<PAGE>
THE INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT.
<PAGE>
Filed Pursuant to
Rule 424(b)(3)
File No. 33-57840
SUBJECT TO COMPLETION, DATED JUNE 15, 1994
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED FEBRUARY 12, 1993
AS AMENDED MARCH 5, 1993
2,500,000 SHARES
BOSTON EDISON COMPANY
COMMON STOCK
($1.00 PAR VALUE)
------------------------
The Company's Common Stock is listed on the New York and Boston Stock
Exchanges under the symbol "BSE". The last reported sale price of the Company's
Common Stock on June 13, 1994 on the New York Stock Exchange composite tape was
$27 7/8 per share. See "Recent Dividends and Stock Price Information".
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE DISCOUNT(1) COMPANY(2)
--------------------- --------------------- ---------------------
<S> <C> <C> <C>
Per Share................................. $ $ $
Total(3).................................. $ $ $
<FN>
- ------------------------
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(2) Before deducting estimated expenses of $200,000 payable by the Company.
(3) The Company has granted the Underwriters an option for 30 days to purchase
up to an additional 375,000 shares at the initial public offering price per
share, less the underwriting discount, solely to cover over-allotments. If
such option is exercised in full, the total initial public offering price,
underwriting discount and proceeds to the Company will be $ , $
and $ , respectively. See "Underwriting".
</TABLE>
------------------------
The shares offered hereby are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to their
right to reject any order in whole or in part. It is expected that the
certificates for the Shares will be ready for delivery in New York, New York, on
or about , 1994.
GOLDMAN, SACHS & CO.
A.G. EDWARDS & SONS, INC.
KIDDER, PEABODY & CO.
INCORPORATED
LEHMAN BROTHERS
MERRILL LYNCH & CO.
----------------
The date of this Prospectus Supplement is , 1994.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF
THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK OR BOSTON STOCK
EXCHANGES OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT
ANY TIME.
S-2
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY INFORMATION IS QUALIFIED IN ITS ENTIRETY BY THE
DETAILED INFORMATION AND STATEMENTS APPEARING IN THIS PROSPECTUS SUPPLEMENT, THE
PROSPECTUS OR IN THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE. TERMS NOT
DEFINED IN THIS PROSPECTUS SUMMARY ARE DEFINED ELSEWHERE HEREIN.
BOSTON EDISON COMPANY
<TABLE>
<S> <C>
Business........................................ Generation, purchase, transmission,
distribution and sale of electric energy.
Service Area.................................... 590 square mile area encompassing Boston
and 39 other Massachusetts communities,
with a population of approximately
1,500,000.
Installed Electric Generation Capability
(December 1993)................................. Fossil 84%; Nuclear 16%.
</TABLE>
THE OFFERING
<TABLE>
<S> <C>
Securities Offered.............................. 2,500,000 shares of Common Stock, $1.00
par value per share.(1)
Shares Outstanding on March 31, 1994............ 45,227,121
Common Stock Listed............................. New York Stock Exchange and Boston Stock
Exchange (Symbol: BSE).
Use of Proceeds................................. The payment of obligations incurred for
capital expenditures for extensions,
additions and improvements to the
Company's plant and properties.
</TABLE>
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(DOLLARS AND SHARES IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
------------------------------------------- ----------------------------
1991 1992 1993 1993 1994
------------- ------------- ------------- ------------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Operating Revenues............................ $1,354,501 $1,411,753 $1,482,253 $1,423,000 $1,504,950
Operating and Other Income.................... 211,545 218,826 225,908 218,185 230,488
Total AFUDC (Net of Taxes).................... 5,544 4,842 3,928 5,202 3,527
Net Income.................................... 94,670 107,298 118,218 108,934 122,578
Weighted Average Number of Shares of Common
Stock Outstanding............................ 39,348 43,144 44,959 43,815 45,050
Earnings per Share of Common Stock............ $1.96 $2.10 $2.28 $2.11 $2.37
Dividends Declared per Share of Common
Stock........................................ $1.595 $1.655 $1.715 $1.67 $1.73
</TABLE>
S-3
<PAGE>
<TABLE>
<CAPTION>
AS OF MARCH 31, 1994
-----------------------------------
ACTUAL AS ADJUSTED(2)
----------------- -----------------
AMOUNT PERCENT AMOUNT PERCENT
----------------- -----------------
<S> <C> <C> <C> <C>
(UNAUDITED)
CAPITALIZATION:
Long-Term Debt................ $1,272,645 53.8% $1,272,645 52.3%
Cumulative Preferred Stock.... 219,000 9.2% 219,000 9.0%
Common Equity................. 875,103 37.0% 942,500 38.7%
----------------- -----------------
Total..................... $2,366,748 100.0% $2,434,145 100.0%
----------------- -----------------
----------------- -----------------
Short-Term Debt(3)............ $ 207,000 $ 139,603
---------- ----------
---------- ----------
<FN>
- ------------------------
(1) Assumes the Underwriters' over-allotment option for 375,000 shares is not
exercised. See "Underwriting" below.
(2) Adjusted to reflect the issuance of the 2,500,000 shares of Common Stock
(excluding the Underwriters' over-allotment option) at an estimated price
to the public of $27 7/8 per share (the last reported sale price of the
Company's Common Stock on June 13, 1994 on the New York Stock Exchange
composite tape) and the application of the net proceeds thereof
(approximately $67,397,000) to the repayment of short-term indebtedness.
See "Use of Proceeds".
(3) Includes $2,000,000 of current portion of long-term securities.
</TABLE>
S-4
<PAGE>
RECENT DIVIDENDS AND STOCK PRICE INFORMATION
The Company's Common Stock is listed on the New York Stock Exchange and the
Boston Stock Exchange. The high and low sales prices of the Common Stock on the
New York Stock Exchange composite tape as reported in the Eastern Edition of THE
WALL STREET JOURNAL, and the dividends paid, have been as follows:
<TABLE>
<CAPTION>
PRICE
-------------------- DIVIDENDS
YEAR HIGH LOW PAID
----- --------- --------- -----------
<S> <C> <C> <C>
1993
First Quarter........................................................... $ 30 1/2 $ 26 3/8 $ .425
Second Quarter.......................................................... 30 7/8 27 7/8 .425
Third Quarter........................................................... 32 5/8 29 3/4 .425
Fourth Quarter.......................................................... 32 1/4 27 7/8 .425
1994
First Quarter........................................................... 29 7/8 26 .440
Second Quarter.......................................................... 29 1/8 26 .440
(through June 13, 1994)
</TABLE>
See "Dividends and Stock Price Information" in the accompanying Prospectus.
The last reported sale price of the Common Stock on the New York Stock
Exchange composite tape on June 13, 1994 was $27 7/8 per share. At March 31,
1994, the book value of the Company's Common Stock was $19.35 per share.
RECENT DEVELOPMENTS
RECENT FINANCIAL RESULTS
On April 28, 1994, the Company reported earnings per common share of $0.35
and $2.37 for the three and twelve months ended March 31, 1994, respectively,
versus earnings of $0.25 and $2.11 for the same periods ended March 31, 1993.
The increase in 1994 first quarter earnings primarily reflects the elimination
of certain purchased power expenses associated with a $60,000,000 contract that
expired on October 31, 1993, an annual rate increase of $29,000,000 which became
effective November 1, 1993 and a 3.1% increase in retail electricity sales due
in part to weather conditions. These were partially offset by higher
depreciation and amortization, due partly to the amortization of costs in 1994
associated with the cancelled Pilgrim 2 nuclear unit, for which there were no
expenses in 1993 as approved by the Massachusetts Department of Public Utilities
(the "MDPU"), increases in pension and other employee benefit expenses, as well
as higher income tax expenses as a result of MDPU-approved adjustments that
reduced the effective tax rate in 1993.
