Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE BERKSHIRE GAS COMPANY
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-1731220
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
115 Cheshire Road 01201
Pittsfield, Massachusetts (Zip Code)
(Address of principal executive office)
413-442-1511
(Registrant's telephone number, including area code)
Michael J. Marrone, Vice President, Treasurer & Chief Financial Officer
The Berkshire Gas Company
115 Cheshire Road, Pittsfield, Massachusetts 01201
(413) 442-1511
(Name, address and telephone number,
including area code, of agent for service)
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.
The only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans. [X]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================================================
| Title of each class | | Proposed maximum | Proposed maximum | |
| of securities to be | Amount to be | offering price | aggregate | Amount of |
| registered | registered | per share* | offering price | registration fee |
|------------------------|------------------|----------------------|----------------------|--------------------|
<S> <C> <C> <C> <C>
| Common Stock, | | | | |
| $2.50 par value | 200,000** shares | $17.25 | $3,450,000 | $1,190 |
==============================================================================================================
<FN>
- --------------------
<F1> * Used only for the purpose of calculating the amount of the registration
fee pursuant to Rule 457(b), based upon the average of the reported
high and low sales prices of such securities on December 26, 1996.
<F2> ** This Registration Statement relates to 200,000 shares of the Company's
Common Stock to be registered pursuant to this Registration Statement
and, pursuant to Rule 429(a), 7,948 unsold shares of the Company's
Common Stock registered under Registration Statement No. 33-64302.
</FN>
</TABLE>
PROSPECTUS
The Berkshire Gas Company
115 Cheshire Road
Pittsfield, Massachusetts 01201
(413--442--1511)
Share Owner Dividend Reinvestment and Stock Purchase Plan
200,000 Shares
Common Stock, $2.50 Par Value
The Share Owner Dividend Reinvestment and Stock Purchase Plan (the
"Plan") of The Berkshire Gas Company (the "Company") provides holders of
record of Common Stock of the Company a simple and convenient method of
investing in additional shares of Common Stock of the Company.
Participants in the Plan may:
-- have cash dividends on all or a portion of their shares
automatically reinvested; or
-- invest by making optional cash payments at any time in any
amount from a minimum $15.00 in any calendar month to a maximum
of $5,000 in any calendar quarter; or
-- invest both their cash dividends and such optional cash
payments.
The price of the shares of Common Stock of the Company purchased by
participants in the Plan with reinvested dividends or optional cash payments
is 97% of the average of the daily high and low sales price of the Company's
Common Stock in the over-the-counter market (currently quoted in the Nasdaq
National Market Stock tables) during the five consecutive trading days
ending on and including the day of purchase. In the event that such price
falls below the book value of the stock, the 3% discount will be suspended
until such time as the discounted price exceeds the book value. Any shares
purchased under the Plan during such period of price discount suspension
will be at the average of the daily high and low sales price of the
Company's Common Stock in the over-the-counter market during the five
consecutive trading days ending on and including the day of purchase. No
shares will be available for purchase under the Plan at less than par value.
No underwriting discounts or commissions are payable by the Company in
connection with the sale of the Common Stock pursuant to the Plan. The
Company realizes proceeds from such sales equal to the sales price less
customary administrative and legal fees.
This Prospectus relates to authorized shares of Common Stock of the
Company registered under the Plan.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE 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 January 2, 1997.
No dealer, salesman or other person has been authorized to give any
information or to make any representation other than those contained in this
Prospectus in connection with the offer contained herein and, if given or
made, such information or representation must not be relied upon. 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 to any
person to whom it is unlawful for the Company 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.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 and in accordance therewith files reports
and other information with the Securities and Exchange Commission (the
"Commission"). Information with regard to prior years concerning directors
and officers, their remuneration, the principal holders of securities of the
Company, and any material interest of such persons in transactions with the
Company is disclosed in the proxy statements distributed to shareholders of
the Company and filed with the Commission. Such reports, proxy statements
and other information can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549; and at the Commission's Regional Offices in
Chicago (Suite 1400, Citicorp Center, 500 West Madison Street, Chicago,
Illinois 60661) and New York (7 World Trade Center, Suite 1300, New York,
New York 10048). Copies of such materials can be obtained at prescribed
rates from the Public Reference Section of the Commission at the Washington,
D.C. address given above. The Commission maintains a Web site that contains
reports, proxy and information statements and other information regarding
Registrants that file electronically with the Commission (including the
Company). The address of such Web site is http://www.sec.gov.
Additional updating information with respect to the securities and the
Plan may be provided in the future to the Plan participants by means of
appendices to this Prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed with the Commission pursuant
to the Securities Exchange Act of 1934 are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the year ended
June 30, 1996, filed pursuant to the Securities Exchange Act of 1934
which contains, either directly or by incorporation by reference,
audited financial statements for the Company's most recent fiscal
year.
(b) The Company's definitive proxy statement, dated October 11,
1996, in connection with the Company's Annual Meeting of Shareholders
held on November 13, 1996.
(c) The Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1996, filed pursuant to the Securities Exchange
Act of 1934.
All reports and other documents subsequently filed by the Company
pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities Exchange
Act of 1934, as amended, prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of
the filing of such reports and documents.
The Company hereby undertakes to provide, without charge, to each
person to whom this Prospectus is delivered, on the written request of any
such person, a copy of any or all of the documents which have been or may be
incorporated herein by reference (other than exhibits to such documents).
Requests for such copies should be directed to Cheryl M. Clark, The
Berkshire Gas Company, 115 Cheshire Road, Pittsfield, Massachusetts 01201.
Telephone: (413) 442-1511.
THE COMPANY
The Berkshire Gas Company (the "Company") is a public utility company
incorporated in Massachusetts in 1853. It is engaged primarily in the
distribution and sale and transportation of natural gas for residential,
commercial and industrial use, and also sells and leases gas-burning
equipment and markets liquefied petroleum gas through its Berkshire Propane
operations. The Company provides natural gas service in nineteen
communities, including the cities of Pittsfield and North Adams, the towns
of Adams, Amherst, Great Barrington, Greenfield and Williamstown, and twelve
similar municipalities. While primarily residential in character, the
Company's service territory also includes industrial, agricultural and
educational facilities and resort areas. The Company's utility business is
subject to the regulatory jurisdiction of the Massachusetts Department of
Public Utilities with respect to rates, adequacy of service, issuance of
securities, accounting and other matters.
THE OFFERING
The securities being offered hereby consist of 200,000 shares of the
Company's Common Stock.
USE OF PROCEEDS
The Company is unable to predict either the number of shares of Common
Stock that will ultimately be sold pursuant to the Plan or the prices at
which such shares will be sold. The proceeds from any such sales from time
to time are intended for use in financing additions to the Company's
property, plant and equipment or repaying temporary indebtedness incurred to
finance such additions.
DESCRIPTION OF THE PLAN
The following is a question and answer statement of the provisions of
the Plan.
Purpose
1. What is the purpose of the Plan?
The purpose of the Plan is to provide holders of record of Common
Stock of the Company a simple and convenient method of investing cash
dividends and/or optional cash payments in additional shares of Common Stock
of the Company. Since such shares will be purchased directly from the
Company, the Company will receive funds needed for its corporate purposes
(see "Use of Proceeds" herein).
Advantages
2. What are the advantages of the Plan?
Participants in the Plan may:
(i) have cash dividends on all of their Common shares
automatically reinvested;
(ii) have cash dividends on less than all of their Common
shares automatically reinvested;
(iii) invest by making optional cash payments at any time in
any amount from a minimum of $15 in any calendar month to a maximum of
$5,000 in any calendar quarter, whether or not dividends are being
invested.
The shares of Common Stock purchased on behalf of participants in the
Plan generally will be purchased at the discounted price, which price, and
the restrictions thereon, are more fully explained in the answer to Question
11 of this Prospectus.
No brokerage commissions, service charges, or other expenses are paid
by participants in connection with purchases under the Plan. Since
fractional shares, as well as full shares, may be credited to participants'
accounts, full investment of funds is possible. In addition, dividends in
respect of such fractional shares, as well as full shares, will be credited
to participants' accounts. Participants avoid the necessity for safekeeping
of stock certificates for shares credited to their accounts. Regular
statements of account simplify record keeping.
