P R O S P E C T U S Filed Pursuant to Rule 424 (b)(5)
Registration No. 33-50226
Eastern Utilities
DIVIDEND REINVESTMENT AND COMMON SHARE PURCHASE PLAN
The Dividend Reinvestment and Common Share Purchase Plan (the Plan)
of Eastern Utilities Associates (EUA) provides shareholders and
eligible EUA System employees with a simple and convenient method of
purchasing additional common shares, monthly or quarterly, without
payment of any brokerage commission or service charge. Any holder of
record of common shares of EUA and any eligible employee may join
the Plan.
Participants in the Plan may choose one of the following options:
o have cash dividends on all of their common shares
automatically reinvested in additional common shares, or
o have cash dividends on only a portion of their common shares
automatically reinvested in additional or
o continue to receive their cash dividends while investing with
optional cash payments of up to $5,000 per calendar quarter, or
o invest with both cash dividends on all or a portion of their
common shares and optional cash payments.
EUA System employees may arrange to make such optional cash payments
through regular payroll deductions.
Common shares purchased on behalf of participants will, at the
option of EUA, be newly-issued shares or shares purchased on the
open market. As discussed in Question 12, the price of common
shares purchased on the open market will be the weighted average
price of all shares purchased, the price of newly-issued shares will
be the average of the closing sales prices for EUA's common shares
as reported by The Wall Street Journal as Composite Transactions
during the five trading days immediately preceding the Investment
Date.
On October 17, 1994, the EUA Board of Trustees authorized amending
the Plan to provide for (i) the elimination of the 5% discount on
common shares purchased with reinvested dividends. In addition,
certain other administrative changes were made to the Plan. These
changes are set forth in this Prospectus and are effective for
dividends payable on or after February 15, 1995. See "Description
of the Plan" for the procedure to be followed by existing Plan
participants who wish to withdraw from the Plan.
It is suggested that this Prospectus be retained for future
reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE 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 December 23, 1994
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated by reference in this Prospectus the
following documents filed by EUA with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934 (the 1934
Act):
1. EUA's Annual Report on Form 10-K for the year ended December
31, 1993.
2. EUA's Quarterly Report on Form 10-Q for the quarters ended
March 31, 1994, June 30, 1994, and September 30, 1994.
3. EUA's Current Reports on Form 8-K dated January 25, 1994,
February 25, 1994, March 22, 1994, and March 28, 1994.
4. All documents filed by EUA pursuant to Sections 13(a), 13(c),
14, or 15(d) of the 1934 Act after the date of this Prospectus and
prior to the termination of this offering, which shall also be
deemed to be incorporated in this Prospectus and to be a part hereof
from the date of filing of such documents.
EUA will provide without charge to each person, including any
beneficial owner to whom this Prospectus has been delivered, upon
request of such person, a copy of any and all information
incorporated by reference in this Prospectus (not including exhibits
to such incorporated information that are not specifically
incorporated by reference into such information). Written or
telephone requests for such copies should be directed to Clifford J.
Hebert, Jr., Treasurer, Eastern Utilities Associates, P.O. Box 2333,
Boston, Massachusetts 02107 (617) 357-9590.
AVAILABLE INFORMATION
EUA is subject to the informational requirements of the 1934 Act and
in accordance therewith files reports and other information with the
Securities and Exchange Commission. Such reports and other
information can be inspected and copied at the public reference
facilities maintained by the Commission at its principal office at
450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's regional offices at Seven World Trade Center, Suite
1300, New York, N.Y. 10048 and 500 West Madison Street, Suite 1400,
Chicago, Ill. 60661-2511. Copies of such material can be obtained
at prescribed rates from the Public Reference Section of the
Commission at its principal office.
EUA's outstanding common shares are listed on the New York Stock
Exchange and the Pacific Stock Exchange. Reports, proxy statements
and other information concerning EUA can be inspected at the offices
of such Exchanges.
EASTERN UTILITIES ASSOCIATES
Eastern Utilities Associates is a Massachusetts voluntary
association organized and existing under a Declaration of Trust
dated April 2, 1928, as amended, and is a registered holding company
under the Public Utility Holding Company Act of 1935. EUA owns
directly all of the shares of common stock of three operating retail
electric utility companies (the Retail Subsidiaries), namely
Blackstone Valley Electric Company (Blackstone), Newport Electric
Corporation (Newport) and Eastern Edison Company (Eastern Edison).
