<PAGE>
As filed with the Securities and Exchange Commission on March 5, 1998
Registration No. 333-
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_________________
NEW ENGLAND ELECTRIC SYSTEM
(Exact name of Registrant as specified in its charter)
Massachusetts 4911 04-1663060
(State or Other Juris- (Primary Standard (I.R.S.Employer
diction of Incorporation Industrial Classification Identification
or Organization) Code Number) Number)
25 Research Drive
Westborough, Massachusetts 01582
(508) 389-2000
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
John G. Cochrane Kirk L. Ramsauer
Treasurer Associate General Counsel
25 Research Drive 25 Research Drive
Westborough, Massachusetts 01582 Westborough, Massachusetts 01582
(508) 389-2174 (508) 389-2972
(Names, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agents for Service)
Copy to:
Robert W. Mullen, Jr.
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
(212) 530-5000
_________________
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement.
_________________
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. / /
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
_____________________
CALCULATION OF REGISTRATION FEE
Title of Each Amount Proposed Proposed Amount of
Class of to be Maximum Maximum Registration
Securities to be Registered Offering Price Aggregate Fee
Registered per Share* Offering Price*
Common Shares
Par Value $1 1,000,000 $42 $42,000,000 $12,930
* Used only for purposes of calculating the amount of registration fee
(based on the average of the high and low prices on the New York Stock
Exchange - Composite Transactions on February 27, 1998.
_____________________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
==============================================================================
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED MARCH 5, 1998
PROSPECTUS
1,000,000 COMMON SHARES
Par Value $1 Per Share
NEW ENGLAND ELECTRIC SYSTEM
(A Voluntary Association)
________________________
This Prospectus relates to the offer and sale from time to time by New
England Electric System (the Company) of up to 1,000,000 of its Common Shares,
$1.00 par value (the Common Shares), in connection with the acquisition of
assets, businesses, or securities under circumstances where registration of
the Common Shares under the Securities Act of 1933, as amended (the Securities
Act), is required.
It is expected that the terms of acquisitions involving the issuance of the
Common Shares will be determined by direct negotiations with the owners or
controlling persons of the assets, businesses, or securities to be acquired,
and that the Common Shares issued will be valued at prices reasonably related
to the market price of the Common Shares either at the time an agreement is
entered into concerning the terms of the acquisition or at or about the time
the shares are delivered. No underwriting discounts or commissions will be
paid, although finder's fees may be paid in connection with certain
acquisitions. Any person receiving such fees in a transaction where
registration of the Common Shares under the Securities Act is required may be
deemed to be an "underwriter" within the meaning of the Securities Act and any
profit on the resale of Common Shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
This Prospectus has also been prepared for use by the persons who have or
will receive Common Shares issued by the Company in the acquisitions
contemplated hereby, and who wish to offer and sell such Common Shares, on
terms then obtainable, in transactions in which they may be deemed
underwriters within the meaning of the Securities Act. Any profits realized
on such sales by such persons may be regarded as underwriter compensation
within the meaning of the Securities Act.
The Common Shares of the Company are listed on the New York and Boston
Stock Exchanges under the symbol "NES." On February 27, 1998, the last
reported sale price of the Common Shares on the New York and Boston Stock
Exchanges composite tape was $42 1/8 per share.
________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this Prospectus is , 1998
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the Exchange Act), and the rules and
regulations promulgated thereunder, and, in accordance therewith, files
reports, proxy statements and other information with the Securities and
Exchange Commission (the Commission). These reports, proxy statements and
other information concerning the Company 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 located at Citicorp Center, Suite 1400, 500 West Madison Street,
Chicago, Illinois 60661 and at Seven World Trade Center, Suite 1300, New York,
New York 10048. Copies of such material can also be obtained from the
Commission at prescribed rates through its Public Reference Section at 450
Fifth Street, N.W., Washington, D.C. 20549. The Commission also maintains a
site on the World Wide Web at http://www.sec.gov that contains reports, proxy
statements and other information regarding registrants that file
electronically with the Commission. The Company's Common Shares are listed on
the New York and Boston Stock Exchanges. Information filed by the Company and
other information concerning the Company can be inspected at the offices of
these stock exchanges: New York Stock Exchange, Inc., 20 Broad Street, New
York, New York 10005; Boston Stock Exchange, Inc., One Boston Place, Boston,
Massachusetts 02108.