Plan Administration
3. Who administers the Plan for participants?
The Plan is administered by the Share Owner Dividend Reinvestment and
Stock Purchase Plan Committee (the "Committee") appointed by the Board of
Directors of the Company. The Committee shall determine the rights of the
participants in accordance with the Plan and interpret the Plan as it deems
necessary or desirable in connection with its operation. The Committee may
adopt such rules and regulations as it deems appropriate to promote the
objective of the Plan. All correspondence with regard to the Plan, except
communications otherwise specified herein to be directed to the Agent
referred to in Question 4, should be addressed to The Berkshire Gas Company,
Attention: Secretary of the Share Owner Dividend Reinvestment and Stock
Purchase Plan Committee, 115 Cheshire Road, Pittsfield, Massachusetts 01201.
4. Who is the agent for the Plan participants?
The designated agent under the Plan is State Street Bank and Trust
Company (the "Agent"). The Agent will be responsible for investing
participants' funds and keeping continuous records of participants'
accounts. The Agent will send participants statements of accounts at least
quarterly and perform other duties for Plan participants as needed. All
Authorization Forms, optional cash payments, notices of withdrawal and other
communications with the Agent should be sent to:
State Street Bank and Trust Company
P.O. Box 8209
Boston, Massachusetts 02101-8209
Should State Street Bank and Trust Company cease to act as Agent under the
Plan, another agent will be designated by the Company.
Eligibility and Participation
5. Who is eligible to participate?
All holders of record of ten or more shares of Common Stock of the
Company who are not employed by the Company, and all employees of the
Company owning of record one or more shares, are eligible to participate in
the Plan. Shares held in "street" name are also eligible for dividend
reinvestment through the Depository Trust Company. (Your broker should be
contacted for this service.) They are not, however, eligible for optional
cash payments for the purchase of stock through the Plan.
6. How may an eligible person join the Plan?
A shareholder may join the Plan at any time by signing an
Authorization Form and returning it to the Agent. Authorization Forms are
automatically sent to new shareholders or may be obtained upon request from
the Company at the address set forth in Question 3 or from the Agent at the
address set forth in Question 4. A shareholder may also join the Plan by
telephoning the Transfer Agent, 1-800-426-5523.
7. What does the Authorization Form provide?
The Authorization Form directs: (a) the Company to pay to the Agent
the cash dividends on all or a specified portion of the shares of Common
Stock in a participant's name and on all shares credited to such
participant's Plan account; and (b) the Agent to use these cash dividends,
together with any optional cash payments made by the participant, to
purchase shares of Common Stock from the Company.
The Authorization Form provides for the purchase of shares through the
following investment options:
(a) Reinvest dividends on all of the shares held by a
participant;
(b) Reinvest dividends on fewer than all of the shares held by
a participant and continue to receive cash dividends on the other
shares; or
(c) Invest by making optional payments at any time in any
amount from a minimum of $15.00 in any calendar month to a maximum
aggregate of $5,000 in any calendar quarter, whether or not dividends
are being reinvested.
A participant may change the investment option at any time by signing
a new Authorization Form and returning it to the Agent, or by telephone as
noted above.
Cash dividends on shares credited to the participant's account under
the Plan are automatically reinvested in additional Common Stock.
8. When may a shareholder join the Plan?
A shareholder may enroll in the Plan at any time. The Authorization
Form or telephone request must be received by the Agent by the last day of
the month immediately preceding the month in which the next dividend is paid
in order to reinvest that dividend. If received after that date, the
shareholder's participation in dividend reinvestment will become effective
on the next dividend payment date. Dividends historically have been paid on
the fifteenth day of the months of January, April, July and October, but the
Company reserves the right to change its dividend payment dates at any time,
or to suspend dividend payments at any time.
For example, in order to invest a quarterly dividend payable on
January 15, 1997, a shareholder's Authorization Form must be received by the
Agent no later than December 31, 1996. If the Authorization Form is received
after December 31, 1996, the dividend payable on January 15, 1997 will be
paid in cash and the shareholder's participation in dividend reinvestment
will commence on the next dividend payment date.
Cost to Participants
9. Are there any costs to the participants under the Plan?
All administration fees for the Plan will be paid by the Company.
There are no brokerage fees or transfer taxes when shares of Common Stock
are purchased from the Company. However, participants will bear certain
expenses upon their withdrawal from the Plan or if the Company terminates
the Plan (see Question 19).
Purchases
10. How many shares of Common Stock will be purchased for participants?
The number of shares to be purchased for each Plan participant by the
Agent will depend upon the amount of dividends to which the participant is
entitled, any optional cash payments made, and the purchase price of the
Common Stock. Each participant's account will be credited with the number of
shares, including fractional shares computed to four decimal places, equal
to the total dollar amount to be invested divided by the purchase price per
share.
11. What will be the price of the Common shares purchased under the Plan?
The price of the Common shares purchased from the Company by the Agent
on behalf of Plan participants will be 97% of the average of the daily high
and low sales prices of the Company's Common Stock in the over-the-counter
market (currently quoted in the Nasdaq National Market Stock tables) for the
five consecutive trading days ending on and including the day of purchase
(or, in the event that the over-the-counter market is closed on the day of
purchase, for the five consecutive trading days immediately preceding the
day of purchase). Notwithstanding the foregoing sentence, in the event that
such discounted price falls below the book value of the Company's Common
Stock, the discount will be suspended until such time as the discounted
price exceeds the book value. During any period of suspension of the
discount, the price of the Common shares purchased from the Company by the
Agent on behalf of Plan participants will be 100% of the average daily high
and low sales prices of the Company's Common Stock in the over-the-counter
market for the five consecutive trading days ending on and including the day
of purchase (or, in the event that the over-the-counter market is closed on
the day of purchase, for the five consecutive trading days immediately
preceding the day of purchase). The Company will provide written
notification to Plan participants in the event of any period of suspension
of the discount.
No shares will be available for purchase under the Plan at less than
the par value of such shares.
Optional Cash Payments
12. How are optional cash payments made?
Optional cash payments may be made in any amount from a minimum of $15
in any calendar month to a maximum of $5,000 in any calendar quarter.
Optional cash payments may be made in varying amounts and there is no
obligation to make regular optional cash payments. Checks or money orders
for optional cash payments must be made payable to State Street Bank and
Trust Company and mailed to the Agent at the address set forth herein under
Question 4.
13. When must optional cash payments be received by the Agent to be
invested?
Optional cash payments will be invested on the fifteenth of each
month, whether or not such date is a business day. Optional cash payments
must be received by the Agent no later than the fifteenth day of any month
in order to be invested that month. Optional cash payments received by the
Agent after the fifteenth of the month will be held for investment in the
following month.
NO INTEREST WILL BE PAID ON OPTIONAL CASH PAYMENTS
Any optional cash payment which otherwise would be invested will be
returned to the participant if a written request is received by the Agent at
least 48 hours prior to the date of investment.
Reports to Participants
14. What record will a participant have of his or her purchases?
Each participant (of record) in the Plan will receive from the Agent a
statement of account at least quarterly showing amounts invested, purchase
prices, shares purchased and other information for the preceding quarter and
the year-to-date. These statements are a participant's continuing record of
the cost of such participant's purchases and should be retained for income
tax purposes.
15. What other reports will be received by participants?
Plan participants (of record) will receive the same communications
sent to every other holder of the Company's Common Stock, including the
Company's Annual Report to Shareholders, a Notice of Annual Meeting of
Shareholders and Proxy Statement, a proxy, and income tax information forms
reporting dividends paid. Holders of street name shares may request these
reports from the Company or their broker.
Certificates for Shares
16. Will certificates be issued to participants for shares purchased under
the Plan?
Normally, certificates for Common Stock purchased under the Plan will
not be issued to participants. The number of shares held in a participant's
account under the Plan will be shown on such participant's quarterly
statement of account. However, within five business days of receipt by the
Agent of a written request from a participant, certificates for any number
of whole shares credited to a participant's account under the Plan will be
issued to the participant. Any remaining full shares and any fractional
share will continue to be held in the participant's account. Certificates
for fractional shares will not be issued under any circumstances. The
issuance of certificates will not terminate the participant's continuation
of the Plan. Any request for the issuance of certificates to a participant
should be mailed to the Agent at the address set forth under Question 4.
Shares credited to the account of a participant in the Plan may not be
acceptable as collateral for loans. A participant who wishes to pledge such
shares should request that certificates for such shares be issued and
delivered to such participant.
17. In whose name will certificates be registered when issued to a
participant?
The certificates will be issued in the name under which the
participant's shares were registered upon enrolling in the Plan.