Eastern Edison owns all of the permanent securities of Montaup
Electric Company (Montaup), a generation and transmission company,
which supplies electricity to it, to Blackstone, to Newport and to
two unaffiliated utilities for resale. EUA also owns directly all
of the shares of common stock of EUA Cogenex Corporation (EUA
Cogenex), EUA Ocean State Corporation (EUA Ocean State), EUA Energy
Investment Corporation (EUA Energy) and EUA Service Corporation
(Service), which provides various accounting, financial,
engineering, planning, data processing and other services to all EUA
System companies including the Retail Subsidiaries, Montaup, EUA
Cogenex, EUA Ocean State and EUA Energy Investment. EUA Cogenex
provides energy management services to non-affiliated consumers of
energy. EUA Ocean State owns a 29.9% interest in the Ocean State
Power generating project. EUA Energy was organized to invest in
energy-related projects. The holding company system of EUA, the
Retail Subsidiaries, Montaup, Service, EUA Cogenex, EUA Ocean State
and EUA Energy are referred to as the EUA System.
The EUA System supplies retail electric service in 33 cities and
towns in southeastern Massachusetts and Rhode Island. The largest
communities served are the cities of Brockton and Fall River,
Massachusetts. The retail electric service territory covers
approximately 595 square miles and has an estimated population of
approximately 725,000. On December 31, 1993, EUA System companies
served approximately 292,000 retail customers.
The name Eastern Utilities Associates is the designation of the
Trustees for the time being under a Declaration of Trust dated April
2, 1928, as amended. All persons dealing with EUA must look solely
to the trust property for the enforcement of any claims against EUA
as neither the Trustees, officers nor shareholders assume any
personal liability for obligations entered into on behalf of EUA.
DESCRIPTION OF THE PLAN
Changes to the Plan have been made and will be effective as of
February 15, 1995. If you currently participate in the Plan, you
will remain a participant until you notify the Agent in writing that
you wish to withdraw (see Questions 20 and 21). You must notify the
Agent on or before January 15, 1995, if you wish to withdraw from
the Plan in time to receive in cash the dividend which would
normally be paid on February 15, 1995. You may so notify the Agent
at the address specified in Question 3.
The following is a question and answer statement which constitutes
the provisions of the Dividend Reinvestment and Common Share
Purchase Plan (the Plan) of EUA.
PURPOSE
1. What is the purpose of the Plan?
The purpose of the Plan is to provide holders of record of EUA's
common shares and eligible employees with a simple and convenient
method of investing cash dividends or making optional cash payments,
or both, to purchase additional common shares from EUA without
payment of any brokerage commission or service charge. Also, to the
extent common shares purchased under the Plan are acquired directly
from EUA, EUA will receive additional equity funds which will be
made available for investment in its subsidiaries, payment of any
indebtedness of EUA, or toward other general corporate purposes.
2. What are the advantages of the Plan?
Participants in the Plan may (a) have cash dividends on all of their
common shares automatically reinvested, (b) have cash dividends on a
portion of their common shares automatically reinvested, (c)
continue to receive their cash dividends on shares registered in
their names and invest monthly by making optional cash payments
(including employee payroll deductions) up to a maximum of $5,000
per calendar quarter, or (d) reinvest all or a portion of their cash
dividends and, in addition, make optional cash payments. No
commission or service charge is paid by participants in connection
with purchases under the Plan. Full investment of funds is possible
under the Plan because the Plan permits fractions of shares, as well
as full shares, to be credited to participants' accounts. In
addition, dividends on fractions of shares, as well as full shares,
will be credited to participants' accounts. EUA's agent for the Plan
will provide simplified record keeping for shares credited to
participants' accounts. The Plan also provides, at no cost to the
participant, safekeeping of all his EUA share certificates if he so
requests.
ADMINISTRATION
3. Who administers the Plan for participants?
The First National Bank of Boston (the Agent) has been designated by
EUA as the agent to administer the Plan for participants, maintain
records, send statements of account to participants and perform
other duties relating to the Plan.
All correspondence concerning the Plan should be addressed to the
Agent:
The First National Bank of Boston
EUA Automatic Dividend Reinvestment Plan 45-01-06
P.O. Box 1681
Boston, Massachusetts 02105-1681
ELIGIBILITY
4. Who is eligible to participate?
All holders of record of EUA common shares and eligible EUA System
employees are entitled to participate in the Plan. Beneficial owners
of common shares whose shares are registered in names other than
their own (e.g., broker or bank nominee) may be required to become
shareholders of record by having their shares transferred into their
names if the broker, nominee or other holder of their shares does
not have the capability for handling Plan transactions. Questions
22 through 27 discuss employee eligibility and participation.
