any Shares purchased and/or any certificate for Shares not tendered or
not purchased (and accompanying documents, as appropriate) to the abovesigned at
the address shown below the abovesigned's signature(s). In the event that both
"Special Payment Instructions" and "Special Delivery Instructions" are
completed, please issue the check for the purchase price of any Shares purchased
and/or return any Shares not tendered or not purchased in the name(s) of, and
mail said check and/or any certificates to, the person(s) so indicated. The
abovesigned recognizes that Conectiv has no obligation, pursuant to the "Special
Payment Instructions," to transfer any Shares from the name of the registered
holder(s) thereof if Conectiv does not accept for purchase any of the Shares so
tendered.
COMPLETE ONLY IF APPLICABLE:
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased, the certificates for Shares not tendered or not purchased or the
check for the Special Cash Payment are to be issued in the name of someone other
than the abovesigned.
Issue { } Check and/or { } Certificate(s) to:
Name _________________________________________________________________________
(PLEASE PRINT)
Address ______________________________________________________________________
______________________________________________________________________________
(INCLUDE ZIP CODE)
______________________________________________________________________________
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased, the certificates for Shares not tendered or not purchased or the
check for the Special Cash Payment are to be mailed to someone other than the
abovesigned or to the abovesigned at an address other than that shown below the
abovesigned's signature(s).
Mail { } Check and/or { } Certificate(s) to:
Name _________________________________________________________________________
(PLEASE PRINT)
Address ______________________________________________________________________
______________________________________________________________________________
(INCLUDE ZIP CODE)
COMPLETE ONLY IF YOUR SHARES ARE LOST:
LOST CERTIFICATES BOX
{ } CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN
AND WISH TO TENDER HAVE BEEN LOST, DESTROYED OR STOLEN.
(SEE INSTRUCTION 12.)
9
<PAGE> 94
Number of Shares represented by lost, destroyed or stolen
certificates:
-----------------
COMPLETE ONLY IF APPLICABLE:
SOLICITED TENDERS AND PROXIES
(SEE INSTRUCTION 10)
As provided in Instruction 10, Conectiv will pay a solicitation fee of
an amount equal to $1.50 per Share for any Shares tendered, accepted for payment
and paid for pursuant to the Offer (except that for transactions for beneficial
owners whose ownership equals or exceeds 2,500 Shares, Conectiv will pay a
solicitation fee of an amount equal to $1.00 per Share). With respect to fees
payable pursuant to this paragraph involving transactions for beneficial owners
whose ownership is less than 2,500 Shares, any fees payable hereunder shall be
paid in full to the Dealer Manager unless a Soliciting Dealer is designated (as
herein described), in which case such fee shall be payable in full to such
designated Soliciting Dealer (which designated Soliciting Dealer may be the
Dealer Manager). With respect to fees payable pursuant to this paragraph
involving transactions for beneficial owners whose ownership equals or exceeds
2,500 Shares, any fees payable hereunder shall be paid in full to the Dealer
Manager unless a Soliciting Dealer is designated, in which case 80% of such fee
shall be paid to the Dealer manager and 20% of such fee shall be paid to the
designated Soliciting Dealer (which designated Soliciting Dealer may be the
Dealer Manager). However, Soliciting Dealers will not be entitled to a
solicitation fee for Shares beneficially owned by such Soliciting Dealer.
The undersigned represents that the Soliciting Dealer which solicited
and obtained this tender is:
Name of Firm: ________________________________________________________________
(PLEASE PRINT)
Name of Individual Broker
or Financial Consultant: ____________________________________________________
Telephone Number of Broker
or Financial Consultant: ____________________________________________________
Identification Number (if known): ___________________________________________
Address: ____________________________________________________________________
(INCLUDE ZIP CODE)
COMPLETE ONLY IF CUSTOMER'S SHARES HELD IN NOMINEE NAME ARE TENDERED:
<TABLE>
<CAPTION>
NAME OF BENEFICIAL OWNER NUMBER OF SHARES TENDERED
(ATTACH ADDITIONAL LIST IF NECESSARY)
<S> <C>
- ------------------------------------------------------------ ----------------------------------------------------------
- ------------------------------------------------------------ ----------------------------------------------------------
- ------------------------------------------------------------ ----------------------------------------------------------
</TABLE>
The acceptance of compensation by such Soliciting Dealer will
constitute a representation by it that (a) it has complied with the applicable
requirements of the Securities Exchange Act of 1934, as amended, and the
applicable rules and regulations thereunder, in connection with such
solicitation; (b) it is entitled to such compensation for such solicitation
under the terms and conditions of the Offer to Purchase and Proxy Statement; (c)
in soliciting tenders of Shares, it has used no solicitation materials other
than those furnished by Conectiv or the Company; and (d) if it is a foreign
broker or dealer not eligible for
10
<PAGE> 95
membership in the National Association of Securities Dealers, Inc. (the "NASD"),
it has agreed to conform to the NASD's Rules of Fair Practice in making
solicitations.
The payment of compensation to any Soliciting Dealer is dependent on
such Soliciting Dealer returning a Notice of Solicited Tenders to the
Depositary.
THIS LETTER OF TRANSMITTAL AND PROXY IS TO BE USED FOR THE TENDER OF
SHARES OF THE 4.35% 2ND SERIES (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY
STATEMENT) ONLY. ANY PERSON DESIRING TO TENDER OR VOTE SHARES OF ANY OTHER
SERIES OF PREFERRED STOCK FOR WHICH CONECTIV IS MAKING A TENDER OFFER AND/OR
SOLICITING A PROXY MUST SUBMIT A LETTER OF TRANSMITTAL AND PROXY RELATING TO
THAT SPECIFIC SERIES.
11
<PAGE> 96
PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW OR A FORM W-8, AS APPLICABLE.
SIGN HERE: __________________________________________________________________
SIGNATURE OF OWNER(S)
__________________________________________________________________
SIGNATURE OF OWNER(S)
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal and Proxy must be guaranteed by a firm
that is a member of a registered national securities exchange or the NASD, or by
a commercial bank or trust company having an office or correspondent in the
United States which is a participant in an approved Medallion Signature
Guarantee Program (each of the foregoing being referred to as an "Eligible
Institution"). Signatures on this Letter of Transmittal and Proxy need not be
guaranteed (a) if this Letter of Transmittal and Proxy is signed by the
registered holder(s) of the Shares (which term, for purposes of this document,
shall include any participant in the Book-Entry Transfer Facility whose name
appears on a security position listing as the owner of Shares) tendered herewith
and such holder(s) has not completed the box above under the heading "Special
Payment Instructions" or the box above under the heading "Special Delivery
Instructions" on this Letter of Transmittal and Proxy, (b) if such Shares are
tendered for the account of an Eligible Institution or (c) if this Letter of
Transmittal and Proxy is being used solely for the purpose of voting Shares
which are not being tendered pursuant to the Offer. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND PROXY AND SHARES. This Letter
of Transmittal and Proxy is to be used if (a) certificates are to be forwarded
herewith, (b) delivery of Shares to be made by book-entry transfer pursuant to
the procedures set forth under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement and as Agent's
Message (as defined below) is not delivered or (c) Shares are being voted in
connection with the Offer. Certificates for all physically delivered Shares, or
a confirmation of a book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility of all Shares delivered electronically, as well as
a properly completed and duly executed Letter of Transmittal and Proxy, and any
other documents required by this Letter of Transmittal and Proxy, must be
received by the Depositary at one of its addresses set forth on the front page
of this Letter of Transmittal and Proxy on or prior to the Expiration Date (as
defined in the Offer to Purchase and Proxy Statement) with respect to all
Shares. Preferred Shareholders who wish to tender their Shares yet who cannot
deliver their Shares and all other required documents to the Depositary on or
prior to the Expiration Date must tender their Shares pursuant to the guaranteed
delivery procedure set forth under the heading "Terms of the Offer -- Procedure
for Tendering Shares" in the Offer to Purchase and Proxy Statement. Pursuant to
such procedure: (a) such tender must be made by or through an Eligible
Institution, (b) a properly completed and duly executed Notice of Guaranteed
Delivery and Proxy in the form provided by Conectiv (with any required signature
guarantees) must be received by the Depositary on or prior to the Expiration
Date and (c) the certificates for all physically delivered Shares, or a
confirmation of a book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility of all Shares delivered electronically, together
with a properly completed and duly executed Letter of Transmittal and Proxy, and
any other documents required by this Letter of Transmittal and Proxy, must be
received by the Depositary by 5:00 p.m. (New York City time) within three New
York Stock Exchange trading days after the date of execution of such Notice of
Guaranteed Delivery and Proxy, all as provided under the heading "Terms of the
Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy
Statement. Tenders by book-entry transfer may also be made by delivering an
Agent's Message in lieu of this Letter of Transmittal and Proxy. The term
"Agent's Message" means a message, transmitted by the Book-Entry Transfer
Facility, received by the Depositary and forming a part of the book-entry
transfer when a tender is initiated, which states that the Book-Entry Transfer
Facility has received an express acknowledgment from a participant tendering
Shares that such participant has received and agrees to be bound by the terms of
this Letter of Transmittal and Proxy and that Conectiv may enforce such
agreement against such participant.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT
THE OPTION AND RISK OF THE TENDERING PREFERRED SHAREHOLDER. IF CERTIFICATES FOR
SHARES ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED.
No alternative, conditional or contingent tenders will be accepted. See
"Terms of the Offer -- Number of Shares; Purchase Prices; Expiration Date;
Dividends" in the Offer to Purchase and Proxy Statement. By executing this
Letter of
12
<PAGE> 97
Transmittal and Proxy, the tendering shareholder waives any right to receive any
notice of the acceptance for payment of the Shares.
3. VOTING. PREFERRED SHAREHOLDERS (INCLUDING PREFERRED SHAREHOLDERS WHO
ACQUIRE SHARES SUBSEQUENT TO THE RECORD DATE) WHO WISH TO TENDER THEIR SHARES
PURSUANT TO THE OFFER MUST VOTE IN FAVOR OF THE PROPOSED AMENDMENT. THE OFFER IS
CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE
SPECIAL MEETING. In addition, Preferred Shareholders have the right to vote for
the Proposed Amendment regardless of whether they tender their Shares by casting
their vote and duly executing this Letter of Transmittal and Proxy or by voting
in person at the Special Meeting. By executing a Notice of Guaranteed Delivery
and Proxy, a Preferred Shareholder is deemed to have tendered the Shares
described in such Notice of Guaranteed Delivery and Proxy and to have voted such
Shares in accordance with the proxy contained therein. If no vote is indicated
on an otherwise properly executed proxy contained with this Letter of
Transmittal and Proxy (or within a Notice of Guaranteed Delivery and Proxy),
then all Shares in respect of such proxy will be voted in favor of the Proposed
Amendment. See "Proposed Amendment and Proxy Solicitation" in the Offer to
Purchase and Proxy Statement. The Offer is being sent to all persons in whose
names Shares are registered on the books of the Company on the Record Date and
transferees thereof. Preferred Shareholders who purchase or whose purchase is
registered after the Record Date and who wish to tender in the Offer must
arrange with their seller to receive a proxy from the holder of record of such
Shares on the Record Date. Any holder of Shares held of record on the Record
Date in the name of another must establish to the satisfaction of the Company
his entitlement to exercise or transfer such Proxy. This will ordinarily require
an assignment by such record holder in blank or, if not in blank, to and from
each successive transferee, including the holder, with each signature guaranteed
by an Eligible Institution. See Instruction 5. In order to facilitate receipt of
proxies, Shares shall, during the period which commences on September 2, 1998
(two business days prior to the Record Date) and which will end at the close of
business on the Expiration Date, trade in the over-the-counter market with a
proxy providing the transferee with the right to vote such acquired Shares in
the Proxy Solicitation. No record date is fixed for determining which persons
are permitted to tender Shares. However, only the holders of record, or holders
who acquire an assignment of proxy from such holders, are permitted to vote for
the Proposed Amendment and thereby validly tender Shares pursuant to the Offer.
Any person who is the beneficial owner but not the record holder of Shares must
arrange for the record transfer of such Shares prior to tendering or direct the
record holder to tender on behalf of the beneficial owner.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY
BOOK-ENTRY TRANSFER). If fewer than all the Shares represented by any
certificate delivered to the Depositary are to be tendered, fill in the number
of Shares that are to be tendered in the box above under the heading
"Description of Shares Tendered." In such case, a new certificate for the
remainder of the Shares represented by the old certificate will be sent to the
person(s) signing this Letter of Transmittal and Proxy, unless otherwise
provided in the box above under the heading "Special Payment Instructions" or
"Special Delivery Instructions," as promptly as practicable following the
expiration or termination of the Offer. All Shares represented by certificates
delivered to the Depositary will be deemed to have been tendered unless
otherwise indicated.
5. SIGNATURES ON THIS LETTER OF TRANSMITTAL AND PROXY AND/OR NOTICE OF
GUARANTEED DELIVERY AND PROXY; STOCK POWERS AND ENDORSEMENTS. If either this
Letter of Transmittal and Proxy or the Notice of Guaranteed Delivery and Proxy
(together, the "Tender and Proxy Documents") is signed by the registered
holder(s) of the Shares tendered hereby, the signature(s) must correspond with
the name(s) as written one the face of the certificates without alteration,
enlargement or any change whatsoever.
If any of the Shares tendered or voted under either Tender and Proxy
Document are held of record by two or more persons, all such persons must sign
such Tender and Proxy Document.
If any of the Shares tendered or voted under either Tender and Proxy
Document are registered in different names or different certificates, it will be
necessary to complete, sign and submit as many separate applicable Tender and
Proxy Documents as there are different registrations or certificates.
If either Tender and Proxy Document is signed by the registered
holder(s) of the Shares tendered hereby, no endorsements of certificates or
separate stock powers are required unless payment of the purchase price is to be
made to, or Shares not tendered or not purchased are to be registered in the
name of, any person other than the registered holder(s). Signatures on any such
certificates or stock powers must be guaranteed by an Eligible Institution. See
Instruction 1.
If this Letter of Transmittal and Proxy is signed by a person other
than the registered holder(s) of the Shares tendered hereby, certificates must
be endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the
13
<PAGE> 98
name(s) of the registered holder(s) appear(s) on the certificates for such
Shares. Signature(s) on any such certificates or stock powers must be guaranteed
by an Eligible Institution. See Instruction 1.
If either Tender and Proxy Document or any certificate or stock power
is signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Conectiv of the authority of such person so to act must be
submitted.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6,
Conectiv will pay or cause to be paid any stock transfer taxes with respect to
the sale and transfer of any Shares to it or its order pursuant to the Offer.
If, however, payment of the purchase price is to be made to, or Shares not
tendered or not purchased are to be registered in the name of, any person other
than the registered holder(s), or if tendered Shares are registered in the name
of any person other than the person(s) signing this Letter of Transmittal and
Proxy, the amount of any stock transfer taxes (whether imposed on the registered
holder(s), such other person or otherwise) payable on account of the transfer to
such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes, or exemption therefrom, is submitted. See
"Terms of the Offer -- Acceptance of Shares for Payment and Payment of Purchase
Price and Dividends" in the Offer to Purchase and Proxy Statement. EXCEPT AS
PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY TO AFFIX TRANSFER TAX
STAMPS TO THE CERTIFICATES REPRESENTING SHARES TENDERED HEREBY.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the
purchase price of any Shares purchased is to be issued in the name of, any
Shares not tendered or not purchased are to be returned to or the check for the
Special Cash Payment is to be issued in the name of, a person other than the
person(s) signing this Letter of Transmittal and Proxy or if the check and/or
any certificate for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal and Proxy or
to an address other than that shown in the box above under the heading "Name(s)
and Address(es) of Registered Holder(s)," then the "Special Payment
Instructions" and/or "Special Delivery Instructions" on this Letter of
Transmittal and Proxy should be completed. Preferred Shareholders tendering
Shares by book-entry transfer will have any Shares not accepted for payment
returned by crediting the account maintained by such Preferred Shareholder at
the Book-Entry Transfer Facility.
8. SUBSTITUTE FORM W-9 and FORM W-8. A tendering Preferred Shareholder
and a Preferred Shareholder voting in favor of the Proposed Amendment (but not
tendering) is required to provide the Depositary with (i) in the case of a
Untied States Preferred Shareholder, a correct Taxpayer Identification Number
("TIN") and a certification that the IRS has not notified such shareholder that
he is subject to backup withholding on Substitute Form W-9, or (ii) in the case
of a foreign Preferred Shareholder, a properly completed Form W-8, as discussed
below under "Important Tax Information." Failure to provide the information on
either Substitute Form W-9 or Form W-8 may subject the Preferred Shareholder to
a $50 penalty imposed by the Internal Revenue Service and to 31% federal income
tax backup withholding on gross amount payable. The box in Part 2 of Substitute
Form W-9 may be checked if the Preferred Shareholder has not been issued a TIN
and has applied for a number or intends to apply for a number in the near
future. If the box in Part 2 is checked and the Depositary is not provided with
a TIN by the time of payment, the Depositary will withhold 31% of the gross
amount otherwise payable thereafter until a TIN is provided to the Depositary.
9. REQUESTS FOR ASSISTANCE OF ADDITIONAL COPIES. Any questions or
requests for assistance may be directed to the Information Agent or the Dealer
Manager at their respective telephone numbers and addresses listed below.
Requests for additional copies of the Offer to Purchase and Proxy Statement,
this Letter of Transmittal and Proxy or other tender offer materials may be
directed to the Information Agent or the Dealer Manager and such copies will be
furnished promptly at Conectiv's expense. Preferred Shareholders may also
contact their local broker, dealer, commercial bank or trust company for
assistance concerning the Offer.
10. SOLICITED TENDERS. Conectiv will pay a solicitation fee of an
amount equal to $1.50 per Share for Shares that are tendered, accepted for
payment and paid for pursuant to the Offer (except that for transactions for
beneficial owners whose ownership equals or exceeds 2,500 Shares, Conectiv will
pay a solicitation fee of an amount equal to $1.00 per Share). With respect to
fees payable pursuant to this paragraph involving transactions for beneficial
owners whose ownership is less than 2,500 Shares, any fees payable hereunder
shall be paid in full to the Dealer Manager unless a Soliciting Dealer is
designated (as herein described), in which case such fee shall be payable in
full to such designated Soliciting Dealer (which designated Soliciting Dealer
may be the Dealer Manager). With respect to fees payable pursuant to this
paragraph involving transactions for beneficial owners whose ownership equals or
exceeds 2,500 Shares, any fees payable hereunder shall be paid in full to the
Dealer Manager unless a Soliciting Dealer is designated, in which case 80% of
such fee shall be paid to the Dealer Manager and 20% of such fee shall be paid
to the designated Soliciting Dealer (which designated Soliciting Dealer
14
<PAGE> 99
may be the Dealer Manager). A designated Soliciting Dealer shall be named
hereunder under the heading "Solicited Tenders," and shall have solicited and
obtained the tender, and shall also be (a) any broker or dealer in securities
including the Dealer Manager in its capacity as a dealer or broker, which is a
member of any national securities exchange or of the NASD, (b) any foreign
broker or dealer not eligible for membership in the NASD which agrees to conform
to the NASD's Rules of Fair Practice in soliciting tenders outside the United
States to the same extent as though it were an NASD member, or (c) any bank or
trust company (each of which is referred to herein as a "Soliciting Dealer"). No
such fee shall be payable to a Soliciting Dealer with respect to the tender of
Shares by a holder unless the Letter of Transmittal and Proxy accompanying such
tender designates such Soliciting Dealer. No such fee shall be payable to a
Soliciting Dealer in respect of Shares registered in the name of such Soliciting
Dealer unless such Shares are held by such Soliciting Dealer as nominee and such
Shares are being tendered for the benefit of one or more beneficial owners
identified on the Letter of Transmittal and Proxy or on the Notice of Solicited
Tenders (included in the materials provided to brokers and dealers). No such fee
shall be payable to a Soliciting Dealer with respect to the tender of Shares by
the holder of record, for the benefit of the beneficial owner, unless the
beneficial owner has designated such Soliciting Dealer. If tendered Shares are
being delivered by book-entry transfer, the Soliciting Dealer must return a
Notice of Solicited Tenders to the Depositary within three business days after
expiration of the Offer to receive a solicitation fee. No such fee shall be
payable to a Soliciting Dealer if such Soliciting Dealer is required for any
reason to transfer the amount of such fee to a depositing holder (other than
itself). No such fee shall be paid to a Soliciting Dealer with respect to Shares
tendered for such Soliciting Dealer's own account. No broker, dealer, bank,
trust company or fiduciary shall be deemed to be the agent of Conectiv, the
Company, the Depositary, the Information Agent or the Dealer Manager for
purposes of the Offer.
Soliciting Dealers will include any organizations described in clauses
(a), (b) or (c) above even when the activities of such organization in
connection with the Offer consist solely of forwarding to clients materials
relating to the Offer, including this Letter of Transmittal and Proxy, and
tendering Shares as directed by beneficial owners thereof. No Soliciting Dealer
is required to make any recommendation to holders of Shares as to whether to
tender or refrain from tendering in the Offer. No assumption is made, in making
payment to any Soliciting Dealer, that its activities in connection with the
Offer included any activities other than those described above, and for all
purposes noted in all materials relating to the Offer, the term "solicit" shall
be deemed to mean no more than "processing shares tendered" or "forwarding to
customers materials regarding the Offer."
11. IRREGULARITIES. All questions as to the form of documents and the
validity, eligibility (including time of receipt) and acceptance of any tender
of Shares will be determined by Conectiv, in its sole discretion, and its
determination shall be final and binding. Conectiv reserves the absolute right
to reject any and all tenders of Shares that it determines are not in proper
form or the acceptance for payment of or payment for Shares that may, in the
opinion of Conectiv's counsel, be unlawful. Conectiv also reserves the absolute
right to waive any of the conditions to the Offer or any defect or irregularity
in any tender of Shares and Conectiv's interpretation of the terms and
conditions of the Offer (including these instructions) shall be final and
binding. Unless waived, any defects or irregularities in connection with tenders
must be cured within such time as Conectiv shall determine. None of Conectiv,
the Company, the Dealer Manager, the Depositary, the Information Agent or any
other person shall be under any duty to give notice of any defect or
irregularity in tenders, nor shall any of them incur any liability for failure
to give any such notice. Tenders will not be deemed to have been made until all
defects and irregularities have been cured or waived.
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any of your
certificate(s) for Shares have been lost, stolen or destroyed, please call ACE
Stockholder Services at (800) 365-6495 (toll free). You may need to complete and
Affidavit of Loss with respect to the lost certificate(s) (which will be
provided by ACE Stockholder Services) and payment of an indemnity bond premium
fee may be required. The tender of Shares pursuant to this Letter of Transmittal
and Proxy will not be valid unless prior to the Expiration Date: (a) such
procedures have been completed and a replacement certificate for the Shares has
been delivered to the Depositary or (b) a Notice of Guaranteed Delivery and
Proxy has been delivered to the Depositary. See Instruction 2.
IMPORTANT: THIS LETTER OF TRANSMITTAL AND PROXY, DULY EXECUTED,
TOGETHER WITH, IF APPLICABLE, CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY
TRANSFER, AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY,
OR, IF APPLICABLE, THE NOTICE OF GUARANTEED DELIVERY AND PROXY MUST BE RECEIVED
BY THE DEPOSITARY, ON OR PRIOR TO THE EXPIRATION DATE.
15
<PAGE> 100
IMPORTANT TAX INFORMATION
Under federal income tax law, a Preferred Shareholder whose tendered
Shares are accepted for payment or who will receive a Special Cash Payment as a
result of voting in favor of the Proposed Amendment is required to provide the
Depositary (as payer) with either such Preferred Shareholder's correct TIN on
Substitute Form W-9 below or a properly completed Form W-8. If such Preferred
Shareholder is an individual, the TIN is his or her social security number. For
businesses and other entities, the number is the federal employer identification
number. If the Depositary is not provided with the correct TIN or properly
completed Form W-8, the Preferred Shareholder may be subject to a $50 penalty
imposed by the Internal Revenue Code. In addition, payments that are made to
such Preferred Shareholder with respect to Shares purchased pursuant to the
Offer may be subject to 31% backup withholding.
Certain Preferred Shareholders (including, among others, all
corporations and certain foreign individuals) are exempt from backup
withholding. For a corporate United States Preferred Shareholder to qualify for
such exemption, such Preferred Shareholder must provide the Depositary with a
properly completed and executed Substitute Form W-9 attesting to its exempt
status. In order for a foreign Preferred Shareholder to qualify as an exempt
recipient, such Preferred Shareholder must submit to the Depositary a properly
completed Internal Revenue Service Form W-8 (a "Form W-8"), signed under
penalties of perjury, attesting to that Preferred Shareholder's exempt status. A
Form W-8 can be obtained from the Depositary. See the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If federal income tax backup withholding applies, the Depositary is
required to withhold 31% of any payments made to the Preferred Shareholder.
Backup withholding is not an additional tax. Rather, the federal income tax
liability of persons subject to backup withholding will be reduced by the amount
of the tax withheld. If withholding results in an overpayment of taxes, a refund
may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8
To avoid backup withholding on a Special Cash Payment or payments that
are made to a Preferred Shareholder with respect to Shares purchased pursuant to
the Offer, the Preferred Shareholder is required to notify the Depositary of his
or her correct TIN by completing the Substitute Form W-9 attached hereto
certifying that the TIN provided on Substitute Form W-9 is correct and that (a)
the Preferred Shareholder has not been notified by the Internal Revenue Service
that he or she is subject to federal income tax backup withholding as a result
of failure to report all interest or dividends or (b) the Internal Revenue
Service has notified the Preferred Shareholder that he or she is no longer
subject to federal income tax backup withholding. Foreign Preferred Shareholders
must submit a properly completed Form W-8 in order to avoid the applicable
backup withholding; provided, however, that backup withholding will not apply to
foreign Preferred Shareholders subject to withholding under other provisions of
the Code or the Special Cash Payment or on gross payments received pursuant to
the Offer. Foreign Preferred Shareholders that submit a properly completed Form
W-8 may nevertheless be subject to withholding under other provisions of the
Code on the payments received by them.
WHAT NUMBER TO GIVE THE DEPOSITARY
The Preferred Shareholder is required to give the Depositary the social
security number or employer identification number of the registered owner of the
Shares. If the Shares are in more than one name or are not in the name of the
actual owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report.
PAYER'S NAME
<TABLE>
<S> <C> <C>
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT _______________________________
FORM W-9 RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. SOCIAL SECURITY NUMBER
OR
_______________________________
EMPLOYER IDENTIFICATION TIN
NAME (PLEASE PRINT)____________________________ PART 2 --
ADDRESS________________________________________ AWAITING TIN { }
CITY_______________________STATE_______________
ZIP CODE_______________________________________
</TABLE>
16
<PAGE> 101
<TABLE>
<S> <C>
DEPARTMENT OF THE TREASURY PART 3 -- CERTIFICATION -- UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
INTERNAL REVENUE SERVICE
(1) THE NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER IDENTIFICATION NUMBER (OR A
TIN HAS NOT BEEN ISSUED TO ME BUT I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE
A TIN OR INTEND TO DO SO IN THE NEAR FUTURE), (2) I AM NOT SUBJECT TO BACKUP
WITHHOLDING EITHER BECAUSE I HAVE NOT BEEN NOTIFIED BY THE INTERNAL REVENUE SERVICE
(THE "IRS") THAT I AM SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF A FAILURE TO REPORT
ALL INTEREST OR DIVIDENDS OR THE IRS HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT TO
BACKUP WITHHOLDING AND (3) ALL OTHER INFORMATION PROVIDED ON THIS FORM IS TRUE,
CORRECT AND COMPLETE.
SIGNATURE____________________________________________________________________________
DATE _____________________________, 1998
YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE
CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING INTEREST OR
DIVIDENDS ON YOUR TAX RETURN.
PAYER'S REQUEST FOR NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
TAXPAYER IDENTIFICATION WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER OR PROXY
NUMBER ("TIN") AND SOLICITATION. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
CERTIFICATION TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 2 OF
SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER:
I CERTIFY UNDER PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER HAS NOT
BEEN ISSUED TO ME AND EITHER (1) I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE
A TAXPAYER IDENTIFICATION NUMBER TO THE APPROPRIATE INTERNAL REVENUE SERVICE CENTER OR
SOCIAL SECURITY ADMINISTRATION OFFICE OR (2) I INTEND TO DO SO IN THE NEAR FUTURE. I
UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER BY THE TIME OF
PAYMENT, 31% OF ALL PAYMENTS MADE TO ME WILL BE WITHHELD UNTIL I PROVIDE A NUMBER.
SIGNATURE ____________________________________ DATE________________________, 1998
</TABLE>
THE INFORMATION AGENT:
D.F. KING & CO., INC.
77 Water Street, 20th Floor
New York, New York 10005
(800) 431-9629 (toll free)
or
Banks and Brokers call
(212) 269-5550
17
<PAGE> 102
4.75%
LETTER OF TRANSMITTAL AND PROXY
TO ACCOMPANY
SHARES OF 4.75% SERIES PREFERRED STOCK
CUSIP NUMBER 048303309
OF
ATLANTIC CITY ELECTRIC COMPANY
---------------------------
TENDERED PURSUANT TO THE OFFER TO PURCHASE FOR CASH
BY
CONECTIV
DATED SEPTEMBER 8, 1998, FOR PURCHASE AT A
PURCHASE PRICE OF $____ PER SHARE
AND/OR
VOTED PURSUANT TO THE PROXY STATEMENT OF
ATLANTIC CITY ELECTRIC COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON OCTOBER 14, 1998, UNLESS THE OFFER IS EXTENDED
THE PROXY CONTAINED IN THIS DOCUMENT IS IN
RESPECT OF THE SPECIAL MEETING OF SHAREHOLDERS TO
BE HELD ON OCTOBER 14, 1998, OR ON SUCH DATE TO
WHICH THE MEETING IS ADJOURNED OR POSTPONED.
TO: THE BANK OF NEW YORK, DEPOSITARY
BY MAIL: BY HAND OR OVERNIGHT COURIER:
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN EXACTLY AS NAME(S) AND ADDRESS(ES) APPEAR(S) ON CERTIFICATE(S))
IF YOU HAVE ANY QUESTIONS, HAVE NOT RECEIVED THE OFFER TO PURCHASE AND
PROXY STATEMENT OR OTHER DOCUMENTS PERTAINING TO THE OFFER OR NEED ASSISTANCE IN
COMPLETING THIS LETTER OF TRANSMITTAL AND PROXY, PLEASE CONTACT D.F. KING & CO.,
INC., THE INFORMATION AGENT, AT TELEPHONE (800) 431-9629 (TOLL FREE).
<PAGE> 103
PREFERRED SHAREHOLDERS (INCLUDING PREFERRED SHAREHOLDERS WHO ACQUIRE
SHARES SUBSEQUENT TO THE RECORD DATE) WILL NOT BE ABLE TO VALIDLY TENDER THEIR
SHARES UNLESS THEY HAVE SUBMITTED A DULY COMPLETED, VALID AND UNREVOKED PROXY
INDICATING THEIR VOTE FOR THE PROPOSED AMENDMENT OR INDICATE IN THE ACCOMPANYING
PROXY THEIR INTENTION TO VOTE FOR THE PROPOSED AMENDMENT AT THE SPECIAL MEETING.
CONECTIV ("CONECTIV") WILL NOT BE REQUIRED TO ACCEPT FOR PAYMENT OR PAY FOR ANY
SHARES TENDERED IF THE PROPOSED AMENDMENT IS NOT APPROVED AND ADOPTED AT THE
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON OCTOBER 14, 1998, OR ON SUCH DATE
TO WHICH THE MEETING IS ADJOURNED OR POSTPONED (THE "SPECIAL MEETING").
PREFERRED SHAREHOLDERS HAVE THE RIGHT TO VOTE FOR THE PROPOSED AMENDMENT
REGARDLESS OF WHETHER THEY TENDER THEIR SHARES BY CASTING THEIR VOTE AND SIGNING
THE PROXY CONTAINED WITHIN THIS LETTER OF TRANSMITTAL AND PROXY OR BY VOTING IN
PERSON AT THE SPECIAL MEETING. IF THE PROPOSED AMENDMENT IS APPROVED AND
ADOPTED, ATLANTIC CITY ELECTRIC COMPANY (THE "COMPANY") WILL MAKE A SPECIAL CASH
PAYMENT TO EACH PREFERRED SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED
AMENDMENT, PROVIDED THAT SUCH HOLDER'S SHARES ARE NOT TENDERED PURSUANT TO THE
OFFER.
HOLDERS WHO PURCHASE OR WHOSE PURCHASE SETTLES OR IS REGISTERED AFTER
THE CLOSE OF BUSINESS ON SEPTEMBER 4, 1998 (THE "RECORD DATE") AND WHO WISH TO
TENDER IN THE OFFER MUST ARRANGE WITH THEIR SELLER TO RECEIVE A DULY COMPLETED,
VALID AND UNREVOKED PROXY (WHICH MAY BE IN THE FORM OF AN IRREVOCABLE ASSIGNMENT
OF PROXY AS SET FORTH IN THIS LETTER OF TRANSMITTAL AND PROXY) FROM THE HOLDER
OF RECORD OF SUCH SHARES ON THE RECORD DATE. IN ORDER TO FACILITATE RECEIPT OF
PROXIES, SHARES SHALL, DURING THE PERIOD WHICH COMMENCES SEPTEMBER 2, 1998 (TWO
BUSINESS DAYS PRIOR TO THE RECORD DATE) AND WHICH WILL END AT THE CLOSE OF
BUSINESS ON THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY
STATEMENT), TRADE IN THE OVER-THE-COUNTER MARKET WITH A PROXY PROVIDING THE
TRANSFEREE WITH THE RIGHT TO VOTE SUCH ACQUIRED SHARES IN THE PROXY
SOLICITATION.
NOTE: SIGNATURES MUST BE PROVIDED HEREIN. PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY.