Withdrawal from the Plan
18. When may a participant withdraw from the Plan?
A participant may withdraw from the Plan at any time. If a notice of
withdrawal is received by the Agent at least ten days prior to the record
date for the next dividend, such dividend and all subsequent dividends will
be paid in cash to the withdrawing participant. If such notice of withdrawal
is received by the Agent subsequent to the date specified, such dividends
will be invested under the Plan for the participant's account. All
subsequent dividends will be paid in cash to the withdrawing participant.
Investment of any optional cash payments will be cancelled upon receipt by
the Agent of such notice of withdrawal at least 48 hours prior to an
investment date, and any optional cash payments received prior to such
withdrawal date will be returned to the withdrawing participant.
Any shareholder who has withdrawn from the Plan may re-enroll at any
time upon submission of an Authorization Form or telephone request, as
provided under Question 6. Until such time, dividends will be paid to such
shareholder in cash.
19. How does a participant withdraw from the Plan?
In order to withdraw from the Plan, a participant must write to the
Agent at the address set forth under Question 4, giving notice that such
participant wishes to withdraw from the Berkshire Gas Company's Share Owner
Dividend Reinvestment and Stock Purchase Plan. The participant's account
number must also be stated. To facilitate the withdrawal, the participant
may forward the bottom portion of such participant's most recent quarterly
account statement.
When a participant withdraws from the Plan, or upon termination of the
Plan by the Company, the Agent will cause a certificate or certificates for
the full shares credited to the participant's account to be issued and
delivered to the participant. The participant's interest in any fractional
share will be converted to cash at a price equal to the average of the daily
high and low sales prices for the Company's Common Stock for the five
consecutive trading days ending on and including such date of withdrawal.
Upon withdrawal from the Plan, the participant may also request in writing
that some or all of the shares, both whole and fractional, held in such
participant's Plan account be sold. If the participant so requests, the
Agent will sell such shares and deliver to the participant the proceeds,
less a handling charge of 5% of the proceeds received from such sale or
$5.00 (whichever is less), and any broker's commissions and transfer taxes
payable.
Shares will be sold for the participant only upon the receipt by the
Agent of clear written instructions to sell at the prevailing market price
and the proper documents to effect the sale. Such documents include a stock
power, signed by the registered owner exactly as such owner's name appears
on the Agent's records, with signature guaranteed according to the Uniform
Commercial Code by a commercial bank which is a member of the Federal
Deposit Insurance Corporation or by a member firm of the New York, American,
Boston, Midwest or Pacific Stock Exchange (Medallion Guarantee). If the
shares are held of record in the name of a corporation, partnership, trust
or other fiduciary or if a record owner has died, the Agent may require
certified and current evidence of authority before accepting a request to
sell shares credited to a participant.
Voting Rights
20. How are participant's shares voted?
All shares owned by the participant, whether held by the shareholder
directly or by the Agent under the Plan for such shareholder's account, will
be aggregated for voting purposes. Each participant in the Plan will receive
a proxy indicating the total number of shares of Common Stock held by the
participant, including shares registered in such participant's name and
shares credited to such participant's account under the Plan.
Instruction forms for voting purposes will be forwarded to the
participant. Alternatively, a participant may vote the shares registered in
such participant's name and shares credited to such participant's Plan
account in person at meetings of the Company's shareholders.
Income Tax Information
21. What are the Federal income tax consequences of participation in the
Plan?
a. General:
In general, participants in the Plan have the same Federal income tax
obligations with respect to reinvested dividends as with dividends not
reinvested under the Plan. Participants are treated for Federal income tax
purposes as having received, on the dividend payment date, a dividend equal
to the full amount of the cash dividend payable on such date with respect to
(1) the Common Stock credited to the participant's account under the Plan,
and (2) the shares of Common Stock owned directly by the participant (the
dividends from which may or may not be reinvested under the Plan). This is
required even though the reinvested dividends are not actually received but
are applied to the purchase of additional shares.
The tax basis of shares purchased with optional cash payments is the
purchase price, before discount, per share of the stock on the Investment
Date. (See Question 11.) The holding period for shares purchased with
dividends or optional cash payments begins on the day after the applicable
date of investment.
A participant will not realize any taxable income upon receiving
certificates for whole shares, either upon request for certificates for
those shares or upon withdrawal from or termination of the Plan. However, a
participant may realize ordinary income or a capital gain or loss on any
cash payment that is made in settlement of a fractional share upon
withdrawal from or termination of the Plan. Ordinary income or capital gain
or loss may also be realized upon withdrawal from the Plan, when any or all
whole shares are sold by the participant. The amount of income, capital gain
or loss will be the difference between the amount received and the tax basis
for both the fractional and whole shares which are sold.
b. Tax Information Forms:
Following each tax year, the Company sends each participant a United
States Information Return (Form 1099 Div. B) reporting the taxable dividends
and the aggregate discount received by the participant for that tax year.
This form contains the information necessary for each participant to
complete the dividend income information on such participant's Federal
income tax return. Generally, the amount in the box labeled "Total Dividends
For The Calendar Year" should be included on a participant's Federal income
tax return as taxable income.
Tax consequences will vary depending on the special circumstances of
each participant (and for shares purchased between 1982 and 1985, where
taxes on reinvested dividends may have been deferred under then effective
law). For additional information and any questions regarding tax
consequences of participation in the Plan, participants should consult their
own tax advisors.
22. What provision is made for foreign shareholders whose dividends are
subject to United States' income tax withholdings?
In case of those foreign shareholders whose dividends are subject to
United States' income tax withholding, the Agent will apply the net amount
of the dividend of such participants, after the deduction of taxes, to the
purchase of Common Stock. If such foreign participants desire to invest the
full amount of their dividends, they may tender cash payments to the Agent
equal to the amount of tax withheld. The minimum optional cash payment
requirement of $15.00 will be waived to accommodate all payments, regardless
of size, made by foreign shareholders for this express purpose. Such
payments will be invested for the foreign shareholders for this express
purpose. Such payments will be invested for the foreign participants on the
regular investment date for all participants if received by the Agent prior
to that date. In addition, foreign shareholders may, of course, make
optional cash payments.
Miscellaneous
23. What are the responsibilities of the Agent and the Company under the
Plan?
Neither the Company nor the Agent will be liable for any act done in
good faith or for any good faith omission to act in administering the Plan
including, without limitation, any claim of liability arising out of failure
to terminate a participant's account upon such participant's death prior to
receipt of notice in writing of such death.
Participants should recognize that neither the Company nor the Agent
can assure them of a profit or protect them against a loss on the shares
purchased by participants under the Plan, nor guarantee the existence,
frequency or amount of any future dividends on the shares declared or paid
by the Company.
24. May the Plan be changed or discontinued?
Although the Company hopes that shareholder response will justify
continuing the Plan indefinitely, the Company reserves the right to modify,
suspend or terminate the plan at any time, specifically including, but not
limited to the operation of 3% price discount referred to above. Notice of
any such action will be mailed to all participants at their address of
record. Upon termination of the Plan by the Company, certificates for whole
shares credited to a participant's account under the Plan will be issued and
a cash payment will be made for any fractional share. The Company reserves
the right to interpret and regulate the Plan as may be necessary,
appropriate or desirable in connection with the operation of the Plan.
25. What happens if a participant sells or transfers all the shares
registered to the participant?
If a participant sells or transfers all of the shares registered in
the participant's name, participation in the Plan will terminate
automatically. Certificates for whole shares credited to the former
participant's account under the Plan will be issued to the participant and a
cash payment will be made to the former participant for any fractional
share, in each case, to the date of such transfer or sale.
DIVIDENDS ON COMMON STOCK
The following table sets forth the cash dividends declared and paid on
the Company's Common Stock for the periods shown:
Dividend
Quarter Ended Per Share
------------- ---------
March 31, 1994 $.27
June 30, 1994 $.275
September 30, 1994 $.275
December 31, 1994 $.275
March 31, 1995 $.275
June 30, 1995 $.275
September 30, 1995 $.275
December 31, 1995 $.275
March 31, 1996 $.275
June 30, 1996 $.28
September 30, 1996 $.28
It is the intention of the Company to declare and pay dividends
quarterly on its Common Stock, but the Company can make no representations
concerning the amount or frequency of future dividends. The declaration of
dividends must be determined by the Board of Directors from time to time in
the light of earnings, cash position and other relevant factors then
existing. Reference is made to "Description of Common Stock" herein for
information with respect to limitations on the payment of dividends.
COMMON STOCK PRICE RANGE
The Company's Common Stock is traded on the National Market System
("NMS") and quoted through the NASDAQ System. The table below sets forth the
high and low average of the bid and asked prices for shares of the Company's
Common Stock, as reported by the National Quotation Bureau, Incorporated,
for the periods indicated.