MANAGEMENT CHANGES
On April 28, 1994, the Company announced that Thomas J. May, the current
President of the Company, had been elected Chairman and Chief Executive Officer
of the Company effective July 1, 1994, and that Executive Vice President George
W. Davis had been elected to serve as the Company's President and Chief
Operating Officer, also effective July 1. Bernard W. Reznicek announced his
retirement as Chairman and Chief Executive Officer as of July 1, 1994.
S-5
<PAGE>
USE OF PROCEEDS
The Company will use the net proceeds from the sale of the shares of Common
Stock offered hereby for the payment of obligations incurred under bank lines of
credit and commercial paper for capital expenditures for extensions, additions
and improvements to the Company's plant and properties. As of June 13, 1994,
such lines of credit and commercial paper had a weighted average interest rate
of 4.42% and a weighted average maturity of 20 days.
LEGAL OPINIONS
The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Ropes & Gray, One International Place, Boston,
Massachusetts, counsel for the Company, and for the Underwriters by Choate, Hall
& Stewart, Exchange Place, 53 State Street, Boston, Massachusetts, counsel for
the Underwriters. Thomas G. Dignan, Jr., a partner of Ropes & Gray, is a
Director of the Company.
EXPERTS
The consolidated balance sheets of the Company as of December 31, 1993 and
1992 and the consolidated statements of income, retained earnings, and cash
flows for each of the three years in the period ended December 31, 1993, have
been incorporated by reference herein in reliance on the report of Coopers &
Lybrand, independent accountants, given on the authority of that firm as experts
in accounting and auditing.
With respect to the unaudited interim consolidated financial information for
the periods ended March 31, 1994 and 1993, incorporated by reference herein,
Coopers & Lybrand have reported that they have applied limited procedures in
accordance with professional standards for a review of such information.
However, their separate report included in the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1994, and incorporated by reference
herein, states that they did not audit and they do not express an opinion on
that interim consolidated financial information. Accordingly, the degree of
reliance on their report on such information should be restricted in light of
the limited nature of the review procedures applied. Coopers & Lybrand are not
subject to the liability provisions of Section 11 of the Securities Act of 1933,
as amended (the "Act"), for their report on the unaudited interim consolidated
financial information because such report is not a "report", or a "part" of the
registration statement prepared or certified by Coopers & Lybrand within the
meaning of Sections 7 and 11 of the Act.
S-6
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Purchase Agreement, the Company
has agreed to sell to each of the Underwriters named below, and each of such
Underwriters, for whom Goldman, Sachs & Co., A.G. Edwards & Sons, Inc., Kidder,
Peabody & Co. Incorporated, Lehman Brothers Inc. and Merrill Lynch, Pierce,
Fenner & Smith Incorporated are acting as representatives, has severally agreed
to purchase from the Company, the respective number of shares of Common Stock
set forth opposite its name below:
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
UNDERWRITER COMMON STOCK
- ------------------------------------------------------------------------------------------------- ---------------
<S> <C>
Goldman, Sachs & Co..............................................................................
A.G. Edwards & Sons, Inc.........................................................................
Kidder, Peabody & Co. Incorporated...............................................................
Lehman Brothers Inc..............................................................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated...........................................................................
---------------
Total............................................................................................ 2,500,000
---------------
---------------
</TABLE>
Under the terms and conditions of the Purchase Agreement, the Underwriters
are committed to take and pay for all of the shares offered hereby, if any are
taken.
The Underwriters propose to offer the shares of Common Stock in part
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus Supplement, and in part to certain securities
dealers at such price less a concession of $ per share. The Underwriters may
allow, and such dealers may reallow, a concession not to exceed $ per share to
certain brokers and dealers. After the shares of Common Stock are released for
sale to the public, the offering price and other selling terms may from time to
time be varied by the representatives of the Underwriters.
S-7
<PAGE>
The Company has granted the Underwriters an option exercisable for 30
calendar days after the date of this Prospectus Supplement to purchase up to an
aggregate of 375,000 additional shares of Common Stock to cover over-allotments,
if any. If the Underwriters exercise their over-allotment option, the
Underwriters have severally agreed, subject to certain conditions, to purchase
approximately the same percentage thereof that the number of shares to be
purchased by each of them, as shown in the foregoing table, bears to the
2,500,000 shares of Common Stock offered hereby. The Underwriters may exercise
such option only to cover over-allotments in connection with the sale of the
2,500,000 shares of Common Stock offered hereby.
The Company has agreed not to offer, sell or otherwise dispose of any shares
of Common Stock for a period of 90 days after the date of this Prospectus
Supplement (with certain exceptions) without the prior written consent of the
representatives of the Underwriters.
The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Act.
S-8
<PAGE>
$1,100,000,000
BOSTON EDISON COMPANY
DEBT SECURITIES, CUMULATIVE PREFERRED STOCK AND
COMMON STOCK
------------------------
Boston Edison Company (the "Company") may from time to time offer (i) Debt
Securities (the "New Debt Securities") consisting of unsecured debentures, notes
and/or other evidences of indebtedness, in one or more series, (ii) shares of
its Cumulative Preferred Stock, $100 par value (the "New Preferred Stock"), in
one or more series, and/or (iii) shares of its Common Stock, $1.00 par value
(the "Common Stock"), at an aggregate initial offering price not to exceed
$1,100,000,000 at prices and on terms to be determined at the time or times of
sale. One or more series of the New Preferred Stock may be represented by
Depositary Shares evidenced by Depositary Receipts ("Depositary Shares") as
described herein. The New Debt Securities, New Preferred Stock, Depositary
Shares and Common Stock are referred to herein collectively as the "Securities".
For each offering of Securities for which this Prospectus is being
delivered, there will be an accompanying Prospectus Supplement (each a
Prospectus Supplement) that sets forth the specific series designation,
aggregate principal amount, maturity or maturities, rate or rates (or manner of
calculation thereof) and times of payment of interest, redemption terms and any
other special terms of the New Debt Securities, if any, in respect of which this
Prospectus is being delivered; the specific series designation, number of
shares, dividend rate, redemption terms, sinking fund or purchase fund
provisions, if any, and any other special terms of the New Preferred Stock, if
any, in respect of which this Prospectus is being delivered; and the number of
shares and the specific terms of the offering thereof of the Common Stock, if
any, in respect of which this Prospectus is being delivered.
The Company's Common Stock is listed on the New York and Boston Stock
Exchanges under the symbol "BSE." See "Dividends and Stock Price Information."
The Securities may be sold directly by the Company or through agents
designated from time to time or through underwriters or dealers or a group of
underwriters represented by one or more underwriters. If any agents of the
Company or any underwriters are involved in any sale of the Securities in
respect of which this Prospectus is being delivered, the names of such agents or
underwriters, the initial public offering price, any applicable commissions or
discounts and the net proceeds to the Company from such sale will be set forth
in a Prospectus Supplement. See "Description of Debt Securities", "Description
of Cumulative Preferred Stock", "Description of Capital Stock", and "Plan of
Distribution" herein.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is February 12, 1993
as amended March 5, 1993.