The undersigned hereby appoints Howard E. Cosgrove, Barbara S. Graham
and Louis M. Walters, or any of them, as proxies, each with the power to appoint
his or her substitute, and hereby authorizes them to represent and to vote as
designated hereunder and in their discretion with respect to any other business
properly brought before the Special Meeting all the shares of preferred stock of
the Company which the undersigned is entitled to vote at the Special Meeting or
any adjournment(s) or postponement(s) thereof.
NOTE: IF YOU ARE VOTING BUT NOT TENDERING SHARES, DO NOT SEND ANY SHARE
CERTIFICATES WITH THIS LETTER OF TRANSMITTAL AND PROXY.
THIS LETTER OF TRANSMITTAL AND PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF THE COMPANY. The proxy contained herein, when properly
executed, will be voted in the manner described herein by the undersigned
shareholder(s). If no direction is made, the proxy will be voted FOR Item 1. An
abstention is the equivalent of a vote AGAINST the Proposed Amendment.
PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES MUST VOTE FOR
ITEM 1.
Indicate your vote by an (X). The Board of Directors recommends voting
FOR Item 1.
ITEM 1.
HOLDERS OF SHARES WHO WISH TO TENDER THEIR SHARES MUST VOTE FOR THE
PROPOSED AMENDMENT EITHER BY SUBMITTING THIS PROXY OR BY VOTING AT THE SPECIAL
MEETING.
To remove from the Company's charter Paragraph (7)(B)(c) of Article
III, a provision restricting the amount of securities representing unsecured
indebtedness issuable by the Company.
{ } FOR { } AGAINST { } ABSTAIN
2
<PAGE> 104
SHARES REPRESENTED BY ALL PROPERLY EXECUTED PROXIES WILL BE VOTED IN
ACCORDANCE WITH INSTRUCTIONS APPEARING ON THIS PROXY. IN THE ABSENCE OF SPECIFIC
INSTRUCTIONS, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF
THE BOARD OF DIRECTORS, AND IN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE SPECIAL MEETING.
Any holder of Shares held of record on the Record Date in the name of
another holder must establish to the satisfaction of the Company its entitlement
to exercise or transfer this Proxy. This will ordinarily require an assignment
by such record holders in blank or, if not in blank, to and from each successive
transferee, including the holder, with each signature guaranteed by an Eligible
Institution. A form of irrevocable assignment of proxy has been provided herein.
Please check box if you plan to attend the Special Meeting. { }
SIGNATURE(S) OF OWNER(S)
X _____________________________________________________________________________
X _____________________________________________________________________________
Dated: _________________________________________________________________ , 1998
Name(s): ______________________________________________________________________
(PLEASE PRINT)
Capacity (full title): ________________________________________________________
Address: ______________________________________________________________________
(INCLUDE ZIP CODE)
DAYTIME Area Code and Telephone No.: __________________________________________
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
stock certificates or on a security position listing or by person(s) authorized
to become registered holder(s) by certificates and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, please set forth full title and see Instruction 5.)
3
<PAGE> 105
PLEASE COMPLETE:
DESCRIPTION OF SHARES TENDERED
(IF TENDERING SHARES, PLEASE FILL IN EXACTLY AS INFORMATION
APPEARS ON CERTIFICATE(S))
(ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
<TABLE>
<CAPTION>
NUMBER OF SHARES NOT
TOTAL NUMBER OF SHARES TENDERED BUT AS TO
REPRESENTED BY NUMBER OF SHARES WHICH PROXIES GIVEN
CERTIFICATE NUMBER(S)* CERTIFICATE(S)* TENDERED** ONLY
<S> <C> <C> <C>
</TABLE>
* Need not be completed by shareholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented
by any certificates delivered to the Depositary are being tendered. See
Instruction 4. You must vote for the Proposed Amendment with respect to any
Shares tendered.
If any of your certificate(s) for Shares have been lost, stolen or
destroyed, please call the Company's shareholder services department ("ACE
Stockholder Services") at 800-365-6495 (toll free). You may need to complete an
Affidavit of Loss with respect to the lost certificate(s) (which will be
provided by ACE Stockholder Services) and payment of an indemnity bond premium
fee may be required.
PLEASE COMPLETE IF APPLICABLE:
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature: _________________________________________________________
Name: _________________________________________________________________________
Name of Firm: _________________________________________________________________
Address of Firm: ______________________________________________________________
Area Code and Telephone No.: __________________________________________________
Dated: _________________________________________________________________ , 1998
4
<PAGE> 106
IF SELLING SHARES SUBSEQUENT TO SEPTEMBER 4, 1998, A RECORD HOLDER MUST
COMPLETE THE FOLLOWING IRREVOCABLE PROXY
PLEASE SIGN THIS TO IRREVOCABLY TRANSFER A PREFERRED STOCK
PROXY TO A SUBSEQUENT HOLDER OF PREFERRED STOCK WHO
WAS NOT A HOLDER OF RECORD ON SEPTEMBER 4, 1998
IRREVOCABLE PROXY
with respect to shares of the
4.75% Series Cumulative Preferred Stock
of
ATLANTIC CITY ELECTRIC COMPANY
the undersigned hereby irrevocably appoints
--------------------------------------------
Type or Print Name of Transferee
as attorney and proxy, with full power of substitution, to vote and otherwise
act for and in the name(s) of the undersigned with respect to the Shares
indicated below which were held of record by the undersigned on September 4,
1998, in the manner in which the undersigned would be entitled to vote and
otherwise act in respect of such Shares on any and all matters.
This proxy shall be effective whether or not the Shares indicated below
are tendered in the Offer.
This instrument supersedes and revokes any and all previous
appointments of proxies heretofore made by the undersigned with respect to the
Shares indicated below as to any and all matters. THIS PROXY IS IRREVOCABLE AND
IS COUPLED WITH AN INTEREST.
All authority conferred or agreed to be conferred herein shall survive
the death or incapacity of the undersigned, and any obligation of the
undersigned hereunder shall be binding upon the heirs, executors,
administrators, legal and personal representatives, successors in interest and
assigns of the undersigned. The undersigned understands that tenders of Shares
pursuant to any of the procedures described in the Offer to Purchase and Proxy
Statement and in this Letter of Transmittal and Proxy will constitute a binding
agreement between the undersigned and the Company upon the terms and subject to
the conditions of the Offer.
- --------------------------------------------------------------------------------
DESCRIPTION OF PREFERRED STOCK
- --------------------------------------------------------------------------------
CERTIFICATE NUMBER(S) AGGREGATE NUMBER
(ATTACH LIST IF NECESSARY) OF SHARES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL:
- --------------------------------------------------------------------------------
- ---------------------------------- ------------------------------------
Signature of Record Holder or Signature of Record Holder of
Authorized Signatory Authorized Signatory
- ---------------------------------- ------------------------------------
Type or Print Name Type or Print Name
Date: _____________________, 1998 Date: _______________________, 1998
Tax Identification or Social Security No(s). __________________________________
5
<PAGE> 107
Must be signed by holder(s) exactly as name(s) appear(s) on the Record Date on
certificate(s) for the Shares or on a security position listing or by person(s)
authorized to become holder(s) by certificates and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation, agent or other person acting in a
fiduciary or representative capacity, please provide the following information
and see Instruction 5.
Name: ________________________________________________________________________
(PLEASE PRINT)
Capacity: ____________________________________________________________________
(FULL TITLE)
Address: _____________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Tel. No. _______________________________________________________
PLEASE COMPLETE IF APPLICABLE:
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
Name of Firm: ________________________________________________________________
Authorized Signature: ________________________________________________________
Title: _______________________________________________________________________
Dated: ________________________________________________________________ , 1998
DELIVERY OF THIS LETTER OF TRANSMITTAL AND PROXY TO AN ADDRESS OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS
LETTER OF TRANSMITTAL AND PROXY IN THE APPROPRIATE SPACE THEREFOR PROVIDED AND,
IF YOU ARE TENDERING ANY SHARES OR VOTING IN FAVOR OF THE PROPOSED AMENDMENT,
COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW OR A FORM W-8, AS APPLICABLE.
SEE INSTRUCTION 8 AND "IMPORTANT TAX INFORMATION" BELOW.
DO NOT SEND ANY CERTIFICATES TO MORGAN STANLEY DEAN WITTER, D. F. KING
& CO., INC., CONECTIV, ACE STOCKHOLDER SERVICES OR ATLANTIC CITY ELECTRIC
COMPANY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL AND PROXY
SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL AND PROXY IS
COMPLETED. QUESTIONS REGARDING AND REQUESTS FOR COPIES OF THE OFFER TO PURCHASE
AND PROXY STATEMENT OR THIS LETTER OF TRANSMITTAL AND PROXY MAY BE DIRECTED TO
D.F. KING & CO., INC., THE INFORMATION AGENT, AT (800) 431-9629 (TOLL FREE) OR
BANKS AND BROKERS CALL (212) 269-5550.
This Letter of Transmittal and Proxy is to be used (a) if Shares are to
be voted but not tendered, or (b) if certificates for Shares are to be forwarded
to The Bank of New York ("Depositary") or (c) if delivery of tendered Shares (as
defined below) is to be made by book-entry transfer to the Depositary's account
at The Depository Trust Company ("DTC" or the "Book-Entry Transfer Facility")
pursuant to the procedures set forth under the heading "Terms of the Offer --
Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement (as
defined below) and an Agent's Message (as defined below) is not delivered.
Preferred Shareholders who wish to tender Shares but who cannot deliver
their Shares and all other documents required hereby to the Depositary by the
Expiration Date must tender their Shares pursuant to the guaranteed delivery
procedure set forth under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement. See Instruction
2. DELIVERY OF DOCUMENTS TO CONECTIV, THE COMPANY OR THE BOOK-ENTRY TRANSFER
FACILITY DOES NOT CONSTITUTE A VALID DELIVERY.
6
<PAGE> 108
{ } CHECK HERE IF TENDERED SHARES ARE ENCLOSED HEREWITH.
A Holder tendering Shares pursuant to this Letter of Transmittal and Proxy
must check one of the following boxes:
{ } A duly completed, valid and unrevoked proxy indicating a vote FOR the
Proposed Amendment is included herein.
{ } A vote FOR the Proposed Amendment will be cast at the Special Meeting.
ELIGIBLE INSTITUTIONS OR BROKERS TO COMPLETE ONLY IF APPLICABLE:
{ } CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING:
Name of tendering institution ____________________________________________
Account No. at DTC _______________________________________________________
Transaction Code No. _____________________________________________________
{ } CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY AND PROXY PREVIOUSLY SENT TO THE DEPOSITARY AND
COMPLETE THE FOLLOWING:
Name(s) of tendering shareholder(s)
Date of execution of Notice of Guaranteed Delivery and Proxy
Name of institution that guaranteed delivery
If delivery is by book-entry transfer:
Name of tendering institution
Account No. at DTC
Transaction Code No.
A holder electing to tender Shares pursuant to a Notice of Guaranteed
Delivery and Proxy must check one of the following boxes:
{ } A duly completed, valid and unrevoked proxy indicating a vote FOR the
Proposed Amendment was included with the Notice of Guaranteed Delivery
and Proxy previously sent to the Depositary.
{ } A duly completed, valid and unrevoked proxy indicating a vote FOR the
Proposed Amendment is being delivered pursuant to a Notice of
Guaranteed Delivery and Proxy previously sent to the Depositary.
{ } A valid vote FOR the Proposed Amendment will be cast at the Special
Meeting.
NOTE: SIGNATURES MUST BE PROVIDED ABOVE.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
7
<PAGE> 109
Ladies and Gentlemen:
The abovesigned hereby tenders to Conectiv, a Delaware corporation
("Conectiv"), the shares in the amount set forth in the box above designated
"Description of Shares Tendered" pursuant to Conectiv's offer to purchase any
and all of the outstanding shares (the "Shares") of the series of preferred
stock of Atlantic City Electric Company, a New Jersey corporation, and direct
utility subsidiary of Conectiv (the "Company"), shown on the first page hereof
as to which this Letter of Transmittal and Proxy is applicable (the "Shares") at
the purchase price per Share shown on the first page hereof, net to the seller
in cash, upon the terms and subject to the conditions set forth in the Offer to
Purchase and Proxy Statement, dated September 8, 1998 (the "Offer to Purchase
and Proxy Statement"), receipt of which is hereby acknowledged, and in this
Letter of Transmittal and Proxy (which as to the Shares, together with the Offer
to Purchase and Proxy Statement, constitutes the "Offer"). PREFERRED
SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER MUST VOTE IN
FAVOR OF THE PROPOSED AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION,
AS AMENDED, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE
"PROPOSED AMENDMENT"). THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT
BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON
OCTOBER 14, 1998, OR ON SUCH DATE TO WHICH THE MEETING IS ADJOURNED OR POSTPONED
(THE "SPECIAL MEETING"). See "Proposed Amendment and Proxy Solicitation," "Terms
of the Offer -- Extension of Tender Period; Termination; Amendments" and "Terms
of the Offer -- Certain Conditions of the Offer" in the Offer to Purchase and
Proxy Statement.
Subject to, and effective upon, acceptance for payment of and payment
for the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the abovesigned hereby
sells, assigns and transfers to, or upon the order of, Conectiv all right, title
and interest in and to all the Shares that are being tendered hereby and hereby
constitutes and appoints The Bank of New York (the "Depositary") the true and
lawful agent and attorney-in-fact of the abovesigned with respect to such
Shares, with full power of substitution (such power of attorney being an
irrevocable power coupled with an interest), to (a) deliver certificates for
such Shares, or transfer ownership of such Shares on the account books
maintained by the Book-Entry Transfer Facility, together, in any such case, with
all accompanying evidences of transfer and authenticity, to or upon the order of
Conectiv, (b) present such Shares for registration and transfer on the books of
the Company and (c) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares, all in accordance with the terms of the
Offer. The Depositary will act as agent for tendering shareholders for the
purpose of receiving payment from Conectiv and transmitting payment to tendering
shareholders.
The abovesigned hereby represents and warrants that the abovesigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and that, when and to the extent the same are accepted for
payment by Conectiv, Conectiv will acquire good, marketable and unencumbered
title thereto, free and clear of all liens, restrictions, charges, encumbrances,
conditional sales agreements or other obligations relating to the sale or
transfer thereof, and the same will not be subject to any adverse claims. The
abovesigned will, upon request, execute and deliver any additional documents
deemed by the Depositary or Conectiv to be necessary or desirable to complete
the sale, assignment and transfer of the Shares tendered hereby.
All authority herein conferred or agreed to be conferred shall not be
affected by and shall survive the death, bankruptcy or incapacity of the
abovesigned, and any obligations of the abovesigned hereunder shall be binding
upon the heirs, legal representatives, successors, assigns, executors and
administrators of the abovesigned. Except as stated in the Offer, this tender is
irrevocable.
The abovesigned understands that tenders of Shares pursuant to any one
of the procedures described under the heading "Terms of the Offer -- Procedure
for Tendering Shares" in the Offer to Purchase and Proxy Statement and in the
instructions hereto will constitute the abovesigned's acceptance of the terms
and conditions of the Offer, including the abovesigned's representation and
warranty that (a) the abovesigned has a net long position in the Shares being
tendered within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended, and (b) the tender of such Shares complies
with such Rule 14e-4. Conectiv's acceptance for payment of Shares tendered
pursuant to the Offer will constitute a binding agreement between the
abovesigned and Conectiv upon the terms and subject to the conditions of the
Offer.
The abovesigned recognizes that, under certain circumstances set forth
in the Offer to Purchase and Proxy Statement, Conectiv may terminate or amend
the Offer or may not be required to purchase any of the Shares tendered hereby.
In either event, the abovesigned understands that certificate(s) for any Shares
not tendered or not purchased will be returned to the abovesigned.
8
<PAGE> 110
Unless otherwise indicated in the box below under the heading "Special
Payment Instructions," please issue the check for the purchase price of any
Shares purchased, and/or return any Shares not tendered or not purchased, in the
name(s) of the abovesigned (and, in the case of Shares tendered by book-entry
transfer, by credit to the account of the abovesigned at the Book-Entry Transfer
Facility). Similarly, unless otherwise indicated in the box below under the
heading "Special Delivery Instructions," please mail the check for the purchase
price of any Shares purchased and/or any certificate for Shares not tendered or
not purchased (and accompanying documents, as appropriate) to the abovesigned at
the address shown below the abovesigned's signature(s). In the event that both
"Special Payment Instructions" and "Special Delivery Instructions" are
completed, please issue the check for the purchase price of any Shares purchased
and/or return any Shares not tendered or not purchased in the name(s) of, and
mail said check and/or any certificates to, the person(s) so indicated. The
abovesigned recognizes that Conectiv has no obligation, pursuant to the "Special
Payment Instructions," to transfer any Shares from the name of the registered
holder(s) thereof if Conectiv does not accept for purchase any of the Shares so
tendered.
COMPLETE ONLY IF APPLICABLE:
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased, the certificates for Shares not tendered or not purchased or the
check for the Special Cash Payment are to be issued in the name of someone other
than the abovesigned.
Issue { } Check and/or { } Certificate(s) to:
Name _________________________________________________________________________
(PLEASE PRINT)
Address ______________________________________________________________________
______________________________________________________________________________
(INCLUDE ZIP CODE)
______________________________________________________________________________
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased, the certificates for Shares not tendered or not purchased or the
check for the Special Cash Payment are to be mailed to someone other than the
abovesigned or to the abovesigned at an address other than that shown below the
abovesigned's signature(s).
Mail { } Check and/or { } Certificate(s) to:
Name _________________________________________________________________________
(PLEASE PRINT)
Address ______________________________________________________________________
______________________________________________________________________________
(INCLUDE ZIP CODE)
COMPLETE ONLY IF YOUR SHARES ARE LOST:
LOST CERTIFICATES BOX
{ } CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN
AND WISH TO TENDER HAVE BEEN LOST, DESTROYED OR STOLEN.
(SEE INSTRUCTION 12.)
9
<PAGE> 111
Number of Shares represented by lost, destroyed or stolen
certificates:
-----------------
COMPLETE ONLY IF APPLICABLE:
SOLICITED TENDERS AND PROXIES
(SEE INSTRUCTION 10)
As provided in Instruction 10, Conectiv will pay a solicitation fee of
an amount equal to $1.50 per Share for any Shares tendered, accepted for payment
and paid for pursuant to the Offer (except that for transactions for beneficial
owners whose ownership equals or exceeds 2,500 Shares, Conectiv will pay a
solicitation fee of an amount equal to $1.00 per Share). With respect to fees
payable pursuant to this paragraph involving transactions for beneficial owners
whose ownership is less than 2,500 Shares, any fees payable hereunder shall be
paid in full to the Dealer Manager unless a Soliciting Dealer is designated (as
herein described), in which case such fee shall be payable in full to such
designated Soliciting Dealer (which designated Soliciting Dealer may be the
Dealer Manager). With respect to fees payable pursuant to this paragraph
involving transactions for beneficial owners whose ownership equals or exceeds
2,500 Shares, any fees payable hereunder shall be paid in full to the Dealer
Manager unless a Soliciting Dealer is designated, in which case 80% of such fee
shall be paid to the Dealer manager and 20% of such fee shall be paid to the
designated Soliciting Dealer (which designated Soliciting Dealer may be the
Dealer Manager). However, Soliciting Dealers will not be entitled to a
solicitation fee for Shares beneficially owned by such Soliciting Dealer.
The undersigned represents that the Soliciting Dealer which solicited
and obtained this tender is:
Name of Firm: ________________________________________________________________
(PLEASE PRINT)
Name of Individual Broker
or Financial Consultant: _____________________________________________________
Telephone Number of Broker
or Financial Consultant: _____________________________________________________
Identification Number (if known): ____________________________________________
Address: _____________________________________________________________________
(INCLUDE ZIP CODE)
COMPLETE ONLY IF CUSTOMER'S SHARES HELD IN NOMINEE NAME ARE TENDERED:
<TABLE>
<CAPTION>
NAME OF BENEFICIAL OWNER NUMBER OF SHARES TENDERED
(ATTACH ADDITIONAL LIST IF NECESSARY)
<S> <C>
- ------------------------------------------------------------ ----------------------------------------------------------
- ------------------------------------------------------------ ----------------------------------------------------------
- ------------------------------------------------------------ ----------------------------------------------------------
</TABLE>
The acceptance of compensation by such Soliciting Dealer will
constitute a representation by it that (a) it has complied with the applicable
requirements of the Securities Exchange Act of 1934, as amended, and the
applicable rules and regulations thereunder, in connection with such
solicitation; (b) it is entitled to such compensation for such solicitation
under the terms and conditions of the Offer to Purchase and Proxy Statement; (c)
in soliciting tenders of Shares, it has used no solicitation materials other
than those furnished by Conectiv or the Company; and (d) if it is a foreign
broker or dealer not eligible for
10
<PAGE> 112
membership in the National Association of Securities Dealers, Inc. (the "NASD"),
it has agreed to conform to the NASD's Rules of Fair Practice in making
solicitations.
The payment of compensation to any Soliciting Dealer is dependent on
such Soliciting Dealer returning a Notice of Solicited Tenders to the
Depositary.
THIS LETTER OF TRANSMITTAL AND PROXY IS TO BE USED FOR THE TENDER OF
SHARES OF THE 4.75% SERIES (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY
STATEMENT) ONLY. ANY PERSON DESIRING TO TENDER OR VOTE SHARES OF ANY OTHER
SERIES OF PREFERRED STOCK FOR WHICH CONECTIV IS MAKING A TENDER OFFER AND/OR
SOLICITING A PROXY MUST SUBMIT A LETTER OF TRANSMITTAL AND PROXY RELATING TO
THAT SPECIFIC SERIES.
11
<PAGE> 113
PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW OR A FORM W-8, AS APPLICABLE.
SIGN HERE: ___________________________________________________________________
SIGNATURE OF OWNER(S)
___________________________________________________________________
SIGNATURE OF OWNER(S)
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal and Proxy must be guaranteed by a firm
that is a member of a registered national securities exchange or the NASD, or by
a commercial bank or trust company having an office or correspondent in the
United States which is a participant in an approved Medallion Signature
Guarantee Program (each of the foregoing being referred to as an "Eligible
Institution"). Signatures on this Letter of Transmittal and Proxy need not be
guaranteed (a) if this Letter of Transmittal and Proxy is signed by the
registered holder(s) of the Shares (which term, for purposes of this document,
shall include any participant in the Book-Entry Transfer Facility whose name
appears on a security position listing as the owner of Shares) tendered herewith
and such holder(s) has not completed the box above under the heading "Special
Payment Instructions" or the box above under the heading "Special Delivery
Instructions" on this Letter of Transmittal and Proxy, (b) if such Shares are
tendered for the account of an Eligible Institution or (c) if this Letter of
Transmittal and Proxy is being used solely for the purpose of voting Shares
which are not being tendered pursuant to the Offer. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND PROXY AND SHARES. This Letter
of Transmittal and Proxy is to be used if (a) certificates are to be forwarded
herewith, (b) delivery of Shares to be made by book-entry transfer pursuant to
the procedures set forth under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement and as Agent's
Message (as defined below) is not delivered or (c) Shares are being voted in
connection with the Offer. Certificates for all physically delivered Shares, or
a confirmation of a book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility of all Shares delivered electronically, as well as
a properly completed and duly executed Letter of Transmittal and Proxy, and any
other documents required by this Letter of Transmittal and Proxy, must be
received by the Depositary at one of its addresses set forth on the front page
of this Letter of Transmittal and Proxy on or prior to the Expiration Date (as
defined in the Offer to Purchase and Proxy Statement) with respect to all
Shares. Preferred Shareholders who wish to tender their Shares yet who cannot
deliver their Shares and all other required documents to the Depositary on or
prior to the Expiration Date must tender their Shares pursuant to the guaranteed
delivery procedure set forth under the heading "Terms of the Offer -- Procedure
for Tendering Shares" in the Offer to Purchase and Proxy Statement. Pursuant to
such procedure: (a) such tender must be made by or through an Eligible
Institution, (b) a properly completed and duly executed Notice of Guaranteed
Delivery and Proxy in the form provided by Conectiv (with any required signature
guarantees) must be received by the Depositary on or prior to the Expiration
Date and (c) the certificates for all physically delivered Shares, or a
confirmation of a book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility of all Shares delivered electronically, together
with a properly completed and duly executed Letter of Transmittal and Proxy, and
any other documents required by this Letter of Transmittal and Proxy, must be
received by the Depositary by 5:00 p.m. (New York City time) within three New
York Stock Exchange trading days after the date of execution of such Notice of
Guaranteed Delivery and Proxy, all as provided under the heading "Terms of the
Offer --Procedure for Tendering Shares" in the Offer to Purchase and Proxy
Statement. Tenders by book-entry transfer may also be made by delivering an
Agent's Message in lieu of this Letter of Transmittal and Proxy. The term
"Agent's Message" means a message, transmitted by the Book-Entry Transfer
Facility, received by the Depositary and forming a part of the book-entry
transfer when a tender is initiated, which states that the Book-Entry Transfer
Facility has received an express acknowledgment from a participant tendering
Shares that such participant has received and agrees to be bound by the terms of
this Letter of Transmittal and Proxy and that Conectiv may enforce such
agreement against such participant.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT
THE OPTION AND RISK OF THE TENDERING PREFERRED SHAREHOLDER. IF CERTIFICATES FOR
SHARES ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED.
No alternative, conditional or contingent tenders will be accepted. See
"Terms of the Offer -- Number of Shares; Purchase Prices; Expiration Date;
Dividends" in the Offer to Purchase and Proxy Statement. By executing this
Letter of
12
<PAGE> 114
Transmittal and Proxy, the tendering shareholder waives any right to receive any
notice of the acceptance for payment of the Shares.
3. VOTING. PREFERRED SHAREHOLDERS (INCLUDING PREFERRED SHAREHOLDERS WHO
ACQUIRE SHARES SUBSEQUENT TO THE RECORD DATE) WHO WISH TO TENDER THEIR SHARES
PURSUANT TO THE OFFER MUST VOTE IN FAVOR OF THE PROPOSED AMENDMENT. THE OFFER IS
CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE
SPECIAL MEETING. In addition, Preferred Shareholders have the right to vote for
the Proposed Amendment regardless of whether they tender their Shares by casting
their vote and duly executing this Letter of Transmittal and Proxy or by voting
in person at the Special Meeting. By executing a Notice of Guaranteed Delivery
and Proxy, a Preferred Shareholder is deemed to have tendered the Shares
described in such Notice of Guaranteed Delivery and Proxy and to have voted such
Shares in accordance with the proxy contained therein. If no vote is indicated
on an otherwise properly executed proxy contained with this Letter of
Transmittal and Proxy (or within a Notice of Guaranteed Delivery and Proxy),
then all Shares in respect of such proxy will be voted in favor of the Proposed
Amendment. See "Proposed Amendment and Proxy Solicitation" in the Offer to
Purchase and Proxy Statement. The Offer is being sent to all persons in whose
names Shares are registered on the books of the Company on the Record Date and
transferees thereof. Preferred Shareholders who purchase or whose purchase is
registered after the Record Date and who wish to tender in the Offer must
arrange with their seller to receive a proxy from the holder of record of such
Shares on the Record Date. Any holder of Shares held of record on the Record
Date in the name of another must establish to the satisfaction of the Company
his entitlement to exercise or transfer such Proxy. This will ordinarily require
an assignment by such record holder in blank or, if not in blank, to and from
each successive transferee, including the holder, with each signature guaranteed
by an Eligible Institution. See Instruction 5. In order to facilitate receipt of
proxies, Shares shall, during the period which commences on September 2, 1998
(two business days prior to the Record Date) and which will end at the close of
business on the Expiration Date, trade in the over-the-counter market with a
proxy providing the transferee with the right to vote such acquired Shares in
the Proxy Solicitation. No record date is fixed for determining which persons
are permitted to tender Shares. However, only the holders of record, or holders
who acquire an assignment of proxy from such holders, are permitted to vote for
the Proposed Amendment and thereby validly tender Shares pursuant to the Offer.
Any person who is the beneficial owner but not the record holder of Shares must
arrange for the record transfer of such Shares prior to tendering or direct the
record holder to tender on behalf of the beneficial owner.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY
BOOK-ENTRY TRANSFER). If fewer than all the Shares represented by any
certificate delivered to the Depositary are to be tendered, fill in the number
of Shares that are to be tendered in the box above under the heading
"Description of Shares Tendered." In such case, a new certificate for the
remainder of the Shares represented by the old certificate will be sent to the
person(s) signing this Letter of Transmittal and Proxy, unless otherwise
provided in the box above under the heading "Special Payment Instructions" or
"Special Delivery Instructions," as promptly as practicable following the
expiration or termination of the Offer. All Shares represented by certificates
delivered to the Depositary will be deemed to have been tendered unless
otherwise indicated.
5. SIGNATURES ON THIS LETTER OF TRANSMITTAL AND PROXY AND/OR NOTICE OF
GUARANTEED DELIVERY AND PROXY; STOCK POWERS AND ENDORSEMENTS. If either this
Letter of Transmittal and Proxy or the Notice of Guaranteed Delivery and Proxy
(together, the "Tender and Proxy Documents") is signed by the registered
holder(s) of the Shares tendered hereby, the signature(s) must correspond with
the name(s) as written one the face of the certificates without alteration,
enlargement or any change whatsoever.
If any of the Shares tendered or voted under either Tender and Proxy
Document are held of record by two or more persons, all such persons must sign
such Tender and Proxy Document.
If any of the Shares tendered or voted under either Tender and Proxy
Document are registered in different names or different certificates, it will be
necessary to complete, sign and submit as many separate applicable Tender and
Proxy Documents as there are different registrations or certificates.
If either Tender and Proxy Document is signed by the registered
holder(s) of the Shares tendered hereby, no endorsements of certificates or
separate stock powers are required unless payment of the purchase price is to be
made to, or Shares not tendered or not purchased are to be registered in the
name of, any person other than the registered holder(s). Signatures on any such
certificates or stock powers must be guaranteed by an Eligible Institution. See
Instruction 1.
If this Letter of Transmittal and Proxy is signed by a person other
than the registered holder(s) of the Shares tendered hereby, certificates must
be endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the
13
<PAGE> 115
name(s) of the registered holder(s) appear(s) on the certificates for such
Shares. Signature(s) on any such certificates or stock powers must be guaranteed
by an Eligible Institution. See Instruction 1.
If either Tender and Proxy Document or any certificate or stock power
is signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Conectiv of the authority of such person so to act must be
submitted.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6,
Conectiv will pay or cause to be paid any stock transfer taxes with respect to
the sale and transfer of any Shares to it or its order pursuant to the Offer.
If, however, payment of the purchase price is to be made to, or Shares not
tendered or not purchased are to be registered in the name of, any person other
than the registered holder(s), or if tendered Shares are registered in the name
of any person other than the person(s) signing this Letter of Transmittal and
Proxy, the amount of any stock transfer taxes (whether imposed on the registered
holder(s), such other person or otherwise) payable on account of the transfer to
such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes, or exemption therefrom, is submitted. See
"Terms of the Offer -- Acceptance of Shares for Payment and Payment of Purchase
Price and Dividends" in the Offer to Purchase and Proxy Statement. EXCEPT AS
PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY TO AFFIX TRANSFER TAX
STAMPS TO THE CERTIFICATES REPRESENTING SHARES TENDERED HEREBY.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the
purchase price of any Shares purchased is to be issued in the name of, any
Shares not tendered or not purchased are to be returned to or the check for the
Special Cash Payment is to be issued in the name of, a person other than the
person(s) signing this Letter of Transmittal and Proxy or if the check and/or
any certificate for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal and Proxy or
to an address other than that shown in the box above under the heading "Name(s)
and Address(es) of Registered Holder(s)," then the "Special Payment
Instructions" and/or "Special Delivery Instructions" on this Letter of
Transmittal and Proxy should be completed. Preferred Shareholders tendering
Shares by book-entry transfer will have any Shares not accepted for payment
returned by crediting the account maintained by such Preferred Shareholder at
the Book-Entry Transfer Facility.
8. SUBSTITUTE FORM W-9 and FORM W-8. A tendering Preferred Shareholder
and a Preferred Shareholder voting in favor of the Proposed Amendment (but not
tendering) is required to provide the Depositary with (i) in the case of a
Untied States Preferred Shareholder, a correct Taxpayer Identification Number
("TIN") and a certification that the IRS has not notified such shareholder that
he is subject to backup withholding on Substitute Form W-9, or (ii) in the case
of a foreign Preferred Shareholder, a properly completed Form W-8, as discussed
below under "Important Tax Information." Failure to provide the information on
either Substitute Form W-9 or Form W-8 may subject the Preferred Shareholder to
a $50 penalty imposed by the Internal Revenue Service and to 31% federal income
tax backup withholding on gross amount payable. The box in Part 2 of Substitute
Form W-9 may be checked if the Preferred Shareholder has not been issued a TIN
and has applied for a number or intends to apply for a number in the near
future. If the box in Part 2 is checked and the Depositary is not provided with
a TIN by the time of payment, the Depositary will withhold 31% of the gross
amount otherwise payable thereafter until a TIN is provided to the Depositary.
9. REQUESTS FOR ASSISTANCE OF ADDITIONAL COPIES. Any questions or
requests for assistance may be directed to the Information Agent or the Dealer
Manager at their respective telephone numbers and addresses listed below.
Requests for additional copies of the Offer to Purchase and Proxy Statement,
this Letter of Transmittal and Proxy or other tender offer materials may be
directed to the Information Agent or the Dealer Manager and such copies will be
furnished promptly at Conectiv's expense. Preferred Shareholders may also
contact their local broker, dealer, commercial bank or trust company for
assistance concerning the Offer.
