<PAGE>
RULE 424(A)
REGISTRATION NO. 33-52191
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+ REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+ SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+ OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+ BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+ THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+ SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+ UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION DATED FEBRUARY 22, 1994
PROSPECTUS
900,000 SHARES
LOGO
CONNECTICUT ENERGY CORPORATION
COMMON STOCK
(PAR VALUE $1 PER SHARE)
-----------
The outstanding shares of the Common Stock of Connecticut Energy Corporation
(the "Company") are, and the shares offered hereby will be, listed on the New
York Stock Exchange under the symbol "CNE." On February 18, 1994, the last
reported sale price of the Common Stock on the New York Stock Exchange
Composite Tape was $20.875 per share. See "Common Stock Price Range and
Dividends."
-----------
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. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
================================================================================
UNDERWRITING PROCEEDS
PRICE TO DISCOUNTS AND TO
PUBLIC COMMISSIONS(1) COMPANY(2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share.............................. $ $ $
- --------------------------------------------------------------------------------
Total(3)............................... $ $ $
================================================================================
</TABLE>
(1) The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act of
1933. See "Underwriting."
(2) Before deduction of expenses payable by the Company, estimated at $142,000.
(3) The Company has granted to the Underwriters a 30-day option to purchase up
to an aggregate of 100,000 additional shares of Common Stock at the Price
to Public, less the Underwriting Discount, for the purpose of covering
over-allotments, if any. If all such additional shares are purchased by the
Underwriters, the total Price to Public, Underwriting Discounts and
Commissions and Proceeds to the Company will be $ , $ and
$ , respectively. See "Underwriting."
-----------
The shares of Common Stock are being offered by the several Underwriters
named herein, subject to prior sale, when, as and if accepted by them and
subject to certain conditions. It is expected that certificates for the shares
of Common Stock offered hereby will be made available for delivery on or about
March , 1994, at the offices of Smith Barney Shearson Inc., 388 Greenwich
Street, New York, New York 10013.
-----------
SMITH BARNEY SHEARSON INC.
A.G. EDWARDS & SONS, INC.
EDWARD D. JONES & CO.
March , 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 STOCK EXCHANGE, IN
THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY
BE DISCONTINUED AT ANY TIME.
---------------
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (hereinafter, together with
all amendments and exhibits, referred to as the "Registration Statement")
under the Securities Act of 1933 (the "1933 Act") with respect to the Common
Stock offered hereby. Certain information contained in this Prospectus
summarizes, is based upon, or refers to, information and financial statements
contained in one or more documents incorporated by reference in the
Registration Statement. Accordingly, the information contained herein is
qualified in its entirety by reference to such documents and should be read in
conjunction therewith. Copies of the Registration Statement may be inspected
without charge at offices of the Commission, and copies of all or any portion
thereof may be obtained from the Commission upon payment of the prescribed
fee.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "1934 Act") and in accordance therewith files
reports and other information with the Commission. Such reports, proxy
statements and other information can be inspected and copied at the Public
Reference Section of the Commission, Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices
at 7 World Trade Center, 13th Floor, New York, New York 10048-1102, and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-
2511. Copies of this material can also be obtained at prescribed rates from
the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Company's Common Stock is listed on the New York
Stock Exchange (the "NYSE"). Reports, proxy statements and other information
concerning the Company can be inspected and copied at the office of the NYSE
at Room 401, 20 Broad Street, New York, New York.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended September
30, 1993 and the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended December 31, 1993, filed by the Company with the Commission
pursuant to the 1934 Act, are hereby incorporated in this Prospectus by
reference.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the 1934 Act after the date of this Prospectus and prior
to the termination of the offering made by this Prospectus shall be deemed to
be incorporated by reference in this Prospectus and to be a part hereof from
the date of filing of such documents; provided, however, that the documents
enumerated above or subsequently filed by the Company pursuant to Section 13
of the 1934 Act prior to the filing of the Company's most recent Form 10-K
with the Commission shall not be incorporated by reference in this Prospectus
or be a part hereof from and after the filing of such Form 10-K.