Quarter Ended High Low
------------- ---- ---
March 31, 1994 18.25 16.50
June 30, 1994 17.25 15.50
September 30, 1994 17.75 16.00
December 31, 1994 16.75 14.25
March 31, 1995 16.00 14.75
June 30, 1995 15.75 14.00
September 30, 1995 15.50 14.00
December 31, 1995 17.00 15.00
March 31, 1996 16.75 15.00
June 30, 1996 16.00 14.75
September 30, 1996 16.75 14.88
These quotations represent prices between dealers and do not include
retail markup, markdown or commission. They do not necessarily represent
actual transactions. The daily high and low sales prices on Decmeber 26, 1996
were $17.25 and $17.25, respectively.
DESCRIPTION OF COMMON STOCK
As of November 30, 1996, the capital stock of the Company consisted of
4,600,000 shares of Common Stock, $2.50 par value, of which 2,175,610 were
issued and outstanding, and 3,632 shares of Class A 4.8% Cumulative
Preferred Stock, $100 par value per share, were issued and outstanding.
The information set forth below is summarized from the Articles of
Organization, as amended, of the Company and the Indenture referred to
below, each as amended or supplemented from time to time, which either have
been heretofore filed with the Securities and Exchange Commission and are
incorporated herein by reference, or are filed herewith as exhibits. The
statements and descriptions hereinafter contained do not purport to be
complete and are qualified in their entirety by reference to such exhibits.
Dividend Rights
The holders of Common Stock shall be entitled to receive such
dividends as may be declared by the Board of Directors subject to the
preferential rights of the holders of Preferred Stock to receive full
cumulative quarterly dividends at the rates set forth in the title of each
class and series thereof before any dividends are paid to the holders of
Common Stock.
Limitation on Payment of Dividends on Common Stock
The Company's charter provisions relating to its Preferred Stock and
the provisions of the Company's Indenture, as supplemented and amended,
securing the Company's outstanding First Mortgage Bonds impose certain
restrictions on the payment of cash dividends on, or repurchases of, Common
Stock. Under the most restrictive of these provisions $2,622,880 of retained
earnings was unrestricted at September 30, 1996.
Voting Rights
Except as provided by law or otherwise provided below, the holders of
Common Stock have the sole voting rights and are entitled to one vote for
each share held of record. In addition, holders of fractional shares are
permitted a vote equal to their fractional interest. The Company's Board of
Directors is classified into three classes. There are no cumulative voting
rights, which means that a majority of the Common Stock voting at any
election can elect the directors for the class whose term is then expiring.
The Company's Articles of Organization and By-laws contain provisions
specifying the vote necessary to take certain actions. The approval of a
business combination not approved by a two-thirds vote of the Board of
Directors requires a 75% vote of the Common shareholders. The approval of an
amendment removing or altering that provision or provisions concerning the
classification of directors, filling vacancies on the Board of Directors and
notice requirements for shareholder meetings also require a 75% vote of the
Common shareholders.
Charter Provisions That May Affect Attempts To Change Control Of The Company
The Company's Articles of Organization and By-Laws contain provisions
that may have the effect of delaying or deterring a change in control of the
Company by requiring a vote of 75% of the Company's outstanding Common
shares for approval of certain business combinations of the Company and
another entity, which the Company's Board of Directors has not approved by a
two-thirds majority. Other provisions concerning classification of the
Board, filling vacancies on the Board and notice requirements also may have
such an effect, but those provisions operate regardless of whether
extraordinary corporate transactions are proposed.
Miscellaneous
The Common Stock has no conversion rights and is not subject to
redemption. The outstanding shares of Common Stock are, and the shares to be
issued under the Plan will be, when issued and paid for, fully paid and
non-assessable.
The Company distributes to its shareholders annual reports containing
audited financial statements, and, in addition, twelve-month condensed
financial statements in each quarter.
The transfer agent of the Company's Common Stock is State Street Bank
and Trust Company, Boston, Massachusetts.
LEGAL OPINIONS
Legal matters in connection with this offering will be passed upon for
the Company by Rich, May, Bilodeau & Flaherty, P.C., Old South Building, 294
Washington Street, Boston, Massachusetts 02108, general counsel for the
Company. Franklin M. Hundley, a managing director of the firm of Rich, May,
Bilodeau & Flaherty, P.C., is the Chairman of the Board of Directors of the
Company.
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this Prospectus by reference from the Company's Annual
Report on Form 10-K for the year ended June 30, 1996 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their reports
which are incorporated herein by reference, and have been so incorporated in
reliance upon the reports of such firm given upon their authority as experts
in accounting and auditing.
With respect to the unaudited interim financial information which is
incorporated herein by reference, Deloitte & Touche LLP have applied limited
procedures in accordance with professional standards for a review of such
information. However, as stated in their reports included in the Company's
Quarterly Reports on Form 10-Q and incorporated by reference herein, they
did not audit and they do not express an opinion on that interim 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. Deloitte & Touche LLP are not subject to the
liability provisions of Section 11 of the Securities Act of 1933 for their
reports on the unaudited interim financial information because those reports
are not "reports" or a "part" of the registration statement prepared or
certified by an accountant within the meaning of Sections 7 and 11 of the
Act.
INDEMNIFICATION
The Company's By-Laws permit the Company's directors and officers (and
persons who occupy such positions in other companies at the request of the
Company) to be indemnified for liabilities arising in connection with any
action, suit or proceeding prosecuted to a final determination on the merits
(except for any costs or expenses as to which such person shall be finally
adjudged to be liable), and any action, suit or proceeding which is settled
with the approval of the court having jurisdiction thereof, but only in such
amount (which shall not include any sum ordered to be paid by such
indemnified person to the Company) as such court shall determine to be fair
and reasonable under the circumstances. Indemnification payments properly
authorized may include reimbursement for the amount of the claim or judgment
and expenses of defense, including legal fees. Massachusetts law allows such
indemnification, but limits provision of indemnification where a person is
adjudicated not to have acted in good faith in the reasonable belief that
such action was in the best interest of the corporation. Indemnification is
also available to officers and directors in connection with certain actions
taken by them in reliance upon governmental regulations, rules, orders and
determinations. Certain liabilities arising under the Securities Act of 1933
may be covered by this indemnification provision, although the By-Laws
provide that indemnification of liabilities arising under such Act shall be
available only to the extent that such rights of indemnification may be
determined to be valid by a court of competent jurisdiction. Massachusetts
law also allows a corporation to purchase and maintain insurance on behalf
of such persons against any liabilities incurred in the capacity of director
or officer and the Company has such insurance.
Pursuant to a vote by Common shareholders at their 1987 Annual
Meeting, the Company's Articles of Organization were amended to provide
that, to the fullest extent that the General Laws of the Commonwealth of
Massachusetts as they exist on the date of such vote, or as they may
thereafter be amended, permit the limitation or elimination of the liability
of directors, no director of the Company shall be personally liable to the
Company or its shareholders for monetary damages for breach of fiduciary
duty, notwithstanding any provision of law imposing such liability. No
amendment to or repeal of this provision shall apply to or have any effect
on the liability or alleged liability of any director of the Company with
respect to any acts or omissions of such director occurring prior to such
amendment or repeal.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the Company
has been informed that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in
the Securities Act of 1933 and is therefore unenforceable.
================================== ===================================
TABLE OF CONTENTS The Berkshire Gas Company
Page
Available Information 2 SHAREOWNER
Incorporation of Certain DIVIDEND REINVESTMENT
Documents by Reference 2 and
The Company 3 STOCK PURCHASE PLAN
The Offering 3
Use of Proceeds 3
Description of the Plan 3 Common Stock
Dividends on Common Stock 10 ($2.50 Par Value)
Common Stock Price Range 11
Description of Common Stock 11 January 2, 1997
Legal Opinions 12
Experts 12
Indemnification 13 PROSPECTUS
================================== ===================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The estimated expenses in connection with the proposed issuance and
distribution of the Common Stock are set forth below:
<TABLE>
<S> <C>
Registration Fee.................................. $ 1,190
Printing.......................................... $ 5,000
Accounting Fees................................... $ 1,000
Legal Fees........................................ $10,000
Blue Sky Filing Fees and Expenses................. $ 1,000
Miscellaneous Expenses............................ $ 1,000
-------
Total (estimated)........................... $19,190
========
</TABLE>
Item 15. Indemnification of Directors and Officers
The general effect of the Company's By-laws with respect to issuance for
and indemnification of directors and officers is set forth in Part I of this
Registration Statement under "INDEMNIFICATION" and is incorporated herein by
reference thereto.