10. SOLICITED TENDERS. Conectiv will pay a solicitation fee of an
amount equal to $1.50 per Share for Shares that are tendered, accepted for
payment and paid for pursuant to the Offer (except that for transactions for
beneficial owners whose ownership equals or exceeds 2,500 Shares, Conectiv will
pay a solicitation fee of an amount equal to $1.00 per Share). With respect to
fees payable pursuant to this paragraph involving transactions for beneficial
owners whose ownership is less than 2,500 Shares, any fees payable hereunder
shall be paid in full to the Dealer Manager unless a Soliciting Dealer is
designated (as herein described), in which case such fee shall be payable in
full to such designated Soliciting Dealer (which designated Soliciting Dealer
may be the Dealer Manager). With respect to fees payable pursuant to this
paragraph involving transactions for beneficial owners whose ownership equals or
exceeds 2,500 Shares, any fees payable hereunder shall be paid in full to the
Dealer Manager unless a Soliciting Dealer is designated, in which case 80% of
such fee shall be paid to the Dealer Manager and 20% of such fee shall be paid
to the designated Soliciting Dealer (which designated Soliciting Dealer
14
<PAGE> 116
may be the Dealer Manager). A designated Soliciting Dealer shall be named
hereunder under the heading "Solicited Tenders," and shall have solicited and
obtained the tender, and shall also be (a) any broker or dealer in securities
including the Dealer Manager in its capacity as a dealer or broker, which is a
member of any national securities exchange or of the NASD, (b) any foreign
broker or dealer not eligible for membership in the NASD which agrees to conform
to the NASD's Rules of Fair Practice in soliciting tenders outside the United
States to the same extent as though it were an NASD member, or (c) any bank or
trust company (each of which is referred to herein as a "Soliciting Dealer"). No
such fee shall be payable to a Soliciting Dealer with respect to the tender of
Shares by a holder unless the Letter of Transmittal and Proxy accompanying such
tender designates such Soliciting Dealer. No such fee shall be payable to a
Soliciting Dealer in respect of Shares registered in the name of such Soliciting
Dealer unless such Shares are held by such Soliciting Dealer as nominee and such
Shares are being tendered for the benefit of one or more beneficial owners
identified on the Letter of Transmittal and Proxy or on the Notice of Solicited
Tenders (included in the materials provided to brokers and dealers). No such fee
shall be payable to a Soliciting Dealer with respect to the tender of Shares by
the holder of record, for the benefit of the beneficial owner, unless the
beneficial owner has designated such Soliciting Dealer. If tendered Shares are
being delivered by book-entry transfer, the Soliciting Dealer must return a
Notice of Solicited Tenders to the Depositary within three business days after
expiration of the Offer to receive a solicitation fee. No such fee shall be
payable to a Soliciting Dealer if such Soliciting Dealer is required for any
reason to transfer the amount of such fee to a depositing holder (other than
itself). No such fee shall be paid to a Soliciting Dealer with respect to Shares
tendered for such Soliciting Dealer's own account. No broker, dealer, bank,
trust company or fiduciary shall be deemed to be the agent of Conectiv, the
Company, the Depositary, the Information Agent or the Dealer Manager for
purposes of the Offer.
Soliciting Dealers will include any organizations described in clauses
(a), (b) or (c) above even when the activities of such organization in
connection with the Offer consist solely of forwarding to clients materials
relating to the Offer, including this Letter of Transmittal and Proxy, and
tendering Shares as directed by beneficial owners thereof. No Soliciting Dealer
is required to make any recommendation to holders of Shares as to whether to
tender or refrain from tendering in the Offer. No assumption is made, in making
payment to any Soliciting Dealer, that its activities in connection with the
Offer included any activities other than those described above, and for all
purposes noted in all materials relating to the Offer, the term "solicit" shall
be deemed to mean no more than "processing shares tendered" or "forwarding to
customers materials regarding the Offer."
11. IRREGULARITIES. All questions as to the form of documents and the
validity, eligibility (including time of receipt) and acceptance of any tender
of Shares will be determined by Conectiv, in its sole discretion, and its
determination shall be final and binding. Conectiv reserves the absolute right
to reject any and all tenders of Shares that it determines are not in proper
form or the acceptance for payment of or payment for Shares that may, in the
opinion of Conectiv's counsel, be unlawful. Conectiv also reserves the absolute
right to waive any of the conditions to the Offer or any defect or irregularity
in any tender of Shares and Conectiv's interpretation of the terms and
conditions of the Offer (including these instructions) shall be final and
binding. Unless waived, any defects or irregularities in connection with tenders
must be cured within such time as Conectiv shall determine. None of Conectiv,
the Company, the Dealer Manager, the Depositary, the Information Agent or any
other person shall be under any duty to give notice of any defect or
irregularity in tenders, nor shall any of them incur any liability for failure
to give any such notice. Tenders will not be deemed to have been made until all
defects and irregularities have been cured or waived.
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any of your
certificate(s) for Shares have been lost, stolen or destroyed, please call ACE
Stockholder Services at (800) 365-6495 (toll free). You may need to complete and
Affidavit of Loss with respect to the lost certificate(s) (which will be
provided by ACE Stockholder Services) and payment of an indemnity bond premium
fee may be required. The tender of Shares pursuant to this Letter of Transmittal
and Proxy will not be valid unless prior to the Expiration Date: (a) such
procedures have been completed and a replacement certificate for the Shares has
been delivered to the Depositary or (b) a Notice of Guaranteed Delivery and
Proxy has been delivered to the Depositary. See Instruction 2.
IMPORTANT: THIS LETTER OF TRANSMITTAL AND PROXY, DULY EXECUTED,
TOGETHER WITH, IF APPLICABLE, CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY
TRANSFER, AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY,
OR, IF APPLICABLE, THE NOTICE OF GUARANTEED DELIVERY AND PROXY MUST BE RECEIVED
BY THE DEPOSITARY, ON OR PRIOR TO THE EXPIRATION DATE.
15
<PAGE> 117
IMPORTANT TAX INFORMATION
Under federal income tax law, a Preferred Shareholder whose tendered
Shares are accepted for payment or who will receive a Special Cash Payment as a
result of voting in favor of the Proposed Amendment is required to provide the
Depositary (as payer) with either such Preferred Shareholder's correct TIN on
Substitute Form W-9 below or a properly completed Form W-8. If such Preferred
Shareholder is an individual, the TIN is his or her social security number. For
businesses and other entities, the number is the federal employer identification
number. If the Depositary is not provided with the correct TIN or properly
completed Form W-8, the Preferred Shareholder may be subject to a $50 penalty
imposed by the Internal Revenue Code. In addition, payments that are made to
such Preferred Shareholder with respect to Shares purchased pursuant to the
Offer may be subject to 31% backup withholding.
Certain Preferred Shareholders (including, among others, all
corporations and certain foreign individuals) are exempt from backup
withholding. For a corporate United States Preferred Shareholder to qualify for
such exemption, such Preferred Shareholder must provide the Depositary with a
properly completed and executed Substitute Form W-9 attesting to its exempt
status. In order for a foreign Preferred Shareholder to qualify as an exempt
recipient, such Preferred Shareholder must submit to the Depositary a properly
completed Internal Revenue Service Form W-8 (a "Form W-8"), signed under
penalties of perjury, attesting to that Preferred Shareholder's exempt status. A
Form W-8 can be obtained from the Depositary. See the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If federal income tax backup withholding applies, the Depositary is
required to withhold 31% of any payments made to the Preferred Shareholder.
Backup withholding is not an additional tax. Rather, the federal income tax
liability of persons subject to backup withholding will be reduced by the amount
of the tax withheld. If withholding results in an overpayment of taxes, a refund
may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8
To avoid backup withholding on a Special Cash Payment or payments that
are made to a Preferred Shareholder with respect to Shares purchased pursuant to
the Offer, the Preferred Shareholder is required to notify the Depositary of his
or her correct TIN by completing the Substitute Form W-9 attached hereto
certifying that the TIN provided on Substitute Form W-9 is correct and that (a)
the Preferred Shareholder has not been notified by the Internal Revenue Service
that he or she is subject to federal income tax backup withholding as a result
of failure to report all interest or dividends or (b) the Internal Revenue
Service has notified the Preferred Shareholder that he or she is no longer
subject to federal income tax backup withholding. Foreign Preferred Shareholders
must submit a properly completed Form W-8 in order to avoid the applicable
backup withholding; provided, however, that backup withholding will not apply to
foreign Preferred Shareholders subject to withholding under other provisions of
the Code or the Special Cash Payment or on gross payments received pursuant to
the Offer. Foreign Preferred Shareholders that submit a properly completed Form
W-8 may nevertheless be subject to withholding under other provisions of the
Code on the payments received by them.
WHAT NUMBER TO GIVE THE DEPOSITARY
The Preferred Shareholder is required to give the Depositary the social
security number or employer identification number of the registered owner of the
Shares. If the Shares are in more than one name or are not in the name of the
actual owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report.
PAYER'S NAME
<TABLE>
<S> <C> <C>
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT _______________________________
FORM W-9 RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. SOCIAL SECURITY NUMBER
OR
_______________________________
EMPLOYER IDENTIFICATION TIN
NAME (PLEASE PRINT)____________________________ PART 2 --
ADDRESS________________________________________ AWAITING TIN { }
CITY_______________________STATE_______________
ZIP CODE_______________________________________
</TABLE>
16
<PAGE> 118
<TABLE>
<S> <C>
DEPARTMENT OF THE TREASURY PART 3 -- CERTIFICATION -- UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
INTERNAL REVENUE SERVICE
(1) THE NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER IDENTIFICATION NUMBER (OR A
TIN HAS NOT BEEN ISSUED TO ME BUT I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE
A TIN OR INTEND TO DO SO IN THE NEAR FUTURE), (2) I AM NOT SUBJECT TO BACKUP
WITHHOLDING EITHER BECAUSE I HAVE NOT BEEN NOTIFIED BY THE INTERNAL REVENUE SERVICE
(THE "IRS") THAT I AM SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF A FAILURE TO REPORT
ALL INTEREST OR DIVIDENDS OR THE IRS HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT TO
BACKUP WITHHOLDING AND (3) ALL OTHER INFORMATION PROVIDED ON THIS FORM IS TRUE,
CORRECT AND COMPLETE.
SIGNATURE____________________________________________________________________________
DATE _____________________________, 1998
YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE
CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING INTEREST OR
DIVIDENDS ON YOUR TAX RETURN.
PAYER'S REQUEST FOR NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
TAXPAYER IDENTIFICATION WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER OR PROXY
NUMBER ("TIN") AND SOLICITATION. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
CERTIFICATION TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 2 OF
SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER:
I CERTIFY UNDER PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER HAS NOT
BEEN ISSUED TO ME AND EITHER (1) I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE
A TAXPAYER IDENTIFICATION NUMBER TO THE APPROPRIATE INTERNAL REVENUE SERVICE CENTER OR
SOCIAL SECURITY ADMINISTRATION OFFICE OR (2) I INTEND TO DO SO IN THE NEAR FUTURE. I
UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER BY THE TIME OF
PAYMENT, 31% OF ALL PAYMENTS MADE TO ME WILL BE WITHHELD UNTIL I PROVIDE A NUMBER.
SIGNATURE ____________________________________ DATE________________________, 1998
</TABLE>
THE INFORMATION AGENT:
D.F. KING & CO., INC.
77 Water Street, 20th Floor
New York, New York 10005
(800) 431-9629 (toll free)
or
Banks and Brokers call
(212) 269-5550
17
<PAGE> 119
5%
LETTER OF TRANSMITTAL AND PROXY
TO ACCOMPANY
SHARES OF 5% SERIES PREFERRED STOCK
CUSIP NUMBER 048303788
OF
ATLANTIC CITY ELECTRIC COMPANY
---------------------------
TENDERED PURSUANT TO THE OFFER TO PURCHASE FOR CASH
BY
CONECTIV
DATED SEPTEMBER 8, 1998, FOR PURCHASE AT A
PURCHASE PRICE OF $____ PER SHARE
AND/OR
VOTED PURSUANT TO THE PROXY STATEMENT OF
ATLANTIC CITY ELECTRIC COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON OCTOBER 14, 1998, UNLESS THE OFFER IS EXTENDED
THE PROXY CONTAINED IN THIS DOCUMENT IS IN
RESPECT OF THE SPECIAL MEETING OF SHAREHOLDERS TO
BE HELD ON OCTOBER 14, 1998, OR ON SUCH DATE TO
WHICH THE MEETING IS ADJOURNED OR POSTPONED.
TO: THE BANK OF NEW YORK, DEPOSITARY
BY MAIL: BY HAND OR OVERNIGHT COURIER:
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN EXACTLY AS NAME(S) AND ADDRESS(ES) APPEAR(S) ON CERTIFICATE(S))
IF YOU HAVE ANY QUESTIONS, HAVE NOT RECEIVED THE OFFER TO PURCHASE AND
PROXY STATEMENT OR OTHER DOCUMENTS PERTAINING TO THE OFFER OR NEED ASSISTANCE IN
COMPLETING THIS LETTER OF TRANSMITTAL AND PROXY, PLEASE CONTACT D.F. KING & CO.,
INC., THE INFORMATION AGENT, AT TELEPHONE (800) 431-9629 (TOLL FREE).
<PAGE> 120
PREFERRED SHAREHOLDERS (INCLUDING PREFERRED SHAREHOLDERS WHO ACQUIRE
SHARES SUBSEQUENT TO THE RECORD DATE) WILL NOT BE ABLE TO VALIDLY TENDER THEIR
SHARES UNLESS THEY HAVE SUBMITTED A DULY COMPLETED, VALID AND UNREVOKED PROXY
INDICATING THEIR VOTE FOR THE PROPOSED AMENDMENT OR INDICATE IN THE ACCOMPANYING
PROXY THEIR INTENTION TO VOTE FOR THE PROPOSED AMENDMENT AT THE SPECIAL MEETING.
CONECTIV ("CONECTIV") WILL NOT BE REQUIRED TO ACCEPT FOR PAYMENT OR PAY FOR ANY
SHARES TENDERED IF THE PROPOSED AMENDMENT IS NOT APPROVED AND ADOPTED AT THE
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON OCTOBER 14, 1998, OR ON SUCH DATE
TO WHICH THE MEETING IS ADJOURNED OR POSTPONED (THE "SPECIAL MEETING").
PREFERRED SHAREHOLDERS HAVE THE RIGHT TO VOTE FOR THE PROPOSED AMENDMENT
REGARDLESS OF WHETHER THEY TENDER THEIR SHARES BY CASTING THEIR VOTE AND SIGNING
THE PROXY CONTAINED WITHIN THIS LETTER OF TRANSMITTAL AND PROXY OR BY VOTING IN
PERSON AT THE SPECIAL MEETING. IF THE PROPOSED AMENDMENT IS APPROVED AND
ADOPTED, ATLANTIC CITY ELECTRIC COMPANY (THE "COMPANY") WILL MAKE A SPECIAL CASH
PAYMENT TO EACH PREFERRED SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED
AMENDMENT, PROVIDED THAT SUCH HOLDER'S SHARES ARE NOT TENDERED PURSUANT TO THE
OFFER.
HOLDERS WHO PURCHASE OR WHOSE PURCHASE SETTLES OR IS REGISTERED AFTER
THE CLOSE OF BUSINESS ON SEPTEMBER 4, 1998 (THE "RECORD DATE") AND WHO WISH TO
TENDER IN THE OFFER MUST ARRANGE WITH THEIR SELLER TO RECEIVE A DULY COMPLETED,
VALID AND UNREVOKED PROXY (WHICH MAY BE IN THE FORM OF AN IRREVOCABLE ASSIGNMENT
OF PROXY AS SET FORTH IN THIS LETTER OF TRANSMITTAL AND PROXY) FROM THE HOLDER
OF RECORD OF SUCH SHARES ON THE RECORD DATE. IN ORDER TO FACILITATE RECEIPT OF
PROXIES, SHARES SHALL, DURING THE PERIOD WHICH COMMENCES SEPTEMBER 2, 1998 (TWO
BUSINESS DAYS PRIOR TO THE RECORD DATE) AND WHICH WILL END AT THE CLOSE OF
BUSINESS ON THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY
STATEMENT), TRADE IN THE OVER-THE-COUNTER MARKET WITH A PROXY PROVIDING THE
TRANSFEREE WITH THE RIGHT TO VOTE SUCH ACQUIRED SHARES IN THE PROXY
SOLICITATION.
NOTE: SIGNATURES MUST BE PROVIDED HEREIN. PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY.
The undersigned hereby appoints Howard E. Cosgrove, Barbara S. Graham
and Louis M. Walters, or any of them, as proxies, each with the power to appoint
his or her substitute, and hereby authorizes them to represent and to vote as
designated hereunder and in their discretion with respect to any other business
properly brought before the Special Meeting all the shares of preferred stock of
the Company which the undersigned is entitled to vote at the Special Meeting or
any adjournment(s) or postponement(s) thereof.
NOTE: IF YOU ARE VOTING BUT NOT TENDERING SHARES, DO NOT SEND ANY SHARE
CERTIFICATES WITH THIS LETTER OF TRANSMITTAL AND PROXY.
THIS LETTER OF TRANSMITTAL AND PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF THE COMPANY. The proxy contained herein, when properly
executed, will be voted in the manner described herein by the undersigned
shareholder(s). If no direction is made, the proxy will be voted FOR Item 1. An
abstention is the equivalent of a vote AGAINST the Proposed Amendment.
PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES MUST VOTE FOR
ITEM 1.
Indicate your vote by an (X). The Board of Directors recommends voting
FOR Item 1.
ITEM 1.
HOLDERS OF SHARES WHO WISH TO TENDER THEIR SHARES MUST VOTE FOR THE
PROPOSED AMENDMENT EITHER BY SUBMITTING THIS PROXY OR BY VOTING AT THE SPECIAL
MEETING.
To remove from the Company's charter Paragraph (7)(B)(c) of Article
III, a provision restricting the amount of securities representing unsecured
indebtedness issuable by the Company.
{ } FOR { } AGAINST { } ABSTAIN
2
<PAGE> 121
SHARES REPRESENTED BY ALL PROPERLY EXECUTED PROXIES WILL BE VOTED IN
ACCORDANCE WITH INSTRUCTIONS APPEARING ON THIS PROXY. IN THE ABSENCE OF SPECIFIC
INSTRUCTIONS, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF
THE BOARD OF DIRECTORS, AND IN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE SPECIAL MEETING.
Any holder of Shares held of record on the Record Date in the name of
another holder must establish to the satisfaction of the Company its entitlement
to exercise or transfer this Proxy. This will ordinarily require an assignment
by such record holders in blank or, if not in blank, to and from each successive
transferee, including the holder, with each signature guaranteed by an Eligible
Institution. A form of irrevocable assignment of proxy has been provided herein.
Please check box if you plan to attend the Special Meeting. { }
SIGNATURE(S) OF OWNER(S)
X _____________________________________________________________________________
X _____________________________________________________________________________
Dated: _________________________________________________________________ , 1998
Name(s): ______________________________________________________________________
(PLEASE PRINT)
Capacity (full title): ________________________________________________________
Address: ______________________________________________________________________
(INCLUDE ZIP CODE)
DAYTIME Area Code and Telephone No.: __________________________________________
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
stock certificates or on a security position listing or by person(s) authorized
to become registered holder(s) by certificates and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, please set forth full title and see Instruction 5.)
3
<PAGE> 122
PLEASE COMPLETE:
DESCRIPTION OF SHARES TENDERED
(IF TENDERING SHARES, PLEASE FILL IN EXACTLY AS INFORMATION
APPEARS ON CERTIFICATE(S))
(ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
<TABLE>
<CAPTION>
NUMBER OF SHARES NOT
TOTAL NUMBER OF SHARES TENDERED BUT AS TO
REPRESENTED BY NUMBER OF SHARES WHICH PROXIES GIVEN
CERTIFICATE NUMBER(S)* CERTIFICATE(S)* TENDERED** ONLY
<S> <C> <C> <C>
</TABLE>
* Need not be completed by shareholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented
by any certificates delivered to the Depositary are being tendered. See
Instruction 4. You must vote for the Proposed Amendment with respect to any
Shares tendered.
If any of your certificate(s) for Shares have been lost, stolen or
destroyed, please call the Company's shareholder services department ("ACE
Stockholder Services") at 800-365-6495 (toll free). You may need to complete an
Affidavit of Loss with respect to the lost certificate(s) (which will be
provided by ACE Stockholder Services) and payment of an indemnity bond premium
fee may be required.
PLEASE COMPLETE IF APPLICABLE:
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature: _________________________________________________________
Name: _________________________________________________________________________
Name of Firm: _________________________________________________________________
Address of Firm: ______________________________________________________________
Area Code and Telephone No.: __________________________________________________
Dated: _________________________________________________________________ , 1998
4
<PAGE> 123
IF SELLING SHARES SUBSEQUENT TO SEPTEMBER 4, 1998, A RECORD HOLDER MUST
COMPLETE THE FOLLOWING IRREVOCABLE PROXY
PLEASE SIGN THIS TO IRREVOCABLY TRANSFER A PREFERRED STOCK
PROXY TO A SUBSEQUENT HOLDER OF PREFERRED STOCK WHO
WAS NOT A HOLDER OF RECORD ON SEPTEMBER 4, 1998
IRREVOCABLE PROXY
with respect to shares of the
5% Series Cumulative Preferred Stock
of
ATLANTIC CITY ELECTRIC COMPANY
the undersigned hereby irrevocably appoints
--------------------------------------------
Type or Print Name of Transferee
as attorney and proxy, with full power of substitution, to vote and otherwise
act for and in the name(s) of the undersigned with respect to the Shares
indicated below which were held of record by the undersigned on September 4,
1998, in the manner in which the undersigned would be entitled to vote and
otherwise act in respect of such Shares on any and all matters.
This proxy shall be effective whether or not the Shares indicated below
are tendered in the Offer.
This instrument supersedes and revokes any and all previous
appointments of proxies heretofore made by the undersigned with respect to the
Shares indicated below as to any and all matters. THIS PROXY IS IRREVOCABLE AND
IS COUPLED WITH AN INTEREST.
All authority conferred or agreed to be conferred herein shall survive
the death or incapacity of the undersigned, and any obligation of the
undersigned hereunder shall be binding upon the heirs, executors,
administrators, legal and personal representatives, successors in interest and
assigns of the undersigned. The undersigned understands that tenders of Shares
pursuant to any of the procedures described in the Offer to Purchase and Proxy
Statement and in this Letter of Transmittal and Proxy will constitute a binding
agreement between the undersigned and the Company upon the terms and subject to
the conditions of the Offer.
- --------------------------------------------------------------------------------
DESCRIPTION OF PREFERRED STOCK
- --------------------------------------------------------------------------------
CERTIFICATE NUMBER(S) AGGREGATE NUMBER
(ATTACH LIST IF NECESSARY) OF SHARES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL:
- --------------------------------------------------------------------------------
- ---------------------------------- ------------------------------------
Signature of Record Holder or Signature of Record Holder of
Authorized Signatory Authorized Signatory
- ---------------------------------- ------------------------------------
Type or Print Name Type or Print Name
Date: _____________________, 1998 Date: _______________________, 1998
Tax Identification or Social Security No(s). __________________________________
5
<PAGE> 124
Must be signed by holder(s) exactly as name(s) appear(s) on the Record Date on
certificate(s) for the Shares or on a security position listing or by person(s)
authorized to become holder(s) by certificates and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation, agent or other person acting in a
fiduciary or representative capacity, please provide the following information
and see Instruction 5.
Name: ________________________________________________________________________
(PLEASE PRINT)
Capacity: ____________________________________________________________________
(FULL TITLE)
Address: _____________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Tel. No. _______________________________________________________
PLEASE COMPLETE IF APPLICABLE:
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
Name of Firm: ________________________________________________________________
Authorized Signature: ________________________________________________________
Title: _______________________________________________________________________
Dated: ________________________________________________________________ , 1998
DELIVERY OF THIS LETTER OF TRANSMITTAL AND PROXY TO AN ADDRESS OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS
LETTER OF TRANSMITTAL AND PROXY IN THE APPROPRIATE SPACE THEREFOR PROVIDED AND,
IF YOU ARE TENDERING ANY SHARES OR VOTING IN FAVOR OF THE PROPOSED AMENDMENT,
COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW OR A FORM W-8, AS APPLICABLE.
SEE INSTRUCTION 8 AND "IMPORTANT TAX INFORMATION" BELOW.
DO NOT SEND ANY CERTIFICATES TO MORGAN STANLEY DEAN WITTER, D. F. KING
& CO., INC., CONECTIV, ACE STOCKHOLDER SERVICES OR ATLANTIC CITY ELECTRIC
COMPANY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL AND PROXY
SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL AND PROXY IS
COMPLETED. QUESTIONS REGARDING AND REQUESTS FOR COPIES OF THE OFFER TO PURCHASE
AND PROXY STATEMENT OR THIS LETTER OF TRANSMITTAL AND PROXY MAY BE DIRECTED TO
D.F. KING & CO., INC., THE INFORMATION AGENT, AT (800) 431-9629 (TOLL FREE) OR
BANKS AND BROKERS CALL (212) 269-5550.
This Letter of Transmittal and Proxy is to be used (a) if Shares are to
be voted but not tendered, or (b) if certificates for Shares are to be forwarded
to The Bank of New York ("Depositary") or (c) if delivery of tendered Shares (as
defined below) is to be made by book-entry transfer to the Depositary's account
at The Depository Trust Company ("DTC" or the "Book-Entry Transfer Facility")
pursuant to the procedures set forth under the heading "Terms of the Offer --
Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement (as
defined below) and an Agent's Message (as defined below) is not delivered.
Preferred Shareholders who wish to tender Shares but who cannot deliver
their Shares and all other documents required hereby to the Depositary by the
Expiration Date must tender their Shares pursuant to the guaranteed delivery
procedure set forth under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement. See Instruction
2. DELIVERY OF DOCUMENTS TO CONECTIV, THE COMPANY OR THE BOOK-ENTRY TRANSFER
FACILITY DOES NOT CONSTITUTE A VALID DELIVERY.
6
<PAGE> 125
{ } CHECK HERE IF TENDERED SHARES ARE ENCLOSED HEREWITH.
A Holder tendering Shares pursuant to this Letter of Transmittal and Proxy
must check one of the following boxes:
{ } A duly completed, valid and unrevoked proxy indicating a vote FOR the
Proposed Amendment is included herein.
{ } A vote FOR the Proposed Amendment will be cast at the Special Meeting.
ELIGIBLE INSTITUTIONS OR BROKERS TO COMPLETE ONLY IF APPLICABLE:
{ } CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING:
Name of tendering institution ____________________________________________
Account No. at DTC _______________________________________________________
Transaction Code No. _____________________________________________________
{ } CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY AND PROXY PREVIOUSLY SENT TO THE DEPOSITARY AND
COMPLETE THE FOLLOWING:
Name(s) of tendering shareholder(s)
Date of execution of Notice of Guaranteed Delivery and Proxy
Name of institution that guaranteed delivery
If delivery is by book-entry transfer:
Name of tendering institution
Account No. at DTC
Transaction Code No.
A holder electing to tender Shares pursuant to a Notice of Guaranteed
Delivery and Proxy must check one of the following boxes:
{ } A duly completed, valid and unrevoked proxy indicating a vote FOR the
Proposed Amendment was included with the Notice of Guaranteed Delivery
and Proxy previously sent to the Depositary.
{ } A duly completed, valid and unrevoked proxy indicating a vote FOR the
Proposed Amendment is being delivered pursuant to a Notice of
Guaranteed Delivery and Proxy previously sent to the Depositary.
{ } A valid vote FOR the Proposed Amendment will be cast at the Special
Meeting.
NOTE: SIGNATURES MUST BE PROVIDED ABOVE.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
7
<PAGE> 126
Ladies and Gentlemen:
The abovesigned hereby tenders to Conectiv, a Delaware corporation
("Conectiv"), the shares in the amount set forth in the box above designated
"Description of Shares Tendered" pursuant to Conectiv's offer to purchase any
and all of the outstanding shares (the "Shares") of the series of preferred
stock of Atlantic City Electric Company, a New Jersey corporation, and direct
utility subsidiary of Conectiv (the "Company"), shown on the first page hereof
as to which this Letter of Transmittal and Proxy is applicable (the "Shares") at
the purchase price per Share shown on the first page hereof, net to the seller
in cash, upon the terms and subject to the conditions set forth in the Offer to
Purchase and Proxy Statement, dated September 8, 1998 (the "Offer to Purchase
and Proxy Statement"), receipt of which is hereby acknowledged, and in this
Letter of Transmittal and Proxy (which as to the Shares, together with the Offer
to Purchase and Proxy Statement, constitutes the "Offer"). PREFERRED
SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER MUST VOTE IN
FAVOR OF THE PROPOSED AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION,
AS AMENDED, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE
"PROPOSED AMENDMENT"). THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT
BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON
OCTOBER 14, 1998, OR ON SUCH DATE TO WHICH THE MEETING IS ADJOURNED OR POSTPONED
(THE "SPECIAL MEETING"). See "Proposed Amendment and Proxy Solicitation," "Terms
of the Offer -- Extension of Tender Period; Termination; Amendments" and "Terms
of the Offer -- Certain Conditions of the Offer" in the Offer to Purchase and
Proxy Statement.
Subject to, and effective upon, acceptance for payment of and payment
for the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the abovesigned hereby
sells, assigns and transfers to, or upon the order of, Conectiv all right, title
and interest in and to all the Shares that are being tendered hereby and hereby
constitutes and appoints The Bank of New York (the "Depositary") the true and
lawful agent and attorney-in-fact of the abovesigned with respect to such
Shares, with full power of substitution (such power of attorney being an
irrevocable power coupled with an interest), to (a) deliver certificates for
such Shares, or transfer ownership of such Shares on the account books
maintained by the Book-Entry Transfer Facility, together, in any such case, with
all accompanying evidences of transfer and authenticity, to or upon the order of
Conectiv, (b) present such Shares for registration and transfer on the books of
the Company and (c) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares, all in accordance with the terms of the
Offer. The Depositary will act as agent for tendering shareholders for the
purpose of receiving payment from Conectiv and transmitting payment to tendering
shareholders.
The abovesigned hereby represents and warrants that the abovesigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and that, when and to the extent the same are accepted for
payment by Conectiv, Conectiv will acquire good, marketable and unencumbered
title thereto, free and clear of all liens, restrictions, charges, encumbrances,
conditional sales agreements or other obligations relating to the sale or
transfer thereof, and the same will not be subject to any adverse claims. The
abovesigned will, upon request, execute and deliver any additional documents
deemed by the Depositary or Conectiv to be necessary or desirable to complete
the sale, assignment and transfer of the Shares tendered hereby.
All authority herein conferred or agreed to be conferred shall not be
affected by and shall survive the death, bankruptcy or incapacity of the
abovesigned, and any obligations of the abovesigned hereunder shall be binding
upon the heirs, legal representatives, successors, assigns, executors and
administrators of the abovesigned. Except as stated in the Offer, this tender is
irrevocable.
The abovesigned understands that tenders of Shares pursuant to any one
of the procedures described under the heading "Terms of the Offer -- Procedure
for Tendering Shares" in the Offer to Purchase and Proxy Statement and in the
instructions hereto will constitute the abovesigned's acceptance of the terms
and conditions of the Offer, including the abovesigned's representation and
warranty that (a) the abovesigned has a net long position in the Shares being
tendered within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended, and (b) the tender of such Shares complies
with such Rule 14e-4. Conectiv's acceptance for payment of Shares tendered
pursuant to the Offer will constitute a binding agreement between the
abovesigned and Conectiv upon the terms and subject to the conditions of the
Offer.
The abovesigned recognizes that, under certain circumstances set forth
in the Offer to Purchase and Proxy Statement, Conectiv may terminate or amend
the Offer or may not be required to purchase any of the Shares tendered hereby.
In either event, the abovesigned understands that certificate(s) for any Shares
not tendered or not purchased will be returned to the abovesigned.
8
<PAGE> 127
Unless otherwise indicated in the box below under the heading "Special
Payment Instructions," please issue the check for the purchase price of any
Shares purchased, and/or return any Shares not tendered or not purchased, in the
name(s) of the abovesigned (and, in the case of Shares tendered by book-entry
transfer, by credit to the account of the abovesigned at the Book-Entry Transfer
Facility). Similarly, unless otherwise indicated in the box below under the
heading "Special Delivery Instructions," please mail the check for the purchase
price of any Shares purchased and/or any certificate for Shares not tendered or
not purchased (and accompanying documents, as appropriate) to the abovesigned at
the address shown below the abovesigned's signature(s). In the event that both
"Special Payment Instructions" and "Special Delivery Instructions" are
completed, please issue the check for the purchase price of any Shares purchased
and/or return any Shares not tendered or not purchased in the name(s) of, and
mail said check and/or any certificates to, the person(s) so indicated. The
abovesigned recognizes that Conectiv has no obligation, pursuant to the "Special
Payment Instructions," to transfer any Shares from the name of the registered
holder(s) thereof if Conectiv does not accept for purchase any of the Shares so
tendered.
COMPLETE ONLY IF APPLICABLE:
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased, the certificates for Shares not tendered or not purchased or the
check for the Special Cash Payment are to be issued in the name of someone other
than the abovesigned.
Issue { } Check and/or { } Certificate(s) to:
Name ________________________________________________________________________
(PLEASE PRINT)
Address _____________________________________________________________________
_____________________________________________________________________________
(INCLUDE ZIP CODE)
_____________________________________________________________________________
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased, the certificates for Shares not tendered or not purchased or the
check for the Special Cash Payment are to be mailed to someone other than the
abovesigned or to the abovesigned at an address other than that shown below the
abovesigned's signature(s).
Mail { } Check and/or { } Certificate(s) to:
Name ________________________________________________________________________
(PLEASE PRINT)
Address _____________________________________________________________________
_____________________________________________________________________________
(INCLUDE ZIP CODE)
COMPLETE ONLY IF YOUR SHARES ARE LOST:
LOST CERTIFICATES BOX
{ } CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN
AND WISH TO TENDER HAVE BEEN LOST, DESTROYED OR STOLEN.
(SEE INSTRUCTION 12.)