<PAGE>
AVAILABLE INFORMATION
Boston Edison Company (the "Company") is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information filed with the Commission can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C., and at the Commission's
regional offices at Northwest Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661; and Room 1228, 75 Park Place, New York, New York
10007; and copies of such material can also be obtained at prescribed rates from
the Public Reference Section of the Commission at its principal office at 450
Fifth Street, N.W., Washington, D.C. 20549. Certain securities of the Company
are listed on the New York and Boston Stock Exchanges, where reports, proxy
statements and other information concerning the Company can also be inspected.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended, with
respect to the Securities offered hereby. This Prospectus does not contain all
of the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. For further information, reference is hereby made to the
Registration Statement.
------------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No. 1-2301) pursuant
to the Exchange Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the year ended December
31, 1991, as amended by Form 8 dated June 26, 1992;
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, June 30, and September 30, 1992;
3. The Company's Current Reports on Form 8-K dated September 3, 1992,
January 28, 1993, and February 11, 1993; and
4. All other documents filed by the Company pursuant to Sections 13, 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Securities offered hereby.
Any statement contained in a document incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, on the written or oral request of any such person, a copy of any or
all of the documents incorporated herein by reference, other than exhibits to
such documents unless specifically incorporated by reference in such documents.
Requests for such copies should be directed to Theodora S. Convisser, Clerk,
Boston Edison Company, 800 Boylston Street, Boston, Massachusetts 02199,
telephone: (617) 424-2000.
2
<PAGE>
THE COMPANY
The Company is an investor-owned regulated public utility engaged in the
energy and energy services business, which includes the generation, purchase,
transmission, distribution and sale of electric energy. It was incorporated in
1886 under the laws of The Commonwealth of Massachusetts. Its principal
executive offices are located at 800 Boylston Street, Boston, Massachusetts
02199, and its main telephone number is (617) 424-2000.
The Company supplies electricity at retail to an area of approximately 590
square miles within 30 miles of Boston, Massachusetts, encompassing the City of
Boston and 39 surrounding cities and towns. The population of the territory
served with electricity at retail is approximately 1,500,000. At December 31,
1992, the Company served approximately 650,000 customers. The Company also
supplies electricity at wholesale for resale to other utilities and municipal
electric departments. Through Harbor Electric Energy Company, a wholly owned
subsidiary, the Company provides distribution service to the Massachusetts Water
Resource Authority's wastewater treatment facility on Deer Island in Boston,
Massachusetts.
For the year ending December 31, 1992, approximately 85% of the Company's
revenues were derived from retail electric sales, 13% from wholesale electric
sales and 2% from other sources. Sources of installed electric generation
capability in 1992 were 81% fossil and 19% nuclear.
USE OF PROCEEDS
The Company may use the net proceeds from the sale of the Securities offered
hereby for any or all of the following purposes: (i) for the redemption,
repurchase or payment at maturity of any or all of the following outstanding
securities of the Company: $25,000,000 outstanding principal amount of First
Mortgage Bonds, Series I, 4 3/4% due 1995; $40,000,000 outstanding principal
amount of First Mortgage Bonds, Series J, 6 1/8% due 1997; $50,000,000
outstanding principal amount of First Mortgage Bonds, Series K, 6 7/8% due 1998;
$50,000,000 outstanding principal amount of First Mortgage Bonds, Series L, 9%
due 1999; $60,000,000 outstanding principal amount of First Mortgage Bonds,
Series M, 9 3/8% due 2000; $75,000,000 outstanding principal amount of First
Mortgage Bonds, Series N, 8 1/8% due 2001; $60,000,000 outstanding principal
amount of First Mortgage Bonds, Series P, 9 1/4% due 2007; $59,375,000
outstanding principal amount of First Mortgage Bonds, Series Q, 9 3/4% due 2003;
$44,250,000 outstanding principal amount of First Mortgage Bonds, Series R,
10.95% due 2004; $25,000,000 outstanding principal amount of First Mortgage
Bonds, Series S, variable rate (currently 9.2%) due 2002; $15,000,000
outstanding principal amount of Collateralized Pollution Control Revenue Bonds,
1984 Series A (10.25%) due 2014; $135,000,000 outstanding principal amount of
First Mortgage Bonds, Series W, 9 1/2% due 2016; $50,000,000 outstanding
principal amount of Series A Medium Term Notes, 9.75% due 1994; and/or 400,000
outstanding shares of the Company's Cumulative Preferred Stock, 8.88% Series, or
for the payment of obligations of the Company incurred for such redemptions or
payments; (ii) for the payment of obligations of the Company incurred for
capital expenditures for extensions, additions and improvements to the Company's
plant and properties or for the payment of obligations of the Company incurred
for such purposes; (iii) to make certain required and voluntary sinking fund
payments in respect of the Company's issued and outstanding First Mortgage Bonds
and Cumulative Preferred Stock; and/or (iv) for the repayment of short-term debt
balances. As of January 29, 1993, such short-term debt balances had a weighted
average interest rate of 3.36% and a weighted average maturity of 21 days.
3
<PAGE>
PLANT EXPENDITURES AND FINANCING
The Company's current estimate of plant expenditures for the period 1993
through 1996, which is subject to continuing review and adjustment, is
approximately $790,000,000 (excluding allowances for funds used during
construction and $64,000,000 in nuclear fuel expenditures). A significant
portion of such expenditures relate to the Company's transmission and
distribution system. Funds generated internally (excluding the effects of
certain settlement agreements between the Company and the Massachusetts
Department of Public Utilities in 1989 and the Federal Energy Regulatory
Commission in 1990) represented approximately 90%, 89% and 73% of plant
expenditures in 1992, 1991 and 1990, respectively. It is expected that a portion
of future plant expenditures will be funded internally. It is anticipated that
the balance of the Company's plant expenditures, long-term debt maturities and
sinking fund requirements (the latter two items aggregating $213,535,000 for the
period 1993 through 1996), will be financed by the issuance of debt and equity
securities, including the Securities.
RATIO OF EARNINGS TO FIXED CHARGES AND RATIO
OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS*
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------------------
1992 1991 1990 1989 1988
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges............................... 1.93x 1.86x 1.91x 0.52x 2.08x
Ratio of Earnings to Fixed Charges and
Preferred Dividends............................................. 1.71x 1.71x 1.73x 0.47x 1.86x
</TABLE>
Earnings have been computed by adding the amount of income taxes and fixed
charges to net income. Fixed charges include gross interest expense and the
estimated interest component of rentals. The Company reported a loss for the
year ended December 31, 1989, primarily as a result of a charge of $178,650,000
reflecting the settlement of certain regulatory and legal proceedings. Excluding
the effects of such charge, the Ratio of Earnings to Fixed Charges and the Ratio
of Earnings to Fixed Charges and Preferred Dividends for 1989 would have been
2.06x and 1.86x, respectively. The Company would have needed to generate
additional pre-tax income of $55,708,000 and $68,183,000, to cover its fixed
charges of $116,445,000 and fixed charges and preferred dividends of
$128,921,000, respectively, in 1989.
- ------------------------
*No shares of the Company's Preference Stock are currently outstanding, although
shares of Preference Stock were outstanding during each of the periods listed
above. The Ratio of Earnings to Fixed Charges and Preferred and Preference
Dividends for each of the years ended December 31, 1992, 1991, 1990, 1989 and
1988 were 1.69x, 1.60x, 1.59x, 0.43x and 1.76x, respectively. The Company would
have needed to generate additional pre-tax income of $79,784,000 to cover its
fixed charges and preferred and preference dividends of $140,522,000 in 1989.