PARTICIPATION BY SHAREHOLDERS
5. How does an eligible shareholder participate?
A holder of record of common shares may join the Plan by checking
the appropriate box on the Authorization Form, signing it and
returning it to the Agent. A postage paid envelope is provided for
this purpose. Authorization Forms will be provided from time to
time to all non-participating shareholders and may also be obtained
at any time by written request to the Agent at the above address or
by calling the Agent toll free at 1-(800) 738-3001 or at (617) 575-
3100 or EUA at (617) 357-9590. If a signed Authorization Form is
returned to the Agent without one of the boxes checked, the
shareholder will be enrolled in the Plan for the purpose of
reinvesting all dividends. An existing participant continues
automatically in the Plan unless he notifies the Agent in writing
that he wishes to withdraw, which he may do at any time.
6. When may a shareholder join the Plan?
A holder of record of common shares may join the Plan at any time.
With respect to reinvested dividends, if the Authorization Form is
received by the Agent prior to the first day of the dividend payment
month (dividends are normally paid on the 15th day of February, May,
August and November), then the dividend, will be reinvested.
Optional cash payments must be received not later than the 5th day
preceding the Investment Date in order to be used to purchase
additional common shares for the shareholder. Optional cash
received after that date will be used to purchase additional common
shares as of the next Investment Date.
The "Investment Date" is the dividend payment date for the months in
which dividends are payable. For each month in which a dividend is
not payable, the Investment Date is the 15th day of such month. If
an Investment Date falls on a Saturday, Sunday or other day on which
banking institutions in Boston are authorized or required to close,
the Investment Date is the next succeeding business day.
If the Authorization Form is received by the Agent on or after the
first day of the dividend payment month, the reinvestment of
dividends will be delayed until the dividend for the next quarter.
For example, in order to invest the quarterly dividend expected to
be payable on February 15, 1995, a shareholder's Authorization Form
must be received by the Agent prior to February 1. If the
Authorization Form is received on or after February 1, the dividend
payable on February 15 will be paid in cash and the shareholder's
participation in the dividend reinvestment aspect of the Plan will
commence with the next dividend payment date.
7. What does the Authorization Form provide?
By means of the Authorization Form, a shareholder may invest in
additional common shares through the following investment options:
A shareholder checking the "Full Dividend Reinvestment" box directs
the Agent to invest in additional common shares (i) all cash
dividends on common shares registered in his own name as well as on
all of the shares credited to his account under the Plan, and (ii)
any optional cash payments made by him within the limit described in
Question 14 below.
A shareholder checking the "Partial Dividend Reinvestment" box and
designating in the appropriate space the number of shares registered
in his name on which cash dividends are to continue to be received,
directs the Agent to invest in additional common shares (i) all cash
dividends on the remaining number of common shares registered in his
name, as well as on all of the shares credited to his account under
the Plan, and (ii) any optional cash payments made by him within the
limit described in Question 14 below.
A shareholder checking the "Optional Cash Payments Only" box directs
the Agent to (i) continue to pay cash dividends to him on all shares
registered in his name, as well as on shares credited to his Plan
account, in the usual manner and (ii) invest in additional common
shares any optional cash payments made by him within the limit
described in Question 14 below.
If a signed Authorization Form is returned to the Agent without one
of the boxes checked, the shareholder will be enrolled under the
"Full Dividend Reinvestment" option. If a signed Authorization Form
is returned to the Agent with the "Partial Dividend Reinvestment"
box checked but without the number of shares designated, the form
will be returned to the shareholder for completion.
8. How may a participant change options under the Plan?
A participant may change his investment option at any time by
signing a new Authorization Form and returning it to The First
National Bank of Boston, EUA Automatic Dividend Reinvestment Plan
45-01-06, Post Office Box 1681, Boston, Massachusetts 02105. An
Authorization Form and postage-paid envelope may be obtained as
stated in Question 5. Any Authorization Form directing the Agent to
change an option must be received by the Agent by the first day of
the month in which the change is to take place.
COSTS
9. Are there any expenses to participants in connection with
purchases under the Plan?
No. All costs of administration of the Plan are to be paid by EUA.
There will be no brokerage commissions or service charges to
participants for purchases, whether shares are purchased from EUA or
on the open market.
In the event a participant requests the Agent to sell his shares,
the participant will be charged a brokerage commission on the sale
and any transfer or withholding tax (see Question 20).
PURCHASES
10. How many common shares will be purchased for a participant?
The number of shares to be purchased depends on the amount of the
participant's dividends and cash payments and on the price of the
common shares. The participant's account will be credited with a
number of shares, including fractions computed to three decimal
places, equal to the amount of cash payments or dividends invested
divided by the purchase price for the shares, determined as
described in Question 12.