9
<PAGE> 128
Number of Shares represented by lost, destroyed or stolen
certificates:
------------------
COMPLETE ONLY IF APPLICABLE:
SOLICITED TENDERS AND PROXIES
(SEE INSTRUCTION 10)
As provided in Instruction 10, Conectiv will pay a solicitation fee of
an amount equal to $1.50 per Share for any Shares tendered, accepted for payment
and paid for pursuant to the Offer (except that for transactions for beneficial
owners whose ownership equals or exceeds 2,500 Shares, Conectiv will pay a
solicitation fee of an amount equal to $1.00 per Share). With respect to fees
payable pursuant to this paragraph involving transactions for beneficial owners
whose ownership is less than 2,500 Shares, any fees payable hereunder shall be
paid in full to the Dealer Manager unless a Soliciting Dealer is designated (as
herein described), in which case such fee shall be payable in full to such
designated Soliciting Dealer (which designated Soliciting Dealer may be the
Dealer Manager). With respect to fees payable pursuant to this paragraph
involving transactions for beneficial owners whose ownership equals or exceeds
2,500 Shares, any fees payable hereunder shall be paid in full to the Dealer
Manager unless a Soliciting Dealer is designated, in which case 80% of such fee
shall be paid to the Dealer manager and 20% of such fee shall be paid to the
designated Soliciting Dealer (which designated Soliciting Dealer may be the
Dealer Manager). However, Soliciting Dealers will not be entitled to a
solicitation fee for Shares beneficially owned by such Soliciting Dealer.
The undersigned represents that the Soliciting Dealer which solicited
and obtained this tender is:
Name of Firm: ________________________________________________________________
(PLEASE PRINT)
Name of Individual Broker
or Financial Consultant: _____________________________________________________
Telephone Number of Broker
or Financial Consultant: _____________________________________________________
Identification Number (if known): ____________________________________________
Address: _____________________________________________________________________
(INCLUDE ZIP CODE)
COMPLETE ONLY IF CUSTOMER'S SHARES HELD IN NOMINEE NAME ARE TENDERED:
<TABLE>
<CAPTION>
NAME OF BENEFICIAL OWNER NUMBER OF SHARES TENDERED
(ATTACH ADDITIONAL LIST IF NECESSARY)
<S> <C>
- ------------------------------------------------------------ ----------------------------------------------------------
- ------------------------------------------------------------ ----------------------------------------------------------
- ------------------------------------------------------------ ----------------------------------------------------------
</TABLE>
The acceptance of compensation by such Soliciting Dealer will
constitute a representation by it that (a) it has complied with the applicable
requirements of the Securities Exchange Act of 1934, as amended, and the
applicable rules and regulations thereunder, in connection with such
solicitation; (b) it is entitled to such compensation for such solicitation
under the terms and conditions of the Offer to Purchase and Proxy Statement; (c)
in soliciting tenders of Shares, it has used no solicitation materials other
than those furnished by Conectiv or the Company; and (d) if it is a foreign
broker or dealer not eligible for
10
<PAGE> 129
membership in the National Association of Securities Dealers, Inc. (the "NASD"),
it has agreed to conform to the NASD's Rules of Fair Practice in making
solicitations.
The payment of compensation to any Soliciting Dealer is dependent on
such Soliciting Dealer returning a Notice of Solicited Tenders to the
Depositary.
THIS LETTER OF TRANSMITTAL AND PROXY IS TO BE USED FOR THE TENDER OF
SHARES OF THE 5% SERIES (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY
STATEMENT) ONLY. ANY PERSON DESIRING TO TENDER OR VOTE SHARES OF ANY OTHER
SERIES OF PREFERRED STOCK FOR WHICH CONECTIV IS MAKING A TENDER OFFER AND/OR
SOLICITING A PROXY MUST SUBMIT A LETTER OF TRANSMITTAL AND PROXY RELATING TO
THAT SPECIFIC SERIES.
11
<PAGE> 130
PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW OR A FORM W-8, AS APPLICABLE.
SIGN HERE: ___________________________________________________________________
SIGNATURE OF OWNER(S)
___________________________________________________________________
SIGNATURE OF OWNER(S)
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal and Proxy must be guaranteed by a firm
that is a member of a registered national securities exchange or the NASD, or by
a commercial bank or trust company having an office or correspondent in the
United States which is a participant in an approved Medallion Signature
Guarantee Program (each of the foregoing being referred to as an "Eligible
Institution"). Signatures on this Letter of Transmittal and Proxy need not be
guaranteed (a) if this Letter of Transmittal and Proxy is signed by the
registered holder(s) of the Shares (which term, for purposes of this document,
shall include any participant in the Book-Entry Transfer Facility whose name
appears on a security position listing as the owner of Shares) tendered herewith
and such holder(s) has not completed the box above under the heading "Special
Payment Instructions" or the box above under the heading "Special Delivery
Instructions" on this Letter of Transmittal and Proxy, (b) if such Shares are
tendered for the account of an Eligible Institution or (c) if this Letter of
Transmittal and Proxy is being used solely for the purpose of voting Shares
which are not being tendered pursuant to the Offer. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND PROXY AND SHARES. This Letter
of Transmittal and Proxy is to be used if (a) certificates are to be forwarded
herewith, (b) delivery of Shares to be made by book-entry transfer pursuant to
the procedures set forth under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement and as Agent's
Message (as defined below) is not delivered or (c) Shares are being voted in
connection with the Offer. Certificates for all physically delivered Shares, or
a confirmation of a book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility of all Shares delivered electronically, as well as
a properly completed and duly executed Letter of Transmittal and Proxy, and any
other documents required by this Letter of Transmittal and Proxy, must be
received by the Depositary at one of its addresses set forth on the front page
of this Letter of Transmittal and Proxy on or prior to the Expiration Date (as
defined in the Offer to Purchase and Proxy Statement) with respect to all
Shares. Preferred Shareholders who wish to tender their Shares yet who cannot
deliver their Shares and all other required documents to the Depositary on or
prior to the Expiration Date must tender their Shares pursuant to the guaranteed
delivery procedure set forth under the heading "Terms of the Offer -- Procedure
for Tendering Shares" in the Offer to Purchase and Proxy Statement. Pursuant to
such procedure: (a) such tender must be made by or through an Eligible
Institution, (b) a properly completed and duly executed Notice of Guaranteed
Delivery and Proxy in the form provided by Conectiv (with any required signature
guarantees) must be received by the Depositary on or prior to the Expiration
Date and (c) the certificates for all physically delivered Shares, or a
confirmation of a book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility of all Shares delivered electronically, together
with a properly completed and duly executed Letter of Transmittal and Proxy, and
any other documents required by this Letter of Transmittal and Proxy, must be
received by the Depositary by 5:00 p.m. (New York City time) within three New
York Stock Exchange trading days after the date of execution of such Notice of
Guaranteed Delivery and Proxy, all as provided under the heading "Terms of the
Offer --Procedure for Tendering Shares" in the Offer to Purchase and Proxy
Statement. Tenders by book-entry transfer may also be made by delivering an
Agent's Message in lieu of this Letter of Transmittal and Proxy. The term
"Agent's Message" means a message, transmitted by the Book-Entry Transfer
Facility, received by the Depositary and forming a part of the book-entry
transfer when a tender is initiated, which states that the Book-Entry Transfer
Facility has received an express acknowledgment from a participant tendering
Shares that such participant has received and agrees to be bound by the terms of
this Letter of Transmittal and Proxy and that Conectiv may enforce such
agreement against such participant.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT
THE OPTION AND RISK OF THE TENDERING PREFERRED SHAREHOLDER. IF CERTIFICATES FOR
SHARES ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED.
No alternative, conditional or contingent tenders will be accepted. See
"Terms of the Offer -- Number of Shares; Purchase Prices; Expiration Date;
Dividends" in the Offer to Purchase and Proxy Statement. By executing this
Letter of
12
<PAGE> 131
Transmittal and Proxy, the tendering shareholder waives any right to receive any
notice of the acceptance for payment of the Shares.
3. VOTING. PREFERRED SHAREHOLDERS (INCLUDING PREFERRED SHAREHOLDERS WHO
ACQUIRE SHARES SUBSEQUENT TO THE RECORD DATE) WHO WISH TO TENDER THEIR SHARES
PURSUANT TO THE OFFER MUST VOTE IN FAVOR OF THE PROPOSED AMENDMENT. THE OFFER IS
CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE
SPECIAL MEETING. In addition, Preferred Shareholders have the right to vote for
the Proposed Amendment regardless of whether they tender their Shares by casting
their vote and duly executing this Letter of Transmittal and Proxy or by voting
in person at the Special Meeting. By executing a Notice of Guaranteed Delivery
and Proxy, a Preferred Shareholder is deemed to have tendered the Shares
described in such Notice of Guaranteed Delivery and Proxy and to have voted such
Shares in accordance with the proxy contained therein. If no vote is indicated
on an otherwise properly executed proxy contained with this Letter of
Transmittal and Proxy (or within a Notice of Guaranteed Delivery and Proxy),
then all Shares in respect of such proxy will be voted in favor of the Proposed
Amendment. See "Proposed Amendment and Proxy Solicitation" in the Offer to
Purchase and Proxy Statement. The Offer is being sent to all persons in whose
names Shares are registered on the books of the Company on the Record Date and
transferees thereof. Preferred Shareholders who purchase or whose purchase is
registered after the Record Date and who wish to tender in the Offer must
arrange with their seller to receive a proxy from the holder of record of such
Shares on the Record Date. Any holder of Shares held of record on the Record
Date in the name of another must establish to the satisfaction of the Company
his entitlement to exercise or transfer such Proxy. This will ordinarily require
an assignment by such record holder in blank or, if not in blank, to and from
each successive transferee, including the holder, with each signature guaranteed
by an Eligible Institution. See Instruction 5. In order to facilitate receipt of
proxies, Shares shall, during the period which commences on September 2, 1998
(two business days prior to the Record Date) and which will end at the close of
business on the Expiration Date, trade in the over-the-counter market with a
proxy providing the transferee with the right to vote such acquired Shares in
the Proxy Solicitation. No record date is fixed for determining which persons
are permitted to tender Shares. However, only the holders of record, or holders
who acquire an assignment of proxy from such holders, are permitted to vote for
the Proposed Amendment and thereby validly tender Shares pursuant to the Offer.
Any person who is the beneficial owner but not the record holder of Shares must
arrange for the record transfer of such Shares prior to tendering or direct the
record holder to tender on behalf of the beneficial owner.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY
BOOK-ENTRY TRANSFER). If fewer than all the Shares represented by any
certificate delivered to the Depositary are to be tendered, fill in the number
of Shares that are to be tendered in the box above under the heading
"Description of Shares Tendered." In such case, a new certificate for the
remainder of the Shares represented by the old certificate will be sent to the
person(s) signing this Letter of Transmittal and Proxy, unless otherwise
provided in the box above under the heading "Special Payment Instructions" or
"Special Delivery Instructions," as promptly as practicable following the
expiration or termination of the Offer. All Shares represented by certificates
delivered to the Depositary will be deemed to have been tendered unless
otherwise indicated.
5. SIGNATURES ON THIS LETTER OF TRANSMITTAL AND PROXY AND/OR NOTICE OF
GUARANTEED DELIVERY AND PROXY; STOCK POWERS AND ENDORSEMENTS. If either this
Letter of Transmittal and Proxy or the Notice of Guaranteed Delivery and Proxy
(together, the "Tender and Proxy Documents") is signed by the registered
holder(s) of the Shares tendered hereby, the signature(s) must correspond with
the name(s) as written one the face of the certificates without alteration,
enlargement or any change whatsoever.
If any of the Shares tendered or voted under either Tender and Proxy
Document are held of record by two or more persons, all such persons must sign
such Tender and Proxy Document.
If any of the Shares tendered or voted under either Tender and Proxy
Document are registered in different names or different certificates, it will be
necessary to complete, sign and submit as many separate applicable Tender and
Proxy Documents as there are different registrations or certificates.
If either Tender and Proxy Document is signed by the registered
holder(s) of the Shares tendered hereby, no endorsements of certificates or
separate stock powers are required unless payment of the purchase price is to be
made to, or Shares not tendered or not purchased are to be registered in the
name of, any person other than the registered holder(s). Signatures on any such
certificates or stock powers must be guaranteed by an Eligible Institution. See
Instruction 1.
If this Letter of Transmittal and Proxy is signed by a person other
than the registered holder(s) of the Shares tendered hereby, certificates must
be endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the
13
<PAGE> 132
name(s) of the registered holder(s) appear(s) on the certificates for such
Shares. Signature(s) on any such certificates or stock powers must be guaranteed
by an Eligible Institution. See Instruction 1.
If either Tender and Proxy Document or any certificate or stock power
is signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Conectiv of the authority of such person so to act must be
submitted.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6,
Conectiv will pay or cause to be paid any stock transfer taxes with respect to
the sale and transfer of any Shares to it or its order pursuant to the Offer.
If, however, payment of the purchase price is to be made to, or Shares not
tendered or not purchased are to be registered in the name of, any person other
than the registered holder(s), or if tendered Shares are registered in the name
of any person other than the person(s) signing this Letter of Transmittal and
Proxy, the amount of any stock transfer taxes (whether imposed on the registered
holder(s), such other person or otherwise) payable on account of the transfer to
such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes, or exemption therefrom, is submitted. See
"Terms of the Offer -- Acceptance of Shares for Payment and Payment of Purchase
Price and Dividends" in the Offer to Purchase and Proxy Statement. EXCEPT AS
PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY TO AFFIX TRANSFER TAX
STAMPS TO THE CERTIFICATES REPRESENTING SHARES TENDERED HEREBY.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the
purchase price of any Shares purchased is to be issued in the name of, any
Shares not tendered or not purchased are to be returned to or the check for the
Special Cash Payment is to be issued in the name of, a person other than the
person(s) signing this Letter of Transmittal and Proxy or if the check and/or
any certificate for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal and Proxy or
to an address other than that shown in the box above under the heading "Name(s)
and Address(es) of Registered Holder(s)," then the "Special Payment
Instructions" and/or "Special Delivery Instructions" on this Letter of
Transmittal and Proxy should be completed. Preferred Shareholders tendering
Shares by book-entry transfer will have any Shares not accepted for payment
returned by crediting the account maintained by such Preferred Shareholder at
the Book-Entry Transfer Facility.
8. SUBSTITUTE FORM W-9 and FORM W-8. A tendering Preferred Shareholder
and a Preferred Shareholder voting in favor of the Proposed Amendment (but not
tendering) is required to provide the Depositary with (i) in the case of a
Untied States Preferred Shareholder, a correct Taxpayer Identification Number
("TIN") and a certification that the IRS has not notified such shareholder that
he is subject to backup withholding on Substitute Form W-9, or (ii) in the case
of a foreign Preferred Shareholder, a properly completed Form W-8, as discussed
below under "Important Tax Information." Failure to provide the information on
either Substitute Form W-9 or Form W-8 may subject the Preferred Shareholder to
a $50 penalty imposed by the Internal Revenue Service and to 31% federal income
tax backup withholding on gross amount payable. The box in Part 2 of Substitute
Form W-9 may be checked if the Preferred Shareholder has not been issued a TIN
and has applied for a number or intends to apply for a number in the near
future. If the box in Part 2 is checked and the Depositary is not provided with
a TIN by the time of payment, the Depositary will withhold 31% of the gross
amount otherwise payable thereafter until a TIN is provided to the Depositary.
9. REQUESTS FOR ASSISTANCE OF ADDITIONAL COPIES. Any questions or
requests for assistance may be directed to the Information Agent or the Dealer
Manager at their respective telephone numbers and addresses listed below.
Requests for additional copies of the Offer to Purchase and Proxy Statement,
this Letter of Transmittal and Proxy or other tender offer materials may be
directed to the Information Agent or the Dealer Manager and such copies will be
furnished promptly at Conectiv's expense. Preferred Shareholders may also
contact their local broker, dealer, commercial bank or trust company for
assistance concerning the Offer.
10. SOLICITED TENDERS. Conectiv will pay a solicitation fee of an
amount equal to $1.50 per Share for Shares that are tendered, accepted for
payment and paid for pursuant to the Offer (except that for transactions for
beneficial owners whose ownership equals or exceeds 2,500 Shares, Conectiv will
pay a solicitation fee of an amount equal to $1.00 per Share). With respect to
fees payable pursuant to this paragraph involving transactions for beneficial
owners whose ownership is less than 2,500 Shares, any fees payable hereunder
shall be paid in full to the Dealer Manager unless a Soliciting Dealer is
designated (as herein described), in which case such fee shall be payable in
full to such designated Soliciting Dealer (which designated Soliciting Dealer
may be the Dealer Manager). With respect to fees payable pursuant to this
paragraph involving transactions for beneficial owners whose ownership equals or
exceeds 2,500 Shares, any fees payable hereunder shall be paid in full to the
Dealer Manager unless a Soliciting Dealer is designated, in which case 80% of
such fee shall be paid to the Dealer Manager and 20% of such fee shall be paid
to the designated Soliciting Dealer (which designated Soliciting Dealer
14
<PAGE> 133
may be the Dealer Manager). A designated Soliciting Dealer shall be named
hereunder under the heading "Solicited Tenders," and shall have solicited and
obtained the tender, and shall also be (a) any broker or dealer in securities
including the Dealer Manager in its capacity as a dealer or broker, which is a
member of any national securities exchange or of the NASD, (b) any foreign
broker or dealer not eligible for membership in the NASD which agrees to conform
to the NASD's Rules of Fair Practice in soliciting tenders outside the United
States to the same extent as though it were an NASD member, or (c) any bank or
trust company (each of which is referred to herein as a "Soliciting Dealer"). No
such fee shall be payable to a Soliciting Dealer with respect to the tender of
Shares by a holder unless the Letter of Transmittal and Proxy accompanying such
tender designates such Soliciting Dealer. No such fee shall be payable to a
Soliciting Dealer in respect of Shares registered in the name of such Soliciting
Dealer unless such Shares are held by such Soliciting Dealer as nominee and such
Shares are being tendered for the benefit of one or more beneficial owners
identified on the Letter of Transmittal and Proxy or on the Notice of Solicited
Tenders (included in the materials provided to brokers and dealers). No such fee
shall be payable to a Soliciting Dealer with respect to the tender of Shares by
the holder of record, for the benefit of the beneficial owner, unless the
beneficial owner has designated such Soliciting Dealer. If tendered Shares are
being delivered by book-entry transfer, the Soliciting Dealer must return a
Notice of Solicited Tenders to the Depositary within three business days after
expiration of the Offer to receive a solicitation fee. No such fee shall be
payable to a Soliciting Dealer if such Soliciting Dealer is required for any
reason to transfer the amount of such fee to a depositing holder (other than
itself). No such fee shall be paid to a Soliciting Dealer with respect to Shares
tendered for such Soliciting Dealer's own account. No broker, dealer, bank,
trust company or fiduciary shall be deemed to be the agent of Conectiv, the
Company, the Depositary, the Information Agent or the Dealer Manager for
purposes of the Offer.
Soliciting Dealers will include any organizations described in clauses
(a), (b) or (c) above even when the activities of such organization in
connection with the Offer consist solely of forwarding to clients materials
relating to the Offer, including this Letter of Transmittal and Proxy, and
tendering Shares as directed by beneficial owners thereof. No Soliciting Dealer
is required to make any recommendation to holders of Shares as to whether to
tender or refrain from tendering in the Offer. No assumption is made, in making
payment to any Soliciting Dealer, that its activities in connection with the
Offer included any activities other than those described above, and for all
purposes noted in all materials relating to the Offer, the term "solicit" shall
be deemed to mean no more than "processing shares tendered" or "forwarding to
customers materials regarding the Offer."
11. IRREGULARITIES. All questions as to the form of documents and the
validity, eligibility (including time of receipt) and acceptance of any tender
of Shares will be determined by Conectiv, in its sole discretion, and its
determination shall be final and binding. Conectiv reserves the absolute right
to reject any and all tenders of Shares that it determines are not in proper
form or the acceptance for payment of or payment for Shares that may, in the
opinion of Conectiv's counsel, be unlawful. Conectiv also reserves the absolute
right to waive any of the conditions to the Offer or any defect or irregularity
in any tender of Shares and Conectiv's interpretation of the terms and
conditions of the Offer (including these instructions) shall be final and
binding. Unless waived, any defects or irregularities in connection with tenders
must be cured within such time as Conectiv shall determine. None of Conectiv,
the Company, the Dealer Manager, the Depositary, the Information Agent or any
other person shall be under any duty to give notice of any defect or
irregularity in tenders, nor shall any of them incur any liability for failure
to give any such notice. Tenders will not be deemed to have been made until all
defects and irregularities have been cured or waived.
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any of your
certificate(s) for Shares have been lost, stolen or destroyed, please call ACE
Stockholder Services at (800) 365-6495 (toll free). You may need to complete and
Affidavit of Loss with respect to the lost certificate(s) (which will be
provided by ACE Stockholder Services) and payment of an indemnity bond premium
fee may be required. The tender of Shares pursuant to this Letter of Transmittal
and Proxy will not be valid unless prior to the Expiration Date: (a) such
procedures have been completed and a replacement certificate for the Shares has
been delivered to the Depositary or (b) a Notice of Guaranteed Delivery and
Proxy has been delivered to the Depositary. See Instruction 2.
IMPORTANT: THIS LETTER OF TRANSMITTAL AND PROXY, DULY EXECUTED,
TOGETHER WITH, IF APPLICABLE, CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY
TRANSFER, AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY,
OR, IF APPLICABLE, THE NOTICE OF GUARANTEED DELIVERY AND PROXY MUST BE RECEIVED
BY THE DEPOSITARY, ON OR PRIOR TO THE EXPIRATION DATE.
15
<PAGE> 134
IMPORTANT TAX INFORMATION
Under federal income tax law, a Preferred Shareholder whose tendered
Shares are accepted for payment or who will receive a Special Cash Payment as a
result of voting in favor of the Proposed Amendment is required to provide the
Depositary (as payer) with either such Preferred Shareholder's correct TIN on
Substitute Form W-9 below or a properly completed Form W-8. If such Preferred
Shareholder is an individual, the TIN is his or her social security number. For
businesses and other entities, the number is the federal employer identification
number. If the Depositary is not provided with the correct TIN or properly
completed Form W-8, the Preferred Shareholder may be subject to a $50 penalty
imposed by the Internal Revenue Code. In addition, payments that are made to
such Preferred Shareholder with respect to Shares purchased pursuant to the
Offer may be subject to 31% backup withholding.
Certain Preferred Shareholders (including, among others, all
corporations and certain foreign individuals) are exempt from backup
withholding. For a corporate United States Preferred Shareholder to qualify for
such exemption, such Preferred Shareholder must provide the Depositary with a
properly completed and executed Substitute Form W-9 attesting to its exempt
status. In order for a foreign Preferred Shareholder to qualify as an exempt
recipient, such Preferred Shareholder must submit to the Depositary a properly
completed Internal Revenue Service Form W-8 (a "Form W-8"), signed under
penalties of perjury, attesting to that Preferred Shareholder's exempt status. A
Form W-8 can be obtained from the Depositary. See the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If federal income tax backup withholding applies, the Depositary is
required to withhold 31% of any payments made to the Preferred Shareholder.
Backup withholding is not an additional tax. Rather, the federal income tax
liability of persons subject to backup withholding will be reduced by the amount
of the tax withheld. If withholding results in an overpayment of taxes, a refund
may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8
To avoid backup withholding on a Special Cash Payment or payments that
are made to a Preferred Shareholder with respect to Shares purchased pursuant to
the Offer, the Preferred Shareholder is required to notify the Depositary of his
or her correct TIN by completing the Substitute Form W-9 attached hereto
certifying that the TIN provided on Substitute Form W-9 is correct and that (a)
the Preferred Shareholder has not been notified by the Internal Revenue Service
that he or she is subject to federal income tax backup withholding as a result
of failure to report all interest or dividends or (b) the Internal Revenue
Service has notified the Preferred Shareholder that he or she is no longer
subject to federal income tax backup withholding. Foreign Preferred Shareholders
must submit a properly completed Form W-8 in order to avoid the applicable
backup withholding; provided, however, that backup withholding will not apply to
foreign Preferred Shareholders subject to withholding under other provisions of
the Code or the Special Cash Payment or on gross payments received pursuant to
the Offer. Foreign Preferred Shareholders that submit a properly completed Form
W-8 may nevertheless be subject to withholding under other provisions of the
Code on the payments received by them.
WHAT NUMBER TO GIVE THE DEPOSITARY
The Preferred Shareholder is required to give the Depositary the social
security number or employer identification number of the registered owner of the
Shares. If the Shares are in more than one name or are not in the name of the
actual owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report.
PAYER'S NAME
<TABLE>
<S> <C> <C>
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT _______________________________
FORM W-9 RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. SOCIAL SECURITY NUMBER
OR
_______________________________
EMPLOYER IDENTIFICATION TIN
NAME (PLEASE PRINT)____________________________ PART 2 --
ADDRESS________________________________________ AWAITING TIN { }
CITY_______________________STATE_______________
ZIP CODE_______________________________________
</TABLE>
16
<PAGE> 135
<TABLE>
<S> <C>
DEPARTMENT OF THE TREASURY PART 3 -- CERTIFICATION -- UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
INTERNAL REVENUE SERVICE
(1) THE NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER IDENTIFICATION NUMBER (OR A
TIN HAS NOT BEEN ISSUED TO ME BUT I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE
A TIN OR INTEND TO DO SO IN THE NEAR FUTURE), (2) I AM NOT SUBJECT TO BACKUP
WITHHOLDING EITHER BECAUSE I HAVE NOT BEEN NOTIFIED BY THE INTERNAL REVENUE SERVICE
(THE "IRS") THAT I AM SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF A FAILURE TO REPORT
ALL INTEREST OR DIVIDENDS OR THE IRS HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT TO
BACKUP WITHHOLDING AND (3) ALL OTHER INFORMATION PROVIDED ON THIS FORM IS TRUE,
CORRECT AND COMPLETE.
SIGNATURE____________________________________________________________________________
DATE _____________________________, 1998
YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE
CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING INTEREST OR
DIVIDENDS ON YOUR TAX RETURN.
PAYER'S REQUEST FOR NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
TAXPAYER IDENTIFICATION WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER OR PROXY
NUMBER ("TIN") AND SOLICITATION. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
CERTIFICATION TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 2 OF
SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER:
I CERTIFY UNDER PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER HAS NOT
BEEN ISSUED TO ME AND EITHER (1) I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE
A TAXPAYER IDENTIFICATION NUMBER TO THE APPROPRIATE INTERNAL REVENUE SERVICE CENTER OR
SOCIAL SECURITY ADMINISTRATION OFFICE OR (2) I INTEND TO DO SO IN THE NEAR FUTURE. I
UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER BY THE TIME OF
PAYMENT, 31% OF ALL PAYMENTS MADE TO ME WILL BE WITHHELD UNTIL I PROVIDE A NUMBER.
SIGNATURE ____________________________________ DATE________________________, 1998
</TABLE>
THE INFORMATION AGENT:
D.F. KING & CO., INC.
77 Water Street, 20th Floor
New York, New York 10005
(800) 431-9629 (toll free)
or
Banks and Brokers call
(212) 269-5550
17
<PAGE> 136
Exhibit 99(a)(3)
NOTICE OF GUARANTEED DELIVERY AND PROXY
FOR
CONECTIV
OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES
OF THE FOLLOWING SERIES OF CUMULATIVE PREFERRED STOCK OF
ATLANTIC CITY ELECTRIC COMPANY
Cumulative Preferred Stock:
4% Series ($100 par value) 4.10%
Series ($100 par value) 4.35%
Series ($100 par value)
4.35% 2nd Series ($100 par value)
4.75% Series ($100 par value)
5% Series (100 par value)
This form, or a form substantially equivalent to this form, must be
used to accept the Offer (as defined below) if certificates for shares of a
series of preferred stock of Atlantic City Electric Company (the "Company"), a
New Jersey corporation and direct utility subsidiary of Conectiv, listed above
(each a "Series of Preferred") to be tendered pursuant to the Offer (the
"Shares") are not immediately available, if the procedure for book-entry
transfer cannot be completed on a timely basis, or if time will not permit all
other documents required by the Letter of Transmittal and Proxy to be delivered
to the Depositary on or prior to the Expiration Date (as defined in the Offer to
Purchase and Proxy Statement referred to below). Such form may be delivered by
hand or transmitted by mail or by facsimile transmission to the Depositary. See
"Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase
and Proxy Statement.
A SEPARATE NOTICE OF GUARANTEED DELIVERY AND PROXY MUST BE USED FOR
EACH SERIES OF PREFERRED.
THE ELIGIBLE INSTITUTION WHICH COMPLETES THIS FORM MUST COMMUNICATE THE
GUARANTEE TO THE DEPOSITARY AND MUST DELIVER THE LETTER OF TRANSMITTAL AND PROXY
AND CERTIFICATES FOR SHARES TO THE DEPOSITARY WITHIN THE TIME SHOWN HEREIN.
FAILURE TO DO SO COULD RESULT IN A FINANCIAL LOSS TO SUCH ELIGIBLE INSTITUTION.
TO: THE BANK OF NEW YORK, DEPOSITARY
By Mail: By Hand or Overnight Courier:
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
By Facsimile Transmission:
(212) 815-6213
Information and Confirm by Telephone:
(800) 507-9357
1
<PAGE> 137
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE
OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN ONE LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on
a Letter of Transmittal and Proxy is required to be guaranteed by an Eligible
Institution (as defined in the Letter of Transmittal and Proxy) under the
instructions thereto, such signature guarantee must appear in the applicable
space provided in the signature box on the Letter of Transmittal and Proxy.
The undersigned hereby tenders to Conectiv, a Delaware corporation
("Conectiv"), upon the terms and subject to the conditions set forth in the
Offer to Purchase and Proxy Statement, dated September 8, 1998 (the "Offer to
Purchase and Proxy Statement"), and the related Letter of Transmittal and Proxy
(which together constitute the "Offer"), receipt of which is hereby
acknowledged, the number of Shares listed below, pursuant to the guaranteed
delivery procedure set forth in "Terms of the Offer -- Procedure for Tendering
Shares" in the Offer to Purchase and Proxy Statement. PREFERRED SHAREHOLDERS
(INCLUDING PREFERRED SHAREHOLDERS WHO ACQUIRE SHARES SUBSEQUENT TO THE RECORD
DATE) WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER MUST VOTE IN FAVOR
OF THE PROPOSED AMENDMENT TO THE COMPANY'S CHARTER (THE "CHARTER"), AS SET FORTH
IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE "PROPOSED AMENDMENT").
PREFERRED SHAREHOLDERS WHO PURCHASE OR WHOSE PURCHASE SETTLES OR IS REGISTERED
AFTER THE CLOSE OF BUSINESS ON SEPTEMBER 4, 1998 (THE "RECORD DATE") AND WHO
WISH TO TENDER THEIR SHARES IN THE OFFER MUST ARRANGE WITH THEIR SELLER TO
RECEIVE A DULY COMPLETED, VALID AND UNREVOKED PROXY (WHICH MAY BE IN THE FORM OF
IRREVOCABLE ASSIGNMENT OF PROXY ATTACHED HERETO) FROM THE HOLDER OF RECORD ON
THE RECORD DATE AND INCLUDE SUCH PROXY WITH THIS NOTICE OF GUARANTEED DELIVERY
AND PROXY OR VOTE SUCH PROXY FOR THE PROPOSED AMENDMENT AT THE SPECIAL MEETING
(AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT). THE OFFER IS
CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE
SPECIAL MEETING. IN ADDITION, PREFERRED SHAREHOLDERS HAVE THE RIGHT TO VOTE FOR
THE PROPOSED AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR SHARES BY CASTING
THEIR VOTE AND SIGNING THE PROXY CONTAINED WITHIN THE ACCOMPANYING LETTER OF
TRANSMITTAL AND PROXY OR BY VOTING IN PERSON AT THE SPECIAL MEETING. IF THE
PROPOSED AMENDMENT IS APPROVED AND ADOPTED, THE COMPANY WILL MAKE A SPECIAL CASH
PAYMENT (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT) TO EACH
PREFERRED SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED AMENDMENT, PROVIDED
THAT SUCH HOLDER'S SHARES ARE NOT TENDERED PURSUANT TO THE OFFER.
The undersigned hereby also appoints Howard E. Cosgrove, Barbara S.
Graham and Louis M. Walters, or any of them, as proxies, each with the power to
appoint his or her substitute, and hereby authorizes them to represent and to
vote as designated hereunder ant in their discretion with respect to any other
business properly brought before the Special Meeting all shares of preferred
stock of the Company which the undersigned is entitled to vote at the Special
Meeting of Shareholders to be held on October 14, 1998, or any adjournment(s) or
postponement(s) thereof.
THIS NOTICE OF GUARANTEED DELIVERY AND PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF THE COMPANY. THE PROXY CONTAINED HEREIN, WHEN PROPERLY
EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
SHAREHOLDER(S). If no direction is made, the proxy will be voted FOR Item 1. An
abstention is the equivalent of a vote AGAINST the Proposed Amendment.
A holder of Preferred Shares who elects to tender Shares pursuant to
this Notice of Guaranteed Delivery and Proxy must check one of the boxes below:
{ } A duly completed, valid and unrevoked proxy indicating a vote FOR the
Proposed Amendment is enclosed herein.
{ } A valid vote FOR the Proposed Amendment will be cast at the Special
Meeting.
2
<PAGE> 138
{ } A duly completed, valid and unrevoked proxy indicating a vote FOR the
Proposed Amendment will be delivered within three New York Stock
Exchange trading days after the execution of this Notice of Guaranteed
Delivery and Proxy.
Indicate your vote by an {X}. The Board of Directors recommends voting
FOR Item 1.
HOLDERS OF SHARES WHO WISH TO TENDER THEIR SHARES MUST VOTE FOR THE
PROPOSED AMENDMENT EITHER BY SUBMITTING THIS PROXY OR BY VOTING AT THE SPECIAL
MEETING.
ITEM 1.
To remove from the Charter Paragraph (7)(B)(c) of Article III, a
provision restricting the amount of securities representing unsecured
indebtedness issuable by the Company.