4
<PAGE>
DIVIDENDS AND STOCK PRICE INFORMATION
The Company's Common Stock is listed on the New York Stock Exchange and the
Boston Stock Exchange. The high and low sales prices of the Common Stock on the
New York Stock Exchange composite tape as reported in the Eastern Edition of THE
WALL STREET JOURNAL, and the dividends paid, have been as follows:
<TABLE>
<CAPTION>
PRICE
-------------------- DIVIDENDS
YEAR HIGH LOW PAID
- -------------------------------------------------------------------------- --------- --------- -----------
<S> <C> <C> <C>
1991
First Quarter........................................................... $ 20 1/2 $ 18 1/4 $ .395
Second Quarter.......................................................... 20 5/8 19 1/8 .395
Third Quarter........................................................... 21 3/4 18 3/4 .395
Fourth Quarter.......................................................... 24 7/8 21 1/4 .395
1992
First Quarter........................................................... $ 24 5/8 $ 22 1/8 $ .41
Second Quarter.......................................................... 26 22 3/8 .41
Third Quarter........................................................... 26 7/8 24 7/8 .41
Fourth Quarter.......................................................... 28 1/4 24 3/4 .41
1993
First Quarter........................................................... $ 28 3/8 $ 26 3/8 $ .425
(through February 1, 1993)
</TABLE>
The Company customarily pays dividends on its Common Stock on the first days
of February, May, August and November, to shareholders of record as of the tenth
day of the preceding month. Cash dividends have been paid on the Common Stock
each year since 1890. Future dividends are subject to factors that ordinarily
affect dividend policy, such as earnings, timely and adequate rate increases and
other regulatory action affecting the Company.
The reported last sale price of the Common Stock on the New York Stock
Exchange composite tape on February 1, 1993 was $28 1/8 per share. At December
31, 1992, the book value of the Company's Common Stock was $18.71 per share.
DESCRIPTION OF DEBT SECURITIES
GENERAL
The New Debt Securities will be issued under the Indenture dated as of
September 1, 1988 between the Company and Bank of Montreal Trust Company, as
Trustee (the "Trustee"), as supplemented and modified by indentures supplemental
thereto (the "Indenture"). The debt securities of all series issued, or which
may be issued, under the Indenture are hereinafter referred to as the "Debt
Securities". Capitalized terms used in this section of the Prospectus entitled
"Description of Debt Securities" and not otherwise defined in this Prospectus
shall have the respective meanings ascribed to them in the Indenture.
The description set forth below of certain provisions of the New Debt
Securities, the Debt Securities and the Indenture does not purport to be
complete and is subject to, and qualified in its entirety by reference to, the
instruments constituting the Indenture which are filed with the Commission as
exhibits to the Registration Statement of which this Prospectus is a part.
The Indenture provides that, in addition to any New Debt Securities offered
hereby, additional debt securities (including both interest bearing and original
issue discount securities in both registered and bearer form) may be issued
thereunder, without limitation as to the aggregate principal amount. The
Indenture does not limit the amount of other debt, secured or unsecured, which
may be issued by the Company. As of December 31, 1992, the Company had an
aggregate of $435,000,000 principal amount of Debt Securities outstanding under
the Indenture, consisting of five series. On February 2, 1993, the Company
issued and sold $65,000,000 principal amount of 6.80% Debentures Due February 1,
2000
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under the Indenture. The Debt Securities are unsecured and rank equally with the
Company's other unsecured indebtedness. Substantially all franchises and
property of the Company are subject to the lien of the Indenture of Trust and
First Mortgage dated as of December 1, 1940, as supplemented and amended,
between the Company and State Street Bank & Trust Company, as Trustee (the
"First Mortgage Indenture"). As of December 31, 1992, the Company had
outstanding $638,625,000 aggregate principal amount of First Mortgage Bonds
under the First Mortgage Indenture.
The Indenture provides that Debt Securities may be issued at various times,
may have differing stated maturity dates and may bear interest at differing
rates. Unless otherwise indicated in a Prospectus Supplement relating thereto,
the New Debt Securities will be issued only in fully registered form, without
coupons, in denominations of $1,000 or any multiple thereof, will be registered
for transfer or exchange, and principal and interest, if any, will be payable at
the Corporate Trust Office of the Trustee in the City of New York, 77 Water
Street, New York, New York 10005. No service charge will be made for any
transfer or exchange of the Debt Securities, but the Company may require payment
of a sum sufficient to cover any tax or other government charge payable in
connection therewith.
Unless otherwise indicated in a Prospectus Supplement relating to a series
of New Debt Securities (the "Offered Debt Securities"), there are no provisions
in the Indenture that require the Company to redeem, or permit the holders to
cause a redemption of, the New Debt Securities or that otherwise protect the
holders in the event that the Company incurs substantial additional
indebtedness, whether or not in connection with a change in control of the
Company.
Certain other terms and provisions of the New Debt Securities, including the
maturity, rate of interest, interest payment dates, redemption provisions and
whether any of the Debt Securities are to be issuable in permanent global form,
will be described in a Prospectus Supplement relating to such New Debt
Securities.
EVENTS OF DEFAULT
The following constitute Events of Default under the Indenture with respect
to Debt Securities of any series: (1) default in the payment of principal of any
Debt Security when due and the continuation of such default for a period of
three Business Days thereafter; (2) default in the payment of interest on any
Debt Security when due and the continuation thereof for a period of 30 days; (3)
default in the payment of any sinking fund payment when due by the terms of the
Debt Securities of the series; (4) default in the performance or breach of any
covenant or warranty of the Company in the Indenture (other than a covenant or
warranty included in the Indenture solely for the benefit of one or more series
of Debt Securities other than the Offered Debt Securities), and the continuation
thereof for 60 days after written notice to the Company as provided in the
Indenture; (5) default in the payment of principal or interest on, or
acceleration of, securities of any other series issued under the Indenture or
any other mortgage, indenture or instrument or other evidence of indebtedness of
the Company for borrowed money, in an aggregate amount exceeding $10,000,000,
which default is not cured or acceleration not rescinded or annulled, or
indebtedness not discharged, within 90 days after written notice to the Company
as provided in the Indenture; (6) certain events of bankruptcy, insolvency or
reorganization; and (7) any other Event of Default provided with respect to Debt
Securities of a particular series.
If an Event of Default with respect to the Debt Securities occurs and is
continuing, either the Trustee or the Holders of at least 33% in aggregate
principal amount of the outstanding Debt Securities may declare the principal
amount of all Debt Securities to be due and payable immediately. At any time
after the declaration of acceleration with respect to the Debt Securities has
been made, but before a judgment or decree based on acceleration has been
obtained, the Holders of a majority in principal amount of the outstanding Debt
Securities may, under certain circumstances, rescind and annul such
acceleration.
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the
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Indenture at the request or direction of any of the Holders of the outstanding
Debt Securities, unless such Holders shall have offered to the Trustee
reasonable indemnity. Subject to such provisions for the indemnification of the
Trustee, the Holders of 33% in principal amount of the outstanding Debt
Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, with respect to the Debt
Securities. The right of a Holder of any Debt Security to institute a proceeding
with respect to the Indenture is subject to certain conditions precedent, but
each Holder of a Debt Security has an absolute right to receive payment of
principal and interest when due and to institute suit for the enforcement of any
such payment. The Indenture provides that the Trustee, within 90 days after the
occurrence of a default with respect to the Debt Securities, is required to give
the Holders of the Debt Securities notice of such default, unless cured or
waived; provided that, except in the case of default in the payment of principal
or interest on any Debt Security, the Trustee may withhold such notice if it
determines it is in the interest of such Holders to do so.