Any statement contained herein or 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
subsequently incorporated document modifies or supersedes such statement. Any
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 TO
WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, ON THE WRITTEN OR ORAL
REQUEST OF SUCH PERSON, A COPY OF ANY AND ALL OF THE DOCUMENTS WHICH HAVE BEEN
OR MAY BE INCORPORATED IN THIS PROSPECTUS BY REFERENCE, OTHER THAN EXHIBITS TO
SUCH DOCUMENTS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY
REFERENCE INTO THE INFORMATION THAT THIS PROSPECTUS INCORPORATES. REQUESTS FOR
SUCH COPIES SHOULD BE DIRECTED TO J. RICHARD TIANO, ESQUIRE, VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY, CONNECTICUT ENERGY CORPORATION, 855 MAIN
STREET, BRIDGEPORT, CONNECTICUT 06604 (TELEPHONE: 203-579-1732).
2
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the detailed
information and financial statements (including the notes thereto) appearing
elsewhere in this Prospectus and in the documents incorporated herein by
reference. Unless otherwise indicated, the information in this Prospectus
assumes that the Underwriters' over-allotment option will not be exercised.
THE COMPANY
The Company is a public utility holding company whose principal subsidiary,
The Southern Connecticut Gas Company ("Southern"), is engaged in the retail
distribution of natural gas for residential, commercial and industrial uses.
Southern serves approximately 152,000 customers in parts of New Haven,
Fairfield and Middlesex Counties in Connecticut. Southern's service area
includes two of Connecticut's largest cities, Bridgeport and New Haven, a
concentration of residential communities and a large number of commercial
businesses and service industries.
THE OFFERING
<TABLE>
<S> <C>
Securities Offered.................... 900,000 Shares of Common Stock, par
value $1 per share
Common Shares to be Outstanding after
the Offering......................... Approximately 8,444,413 shares (a)
Listing............................... New York Stock Exchange (Symbol: "CNE")
Common Stock Price Range (January 3,
1993 through February 18, 1994)...... $20 7/8 to 26 1/2
Indicated Annual Dividend Rate........ $1.28. The Company's Board of
Directors declared a regular quarterly
dividend on January 25, 1994 of $.32
per share on the Company's Common
Stock, payable on March 31, 1994, to
shareholders of record on March 18,
1994. Holders, as of the record date,
of the Common Stock offered hereby
will be entitled to receive this
dividend.
Use of Proceeds....................... To reduce short-term debt incurred
primarily in connection with
Southern's capital expenditures
program and for other corporate
purposes.
</TABLE>
- --------
(a) As of February 1, 1994; assumes the subsequent issuance through March 1,
1994 of 9,186 shares of Common Stock pursuant to the Company's Dividend
Reinvestment and Stock Purchase Plan.
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FISCAL YEARS ENDED SEPTEMBER 30,
TWELVE MONTHS ENDED --------------------------------------
DECEMBER 31, 1993 1993 1992 1991 1990
------------------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Operating Revenues.... $215,313 $212,762 $203,011 $179,172 $174,059
Operating Income...... 22,648 23,125 22,328 19,817 16,906
Net Income............ 10,214 11,053 10,227 9,004 8,219(a)(b)
Net Income Per Share.. 1.37 1.50 1.43 1.38 1.33(a)(b)
Dividends Per Share... 1.28 1.28 1.265 1.24 1.23
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1993
---------------------------------------
ACTUAL AS ADJUSTED(C)
------------------- -------------------
AMOUNT PERCENTAGE AMOUNT PERCENTAGE
-------- ---------- -------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Long-Term Debt................................ $120,511 54% $120,511 50%
Common Shareholders' Equity................... 103,455 46 121,538 50
-------- --- -------- ---
Total Capitalization.......................... $223,966 100% $242,049 100%
======== === ======== ===
Total Short-Term Debt......................... $ 38,900 $ 20,817
Net Utility Plant and Other Property.......... $223,359 $223,359
Total Assets.................................. $361,470 $361,470
</TABLE>
- --------
(a) Includes the cumulative effect of accounting change for municipal property
taxes which increased earnings by $1,280 or $.21 per share.