{ } FOR { } AGAINST { } ABSTAIN
Series of Preferred (check one):
Cumulative Preferred Stock ($100 par value):
{ } 4% Series
{ } 4.10% Series
{ } 4.35% Series
{ } 4.35% 2nd Series
{ } 4.75% Series
{ } 5% Series
A separate Notice of Guaranteed Delivery and Proxy must be used for
each Series of Preferred.
Number of Shares:
_____________________________________
Certificate Nos. (if available):
_____________________________________
_____________________________________
_____________________________________
_____________________________________
Any holders of Shares held of record on the Record Date in the name of
another holder must establish to the satisfaction of the Company its entitlement
to exercise or transfer this Proxy. This will ordinarily require an assignment
by such record holders in blank or, if not in blank, to and from each successive
transferee, including the holder, with each signature guaranteed by an Eligible
Institution. A form of irrevocable assignment of proxy has been provided herein.
Please check box if you plan to attend the Special Meeting. { }
3
<PAGE> 139
SIGNATURE(S) OF OWNER(S)
X _____________________________________________________________________________
X _____________________________________________________________________________
Dated: _________________________________________________________________ , 1998
Name(s): ______________________________________________________________________
(PLEASE PRINT)
Capacity (full title): ________________________________________________________
Address: ______________________________________________________________________
(INCLUDE ZIP CODE)
DAYTIME Area Code and Telephone No.: __________________________________________
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
stock certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please set forth full title and see
Instruction 5 to the Letter of Transmittal and Proxy.)
If Shares will be tendered by book-entry transfer, Name of Tendering
Institution:
__________________________________________
Account No. ___________________________ at
The Depositary Trust Company
__________________________________________
Signature(s)
__________________________________________
Name(s) of Record Holders(s)
(Please Print)
__________________________________________
Address
__________________________________________
Area Code and Telephone Number
4
<PAGE> 140
IF SELLING SHARES SUBSEQUENT TO SEPTEMBER 4, 1998, A RECORD HOLDER
MUST COMPLETE THE FOLLOWING IRREVOCABLE PROXY.
PLEASE SIGN THIS TO IRREVOCABLY TRANSFER A PREFERRED STOCK
PROXY TO A SUBSEQUENT HOLDER OF PREFERRED STOCK WHO
WAS NOT A HOLDER OF RECORD ON SEPTEMBER 4, 1998
IRREVOCABLE PROXY
with respect to shares of the
_____ Series of Cumulative Preferred Stock
of
ATLANTIC CITY ELECTRIC COMPANY (THE "COMPANY")
The undersigned hereby irrevocably appoints
--------------------------------
Type or Print Name of Transferee
as attorney and proxy, with full power of substitution, to vote and otherwise
act for and in the name(s) of the undersigned with respect to the Shares
indicated below which were held of record by the undersigned on September 4,
1998, in the manner in which the undersigned would be entitled to vote and
otherwise act in respect of such Shares on any and all matters.
This proxy shall be effective whether or not the Shares indicated below
are tendered in the Offer.
This instrument supersedes and revokes any and all previous
appointments of proxies heretofore made by the undersigned with respect to the
Shares indicated below as to any and all matters. THIS PROXY IS IRREVOCABLE AND
IS COUPLED WITH AN INTEREST.
All authority conferred or agreed to be conferred herein shall survive
the death or incapacity of the undersigned, and any obligation of the
undersigned hereunder shall be binding upon the heirs, executors,
administrators, legal and personal representatives, successors in interest and
assigns of the undersigned. The undersigned understands that tenders of Shares
pursuant to any of the procedures described in the Offer to Purchase and Proxy
Statement and in the Letter of Transmittal and Proxy will constitute a binding
agreement between the undersigned and the Company upon the terms and subject to
the conditions of the Offer.
- --------------------------------------------------------------------------------
DESCRIPTION OF PREFERRED STOCK
- --------------------------------------------------------------------------------
CERTIFICATE NUMBER(S) AGGREGATE NUMBER
(ATTACH LIST IF NECESSARY) OF SHARES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL:
- --------------------------------------------------------------------------------
- ---------------------------------- ------------------------------------
Signature of Record Holder or Signature of Record Holder of
Authorized Signatory Authorized Signatory
5
<PAGE> 141
- ---------------------------------- ------------------------------------
Type or Print Name Type or Print Name
Date: _____________________, 1998 Date: _______________________, 1998
Tax Identification or Social Security No(s). __________________________________
Must be signed by holder(s) exactly as name(s) appear(s) on the Record Date on
certificate(s) for the Shares or on a security position listing or by person(s)
authorized to become holder(s) by certificates and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation, agent or other person acting in a
fiduciary or representative capacity, please provide the following information
and see Instruction 5 of the Letter of Transmittal and Proxy.
<TABLE>
<S> <C>
Name Address
- -------------------------------------------- --------------------------------------------------------------
- -------------------------------------------- --------------------------------------------------------------
Please Print Include Zip Code
Area Code and Tel. No.
---------------------------------------------------------------------------------------------
Capacity (Full Title)
---------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
Name of Firm:_________________________________________________________________________________
Authorized Signature:___________________________________________________________________________
Title:_________________________________________________________________________________________
Dated:__________________________________________________________________________________, 1998
</TABLE>
6
<PAGE> 142
GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a member of a registered national
securities exchange or the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office or correspondent in the United
States, guarantees to deliver to the Depositary at one of its addresses set
forth above certificate(s) for the Shares tendered hereby, in proper form for
transfer, or a confirmation of the book-entry transfer of the Shares tendered
hereby into the Depositary's account at The Depository Trust Company, in each
case together with properly completed and duly executed Letter(s) of Transmittal
and Proxy (or facsimile(s) thereof), with any required signature guarantee(s)
and any other required documents, all within three New York Stock Exchange
trading days after the date hereof.
<TABLE>
<S> <C>
- ------------------------------------------------------- -----------------------------------------------------------
Name of Firm Authorized Signature
- ------------------------------------------------------- -----------------------------------------------------------
Address Name
- ------------------------------------------------------- -----------------------------------------------------------
City, State, Zip Code Title
- -------------------------------------------------------
Area Code and
Telephone Number
</TABLE>
Dated:______________________________, 1998
DO NOT SEND STOCK CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES
MUST BE SENT WITH THE LETTER OF TRANSMITTAL AND PROXY.
7
<PAGE> 143
Exhibit 99(a)(4)
CONECTIV
OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES OF THE FOLLOWING SERIES OF
PREFERRED STOCK OF
ATLANTIC CITY ELECTRIC COMPANY
<TABLE>
<CAPTION>
OUTSTANDING CUSIP PURCHASE PRICE
TITLE OF SERIES OF PREFERRED SHARES NUMBER (PER SHARE)
- ---------------------------------------------- --------------------- -------------------- ----------------------
<S> <C> <C> <C>
Cumulative Preferred Stock ($100 par value)
4% Series........................................... 77,000 048303200 $
4.10% Series........................................ 72,000 048303770 $
4.35% Series........................................ 15,000 048303762 $
4.35% 2nd Series.................................... 36,000 048303507 $
4.75% Series........................................ 50,000 048303309 $
5% Series........................................... 50,000 048303788 $
</TABLE>
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON OCTOBER 14, 1998, UNLESS THE OFFER IS EXTENDED.
September 8, 1998
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
In our capacity as Dealer Manager, we are enclosing the material listed
below relating to the invitation of Conectiv, a Delaware corporation
("Conectiv"), to the holders of each series of preferred stock of Atlantic City
Electric Company (the "Company"), a New Jersey corporation and direct utility
subsidiary of Conectiv, listed above (each a "Series of Preferred") to tender
any and all of their shares of a Series of Preferred ("Shares") for purchase at
the purchase price per Share listed above, net to the seller in cash, upon the
terms and subject to the conditions set forth in the Offer to Purchase and Proxy
Statement, dated September 8, 1998 (the "Offer to Purchase and Proxy
Statement"), and in the Letter of Transmittal and Proxy for the Shares tendered.
As to each Series of Preferred, the Offer to Purchase and Proxy Statement,
together with the applicable Letter of Transmittal and Proxy, constitutes the
"Offer." Conectiv will purchase all Shares validly tendered and not withdrawn,
upon the terms and subject to the conditions of the Offer. The Offer for a
Series of Preferred is not conditioned upon any minimum number of Shares of such
Series of Preferred being tendered and is independent of the Offer for any other
Series of Preferred. PREFERRED SHAREHOLDERS (INCLUDING PREFERRED SHAREHOLDERS
WHO ACQUIRE SHARES AFTER THE RECORD DATE) WHO WISH TO TENDER THEIR SHARES
PURSUANT TO THE OFFER MUST VOTE IN FAVOR OF THE PROPOSED AMENDMENT TO THE
COMPANY'S CHARTER, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT
(THE "PROPOSED AMENDMENT"). THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT
BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED IN THE OFFER TO
PURCHASE AND PROXY STATEMENT). IN ADDITION, PREFERRED SHAREHOLDERS HAVE THE
RIGHT TO VOTE FOR THE PROPOSED AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR
SHARES. SEE "PROPOSED AMENDMENT AND PROXY SOLICITATION," "TERMS OF THE OFFER --
CERTAIN CONDITIONS OF THE OFFER" AND "TERMS OF THE OFFER -- EXTENSION OF TENDER
PERIOD; TERMINATION; AMENDMENTS" IN THE OFFER TO PURCHASE AND PROXY STATEMENT.
IN ORDER TO VALIDLY TENDER SHARES PURSUANT TO THE OFFER, PREFERRED
SHAREHOLDERS WHO ACQUIRE SHARES DURING THE PERIOD BEGINNING TWO DAYS PRIOR TO
THE
1
<PAGE> 144
RECORD DATE AND UP TO AN INCLUDING THE EXPIRATION DATE MUST OBTAIN AN ASSIGNMENT
OF PROXY FROM THE SELLER OF SUCH SHARES AND VOTE SUCH PROXY IN FAVOR OF THE
PROPOSED AMENDMENT. IN ORDER TO FACILITATE THE TRANSFER OF SHARES DURING THE
PERIOD DESCRIBED ABOVE, THE SHARES OF EACH SERIES OF PREFERRED WILL TRADE "WITH
PROXY" IN THE OVER-THE-COUNTER MARKET. SETTLEMENT OF ALL TRADES DURING THE
PERIOD DESCRIBED ABOVE SHOULD INCLUDE AN ASSIGNMENT OF PROXY FROM THE SELLER.
The Shares will trade, during the period which begins two days prior to
the Record Date and which will end at the close of business on the Expiration
Date, in the over-the-counter market under the symbol "___" for the 4% Series of
Preferred, "___" for the 4.10% Series of Preferred, "___" for the 4.35% Series
of Preferred, "___" for the 4.35% 2nd Series of Preferred, "___" for the 4.75%
Series of Preferred and "___" for the 5% Series of Preferred indicating that
such Shares are trading "with proxy." A Preferred Shareholder who acquires
Shares during this period must obtain, or have its authorized representative
obtain, an assignment of proxy (which is included in the applicable Letter of
Transmittal and Proxy) at settlement from the seller. The National Association
of Securities Dealers, Inc. (the "NASD") and The Depository Trust Company have
issued notices informing their members and participants that the Shares are
trading "with proxy" and that settlement of all trades during the period
described above should include an assignment of proxy from the seller.
We are asking you to contact your clients for whom you hold Shares
registered in you name (or in the name of your nominee) or who hold Shares
registered in their own names. Please being the Offer to their attention as
promptly as possible.
Conectiv will pay a solicitation fee of $ 1.50 per Share for any Shares
tendered, accepted for payment and paid for pursuant to the Offer; provided that
with respect to transactions for beneficial owners whose ownership equals or
exceeds 2,500 Shares, Conectiv will pay a solicitation fee of $1.00 per Share.
With respect to fees that involve transactions for beneficial owners of whose
ownership is less than 2,500 Shares, any fee payable thereunder shall be paid in
full to the Dealer Manager unless a Soliciting Dealer is designated, in which
case such fee shall be paid in full to the Soliciting Dealer (which designated
Soliciting Dealer may be the Dealer Manager). With respect to fees that involve
transactions for beneficial owners whose ownership equals or exceeds 2,500
Shares, any fee payable thereunder shall be paid in full to the Dealer Manager
unless a Soliciting Dealer is designated, in which case, 80% of such fee shall
be paid to the Dealer Manager and 20% of such fee shall be paid to the
Soliciting Dealer (which designated Soliciting Dealer may be the Dealer
Manager).
A designated Soliciting Dealer is an entity covered by a Letter of
Transmittal and Proxy which designates its name as having solicited and obtained
the tender, and it is (i) any broker or dealer in securities, including the
Dealer Manager in its capacity as a broker or dealer, which is a member of any
national securities exchange or of the NASD, (ii) any foreign broker or dealer
not eligible for membership in the NASD which agrees to conform to the NASD's
Rules of Fair Practice in soliciting tenders outside the United States to the
same extent as though it were an NASD member, or (iii) any bank or trust company
(each of which is referred to herein as a "Soliciting Dealer"). No such fee
shall be payable to a Soliciting Dealer with respect to the tender of Shares by
a holder unless the Letter of Transmittal and Proxy accompanying such tender
designates such Soliciting Dealer. No such fee shall be payable to a Soliciting
Dealer in respect of Shares registered in the name of such Soliciting Dealer
unless such Shares are held by such Soliciting Dealer as nominee and such Shares
are being tendered for the benefit of one or more beneficial owners identified
on the Letter of Transfer and Proxy or on the Notice of Solicited Tenders
(included below). No such fee shall be payable to a Soliciting Dealer if such
Soliciting Dealer is required for any reason to transfer the amount of such fee
to a depositing holder (other than itself). No such fee shall be paid to a
Soliciting Dealer with respect to Shares tendered for such Soliciting Dealer's
own account. No broker, dealer, bank, trust company or fiduciary shall be deemed
to be the agent of Conectiv, the Company, the Depositary (as defined below), the
Dealer Manager or the Information Agent for purposes of the Offer. For all
purposes noted in all materials relating to the Offer, the term "solicit" shall
be deemed to mean no more than "processing shares tendered" or "forwarding to
customers materials relating to the Offer."
Conectiv will also, upon request, reimburse Soliciting Dealers for
reasonable and customary handling and mailing expenses incurred by them in
forwarding materials relating to the Offer to their customers. Conectiv will pay
all stock transfer taxes applicable to its purchase of Shares pursuant to the
offer, subject to Instruction 6 of the Letter of Transmittal and Proxy.
IN ORDER FOR A SOLICITING DEALER TO RECEIVE A SOLICITATION FEE, THE
BANK OF NEW YORK, AS DEPOSITARY (THE "DEPOSITARY"), MUST HAVE RECEIVED FROM SUCH
SOLICITING DEALER
2
<PAGE> 145
A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF SOLICITED TENDERS IN THE FORM
ATTACHED HERETO (OR FACSIMILE THEREOF) WITHIN THREE BUSINESS DAYS AFTER THE
EXPIRATION OF THE OFFER.
For your information and for forwarding to your clients for whom you
hold Shares registered in your name (or in the name of your nominee), we are
enclosing the following documents:
1. The Offer to Purchase and Proxy Statement, dated September 8, 1998.
2. A separate Letter of Transmittal and Proxy for each Series of
Preferred for your use and for the information of your clients.
3. A letter to shareholders of the Company from its Chairman and Chief
Executive Officer.
4. A Notice of Guaranteed Delivery and Proxy to be used to accept the
Offer if the Shares and all other required documents cannot be delivered to
the Depositary by the applicable Expiration Date (as defined in the Offer to
Purchase and Proxy Statement).
5. A form of letter which may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name of your
nominee, with space for obtaining such clients' instructions with regard to
the Offer by Conectiv and with regard to the proxy solicitation by the
Company.
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9, providing information relating to backup federal income
tax withholding.
7. A return envelope addressed to The Bank of New York, the Depositary.
8. A DTC Summary Voting Form to be used by participants of DTC to
consolidate voting across multiple issues (i.e., summary ballot).
EACH SERIES OF PREFERRED HAS ITS OWN LETTER OF TRANSMITTAL AND PROXY,
AND ONLY THE APPLICABLE LETTER OF TRANSMITTAL AND PROXY FOR A PARTICULAR SERIES
OR A NOTICE OF GUARANTEED DELIVERY AND PROXY MAY BE USED TO TENDER SHARES OF
SUCH SERIES OF PREFERRED.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE
NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON OCTOBER 14, 1998, UNLESS THE OFFER IS EXTENDED.
NEITHER CONECTIV, THE COMPANY, THEIR RESPECTIVE BOARDS OF DIRECTORS NOR
ANY OF THEIR RESPECTIVE OFFICERS MAKES ANY RECOMMENDATION TO ANY PREFERRED
SHAREHOLDER AS TO WHETHER TO TENDER ANY OR ALL SHARES. EACH PREFERRED
SHAREHOLDER MUST MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES
AND, IF SO, HOW MANY SHARES TO TENDER.
Any questions or requests for assistance or additional copies of the
enclosed materials may be directed to D.F. King & Co., Inc., the Information
Agent, or to us, as Dealer Manager, at the respective addresses and telephone
numbers set forth on the back cover of the enclosed Offer to Purchase and Proxy
Statement.
Very truly yours,
Morgan Stanley & Co. Incorporated
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE
YOU OR ANY PERSON AS THE AGENT OF CONECTIV, THE COMPANY, THE DEALER MANAGER, THE
INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE
ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH
THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS
CONTAINED THEREIN.
3
<PAGE> 146
ATLANTIC CITY ELECTRIC COMPANY
NOTICE OF SOLICITED TENDERS FOR THE 4% SERIES
CUSIP NUMBER 048303200
List below the number of Shares tendered by each beneficial owner whose
tender you have solicited. All shares in a Series of Preferred beneficially
owned by a beneficial owner, whether in one account or several, and in however
many capacities, must be aggregated for purposes of completing the table below.
Any questions as to what constitutes beneficial ownership should be directed to
the Depositary. If the space below is inadequate, list the Shares in a separate
signed schedule and affix the list to this Notice of Solicited Tenders.
ALL NOTICES OF SOLICITED TENDERS SHOULD BE DETACHED BY TEARING ALONG
THE PERFORATED EDGE AND RETURNED TO THE DEPOSITARY AT THE ADDRESS SET FORTH ON
THE BACK COVER OF THE OFFER TO PURCHASE WITHIN THREE NEW YORK STOCK EXCHANGE
TRADING DAYS AFTER THE EXPIRATION OF THE OFFER. NOTICES MAY BE FAXED TO THE
DEPOSITARY AT (212) 815-6213 CONFIRMATION TELEPHONE NUMBER (800) 507-9357. ALL
QUESTIONS CONCERNING THE NOTICES OF SOLICITED TENDERS SHOULD BE DIRECTED TO THE
INFORMATION AGENT AT THE TELEPHONE NUMBER SET FORTH ON THE BACK COVER OF THE
OFFER TO PURCHASE.
ALL SOLICITING DEALERS ARE REQUIRED TO COMPLETE THE FOLLOWING. PLEASE
TYPE OR PRINT NEATLY.
<TABLE>
<CAPTION>
Beneficial Owners of Less Than 2,500 Shares -- Solicitation Fee of
$1.50 per Share
Number of Shares Number of
DTC Participant VOI Ticket Requested for Beneficial Owner(s)
Number Number* Payment Represented
<S> <C> <C> <C>
Beneficial Owners of 2,500 or More Shares -- Solicitation Fee of
$1.00 per Share
Number of
Number of Shares Beneficial
DTC Participant VOI Ticket Requested for Owner(s) Name of Soliciting
Number Number* Payment Represented Dealer
</TABLE>
- ---------------
* Complete if Shares delivered by book-entry transfer. Please submit a
separate VOI ticket for Shares tendered when the solicitation fee is to be
directed to another Soliciting Dealer.
DO NOT SEND STOCK CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES
MUST BE SENT WITH THE LETTER OF TRANSMITTAL AND PROXY.
PLEASE COMPLETE THE SIGNATURE FORM ON THE LAST PAGE.
4
<PAGE> 147
ATLANTIC CITY ELECTRIC COMPANY
NOTICE OF SOLICITED TENDERS FOR THE 4.10% SERIES
CUSIP NUMBER 048303770
List below the number of Shares tendered by each beneficial owner whose
tender you have solicited. All shares in a Series of Preferred beneficially
owned by a beneficial owner, whether in one account or several, and in however
many capacities, must be aggregated for purposes of completing the table below.
Any questions as to what constitutes beneficial ownership should be directed to
the Depositary. If the space below is inadequate, list the Shares in a separate
signed schedule and affix the list to this Notice of Solicited Tenders.
ALL NOTICES OF SOLICITED TENDERS SHOULD BE DETACHED BY TEARING ALONG
THE PERFORATED EDGE AND RETURNED TO THE DEPOSITARY AT THE ADDRESS SET FORTH ON
THE BACK COVER OF THE OFFER TO PURCHASE WITHIN THREE NEW YORK STOCK EXCHANGE
TRADING DAYS AFTER THE EXPIRATION OF THE OFFER. NOTICES MAY BE FAXED TO THE
DEPOSITARY AT (212) 815-6213 CONFIRMATION TELEPHONE NUMBER (800) 507-9357. ALL
QUESTIONS CONCERNING THE NOTICES OF SOLICITED TENDERS SHOULD BE DIRECTED TO THE
INFORMATION AGENT AT THE TELEPHONE NUMBER SET FORTH ON THE BACK COVER OF THE
OFFER TO PURCHASE.
ALL SOLICITING DEALERS ARE REQUIRED TO COMPLETE THE FOLLOWING. PLEASE
TYPE OR PRINT NEATLY.
<TABLE>
<CAPTION>
Beneficial Owners of Less Than 2,500 Shares -- Solicitation Fee of
$1.50 per Share
Number of Shares Number of
DTC Participant VOI Ticket Requested for Beneficial Owner(s)
Number Number* Payment Represented
<S> <C> <C> <C>
Beneficial Owners of 2,500 or More Shares -- Solicitation Fee of
$1.00 per Share
Number of
Number of Shares Beneficial
DTC Participant VOI Ticket Requested for Owner(s) Name of Soliciting
Number Number* Payment Represented Dealer
</TABLE>
- ---------------
* Complete if Shares delivered by book-entry transfer. Please submit a
separate VOI ticket for Shares tendered when the solicitation fee is to be
directed to another Soliciting Dealer.
DO NOT SEND STOCK CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES
MUST BE SENT WITH THE LETTER OF TRANSMITTAL AND PROXY.
PLEASE COMPLETE THE SIGNATURE FORM ON THE LAST PAGE.
5
<PAGE> 148
ATLANTIC CITY ELECTRIC COMPANY
NOTICE OF SOLICITED TENDERS FOR THE 4.35% SERIES
CUSIP NUMBER 048303762
List below the number of Shares tendered by each beneficial owner whose
tender you have solicited. All shares in a Series of Preferred beneficially
owned by a beneficial owner, whether in one account or several, and in however
many capacities, must be aggregated for purposes of completing the table below.
Any questions as to what constitutes beneficial ownership should be directed to
the Depositary. If the space below is inadequate, list the Shares in a separate
signed schedule and affix the list to this Notice of Solicited Tenders.
ALL NOTICES OF SOLICITED TENDERS SHOULD BE DETACHED BY TEARING ALONG
THE PERFORATED EDGE AND RETURNED TO THE DEPOSITARY AT THE ADDRESS SET FORTH ON
THE BACK COVER OF THE OFFER TO PURCHASE WITHIN THREE NEW YORK STOCK EXCHANGE
TRADING DAYS AFTER THE EXPIRATION OF THE OFFER. NOTICES MAY BE FAXED TO THE
DEPOSITARY AT (212) 815-6213 CONFIRMATION TELEPHONE NUMBER (800) 507-9357. ALL
QUESTIONS CONCERNING THE NOTICES OF SOLICITED TENDERS SHOULD BE DIRECTED TO THE
INFORMATION AGENT AT THE TELEPHONE NUMBER SET FORTH ON THE BACK COVER OF THE
OFFER TO PURCHASE.
ALL SOLICITING DEALERS ARE REQUIRED TO COMPLETE THE FOLLOWING. PLEASE
TYPE OR PRINT NEATLY.
<TABLE>
<CAPTION>
Beneficial Owners of Less Than 2,500 Shares -- Solicitation Fee of
$1.50 per Share
Number of Shares Number of
DTC Participant VOI Ticket Requested for Beneficial Owner(s)
Number Number* Payment Represented
<S> <C> <C> <C>
Beneficial Owners of 2,500 or More Shares -- Solicitation Fee of
$1.00 per Share
Number of
Number of Shares Beneficial
DTC Participant VOI Ticket Requested for Owner(s) Name of Soliciting
Number Number* Payment Represented Dealer
</TABLE>
- ---------------
* Complete if Shares delivered by book-entry transfer. Please submit a
separate VOI ticket for Shares tendered when the solicitation fee is to be
directed to another Soliciting Dealer.
DO NOT SEND STOCK CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES
MUST BE SENT WITH THE LETTER OF TRANSMITTAL AND PROXY.
PLEASE COMPLETE THE SIGNATURE FORM ON THE LAST PAGE.
6
<PAGE> 149
ATLANTIC CITY ELECTRIC COMPANY
NOTICE OF SOLICITED TENDERS FOR THE 4.35% 2ND SERIES
CUSIP NUMBER 048303507
List below the number of Shares tendered by each beneficial owner whose
tender you have solicited. All shares in a Series of Preferred beneficially
owned by a beneficial owner, whether in one account or several, and in however
many capacities, must be aggregated for purposes of completing the table below.
Any questions as to what constitutes beneficial ownership should be directed to
the Depositary. If the space below is inadequate, list the Shares in a separate
signed schedule and affix the list to this Notice of Solicited Tenders.
ALL NOTICES OF SOLICITED TENDERS SHOULD BE DETACHED BY TEARING ALONG
THE PERFORATED EDGE AND RETURNED TO THE DEPOSITARY AT THE ADDRESS SET FORTH ON
THE BACK COVER OF THE OFFER TO PURCHASE WITHIN THREE NEW YORK STOCK EXCHANGE
TRADING DAYS AFTER THE EXPIRATION OF THE OFFER. NOTICES MAY BE FAXED TO THE
DEPOSITARY AT (212) 815-6213 CONFIRMATION TELEPHONE NUMBER (800) 507-9357. ALL
QUESTIONS CONCERNING THE NOTICES OF SOLICITED TENDERS SHOULD BE DIRECTED TO THE
INFORMATION AGENT AT THE TELEPHONE NUMBER SET FORTH ON THE BACK COVER OF THE
OFFER TO PURCHASE.
ALL SOLICITING DEALERS ARE REQUIRED TO COMPLETE THE FOLLOWING. PLEASE
TYPE OR PRINT NEATLY.
<TABLE>
<CAPTION>
Beneficial Owners of Less Than 2,500 Shares -- Solicitation Fee of
$1.50 per Share
Number of Shares Number of
DTC Participant VOI Ticket Requested for Beneficial Owner(s)
Number Number* Payment Represented
<S> <C> <C> <C>
Beneficial Owners of 2,500 or More Shares -- Solicitation Fee of
$1.00 per Share
Number of
Number of Shares Beneficial
DTC Participant VOI Ticket Requested for Owner(s) Name of Soliciting
Number Number* Payment Represented Dealer
</TABLE>
- ---------------
* Complete if Shares delivered by book-entry transfer. Please submit a
separate VOI ticket for Shares tendered when the solicitation fee is to be
directed to another Soliciting Dealer.
DO NOT SEND STOCK CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES
MUST BE SENT WITH THE LETTER OF TRANSMITTAL AND PROXY.
PLEASE COMPLETE THE SIGNATURE FORM ON THE LAST PAGE.
7
<PAGE> 150
ATLANTIC CITY ELECTRIC COMPANY
NOTICE OF SOLICITED TENDERS FOR THE 4.75% SERIES
CUSIP NUMBER 048303309
List below the number of Shares tendered by each beneficial owner whose
tender you have solicited. All shares in a Series of Preferred beneficially
owned by a beneficial owner, whether in one account or several, and in however
many capacities, must be aggregated for purposes of completing the table below.
Any questions as to what constitutes beneficial ownership should be directed to
the Depositary. If the space below is inadequate, list the Shares in a separate
signed schedule and affix the list to this Notice of Solicited Tenders.
ALL NOTICES OF SOLICITED TENDERS SHOULD BE DETACHED BY TEARING ALONG
THE PERFORATED EDGE AND RETURNED TO THE DEPOSITARY AT THE ADDRESS SET FORTH ON
THE BACK COVER OF THE OFFER TO PURCHASE WITHIN THREE NEW YORK STOCK EXCHANGE
TRADING DAYS AFTER THE EXPIRATION OF THE OFFER. NOTICES MAY BE FAXED TO THE
DEPOSITARY AT (212) 815-6213 CONFIRMATION TELEPHONE NUMBER (800) 507-9357. ALL
QUESTIONS CONCERNING THE NOTICES OF SOLICITED TENDERS SHOULD BE DIRECTED TO THE
INFORMATION AGENT AT THE TELEPHONE NUMBER SET FORTH ON THE BACK COVER OF THE
OFFER TO PURCHASE.
ALL SOLICITING DEALERS ARE REQUIRED TO COMPLETE THE FOLLOWING. PLEASE
TYPE OR PRINT NEATLY.
<TABLE>
<CAPTION>
Beneficial Owners of Less Than 2,500 Shares -- Solicitation Fee of
$1.50 per Share
Number of Shares Number of
DTC Participant VOI Ticket Requested for Beneficial Owner(s)
Number Number* Payment Represented
<S> <C> <C> <C>
Beneficial Owners of 2,500 or More Shares -- Solicitation Fee of
$1.00 per Share
Number of
Number of Shares Beneficial
DTC Participant VOI Ticket Requested for Owner(s) Name of Soliciting
Number Number* Payment Represented Dealer
</TABLE>
- ---------------
* Complete if Shares delivered by book-entry transfer. Please submit a
separate VOI ticket for Shares tendered when the solicitation fee is to be
directed to another Soliciting Dealer.
DO NOT SEND STOCK CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES
MUST BE SENT WITH THE LETTER OF TRANSMITTAL AND PROXY.
PLEASE COMPLETE THE SIGNATURE FORM ON THE LAST PAGE.
8
<PAGE> 151
ATLANTIC CITY ELECTRIC COMPANY
NOTICE OF SOLICITED TENDERS FOR THE 5% SERIES
CUSIP NUMBER 048303788
List below the number of Shares tendered by each beneficial owner whose
tender you have solicited. All shares in a Series of Preferred beneficially
owned by a beneficial owner, whether in one account or several, and in however
many capacities, must be aggregated for purposes of completing the table below.
Any questions as to what constitutes beneficial ownership should be directed to
the Depositary. If the space below is inadequate, list the Shares in a separate
signed schedule and affix the list to this Notice of Solicited Tenders.
ALL NOTICES OF SOLICITED TENDERS SHOULD BE DETACHED BY TEARING ALONG
THE PERFORATED EDGE AND RETURNED TO THE DEPOSITARY AT THE ADDRESS SET FORTH ON
THE BACK COVER OF THE OFFER TO PURCHASE WITHIN THREE NEW YORK STOCK EXCHANGE
TRADING DAYS AFTER THE EXPIRATION OF THE OFFER. NOTICES MAY BE FAXED TO THE
DEPOSITARY AT (212) 815-6213 CONFIRMATION TELEPHONE NUMBER (800) 507-9357. ALL
QUESTIONS CONCERNING THE NOTICES OF SOLICITED TENDERS SHOULD BE DIRECTED TO THE
INFORMATION AGENT AT THE TELEPHONE NUMBER SET FORTH ON THE BACK COVER OF THE
OFFER TO PURCHASE.
ALL SOLICITING DEALERS ARE REQUIRED TO COMPLETE THE FOLLOWING. PLEASE
TYPE OR PRINT NEATLY.
<TABLE>
<CAPTION>
Beneficial Owners of Less Than 2,500 Shares -- Solicitation Fee of
$1.50 per Share
Number of Shares Number of
DTC Participant VOI Ticket Requested for Beneficial Owner(s)
Number Number* Payment Represented
<S> <C> <C> <C>
Beneficial Owners of 2,500 or More Shares -- Solicitation Fee of
$1.00 per Share
Number of
Number of Shares Beneficial
DTC Participant VOI Ticket Requested for Owner(s) Name of Soliciting
Number Number* Payment Represented Dealer
</TABLE>
- ---------------
* Complete if Shares delivered by book-entry transfer. Please submit a
separate VOI ticket for Shares tendered when the solicitation fee is to be
directed to another Soliciting Dealer.
DO NOT SEND STOCK CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES
MUST BE SENT WITH THE LETTER OF TRANSMITTAL AND PROXY.
PLEASE COMPLETE THE SIGNATURE FORM ON THE LAST PAGE.
9
<PAGE> 152
SOLICITATION FEE PAYMENT INSTRUCTIONS
ISSUE CHECK TO:
Firm _________________________________________________________________________
(Please Print)
Attention ____________________________________________________________________
Address ______________________________________________________________________
______________________________________________________________________________
(Include Zip Code)
Phone Number _________________________________________________________________
Taxpayer Identification or Social Security No. _______________________________
Applicable VOI Number ___________________ Number of Shares __________________
IF SOLICITATION FEES ARE TO BE PAID TO ANOTHER ELIGIBLE INSTITUTION(S),
PLEASE COMPLETE THE FOLLOWING BOXES:
ISSUE CHECK TO:
Firm _________________________________________________________________________
(Please Print)
Attention ____________________________________________________________________
Address ______________________________________________________________________
______________________________________________________________________________
(Include Zip Code)
Phone Number _________________________________________________________________
Taxpayer Identification or Social Security No. _______________________________
Applicable VOI Number ___________________ Number of Shares __________________
Series __________________
ISSUE CHECK TO:
Firm _________________________________________________________________________
(Please Print)
Attention ____________________________________________________________________
Address ______________________________________________________________________
______________________________________________________________________________
(Include Zip Code)
Phone Number _________________________________________________________________
10
<PAGE> 153
Taxpayer Identification or Social Security No. _______________________________
Applicable VOI Number ___________________ Number of Shares __________________
Series __________________
NOTE: IF ADDITIONAL PAYMENT INSTRUCTIONS, PLEASE COPY AND ATTACH.