The Company has filed with the Commission a Registration Statement on Form
S-4 (Reg. No. 333- ) under the Securities Act with respect to the Common
Shares offered hereby (including all amendments and supplements thereto, the
Registration Statement). This Prospectus, which forms a part of the
Registration Statement, does not contain all of the information set forth in
the Registration Statement, certain parts of which have been omitted in
accordance with the rules and regulations of the Commission. Statements
contained herein concerning the provisions of certain documents are not
necessarily complete and, in each instance, reference is made to the copy of
such document filed as an exhibit to the Registration Statement or otherwise
filed with the Commission. Each such statement is qualified in its entirety
by such reference. The Registration Statement and the exhibits thereto can be
inspected and copied at the public reference facilities and regional offices
of the Commission and at the offices of the New York and Boston Stock
Exchanges referred to above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated by reference in this Prospectus the following
documents heretofore filed with the Commission pursuant to the Exchange Act:
a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1996, which incorporates by reference consolidated financial
statements of the Company as of December 31, 1996, and for the three years in
the period ended December 31, 1996, and incorporates by reference the related
report of Coopers & Lybrand L.L.P., independent accountants.
b) The Company's Quarterly Report on Form 10-Q for the quarters ended
March 31, 1997, June 30, 1997, and September 30, 1997.
c) The Company's Current Reports on Form 8-K dated April 14, 1997,
May 20, 1997, August 7, 1997, December 1, 1997, December 4, 1997, December 18,
1997, December 30, 1997, February 6, 1998, and March 3, 1998.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act subsequent to the date
of this Prospectus and prior to the termination of the offering made by this
Prospectus shall be incorporated herein by reference and shall be deemed to be
a part hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein, modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part
hereof.
<PAGE>
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, upon the written or oral request directed to the Treasurer of the
Company at the address provided below of any such person, a copy of any or all
of the other documents referred to above which have been or may be
incorporated in this Prospectus by reference (not including the exhibits to
such documents, unless such exhibits are specifically incorporated by
reference in such documents), as well as a copy of the Company's Annual Report
to Shareholders for 1996. Copies of these documents are available upon
request from the Company by contacting: Treasurer, New England Electric
System, 25 Research Drive, Westborough, Massachusetts 01582, (508) 389-2000.
THE COMPANY
The Company is a voluntary association created under the laws of The
Commonwealth of Massachusetts by an Agreement and Declaration of Trust dated
January 2, 1926, and is a public utility holding company registered under the
Public Utility Holding Company Act of 1935 (the 1935 Act). The Company is a
utility holding company which owns outstanding common stock of the following
direct subsidiaries (with percentage of ownership, all 100% except as noted):
Granite State Electric Company
Granite State Energy, Inc.
Massachusetts Electric Company
Nantucket Electric Company
The Narragansett Electric Company
Narragansett Energy Resources Company
NEES Communications, Inc.
NEES Energy, Inc.
NEES Global Transmission, Inc.
New England Electric Transmission Corporation
New England Hydro-Transmission Corporation (50.4%)
New England Hydro-Transmission Electric Company, Inc. (50.4%)
New England Power Company
New England Power Service Company
The Company provides electric service to approximately 1,300,000 customers
within Massachusetts, Rhode Island, and New Hampshire. The Company's
subsidiaries include four retail operating companies: Massachusetts Electric
Company (Mass. Electric) and Nantucket Electric Company, which serve 975,000
customers in 147 communities in Massachusetts; The Narragansett Electric
Company (Narragansett), which serves 330,000 customers in 27 Rhode Island
communities; and Granite State Electric Company, which serves 36,000 customers
in 21 New Hampshire communities. New England Power Company (NEP), the
Company's wholesale generation and transmission subsidiary, owns and operates
a number of generating stations. Other subsidiaries include three
transmission companies: New England Electric Transmission Corporation, New
England Hydro-Transmission Corporation, and New England Hydro-Transmission
Electric Company, Inc.; a nonutility company, NEES Global Transmission, Inc.,
which provides consulting and independent project development services and
maintenance and construction services under contract to nonaffiliates; a
wholesale generation company, Narragansett Energy Resources Company; and a
service company, New England Power Service Company. NEES Communications, Inc.
is a nonutility subsidiary of the Company which provides telecommunications
and information-related products and services.
