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Rule 424(b)(3)
File No. 2-67531
PROSPECTUS
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NEW ENGLAND ELECTRIC SYSTEM
(A Voluntary Association)
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100,000 COMMON SHARES
Par Value $1 Per Share
and
INTERESTS IN THE PLAN
Offered as set forth herein pursuant to
YANKEE ATOMIC ELECTRIC COMPANY
Thrift Plan
Participation in the Yankee Atomic Electric Company
Thrift Plan is offered as set forth herein to
eligible employees of Yankee Atomic Electric Company
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is January 11, 1996
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Table of Contents
PROSPECTUS PAGE
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . .3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . . . .3
DESCRIPTION OF THE COMMON SHARES OF NEES. . . . . . . . . . .4
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . .7
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . .7
INDEMNIFICATION OF DIRECTORS AND OFFICERS . . . . . . . . . .7
No person has been authorized to give any information or make
any representations, other than as contained herein or contained in
documents incorporated by reference, in connection with the offer
contained in this prospectus, and, if given or made, such information
or representation must not be relied upon as having been authorized
by Yankee Atomic Electric Company, New England Electric System or the
Benefits Committee.
The New England Electric System offices and the Benefits
Committee are located at 25 Research Drive, Westborough,
Massachusetts 01582, telephone number (508) 389 - 2000.
Various documents incorporated by reference in this prospectus
may be inspected during normal business hours at the above address.
Please refer to the Summary Plan Description for information
about the operation of the Yankee Atomic Electric Company Thrift Plan
(the Plan) and to the Investment Fund Description for information
about the various investment funds available under the Plan.
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AVAILABLE INFORMATION
New England Electric System (NEES or the Company) is subject to
the informational requirements of the Securities Exchange Act of 1934
(the 1934 Act) and in accordance therewith files reports and other
information with the Securities and Exchange Commission (SEC).
Certain information, as of particular dates, with respect to NEES'
directors and officers, their renumeration, and any material
interest of such persons in transactions with NEES is disclosed in
proxy statements distributed to shareholders of NEES and filed with
the SEC. Such reports, proxy statements, and other information can
be inspected and copied at the Public Reference
Room of the SEC at 450 Fifth Street, N.W., Washington, DC and at the
regional offices of the SEC located at 75 Park Place, New York, New
York and 219 South Dearborn Street, Chicago, Illinois. Copies of
such material can be obtained from the Public Reference Section of
the SEC, Washington, DC 20549, at prescribed rates. NEES' common
shares are listed on the New York and Boston Stock Exchanges.
Reports, proxy statements, and other information concerning NEES can
be inspected at the offices of these stock exchanges: New York Stock
Exchange, Inc., 20 Broad Street, New York, New York; Boston Stock
Exchange Incorporated, One Boston Place, Boston, Massachusetts.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated by reference in this prospectus
the following documents heretofore filed with the Securities and
Exchange Commission pursuant to the 1934 Act:
a) The NEES Annual Report on Form 10-K for the year ended December
31, 1994.
b) The NEES definitive Proxy Statement, dated March 9, 1995, for
the Annual Meeting of Shareholders held on April 25, 1995.
c) The NEES Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1995, June 30, 1995, and September 30, 1995, as
amended.
d) The Yankee Atomic Electric Company Thrift Plan Audited
Financial Statements for the year ended December 31, 1994, as
contained in Exhibit A of the NEES Annual Report on Form U-5-S
for the year ended December 31, 1994.
All documents filed by NEES and the Yankee Atomic Electric
Company Thrift Plan pursuant to Sections 13, 14, or 15(d) of the 1934
Act after the date of this prospectus and prior to termination of the
offering of NEES common shares under the Plan, shall be deemed also
to be incorporated by reference herein and a part hereof from their
respective dates of filing.
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NEES hereby undertakes to provide without charge to each person
to whom a copy of this prospectus has been delivered, upon the
written or oral request of such person, a copy of any or all other
documents referred to above which have been or may be incorporated
in this prospectus by reference, other than exhibits to such
documents, as well as a copy of the NEES Annual Report to
Shareholders for 1994. Written or oral requests for such copies
should be directed to: Treasurer, New England Electric System, 25
Research Drive, Westborough, Massachusetts 01582, (508) 389 - 2000.
In addition to the documents described above, any document which
is entitled with the name of the Plan and which contains the legend,
"This document constitutes part of a prospectus covering
securities that have been registered under the Securities Act of
1933", is incorporated in this prospectus by reference.
DESCRIPTION OF THE COMMON SHARES OF NEES
The common shares are the only outstanding class of shares of
NEES. The Transfer Agent and Registrar for the common shares is The
First National Bank of Boston, 100 Federal Street, Boston,
Massachusetts 02110.
The outstanding common shares are listed on the New York Stock
Exchange and the Boston Stock Exchange. The additional common shares
will be listed on those exchanges when issued.
The following brief summary of certain provisions relating to
the common shares is merely an outline and does not purport to be
complete. It sues terms defined in the documents mentioned and is
qualified in its entirety by reference to said documents which are
either filed as exhibits to the registration statement or are
documents incorporated by reference herein.
Voting and Dividend Rights
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The holders of common shares are entitled to one vote for each
share held and are entitled to dividends out of the net earnings or
surplus fund of NEES when such dividends have been declared by the
NEES board of directors, but shareholders must look only to the trust
estate for the payment thereof.
The Agreement and Declaration of Trust, as amended, of NEES (the
Declaration of Trust) contains a fair price provision (the Fair Price
Provision) governing Business Combinations (as defined) involving
NEES and any substantial (10% or more) holder of NEES' common shares.