11
<PAGE> 154
All questions as to the validity, form and eligibility (including time
of receipt) of Notices of Solicited Tenders will be determined by the
Depositary, it its sole discretion, which determination will be final and
binding. Neither the Depositary nor any other person will be under any duty to
give notification of any defects or irregularities in any Notice of Solicited
Tenders or incur any liability for failure to give such notification.
The undersigned hereby confirms that: (i) it has complied with the
applicable requirements of the Securities Exchange Act of 1934, as amended, and
the applicable rules and regulations thereunder, in connection with such
solicitation; (ii) it is entitled to such compensation for such solicitation
under the terms and conditions of the Offer; (iii) in soliciting tenders of
Shares, it has used no soliciting materials other than those furnished by
Conectiv or the Company; and (iv) if it is a foreign broker or dealer not
eligible for membership in the NASD, it has agreed to conform to the NASD's
Rules of Fair Practice in making solicitations.
Firm Name: __________________________________________________________________
By: _________________________________________________________________________
Title: ______________________________________________________________________
Address (Including Zip Code): _______________________________________________
Area Code and Telephone Number: _____________________________________________
12
<PAGE> 155
Exhibit 99(a)(5)
CONECTIV
OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES OF THE FOLLOWING SERIES OF
CUMULATIVE PREFERRED STOCK OF
ATLANTIC CITY ELECTRIC COMPANY
<TABLE>
<CAPTION>
OUTSTANDING CUSIP PURCHASE PRICE
TITLE OF SERIES OF PREFERRED SHARES NUMBER (PER SHARE)
- ---------------------------------------------- --------------------- -------------------- ------------------
<S> <C> <C> <C>
Cumulative Preferred Stock ($100 par value)
4% Series........................................... 77,000 048303200 $
4.10% Series........................................ 72,000 048303770 $
4.35% Series........................................ 15,000 048303762 $
4.35% 2nd Series.................................... 36,000 048303507 $
4.75% Series........................................ 50,000 048303309 $
5% Series........................................... 50,000 048303788 $
</TABLE>
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON OCTOBER 14, 1998, UNLESS THE OFFER IS EXTENDED.
September 8, 1998
To Our Clients:
Enclosed for your consideration are the Offer to Purchase and Proxy
Statement, dated September 8, 1998, and a separate Letter of Transmittal, and
Proxy for each series of preferred stock listed above (each a "Series of
Preferred") of Atlantic City Electric Company (the "Company"), a New Jersey
corporation and direct utility subsidiary of Conectiv ("Conectiv"), of which you
own shares. As to each Series of Preferred, the Offer to Purchase and Proxy
Statement, together with the applicable Letter of Transmittal and Proxy,
constitutes the "Offer" of Conectiv to purchase any and all shares of the Series
of Preferred ("Shares") at the purchase price per Share listed above, net to the
seller in cash, upon the terms and subject to the conditions of the Offer.
Conectiv will purchase all Shares validly tendered and not withdrawn, upon the
terms and subject to the conditions of the Offer. The Offer for a Series of
Preferred is not conditioned upon any minimum number of Shares of such Series of
Preferred being tendered and is independent of the Offer for any other Series of
Preferred. Preferred Shareholders (including Preferred Shareholders who acquire
Shares subsequent to the Record Date) who wish to tender their Shares pursuant
to the Offer must vote in favor of the proposed amendment to the Company's
Charter, as set forth in the Offer to Purchase and Proxy Statement (the
"Proposed Amendment"). The Offer is conditioned upon the Proposed Amendment
being approved and adopted at the Special Meeting (as defined in the Offer to
Purchase and Proxy Statement). In addition, Preferred Shareholders have the
right to vote for the Proposed Amendment regardless of whether they tender their
Shares. See "Proposed Amendment and Proxy Solicitation," "Terms of the Offer --
Certain Conditions of the Offer" and "Terms of the Offer -- Extension of Tender
Period, Termination; Amendments" in the Offer to Purchase and Proxy Statement.
IN ORDER TO VALIDLY TENDER SHARES PURSUANT TO THE OFFER, PREFERRED
SHAREHOLDERS WHO ACQUIRE SHARES DURING THE PERIOD BEGINNING TWO DAYS PRIOR TO
THE RECORD DATE AND UP TO AND INCLUDING THE EXPIRATION DATE MUST OBTAIN AN
ASSIGNMENT OF PROXY FROM THE SELLER OF SUCH SHARES AND VOTE SUCH PROXY IN FAVOR
OF THE PROPOSED AMENDMENT. IN ORDER TO FACILITATE THE TRANSFER OF SHARES DURING
THE PERIOD DESCRIBED ABOVE, THE SHARES OF EACH SERIES OF PREFERRED WILL TRADE
"WITH PROXY" IN THE OVER-THE-
<PAGE> 156
COUNTER MARKET. SETTLEMENT OF ALL TRADES DURING THE PERIOD DESCRIBED ABOVE
SHOULD INCLUDE AN ASSIGNMENT OF PROXY FROM THE SELLER.
The Shares will trade, during the period which begins two days prior to
the Record Date and which will end at the close of business on the Expiration
Date, in the over-the-counter market under the symbol "___" for the 4% Series of
Preferred, "___" for the 4.10% Series of Preferred, "___" for the 4.35% Series
of Preferred, "___" for the 4.35% 2nd Series of Preferred, "___" for the 4.75%
Series of Preferred and "___" for the 5% Series of Preferred, indicating that
such Shares are trading "with proxy." A Preferred Shareholder who acquires
Shares during this period must obtain, or have its authorized representative
obtain, an assignment of proxy (which is included in the applicable Letter of
Transmittal and Proxy) at settlement from the seller. The National Association
of Securities Dealers, Inc. (the "NASD") and The Depository Trust Company have
issued notices informing their members and participants that the Shares are
trading "with proxy" and that settlement of all trades during the period
described above should include an assignment of proxy from the seller.
WE ARE THE HOLDER OF RECORD OF SHARES HELD FOR YOUR ACCOUNT BUT NOT
REGISTERED IN YOUR NAME. A TENDER OR A VOTE OF SUCH SHARES CAN BE MADE ONLY BY
US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. ANY LETTER OF
TRANSMITTAL AND PROXY FURNISHED TO YOU IS SOLELY FOR YOUR INFORMATION AND CANNOT
BE USED BY YOU TO TENDER OR VOTE SHARES HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish us to tender and/or vote
any or all of the Shares held by us for your account, upon the terms and subject
to the conditions set forth in the Offer.
PLEASE READ THE FOLLOWING INFORMATION CAREFULLY:
(1) The Offer is for any and all Shares outstanding as of September 8,
1998. The Offer for a Series of Preferred is independent of the Offer for
any other Series of Preferred.
(2) The Offer and withdrawal rights will expire at 5:00 p.m., New York
City time, on October 14, 1998, unless the Offer is extended with respect
to a Series of Preferred. Your instructions to us should be forwarded to us
in ample time to permit us to submit a tender on your behalf by the
expiration of the Offer. If you would like to withdraw your Shares that we
have tendered, you can withdraw them so long as the Offer remains open or
at any time after the expiration of forty business days from the
commencement of the Offer if such tendered Shares have not been accepted
for payment.
(3) Preferred Shareholders who wish to tender their Shares pursuant to
the Offer must vote in favor of the Proposed Amendment. The Offer is
conditioned upon the Proposed Amendment being approved and adopted at the
Special Meeting.
(4) Preferred Shareholders have the right to vote in favor of the
Proposed Amendment regardless of whether they tender their Shares. If the
Proposed Amendment is approved and adopted, the Company will make a special
cash payment in the amount of $1.00 per Share to each Preferred Shareholder
who voted in favor of the Proposed Amendment, provided that such Shares
have not been tendered pursuant to the Offer.
(5) Any stock transfer taxes applicable to the sale of Shares to
Conectiv pursuant to the Offer will be paid by Conectiv, except as
otherwise provided in Instruction 6 of the Letter of Transmittal and Proxy.
NEITHER CONECTIV, THE COMPANY, THEIR RESPECTIVE BOARDS OF DIRECTORS NOR
ANY OF THEIR RESPECTIVE OFFICERS MAKES ANY RECOMMENDATION TO ANY PREFERRED
SHAREHOLDER AS TO WHETHER TO TENDER ANY OR ALL SHARES. EACH PREFERRED
SHAREHOLDER MUST MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES
AND, IF SO, HOW MANY SHARES TO TENDER.
If you wish to have us tender and/or vote any or all of your Shares
held by us for your account upon the terms and subject to the conditions set
forth in the Offer, please so instruct us by completing, executing, detaching
and returning to us the instruction form on the detachable part hereof. An
envelope to return your instructions to us is enclosed. If you authorize tender
of your Shares, all such Shares will be tendered unless otherwise specified on
the
2
<PAGE> 157
detachable part hereof. Your instructions should be forwarded to us in ample
time to permit us to submit a tender and/or vote on your behalf by the
expiration of the Offer or the Special Meeting, as applicable.
The Offer is being made to all holders of Shares. Conectiv is not aware
of any state where the making of the Offer is prohibited by administrative or
judicial action pursuant to a valid state statute. If Conectiv becomes aware of
any valid state statute prohibiting the making of the Offer, Conectiv will make
a good faith effort to comply with such statute. If, after such good faith
effort, Conectiv cannot comply with such statute, the Offer will not be made to,
nor will tenders be accepted from or on behalf of, holders of Shares in such
state. In those jurisdictions where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of Conectiv by the Dealer Manager (as defined in the
Offer) or one or more registered brokers or dealers licensed under the laws of
such jurisdictions.
INSTRUCTIONS
WITH RESPECT TO OFFER TO PURCHASE BY CONECTIV FOR CASH
ANY AND ALL OUTSTANDING SHARES OF
THE PREFERRED STOCK OF,
AND PROXY SOLICITATION BY,
ATLANTIC CITY ELECTRIC COMPANY
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase and Proxy Statement, dated September 8, 1998, and a separate
Letter of Transmittal and Proxy for each series of preferred stock of Atlantic
City Electric Company (the "Company") (each a "Series of Preferred") in which
the undersigned owns shares (as to each Series of Preferred, the Offer to
Purchase and Proxy Statement, together with the applicable Letter of Transmittal
and Proxy, constitutes the "Offer") in connection with the invitation of
Conectiv ("Conectiv") to the holders of each Series of Preferred to tender any
and all of their shares of a Series of Preferred ("Shares") for purchase at the
purchase price per Share listed on the front cover of the Offer to Purchase and
Proxy Statement, net to the seller in cash, upon the terms and subject to the
conditions of the Offer, and in connection with the proxy solicitation being
conducted by the Board of Directors of the Company.
This will instruct you to tender to Conectiv the number of Shares
indicated below (or, if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions of the Offer.
<TABLE>
<CAPTION>
SERIES OF PREFERRED NUMBER OF SHARES TO BE TENDERED*
------------------- --------------------------------
<S> <C>
- ---------------------------------------------- ---------------------------------------------------------------
- ---------------------------------------------- ---------------------------------------------------------------
- ---------------------------------------------- ---------------------------------------------------------------
- ---------------------------------------------- ---------------------------------------------------------------
- ---------------------------------------------- ---------------------------------------------------------------
- ---------------------------------------------- ---------------------------------------------------------------
- ---------------------------------------------- ---------------------------------------------------------------
- ---------------------------------------------- ---------------------------------------------------------------
</TABLE>
You are further instructed to vote as designated hereunder in respect
of the Proposed Amendment all Shares which the undersigned is entitled to vote
at the Special Meeting.**
{ } FOR { } AGAINST { } ABSTAIN
3
<PAGE> 158
SIGN HERE
Signature(s): ____________________________________________________________
Name(s): ____________________________________________________________
Address: ____________________________________________________________
____________________________________________________________
Dated: ______________________________________________________, 1998
Social Security or Taxpayer Identification No.:____________________________
- ------------------
* By executing and returning these Instructions, unless otherwise indicated,
it will be assumed that all Shares held by us for your account are to be
tendered.
** By executing and returning these Instructions, unless otherwise indicated,
it will be assumed that all Shares held by us for your account are to be
voted FOR the Proposed Amendment.
4
<PAGE> 159
Exhibit 99(a)(6)
This announcement is neither an offer to purchase nor a solicitation of
an offer to sell Shares. The Offers are made solely by the Offers to Purchase
and Proxy Statements and the related Letters of Transmittal and Proxy, and are
being made to all holders of Shares. Conectiv is not aware of any jurisdiction
where the making of the Offers or the tender of Shares is not in compliance with
any applicable law. If Conectiv becomes aware of any jurisdiction where the
making of the Offer or the tender of Shares is not in compliance with any
applicable law, Conectiv will make a good faith effort to comply with such law.
If, after such good faith effort, Conectiv cannot comply with such law, the
Offers will not be made to (nor will tenders be accepted from or on behalf of)
the owners of Shares residing in such jurisdiction. In any jurisdiction where
the securities, blue sky or other laws require the Offers to be made by a
licensed broker or dealer, the Offers shall be deemed to be made on behalf of
Conectiv by Morgan Stanley & Co. Incorporated or one or more registered brokers
or dealers licensed under the laws of such jurisdiction.
[CONECTIV LOGO]
CONECTIV
NOTICE OF OFFER TO PURCHASE FOR CASH ANY AND ALL OUTSTANDING SHARES
OF THE FOLLOWING SERIES OF ATLANTIC CITY ELECTRIC COMPANY
77,000 SHARES, CUMULATIVE PREFERRED STOCK,
$100 PAR VALUE, 4% SERIES AT A PURCHASE PRICE OF $________ PER SHARE,
CUSIP NUMBER 048303200
72,000 SHARES, CUMULATIVE PREFERRED STOCK,
$100 PAR VALUE, 4.10% SERIES AT A PURCHASE PRICE OF $________ PER SHARE,
CUSIP NUMBER 048303770
15,000 SHARES, CUMULATIVE PREFERRED STOCK,
$100 PAR VALUE, 4.35% SERIES AT A PURCHASE PRICE OF $________ PER SHARE,
CUSIP NUMBER 048303762
36,000 SHARES, CUMULATIVE PREFERRED STOCK,
$100 PAR VALUE, 4.35% 2ND SERIES AT A PURCHASE PRICE OF $________ PER SHARE,
CUSIP NUMBER 048303507
50,000 SHARES, CUMULATIVE PREFERRED STOCK,
$100 PAR VALUE, 4.75% SERIES AT A PURCHASE PRICE OF $________ PER SHARE,
CUSIP NUMBER 048303309
50,000 SHARES, CUMULATIVE PREFERRED STOCK,
$100 PAR VALUE, 5% SERIES AT A PURCHASE PRICE OF $________ PER SHARE,
CUSIP NUMBER 048303788
(THE "TENDER OFFER")
ATLANTIC CITY ELECTRIC COMPANY
PROXY SOLICITATION FOR THE
OUTSTANDING SHARES OF THE FOLLOWING SERIES OF PREFERRED STOCK
239,500 SHARES, $7.80 NO PAR PREFERRED STOCK
CUSIP NUMBER 048303861
(THE "PROXY SOLICITATION")
<PAGE> 160
FOR THE TENDER OFFER:
Conectiv ("Conectiv"), a Delaware corporation, invites the holders of
each series of preferred stock listed above under the Tender Offer (each, a
"Series of Preferred") of Atlantic City Electric Company (the "Company"), a New
Jersey corporation and direct utility subsidiary of Conectiv, to tender any and
all of their shares of a Series of Preferred (the "Shares") for purchase at the
price per Share listed above, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase and Proxy Statement
dated September 8, 1998 and in the related Letter of Transmittal and Proxy
(which together constitute the "Offer").
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON OCTOBER 14, 1998 (THE "EXPIRATION DATE"), UNLESS THE OFFER IS EXTENDED.
THE OFFER FOR A SERIES OF PREFERRED IS NOT CONDITIONED UPON ANY MINIMUM
NUMBER OF SHARES OF SUCH SERIES OF PREFERRED BEING TENDERED AND IS INDEPENDENT
OF THE OFFER FOR ANY OTHER SERIES OF PREFERRED. THE OFFER, HOWEVER, IS
CONDITIONED UPON, AMONG OTHER THINGS, THE PROPOSED AMENDMENT, AS DESCRIBED
BELOW, BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING. PREFERRED SHAREHOLDERS
OF THE COMPANY WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER MUST VOTE
IN FAVOR OF THE PROPOSED AMENDMENT. SEE "TERMS OF THE OFFER -- CERTAIN
CONDITIONS OF THE OFFER" IN THE OFFER TO PURCHASE AND PROXY STATEMENT.
The Board of Directors of the Company will consider the declaration of
dividends on the Company's capital stock at its meeting on September 24, 1998.
The Regular Quarterly Dividend on the Company's preferred stock, if, when and as
declared, will be paid on November 2, 1998 to holders of record as of the close
of business on October 2, 1998. A holder of record of Shares on October 2, 1998
who tenders Shares will be entitled to the Regular Quarterly Dividend,
regardless of when such tender is made. Holders of Shares purchased pursuant to
the Offer will not be entitled to any dividends in respect of any later dividend
periods.
Concurrently with the Offer, the Board of Directors of the Company is
soliciting proxies for use at the Special Meeting of Shareholders of the Company
to be held at Christiana Conference Center, 4100 South Wakefield Drive, Newark,
Delaware, on October 14, 1998 or any adjournment or postponement of such meeting
(the "Special Meeting"). The Special Meeting is being held to consider an
amendment (the "Proposed Amendment") to the Company's charter (the "Charter")
which would remove provisions of the Company's Charter that restrict the ability
of the Company to issue unsecured indebtedness. The Board of Directors of the
Company recommends voting FOR the Proposed Amendment.
HOLDERS OF A SERIES OF PREFERRED WHO WISH TO TENDER THEIR SHARES MUST
VOTE IN FAVOR OF THE PROPOSED AMENDMENT. HOWEVER, HOLDERS OF A SERIES OF
PREFERRED HAVE THE RIGHT TO VOTE FOR THE PROPOSED AMENDMENT REGARDLESS OF
WHETHER THEY TENDER THEIR SHARES. IF THE PROPOSED AMENDMENT IS APPROVED AND
ADOPTED, THE COMPANY WILL MAKE A SPECIAL CASH PAYMENT EQUAL TO $1.00 PER SHARE
FOR EACH SHARE PROPERLY VOTED IN FAVOR OF THE PROPOSED AMENDMENT, PROVIDED THAT
SUCH SHARES HAVE NOT BEEN TENDERED PURSUANT TO THE OFFER. THOSE HOLDERS OF
PREFERRED STOCK WHO VALIDLY TENDER THEIR SHARES WILL BE ENTITLED ONLY TO THE
PURCHASE PRICE PER SHARE LISTED ABOVE BUT NOT THE SPECIAL CASH PAYMENT.
IN ORDER TO VALIDLY TENDER SHARES PURSUANT TO THE OFFER, PREFERRED
SHAREHOLDERS WHO ACQUIRE SHARES DURING THE PERIOD BEGINNING TWO DAYS PRIOR TO
SEPTEMBER 4, 1998 AND UP TO AND INCLUDING THE EXPIRATION DATE MUST OBTAIN AN
ASSIGNMENT OF PROXY FROM THE SELLER OF SUCH SHARES AND VOTE SUCH PROXY IN FAVOR
OF THE PROPOSED AMENDMENT. IN ORDER TO FACILITATE THE TRANSFER OF SHARES DURING
THE PERIOD DESCRIBED ABOVE, THE SHARES OF EACH SERIES OF PREFERRED WILL TRADE
"WITH PROXY" IN THE OVER-THE-COUNTER MARKET. SETTLEMENT OF ALL TRADES DURING THE
PERIOD DESCRIBED ABOVE SHOULD INCLUDE AN ASSIGNMENT OF PROXY FROM THE SELLER.
Any holder of a Series of Preferred desiring to accept the Offer and
tender all or any portion of his or her Shares should either (i) request his or
her broker, dealer, commercial bank, trust company or nominee to effect the
transaction for him or her, or (ii) complete and sign the Letter of Transmittal
and Proxy in accordance with the
2
<PAGE> 161
instructions in the Letter of Transmittal and Proxy, mail or deliver the same
and any other required documents to The Bank of New York (the "Depositary"), and
deliver the certificates for such Shares to the Depositary, along with the
Letter of Transmittal and Proxy, or tender such Shares pursuant to the procedure
for book-entry transfer set forth in the Offer to Purchase and Proxy Statement
under "Terms of the Offer -- Procedure for Tendering Shares," on or prior to the
Expiration Date (set forth above). A holder of a Series of Preferred whose
Shares are registered in the name of a broker, dealer, commercial bank, trust
company or nominee must contact such broker, dealer, commercial bank, trust
company or nominee if he or she desires to tender such Shares. Any holder of a
Series of Preferred who desires to tender Shares and whose certificates for such
Shares are not immediately available, or who cannot comply in a timely manner
with the procedure for book-entry transfer, should tender such Shares by
following the procedures for guaranteed delivery set forth in the Offer to
Purchase and Proxy Statement under "Terms of the Offer -- Procedure for
Tendering Shares." Conectiv will pay a solicitation fee for any Shares tendered,
accepted for payment and paid for pursuant to the Offer. See "Fees and Expenses
Paid to Dealers" in the Offer to Purchase and Proxy Statement.
EACH SERIES OF PREFERRED HAS ITS OWN LETTER OF TRANSMITTAL AND PROXY,
AND ONLY THE APPLICABLE LETTER OF TRANSMITTAL AND PROXY FOR SUCH SERIES OF
PREFERRED OR A NOTICE OF GUARANTEED DELIVERY AND PROXY MAY BE USED TO TENDER
SHARES OF SUCH SERIES OF PREFERRED.
NEITHER CONECTIV, THE COMPANY, THEIR RESPECTIVE BOARDS OF DIRECTORS,
NOR ANY OF THEIR RESPECTIVE OFFICERS MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER
AS TO WHETHER TO TENDER ANY OR ALL SHARES. EACH SHAREHOLDER MUST MAKE HIS OR HER
OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO
TENDER.
Tenders of Shares of a Series of Preferred made pursuant to the Offer
may be withdrawn at any time on or prior to the Expiration Date. Thereafter,
such tenders are irrevocable, except that they may be withdrawn after November
3, 1998, unless theretofore accepted for payment by Conectiv as provided in the
Offer to Purchase and Proxy Statement.
The Offer to Purchase and Proxy Statement is first being mailed on or
about September 8, 1998.
THE OFFER TO PURCHASE AND PROXY STATEMENT AND THE RELATED LETTER OF
TRANSMITTAL AND PROXY CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE
ANY DECISION IS MADE WITH RESPECT TO THE OFFER.
FOR THE PROXY SOLICITATION:
The Board of Directors of the Company is soliciting proxies of holders
of the shares of the series of preferred stock listed above under the Proxy
Solicitation (the "Proxy Only Shares") with respect to the Proposed Amendment.
The Special Meeting of Shareholders, at which the Proposed Amendment will be
considered, is scheduled to occur on October 14, 1998.
If the Proposed Amendment is approved and adopted, the Company will
make a special cash payment to each holder of Proxy Only Shares who properly
voted his Shares in favor of the Proposed Amendment in the amount of $1.00 per
Share. If a Preferred Shareholder votes against the Proposed Amendment or
abstains, such Preferred Shareholder shall not be entitled to the special cash
payment (regardless of whether the Proposed Amendment is approved and adopted).
Questions and requests for assistance may be directed to the
Information Agent or the Dealer Manager as set forth below. Requests for copies
of the Offers to Purchase and Proxy Statement and the related Letters of
Transmittal and Proxy or other tender offer or proxy materials may be directed
to the Information Agent and such copies will be furnished promptly at
Conectiv's expense. Preferred Shareholders may also contact their local broker,
dealer, commercial bank or trust company for assistance concerning the Offers.
The Information Agent for the Offer is:
D. F. KING & CO., INC.
77 Water Street, 20th Floor
New York, New York 10005
(800) 431-9629 (toll-free)
3
<PAGE> 162
or Banks and Brokers call (212) 269-5550
The Dealer Manager for the Offer is:
MORGAN STANLEY DEAN WITTER
Liability Management Group
1585 Broadway, 2nd Floor
New York, New York 10036
Call Toll Free:
(800) 624-1808
September 8, 1998
4
<PAGE> 163
Exhibit 99(a)(7)
Atlantic City Electric Company Letterhead
September 8, 1998
Dear Shareholder:
Please find enclosed important information pertaining to the following
two items:
(i) a proposed amendment (the "Proposed Amendment") to the
charter (the "Charter") of Atlantic City Electric Company (the "Company")
which will be considered at a Special Meeting (the "Special Meeting") of
its Shareholders; and
(ii) an offer by Conectiv ("Conectiv") to purchase certain
outstanding shares (the "Shares") of the Company's preferred stock.
We would greatly appreciate your giving prompt attention to the
enclosed material which you are urged to read in its entirety.
The Charter presently restricts the ability of the Company to issue
unsecured indebtedness without preferred shareholder approval under certain
circumstances. This restriction limits the Company's flexibility in planning and
financing its business activities. Because financial flexibility and capital
cost reduction are crucial factors to success in a competitive utility
environment, the Company ultimately may be placed at a competitive disadvantage
if these restrictions are not removed from the Charter. The Proposed Amendment,
as set forth and explained in the enclosed Offer to Purchase and Proxy
Statement, would remove this restriction.
Concurrently with the Company's proxy solicitation, Conectiv is
offering to purchase all of the outstanding shares of certain series of the
Company's preferred stock. NEITHER CONECTIV, THE COMPANY, THEIR RESPECTIVE
BOARDS OF DIRECTORS, NOR ANY OF THEIR RESPECTIVE OFFICERS MAKES ANY
RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER ANY OR ALL SHARES.
EACH SHAREHOLDER MUST MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER
SHARES AND IF SO, HOW MANY SHARES TO TENDER. You must vote in favor of the
Proposed Amendment in order to tender your Shares. Conectiv's offer is
conditioned upon the Proposed Amendment being approved and adopted at the
Special Meeting. In addition, you have the right to vote for the Proposed
Amendment regardless of whether you tender your shares. If you vote in favor of
the Proposed Amendment and it passes, you will be entitled to receive a special
cash payment equal to $1.00 per Share for each Share properly voted in favor of
the Proposed Amendment, provided your shares have not been tendered.
Instructions for tendering your shares and information pertaining to the special
cash payment are included with the enclosed material.
Your Board of Directors recommends voting FOR the Proposed Amendment.
It is important to your interests that all shareholders, regardless of the
number of shares owned, vote at the Special Meeting. Even if you plan to attend
the Special Meeting, WE URGE YOU TO MARK, SIGN AND DATE THE ENCLOSED PROXY,
WHICH IS INCLUDED WITHIN THE ENCLOSED LETTER OF TRANSMITTAL AND PROXY, AND
RETURN IT PROMPTLY. By signing and returning your proxy promptly, you are
assuring that your shares will be voted.
You are invited to attend the Special Meeting which will be held at
Christiana Conference Center, 4100 South Wakefield Drive, Newark, Delaware on
October 14, 1998 at 4:00 p.m., Eastern time.
<PAGE> 164
If you have questions regarding the Proposed Amendment, the Special
Meeting or Conectiv's tender offer, please call D.F. King & Co., Inc., the
Information Agent, at (800) 431-9629 (toll free) and (212) 269-5550 (banks and
brokers) or Morgan Stanley at (800) 624-1808 (toll free).
Thank you for your continued interest in the Company.
Sincerely yours,
/s/ HOWARD E. COSGROVE
------------------------------------
Howard E. Cosgrove
Chairman and Chief Executive Officer
2
<PAGE> 165
EXHIBIT 99(a)(8)
[CONECTIV LETTERHEAD]
September 8, 1998
CONECTIV OFFERS TO PURCHASE PREFERRED STOCK
Conectiv announced today offers to purchase certain series of the
outstanding shares of preferred stock of its subsidiary Atlantic City Electric
Company ("ACE").
The company also announced that ACE is soliciting proxies for use at a
special meeting of preferred shareholders, scheduled for October 14, 1998. The
meeting would be to consider an amendment to ACE's charter. The amendment would
eliminate a restriction on the subsidiary's ability to issue unsecured
indebtedness without preferred stockholder approval under certain circumstances.
"The change we're asking ACE preferred stockholders to consider would
make Conectiv more agile in a competitive environment," said Barbara S. Graham,
Conectiv's Chief Financial Officer. "We're hoping to eliminate a certain charter
restriction to gain financial flexibility as we move toward a more competitive
energy market."
The offers to purchase certain series of preferred stock will expire 5
p.m. Eastern time October 14, 1998, unless any offer is extended.
Purchase prices for each issue are indicated below:
<TABLE>
<CAPTION>
SERIES CUSIP NUMBER PURCHASE PRICE PER SHARE
- ------------------------------------------ ----------------------------------------
<S> <C> <C>
ATLANTIC CITY ELECTRIC COMPANY, CUMULATIVE
PREFERRED STOCK ($100 PAR VALUE)
4% Series 048303200 $
4.10% Series 048303770 $
4.35% Series 048303762 $
4.35% 2nd Series 048303762 $
4.75% Series 048303309 $
5% Series 048303788 $
</TABLE>
The Board of Directors of ACE will consider the declaration of
dividends on ACE's capital stock at its meeting on September 24, 1998. The
Regular Quarterly Dividend on ACE's preferred stock, if, when and as declared,
will be paid on November 2, 1998 to holders of record as of the close of
business on October 2, 1998. A holder of record of shares of ACE's preferred
stock on October 2, 1998 who tenders shares will be entitled to the Regular
Quarterly Dividend, regardless of when such tender is made. Holders of shares of
ACE's preferred stock purchased pursuant to the offers will not be entitled to
any dividends in respect of any later dividend periods.
The dealer manager for the tender offers is Morgan Stanley Dean Witter.
The information agent is D.F. King & Co., Inc. Shareholder questions or requests
for assistance may be directed toll-free to the information agent at (800)
431-9629 or to Morgan Stanley at (800) 624-1808.
The Conectiv family of companies includes Delmarva Power & Light
Company, Atlantic City Electric Company, Conectiv Communications
(telecommunications), Conectiv Services (HVAC services),
<PAGE> 166
Conectiv Energy (retail electric and gas), Conectiv Energy Supply (bulk and
wholesale electric and gas), Conectiv Solutions (energy services) and Conectiv
Thermal (district heating/cooling).
# # # # #
- - - - - - - - - - - - - - - -
Important notes:
Each of the offers for a series of preferred stock is independent of
the offers for the other series and is not conditioned upon any minimum number
of shares of such series being tendered. Each offer is conditioned upon, among
other things, the proposed charter amendment being approved and adopted at the
respective company's special meeting. Shareholders who wish to tender their
shares must vote in favor of the proposed charter amendment.
This announcement is neither an offer to purchase nor a solicitation of
an offer to sell shares. The offers are made solely by the Offer to Purchase and
Proxy Statement, dated September 8, 1998, and the related Letters of Transmittal
and Proxy and are not being made to (nor will tenders be accepted from or on
behalf of) owners of shares residing in any jurisdiction which the making of the
offers or the acceptance thereof would not be in compliance with the laws of
such jurisdiction. In any jurisdiction, the laws of which require the offers to
be made by a licensed broker or dealer, the offers shall be deemed made on
behalf of Conectiv by Morgan Stanley & Co. Incorporated or one or more
registered brokers or dealers licensed under the laws of such jurisdiction. This
announcement is also not a solicitation of proxies, which is made only by the
Proxy Statement, dated September 8, 1998, and such Offer to Purchase and Proxy
Statement.
2
<PAGE> 167
Exhibit 99(a)(9)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYOR --
Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payor.
<TABLE>
<S> <C>
FOR THIS TYPE OF ACCOUNT: GIVE THE SOCIAL SECURITY NUMBER OF --
1. An individual's account The individual
2. Two or more individuals (joint account) The actual owner of the account or, if combined funds,
the first individual on the account(1)
3. Custodian account of a minor (Uniform Gift to The minor(2)
Minors Act)
4. a. The usual revocable savings trust account The grantor-trustee(1)
(grantor is also trustee)
b. So-called trust account that is not a legal The actual owner(1)
or valid trust under State Law
5. Sole proprietorship account The owner(3)
6. A valid trust, estate, or pension trust The legal entity (Do not furnish the identifying number of
the personal representative or trustee unless the legal
entity itself is not designated in the account title)(4)
7. Corporate account The corporation
8. Association, club, religious, charitable, educational The organization
or other tax-exempt organization
9. Partnership account The partnership
10. A broker or registered nominee The broker or nominee
11. Account with the Department of Agriculture in the The public entity
name of a public entity (such as a State or local government, school
district or prison) that receives agricultural program payments
</TABLE>
- --------
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a social security number, that
person's number must be furnished.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Show the name of the owner. May also use business name and its Employer
Identification Number (if any).
(4) List first and circle the name of the valid trust, estate, or pension
trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
1
<PAGE> 168
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER (TIN) ON SUBSTITUTE FORM W-9
(SECTION REFERENCES ARE TO THE INTERNAL REVENUE CODE)
PAGE 2
NAME
If you are an individual, generally provide the name shown on your
social security card. However, if you have changed your last name, for instance,
due to marriage, without informing the Social Security Administration of the
name change, please enter your first name and both the last name shown on your
social security card and your new last name.
OBTAINING A NUMBER
If you don't have a taxpayer identification number ("TIN"), apply for
one immediately. To apply, obtain Form SS-5, Application for a Social Security
Number Card, Form SS-4, Application for Employer Identification Number, or, if
you are a U.S. resident alien for U.S. tax purposes, Form W-7, Application for
IRS Individual Taxpayer Identification Number, at the local office of the Social
Security Administration or the Internal Revenue Service (the "IRS").