The Company will be required to furnish annually to the Trustee a statement
as to the performance by the Company of certain of its obligations under the
Indenture and as to default in such performance.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
The Indenture provides that the Company may not, without the consent of the
Holders of not less than a majority in principal amount (calculated as provided
in the Indenture) of the Outstanding Securities (as defined in the Indenture),
consolidate with or merge into any other corporation or convey, transfer or
lease its properties and assets substantially as an entirety, unless (i) if the
Company is not the continuing corporation, the successor corporation shall
assume by a supplemental indenture the Company's obligations under the Indenture
and (ii) immediately after giving effect to such transaction, no Event of
Default, and no event which after notice or lapse of time would become an Event
of Default, shall have occurred and be continuing.
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than a majority in principal amount
(calculated as provided in the Indenture) of the Outstanding Securities (as
defined in the Indenture), if all series of Outstanding Securities are affected,
or the Holders of a majority in aggregate principal amount of each series
affected by such modification, in case one or more, but less than all, of the
series of Outstanding Securities are affected, to modify the Indenture or any
supplemental indenture or the rights of the Holders of the Outstanding
Securities of any series; provided that no such modification shall, without the
consent of the Holders of each Outstanding Security affected thereby, change the
maturity of any Outstanding Security, or reduce the principal amount thereof, or
reduce the rate or extend the time of payment of interest thereon, or reduce any
amount payable upon redemption of any Outstanding Security, or reduce the
overdue rate thereof or change the currency of payment of principal or interest
on any Outstanding Security or reduce the above stated percentage in principal
amount of Outstanding Securities the consent of the Holders of which is required
for modification or amendment of the Indenture or for waiver of certain
defaults, or change any obligation of the Company to maintain an office or
agency in each Place of Payment.
The Indenture also permits the Company and the Trustee to amend the
Indenture in certain circumstances without the consent of the Holders of any
Debt Securities to evidence the merger of the Company or the replacement of the
Trustee and for certain other purposes.
CONCERNING THE TRUSTEE
Bank of Montreal Trust Company is the Trustee and Paying Agent under the
Indenture. The bank or one of its affiliates has had a regular course of
commercial dealings with the Company including participation in its revolving
credit agreement, and from time to time its working lines of credit.
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DESCRIPTION OF CUMULATIVE PREFERRED STOCK
GENERAL
The description set forth below of certain provisions of the Company's
Restated Articles of Organization, as amended, the laws of The Commonwealth of
Massachusetts and the regulations of the Massachusetts Department of Public
Utilities does not purport to be complete and is subject to, and qualified in
its entirety by reference to, the Company's Restated Articles of Organization,
as amended, the laws of The Commonwealth of Massachusetts and the regulations of
the Massachusetts Department of Public Utilities.
The Cumulative Preferred Stock constitutes a class of capital stock, of
which 2,830,000 shares have been authorized, which may be issued in series and
was created by a vote of the holders of Common Stock in 1956. See "Description
of Capital Stock". The initial series, consisting of 180,000 shares of
Cumulative Preferred Stock, 4.25% Series, was issued in 1956. The second series,
consisting of 250,000 shares of Cumulative Preferred Stock, 4.78% Series, was
issued in 1958. The third series, consisting of 400,000 shares of Cumulative
Preferred Stock, 8.88% Series, was issued in 1970. The fourth series, consisting
of 500,000 shares of Cumulative Preferred Stock, 7.27% Series, of which 480,000
shares are currently outstanding, was issued in 1987. The fifth series,
consisting of 500,000 shares of Cumulative Preferred Stock, 8% Series, was
issued in 1991. The sixth series, consisting of 400,000 shares of Cumulative
Preferred Stock, 8 1/4% Series (evidenced by 1,600,000 depositary shares, each
representing a one-fourth interest in a share of Cumulative Preferred Stock,
8 1/4% Series), was issued in 1992. Each series of Cumulative Preferred Stock
may differ, as determined by the Board of Directors, from other series in
certain respects, the principal differences being as follows: number of shares,
dividend rate, the date of the first dividend payment, the date from which
dividends will be cumulative, redemption prices, sinking or purchase funds,
amounts payable upon distribution of assets and conversion, participation and
other special rights. Holders of Cumulative Preferred Stock are not entitled to
vote except in certain circumstances. See "Description of Cumulative Preferred
Stock -- Voting Rights." For further information relating to the issued and
outstanding shares of each series of Cumulative Preferred Stock, see Notes 2 and
3 of Notes to Consolidated Schedules of Capital Stock and Indebtedness contained
in the Company's 1991 Annual Report to Shareholders incorporated by reference in
the Company's Annual Report which is incorporated by reference herein.
As set forth under "Description of Depositary Shares" below, the Company
may, at its option, elect to offer depositary shares ("Depositary Shares")
evidenced by depositary receipts ("Depositary Receipts"), each such Depositary
Share representing a fractional interest (to be specified in a Prospectus
Supplement relating to a series of New Preferred Stock) in a share of such
series of the New Preferred Stock issued and deposited with a depositary, in
lieu of offering full shares of Cumulative Preferred Stock. Whether the Company
has elected to offer Depositary Shares with respect to a series of New Preferred
Stock will be set forth in a Prospectus Supplement.
DIVIDENDS
Holders of Cumulative Preferred Stock are entitled to receive, when and as
declared by the Board of Directors out of funds legally available therefor,
cumulative dividends at the rate fixed for each series, payable quarterly on the
first days of February, May, August and November in each year, before any
dividends are paid on the Common Stock or other junior stock. Dividends must be
paid on all such shares if paid on the shares of any series and, if full
dividends are not declared, payments must be made pro rata in proportion to the
rate of dividend fixed for each series. After payment in full of all dividends
accrued on Cumulative Preferred Stock, dividends on the Common Stock or any such
junior stock may be declared and paid as the Board of Directors may determine.
Dividends on the New Preferred Stock will be cumulative from the date of issue
and payable at the rate per annum set forth in the Prospectus Supplement
relating to such New Preferred Stock.
REDEMPTION PROVISIONS
Except as otherwise set forth in the Prospectus Supplement for the New
Preferred Stock, the Cumulative Preferred Stock and any series thereof may be
redeemed as a whole or in part at any time, by
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resolution of the Board of Directors, upon not less than thirty days' notice, at
the applicable redemption prices therefor plus dividends accrued to the
redemption date except that if there are any dividend arrearages on any
Cumulative Preferred Stock no part less than all of the Cumulative Preferred
Stock may be redeemed or purchased. The redemption prices for the New Preferred
Stock will be set forth in the Prospectus Supplement relating to such New
Preferred Stock.
LIQUIDATION
Upon any liquidation, dissolution or winding up of the affairs of the
Company or distribution of capital, the holders of Cumulative Preferred Stock
are entitled to receive the full distributive amounts fixed for their particular
series, plus dividends accrued to the date of distribution, before any
distribution shall be made to holders of Common Stock or other junior stock.
Distributions of assets on liquidation must be pro rata in proportion to the
amount fixed for each series, if less than payment in full is all that the
available assets will provide. The distributive amounts for the New Preferred
Stock are equal to the par value thereof per share if the liquidation,
dissolution, winding up or distribution of capital is involuntary and an amount
equal to the applicable redemption price per share if such action is voluntary,
together in each case with dividends accrued to the date of distribution.