Because of legislation enacted in the states served by the NEES
companies, most customers served by the NEES companies will have the ability
to choose their power supplier during the first quarter of 1998. When
customers are allowed to choose their power supplier, utilities face the risk
that market prices may not be sufficient to recover the costs of the
commitments incurred to supply customers under a regulated structure. The
amounts by which such costs exceed market prices are commonly referred to as
"stranded costs." The NEES companies have reached settlement agreements with
parties representing all of their distribution customers. In each case, these
settlements provide for recovery of stranded costs.
In addition to addressing customer choice and the recovery of stranded
costs, the Massachusetts settlement also required the NEES companies to divest
their nonnuclear generating business as well as their oil and gas properties.
In August 1997, NEP and Narragansett entered into an agreement to sell
<PAGE>
substantially all of their nonnuclear generation business. The oil and gas
properties were sold in February 1998. After completion of these
transactions, the Company will consist primarily of transmission and
distribution assets.
The Company intends to complement its existing lines of business
through internal growth and acquisitions. The Company is actively negotiating
to acquire additional companies in existing and complementary lines of
business.
The principal executive offices of the company are located at 25
Research Drive, Westborough, Massachusetts 01582. The telephone number at
such offices is (508) 389-2000.
<PAGE>
SELECTED CONSOLIDATED FINANCIAL INFORMATION
NEW ENGLAND ELECTRIC SYSTEM
(In thousands except share and per share data)
<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Operating revenue $2,502,591 $2,350,698 $2,271,712 $2,243,029 $2,233,978
Net income $220,038 $208,936 $204,757 $199,426 $190,223
Average common
shares - Basic 64,899,322 64,960,496 64,969,652 64,969,652 64,969,652
- Diluted 64,952,185 64,986,136 64,985,697 64,987,549 64,985,002
Net income per
average share -
Basic and Diluted $3.39 $3.22 $3.15 $3.07 $2.93
Dividends declared
per share $2.36 $2.360 $2.345 $2.285 $2.22
Book value per
share-period end $27.03 $25.98 $25.13 $24.33 $23.55
Total assets $5,311,647 $5,223,251 $5,190,876 $5,084,841 $4,795,878
Long-term debt and
preferred stock (1) $1,616,504 $1,820,449 $1,846,146 $1,733,424 $1,672,037
</TABLE>
As of December 31, 1997
(In Thousands)
(unaudited)
Actual (2) Ratio
Capitalization:
Long-term debt (1) $1,577,391 47%
Minority interest in
consolidated subsidiaries 43,062 1%
Preferred stock 39,113 1%
Common share equity 1,744,442 51%
--------- ----
Total $3,404,008 100%
Total Assets $5,311,647
(1) Includes long-term debt due within one year.
(2) Pro Forma effects of this transaction are, including the contemplated
acquisitions, immaterial.
<PAGE>
COMMON SHARE PRICE RANGE AND DIVIDENDS
The high and low prices of the Common Shares of the Company, as reported
in The Wall Street Journal for the New York Stock Exchange -- Composite
Transactions, were:
Common Share Price Dividends
------------------ ---------
Year High Low Declared
---- ---- --- --------
1995
First Quarter $34 1/4 $30 5/8 $.575
Second Quarter $35 1/4 $29 5/8 $.590
Third Quarter $37 1/4 $32 7/8 $.590
Fourth Quarter $40 $37 $.590
1996
First Quarter $40 5/8 $36 1/8 $.590
Second Quarter $38 7/8 $32 7/8 $.590
Third Quarter $36 3/8 $31 1/8 $.590
Fourth Quarter $35 5/8 $31 $.590
1997
First Quarter $35 5/8 $33 1/2 $.590
Second Quarter $37 1/8 $33 1/4 $.590
Third Quarter $39 11/16 $36 1/4 $.590
Fourth Quarter $43 5/16 $37 1/4 $.590
1998
First Quarter $43 1/8 $41 $.590
(through February 27, 1998)
The reported last sale price of the Common Shares on the New York Stock
Exchange -- Composite Transactions on February 27, 1998, was $42 1/8 per
share. Book value per share on December 31, 1997, was $27.03.