11. How will the shares be purchased?
Common shares purchased for participants will, at the option of EUA,
be purchased on the open market or come from authorized but unissued
common shares purchased from EUA.
If shares are purchased from EUA, such purchases shall be made as of
the Investment Date as described in Question 6. If shares are to be
purchased on the open market, purchases will be made in accordance
with the following procedures. The Agent will select an independent
agent (the Purchasing Agent) to purchase the shares. The Agent will
provide the Purchasing Agent, as soon as practicable following the
10th day of each month, with all optional cash funds held for
investment. The Purchasing Agent will purchase common shares with
the funds provided as soon as practicable following receipt. Shares
will be allocated to the participants' accounts as soon as
practicable thereafter.
With regard to shares to be purchased with reinvested dividends in
the open market, the Purchasing Agent will commence purchasing
common shares based upon an estimate of reinvested dividends as soon
as practicable after the record date. EUA will make non-interest
bearing open account advances to the Purchasing Agent on or prior to
the settlement date for all purchases made prior to the dividend
payment date. On the dividend payment date EUA will receive credit
for all such open account advances. Any remaining dividend proceeds
will be invested by the Purchasing Agent in common shares. Shares
will be allocated to the participants' accounts as soon as
practicable thereafter.
The Purchasing Agent will have full discretion as to all matters
relating to such purchases. The Purchasing Agent will use its best
judgment in connection with all purchases made on behalf of the
Plan, with the objectives of realizing the lowest purchase prices
obtainable for the common shares and maximizing the number of shares
that can be purchased with Plan funds. The Agent reserves the right
to replace the Purchasing Agent at any time.
12. What will be the price of the Common Shares purchased under the
Plan?
The price of the common shares purchased from EUA will be the
average of the closing sales prices of EUA's common shares as
reported by The Wall Street Journal as Composite Transactions during
the last five trading days immediately preceding the Investment
Date. If there is no trading in EUA's common shares for any day in
the five-day period, or if publication by The Wall Street Journal of
reports of EUA's common share transactions for any day in the five-
day period does not take place or is subject to reporting error, the
purchase price will be determined by EUA on the basis of such market
quotations or other method as EUA and the Agent deem appropriate.
The price of shares purchased on the open market will be the
weighted average price paid by the Purchasing Agent for all shares
purchased with reinvested dividends or optional cash payments, as
applicable, during the period in which such common shares were
purchased.
OPTIONAL CASH PAYMENTS
13. How do optional cash payments work?
Optional cash payments received from a participant on or prior to
the fifth day preceding an Investment Date will be applied by the
Agent to the purchase of additional common shares as of that
Investment Date. Optional cash payments received after the fifth
day preceding the Investment Date will be held by the Agent until
the Investment Date a month later. No interest will be paid by EUA
or the Agent on optional cash payments.
14. How may optional cash payments be made?
An optional cash payment may be made by a participant when enrolling
in the Plan by enclosing with the Authorization Form a check made
payable to The First National Bank of Boston. Thereafter, optional
cash payments may be made monthly through the use of cash payment
forms, attached to statements of account, sent by the Agent to
participants. The same amount of money need not be sent each month,
and there is no obligation to make an optional cash payment in each
or any month. Optional cash payments may not exceed $5,000 in any
calendar quarter.
REPORTS TO PARTICIPANTS
15. What kind of reports will be sent to participants in the Plan?
Each participant will receive a statement of his account for each
month in which a transaction takes place. Each participant will
also receive a statement before January 31 of each year showing the
number of shares purchased for his account during the previous
calendar year, the date of each such purchase and the fair market
value on the date of purchase of the shares so purchased. These
statements are a participant's continuing record of the cost of his
purchases and should be retained for income tax purposes. In
addition, each participant will receive the most recent prospectus
relating to the Plan and copies of all communications sent to all
holders of EUA's common shares, including interim reports to
shareholders, the Annual Report to Shareholders, the Notice of
Annual Meeting and Proxy Statement, and any reports of taxable
income required by the Internal Revenue Service.
DIVIDENDS
16. Will a participant be credited with or paid dividends on
fractions of shares?
Yes, dividends will be paid on full shares and any fraction of a
share credited to a participant's account.
CERTIFICATES FOR SHARES
17. Will certificates be issued for common shares purchased by
participants?
Normally, certificates for common shares purchased under the Plan
will not be issued to participants. Common shares purchased for
participants in the Plan will be registered in the nominee name of
the Agent, and credit for shares purchased will be shown on each
participant's statement of account. Participants are therefore
assured of safekeeping of shares credited to their account under the
Plan.