The Fair Price Provision requires that in a business combination
involving NEES and a 10% or greater shareholder of NEES, all
shareholders must receive the same price for their shares, unless the
transaction is approved by (i) a majority of the "continuing
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directors" of NEES, as defined therein, or (ii) a vote of 80% of all
outstanding shares and two-thirds of the shares held by
disinterested shareholders, voting as a separate class.
The Fair Price Provision can subsequently be amended or repealed
only by the affirmative vote of holders of the same percentage of
outstanding common shares required to approve a business combination
described in (ii) above, except that it may be amended by holders of
a majority of common shares if the proposed amendment has also been
approved by the continuing directors as in the best interests of
shareholders.
Limitations on Dividends
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The Declaration of Trust provides that share capital
representing the common shares shall include (a) $94,544,131 for the
common shares issued prior to January 1, 1953, (b) the consideration
received for such shares issued thereafter, and (c) any balances
remaining in capital surplus not included in (a) or (b). The
Declaration of Trust further provides that the share capital shall
not be available for the payment of dividends, and that the share
capital shall not be reduced below the sum of (a) and (b) without a
vote of a majority of the shares outstanding and entitled to vote at
a meeting duly called.
The income of NEES is derived mainly from dividends paid by
subsidiaries. In addition to the many factors of specific
application, including accounting requirements, regulatory orders,
indentures relating to indebtedness, and preferred stock
preferences, which may affect dividends or the income of the
subsidiaries available for dividends, the dividends payable by
subsidiaries may be affected by various Federal or state statutes,
rules, regulations, and decisions of general application to
corporations of a similar type.
Liquidation Rights
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After satisfaction of all liabilities, the holders of the common
shares are entitled to receive pro rata the remaining assets of NEES,
in cash or in kind.
Preemptive Rights
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There are no preemptive rights associated with the NEES common
shares.
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General
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NEES being an unincorporated voluntary association, the title
to its property is in a trustee (now The State Street Bank and Trust
Company) which acts at the direction of the board of directors of
NEES.
The board of directors of NEES is elected annually by the
shareholders. NEES has broad powers under the Declaration of Trust,
most of which can be exercised by the board of directors.
The outstanding common shares of NEES are, and when duly issued
and paid for the additional common shares will be, full-paid and
nonassessable. Authorized by unissued shares of NEES may be issued
either for money, services, or property, or in exchange for other
shares of NEES at the time outstanding, and upon such terms as to
valuation of shares, services or property or other shares and
otherwise, as the board of directors of NEES may in its absolute
discretion see fit.
The Declaration of Trust contains a provision designed to
eliminate liability of shareholders to the extent permitted by law.
It specifies that every person shall look only to the trust estate
for payment or damages or otherwise and that every written agreement
and obligation shall refer to this provision. Despite these
provisions, the shareholders of a voluntary association such as NEES
might, with respect to the liabilities of shareholders under
Massachusetts law, be treated in legal contemplation as partners and
as such under some circumstances might be held personally liable for
certain obligations or liabilities of NEES. Counsel for NEES
considers the possibility of any such personal liability to be remote
because, in his opinion, shareholders are protected under the laws
of Massachusetts from personal liability on contract obligations
containing the so-called limited liability clause which NEES inserts
in all contract obligations including debt securities, and because
NEES is a holding company and the possibility of substantial
liabilities arising from torts or statutory liabilities or
penalties, other than tax liabilities, is not as great as in the case
of companies operating physical properties.
Notwithstanding the fact that NEES is a holding company, in
suits and claims against its subsidiaries, including environmental
claims, courts and agencies might attempt to assign liability to NEES
despite traditional principles of corporate law. Further, counsel
for NEES understands that unincorporated voluntary associations have
been treated as general partnerships under the laws of a few states,
including Texas in which NEES' oil and gas subsidiary has qualified
to do business as a foreign corporation. Even so, for the reasons
cited above and because of the substantial capitalization of NEES and
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its subsidiaries, counsel for NEES considers the possibility of
personal liability of the shareholders
of NEES to be remote.
LEGAL MATTERS
Legal matters in connection with the issuance of NEES common
shares offered hereby have been passed upon for NEES by Robert King
Wulff, Esq., Corporation Counsel, 25 Research Drive, Westborough,
Massachusetts 01582, an employee of a subsidiary of NEES, as of
October 1, 1995, owner of approximately 8,010 common shares of NEES.
Messrs. Ropes & Gray, One International Place, Boston,
Massachusetts 02110 have reviewed the Plan for compliance with the
Employee Retirement Income Security Act.
EXPERTS
The consolidated balance sheets and statements of
capitalization of NEES and its subsidiaries as of December 31, 1994
and 1993 and the related consolidated statements of income, retained
earnings and changes in financial position for each of the three
years in the period ended December 31, 1994 and the consolidated
financial statement schedules; and the net assets available for plan
benefits of the Plan as of December 31, 1994 and 1993 and the related
statements of changes in the net assets available for plan benefits
for each of the three years in the period ended December 31, 1994,
incorporated by reference in this prospectus, have been so
incorporated in reliance upon the reports of Coopers & Lybrand,
independent certified public accountants, given on the authority of
that firm as experts in accounting and auditing.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
To the extent applicable under the provisions of the Declaration
of Trust, NEES will indemnify its directors and officers (including
members of the Benefits Committee) against liabilities and expenses,
including counsel fees reasonably incurred, resulting from
litigation or threatened litigation in which any such directors or
officers may be involved by reason of their positions.
Indemnification is withheld whenever the director or officer is
adjudicated "not to have acted in good faith in the reasonable belief
that his action was in the best interest" of NEES. Officers and
Directors Insurance is also provided.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors and officers of
NEES pursuant to the foregoing provision or otherwise, NEES has been
advised that, in the opinion of the SEC such indemnification is
against public policy as expressed in said Act, and is, therefore,
unenforceable.