Item 16. List of Exhibits
See Exhibit Index at page II-5.
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include in any prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement, unless
such information is provided in subsequent reports and
documents filed pursuant to Section 13 and 15(d) of the
Securities Exchange Act of 1934;
(ii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
(2) That for the purpose of determining any liability under the Act each
such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) That for the purpose of determining any liability under the Act each
filing of the registrant's annual report pursuant to section 13(a)
or section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein and the offering of such securities at the time
shall be deeded to be the initial bona fide offering thereof;
(4) That all post-effective amendments will comply with the applicable
forms, rules and regulations of the Commission in effect at the time
such post-effective amendments are files;
(5) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering; and
(6) To furnish the Division of Corporation Finance a letter informing
said Division when all of the securities registered have been sold.
The issuer hereby undertakes to transmit or cause to be transmitted to all
participants in the Plan (except those who, having the same address as a
shareholder of the registrant, have consented in writing that only one copy of
such material need be sent to such address), who do not otherwise receive such
material as shareholders of the issuer, at the time and in the manner such
material is sent to its shareholders generally, copies of all reports, proxy
statements and other communications distributed to its shareholders generally.
The issuer also undertakes to transmit to the Commission for its information
copies of all such material which is not otherwise furnished to or filed with
the Commission pursuant to any other requirement of the Commission.
Copies of such material transmitted to the Commission pursuant to this
undertaking shall not be deemed to be "filed" as a part of the registration
statement.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Pittsfield,
Massachusetts, on the 2nd day of January, 1997.
THE BERKSHIRE GAS COMPANY
By: /s/ MICHAEL J. MARRONE
-------------------------------------------
(Michael J. Marrone, Vice President,
Treasurer, and Chief Financial Officer)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Scott S. Robinson and Michael J. Marrone, and
each of them, his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about said
matters, as fully to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents or
any of them, or their or his substitutes or substitute, may lawfully do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons and in the
capacities indicated on the 2nd day of January, 1997.
(i) Principal Executive Officer:
/s/ SCOTT S. ROBINSON President
--------------------------------
(Scott S. Robinson)
(ii) Principal Financial Officer and
Principal Accounting Officer:
/s/ MICHAEL J. MARRONE Vice President, Treasurer
-------------------------------- and Chief Financial Officer
(Michael J. Marrone)
(iii) Directors:
/s/ GEORGE R. BALDWIN
--------------------------------
(George R. Baldwin)
/s/ JOHN W. BOND
--------------------------------
(John W. Bond)
/s/ PAUL L. GIOIA
--------------------------------
(Paul L. Gioia)
/s/ FRANKLIN M. HUNDLEY
--------------------------------
(Franklin M. Hundley)
/s/ JAMES R. KEYS
--------------------------------
(James R. Keys))
/s/ SCOTT S. ROBINSON
--------------------------------
(Scott S. Robinson)
/s/ ROBERT B. TRASK
--------------------------------
(Robert B. Trask)
EXHIBIT INDEX
Certain of the following exhibits are filed herewith or will be filed
herewith by amendment. Certain other of the following exhibits have heretofore
been filed with the Commission and pursuant to Rule 411 are incorporated herein
by reference.
<TABLE>
<CAPTION>
Sequential
Exhibits* Description of Exhibit Page Number
- --------- ---------------------- -----------
<S> <S> <C>
Exhibit 1. Underwriting Agreement.
Not applicable.
Exhibit 2. Plan of acquisition, reorganization arrangement, liquidation
or succession.
Not applicable.
Exhibit 4. Instruments defining rights of security holders, including
indentures.
4(a) First Mortgage Indenture and Deed of Trust, dated as of July
1, 1954, between Pittsfield Coal Gas Company (now the
Berkshire Gas Company) and Chemical Bank & Trust Company (now
Chemical Bank), Trustee (Exhibit 4(c) to the Company's
Registration Statement on Form S-1, File No. 2-19808).
4(b) First Supplemental Indenture, dated as of June 1, 1956,
between the Company and Chemical Corn Exchange Bank (now
Chemical Bank), Trustee (Exhibit 4(d) to the Company's
Registration Statement on Form S-1, File No. 2-19808).
4(c) Second Supplemental Indenture, dated as of October 1, 1957,
between the Company and Chemical Corn Exchange Bank (now
Chemical Bank), Trustee (Exhibit 4(e) to the Company's
Registration Statement on Form S-1, File No. 2-19808).
4(d) Third Supplemental Indenture, dated as of October 1, 1958,
between the Company and Chemical Corn Exchange Bank (now
Chemical Bank), Trustee (Exhibit 4(f) to the Company's
Registration Statement on Form S-1, File No. 2-19808).
4(e) Fourth Supplemental Indenture, dated as of August 1, 1960,
between the Company and Chemical Bank New York Trust Company
(now Chemical Bank), Trustee. (Exhibit 4(e) to the Company's
Registration Statement on Form S-2, File No. 33-1492).
4(f) Fifth Supplemental Indenture, dated as of June 1, 1962,
between the Company and Chemical Bank New York Trust Company
(now Chemical Bank), Trustee. Filed as Exhibit 4(f) to the
Company's Registration Statement on Form S-2, File No. 33
1492, and incorporated herein by reference.
4(g) Sixth Supplemental Indenture, dated as of February 1, 1965,
between the Company and Chemical Bank New York Trust Company
(now Chemical Bank), Trustee. Filed as Exhibit 4(g) to the
Company's Registration Statement on Form S-2, File No.
33-1492, and incorporated herein by reference.
4(h) Seventh Supplemental Indenture, dated as of October 1, 1965,
between the Company and Chemical Bank New York Trust Company
(now Chemical Bank), Trustee. Filed as Exhibit 4(h) to the
Company's Registration Statement on Form S-2, File No.
33-1492, and incorporated herein by reference.
4(i) Eighth Supplemental Indenture, dated as of September 1, 1967,
between the Company and Chemical Bank New York Trust Company
(now Chemical Bank), Trustee. Filed as Exhibit 4(i) to the
Company's Registration Statement on Form S-2, File No.
33-1492, and incorporated herein by reference.
4(j) Ninth Supplemental Indenture, dated as of April 1, 1969,
between the Company and Chemical Bank, Trustee. Filed as
Exhibit 4(j) to the Company's Registration Statement on Form
S-2, File No. 33-1492, and incorporated herein by reference.
4(k) Tenth Supplemental Indenture, dated as of March 1, 1972,
between the Company and Chemical Bank, Trustee. Filed as
Exhibit 4(k) to the Company's Registration Statement on Form
S-2, File No. 33-1492, and incorporated herein by reference.
4(l) Eleventh Supplemental Indenture, dated as of April 15, 1975,
between the Company and Chemical Bank, Trustee. Filed as
Exhibit 4(l) the Company's Registration Statement on Form S-2,
File No. 33-1492, and incorporated herein by reference.
4(m) Twelfth Supplemental Indenture, dated as of November 27, 1978,
between the Company and Chemical Bank, Trustee. Filed as
Exhibit 4(m) to the Company's Registration Statement on Form
S-2, File No. 33-1492, and incorporated herein by reference.
4(n) Thirteenth Supplemental Indenture, dated as of October 15,
1981, between the Company and Chemical Bank, Trustee. Filed as
Exhibit 4(n) to the Company's Registration Statement on Form
S-2, File No. 33-1492, and incorporated herein by reference.
4(o) Fourteenth Supplemental Indenture, dated as of August 19,
1983, between the Company and Chemical Bank, Trustee. Filed as
Exhibit 4(o) to the Company's Registration Statement on Form
S-2, File No. 33-1492, and incorporated herein by reference.
4(p) Fifteenth Supplemental Indenture, dated as of August 19, 1985,
between the Company and Chemical Bank, Trustee. Filed as
Exhibit 4(p) to the Company's Registration Statement on Form
S-2, Registration No. 33-1492, and incorporated herein by
reference.
4(q) Sixteenth Supplemental Indenture, dated as of January 1, 1988,
between the Company and Chemical Bank, Trustee. Filed as
Exhibit 4(q) to the Company's Registration Statement on Form
S-3, Registration No. 33-27785, and incorporated herein by
reference.
4(r) Seventeenth Supplemental Indenture, dated as of February 1,
1989, between the Company and Chemical Bank, Trustee. Filed as
Exhibit 4(r) to the Company's Registration Statement on Form
S-3, Registration Statement No. 33-27785, and incorporated
herein by reference.