Certificates for any number of whole shares credited to an account
under the Plan will be issued upon written request to the Agent from
a participant. This request should be mailed to The First National
Bank of Boston, EUA Automatic Dividend Reinvestment Plan 45-01-06,
Post Office Box 1681, Boston, Massachusetts 02105. Any remaining
full shares and fractions of shares will continue to be credited to
the participant's account. Certificates for fractions of shares will
not be issued under any circumstances.
18. May participants send share certificates of EUA held in their
possession to the Agent for safekeeping?
Yes. Participants in the Plan may send the share certificates of EUA
held in their possession to the Agent for safekeeping at no cost.
These shares should be sent to the Agent, preferably by registered
mail, and will be combined with those other shares acquired under
the Plan and held by the Agent. Shortly thereafter, the participant
will receive a statement showing his combined holdings. The Agent
will treat these shares in the same manner as shares purchased for
the participant's account.
19. In whose name will certificates be registered when issued?
Accounts under the Plan are maintained in the names of the
participants in which their certificates were registered at the time
the participants entered the Plan and certificates for whole shares
will be so registered when issued, except in instances such as
death.
WITHDRAWAL
20. How does a participant withdraw from the Plan?
To withdraw from the Plan, a participant must notify the Agent in
writing. When a participant withdraws from the Plan or upon
termination of the Plan by EUA, certificates for whole shares
credited to the participant's account under the Plan will be mailed
to the participant and a cash payment will be made for any
fractional share. The cash payment will be based on the closing
price of EUA's common shares as published in The Wall Street Journal
as Composite Transactions on the next business day following the day
the withdrawal request is received by the Agent.
Upon withdrawal from the Plan, the participant may request that all
of the participant's shares in the Plan, both whole and fractional,
be sold. This sale will be made as promptly as possible, but always
within two trading days after receipt by the Agent of the request.
The participant will receive the proceeds of the sale, less any
brokerage commission and any transfer or withholding tax.
21. When may a participant withdraw from the Plan?
A participant may withdraw from the Plan at any time.
A participant may cancel and shall be deemed to have cancelled his
reinvestment of dividends as of an Investment Date if his written
notice of withdrawal from the Plan is received by the Agent prior to
the 5th day preceding the Investment Date. All subsequent dividends
will be paid in cash to him unless he re-enrolls in the Plan, which
he may do at any time. Optional cash payments will be refunded if a
written request for refund or withdrawal from the Plan is received
by the Agent prior to the 5th day preceding the Investment Date.
If the request to withdraw is received by the Agent on or after the
5th day preceding the Investment Date, any dividends and/or any
optional cash payments received will be invested for the
participant's account. The next dividend and all subsequent
dividends will be paid to the participant unless the participant re-
enrolls in the Plan, which the participant may do at any time.
EMPLOYEE PARTICIPATION
22. Which EUA System employees are eligible to join the Plan?
Any regular full-time employee of the EUA System who is of legal age
is eligible to join the Plan.
23. What are the rights of employees participating under the Plan?
Employees have the same rights, and are governed by the same terms
and limitations, under the Plan as other EUA shareholders, except
that eligible employees may arrange to make optional cash payments
through regular payroll deductions within the limits stated under
Question 25.
24. How does an employee authorize payroll deductions under the
Plan?
An eligible employee may authorize payroll deductions under the Plan
at any time by completing an Employee Authorization Form and
returning it to the EUA System payroll department. Employee
Authorization Forms can be obtained from the personnel department.
25. What is the limit on payroll deductions?
An eligible employee may authorize his employer to deduct a
specified whole dollar amount from each regular pay check. The
minimum weekly deduction is $2.00; the maximum deduction in any week
is $100.00; the minimum monthly deduction is $10.00; the maximum
deduction in any month is $400.00. Once authorized, payroll
deductions will continue until changed or terminated by the
employee. No more than four weekly deductions will be made in a
month.
26. May employees change or terminate payroll deductions?
An employee may change the amount of, or terminate, payroll
deductions at any time by giving written notice to the payroll
department. Employees should allow at least 15 days processing time
prior to the end of the pay period in which the deduction is made
for any change or termination to become effective. Employees may
terminate payroll deductions without withdrawing from the dividend
reinvestment aspect of the Plan and continue to invest by making
optional cash payments to the Agent. In order to withdraw from the
dividend reinvestment aspect of the Plan, an employee-participant
must notify the Agent in writing that he wishes to withdraw (see
Question 20).