(b) A writedown of the value of oil and gas properties reduced earnings by $611
or $.10 per share in 1990.
(c) Adjusted to reflect the sale of the Common Stock offered hereby and the
application of the net proceeds thereof (estimated to be $18,083). See "Use
of Proceeds."
3
<PAGE>
THE COMPANY
The Company is a public utility holding company whose principal subsidiary,
The Southern Connecticut Gas Company ("Southern"), is primarily engaged in the
retail distribution of natural gas for residential, commercial and industrial
uses.
The Company was incorporated in Connecticut in 1979, and its principal
executive offices are located at 855 Main Street, Bridgeport, Connecticut 06604
(Telephone: 203-579-1732). The Company is subject to the provisions of the
Public Utility Holding Company Act of 1935 but claims an exemption from all
provisions thereof except Section 9(a)(2). Southern's predecessor companies,
New Haven Gas Company and The Bridgeport Gas Light Company, were originally
incorporated in Connecticut in 1847 and 1849, respectively. The Company has in
the past engaged, and may in the future from time to time engage, in
discussions regarding possible mergers with or acquisitions of companies
involved in gas distribution or other business activities. The Company is not
currently engaged in any such discussions.
Southern, a Connecticut public service company, serves approximately 152,000
customers in Connecticut, primarily in twenty-two towns, including Bridgeport
and New Haven, in an area along the southern Connecticut coast from Westport to
Old Saybrook. Southern is also authorized to lay mains and sell gas in an
additional ten towns in its service area, but does not currently provide any
service to these towns.
Southern's operating revenue breakdown for the fiscal year ended September
30, 1993 was 61.9% residential, 21.6% commercial, 9.0% industrial, 7.2%
interruptible and other, and 0.3% transportation. Southern is regulated as to
rates and other matters by the Connecticut Department of Public Utility Control
("DPUC").
THE SOUTHERN CONNECTICUT GAS COMPANY
FRANCHISE AND SERVICE AREAS
[MAP]
LONG ISLAND SOUND
FRANCHISE AREA CURRENTLY SERVED
FRANCHISE AREA NOT CURRENTLY
SERVED
4
<PAGE>
RATE MATTERS
On December 1, 1993, the DPUC issued a final Decision allowing an increase in
Southern's rates designed to produce additional annual revenues of $13,400,000
(an increase of approximately 6.6%). The Decision also approved a Partial
Settlement of Certain Issues ("Partial Settlement") which resolved most of the
significant financial aspects of the original rate request filed on April 23,
1993. In addition to the $13,400,000 rate increase based upon Southern's sales
forecast, the Partial Settlement included an allowed return on equity of 11.45%
and implementation of a weather normalization adjustment clause which will
adjust customers' bills for the difference between actual and normally expected
weather conditions and result in a leveling of bills during periods of unusual
weather. Southern was also allowed to recover a number of previously deferred
costs over amortization periods of from three to five years. There can be no
assurances that the additional revenues authorized by the rate increase will
actually be received.
The Partial Settlement also provides for current recovery of postretirement
health care expenses accrued under SFAS No. 106 and the establishment of a
target margin of $4,000,000 associated with sales and transportation services
to Southern's interruptible customers with excess margins shared between firm
customers and shareholders on an 80%/20% split. As part of the Partial
Settlement, Southern agreed that, except in the event of certain circumstances
which would adversely affect its financial condition, Southern would not apply
for rate relief prior to November 30, 1995. The new rates became effective on
December 9, 1993.
RECENT FINANCIAL INFORMATION
The Company's results of operations for the three months ended December 31,
1993 are summarized below (dollars in thousands, except per share data):
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-------------------------
DECEMBER 31, DECEMBER 31,
1993 1992
------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
Operating Revenues...... $ 66,714 $ 64,163
Gross Margin............ $ 30,107 $ 29,360
Net Income.............. $ 4,998 $ 5,837
Net Income Per Share.... $ 0.67 $ 0.80
Weighted Average Common
Shares Outstanding..... 7,498,194 7,284,225
</TABLE>
Results for the quarter ended December 31, 1993 do not reflect the full
impact of Southern's recent rate increase. New rates did not become effective
until December 9, 1993 and, therefore, were in place for only the last three
weeks of the quarter.