PAYEES EXEMPT FROM BACKUP WITHHOLDING
The following is a list of payees exempt from backup withholding and
for which no information reporting is required. For interest and dividends, all
listed payees are exempt except item (9). For broker transactions, payees listed
in (1) through (13), and a person registered under the Investment Advisors Act
of 1940 who regularly acts as a broker are exempt. Payments subject to reporting
under sections 6041 and 6041A are generally exempt from backup withholding only
if made to payees described in items (1) through (7), except that a corporation
that provides medical and health care services or bills and collects payments
for such services is not exempt from backup withholding or information
reporting.
(1) A corporation.
(2) An organization exempt from tax under section 501(a), or an
individual retirement plan ("IRA"), or a custodial account under
section 403(b)(7).
(3) The United States or any agencies or instrumentalities.
(4) A state, the District of Columbia, a possession of the United
States, or any of their political subdivisions or
instrumentalities.
(5) A foreign government or any of its political subdivisions,
agencies or instrumentalities.
(6) An international organization or any of its agencies or
instrumentalities.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the
U.S. or a possession of the U.S.
(9) A futures commission merchant registered with the Commodity
Futures Trading Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the
Investment Company Act of 1940.
2
<PAGE> 169
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or
listed in the most recent publication of the American Society of
Corporate Secretaries, Inc. Nominee List.
(15) A trust exempt from tax under section 664 or described in section
4947.
PAYMENTS EXEMPT FROM BACKUP WITHHOLDING
Payments of dividends generally not subject to backup
withholding also include the following:
- Payments to nonresident aliens subject to withholding under
section 1441.
- Payments to partnerships not engaged in a trade or business in
the U.S. and which have at least one nonresident alien partner.
- Payments made by certain foreign organizations.
- Payments of interest generally not subject to backup withholding
include the following:
- Payments of interest on obligations issued by individuals.
NOTE: You may be subject to backup withholding if this interest
is $600 or more and is paid in the course of the payor's
trade or business and you have not provided your correct
TIN to the payor.
- Payments of tax-exempt interest (including exempt interest
dividends under section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Mortgage interest paid by you.
Payments that are not subject to information reporting are also not
subject to backup withholding. For details, see sections 6041, 6041A(a), 6042,
6044, 6045, 6049, 6050A, and 6050N, and the regulations under those sections.
PRIVACY ACT NOTICE. -- Section 6109 requires you to furnish your
correct TIN to persons who must file information returns with the IRS to report
interest, dividends and certain other income paid to you, mortgage interest you
paid, the acquisition or abandonment of secured property, or contributions you
made to an IRA. The IRS uses the numbers for identification purposes and to help
verify the accuracy of your tax return. The IRS may also provide this
information to the Department of Justice for civil and criminal litigation and
to cities, states and the District of Columbia to carry out their tax laws. You
must provide your TIN whether or not you are qualified to file a tax return.
Payors must generally withhold 31% of taxable interest, dividend, and certain
other payments to a payee who does not furnish a TIN to a payor. Certain
penalties may also apply.
PENALTIES
(1) FAILURE TO FURNISH TIN. -- If you fail to furnish your correct TIN
to a payor, you are subject to a penalty of $50 for each such failure unless
your failure is due to reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. --
If you make a false statement with no reasonable basis that results in no
imposition of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Willfully
falsifying certifications or affirmations may subject you to criminal penalties
including fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT
YOUR TAX CONSULTANT OR THE IRS
3
<PAGE> 170
Exhibit 99(a)(10)
SUMMARY INSTRUCTIONS FOR PARTICIPATING IN THE TENDER OFFER AND PROXY
(1) CHECK CONTENTS OF PACKAGE. Before proceeding, please confirm that this
package contains each of the following materials:
- Letter from the Chairman and Chief Executive Officer.
- Offer to Purchase and Proxy Statement dated September 8, 1998.
- Letter of Transmittal and Proxy relating to the applicable series
of Preferred stock.
- Notice of Guaranteed Delivery.
- Return envelope addressed to The Bank of New York, the Depositary
for the Tender Offer.
- W-9 Instruction Form.
(2) REVIEW MATERIALS CAREFULLY BEFORE DECIDING WHETHER TO PARTICIPATE. Please
review all enclosed materials carefully before deciding whether to
participate in the tender offer.
- IF YOUR SHARES ARE REGISTERED IN YOUR NAME and you decide to
participate, you must follow the instructions in paragraphs (3)
and (4) below.
- IF YOUR SHARES ARE HELD BY A BROKER OR BANK FOR YOUR ACCOUNT and
you decide to participate, you must contact your broker or bank
and advise them to execute your instructions on your behalf.
(3) COMPLETE THE APPLICABLE LETTER OF TRANSMITTAL AND PROXY. You must follow
these instructions to complete the Letter of Transmittal and Proxy.
(a) TENDER OFFER AND PROXY. If you wish to tender your shares pursuant to
the Tender Offer, you must vote FOR Proposal 1.
- Indicate your vote by an (X) on page 3 of the Letter of
Transmittal and Proxy. Sign and date the box entitled
"Signature(s) of Owner(s)" and print your capacity, address
and daytime telephone number.
- Complete the box entitled "Description of Shares Tendered"
on page 4 of the Letter of Transmittal and Proxy.
- Only complete the "Guarantee of Signature" section if the
signatures are different from the registration on the face
of the certificate.
- Complete, sign and date the box entitled "Substitute Form
W-9."
- The following sections of the Letter of Transmittal and
Proxy should be completed only if applicable:
- Notice of Guaranteed Delivery: If you cannot deliver
your preferred stock certificate(s) to the Depositary
before October 14, 1998, a broker must guarantee
delivery of your shares. The broker must complete the
application portion of page 4 of the Letter of
Transmittal and Proxy and submit the separate document
entitled "Notice of Guaranteed Delivery."
1
<PAGE> 171
- Soliciting Dealer: If your tender has been solicited by
a Soliciting Dealer, please complete the box entitled
"Solicited Tenders" on page 10 of the Letter of
Transmittal and Proxy.
- Special Payment and Special Delivery Instructions: If
you would like the check for the purchase price of
shares purchased pursuant to the Tender Offer or the
certificates for shares not purchased to be issued in
the name of someone other than the current holder or to
be mailed to someone other than the current holder, or
to the current holder at an address other than that
shown on the current certificate, please complete the
boxes on page 9 entitled "Special Payment Instructions"
and/or "Special Delivery Instructions" in the Letter of
Transmittal and Proxy. To do either of these, you must
have your signature guaranteed by an eligible
institution. (See Instructions 1 and 5 on the Letter of
Transmittal and Proxy with respect to guarantee of
signature by an eligible institution).
(b) PROXY ONLY. If you choose only to vote the proxy and will not tender
your shares pursuant to the Tender Offer, please follow these
instructions:
- Indicate your vote by an (X) on page 3 of the Letter of
Transmittal and Proxy. Sign and date the box entitled
"Signature(s) of Owner(s)" and print your capacity, address
and daytime telephone number.
- Complete, sign and date the box entitled "Substitute Form
W-9."
- The following sections of the Letter of Transmittal and
Proxy should be completed only if applicable:
- If you would like the Special Cash Payment to be issued
to or mailed to someone other than the current holder,
please complete the boxes entitled "Special Payment
Instructions" and/or "Special Delivery Instructions" on
page 9 of the Letter of Transmittal and Proxy. To do
either of these, you must have your signature
guaranteed by an eligible institution. (See
Instructions 1 and 5 on the Letter of Transmittal and
Proxy with respect to guarantee of signatures by an
eligible institution.)
(4) MAIL UNSIGNED PREFERRED STOCK CERTIFICATES AND SIGNED LETTER OF TRANSMITTAL
AND PROXY TO THE DEPOSITARY. Send the applicable Letter of Transmittal and
Proxy to The Bank of New York, as Depositary, at the address shown on the
Letter of Transmittal and Proxy. If you own more than one series of
preferred stock, you must complete the specific Letter of Transmittal and
Proxy that relates to each individual series. Use of registered or
certified mail is recommended. PLEASE NOTE: If you are not tendering, DO
NOT send in your certificates.
IF YOU HAVE ANY QUESTIONS, HAVE NOT RECEIVED THE APPLICABLE LETTER(S)
OF TRANSMITTAL AND PROXY OR OTHER DOCUMENTS PERTAINING TO THE TENDER OFFER, OR
NEED ASSISTANCE IN COMPLETING THE APPLICABLE FORMS, PLEASE CONTACT THE
INFORMATION AGENT: D.F. KING & CO., INC. AT (800) 431-9629 (TOLL-FREE).
2
<PAGE> 172
Exhibit 99(a)(11)
URGENT NOTICE
______________ __, 1998
Dear Preferred Shareholder:
The Special Meeting of Shareholders of Atlantic City Electric Company is
scheduled to be held on October 14, 1998, and we have attempted to contact you
by telephone to discuss the important agenda. To date we have been unable to
reach you by phone.
It is extremely important that we discuss this critical Special Meeting and the
events surrounding it. We would appreciate it if you would take a moment and
please call during business hours our Information Agent, D.F. King & Co., Inc.
at (800) 431-9629 (toll free).
Thank you for your interest in the affairs of Atlantic City Electric Company. I
appreciate your cooperation.
Sincerely,
Howard E. Cosgrove
Chairman and Chief
Executive Officer
1
<PAGE> 173
Exhibit 99(a)(12)
ATLANTIC CITY ELECTRIC COMPANY
PROXY FORM FOR DTC PARTICIPANTS ONLY
The undersigned hereby appoints Howard E. Cosgrove, Barbara S. Graham
and Louis M. Walters, or any of them as proxies, each with the power to appoint
his or her substitute, and hereby authorizes them to represent and to vote as
designated hereunder and in their discretion with respect to any other business
properly brought before the Special Meeting all the shares of preferred stock of
the company which the undersigned is entitled to vote at the Special Meeting or
any adjustments or postponements thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE
COMPANY. The proxy contained herein, when properly executed, will be voted in
the manner directed herein by the undersigned shareholders. If no direction is
made, the proxy will be voted FOR Item 1. An abstention is the equivalent of a
vote AGAINST the Proposed Amendment.
Indicate your vote by an (X). The Board of Directors recommends voting
FOR Item 1.
ITEM 1.
To remove from the Company's charter, Paragraph (7)(B)(c) of Article
III, a provision restricting the amount of securities representing unsecured
indebtedness issuable by the Company.
( ) FOR ( ) AGAINST ( ) ABSTAIN
SHARES REPRESENTED BY ALL PROPERLY EXECUTED PROXIES WILL BE VOTED IN
ACCORDANCE WITH INSTRUCTIONS APPEARING ON THIS PROXY IN THE ABSENCE OF SPECIFIC
INSTRUCTIONS. PROXIES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF
THE BOARD OF DIRECTORS, AND IN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE SPECIAL METING.
CUSIP # Series FOR AGAINST ABSTAIN
048303200 4%
048303770 4.10%
048303762 4.35%
048303507 4.35% 2nd Series
048303309 4.75%
048303788 5%
NOTICE: THE ABOVE BANK OR BROKER HEREBY CERTIFIES THAT IT HAS NOT GIVEN AND WILL
NOT GIVE INSTITUTIONS TO TENDER ANY SHARES LISTED ABOVE THROUGH THE DTC ATOP
SYSTEM.
1
<PAGE> 174
ATTENTION ALL DTC PARTICIPANTS: PLEASE USE THIS PROXY FORM FOR VOTING ON ANY AND
ALL ISSUES. DO NOT USE THE BENEFICIAL OWNER PROXY FORM.
Date:
Date: ................................. Authorized Signature:.................
DTC Participant Name: ................. Print Name:...........................
DTC Participant Number: ............... Telephone Number:.....................
Number of Firm:........................
Address:...............................
Medallion Stamp:
2
<PAGE> 175
Exhibit 99(d)
September 8, 1998
Conectiv
800 King Street
Wilmington, Delaware 19899
Atlantic City Electric Company
800 King Street
Wilmington, Delaware 19899
Ladies and Gentlemen:
We have acted as special counsel to Conectiv ("Conectiv") and Atlantic
City Electric Company ("ACE") in connection with the Company's tender offer for
any and all of the outstanding shares of certain shares of cumulative preferred
stock (as listed on Schedule A attached hereto) of ACE (the "Preferred").
We have examined (i) the Offer to Purchase and Proxy Statement for the
Preferred dated September 8, 1998 (the "Offer to Purchase and Proxy Statement"),
which incorporated by reference the annual reports on Form 10-K of Conectiv and
ACE for the fiscal year ended December 31, 1997, the Quarterly Reports on Form
10-Q of Conectiv and ACE for the interim periods ended March 31, 1998 and June
30, 1998, and the Current Reports on Form 8-K of Conectiv, dated March 6, 1998,
March 9, 1998, April 23, 1998 and August 3, 1998 and ACE, dated January 6, 1998,
February 27, 1998, March 3, 1998 and March 5, 1998 (the "OPPS Exchange Act
Documents"), each as filed under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), (ii) the Schedule 13E-4 for the Preferred, dated September
8, 1998, filed by the Company under the Exchange Act, including the related
exhibits thereto, which Schedule 13E-4 incorporates by reference the OPPS
Exchange Act Documents and the Quarterly Reports on Form 10-Q of ACE for the
quarterly periods ended March 31, 1998 and June 30, 1998, each as filed under
the Exchange Act and (iii) the Letters of Transmittal and Proxy for the
Preferred. In addition, we have examined, and have relied as to matters of fact
upon, the originals or copies, certified or otherwise identified to our
satisfaction, of such corporate records, agreements, documents and other
instruments and such certificates or comparable documents of public officials
and of officers and representatives of Conectiv and ACE, and have made such
other and further investigations as we have deemed relevant and necessary as a
basis for the opinion hereinafter set forth.
In such examination, we have assumed the genuineness of all signatures,
the legal capacity of all natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents of all documents submitted to us as drafts or as certified, conformed
photostatic or facsimile copies, and the authenticity of originals of such
latter documents.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we hereby advise you that the statements made in the
Offer to Purchase and Proxy Statement under the caption "Certain Federal Income
Tax Consequences," insofar as they purport to constitute summaries of matters of
United States federal income tax law and regulations or legal conclusions with
respect thereto, constitute accurate summaries of the matters described therein
in all material respects.
We are members of the Bar of the State of New York and we do not
express any opinion herein concerning any law other than the federal income tax
law of the United States.
Very truly yours,
SIMPSON THACHER & BARTLETT
1
<PAGE> 176
SCHEDULE A
LIST OF THE SHARES
Atlantic City Electric Company
1. Cumulative Preferred Stock, 4% Series ($100 par value)
2. Cumulative Preferred Stock, 4.10% Series ($100 par value)
3. Cumulative Preferred Stock, 4.35% Series ($100 par value)
4. Cumulative Preferred Stock, 4.35% 2nd Series ($100 par value)
5. Cumulative Preferred Stock, 4.75% Series ($100 par value)
6. Cumulative Preferred Stock, 5% Series ($100 par value)
2
<PAGE> 177
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SUMMARY ....................................................................................................... 4
TERMS OF THE OFFER.............................................................................................. 7
NUMBER OF SHARES, PURCHASE PRICES; EXPIRATION DATE; DIVIDENDS.......................................... 7
PROCEDURE FOR TENDERING SHARES......................................................................... 8
WITHDRAWAL RIGHTS...................................................................................... 10
ACCEPTANCE OF SHARES FOR PAYMENT AND PAYMENT OF PURCHASE PRICE AND
DIVIDENDS..................................................................................... 11
CERTAIN CONDITIONS OF THE OFFER........................................................................ 11
EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS.................................................... 13
PROPOSED AMENDMENT AND PROXY SOLICITATION....................................................................... 14
INTRODUCTION........................................................................................... 14
VOTING SHARES.......................................................................................... 14
VOTING REQUIREMENTS AND PROCEDURES..................................................................... 14
PROXIES .............................................................................................. 14
SPECIAL CASH PAYMENTS.................................................................................. 15
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT......................................... 16
BUSINESS TO COME BEFORE THE SPECIAL MEETING............................................................ 16
EXPLANATION OF THE PROPOSED AMENDMENT.................................................................. 16
REASONS FOR THE PROPOSED AMENDMENT..................................................................... 17
INDEPENDENT PUBLIC ACCOUNTANTS......................................................................... 17
PRICE RANGE OF SHARES; DIVIDENDS................................................................................ 17
PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER.............................................................. 19
CERTAIN FEDERAL INCOME TAX CONSEQUENCES......................................................................... 21
SOURCE AND AMOUNT OF FUNDS...................................................................................... 22
TRANSACTIONS AND AGREEMENTS CONCERNING THE SHARES............................................................... 22
FEES AND EXPENSES PAID TO DEALERS............................................................................... 23
CERTAIN INFORMATION REGARDING CONECTIV AND THE COMPANY.......................................................... 24
SUMMARY OF FINANCIAL INFORMATION................................................................................ 24
MISCELLANEOUS................................................................................................... 26
</TABLE>
3
<PAGE> 1
Exhibit B-2
DRAFT
ATLANTIC CITY ELECTRIC COMPANY
WILMINGTON, DELAWARE
--------------------------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 14, 1998
NOTICE IS HEREBY GIVEN that a special meeting of the shareholders of
Atlantic City Electric Company will be held at Christiana Conference Center,
4100 South Wakefield Drive, Newark, Delaware, on October 14, 1998 at 4:00 p.m.,
Eastern time, to consider and act on the following proposal, as more fully
described in the attached Proxy Statement:
PROPOSAL: To remove from the Company's Charter Paragraph (7)(B)(c) of
Article III, a provision restricting the amount of securities representing
unsecured indebtedness issuable by the Company;
and for the purpose of transacting any and all business in connection with the
foregoing and any other business that may properly come before said meeting or
any adjournment or adjournments thereof.
Only shareholders of record at the close of business on September 4,
1998 will be entitled to notice of and to vote at said meeting or any
adjournment or adjournments thereof.
For the reasons set forth in the attached Proxy Statement, you are
urged to vote FOR the proposal.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
PLEASE MARK, DATE, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED
ENVELOPE. In the event you are able to attend the meeting, you may revoke the
Proxy by voting your shares in person.
BY ORDER OF THE BOARD OF DIRECTORS
Moira K. Donoghue
Secretary
Wilmington, Delaware
September 8, 1998
<PAGE> 2
ATLANTIC CITY ELECTRIC COMPANY
WILMINGTON, DELAWARE
--------------------------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 14, 1998
--------------------------------------------
PROXY STATEMENT
OUTSTANDING CUSIP
TITLE OF SERIES OF PREFERRED SHARES NUMBER
- ---------------------------- ----------- ------
$7.80 No Par Preferred Stock 239,500 048303861
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Atlantic City Electric Company (the "Company") from
the holders (the "Preferred Shareholders") of the $7.80 No Par Preferred Stock
(the "Preferred Stock"). Such proxies are to be used at the Special Meeting of
Shareholders of the Company to be held at Christiana Conference Center, 4100
South Wakefield Drive, Newark, Delaware, on October 14, 1998 at 4:00 p.m.,
Eastern time, or any adjournment or postponement of such meeting (the "Special
Meeting"). IF THE PROPOSED AMENDMENT (AS DEFINED HEREIN) IS APPROVED AND ADOPTED
BY THE COMPANY'S SHAREHOLDERS, THE COMPANY WILL MAKE A SPECIAL CASH PAYMENT (THE
"SPECIAL CASH PAYMENT") EQUAL TO $1.00 FOR EACH SHARE PROPERLY VOTED IN FAVOR OF
THE PROPOSED AMENDMENT. If a Preferred Shareholder votes against the Proposed
Amendment or abstains, such Preferred Shareholder shall not be entitled to the
Special Cash Payment (regardless of whether the Proposed Amendment is approved
and adopted).
The solicitation of proxies has been approved by the Securities and
Exchange Commission (the "Commission") under the Public Utility Holding Company
Act of 1935, as amended (the "Holding Company Act"). This Proxy Statement is
first being mailed on or about September 8, 1998. The record date with respect
to the Preferred Stock is September 4, 1998.
The principal executive offices of the Company are located at 800 King
Street, Wilmington, Delaware 19899. The telephone number is (302) 429-3931.
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS VOTING FOR THE PROPOSED
AMENDMENT.
<PAGE> 3
2
SUMMARY
The Board of Directors of the Company is soliciting proxies from all
holders of the shares of each series of the Company's outstanding preferred
stock (the "Shares") for use at the Special Meeting of Shareholders of the
Company. The proposal to be presented at the Special Meeting, if adopted, is
intended to provide the Company with the necessary flexibility to meet the
demands of an increasingly competitive electric utility industry. See "Reasons
for the Proposed Amendment."
The Special Meeting is being held to consider an amendment to the
Company's charter (the "Charter") which would eliminate the provision
restricting the ability of the Company to issue unsecured indebtedness. If the
Proposed Amendment is approved by the shareholders, such restriction contained
in the Charter will be eliminated with respect to the outstanding Shares.
If the Proposed Amendment is approved and adopted by the Company's
shareholders, the Company will make a Special Cash Payment equal to $1.00 for
each Share properly voted in favor of the Proposed Amendment.
Questions or requests for assistance may be directed to D.F. King &
Co., Inc. (the "Information Agent") at (800) 431-9629 (toll free) or banks and
brokers call (212) 269-5550 (collect). Requests for additional copies of this
Proxy Statement, the proxy or other proxy materials may be directed to the
Information Agent, and such copies will be furnished promptly at the Company's
expense.
The foregoing summary is qualified in its entirety by, and should be
read in conjunction with, the more detailed information appearing elsewhere in
this Proxy Statement.
EXECUTION AND REVOCATION OF PROXY
THE ENCLOSED PROXY IS SOLICITED BY THE COMPANY'S BOARD, WHICH
RECOMMENDS VOTING FOR THE PROPOSED AMENDMENT. ALL SHARES OF THE COMPANY'S COMMON
STOCK WILL BE VOTED IN FAVOR OF THE PROPOSED AMENDMENT. Preferred Shareholders
voting at the Special Meeting by proxy must use the enclosed Proxy. Shares of
the Company's outstanding preferred stock represented by properly executed
proxies received at or prior to the Special Meeting will be voted in accordance
with the instructions thereon. If no instructions are indicated, duly executed
proxies will be voted in accordance with the recommendation of the Board. It is
not anticipated that any other matters will be brought before the Special
Meeting. However, the enclosed proxy gives discretionary authority to the Proxy
holders named therein should any other matters be presented at the Special
Meeting and it is the intention of the proxy holders to act on any other matters
in their discretion.
Execution of a proxy will not prevent a shareholder from attending the
Special Meeting and voting in person. Any shareholder giving a proxy may revoke
it at any time before it is voted by delivering to the Secretary of the Company
written notice of revocation
<PAGE> 4
3
bearing a later date than the proxy, by delivering a duly executed proxy bearing
a later date, or by voting in person by ballot at the Special Meeting.
SPECIAL CASH PAYMENTS
Subject to the terms and conditions set forth in this Proxy Statement,
if (but only if) the Proposed Amendment is approved and adopted by the
shareholders of the Company, the Company will make a Special Cash Payment to
each Preferred Shareholder who voted in favor of the Proposed Amendment, in
person by ballot or by proxy, at the Special Meeting in the amount equal to
$1.00 for each Share held by such Preferred Shareholder which is so voted. The
Company has been advised that there is no controlling precedent under state law
as to the permissibility of its making the Special Cash Payment. Although, as a
result, there can be no assurance as to how a court would rule on the issue, the
Company believes that the Offer (as defined herein) is fair to Preferred
Shareholders and has determined to make the Special Cash Payment. SPECIAL CASH
PAYMENTS WILL BE MADE TO PREFERRED SHAREHOLDERS AS OF THE RECORD DATE ONLY IN
RESPECT OF EACH SHARE WHICH IS VOTED FOR THE ADOPTION OF THE PROPOSED AMENDMENT.
If a Preferred Shareholder votes against the Proposed Amendment or abstains,
such Preferred Shareholder shall not be entitled to the Special Cash Payment
(regardless of whether the Proposed Amendment is approved and adopted). If the
Proposed Amendment is approved and adopted, Special Cash Payments will be paid
out of the Company's general funds, promptly after the Proposed Amendment shall
have become effective. However, no accrued interest will be paid on the Special
Cash Payments regardless of any delay in making such payments.
Only holders of record of the Company's voting securities at the close
of business on the Record Date or persons obtaining a proxy from the holders of
record on the Record Date will be entitled to vote in person or by proxy at the
Special Meeting. Any beneficial holder of Shares who is not the registered
holder of such Shares as of the Record Date (as would be the case for any
beneficial holder whose Shares are registered in the name of such holder's
broker, dealer, commercial bank, trust company or other nominee) must arrange
with the record Preferred Shareholder to execute and deliver a proxy form on
such beneficial owner's behalf. If a beneficial holder of Shares intends to
attend the Special Meeting and vote in person, such beneficial holder must
obtain a legal proxy form from his or her broker, dealer, commercial bank, trust
company or other nominee. The Company will make Special Cash Payments only to
Preferred Shareholders who are registered holders as of the Record Date. Any
beneficial owner of Shares who is not the registered holder of such Shares as of
the Record Date must arrange with the record Preferred Shareholder to receive
his proportionate interest in the Special Cash Payments made to such record
Preferred Shareholder. The Company will have no responsibility or liability for
any aspect of the records relating to or payments made on account of any
beneficial owner's interest in the Special Cash Payments made to a record
Preferred Shareholder.
<PAGE> 5
4
PROPOSED AMENDMENT
BUSINESS TO COME BEFORE THE SPECIAL MEETING
The following proposed amendment (the "Proposed Amendment") to the
Charter is the only item of business expected to be presented at the Special
Meeting.
To remove in its entirety Paragraph (7)(B)(c) of Article III of the
Charter, a provision restricting the amount of securities representing unsecured
indebtedness issuable by the Company.
THE FOLLOWING STATEMENTS ARE SUMMARIES OF THE SUBSTANCE OR GENERAL
EFFECT OF PROVISIONS OF THE CHARTER, AND ARE QUALIFIED IN THEIR ENTIRETY BY THE
CHARTER AND PARAGRAPH (7)(B)(c) OF ARTICLE III THEREIN (AS DESCRIBED BELOW).
EXPLANATION OF THE PROPOSED AMENDMENT
Paragraph (7)(B)(c) of Article III of the Charter currently provides
that, so long as any shares of the Company's preferred stock are outstanding,
without the affirmative vote of the holders of at least a majority of the total
voting power of its outstanding shares of preferred stock, the Company shall not
issue or assume any securities representing unsecured indebtedness (other than
for the purpose of refunding its outstanding unsecured securities or redeeming
or otherwise retiring outstanding shares of its preferred stock) if, immediately
after such issue or assumption, the total outstanding principal amount of all
securities representing unsecured indebtedness of the Company would exceed 20%
of the aggregate of all existing secured indebtedness of the Company and the
capital and surplus of the Company as stated on the Company's books (the "Debt
Limitation Provision").
The Proposed Amendment, if adopted, would eliminate from the Charter in
its entirety the Debt Limitation Provision. Unless otherwise defined,
capitalized terms used herein are used as defined in the Charter.
Paragraph (7)(B)(c) of Article III of the Charter states:
"(B) So long as any shares of the Cumulative Preferred Stock of any
series are outstanding, the Corporation shall not, without the consent
(given by vote at a meeting called for the purpose) of the holders of a
majority of the total number of shares of the Cumulative Preferred
Stock then outstanding:
(c) Issue any unsecured notes, debentures or other securities
representing unsecured indebtedness, or assume any such unsecured
securities, for purposes other than the refunding of outstanding
unsecured securities theretofore issued or assumed by the Corporation
or the redemption or other retirement of outstanding shares of one or
more series of the Cumulative Preferred Stock, if, immediately after
such issue or assumption, the total
<PAGE> 6
5
principal amount of all unsecured notes, debentures or other securities
representing unsecured indebtedness issued or assumed by the
Corporation and then outstanding (including unsecured securities then
to be issued or assumed) would exceed twenty per centum (20%) of the
aggregate of (i) the total principal amount of all bonds or other
securities representing secured indebtedness issued or assumed by the
Corporation and then to be outstanding, and (ii) the capital and
surplus of the Corporation as then to be stated on the books of account
of the Corporation."
REASONS FOR THE PROPOSED AMENDMENT
The electric utility industry has become, and will continue to be,
increasingly competitive as the result of various factors, including regulatory
and technological developments. Various federal and state regulatory initiatives
designed to promote wholesale and retail competition include, among other
things, proposals that would allow customers to choose their electricity
provider. As these competitive initiatives materialize, the structure of the
utility industry could radically change. The Company believes that having the
flexibility to respond to developments in the industry will be crucial to its
success in the new competitive marketplace.
The Company believes that adoption of the Proposed Amendment is
important to creating the necessary flexibility to respond to any industry
developments.
The restriction that would be eliminated by the Proposed Amendment
generally does not burden the industry's new competitors (power marketers,
independent power producers, exempt wholesale generators and owners of
cogeneration facilities) nor even other public utility companies.
Management considers that elimination of the Debt Limitation Provision
is crucial to the Company's financial flexibility and its ability to effect
future capital cost reductions. The deletion of this provision from the Charter
will allow the Company to utilize more fully various unsecured debt alternatives
and thus improve its ability to take full advantage of changing conditions in
the capital markets. The additional flexibility will, for example, permit the
Company to issue long-term debt when, because of mortgage coverage restrictions
or other reasons, it may be unattractive or not possible to issue any additional
first mortgage bonds. In addition, elimination of the Debt Limitation Provision
will afford the Company greater flexibility in the issuance of short-term debt
to meet seasonal cash requirements with what is usually the least expensive form
of capital.
CERTAIN EFFECTS OF THE PROPOSED AMENDMENT
If the Proposed Amendment becomes effective, preferred shareholders
will no longer be entitled to the benefits of the Charter provision limiting the
amount of unsecured indebtedness the Company may issue, which will have been
deleted by the Proposed Amendment. As discussed above, such provision places
restrictions on the Company's ability to issue or assume unsecured indebtedness.
Although the Company's debt instruments may
<PAGE> 7
6
contain certain restrictions on the Company's ability to issue or assume debt,
any such restrictions may be waived and the increased flexibility afforded the
Company by the deletion of the Debt Limitation Provision may permit the Company
to take certain actions that may increase the credit risks with respect to the
Company, adversely affecting the market price and credit rating of the shares of
preferred stock, or otherwise be materially adverse to the interests of the
preferred shareholders. In addition, to the extent that the Company elects to
issue additional unsecured debt, including trust preferred securities, the
preferred shareholders' relative position in the Company's capital structure
could be perceived to decline, which in turn could adversely affect the market
price and credit rating of the shares of preferred stock.
VOTING SHARES
With respect to the Company's Preferred Stock, September 4, 1998 (the
"Record Date") has been fixed as the record date for the determination of
shareholders entitled to notice of and to vote at the Special Meeting. A
separate Offer to Purchase and Proxy Statement is being mailed to the holders of
the 4% Series, the 4.10% Series, the 4.35% Series, the 4.35% 2nd Series, the
4.75% Series and the 5% Series of the Company's cumulative preferred stock
pursuant to which Conectiv, the parent of the Company, is making a tender offer
(the "Offer") for such series and the Company is soliciting proxies in
connection with the Proposed Amendment.
The Company's Charter authorizes the issuance of 25,000,000 shares of
common stock, $3 par value, of which 18,320,937 shares are outstanding. All of
such shares are owned by Conectiv.
The Company's Charter also authorizes the issuance of 799,979 shares of
Cumulative Preferred Stock, $100 par value, 2,000,000 shares of No Par Preferred
Stock and 3,000,000 shares of Preference Stock, without par value, of which
300,000, 239,500 and 0 shares, respectively, are outstanding on the Record Date.
Such shares are publicly held and vary from each other with respect to dividend
rates, redemption prices and amounts payable on liquidation. All outstanding
shares of the Company's preferred stock are entitled to vote on the Proposed
Amendment as a single class.
Pursuant to Section 13(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), a beneficial owner of a security is any person who
directly or indirectly has or shares voting or investment power over such
security. No person or group is known by management of the Company to be the
beneficial owner of more than 5% of the Company's preferred stock as of
September 4, 1998.
Officers and directors of the Company as a group owned, as of September
4, 1998, less than 1% of the total number of the Company's preferred stock and
of the common stock of Conectiv.
<PAGE> 8
7
VOTING REQUIREMENTS AND PROCEDURES
Adoption of the Proposed Amendment requires the affirmative vote of the
holders of (i) at least two-thirds of the shares of the Company then outstanding
and entitled to vote (i.e., the common stock and the preferred stock) and (ii)
at least two-thirds of the total number of shares of the Company's preferred
stock then outstanding (counting shares as described above). Abstentions and
broker non-votes will have the same effect as votes against the Proposed
Amendment. CONECTIV, THE OWNER OF ALL OF THE OUTSTANDING SHARES OF COMMON STOCK
OF THE COMPANY, HAS ADVISED THE COMPANY THAT IT INTENDS TO VOTE ALL OF THE
OUTSTANDING SHARES OF COMMON STOCK OF THE COMPANY IN FAVOR OF THE PROPOSED
AMENDMENT.
Votes at the Special Meeting will be tabulated preliminarily by The
Bank of New York, as Depositary for shares tendered pursuant to the Offer, and
D.F. King & Co., Inc., the Information Agent. Inspectors of Election, duly
appointed by the presiding officer of the Special Meeting, will definitively
count and tabulate the votes and determine and announce the results at the
Special Meeting. The Company has no established procedure for confidential
voting. There are no rights of appraisal in connection with the Proposed
Amendment.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following summary describes certain United States federal income
tax considerations with respect to the receipt of Special Cash Payments in
connection with the approval and adoption of the Proposed Amendment. This
summary is based on the Internal Revenue Code of 1986, as amended to the date
hereof (the "Code"), administrative pronouncements, judicial decisions and
existing and proposed Treasury Regulations, changes to any of which subsequent
to the date of the Proxy Statement may adversely affect the tax consequences
described herein, possibly on a retroactive basis. This summary is addressed to
Preferred Shareholders who hold Shares as capital assets within the meaning of
Section 1221 of the Code. This summary does not discuss all of the tax
consequences that may be relevant to a Preferred Shareholder in light of such
Preferred Shareholder's particular circumstances or to Preferred Shareholders
subject to special rules (including certain financial institutions, tax-exempt
organization, insurance companies, dealers in securities or currencies,
Preferred Shareholders who acquired their Shares pursuant to the exercise of
stock options or other compensation arrangements with the Company or Preferred
Shareholders holding the Shares as part of a conversion transaction, as part of
a hedge or hedging transaction, or as a position in a straddle for tax
purposes). PREFERRED SHAREHOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH REGARD
TO THE APPLICATION OF THE UNITED STATES FEDERAL INCOME TAX LAWS TO THEIR
PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCE ARISING UNDER THE LAWS OF
ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION.