27. What happens when an employee-participant leaves the EUA System?
If an employee who is a dividend reinvestment participant ceases to
be employed by an EUA System company, the Agent will continue to
reinvest cash dividends on the shares credited to the participant's
Plan account and (to the extent which the participant has requested
in an Authorization Form) on shares registered in the participant's
name until the participant withdraws from the Plan. If the employee
is an "Optional Cash Payments Only" participant, all accumulated
shares will be retained by the Agent until the Agent is notified in
writing to issue a certificate, and dividends will continue to be
sent as previously requested. Participation in the Plan may continue
as long as there are shares credited to the participant's Plan
account.
OTHER INFORMATION
28. What happens when a participant sells or transfers all of the
shares registered in his name?
If a Plan participant disposes of all common shares registered in
his name, the Agent will continue to reinvest the dividends on the
shares credited to his account under the Plan until notified by the
participant that he wishes to withdraw from the Plan. If an
"Optional Cash Payments Only" participant disposes of all common
shares registered in his name, the Agent will continue to pay cash
dividends to the participant on shares credited to his account under
the Plan until notified by the participant that he wishes to
withdraw from the Plan.
29. If EUA has a rights offering, how will a participant's
entitlement be computed?
A participant's entitlement in a rights offering will be based upon
historical holdings. Rights will be issued for the number of whole
shares only. Any rights based on a fraction of a share will be sold
for his account and the net proceeds will be invested as an optional
cash payment as of the next Investment Date.
30. What happens if EUA issues a share dividend or declares a share
split?
Any common shares distributed as a result of a share dividend or a
share split on shares credited to the account of a participant will
be added to the participant's account. Such distributions on shares
registered in the name of the participant will be mailed directly to
the participant in the same manner as to shareholders who are not
participating in the Plan.
31. How will a participant's shares be voted at meetings of
shareholders?
Each participant will receive a single proxy card covering the total
number of shares held--both the shares registered in the
participant's name and those credited to his account under the Plan.
If the proxy card is returned properly signed and marked for voting,
all of the shares will be voted as marked. The total number of
shares held may be voted in person at shareholders' meetings.
If a proxy card is returned properly signed but without indicating
instructions as to the manner in which shares are to be voted with
respect to any item, all of the participant's shares--those
registered in his name and those credited to his account--will be
voted (to the extent legally permissible) in accordance with the
recommendations of EUA's management, just as for non-participating
shareholders who return properly signed proxy cards and do not
provide voting instructions. If the proxy card is not returned, or
if it is returned unsigned or improperly signed, none of the
participant's shares covered by such proxy card will be voted unless
the participant votes in person at the meeting.
32. What are the Federal income tax consequences of participation
in the Plan?
The following discussion of federal income tax consequences of
participation in the Plan is provided for purposes of general
information only. For further information concerning the tax
consequences of participation in the Plan, including consequences
under state and local law, participants should consult their own tax
advisors.
When EUA declares a distribution out of current or accumulated
earnings or profits, a participant who reinvests a distribution
under the Plan will be treated as having received a dividend for
Federal income tax purposes, and will have a tax basis in the shares
purchased with the reinvested dividend, equal to the fair market
value of such shares on the dividend payment date.
A participant who makes an optional cash payment under the Plan will
be treated as having received a dividend to the extent that the fair
market value of the shares purchased with the optional cash payment
exceeds the amount of the payment, and the participant's tax basis
in the shares purchased will be equal to the fair market value of
such shares on the date of the purchase.
For the purpose of determining the amount of the dividend and the
tax basis in shares purchased (whether by dividend reinvestment or
by cash payment), the fair market value is the average between the
high and low sales prices as published in The Wall Street Journal as
Composite Transactions on the relevant date, not the Price (see
Question 12) at which such shares were Purchased under the Plan.
If EUA common shares are purchased under the Plan on the open
market, each participant's proportionate share of brokerage
commissions paid by EUA in connection with such purchases will be
treated as additional dividend income to the participant and
included in the participant's tax basis in the shares purchased.
With respect to dividends paid by EUA from 1982 through 1985, the
Plan was intended to satisfy the requirements of the Economic
Recovery Tax Act of 1981 under which qualified individual
participants were permitted to elect to exclude from gross income up
to $750 per year ($1,500 on a joint return) of dividends reinvested
under the Plan and under comparable plans of other qualified public
utilities. (These tax benefits expired for dividends paid after
December 31, 1985.) Under these requirements, shares purchased with
reinvested dividends under the Plan prior to January 1, 1986 have a
zero basis and, if such shares are held for one year or more after
the dividend payment date, the entire amount of proceeds received
from the sale of such shares will be eligible for long-term capital
gain treatment.
