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File No. 70-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-1
APPLICATION/DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
NEW ENGLAND ELECTRIC SYSTEM
25 Research Drive
Westborough, Massachusetts 01582
NEW ENGLAND ELECTRIC SYSTEM
(Name of top registered holding company)
Michael E. Jesanis Robert King Wulff
Treasurer Corporation Counsel
25 Research Drive 25 Research Drive
Westborough, Massachusetts 01582 Westborough, Massachusetts 01582
(Names and addresses of agents for service)
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Item 1. Description of Proposed Transactions
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New England Electric System (NEES) is a holding company
created under the laws of The Commonwealth of Massachusetts by an
Agreement and Declaration of Trust dated January 2, 1926, as
amended, and is registered under the Public Utility Holding
Company Act of 1935.
Subsidiaries of NEES (the Employers) provide, for the
benefit of certain of their officers, life insurance plans funded
by individual policies. The combined death benefit to the
participant under these insurance plans is three times the
participant's annual salary. After termination of employment,
participants in one of the insurance plans (Exhibit B-1) may
elect, commencing at age 55 or later, to receive an annuity
income equal to 40% of annual salary. In that event, the life
insurance is reduced over fifteen years to an amount equal to the
participant's final average salary. Due to changes in the tax
law, this plan was closed to new participants, and an alternative
was established with only a life insurance benefit (Exhibit B-2).
These plans are structured so that, over time, the Employers
should recover the cost of the insurance premiums.
The life insurance benefit in almost all cases will be
provided by an insurance company. The annuity, and in limited
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instances the insurance benefits, will be paid by the Employers.
Although, as noted, the Employers anticipate recovery of their
costs from the proceeds of the policies, their interests in the
policies are not segregated from their general assets and the
participants in the plans are general creditors of the Employers.
From time to time the Employers have granted additional
service credit under their pension plans to executives to
recognize professional and business experience prior to joining
the New England Electric System companies. These letters and
agreements do not have a standard format, reflecting the various
styles of the Company's Human Resources departments over time.
Most of the individuals covered by the plans, the letters,
and the agreements are present or future employees of New England
Power Service Company (the Service Company). The assets of the
Service Company consist mainly of amounts currently receivable
from affiliates.
For the purpose of providing greater assurance of the
payment of these life insurance and annuity benefits and
additional pension benefits to the participants and their
beneficiaries, it is proposed that NEES, from time to time, give
written assurances to the participants that, if an Employer
obligated under the amended life insurance program, the
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collateral assignment life insurance program, or the additional
service letter and agreement does not make the payments provided
therein, NEES will make such payments. Similar assurance is now
provided under four other executive plans. (HCAR No. 22664, File
No. 70-6732)
Item 2. Fees, Commissions and Expenses
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There are no fees or commissions to be paid in connection
with the proposed transactions other than the fee for filing this
Application/Declaration under the Act.
Incidental services in connection herewith will be performed
by the Service Company at the actual cost thereof. The Service
Company, an Employer, is an affiliated service company operating
pursuant to Section 13 of the Act and the Commission's rules
thereunder. The cost of such services is estimated not to exceed
$2,000.
Item 3. Applicable Statutory Provisions
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The assumption by NEES of the obligation to perform for any
defaulting Employer under the insurance programs is subject to
the provisions of Section 12(b) of the Act and Rule 45
thereunder.
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Item 4. Regulatory Approval
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No action by any state commission or Federal commission
(other than the Securities and Exchange Commission) is necessary
to carry out the proposed transactions.
Item 5. Procedure
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It is requested that the Commission take action with respect
to this Application/Declaration without a hearing being held and
that this statement become effective and be granted on or before
December 1, 1994, or as soon thereafter as possible.
The Companies (1) do not request a recommended decision by a
hearing officer, (2) do not request a recommended decision by any
other responsible officer of the Commission, (3) hereby specify
that the Division of Corporate Regulation may assist in the
preparation of the Commission's decision, and (4) hereby request
that there be no 30-day waiting period between the date of
issuance of the Commission's order and the date on which it is to
become effective.
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Item 6. Exhibits and Financial Statements
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(a) Exhibits
B-1 Form of Life Insurance Program, filed as Exhibit
10(s) to NEES Form 10-K for the year ended
December 31, 1986, File No. 1-3446;
B-2 Form of Life Insurance (Collateral Assignment)
filed as Exhibit 10(t) to NEES Form 10-K for the
year ended December 31, 1991, File No. 1-3446.
* F Opinion of Counsel.
H Proposed Form of Notice.
* To be supplied by amendment
Item 7. Information as to Environmental Effects
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The proposed transaction does not involve a major Federal
action significantly affecting the quality of the human
environment.
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SIGNATURE
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Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned Company has duly caused this
statement to be signed on its behalf by the undersigned officer
thereunto duly authorized.
NEW ENGLAND ELECTRIC SYSTEM
s/Michael E. Jesanis
By
Michael E. Jesanis, Treasurer
Date: October 5, 1994
The name "New England Electric System" means the trustee or
trustees for the time being (as trustee or trustees but not
personally) under an agreement and declaration of trust dated
January 2, 1926, as amended, which is hereby referred to, and a
copy of which as amended has been filed with the Secretary of The
Commonwealth of Massachusetts. Any agreement, obligation or
liability made, entered into or incurred by or on behalf of New
England Electric System binds only its trust estate, and no
shareholder, director, trustee, officer or agent thereof assumes
or shall be held to any liability therefor.
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EXHIBIT INDEX
Exhibit No. Description Page
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B-1 Form of Life Insurance Program Incorporated by
reference
B-2 Form of Life Insurance Incorporated by
(Collateral Assignment) reference
F Opinion of Counsel To be filed by
amendment
H Proposed Form of Notice Filed herewith
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EXHIBIT H
PROPOSED FORM OF NOTICE
New England Electric System (NEES), a registered holding
company, has filed an Application/Declaration with this Commission
pursuant to Section 12 of the Public Utility Holding Company Act of
1935 (the Act) and the Commission's rules thereunder.
Subsidiaries of NEES (the Employers) provide, for the benefit
of certain of their officers, life insurance plans funded by
individual policies. From time to time the Employers have also
granted additional service credit under their pension plans to
executives to recognize professional and business experience prior
to joining the NEES companies.
For the purpose of providing greater assurance of the payment
of these life insurance and annuity benefits and additional pension
benefits to the participants and their beneficiaries, it is proposed
that NEES, from time to time, give written assurances to the
participants that, if an Employer obligated under the life insurance
programs or the additional service agreements does not make the
payments provided therein, NEES will make such payments. Similar
assurance is now provided under four other executive plans. (HCAR
No. 22664, File No. 70-6732)