Factors contributing to the decrease in net income for the three month period
ended December 31, 1993 were slightly warmer weather, which was partially
mitigated by the implementation of the 6.6% rate increase on December 9, 1993
and higher operations expenses in respect of uncollectibles, insurance costs,
wages, depreciation and lease costs. Earnings for the three month period ended
December 31, 1992 were positively impacted by a DPUC decision that allowed
Southern to defer shortfalls in energy assistance from state and federal
agencies. This decision allowed Southern to significantly reduce its provision
for uncollectibles during the three months ended December 31, 1992. Results for
the three months ended December 31, 1993 were also affected by higher interest
costs due to the issuance of $15,000,000 and $12,000,000 in additional long-
term debt in December 1992 and September 1993, respectively. The increase in
long-term debt costs was partially offset by lower short-term interest costs.
5
<PAGE>
USE OF PROCEEDS
The net proceeds to the Company from the sale of the Common Stock being
offered hereby are estimated to be $18,082,969 (assuming a public offering
price of $20.875 per share (the closing price per share on February 18, 1994,
as reported on the NYSE Composite Tape)), and will be used to reduce short-term
debt incurred primarily in connection with Southern's capital expenditures
program and for other corporate purposes. At December 31, 1993, the Company's
consolidated outstanding short-term debt totaled $38,900,000 and had a weighted
average annual interest rate of 3.47%.
CAPITAL EXPENDITURES PROGRAM
Southern's capital expenditures totaled approximately $26,100,000 in fiscal
1993, a significant portion of which was funded by cash flow provided by
operations. Construction expenditures in fiscal 1994 are estimated at
$24,000,000, approximately 35% of which will be used for additions to
Southern's utility plant to serve new customers and the balance of which will
be used to maintain and improve existing facilities. Over the fiscal 1994-1998
periods, Southern estimates that total capital expenditures will range between
$110,000,000 and $130,000,000. Additionally, Southern has $7,033,000 of long-
term debt maturing during the fiscal 1994 through 1998 periods. The Company
intends to continue to finance a significant portion of Southern's capital
requirements and financing obligations with internally generated funds. The
remainder of such expenditures will be financed through external sources,
including the issuance of securities and additional borrowings.
COMMON STOCK PRICE RANGE AND DIVIDENDS
The Company and its predecessors have paid 336 consecutive quarterly cash
dividends since 1909 and cash dividends in each year since 1850. See
"Description of Common Stock" for information regarding dividend restrictions.
The Company's Board of Directors reviews the Company's dividend policy from
time to time. The amount of future dividends will depend upon financial
conditions, earnings and such other factors as the Board of Directors deems
relevant.
The Company's Common Stock is traded on the NYSE under the symbol "CNE." The
following table sets forth, for each of the periods indicated, the high and low
sale prices as reported on the NYSE Composite Tape and the quarterly cash
dividends declared per share on the Company's Common Stock.
<TABLE>
<CAPTION>
PRICE RANGE DIVIDENDS
--------------- DECLARED
FISCAL YEAR HIGH LOW PER SHARE
----------- ------- ------- ---------
<S> <C> <C> <C>
1992 QUARTER ENDED
December 31.................................. $20 3/8 $18 5/8 $.312
March 31..................................... 21 7/8 18 7/8 .312
June 30...................................... 22 5/8 19 1/2 .320
September 30................................. 24 3/4 21 5/8 .320
1993 QUARTER ENDED
December 31.................................. $23 1/2 $20 1/8 $.320
March 31..................................... 25 3/8 22 1/2 .320
June 30...................................... 26 1/2 24 5/8 .320
September 30................................. 26 24 3/8 .320
1994 QUARTER ENDING
December 31.................................. $26 $23 $.320
March 31 (through February 18, 1994)......... 25 20 7/8 .320*
</TABLE>
- --------
* The Company's Board of Directors declared a regular quarterly dividend on
January 25, 1994 of $.32 per share on the Company's Common Stock, payable on
March 31, 1994 to shareholders of record on March 18, 1994. Holders, as of
the record date, of the Common Stock offered hereby will be entitled to
receive this dividend.