VOTING RIGHTS
Holders of Common Stock have general voting rights, but holders of the
Cumulative Preferred Stock, except as otherwise required by law, have only the
voting rights set forth below.
Whenever dividends on any shares of any series of the Cumulative Preferred
Stock shall have accrued and remain unpaid in an amount equal to six full
quarterly dividends thereon, holders of the Cumulative Preferred Stock shall
have the exclusive right, voting separately as a class, to elect a majority of
the Directors until all dividends in default thereon shall have been paid or
declared and set apart for payment.
Without the affirmative vote of holders of at least two-thirds of the
outstanding Cumulative Preferred Stock, the Company shall not:
(a) change any provisions of the Cumulative Preferred Stock which would
be substantially prejudicial to the holders thereof, except that, if
such change is prejudicial to less than all series thereof, only the
affirmative vote of holders of two-thirds of the series so affected shall be
required; or
(b) create any class of stock ranking prior to or on a parity with the
Cumulative Preferred Stock in respect of either the payment of
dividends or the distribution of assets.
Without the affirmative vote of holders of at least a majority of the
outstanding Cumulative Preferred Stock, the Company shall not:
(a) issue any additional shares of Cumulative Preferred Stock or of any
class of stock ranking prior to or on a parity with the Cumulative
Preferred Stock in respect of either the payment of dividends or the
distribution of assets (except for the purpose of retiring stock ranking
prior to the Cumulative Preferred Stock or for the purpose of retiring
Cumulative Preferred Stock or stock ranking on a parity therewith if the
shares issued are only shares thereof or on a parity therewith) unless,
after giving effect thereto,
(i) net income of the Company for any period of twelve months within
the next preceding fifteen months (after adding back interest
charges on funded debt of the Company deducted in the computation) shall
have been at least equal to one and one-half (1 1/2) times the sum of the
annual interest charges on funded debt of the Company to be outstanding
at the date of such issue plus the annual dividend requirements on the
Cumulative Preferred Stock and on any class of stock ranking prior to or
on a parity with the Cumulative Preferred Stock in respect of either the
payment of dividends or the distribution of assets which is to be
outstanding at the date of such issue, including the shares to be issued
but excluding any funded debt or shares of such prior or parity stock to
be retired in connection with such issue; and
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(ii)the aggregate amount of capital and paid-in premiums represented
by the Common Stock and any other junior stock plus the earned
surplus of the Company would be at least equal to the capital and paid-in
premiums represented by the Cumulative Preferred Stock and all other
stock ranking prior to or on a parity with the Cumulative Preferred Stock
in respect of either the payment of dividends or the distribution of
assets to be outstanding after giving effect to such issue but excluding
any such stock to be retired in connection therewith; or
(b) merge into or consolidate with any other corporation or sell or
transfer its assets as, or substantially as, an entirety, unless such
merger, consolidation, sale or transfer shall have been required by order of
the Massachusetts Department of Public Utilities or other regulatory
authority of The Commonwealth of Massachusetts or of the United States
having jurisdiction in the premises, or unless, in the case of such merger
or consolidation, the Company shall itself be the successor corporation. The
term "sale or transfer" includes a lease or exchange but does not include a
mortgage or pledge.
PRE-EMPTIVE RIGHTS
Holders of Cumulative Preferred Stock will not have pre-emptive rights in
respect of additional issues of capital stock.
OTHER PROVISIONS
Any sinking or purchase fund or conversion, participation or other special
rights for the New Preferred Stock will be described in the Prospectus
Supplement relating to such New Preferred Stock. The New Preferred Stock, when
issued and paid for at the price determined by the Directors, will be fully paid
and not liable for further call or assessment.
The Transfer Agent and Registrar for the Company's capital stock, including
the New Preferred Stock, is The First National Bank of Boston, 100 Federal
Street, Boston, Massachusetts 02110.
In New York City, shares of Cumulative Preferred Stock may be presented for
transfer at the office of BancBoston Trust Company of NY, One Exchange Plaza,
3rd Floor, 55 Broadway, New York, New York 10006.
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DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement relating to
a series of New Preferred Stock of certain provisions of the Deposit Agreement
(as defined below) and of the Depositary Shares and Depositary Receipts does not
purport to be complete and is subject to, and qualified in its entirety by
reference to, the form of Deposit Agreement and form of Depositary Receipts
relating to each series of the New Preferred Stock which are filed with the
Commission as exhibits to the Registration Statement of which this Prospectus is
a part.
GENERAL
The Company may, at its option, elect to offer fractional interests in
shares of the New Preferred Stock by means of the issuance of Depositary Shares.
The shares of any series of the New Preferred Stock underlying the Depositary
Shares will be deposited under a separate Deposit Agreement (the "Deposit
Agreement") between the Company and a bank or trust company selected by the
Company (the "Depositary"). The Prospectus Supplement relating to a series of
Depositary Shares will set forth the name and address of the Depositary. Subject
to the terms of the Deposit Agreement, each owner of a Depositary Share will be
entitled proportionately to all the rights and preferences of the Cumulative
Preferred Stock underlying such Depositary Share (including dividend, voting,
redemption, conversion and liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement, each of which will represent the fractional
interest in a share of a particular series of the New Preferred Stock described
in the Prospectus Supplement.
DIVIDENDS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the New Preferred Stock to the record
holders of Depositary Receipts relating to such New Preferred Stock in
proportion to the numbers of such Depositary Shares owned by such holders on the
relevant record date. The Depositary shall distribute only such amount, however,
as can be distributed without attributing to any holder of Depositary Shares a
fraction of one cent, and any balance not so distributed shall be added to and
treated as part of the next sum received by the Depositary for distribution to
holders of Depositary Shares.
REDEMPTION OF DEPOSITARY SHARES
If a series of the New Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the proceeds
received by the Depositary resulting from the redemption, in whole or in part,
of such series of the New Preferred Stock held by the Depositary. The redemption
price per Depositary Share will be equal to the applicable fraction of the
redemption price per share payable with respect to such series of the New
Preferred Stock. If less than all the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by lot by the Board of
Directors.
VOTING
Upon receipt of notice of any meeting at which the holders of the Cumulative
Preferred Stock are entitled to vote, the Depositary will mail the information
contained in such notice of meeting to the record holders of the Depositary
Receipts evidencing Depositary Shares relating to such Cumulative Preferred
Stock. Each record holder of such Depositary Receipts on the record date (which
will be the same date as the record date for the Cumulative Preferred Stock)
will be entitled to instruct the Depositary as to the exercise of the voting
rights pertaining to the amount of Cumulative Preferred Stock represented by the
Depositary Shares evidenced by such Depositary Receipts. The Depositary will
endeavor, insofar as practicable, to vote the amount of Cumulative Preferred
Stock underlying such Depositary Shares in accordance with such instructions,
and the Company will agree to take all action which may be deemed necessary by
the Depositary in order to enable the Depositary to do so. The Depositary will
abstain from
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voting the Cumulative Preferred Stock to the extent that it does not receive
specific instructions from the holders of the Depositary Receipts evidencing
Depositary Shares representing such Cumulative Preferred Stock.