The Company has paid 202 consecutive quarterly dividends since Common
Shares of the Company were first issued in 1947. Dividends are normally paid
on the first business day of January, April, July, and October. On February
25, 1998, a dividend of 59 cents per common share was declared payable April
1, 1998, to shareholders of record on March 10, 1998. Future dividends will
depend on earnings (which are derived from dividends paid by subsidiaries),
the financial condition of the Company, and other factors. (See "Description
of Common Shares" for a summary of limitations on dividends.)
TERMS OF THE OFFERING
As a result of the changes in the nature of the electric utility
industry due to the spread of wholesale and retail competition and passage of
legislation at the state level, the subsidiaries of the Company have
contracted to sell their non-nuclear generating businesses. After completion
of this transaction, the Company will consist primarily of transmission and
distribution assets. In order to permit the Company to grow and prosper by
building on existing skills, the Company is contemplating a series of
selective business acquisitions or investments in "energy related companies"
as defined in Rule 58(b) of the 1935 Act. The acquisitions may be made either
directly by the Company or through a direct or indirect non-utility
subsidiary. If the latter approach is utilized, the Common Shares may be
contributed by the Company to the acquiring subsidiary and then used to
acquire the assets of the energy related company.
In connection with acquisitions of energy related companies over the
next two-year period, the Company may satisfy the purchase price through the
use of cash and/or the issuance of Common Shares, to the shareholders thereof.
The Company anticipates that, to the extent possible, it would structure such
transactions or combinations to provide that the number of new Common Shares
issuable in each case would be determined as a function of the total value of
the consideration attributed to the acquisition of shares to the overall
business combination and by the average market price of the Company's Common
Shares, determined by reference to average trading prices on the New York and
Boston Stock Exchanges, over some reasonable period preceding the date of
<PAGE>
entering into the acquisition or business combination agreement, completing
the transaction, or satisfying payment obligations incurred in the course of
such transactions. The Company anticipates that it may issue up to
approximately 1,000,000 Common Shares in connection with such prospective
acquisitions. The Common Shares to be issued by the Company in connection
with such transactions will be treasury shares which are currently held or may
be acquired by the Company. Such number of Common Shares would represent, at
this time, approximately 2% of the issued share capital of the Company as at
February 27, 1998.
USE OF PROCEEDS
The Common Shares issued by the Company hereunder will be issued in
connection with the future acquisition of assets or shares of companies. The
Company will not receive any proceeds upon the issuance of the Common Shares
or sales by holders from time to time of such Common Shares contemplated by
this Prospectus.
OFFERED SECURITIES
The securities of the Company available to be offered by this Prospectus
consist of up to 1,000,000 Common Shares, which the Company proposes to issue
in connection with acquisitions as described herein. The Common Shares to be
issued by the Company in connection with such transactions will be treasury
shares which are currently held or may be acquired by the Company.
Underwriting discounts or commissions will generally not be paid by the
Company.
This Prospectus has also been prepared for use by persons who receive
shares issued by the Company in connection with any acquisition, and who wish
to offer and sell such shares, on terms then available, in transactions in
which they may be deemed underwriters within the meaning of the Securities Act
(such persons being referred to under this caption as Selling Shareholders).
Resales may be made pursuant to this Prospectus as amended or supplemented,
pursuant to Rule 145(d) under the Securities Act, or pursuant to an exemption
from such Act. Profits realized on resales by Selling Shareholders under
certain circumstances may be regarded as underwriting compensation under the
Securities Act.
Resales by Selling Shareholders may be made directly to investors or
through a securities firm acting as an underwriter, broker, or dealer. When
resales are to be made through a securities firm, such securities firm may be
engaged to act as the Selling Shareholder's agent in the sale of shares by
such Selling Shareholder, or such securities firm may purchase shares from the
Selling Shareholder as principal and thereafter resell such shares from time
to time. The fees earned by or paid to such securities firm may be the normal
stock exchange commission or negotiated commissions or underwriting discounts
to the extent permissible. In addition, such securities firm may affect
resales through other securities dealers, and customary commissions or
concessions to such other dealers may be allowed. Sales of shares may be at
negotiated prices, at fixed prices, at market prices, or at prices related to
market prices then prevailing. Any such sales may be made on the New York
Stock Exchange, Boston Stock Exchange, or other exchange on which such shares
are traded, in the over-the-counter market, by block trade, in special or
other offerings, directly to investors, or through a securities firm acting as
agent or principal, or a combination of such methods. Any participating
securities firm may be indemnified against certain civil liabilities,
including liabilities under the Securities Act. Any participating securities
firm may be deemed to be an underwriter within the meaning of the Securities
Act, and any commissions earned by such firm may be deemed to be underwriting
discounts or commissions under such Act.