As used herein, the term "United States Preferred Shareholder" means a
beneficial owner of a Share that is for United States federal income tax
purposes (i) a citizen or resident of the United States or any political
subdivision thereof; (ii) a corporation or
<PAGE> 9
8
partnership created or organized in or under the laws of the United States or of
any political subdivision thereof; (iii) an estate the income of which is
subject to United States federal income taxation regardless of its source; or
(iv) a trust if a court within the United States is able to exercise primary
supervision over the administration of such trust and one or more United States
persons have the authority to control all substantial decisions of such trust.
As used herein, the term "Non-United States Preferred Shareholder" means an
owner of a Share that is not a United States Preferred Shareholder.
SPECIAL CASH PAYMENTS
United States Preferred Shareholders. There is no direct authority
concerning the federal income tax consequences of the receipt of Special Cash
Payments. The Company will, for information reporting purposes, treat Special
Cash Payments as ordinary, non-dividend income to recipient United States
Preferred Shareholders.
Non-United States Preferred Shareholders. The Company will treat
Special Cash Payments paid to Non-United States Preferred Shareholders as
subject to withholding of United States federal income tax at a rate of 30%.
However, a Special Cash Payment that is effectively connected with the conduct
of a trade or business by a Non-United States Preferred Shareholder within the
United States will not be subject to such withholding tax (provided such
Non-United States Preferred Shareholder provides two originals of Internal
Revenue Service ("IRS") Form 4224 stating that such Special Cash Payments are so
effectively connected), but instead will be subject to United States federal
income tax on a net income basis at applicable graduated individuals or
corporate rates. Any such effectively connected Special Cash Payments received
by a foreign corporation may be subject to an additional "branch profits tax" at
a 30% rate (or such lower rate as may be specified by an applicable income tax
treaty). A Non-United States Preferred Shareholder eligible for a reduced rate
of United States withholding tax pursuant to an income tax treaty may obtain a
refund of any excess amounts withheld by filing an appropriate claim for refund
with the IRS.
BACKUP WITHHOLDING
ANY UNITED STATES PREFERRED SHAREHOLDER WHO VOTES IN FAVOR OF THE
PROPOSED AMENDMENT AND WHO FAILS TO COMPLETE AND SIGN THE SUBSTITUTE FORM W-9
THAT IS INCLUDED IN THE PROXY (OR, IN THE CASE OF A NON-UNITED STATES PREFERRED
SHAREHOLDER, FORM W-8 OBTAINABLE FROM THE INFORMATION AGENT) MAY BE SUBJECT TO A
REQUIRED FEDERAL INCOME TAX BACKUP WITHHOLDING OF 31% OF THE SPECIAL CASH
PAYMENT. To prevent United States federal income tax backup withholding with
respect to the Special Cash Payment, a United States Preferred Shareholder must
provide the Information Agent with the Preferred Shareholder's correct Taxpayer
Identification Number ("TIN") and certify that the Preferred Shareholder is not
subject to backup withholding of federal income tax by completing the Substitute
Form W-9 included in the Proxy. Certain Preferred Shareholders (including, among
others, all corporations and Non-United States Preferred Shareholders) are
exempt from backup withholding. For a corporate United States Preferred
Shareholder to qualify for such exemption, such Preferred Shareholder must
provide the Information Agent with a properly completed and executed Substitute
Form W-9 attesting to its exempt status. In order for a Non-United States
<PAGE> 10
9
Preferred Shareholder to qualify as an exempt recipient, the foreign holder must
submit a Form W-8, Certificate of Foreign Status, signed under penalties of
perjury, attesting to that Preferred Shareholder's exempt status. A copy of the
Form W-8 may be obtained from the Information Agent. Any Special Cash Payments
paid to Non-United States Preferred Shareholders that are subject to the 31%
backup withholding, will not be subject to the 30% withholding tax discussed
above under "Special Cash Payments -- Non-United States Preferred Shareholders."
The amount of any backup withholding from a payment to a Preferred
Shareholder will be allowed as a credit against such Preferred Shareholder's
United States federal income tax liability and may entitle such Preferred
Shareholder to a refund, provided that the required information is furnished to
the IRS.
SOLICITATION OF PROXIES
The Company will bear the cost of the solicitation of proxies. The
Company has engaged D.F. King & Co., Inc. to act as Information Agent in
connection with the solicitation of proxies for a fee of $12,500, plus unit fees
per preferred shareholder contacted, plus reimbursement of reasonable
out-of-pocket expenses.
Proxies will be solicited by mail or by telephone. In addition,
officers and employees of the company or its affiliates may also solicit proxies
personally or by telephone; such persons will receive no additional compensation
for these services. The Information Agent has not been retained to make, and
will not make, solicitations or recommendations, other than conveying
information related to the recommendations of the Board, in connection with the
Proposed Amendment.
The Company has requested that brokerage houses and other custodians,
nominees and fiduciaries forward solicitation materials to the beneficial owners
of shares of the Company's outstanding preferred stock held of record by such
persons and will reimburse such brokers and other fiduciaries for their
reasonable out-of-pocket expenses incurred in connection therewith.
The solicitation of proxies has been approved by the Commission under
the Holding Company Act. An application has been filed with the Commission under
the Holding Company Act requesting approval of the Proposed Amendment.
WHAT NUMBER TO GIVE THE DEPOSITARY
A Preferred Shareholder is required to provide The Bank of New York, as
Depositary, with (i) in the case of a United States Preferred Shareholder, a
Taxpayer Identification Number ("TIN") and a certification on Substitute Form
W-9 that the IRS has not notified such shareholder that he is subject to backup
withholding, or (ii) in the case of a Non-United States Preferred Shareholder, a
properly completed Form W-8. Failure to provide the information on either
Substitute Form W-9 or Form W-8 may subject the Preferred Shareholder to a $50
penalty imposed by the IRS and to 31% federal income tax backup
<PAGE> 11
10
withholding on the payment of the Special Cash Payment. The box in Part 2 of the
Substitute Form W-9 may be checked if the Preferred Shareholder has not been
issued a TIN and has applied for a number or intends to apply for a number in
the near future. If the box in Part 2 is checked and the Depositary is not
provided with a TIN by the time of payment, the Depositary will withhold 31% on
the payment of the Special Cash Payment thereafter until a TIN is provided to
the Depositary.
The TIN a United States Preferred Shareholder is required to give the
Depositary is the social security number or employer identification number of
the registered owner of the Shares. If the Shares are in more than one name or
are not in the name of the actual owner, consult the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional guidance on which number to report.
FINANCIAL AND OTHER INFORMATION
The Company is subject to the informational requirements of the
Exchange Act and in accordance therewith files reports and other information
with the Commission. Such reports and other information may be inspected and
copies at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549; 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511; and Seven World Trade Center, Suite 1300, New
York, New York 10048. Copies of such materials can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Commission maintains a Web site at
http://www.sec.gov containing reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission, including the Company. Reports, proxy materials and other
information about the Company are also available at the offices of the New York
Stock Exchange, 20 Broad Street, New York, New York 10005.
The financial statements of the Company and related information
included in its Annual Report on Form 10-K for the year ended December 31, 1996,
its Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997 and
June 30, 1997 and its Current Reports on Form 8-K dated January 6, 1998,
February 27, 1998, March 3, 1998 and March 5, 1998, each as filed with the
Commission, are hereby incorporated herein by reference. All documents
subsequently filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act after the date of this Proxy Statement and prior to the date
of the Special Meeting (or any adjournment thereof) shall be deemed to be
incorporated by reference in this Proxy Statement and to be a 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 Proxy Statement 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 Proxy
Statement.
<PAGE> 12
11
The Company will provide without charge to each person to whom a copy
of this Proxy Statement has been delivered, on the written or oral request of
any such person, a copy of any or all of its documents described above which
have been incorporated by reference in this Proxy Statement, other than exhibits
to such documents. Such requests should be directed to Stephanie M. Scola,
Manager of Capital Markets, Atlantic City Electric Company, 800 King Street,
Wilmington, Delaware 19899, telephone: (302) 429-3931. The information related
to the Company contained in this Proxy Statement does not purport to be
comprehensive and should be read together with the information contained in the
documents incorporated by reference.
Questions or requests for assistance in connection with this Proxy
Statement and the accompanying Proxy may be directed to D.F. King & Co., Inc. at
(800) 431-9269 (toll free) or banks and brokers call (212) 269-5550 (collect).
Requests for additional copies of this Proxy Statement, the Proxy or other proxy
materials may be directed to the Information Agent, and such copies will be
furnished promptly at the Company's expense.
INDEPENDENT PUBLIC ACCOUNTANTS
No representative of PricewaterhouseCoopers, LLP, the Company's
independent public accountants, is expected to be present at the Special Meeting
unless prior to the date of the Special Meeting the Corporate Secretary of the
Company has received written notice from a preferred shareholder addressed to
Moira K. Donoghue, Secretary, Atlantic City Electric Company, 800 King Street,
Wilmington, Delaware 19899 that such Preferred Shareholder will attend the
Special Meeting and wishes to ask questions of a representative of
PricewaterhouseCoopers, LLP.
DELIVERY OF PROXIES
Properly executed proxies must be received by mail at or prior to the
Special Meeting which will be held on October 14, 1998. Such proxies may be
mailed to The Bank of New York, Tender & Exchange Department, P.O. Box 11248,
Church Street Station, New York, New York 10286-1248. A return envelope is
enclosed for your convenience.
<PAGE> 13
12
OTHER MATTERS
The Board of Directors knows of no matter other than the foregoing to
come before the Special Meeting. If any other matters properly come before the
Special Meeting or any adjournment thereof, however, it is intended that the
persons designated as proxies in the enclosed proxy will vote on such matters in
their discretion.
BY ORDER OF THE BOARD OF DIRECTORS
Moira K. Donoghue
Secretary
Wilmington, Delaware
September 8, 1998
<PAGE> 14
13
Questions or requests for assistance may be directed to the Information
Agent at its telephone numbers and address listed below. Requests for additional
copies of the Proxy Statement and the accompanying Proxy may be directed to the
Information Agent, and such copies will be furnished promptly at the Company's
expense.
The Information Agent:
D.F. KING & CO., INC.
77 Water Street, 20th Floor
New York, New York 10005
(800) 431-9629 (toll free)
or
Banks and Brokers call
(212) 269-5550 (collect)
Properly executed Proxies must be received by mail at or prior to the
Special Meeting which will be held on October 14, 1998. Such Proxies should be
sent to:
THE BANK OF NEW YORK
Tender & Exchange Department
P.O. Box 11248
Church Street Station
New York, New York 10286-1248
<PAGE> 15
PROXY
PROXY
ATLANTIC CITY ELECTRIC COMPANY
The undersigned hereby appoints Howard E. Cosgrove, Barbara S. Graham
and Louis M. Walters, or any of them, as proxies, each with the power to appoint
his or her substitute, and hereby authorizes them to represent and to vote as
designated hereunder and in their discretion with respect to any other business
properly brought before the Special Meeting all the shares of preferred stock of
Atlantic City Electric Company (the "Company") which the undersigned is entitled
to vote at the Special Meeting of Shareholders to be held October 14, 1998, or
any adjournment(s) or postponement(s) thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE
COMPANY. This proxy, when properly executed, will be voted in the manner
directed herein by the undersigned shareholder(s). If no direction is made, the
proxy will be voted FOR item 1.
Indicate your vote an (X). The Board of Directors recommends voting FOR
item 1.
ITEM 1.
To remove from the Company's Charter Paragraph (7)(B)(c) of Article
III, a provision restricting the amount of securities representing unsecured
indebtedness issuable by the Company.
( ) FOR ( ) AGAINST ( ) ABSTAIN
SHARES REPRESENTED BY ALL PROPERLY EXECUTED PROXIES WILL BE VOTED IN
ACCORDANCE WITH INSTRUCTION APPEARING ON THIS PROXY. IN THE ABSENCE OF SPECIFIC
INSTRUCTIONS, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF
THE BOARD OF DIRECTORS, AND IN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE SPECIAL MEETING.
Please check box if you plan to attend the Special Meeting. ( ).
<PAGE> 16
2
SIGNATURE(S) OF OWNER(S)
X_______________________________________________________________________________
X_______________________________________________________________________________
Dated: ___________________________________________________________________, 1998
Name(s): _______________________________________________________________________
(PLEASE PRINT)
Capacity (full title): _________________________________________________________
Address: _______________________________________________________________________
________________________________________________________________________________
(INCLUDE ZIP CODE)
DAYTIME Area Code and Telephone No.: ___________________________________________
Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
stock-certificates or on a security position listing or by person(s) authorized
to become registered holder(s) by certificates and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, please set forth full title.
To be Filled Out if Applicable:
Name of Beneficial Holders______________________________________________________
Beneficial Holder's Address
and Daytime Area Code and Telephone No.: ______________________________________
Name of Broker Dealers _________________________________________________________
-- Account Numbers _______________________________________________________
_____________________________________________________
-- DTC No.: ______________________________________________________________
<PAGE> 17
3
PAYER'S NAME: ATLANTIC CITY ELECTRIC COMPANY
<TABLE>
<S> <C> <C>
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT ______________________________
FORM W-9 RIGHT AND CERTIFY BY SIGNING AND DATING BELOW SOCIAL SECURITY NUMBER
OR
------------------------------
EMPLOYER IDENTIFICATION TIN
PART 2 --
NAME (PLEASE PRINT) ______________________________
ADDRESS __________________________________________ AWAITING TIN ( )
CITY _____________________________ STATE _________
ZIP CODE _____________________________
DEPARTMENT OF THE PART 3 -- CERTIFICATION -- UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
TREASURY INTERNAL
REVENUE SERVICE
(1) THE NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER IDENTIFICATION NUMBER (OR A TIN HAS
NOT BEEN ISSUED TO ME BUT I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE A TIN OR
INTEND TO DO SO IN THE NEAR FUTURE), (2) 1 AM NOT SUBJECT TO BACKUP WITHHOLDING EITHER
BECAUSE I HAVE NOT BEEN NOTIFIED BY THE INTERNAL REVENUE SERVICE (THE "IRS") THAT I AM
SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF A FAILURE TO REPORT ALL INTEREST OR DIVIDENDS OR
THE IRS HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT TO BACKUP WITHHOLDING AND (3) ALL OTHER
INFORMATION PROVIDED ON THIS FORM IS TRUE, CORRECT AND COMPLETE.
SIGNATURE ___________________________________________________________________________________________
DATE _______________, 1998
YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE CURRENTLY
SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING INTEREST OR DIVIDENDS ON YOUR TAX
RETURN.
PAYER'S REQUEST NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF
TAXPAYER ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER OR PROXY SOLICITATION. PLEASE REVIEW
IDENTIFICATION THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ("TIN") NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING
AND CERTIFICATION CERTIFICATE IF YOU CHECKED THE BOX IN PART 2 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER:
I CERTIFY UNDER PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER HAS NOT BEEN
ISSUED TO ME AND EITHER (1) I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE A TAXPAYER
IDENTIFICATION NUMBER TO THE APPROPRIATE INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY
ADMINISTRATION OFFICE OR (2) 1 INTEND TO DO SO IN THE NEAR FUTURE. I UNDERSTAND THAT IF I DO
NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER BY THE TIME OF PAYMENT, 31% OF ALL PAYMENTS MADE
TO ME WILL BE WITHHELD UNTIL I PROVIDE A NUMBER.
SIGNATURE __________________________ DATE: __________________________, 1998
</TABLE>
SPECIAL PAYMENT INSTRUCTIONS
To be completed ONLY if the check for the Special Cash Payment
is to be issued in the name of someone other than the above signed.
Issue check to:
Name ___________________________________________________________________________
(PLEASE PRINT)
Address ________________________________________________________________________
________________________________________________________________________________
(INCLUDE ZIP CODE)
________________________________________________________________________________
(TAXPAYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER)
<PAGE> 18
4
SPECIAL DELIVERY INSTRUCTIONS
To be completed ONLY if the check for the Special Cash Payment is to be
mailed to someone other than the abovesigned or to the abovesigned at an address
other than that shown below the abovesigned's signature(s).
Mail check to:
Name ___________________________________________________________________________
(PLEASE PRINT)
Address ________________________________________________________________________
________________________________________________________________________________
(INCLUDE ZIP CODE)
<PAGE> 1
Exhibit F-1
September 8, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Conectiv
SEC File Number 70-9331
-----------------------
Dear Sir or Madam:
As General Counsel for Conectiv, a Delaware corporation ("Conectiv"), I
have acted as counsel to Conectiv in connection with the Application/Declaration
on Form U-1 (File No. 70-9331), as amended (hereinafter the "Declaration"),
filed with the Securities and Exchange Commission (the "Commission"), jointly by
Conectiv and Atlantic City Electric Company, a New Jersey corporation and a
direct operating utility subsidiary of Conectiv ("ACE").
The Declaration seeks authorization under the Public Utility Holding
Company Act of 1935, as amended (the "Act") (i) for ACE to solicit proxies from
the holders of its outstanding shares of preferred stock; (ii) for ACE to amend
its charter; (iii) for Conectiv to make an offer to the holders of certain
series of ACE's outstanding preferred stock to acquire such shares for cash; and
(iv) for Conectiv to sell to ACE any preferred stock so acquired at Conectiv's
purchase price, plus expenses (the "Proposed Transactions").
In connection with this opinion, I, or attorneys in whom I have
confidence, have examined originals or copies, certified or otherwise identified
to my satisfaction, of such records of Conectiv and such other documents,
certificates and corporate or other records as I have deemed necessary or
appropriate as a basis for the opinions set forth herein. In my examination, I
have assumed the genuineness of all signatures, the legal capacity of all
persons, the authenticity of all documents submitted to me as originals, the
conformity to original documents of documents submitted to me as certified or
photostatic copies and the authenticity of the originals of such copies. As to
various questions of fact material to such opinions, I have, when relevant facts
were not independently established, relied upon statements contained in the
Declaration.
<PAGE> 2
The opinions expressed below with respect to the Proposed Transactions
are subject to the following assumptions, qualifications, limitations,
conditions and exceptions:
(a) The Commission shall have duly entered an appropriate order or
orders with respect to the Proposed Transactions, as described
in the Declaration, granting and permitting the Declaration to
become effective under the Act and the rules and regulations
thereunder and the Proposed Transactions are consummated in
accordance with the Declaration.
(b) No act or event other than as described herein shall have
occurred subsequent to the date hereof which would change the
opinions expressed below.
Based on the foregoing and subject to the assumptions, qualifications,
limitations, conditions and exceptions set forth herein, I am of the opinion
that, in the event the Proposed Transactions are consummated in accordance with
the Declaration:
(a) All state laws applicable to the Proposed Transactions will
have been complied with by Conectiv, but I express no opinion
as to the need to comply with state blue sky laws and express
no opinion on the laws of any state except Delaware;
(b) Conectiv may lawfully sell to ACE the shares of ACE's
preferred stock purchased by Conectiv; and
(c) The consummation of such Proposed Transactions by Conectiv
will not violate the legal rights of the holders of any
securities issued by Conectiv or any associate company
thereof.
I hereby consent to the use of this opinion in connection with the
Declaration.
Very truly yours,
/s/ PETER F. CLARK
Peter F. Clark
<PAGE> 1
Exhibit F-2
September 8, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Atlantic City Electric Company
SEC File Number 70-9331
-----------------------
Dear Sir or Madam:
I have acted as counsel to Atlantic City Electric Company
("ACE"), a New Jersey corporation and a direct operating utility subsidiary
of Conectiv, a Delaware corporation ("Conectiv"), in connection with the
Application/Declaration on Form U-1 (File No. 70-9331), as amended (hereinafter
the "Declaration"), filed with the Securities and Exchange Commission (the
"Commission"), jointly by ACE and Conectiv.
The Declaration seeks authorization under the Public Utility Holding
Company Act of 1935, as amended (the "Act") (i) for ACE to solicit proxies from
the holders of its outstanding shares of preferred stock; (ii) for ACE to amend
its charter; (iii) for Conectiv to make an offer to the holders of certain
series of ACE's outstanding preferred stock to acquire such shares for cash; and
(iv) for Conectiv to sell to ACE any preferred stock so acquired at Conectiv's
purchase price, plus expenses (the "Proposed Transactions").
In connection with this opinion, I, or attorneys in whom I have
confidence, have examined originals or copies, certified or otherwise identified
to my satisfaction, of such records of ACE and such other documents,
certificates and corporate or other records as I have deemed necessary or
appropriate as a basis for the opinions set forth herein. In my examination, I
have assumed the genuineness of all signatures, the legal capacity of all
persons, the authenticity of all documents submitted to me as originals, the
conformity to original documents of documents submitted to me as certified or
photostatic copies and the authenticity of the originals of such copies. As to
various questions of fact material to such opinions, I have, when relevant facts
were not independently established, relied upon statements contained in the
Declaration.
<PAGE> 2
The opinions expressed below with respect to the Proposed Transactions
are subject to the following assumptions, qualifications, limitations,
conditions and exceptions:
(a) The Commission shall have duly entered an appropriate order or
orders with respect to the Proposed Transactions, as described
in the Declaration, granting and permitting the Declaration to
become effective under the Act and the rules and regulations
thereunder and the Proposed Transactions are consummated in
accordance with the Declaration.
(b) No act or event other than as described herein shall have
occurred subsequent to the date hereof which would change the
opinions expressed below.
Based on the foregoing and subject to the assumptions, qualifications,
limitations, conditions and exceptions set forth herein, I am of the opinion
that, in the event the Proposed Transactions are consummated in accordance with
the Declaration:
(a) All state laws applicable to the Proposed Transactions will
have been complied with by ACE, but I express no opinion as to
the need to comply with state blue sky laws and express no
opinion on the laws of any state except New Jersey;
(b) ACE may lawfully acquire from Conectiv the shares of its
preferred stock purchased by Conectiv; and
(c) The consummation of such Proposed Transactions by ACE will not
violate the legal rights of the holders of any securities
issued by ACE or any associate company thereof.
I hereby consent to the use of this opinion in connection with the
Declaration.
Very truly yours,
/s/ PAMELA D. JOSEPH
Pamela D. Joseph
<PAGE> 1
EXHIBIT G-1
Conectiv
Atlantic City Electric Company (70- )
Notice of Proposal to Amend Charter and Acquire Preferred Shares Pursuant to
Cash Tender and Reacquisition of Preferred Shares by Utility Subsidiary: Order
Authorizing Proxy Solicitation.
Conectiv, a Delaware Corporation and registered public utility holding
company, and Atlantic City Electric Company ("ACE"), a New Jersey electric
utility company and wholly-owned subsidiary of Conectiv, both with principal
offices at 800 King Street, Wilmington, DE 19899 has filed an
application-declaration pursuant to Sections 6(a) and 7, 9(a) and 10, 12(c),
12(d) and 12(e) of the Act and Rules 42, 43, 51, 54, 62 and 65 thereunder.
ACE has outstanding 18,320,937 shares of common stock, $3.00 par value,
all of which are held by Conectiv. ACE's outstanding preferred stock consists of
300,000 shares of Cumulative Preferred Stock, $100 Par Value issued in six
series and 239,500 shares of Preferred Stock Without Par Value issued in one
series for a total of 539,500 shares outstanding. No Par Preferred Stock is
entitled to the same voting rights and protections as the Cumulative Preferred
Stock. (Hereinafter referred to in the aggregate as "Preferred Stock.")
Article III(7)(B)(c) of the Agreement of Merger dated May 24, 1949 as
amended on April 8, 1952 (the "ACE Charter") provides that:
"III(7)(B) So long as any shares of the Cumulative Preferred Stock are
outstanding, the Corporation shall not without the consent (given by
vote at a meeting called for that purpose) of the holders of a majority
of the total number of shares of the Cumulative Preferred Stock then
outstanding:
. . . .
. . . .
"(C) Issue any unsecured notes, debentures or other securities
representing unsecured indebtedness, or assume any such unsecured
securities, for purposes other than the refunding of outstanding
unsecured securities. . .if, . . .the total principal amount of all
unsecured notes, debentures or other securities representing unsecured
indebtedness issued or assumed by the Corporation and then outstanding.
. . would exceed 20% of the aggregate of (i) the total principal amount
of all bonds or other securities representing secured indebtedness
issued or assumed by the Corporation and then to be outstanding, and
(ii) the capital and surplus of the Corporation as then to be stated on
the books of account of the Corporation;"
ACE proposes to solicit proxies (the "Proxy Solicitation") from the
holders of its outstanding Preferred Stock of each series for use at a special
meeting of its stockholders to be held on or about October 14, 1998 to consider
a proposed amendment to eliminate paragraph (c ) of Article III(7)(B) from the
ACE Charter. Adoption of the proposed amendment requires the affirmative vote of
at least two-thirds of the shares of the Preferred Stock as a class. Conectiv as
the holder of the Common Stock will vote all shares in favor of the proposed
amendment. If the proposed amendment is adopted, Ace proposes to make a special
cash payment of $1.00 per share for each share of Preferred Stock properly voted
at the meeting provided that such shares are not tendered pursuant to the
concurrent tender offer that will be engaged in by Conectiv.
<PAGE> 2
Concurrently with the ACE proxy solicitation, Conectiv proposes to
undertake a program of acquisition through tender offer (the "Tender Offers" or
"Offers") for cash at purchase prices established through market conditions,
without premium and through a redemption at $100 or par values (hereinafter
referred to collectively as the "Purchase Price") as follows:
<TABLE>
<CAPTION>
SERIES SHARES PRINCIPAL AMOUNT SHARES AUTHORIZED
<S> <C> <C> <C>
To be tendered:
4% 77,000 $7,700,000 77,000
4.10% 72,000 7,200,000 72,000
4.35% 15,000 1,500,000 15,000
4.35% 36,000 3,600,000 36,000
4.75% 50,000 3,600,000 50,000
To be redeemed at the call price of $100 per share or tendered if less:
5% 50,000 5,000,000 50,000
The foregoing shall be referred to as the "Tendered Series".
To be offered consent fee only:
7.80% 23,950 23,950,000 70,000
(Referred to as the "Nontendered Series").
</TABLE>
Conectiv anticipates that the Offers will expire at 5:00 p.m. (New York
City time) on the date of the Special Meeting, (currently anticipated to be
October 14, 1998, unless extended as described below (hereinafter the
"Expiration Date"). The Conectiv Offers consist of separate Offers for each
Tendered Series, with the Offer for any one Tendered Series being independent of
the Offer for any other series. The applicable Purchase Price and the other
terms and conditions of the Offers apply equally to all holders of the Tendered
Series. The Offers are not conditioned upon any minimum number of shares being
tendered, but are conditioned, among other things, on tendering Preferred
Shareholder's voting in favor of the Proposed Amendment and the Proposed
Amendment being adopted at the Special Meeting. To tender shares in accordance
with the terms of the Offer Documents, the tendering Preferred stockholder must
either (1) send to The Bank of New York, in its capacity as depositary for the
offers, a properly completed and duly executed Letter of Transmittal and Proxy,
together with any required signature guarantees and any other documents required
by the Letter of Transmittal and Proxy, and either (a) certificates for the
shares to be tendered must be received by the Depositary at one of its addresses
specified in the Offer Documents, or (b) such Shares must be delivered pursuant
to the procedures for book-entry transfer described in the Offer Documents and a
confirmation of such delivery must be received by the Depositary, in each case
by the Expiration Date; or (2) comply with a guaranteed delivery procedure
specified in the Offer Documents. Tenders of shares made pursuant to the Offers
may be withdrawn at any time prior to the Expiration Date. Thereafter such
tenders are irrevocable, subject to certain exceptions identified in the Offer
Documents.
Conectiv's obligation to proceed with the Offer and to accept for
payment and to pay for any tendered shares is made in accordance with Rule 51
under the Act and is subject to various conditions enumerated in the Offer
Documents, including, among other conditions, that tendering Preferred
Shareholders vote in favor of the Proposed Amendments, that the Proposed
Amendments
<PAGE> 3
be adopted at the Special Meeting and that the Commission issue an order under
the Act authorizing the proposed transactions.
At any time and from time to time, Conectiv may extend the Expiration
Date applicable to any series by giving notice of such extension to the
Depositary, without extending the Expiration Date for any other Tendered Series.
During any such extension, all shares of the applicable Tendered Series
previously tendered will remain subject to the offer, and may be withdrawn at
any time prior to the Expiration Date as extended.
Conversely, Conectiv may elect in its sole discretion to terminate one
or more offers prior to the scheduled Expiration Date and not to accept for
payment and pay for any shares tendered, subject to the applicable provisions of
rule 13e-4 under the Securities Exchange Act of 1935 requiring Conectiv either
to pay the consideration offered or to return the shares tendered promptly after
the termination or withdrawal of an offer, upon the occurrence of any of the
conditions to closing enumerating in the Offer Documents, by giving notice of
such termination to the Depositary and making a public announcement thereof.
Subject to compliance with applicable law, Conectiv further reserves
the right in the offering documents, in its sole discretion, to amend one or
more offers in any respect by making a public announcement thereof. If Conectiv
materially changes the terms of an offer or the information concerning an offer
or if Conectiv waives a material condition of an Offer (such as the condition
that the Proposed Amendment be adopted at the Special Meeting), Conectiv will
extend the Expiration Date to the extent required by law.
Shares validly tendered to the Depositary pursuant to an Offer and not
withdrawn in accordance with the procedures set forth in the Offer Documents
will be held by Conectiv until the Expiration Date (or returned in the event the
Offer is terminated). Subject to the terms and conditions of an Offer, as
promptly as practicable after the Expiration Date, Conectiv will accept for
payment (and thereby purchase) and pay for shares validly tendered and not
withdrawn by depositing the Purchase Price with the Depositary, which will act
as agent for tendering Preferred Stockholders for the purpose of receiving
payment from Conectiv and transmitting payment to tendering Preferred
Stockholders. Conectiv will pay all stock transfer taxes, if any, except in
certain limited instances as may be described in the Offer Transmittal Letter
and Proxy.
The Board of Directors of ACE will consider the declaration of
dividends on ACE's capital stock at its meeting on September 24, 1998. The
regular quarterly dividend on the Preferred Stock, if, when and as declared will
be paid on November 2, 1998 to holders of record as of the close of business on
October 2, 1998. A holder of record of shares of Preferred Stock on October 2,
1998 who tenders such shares of Preferred Stock will be entitled to the regular
quarterly dividend, regardless of when such tender is made. Holders of shares of
Preferred Stock purchased pursuant to the Offer will not be entitled to any
dividends in respect of any later dividend periods.
Any holder of Tendered Shares will not be entitled to receive
additional consideration in the form of a Cash Payment. As stated above the
latter payment is payable only to Shares voted by Preferred Stockholders in
favor of the Proposed Amendment provided that such Shares have not been tendered
pursuant to an Offer and the Proposed Amendment is adopted, Preferred
Stockholders who wish to tender their Shares must vote in favor of or consent to
the Proposed Amendment. The Offer is conditioned upon, among other things, the
Proposed Amendment being adopted at the Special Meeting.
<PAGE> 4
If the Proposed Amendment is not adopted at the Special Meeting,
Conectiv may elect, but is not obligated, to waive such condition, subject to
applicable law. In such case, ACE may either adjourn the Special Meeting or call
another special meeting as promptly as practicable and solicit proxies for the
same purpose i.e., securing stockholder approval of the Proposed Amendment. At
such postponed or new meeting, Conectiv would vote any Shares acquired by it
pursuant to the offer or otherwise in favor of the Proposed Amendment.
To finance the purchase of any shares tendered, accepted for payment
and paid for pursuant to the offer, Conectiv intends to use its general funds
and/or incur short-term indebtedness in an amount sufficient to pay the Purchase
Price for all tendered shares.
Morgan Stanley Dean Witter will act as dealer manager ("Dealer
Manager") for Conectiv in connection with the Offers. Conectiv proposes to agree
to pay the dealer manager a fee for shares tendered, accepted for payment and
paid for pursuant to the Offers and to reimburse the Dealer Manager for certain
of its reasonable out-of-pocket expenses. In addition, Conectiv proposes to pay
a solicitation fee to retail dealers for any shares tendered, accepted for
payment and paid for pursuant to the Offers.
If the Proposed Amendment is adopted at the meeting or in any event by
December 31, 2000, Conectiv will sell and ACE will repurchase the shares for the
Purchase Price plus expenses of sale. ACE will thereupon retire and cancel the
shares. To finance its purchase of any Preferred Shares tendered or repurchased,
ACE intends to issue debt securities pursuant to an order of the New Jersey
Board of Public Utilities, which issue would be exempt from the requirements of
Sections 9 and 10 of the Act under Rule 52 promulgated thereunder and/or to
issue securities and guarantees using financing entities as authorized by this
Commission under Release No. 26833 dated February 26, 1998 in File No. 70-9095.
ACE states that it considers the restriction on unsecured debt to be a
significant impediment to its ability to maintain financial flexibility and
minimize financing costs to the detriment of both customers and shareholders.
Conectiv and Ace requests that the declaration be permitted to become effective
forthwith, pursuant to Rule 62(d).
It appearing to the Commission that the declaration regarding the
proposed solicitation of proxies should be permitted to become effective
forthwith, pursuant to Rule 62(d):
IT IS ORDERED, that the declaration regarding the proposed solicitation
of proxies be, and it hereby is, permitted to become effective forthwith
pursuant to Rule 62 and subject to the terms and conditions prescribed in Rule
24 under the 1935 Act.
For the Commission, by the Division of Investment Management, pursuant
to delegated authority.
Jonathan G. Katz
Secretary