6
<PAGE>
As of January 28, 1994, there were 11,108 common shareholders of record.
The Company has a Dividend Reinvestment and Stock Purchase Plan (the "Plan"),
offered by separate prospectus, pursuant to which shareholders automatically
reinvest their dividends and invest optional cash payments in newly issued
shares of Common Stock at 100% of the market price. The Company amended the
Plan in 1992 to permit participation by residential customers of Southern who
reside in Connecticut. Eligible customers who are not already record holders of
Common Stock may purchase shares with a minimum cash investment of $250 and a
maximum cash investment of $50,000. In addition, the Company has amended the
Plan (a) to permit optional cash purchases of not less than $50 per investment
and not more than $50,000 per year; (b) to permit contributions for optional
cash purchases to be made by wire transfer or automatic debit from a bank
account; (c) to allow Plan participants to transfer shares of Common Stock held
in their accounts into Plan accounts for other persons who would be eligible to
participate in the amended Plan and to family members of the participant
initiating the transfer; (d) to allow participants to hold shares of Common
Stock in an individual retirement account ("IRA"); (e) to eliminate the fee
charged for the safekeeping feature of the Plan; and (f) to increase the number
of shares of Common Stock reserved for issuance and sale under the Plan from
1,500,000 shares (after adjustment for a 1989 stock split) to 2,500,000 shares.
The Company absorbs substantially all of the expenses of the Plan.
One of the investment funds under the employee benefit plan for Southern's
employees invests in the Company's Common Stock. The Company has filed
registration statements under the 1933 Act pursuant to which interests in the
plan have been registered and up to 500,000 shares of the Company's Common
Stock may be offered to participants in the plan. The shares of the Company's
Common Stock to be offered through the plan either will be obtained through
open-market purchases or will be newly-issued shares.
DESCRIPTION OF COMMON STOCK
The outstanding Common Stock of the Company is, and the Common Stock offered
hereby when issued and paid for will be, fully paid and non-assessable. The
following summary description of certain provisions of the Company's Amended
and Restated Certificate of Incorporation (the "Company's Certificate") does
not purport to be complete and is qualified in its entirety by reference to
said provisions.
The Company's Certificate authorizes 20,000,000 shares of Common Stock having
a par value of $1 per share. The Company's Certificate also authorizes a class
of 1,000,000 shares of preference stock having a par value of $1 per share. The
Board of Directors is authorized to issue shares of the Company's Common Stock
and preference stock from time to time, without common shareholder approval. To
date, no shares of preference stock have been issued.
DIVIDEND RIGHTS
The Company is a legal entity distinct from its subsidiaries. The right of
the Company and its shareholders to participate in any distribution of the
assets or earnings of any subsidiary is subject to the prior claims of
creditors and preferred shareholders of such subsidiary, if any, except to the
extent that claims of the Company in its capacity as a creditor of any
subsidiary may be recognized.
Subject to the preferential rights of the Company's preference stock, if any
should be issued, dividends may be declared on the Common Stock out of the
funds legally available therefor. The major source of funds for payment of the
Company's dividends is dividends received on the shares of Southern's Common
Stock owned by the Company. Southern's indenture relating to long-term debt,
line of credit/term loan agreement and its Amended and Restated Certificate of
Incorporation ("Southern's Certificate") contain restrictions as to the
declaration or payment of cash dividends on, or the reacquisition of, capital
stock. Under the most restrictive of such provisions, $17,960,000 of Southern's
retained earnings at September 30, 1993 were available for such purposes. The
Company's receipt of dividends from Southern is subject to action by
7
<PAGE>
Southern's Board of Directors. In addition, Southern's Certificate authorizes
the issuance of preference stock, but none has been issued.
VOTING RIGHTS
Each holder of the Common Stock is entitled to one vote for each share held
of record on the books of the Company. Shareholders do not have cumulative
voting rights with respect to the election of directors.
LIQUIDATION AND PREEMPTIVE RIGHTS
After satisfaction of the preferential liquidation rights of the Company's
preference stock, if any should be issued, the holders of the Common Stock are
entitled to share ratably in the distribution of all remaining assets.