WITHDRAWAL OF CUMULATIVE PREFERRED STOCK
Upon surrender of Depositary Receipts at the Corporate Office of the
Depositary and upon payment of the Depositary's customary charges therefor, and
subject to the terms of the Deposit Agreement, the owner of the Depositary
Shares evidenced thereby is entitled to delivery of the number of whole shares
of Cumulative Preferred Stock represented by such Depositary Shares. Owners of
Depositary Shares will be entitled to receive only whole shares of Cumulative
Preferred Stock on the basis of one share of Cumulative Preferred Stock for the
number of Depositary Shares specified in the Prospectus Supplement relating to
such Depositary Shares. Partial shares of Cumulative Preferred Stock will not be
issued. If the Depositary Receipts delivered by the holder evidence a number of
Depositary Shares in excess of the number of Depositary Shares representing the
number of whole shares of Cumulative Preferred Stock to be withdrawn, the
Depositary will deliver to such holder at the same time a new Depositary Receipt
evidencing such excess number of Depositary Shares. Holders of shares of
Cumulative Preferred Stock thus withdrawn will not thereafter be entitled to
deposit such shares under the Deposit Agreement or to receive Depositary
Receipts evidencing Depositary Shares therefor.
AMENDMENT OF FORM OF DEPOSITARY RECEIPTS AND OF DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the Depositary, provided, however, that any amendment
which materially and adversely alters the rights of the existing holders of
Depositary Shares will not be effective unless such amendment has been approved
by holders of at least a majority of the Depositary Shares then outstanding.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
that arise solely from the existence of the depositary arrangements. The Company
will pay charges of the Depositary in connection with the initial deposit of the
Cumulative Preferred Stock, the initial issuance of the Depositary Receipts and
any redemption of the Cumulative Preferred Stock. Holders of Depositary Shares
will pay all other transfer and other taxes and governmental charges, and, in
addition, such other charges as are expressly provided in the Deposit Agreement
to be for their accounts.
TAXATION
Owners of Depositary Shares will be treated for Federal income tax purposes
as if they were owners of the Cumulative Preferred Stock represented by such
Depositary Shares and, accordingly, will be entitled to take into account for
Federal income tax purposes income and deductions to which they would be
entitled if they were holders of such Cumulative Preferred Stock. In addition,
(i) no gain or loss will be recognized for Federal income tax purposes upon the
withdrawal of Cumulative Preferred Stock in exchange for Depositary Shares as
provided in the Deposit Agreement, (ii) the tax basis of each share of
Cumulative Preferred Stock to an exchanging owner of Depositary Shares will,
upon such exchange, be the same as the aggregate tax basis of the Depositary
Shares exchanged therefor, and (iii) the holding period for shares of the
Cumulative Preferred Stock in the hands of an exchanging owner of Depositary
Shares who held such Depositary Shares at the time of the exchange thereof for
Cumulative Preferred Stock will include the period during which such person
owned such Depositary Shares.
MISCELLANEOUS
The Company, or at the option of the Company, the Depositary, will forward
to the holders of Depositary Shares all reports and communications from the
Company which the Company may be required to furnish to the holders of the
Cumulative Preferred Stock.
Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Company and the
Depositary under the Deposit Agreement will be limited to performance in
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good faith of their duties thereunder and they will not be obligated to
prosecute or defend any legal proceeding in respect of any Depositary Shares or
Cumulative Preferred Stock unless satisfactory indemnity is furnished. They may
rely upon written advice of counsel or accountants, or information provided by
persons presenting Cumulative Preferred Stock for deposit, holders of Depositary
Shares or other persons believed to be competent and on documents believed to be
genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY; TERMINATION OF THE DEPOSIT AGREEMENT
The Depositary may resign at any time by delivering to the Company notice of
its election to do so, and the Company may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary will be appointed by the Company within 60 days after delivery of the
notice of resignation or removal. The Deposit Agreement may be terminated at the
direction of the Company or by the Depositary only after (i) all outstanding
Depositary Shares have been redeemed or (ii) there shall have been made a final
distribution with respect to the Cumulative Preferred Stock underlying such
Depositary Shares in connection with any liquidation, dissolution or winding up
of the Company and such distribution shall have been distributed to the record
holders of the Depositary Receipts, or otherwise provided for. Upon termination
of the Deposit Agreement, the Depositary will discontinue the transfer of
Depositary Receipts, will suspend the distribution of dividends to the holders
thereof, and will not give any further notices (other than notice of such
termination) or perform any further acts under the Deposit Agreement. Upon
request of the Company, the Depositary shall deliver all books, records,
certificates evidencing Cumulative Preferred Stock, Depositary Receipts and
other documents respecting the subject matter of the Deposit Agreement to the
Company.
DESCRIPTION OF CAPITAL STOCK
The description set forth below of certain provisions of the Company's
Restated Articles of Organization, as amended, the laws of The Commonwealth of
Massachusetts and the regulations of the Massachusetts Department of Public
Utilities does not purport to be complete and is subject to, and qualified in
its entirety by reference to, the Company's Restated Articles of Organization,
as amended, the laws of The Commonwealth of Massachusetts and the regulations of
the Massachusetts Department of Public Utilities.
The capital stock of the Company consists of Common Stock, par value $1.00
per share, of which 100,000,000 shares have been authorized and 44,763,055
shares had been issued and were outstanding as of December 31, 1992; 2,830,000
authorized shares of Cumulative Preferred Stock, par value $100 per share, which
may be issued in series and of which 2,210,000 shares had been issued and were
outstanding as of December 31, 1992 as described above under "Description of
Cumulative Preferred Stock -- General", and 8,000,000 authorized shares of
Preference Stock, par value $1 per share, which may be issued in series, none of
which were outstanding as of December 31, 1992. Authorized share amounts
indicated above are as of the date of this Prospectus.
Subject to the preferential rights of holders of the Cumulative Preferred
Stock (see "Description of Cumulative Preferred Stock -- Dividends") and the
Cumulative Preference Stock to receive full cumulative dividends at the dividend
rate fixed for each series and designated in the title thereof, dividends on
Common Stock may be declared and paid as the Board of Directors may determine.
Except as provided by Massachusetts law or in the Restated Articles of
Organization of the Company, holders of the Common Stock shall have the
exclusive right to vote for the election of Directors and for any other purpose
or on any other subject. The Restated Articles of Organization provide, however,
that whenever dividends on any shares of any series of the Cumulative Preferred
Stock shall have accrued and remain unpaid in an amount equal to six full
quarterly dividends thereon, holders of the Cumulative Preferred Stock shall
have the exclusive right, voting separately as a class, to elect a majority of
the Directors until all dividends in default thereon shall have been paid or
declared and set apart for payment, and the remaining Directors shall be elected
by the holders of the Common Stock. See "Description of Cumulative Preferred
Stock -- Voting Rights". In addition, the Restated Articles of
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Organization provide that whenever dividends on any shares of any series of
Cumulative Preference Stock have accrued and remain unpaid in an amount equal to
six full quarterly dividends thereon, holders of the Preference Stock, voting as
a class, have the right to elect two directors if the total number of directors
constituting the full Board of Directors is five or more, or one director if
such total number is three or four, until all accrued and unpaid dividends on
shares of Cumulative Preference Stock have been paid in full or set apart for
payment. The Restated Articles of Organization further provide that stockholders
entitled to vote at any meeting shall have one vote for each share of stock
owned by them.