4(s) Eighteenth Supplemental Indenture, dated as of September 1,
1991, between the Company and Chemical Bank, Trustee. Filed as
Exhibit 4(x) to the Company's Registration Statement on Form
S-3, Registration Statement No. 33-64302, and incorporated
herein by reference.
4(t) Nineteenth Supplemental Indenture, dated as of September 1,
1992, between the Company and Chemical Bank, Trustee. Filed as
Exhibit 4(z) to the Company's Registration Statement on Form
S-3, Registration Statement No. 33-64302, and incorporated
herein by reference.
4(u) Debenture Indenture, dated as of November 1, 1986, between the
Company and Centerre Trust Company of St. Louis (now Boatmen's
Trust Company), as Trustee. Filed as Exhibit 4(q) to the
Company's Registration Statement on Form S-2, Registration
Statement No. 33-9509, and incorporated herein by reference.
4(v) Senior Note Agreement, dated as of July 1, 1990, between the
Company and Allstate Life Insurance Company. Filed as Exhibit
4(w) to the Company's Registration Statement on Form S-3,
Registration Statement No. 33-64302, and incorporated herein
by reference.
4(w) Charter of the Company. Filed as Exhibit 3(a) to the Company's
Form 8, amending the Company's Form 10-Q for the fiscal
quarter ended September 30, 1984, File No. 0-1857- 3, and
incorporated herein by reference.
4(x) Amendment to the Company's Charter, dated October 30, 1985.
Filed as Exhibit 3(b) to the Company's Registration Statement
on Form S-2, Registration Statement No. 33-1492, and
incorporated herein by reference.
4(y) Amendment to the Company's Charter, dated July 14, 1986. Filed
as Exhibit 3(a) to the Company's Form 10-K for the fiscal year
ended June 30, 1986, File No. 0-1857-3, and incorporated
herein by reference.
4(z) Amendment to the Company's Charter, dated October 28, 1986.
Filed as Exhibit 4(v) to the Company's Registration Statement
on Form S-3, Registration Statement No. 33- 27785, and
incorporated herein by reference.
4(aa) Amendment to the Company's Charter, dated June 15, 1992. Filed
as Exhibit 4(y) to the Company's Registration Statement on
Form S-3, Registration Statement No. 33- 64302, and
incorporated herein by reference.
4(bb) Amendment to the Company's Charter, dated July 29, 1994.
(Exhibit 4(bb) on the Company Registration Statement on Form
S-2, Registration Statement No. 33-83828).
Exhibit 5. Opinion regarding legality.
**5 Opinion of Rich, May, Bilodeau & Flaherty, P.C.
Exhibit 15. Letter re unaudited interim financial information.
**15 Deloitte & Touche LLP, independent certified public
accountants, Awareness Letter.
Exhibit 24. Consents of Experts and counsel.
**24(a) Consent of Deloitte & Touche LLP, independent certified public
accountants.
**24(b) Consent of Rich, May, Bilodeau & Flaherty, P.C. (included in
opinion filed as Exhibit 5 to this Registration Statement).
Exhibit 25. Power of Attorney.
**25(a) Power of Attorney (set forth on page II-3 of this
Registration Statement).
Exhibit 99. Additional Exhibits
*99(a) A copy of the Order of the Massachusetts Department of Public
Utilities dated August 20, 1996, relating to the issue and the
sale of 200,000 shares of common stock pursuant to the Plan.
<FN>
- --------------------
<F1> * Exhibit numbers designated in Regulation S-K
<F2> ** Filed herewith
</FN>
</TABLE>
EXHIBIT 5
[LETTERHEAD OF RICH, MAY, BILODEAU & FLAHERTY, P.C.]
January 2, 1997
The Berkshire Gas Company
115 Cheshire Road
Pittsfield, Massachusetts 01201
Dear Sirs/Mesdames:
You are seeking to register, pursuant to the Securities Act of 1933,
an aggregate of 200,000 shares of Common Stock, $2.50 par value, of The
Berkshire Gas Company (the "Company"), under the Company's Share Owner
Dividend Reinvestment and Stock Purchase Plan. You have requested that we
furnish to you an opinion which is to be filed as Exhibit 5 to the
Registration Statement on Form S-3 (the "Registration Statement") relating
to such shares.
We have examined the Company's charter documents and the Company's By-
Laws, each as amended, copies of resolutions adopted by the Board of
Directors of the Company, the Registration Statement, and such other
documents as we have deemed pertinent. We have participated in the filing
with the Massachusetts Department of Public Utilities ("MDPU") of the
Company's application and petition relating to authorization and approval of
the issue and sale of such shares and we have examined the order of the MDPU
relating thereto. We have made such examination of law as we have felt
necessary in order to render this opinion.
It is our further understanding that the purpose of the above
described offering is to provide the Company with funds to finance additions
to the Company's property, plant and equipment or to repay temporary
indebtedness incurred to finance such additions.
Based on the foregoing, we are of the opinion and advise you that,
under applicable rules and regulations of the Securities and Exchange
Commission, the Registration Statement will become effective upon the filing
thereof with the Securities and Exchange Commission; we are further of the
opinion that, with respect to the 200,000 shares of the stock being
registered, such shares will be legally issued, fully paid and non-
assessable when issued and delivered for the consideration described in the
Registration Statement.
This opinion does not pass on the application of the securities or
"Blue Sky" laws of the various states.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. We further consent to the use of our name and to
all references to us included in or made a part of the Registration
Statement.
Very truly yours,
/s/ RICH, MAY, BILODEAU & FLAHERTY, P.C.
RICH, MAY, BILODEAU & FLAHERTY, P.C.
January 2, 1997
The Berkshire Gas Company
115 Cheshire Road
Pittsfield, Massachusetts 01201
We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited interim financial
information of The Berkshire Gas Company for the periods ended September 30,
1996 and 1995, as indicated in our report dated November 6, 1996, because we did
not perform an audit, we express no opinion on that information.
We are aware that our reports referred to above, which were included in your
Quarterly Reports on Form 10-Q for the quarter ended September 30, 1996, is
being used in this Registration Statement.
We also are aware that the aforementioned reports, pursuant to Rule 436(e) under
the Securities Act of 1933, are not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of the Act.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Exhibit 24(a)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
for the Share Owner Dividend Reinvestment and Stock Purchase Plan of The
Berkshire Gas Company on Form S-3 of our reports dated August 19, 1996,
appearing in the Annual Report on Form 10-K of The Berkshire Gas Company for
the year ended June 30, 1996 and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Hartford, Connecticut
January 2, 1997
The Commonwealth of Massachusetts
DEPARTMENT OF PUBLIC UTILITIES
August 20, 1996
D.P.U 96-64
Application and Petition of The Berkshire Gas Company to the
Department of Public Utilities pursuant to Sections 8 and 14 of Chapter 164
of the General Laws for approval and authorization to issue and sell on a
negotiated basis a Senior Note in an aggregate principal amount of up to
$16,000,000; to issue and sell not in excess of 200,000 shares of Common
Stock, $2.50 par value, pursuant to the Company's Share Owner Dividend
Reinvestment and Stock Purchase Plan; for an exemption from the advertising
and competitive bid requirements of Section 15 of Chapter 164 of the General
Laws; and for such other actions as may be deemed necessary or appropriate
in connection with the foregoing.
- -------------------------------------------------------------------------------
APPEARANCES: Eric J. Krathwohl, Esq.
Emmett E. Lyne, Esq.
Rich, May, Bilodeau & Flaherty, P.C.
294 Washington Street
Boston, Massachusetts 02108
FOR: THE BERKSHIRE GAS COMPANY
Petitioner
----------
I. INTRODUCTION
------------
On June 13, 1996, The Berkshire Gas Company ("Berkshire" or "Company")
filed a petition with the Department of Public Utilities ("Department")
pursuant to G.L. c. 164, [SECTION] [SECTION] 8, 14, and 15, for approval and
authorization of: (1) the issuance and sale of up to $16,000,000 in a Senior
Note at 7.8 percent; (2) the issuance and sale of not more than 200,000
shares of common stock, $2.50 par value, through a Share Owner Dividend
Reinvestment and Stock Purchase Plan ("Plan"); and (3) an exemption from the
advertising and competitive bidding requirements of G.L. c. 164, [SECTION]
15. The Company's petition was docketed as D.P.U. 96-64.
Pursuant to notice duly issued, a public hearing was held at the
Department's offices on July 24, 1996. In support of its petition, the
Company presented the testimony of Michael J. Marrone, vice president,
treasurer and chief financial officer; and Shaun E. Sprague, manager of
general accounting. The evidentiary record includes five exhibits and two
record requests. There were no intervenors in the case.