Upon withdrawal from or termination of the Plan, a participant may
realize gain or loss on receipt of a cash payment in redemption of a
fractional share held in the participant's account or upon a sale of
shares by the Agent under the Plan (see Question 20) or by the
participant. The amount of such gain or loss will be the difference
between the amount realized on the redemption or sale and the
participant's tax basis in the shares redeemed or sold. The Federal
income tax law requires payers of reportable dividends and
reportable proceeds from the redemption or sale of shares to
withhold 31% from amounts paid or credited to the accounts of
nonexempt payees who have failed to furnish the payer under
penalties of perjury with information relating to their Federal
income tax status, including their correct taxpayer identification
numbers, or who are otherwise subject to such withholding. If a
participant is subject to the 31% withholding, the Agent will deduct
the amount required to be withheld from such dividends or proceeds
before applying such dividends to the purchase of shares under the
Plan or releasing such proceeds to the participant. Payments of
dividends and proceeds to nonexempt persons and amounts, if any, of
tax withheld will be reported to the Internal Revenue Service by EUA
as required by law.
33. What provision is made for foreign shareholders whose dividends
are subject to income tax withholding?
In the case of those foreign holders of common shares whose
dividends are subject to United States income tax withholding, the
Agent will invest in common shares an amount equal to the dividends
less the amount of tax required to be withheld. The statements
confirming purchases made for foreign participants will indicate the
amount of tax withheld.
Foreign shareholders who check the "Optional Cash Payments Only" box
on the Authorization Form will continue to receive cash dividends on
shares registered in their names as well as on shares credited to
their Plan account in the same manner as if they were not
participating in the Plan. Optional cash payments received from them
must be in United States dollars and will be invested in the same
manner as payments from other participants.
34. May the Plan be changed or discontinued?
EUA reserves the right to suspend or terminate the Plan, or to
change the Agent administering the Plan, at any time and, subject to
the approval, if required, of the Securities and Exchange Commission
under the Public Utility Holding Company Act of 1935, reserves the
right to modify or amend the Plan at any time. Notice of any such
modification, amendment, suspension, termination, or change of Agent
will be sent to all participants.
35. What is the responsibility of EUA and the Agent under the Plan?
Neither EUA nor the Agent in administering the Plan will be liable
for any act done in good faith or for any good faith omission to
act, including, without limitation, any claim of liability arising
out of failure to terminate a participant's account upon an
occurrence such as the participant's death prior to receipt of
written notice thereof, or with respect to the prices at which
shares are purchased for the participant's account and the times
when the purchases are made, or with respect to any fluctuation in
the market value after purchase or sale of shares.
The participant should recognize that EUA cannot assure him of a
profit or protect him against a loss on the shares purchased by him
under the Plan. The terms and conditions of the Plan and its
operation shall be governed by and construed in accordance with the
laws of The Commonwealth of Massachusetts.
DESCRIPTION OF COMMON SHARES
The Declaration of Trust, as amended, of EUA provides for the
issuance of transferable certificates of beneficial interest known
as common shares of $5 par value. The common shares are the only
outstanding shares of any class of EUA. Those common shares, when
duly issued, will be, fully paid and nonassessable. See "General"
below.
The outstanding common shares are listed on the New York Stock
Exchange and the Pacific Stock Exchange. The Transfer Agent and
Registrar for the common shares is The First National Bank of
Boston.
Voting and Dividend Rights
The holders of the common shares are entitled to one vote for each
share held. A majority vote of the common shares represented in
person or by proxy at a meeting (or, as to certain matters, a
majority vote of the total number of votes to which shareholders are
entitled) is required for action by the shareholders except that (i)
election of Trustees is by cumulative voting, (ii) a vote of two-
thirds of the total number of votes to which shareholders are
entitled is required as to certain matters including liquidation,
merger, issuance of preferred shares and most amendments of the
Declaration of Trust, and (iii) a unanimous vote of all the votes to
which shareholders are entitled is required for amendment of the
provisions exempting the shareholders, Trustees, officers and agents
of EUA from liability. The holders of the common shares are entitled
to dividends out of the net earnings or surplus of EUA when declared
by the Trustees.
Pre-emptive Rights
Unless the Trustees otherwise prescribe, any common shares and other
securities convertible into common shares to be sold for cash need
not first be offered pro rata to holders of outstanding common
shares, provided that such issue (a) is publicly offered by
competitive bidding or to or through underwriters or investment
bankers for public sale or (b) is pursuant to a plan whereby
shareholders may purchase common shares by directing the
reinvestment of dividends or by making limited optional cash
payments or (c) is pursuant to a plan for share ownership by
employees of EUA or any direct or indirect subsidiary thereof.