In the event of liquidation, dissolution or winding up of the affairs of the
Company or distribution of its capital, holders of the six series of Cumulative
Preferred Stock now outstanding are entitled to receive $100 per share, if
involuntary, or the applicable redemption price, if voluntary. Upon any
liquidation, dissolution or winding up of the Company, holders of any series of
Preference Stock hereafter issued are entitled to receive, subject to the prior
preferential rights of the Cumulative Preferred Stock (see "Description of
Cumulative Preferred Stock -- Liquidation"), the amount fixed and determined by
the Board of Directors for such series. In any of such events, after payment to
holders of the Cumulative Preferred Stock and the Cumulative Preference Stock of
the foregoing distributive amounts, the remaining assets and funds of the
Company shall be distributed among the holders of Common Stock.
The Company's Restated Articles of Organization and Bylaws contain certain
provisions that may be viewed as having an anti-takeover effect, including
provisions establishing a classified Board of Directors and requiring a
supermajority vote of the disinterested stockholders to approve certain business
transactions with a stockholder owning more than 5% of the outstanding shares of
the Company's Common Stock. The Company is also subject to (i) Chapter 110D of
the Massachusetts General Laws, that, in general, prevents anyone who acquires
20% or more of a company's shares from voting those shares unless disinterested
stockholders (excluding the bidder and the company's management) vote to
enfranchise the bidder, and (ii) Chapter 110F of the Massachusetts General Laws,
that, in general, provides that for three years after an acquiror has purchased
5% or more of the stock of a company, the acquiror may not complete the
acquisition through merger, sell or pledge the assets of the company, or engage
in other self-dealing transactions.
Holders of the Common Stock have no conversion or pre-emptive rights and are
not liable for further call or assessment.
The Common Stock of the Company is listed on the New York Stock Exchange and
the Boston Stock Exchange. Application will be made for listing on such
exchanges of additional shares of Common Stock offered in a Prospectus
Supplement relating to this Prospectus.
The Transfer Agent and Registrar for the Company's capital stock, including
the Common Stock, is The First National Bank of Boston, 100 Federal Street,
Boston, Massachusetts 02110. In New York City, the Common Stock may be presented
for transfer at the office of BancBoston Trust Company of NY, One Exchange
Plaza, 3rd Floor, 55 Broadway, New York, New York 10006.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
Under the Company's Dividend Reinvestment and Stock Purchase Plan (the
"DRP"), participants are able to reinvest dividends paid by the Company in the
purchase of additional shares of Common Stock of the Company and to make
optional cash payments (up to $5,000 per calendar quarter) to acquire additional
shares of Common Stock of the Company. Shares purchased under the DRP may either
be shares purchased in the open market or shares newly issued by the Company.
LEGAL OPINIONS
The validity of the Securities will be passed upon for the Company by Ropes
& Gray, One International Place, Boston, Massachusetts, counsel for the Company.
Thomas G. Dignan, Jr., a partner of Ropes & Gray, is a Director of the Company.
Certain legal matters will be passed upon for the underwriters and/or agents by
Choate, Hall & Stewart, Exchange Place, 53 State Street, Boston, Massachusetts.
14
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EXPERTS
The consolidated balance sheets as of December 31, 1992 and 1991 and the
consolidated statements of income, retained earnings, and cash flows for each of
the three years in the period ended December 31, 1992, incorporated by reference
in this Prospectus, have been incorporated herein in reliance on the report of
Coopers & Lybrand, independent accountants, given on the authority of that firm
as experts in accounting and auditing.
With respect to the unaudited interim consolidated financial information for
the periods ended September 30, 1992 and 1991, June 30, 1992 and 1991, and March
31, 1992 and 1991, incorporated by reference in this Prospectus, Coopers &
Lybrand have reported that they have applied limited procedures in accordance
with professional standards for a review of such information. However, their
separate reports included in the Company's Quarterly Reports on Form 10-Q for
the quarters ended September 30, 1992, June 30, 1992 and March 31, 1992, and
incorporated by reference herein, state that they did not audit and they do not
express an opinion on that interim consolidated financial information.
Accordingly, the degree of reliance on their reports on such information should
be restricted in light of the limited nature of the review procedures applied.
Coopers & Lybrand are not subject to the liability provisions of Section 11 of
the Securities Act of 1933, as amended (the "Act"), for their reports on the
unaudited interim consolidated financial information because such reports are
not "reports" or a "part" of the registration statement prepared or certified by
Coopers & Lybrand within the meaning of Sections 7 and 11 of the Act.
Ropes & Gray has reviewed the statements as to matters of law and legal
conclusions under "Description of Debt Securities", "Description of Cumulative
Preferred Stock", "Description of Depositary Shares", and "Description of
Capital Stock." Such statements are included on the authority of said firm.
PLAN OF DISTRIBUTION
The Company may sell the Securities to or through underwriters, and also may
sell the Securities directly to other purchasers or through agents. The
distribution of the Securities may be effected from time to time in one or more
transactions at a fixed price or prices, which may be changed, or at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices.
In connection with the sale of the Securities, underwriters or agents may
receive compensation from the Company or from purchasers of the Securities for
whom they may act as agents in the form of discounts, concessions or
commissions. Underwriters may sell the Securities to or through dealers, and
such dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agents. Underwriters, dealers and agents that participate
in the distribution of the Securities may be deemed to be underwriters, and any
discounts or commissions received by them from the Company and any profit on the
resale of the Securities by them may be deemed to be underwriting discounts and
commissions under the Act. Any such underwriter or agent will be identified, and
any such compensation received from the Company will be described, in a
Prospectus Supplement.
Under agreements which may be entered into by the Company, underwriters and
agents who participate in the distribution of the Securities may be entitled to
indemnification by the Company against certain liabilities, including
liabilities under the Act.
If so indicated in a Prospectus Supplement, the Company will authorize
underwriters or other persons acting as the Company's agents to solicit offers
by certain institutions to purchase the Securities from the Company pursuant to
contracts providing for payment and delivery on a future date. Institutions with
which such contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases such institutions must be approved by
the Company. The obligations of any purchaser under any such contract will be
subject to the condition that the purchase of the offered Securities shall not
at the time of delivery be prohibited under the laws of the jurisdiction to
which such purchaser is subject. The underwriters and such other agents will not
have any responsibility in respect of the validity or performance of such
contracts.
15
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. NEITHER THIS PROSPECTUS SUPPLEMENT NOR
THE PROSPECTUS CONSTITUTES AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS
SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY
SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR THEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Prospectus Summary................................ S-3
Recent Dividends and Stock Price Information...... S-5
Recent Developments............................... S-5
Use of Proceeds................................... S-6
Legal Opinions.................................... S-6
Experts........................................... S-6
Underwriting...................................... S-7
PROSPECTUS
Available Information............................. 2
Incorporation of Certain Documents by Reference... 2
The Company....................................... 3
Use of Proceeds................................... 3
Plant Expenditures and Financing.................. 4
Ratio of Earnings to Fixed Charges and Ratio of
Earnings to Fixed Charges and Preferred
Dividends....................................... 4
Dividends and Stock Price Information............. 5
Description of Debt Securities.................... 5
Description of Cumulative Preferred Stock......... 8
Description of Depositary Shares.................. 11
Description of Capital Stock...................... 13
Legal Opinions.................................... 14
Experts........................................... 15
Plan of Distribution.............................. 15
</TABLE>
2,500,000 SHARES
BOSTON EDISON
COMPANY
COMMON STOCK
($1.00 PAR VALUE)
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PROSPECTUS SUPPLEMENT
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GOLDMAN, SACHS & CO.
A.G. EDWARDS & SONS, INC.
KIDDER, PEABODY & CO.
INCORPORATED
LEHMAN BROTHERS
MERRILL LYNCH & CO.
REPRESENTATIVES OF THE UNDERWRITERS
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