The holders of the Common Stock have no preemptive rights.
PROVISIONS RELATING TO CHANGE IN CONTROL
The Company's Certificate and By-Laws contain provisions which could have the
effect of delaying, deferring or preventing a change in control of the Company.
Some of these provisions operate only with respect to an extraordinary
corporate transaction involving the Company, such as a merger, reorganization,
tender offer, sale or transfer of substantially all of its assets, or
liquidation. Provisions relating to the Company's Board of Directors (1) divide
the Board of Directors into three classes of directors, as nearly equal in
number as possible, serving for staggered three-year terms, (2) provide that
directors can only be removed for cause (as defined in the Company's
Certificate) upon the affirmative vote of (i) the Board of Directors acting by
not less than a majority of directorships or (ii) 80% of the combined voting
power of the then outstanding shares of all classes and series of the Company's
stock entitled to vote generally in the election of directors ("Voting Stock"),
voting as a single class, (3) provide that vacancies on the Board of Directors
may only be filled by the affirmative vote of the majority of the Board of
Directors then in office, even though less than a quorum of the Board, (4)
require that written notice be given to the Board of Directors of a
shareholder's intention to nominate a director at least ninety (90) days in
advance of an annual meeting of shareholders or, in the case of a special
shareholders' meeting, not later than the close of business on the seventh day
following the date on which notice of such meeting was first given to
shareholders, (5) require that a special shareholders' meeting shall only be
called by the affirmative vote of a majority of the Board of Directors, or by
the President or Chairman, unless otherwise required by law, (6) require that,
unless otherwise voted by the Board of Directors, notice shall be given to
shareholders at least thirty (30) days in advance of any special shareholders'
meeting, (7) provide that shareholder action may only be taken at a meeting
unless the unanimous written consent of shareholders is obtained, (8) confirm
that the Board of Directors may consider, in exercising its judgment on any
decision, the impact of its decisions upon employees, customers and communities
served by Southern and Southern's ability to carry out its duties as a public
service company, (9) provide that, when recommended by two-thirds of the
Disinterested Directors (as defined in the Company's Certificate), the
affirmative vote of the holders of 80% of the combined voting power of the then
outstanding shares of the Voting Stock, voting as a single class, and the
additional vote of a majority of the Disinterested Shareholders (as defined in
the Company's Certificate), voting as a single class, shall be required to
amend, repeal or adopt any provisions inconsistent with certain provisions of
the Company's Certificate and (10) provide that the By-Laws may be adopted,
repealed or amended only upon the affirmative vote of (i) 80% of the combined
voting power of the then outstanding shares of Voting Stock, voting as a single
class, or (ii) the Board of Directors acting by not less than a majority of the
entire Board.
The Company's Certificate contains provisions designed to ensure that under
certain circumstances all shareholders receive a minimum price in the event of
a merger or certain other business combinations initiated by a holder of at
least 10% of the Voting Stock of the Company ("Interested Shareholder"). Under
the terms of the amendments, a business combination with an Interested
Shareholder must be approved by the holders
8
<PAGE>
of 80% of the voting power of the then outstanding shares of Voting Stock,
voting as a single class, and also by the holders of a majority of such voting
power not held by the Interested Shareholder unless (i) such business
combination shall have been approved by a majority of the members of the Board
who were directors before the purchaser became an Interested Shareholder
("Disinterested Directors") and the Interested Shareholder acquired his status
as an Interested Shareholder in a manner substantially consistent with an
agreement or understanding approved by the Board of Directors prior to the time
such Interested Shareholder became an Interested Shareholder, (ii) in the case
of some business combinations, approval is voted by a majority of Disinterested
Directors, or (iii) certain minimum price and procedural requirements are met.