II. DESCRIPTION OF THE PROPOSED FINANCING
-------------------------------------
A. Issuance of Up To $16,000,000 in a Senior Note
----------------------------------------------
Berkshire Gas seeks authorization from the Department to issue and
sell, up to $16,000,000 in a Senior Note, with a maturity of 25 years, at a
fixed interest rate of 7.8 percent (Tr. at 5). The Company stated that the
proposed issuance and sale of up to $16,000,000 in a Senior Note is to be
used to finance the purchase of a portion of the Company's debt prior to its
maturity (Exh. BGC-1, at 5, 7).(1) The Company stated that at the time of
the financing, interest rates for long term debt instruments were
significantly lower than some of the Company's outstanding debt (id. at 6).
The Company further stated that the issuance and sale of up to $16,000,000
in a Senior Note at the rate of 7.8 percent resulted in savings on a pro
forma annual basis of approximately $288,000 per year (Tr. at 15). The
Company stated that it proposes to pay for the premium associated with the
redemptions by accumulating the unamortized debt issuance expense on the
repurchased debt, adding to that the premium paid to call the existing debt,
and amortizing the total over the life of the Senior Note (Exh. BGC-1, at
8).
The Company stated it negotiated to sell the Senior Note to a single
purchaser, First Colony Life Insurance Company of Virginia ("First Colony"),
which is also the holder of Berkshire's 8.4 percent preferred stock (id. at
8). The Company stated that the 7.8 percent rate of the proposed financing
was arrived at after extensive negotiations between First Colony and First
Albany Corporation ("First Albany"), the Company's investment bank (id. at
8-9). The Company further stated that the 7.8 percent rate is competitive
with market rates (id. at 8).
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(1) The Company stated that it evaluated the refinancing costs associated
with the following debt: Series K and M Bonds at 7.875 and 9.375
percent, respectively; an outstanding public debenture series at a
rate of 9.25 percent; and preferred stock at 8.4 percent (Tr. at 12-
13). The Company stated that there were savings, though minimal,
associated with the redemption of the Series K and M bonds which had
no premium associated with the purchase (id. at 12). The Company
stated that although there was a three percent premium associated
with calling the public debenture series, the Company concluded that
this redemption was also cost-justified (id. at 13). The Company
stated that it realized substantial savings via an income tax
deduction of 40 percent for dividends on debt issuances by converting
its 8.4 percent preferred stock to debt (Exhs. BGC-1 at 7, BGC-3,
Att. B at 2; Tr. at 13-14).
B. Issuance of Common Shares Pursuant to the Plan
----------------------------------------------
Berkshire Gas seeks authorization from the Department to issue and
sell, from time to time, not in excess of 200,000 shares of Common Stock,
$2.50 par value, through the continued operation of the Plan. The Company
is currently authorized to issue and sell up to 100,000 shares of common
stock through the Plan (Exh. BGC-5, at 2);(2) Berkshire Gas Company, D.P.U.
93-182 (1990).
Under the Plan, participants have the option to reinvest cash
dividends automatically on all or a portion of their shares of common stock
or to purchase common stock at any time in any amount from a minimum of
fifteen dollars in any calendar month to a maximum of five thousand dollars
in any calendar month (Exh. BGC-4, at 1; Tr. at 2 1).(3) The Company stated
that the Plan will be administered by the Plan Committee appointed by the
Company's Board of Directors (Exh. BGC-4, at 4).
The Company stated that the price for the stock under the Plan would
be set at 97 percent of the average of the bid and the asked price of the
Company's common shares in the over-the-counter market during the period of
five days preceding the purchase date (Exh. BGC-5, at 3). The Company
stated that the three percent discount may be suspended at any time, at the
Company's discretion, and would be required to be suspended by the terms of
the Plan in the event that the discounted price of the Company's shares
falls below the book value of the stock (id.). The Company stated that the
Plan provides significant benefits to the Company, its shareholders, and
customers as it provides funds for capital itnprovements at a very
inexpensive cost (Exh. BGC-2, at 5; Tr. at 21).
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(2) The Company noted that of the 100,000 shares authorized by the
Department in D.P.U. 93-182, 47,400 were outstanding on March 31,
1996 (Exh. BGC-5, at 2-3). The Company anticipates that during the
calendar year 1996, an additional 46,000 shares will be purchased
under the Plan which will deplete the remaining supply of authorized
shares pursuant to D.P.U. 93-182 (id. at 3).
(3) All holders of record of ten or more common shares of the Company
who are not employed by the Company and all employees of the Company
owning of record one or more shares are eligible to participate in
the Plan (Exh. BGC-4, at 5).
C. Use of Proceeds.
----------------
The Company stated that the proceeds from the proposed issue and sale
of up to $16,000,000 in a Senior Note and up to 200,000 shares of common
stock pursuant to the Plan will be used to repay short term borrowings that
were used to call the higher interest rate bonds, debentures, and higher
cost preferred stock of the Company (Exhs. BGC-1, at 6; BGC-5, at 4-5). In
addition, the Company stated that the proceeds will be used for financing
additions to the Company's property, plant and equipment and/or repayment of
short term debt incurred from time to time by the Company (Exh. BGC-2, at
5). The Company asserted that the issuance of shares and use of proceeds is
consistent with the Company's traditional method of financing capital
additions temporarily through short term borrowing or internally generated
funds and later permanently financing such additions by the issuance of
equity securities or long term indebtedness (id.). The Company stated that
the Company's Board of Directors authorized the sale and issuance of the
proposed financing on June 4, 1996 (Exh. BGC-3, Att. A).
D. Exemption from G.L. c. 164, [SECTION] 15
----------------------------------------
In addition, the Company requests exemption from the advertising and
competitive bidding requirements of G.L. c. 164, [SECTION] 15. The Company
stated that a negotiated, private sale rather than a public sale is more
favorable as the size of the offering would not likely attract bids on the
open market, and the costs of bidding, advertising, and issuance associated
with a public sale are much greater (Exh. BGC-5, at 4). The Company stated
that it chose First Albany as its investment banker on the basis of cost-
effectiveness as well as its long-standing relationship with First Albany
and First Albany's unique relationship with First Colony (Exh. BGC-1, at 9;
Tr. at 23).(4)
III. CAPITAL STRUCTURE OF THE COMPANY
--------------------------------
The Company provided financial statements and an analysis of its
capital structure as of March 31, 1996 (Exh. BGC-3, Schs. 2-6). The
Company's financial statements indicate that as of March 31, 1996, Berkshire
had: (1) $5,345,000 of common stock (2,137,963 shares at par value of
$2.50); (2) $8,406,000 of preferred stock ($406,000 preferred stock,
4.8 Percent Series plus $8,000,000 preferred stock, 8.4 Percent Series);
and (3) $16,147,000 premium on capital stock for a total of $29,898,000 of
shareholder equity (id., Sch. 4).(5) The Company also has long-term debt of
$24,000,000 (id.). The Company indicated that total securities outstanding
equalled $53,898,000 (id.). The Company's utility plant in service of
$95,328,000, less accumulated depreciation of $25,057,000 equalled a net
utility plant of $70,271,000 (id.). The Company determined an excess of net
utility plant to total securities of $16,373,000, as of March 31, 1996
(id.). After making pro forma adjustments including the redemption of the
$8,000,000 preferred stock, the Company estimated that the excess of net
utility plant to total securities after issuance of up to $16,000,000 in a
Senior Note and the 200,000 shares of common stock pursuant to the Plan for
which it is petitioning for approval equals $5,273,000 (id.). At the time of
the hearing, the Company indicated that its financial statement had not
changed since March 31, 1996 (Tr. at 22).
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(4) The Company noted that First Albany acted as the Company's
investment banker for several other sales of debt and equity capital,
including the sale of the 8.4 percent preferred issuance to First
Colony (Tr. at 24).
(5) The Company determined total securities by adding common stock (at
par), premium on common stock, preferred stock, and long-term debt
excluding retained earnings (Exh. BGC-3, Sch. 4).
IV. STANDARD OF REVIEW
------------------
In order for the Department to approve the issuance of stocks, bonds,
coupon notes, or other types of long-term indebtedness(6) by an electric or
gas company, the Department must determine that the proposed issuance meets
two tests. First, the Department must assess whether the proposed issuance
is reasonably necessary to accomplish some legitimate purpose in meeting a
company's service obligations, pursuant to G.L. c. 164, [SECTION] 14.