Rights Upon Liquidation
After satisfaction of prior claims, holders of common shares are
entitled to receive pro rata the remaining assets of EUA, in cash or
in kind.
General
EUA is an unincorporated voluntary association under the laws of
Massachusetts. Its Declaration of Trust provides for immunity of its
shareholders and of its Trustees (who act as a board of directors)
as individuals from liability under any contract, obligation or
undertaking made by or for the Trustees. It also provides that all
such contracts, obligations and undertakings shall be enforceable
only against the trust estate and that no person has authority to
enter into any agreement or incur any obligation except in
accordance with that provision. The Declaration of Trust also
provides that if a shareholder of EUA shall be held to or be under
any personal liability solely by reason of his being or having been
a shareholder and not by reason of his acts or omissions as a
shareholder, he shall be held harmless and indemnified out of the
trust estate. Although shareholders of certain voluntary
associations have been held, under Massachusetts law, to be partners
and as such liable for certain obligations of such associations, it
is the opinion of counsel for EUA that the courts of Massachusetts
would hold that EUA is a trust and not a partnership and that the
shareholders of EUA have no personal liability for the acts or
omissions of EUA or its Trustees, officers or agents; that in any
event the shareholders are protected by reason of the provisions of
the Declaration of Trust described above from personal liability on
contract obligations containing the so-called limited liability
clause which EUA customarily inserts in all contract obligations
including debt securities; that there are no presently outstanding
material contracts or obligations known to such counsel upon which
personal liability may be imposed on the shareholders under the laws
of states other than Massachusetts; and that so long as EUA
continues, as it has since its organization in 1928, to confine its
activities to Massachusetts and to the ownership of the securities
of, or advances to, companies such as its subsidiaries and does not
operate physical properties, the possibility of substantial
liabilities against EUA arising from torts or statutory liability or
penalties, other than tax liabilities, is very remote. It has been
the experience of EUA over the years since its organization that its
liability for taxes of all classes has been adequately covered by
its income.
USE OF PROCEEDS
EUA does not know either the number of shares that will be purchased
under the Plan or the prices at which such shares will be sold. The
proceeds from the issuance of the additional common shares will be
added to EUA's general funds and will be used for any or all of the
following purchases: (i) investment in EUA's subsidiaries, through
purchases of additional shares of their capital stocks, capital
contributions, open account advances, or loans, (ii) payment of any
indebtedness of EUA, or (iii) general corporate purposes.
LEGAL OPINIONS AND EXPERTS
The legality of the additional common shares offered hereby has been
or will be passed upon for EUA by McDermott, Will & Emery, 75 State
Street, Boston, Massachusetts.
The consolidated balance sheets and consolidated statements of
capitalization as of December 31, 1993 and 1992, and the related
consolidated statements of income, retained earnings and cash flows
for each of the three years in the period ended December 31, 1993
and the related financial statement schedules, all incorporated by
reference or included in EUA's Annual Report on Form 10-K for the
year ended December 31, 1993, incorporated by reference in this
Prospectus, have been so incorporated herein in reliance on the
reports of Coopers & Lybrand, independent certified public
accountants, given on the authority of that firm as experts in
accounting and auditing.
No dealer, salesman or any other person has been authorized to give
any information or to make any representation other than those
contained in this Prospectus and, if given or made, such information
or representations must not be relied upon as having been authorized
by EUA. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, any of these securities in any
jurisdiction to any person to whom it is unlawful to make such offer
or solicitation in such jurisdiction. The delivery of the
Prospectus does not imply that the information herein is correct as
of any time subsequent to its date.
TABLE OF CONTENTS
Page
Incorporation of Certain Documents by
Reference................................ 2
Available Information .................... 2
Eastern Utilities Associates.............. 2
Description of the Plan:
Purpose ............................. 3
Administration....................... 4
Eligibility............................ 4
Participation by Shareholders ......... 4
Costs ................................. 6
Purchases.............................. 6
Optional Cash Payments ................ 7
Reports to Participants ............... 8
Dividends.............................. 8
Certificates for Shares ............... 8
Withdrawal ............................ 9
Employee Participation ................ 9
Other Information ..................... 10
Description of Common Shares .......... 13
Use of Proceeds........................ 14
Legal Opinions and Experts ............ 15
Eastern Utilities
Dividend Reinvestment and Common Share Purchase Plan
PROSPECTUS