Under some circumstances, when approval of the Disinterested Directors has been
obtained, an amendment to the Company's Certificate would require the approval
of only a majority of the voting power of the Voting Stock. In the case of a
merger, consolidation or sale of all or substantially all of the Company's
assets approved by the Disinterested Directors, the Connecticut Stock
Corporation Act (the "Act") requires the vote of the holders of two-thirds of
the voting power of the Voting Stock. Effective June 4, 1984, the Act was
amended to include provisions regulating the minimum price to be paid to
shareholders in certain business combinations. Such provisions of the Act may
supersede the provisions of the Company's Certificate relating to such business
combinations. If the provisions of the Act apply, and subject to the exemptions
contained therein, a business combination must first be approved by the Board
of Directors and then be approved by the affirmative vote of at least (1) the
holders of 80% of the voting power of the outstanding shares of the voting
stock of the corporation and (2) the holders of two-thirds of the voting power
of the outstanding shares of the voting stock of the corporation other than
voting stock held by the interested shareholder who is, or whose affiliate or
associate is, a party to the business combination or held by an affiliate or
associate of the interested shareholder. The above vote required by the Act
does not apply, among other things, to business combinations (1) in which the
minimum price conditions of the Act and certain procedural requirements have
been satisfied, or (2) which have been approved by a resolution of the Board of
Directors involving transactions with a particular interested shareholder. The
Act defines an interested shareholder as the beneficial owner of 10% or more of
the voting power of the outstanding shares of voting stock of the corporation.
GENERAL
The Company's Common Stock is listed, and the Common Stock offered hereby
will be listed, on the NYSE under the symbol "CNE."
The First National Bank of Boston is the registrar and transfer agent for the
Company's Common Stock.
The Company's Certificate contains a provision pursuant to which the personal
liability of a director of the Company to the Company or its shareholders for
monetary damages for breach of duty as a director shall be limited to the
compensation received by the director for serving the Company as a director
during the year of the violation if such breach did not (a) involve a knowing
and culpable violation of law by the director, (b) enable the director or an
associate, as defined in subsection (3) of Section 33-374d of the Act, to
receive an improper personal gain, (c) show a lack of good faith and a
conscious disregard for the duty of the director to the Company under
circumstances in which the director was aware that his conduct or omission
created an unjustifiable risk of serious injury to the Company, (d) constitute
a sustained or unexcused pattern of inattention that amounted to an abdication
of the director's duty to the Company, or (e) create liability under Section
33-321 of the Act. The provision does not preclude or limit a director's
liability for acts or omissions occurring prior to the effective date of the
provision.
SPECIAL REDEMPTION OF BONDS RELATING TO CHANGE IN CONTROL
Bond purchase agreements with holders of first mortgage bonds issued by
Southern in the aggregate principal amount of $121,106,000 contain provisions
that require Southern, if requested by such bondholders, to redeem all of such
bonds in the event of a change in control of Southern. Such special redemption
shall be
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made not less than 15 days nor more than 45 days after receiving a request from
the bondholder for redemption of its bonds. Such request must be made not later
than 45 days after the change in control has taken place. A change in control
occurs when any person or group of related persons (other than the Company) (i)
has beneficial ownership of a majority in interest of Southern's outstanding
voting stock or (ii) acquires all or substantially all of Southern's assets.
Neither of such events shall be deemed to be a change in control if Southern
shall have merged or sold all or substantially all of its assets in compliance
with and as permitted by Southern's current bond indenture and, after either of
such events, no person or group of related persons shall have beneficial
ownership of a majority in interest of the outstanding voting stock of the
successor corporation.
If a special redemption occurs, the special redemption price shall equal the
sum of the respective Payment Values of each prospective Interest Payment and
Principal Payment, as such terms are defined in the bond purchase agreements.
The existence of the special redemption provisions may act as a deterrent to a
person desiring to take control of the Company as it could require the
refinancing of a substantial portion of Southern's long-term debt.
Southern's revolving credit/term loan agreement also contains provisions
requiring repayment in certain circumstances of the outstanding indebtedness in
the event of a "change in control," as such term is defined in that agreement.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
the Company has agreed to sell an aggregate of 900,000 shares of Common Stock
to Smith Barney Shearson Inc., A.G. Edwards & Sons, Inc. and Edward D. Jones &
Co. (the "Underwriters"), and each Underwriter has severally agreed to purchase
300,000 shares of Common Stock from the Company.