Fitchburg Gas & Electric Light Company v. Department of Public Utilities,
395 Mass. 836, 842 (1985) ("Fitchburg II"), Fitchburg Gas & Electric Light
Company v. Department of Public Utilities, 394 Mass. 671, 678 (1985)
("Fitchburg I"). Second, the Department must determine whether the Company
has met the net plant test.(7) Colonial Gas Company, D.P.U. 84-96 (1984).
The Court has found that, for the purposes of G.L. c. 164, [SECTION]
14, "reasonably necessary" means "reasonably necessary for the
accomplishment of some purpose having to do with the obligations of the
company to the public and its ability to carry out those obligations with
the greatest possible efficiency." Fitchburg II at 836, citing Lowell Gas
Light Company v. Department of Public Utilities, 319 Mass. 46, 52 (1946).
In cases where no issue exists about the reasonableness of management
decisions regarding the requested financing, the Department limits its
Section 14 review to the facial reasonableness of the purpose to which the
proceeds of the proposed issuance will be put. Canal Electric Company, et
al., D.P.U. 84-152, at 20 (1984); see, e.g., Colonial Gas Company, D.P.U.
90-50, at 6 (1990).
- -------------------
(6) Long-term refers to periods of more than one year after the date of
issuance. G. L. c. 164, [SECTION] 14.
(7) The net plant test is derived from G.L. c. 164, [SECTION] 16.
The Fitchburg I and 11 and Lowell Gas cases also established that the
burden of proving that an issuance is reasonably necessary rests with the
company proposing the issuance, and that the Department's authority to review
a proposed issuance "is not limited to a 'perfunctory review.'" Fitchburg I at
678; Fitchburg II at 842, citing Lowell Gas at 52. Regarding the net plant
test, a company is required to present evidence that its net utility plant
(original cost of capitalizable plant, less accumulated depreciation) equals
or exceeds its total capitalization (the sum,of its long-term debt and its
preferred and common stock outstanding) and will continue to do so following
the proposed issuance. Colonial Gas Company, D.P.U. 84-96, at 5 (1984).
Pursuant to G.L. c. 164, [SECTION] 15, an electric or gas company
offering long-term bonds or notes in excess of $1 million in face amount
payable at periods of more than five years after the date thereof must
invite purchase proposals through newspaper advertisements. The Department
may grant an exemption from this advertising requirement if the Department
finds that an exemption is in the public interest. G.L. c. 164, [SECTION]
15. The Department has found it in the public interest to grant an exemption
from the advertising requirement where there has been a measure of
competition in private placement. See, e.g., Western Massachusetts Electric
Company, D.P.U. 88-32, at 5 (1988); Eastern Edison Company, D.P.U. 88-127,
at 11-12 (1988),Berkshire Gas Company, D.P.U. 89-12, at 11 (1989). The
Department also has found that it is in the public interest to grant a
company an exemption from the advertising requirement when a measure of
flexibility is necessary in order for a company to enter the bond market in
a timely manner. See, e.g., Western Massachusetts Electric Company, D.P.U.
88-32, at 5 (1988). However, G.L. c. 164, [SECTION] 15 requires advertising
as the general rule; and waiver cannot be automatic but must be justified
whenever requested.
Where issues concerning the prudence of the Company's capital
financing have not been raised or adjudicated in a proceeding, the
Department's decision in such a case does not represent a determination that
any specific project is economically beneficial to a company or to its
customers. In such circumstances, the Department's determination in its
Order may not in any way be construed as ruling on the appropriate
ratemaking treatment to be accorded any costs associated with the proposed
financing. See, e.g., Boston Gas Company, D.P.U. 95-66, at 7 (1995).
V. ANALYSIS AND FINDINGS
---------------------
Based on the foregoing, the Department finds that the proposed
issuance of up to $16,000,000 in a Senior Note with a term of twenty-five
years and bearing an interest rate of 7.8 percent per annum and the proposed
issuance and sale of up to 200,000 shares of common stock under the Plan is
reasonably necessary to repay short term borrowings that were used to call
the higher interest rate bonds, debentures, and higher cost preferred stock
of the Company as well as to finance additions to the Company's property,
plant and equipment and repay short term borrowings incurred from time to
time by the Company. As such, the Department finds that the proposed
issuance and sale of up to $16,000,000 in a Senior Note and up to 200,000
shares of common stock pursuant to the Plan is reasonably necessary to
accomplish some legitimate purpose in meeting the Company's service
obligations in accordance with G.L. c. 164, [SECTION]14. The Department
further finds that the costs associated with the proposed financing,
including costs associated with the redemption of the preferred stock and
debt securities should be amortized over the life of the Senior Note.
In regard to the net plant test, the Department finds that the
Company's proposed financing meets the net plant test, since the Company's
net utility plant equals or exceeds its total capitalization and will
continue to do so following the proposed issuance. Regarding the Company's
request for an exemption from the requirements of G.L. c. 164, [SECTION] 15,
we find that it is appropriate to allow the Company the flexibility offered
by the private placement process in order to assist the Company in
responding to market conditions and to take advantage of prevailing
interest rates. The record in this case further demonstrates that the
Company ensured a competitive rate through the private placement process.
Therefore, the Department finds that it is in the public interest to exempt
the Company from the advertisement and bidding requirements of G.L. c. 164,
[SECTION]15.
VI. ORDER
-----
Accordingly, after due notice, hearing, and consideration, the
Department
VOTES: That the issuance and sale by Berkshire Gas Company of a Senior
Note in the aggregate principal amount of up to $16,000,000 is reasonably
necessary for the purpose for which the Company has petitioned; and it
FURTHER VOTES: That the issuance and sale, from time to time, by
Berkshire Gas Company of not in excess of 200,000 shares of common stock,
$2.50 par value, pursuant to its Share Owner Dividend Reinvestment and Stock
Purchase Plan, is reasonably necessary for the purpose for which the Company
has petitioned; and it is
ORDERED: That the Department hereby approves and authorizes the issue
and sale of a Senior Note in the aggregate principal amount of up to
$16,000,000, to bear interest at a rate of 7.8 percent, due to mature not
later than 25 years from the date of issue; and it is
FURTHER ORDERED: That the Department hereby approves and authorizes
the issuance and sale from time to time of not in excess of an additional
200,000 shares of common stock, $2.50, par value, pursuant to its Share
Owner Dividend Reinvestment and Stock Purchase Plan; and it is
FURTHER ORDERED: That the costs associated with the proposed
financing, including costs associated with th6 redemption of the preferred
stock and debt securities, be amortized over the life of the Senior Note;
and it is
FURTHER ORDERED: That the issuance and sale by Berkshire Gas Company
of a Senior Note in the aggregate principal amount of up to $16,000,000,
without inviting proposals for the purchase thereof by publication in
certain designated newspapers, is in the public interest, and such issue
shall be exempt from the provisions of G.L. c. 164, [SECTION]15; and it is
FURTHER ORDERED: That the net proceeds from such sale of all such
securities shall be used for the purposes as set forth herein; and it is
FURTHER ORDERED: That the Secretary of the Department shall within
three days of the issuance of this Order cause a certified copy of it to be
filed with the Secretary of the Commonwealth.
By Order of the Department,
/s/ John B. Howe
--------------------------------------
John B. Howe, Chairman
/s/ Mary Clark Webster
--------------------------------------
Mary Clark Webster, Commissioner
/s/ Janet Gail Besser
A true copy --------------------------------------
Attest; Janet Gail Besser, Commissioner
/s/ Mary L. Cottrell
MARY L. COTTRELL
Secretary
Appeal as to matters of law from any final decision, order or ruling
of the Commission may be taken to the Supreme Judicial Court by an
aggrieved party in interest by the filing of a written petition praying
that the Order of the Commission be modified or set aside in whole or in
part.
Such petition for appeal shall be filed with the Secretary of the
Commission within twenty days after the date of service of the decision,
order or ruling of the Commission, or within such further time as the
Commission may allow upon request filed prior to the expiration of twenty
days after the date of service of said decision, order or ruling. Within ten
days after such petition has been filed, the appealing party shall enter the
appeal in the Supreme Judicial Court sitting in Suffolk County by filing a
copy thereof with the Clerk of said Court. (Sec. 5, Chapter 25, G.L. Ter.
Ed., as most recently amended by Chapter 485 of the Acts of 1971).