In the Underwriting Agreement, the several Underwriters have agreed, subject
to the terms and conditions set forth therein, to purchase all of the shares of
Common Stock offered hereby if any such shares are purchased.
The Company has been advised by the Underwriters that the several
Underwriters propose initially to offer the Common Stock to the public at the
initial public offering price set forth on the cover page of this Prospectus,
and in part to certain securities dealers at such price less a concession not
in excess of $ per share. The Underwriters may allow and such dealers
may reallow a concession not in excess of $ per share to certain brokers
and dealers. After the initial public offering, the public offering price and
such concessions may be changed.
The Company has granted to the Underwriters an option, exercisable for 30
days after the date of this Prospectus, to purchase up to an aggregate of
100,000 additional shares of Common Stock to cover over-allotments, if any. If
the Underwriters exercise their over-allotment option, Smith Barney Shearson
Inc., A.G. Edwards & Sons, Inc. and Edward D. Jones & Co., have severally
agreed, subject to certain conditions, to purchase 33,334, 33,333 and 33,333
shares of Common Stock, respectively. The Underwriters may exercise such option
only to cover over-allotments in connection with the sale of the 900,000 shares
of Common Stock offered hereby.
The Company has agreed in the Underwriting Agreement not to offer, sell or
otherwise dispose of any shares of Common Stock for a period of 120 days after
the date of this Prospectus, without the prior written consent of the
Underwriters, provided that the Company may issue shares under its Dividend
Reinvestment and Stock Purchase Plan.
The Company and the Underwriters have agreed to indemnify each other against
certain liabilities, including liabilities under the 1933 Act.
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LEGAL OPINIONS
The validity of shares of the Company's Common Stock offered hereby will be
passed upon for the Company by Tyler Cooper & Alcorn, 205 Church Street, New
Haven, Connecticut 06510, and for the Underwriters by Winthrop, Stimson, Putnam
& Roberts, One Battery Park Plaza, New York, New York 10004-1490, who will rely
on Tyler Cooper & Alcorn for all matters governed by the laws of the State of
Connecticut.
EXPERTS
The consolidated financial statements of the Company and its subsidiaries as
of September 30, 1993 and 1992 and for the years ended September 30, 1993, 1992
and 1991 and the financial statement schedules of the Company and its
subsidiaries for the years ended September 30, 1993, 1992 and 1991 incorporated
by reference in this Prospectus have been incorporated herein in reliance on
the reports of Coopers & Lybrand, independent accountants, given on the
authority of that firm as experts in accounting and auditing.
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NO DEALER, SALESPERSON, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION, OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER
CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR BY ANY OF THE REPRESENTATIVES OR ANY UNDERWRITERS OR BY ANY OTHER
PERSON. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION IN
WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY
OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
Prospectus Summary......................................................... 3
The Company................................................................ 4
Map........................................................................ 4
Rate Matters............................................................... 5
Recent Financial Information............................................... 5
Use of Proceeds............................................................ 6
Capital Expenditures Program............................................... 6
Common Stock Price Range and Dividends..................................... 6
Description of Common Stock................................................ 7
Underwriting............................................................... 10
Legal Opinions............................................................. 11
Experts.................................................................... 11
</TABLE>
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900,000 SHARES
LOGO
CONNECTICUT
ENERGY
CORPORATION
COMMON STOCK
(PAR VALUE $1 PER SHARE)
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PROSPECTUS
MARCH , 1994
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SMITH BARNEY SHEARSON INC.
A.G. EDWARDS & SONS, INC.
EDWARD D. JONES & CO.
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<PAGE>
GRAPHICS APPENDIX LIST
Following the last paragraph under the caption "The Company" in the
Prospectus which forms a part of the Registration Statement on Form S-3 of
Connecticut Energy Corporation, the registrant has presented a map of the State
of Connecticut which describes the franchise and service areas of the
registrant's wholly-owned subsidiary, The Southern Connecticut Gas Company
("Southern"). The map includes two shaded areas of the southern coast of
Connecticut. One shaded area illustrates twenty-town towns in Southern's
franchise area currently served, and the other shaded area illustrates an
additional ten towns in Southern's franchise area not currently served.