A Prospectus Supplement, if required, will be filed under Rule 424(b)
under the Securities Act, disclosing the name of the Selling Shareholder, the
participating securities firm, if any, the number of shares involved, and
other details of such resale, if appropriate.
<PAGE>
DESCRIPTION OF COMMON SHARES
GENERAL
The authorized share capital of the Company consists solely of Common
Shares, of which 64,301,862 shares were issued and outstanding as of February
27, 1998. The Transfer Agent and Registrar for the Common Shares is
BankBoston, 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 uses
terms defined in the documents mentioned and is qualified in its entirety by
reference to said documents, which are filed as exhibits to the registration
statement.
VOTING AND DIVIDEND RIGHTS
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
the Company when such dividends have been declared by the Company's board of
directors, but shareholders must look only to the trust estate for the payment
thereof. The rights and powers of the Company's shareholders are set forth in
the Agreement and Declaration of Trust, as amended, of the Company (the
Declaration of Trust).
LIMITATIONS ON DIVIDENDS
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 the Company 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. At September 30, 1997, the consolidated retained earnings of $934
million included $264 million of retained earnings of the Company and $670
million of undistributed retained earnings of subsidiaries. At September 30,
1997 approximately $45 million of the Company's subsidiaries' retained
earnings may be unavailable for dividends to the Company.
LIQUIDATION RIGHTS
After satisfaction of all liabilities, the holders of the Common Shares
are entitled to receive pro rata the remaining assets of the Company, in cash
or in kind.
PREEMPTIVE RIGHTS
There are no preemptive rights.
OTHER
The Company being an unincorporated voluntary association, the title to
its property is held by a trustee (currently BankBoston) which acts at the
direction of the board of directors of the Company.
The board of directors of the Company is elected annually by the
shareholders. The Company has broad powers under the Declaration of Trust,
most of which can be exercised by the board of directors.
<PAGE>
The outstanding Common Shares of the Company are, and when duly issued
and paid for the Common Shares covered by this Prospectus will be, full-paid
and nonassessable. Authorized but unissued shares of the Company may be
issued either for money, services, or property, or in exchange for other
shares of the Company 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 the Company 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 the Company 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 the Company. Counsel for the
Company 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 the Company inserts in all contract
obligations including debt securities, and because the Company 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 the Company is a holding company, in suits
and claims against its subsidiaries, including environmental claims, courts
and agencies might attempt to assign liability to the Company despite
traditional principles of corporate law. Further, counsel for the Company
understands that unincorporated voluntary associations have been treated as
general partnerships under the laws of a few states. Even so, for the reasons
cited above and because of the substantial capitalization of the Company and
its subsidiaries, counsel for the Company considers the possibility of
personal liability of the shareholders of the Company to be remote.
PLAN OF DISTRIBUTION
It is anticipated that the Common Shares to be issued by the Company
pursuant to this Prospectus will be issued on terms determined at the time of
issuance and in accordance with terms and conditions contained in any relevant
agreement pertaining to the acquisition or business combination. Such
transactions will be effected on a negotiated basis, taking into account the
Company's assessment of the assets, shares, or business being acquired, and at
prices and terms then obtainable. Negotiated fees or commissions may be paid
to brokers or finders in connection with such negotiated sales. At present,
there are no such arrangements or agreements with any broker or dealer
relating to prospective transactions. The Company expects that the number of
Common Shares to be issued in connection with any such future transaction will
be generally determined by reference to the aggregate negotiated consideration
and the average trading price of the Common Shares over some reasonable period
preceding the date of issuance or the date of the commitment to issue Common
Shares. The aggregate number of Common Shares to be issued at any time, and
the issue price and any other specific terms of any particular issuance in
respect of an acquisition, will be set forth in any accompanying prospectus
supplement in each case where registration of the Common Shares under the
Securities Act is required, together with a description of any arrangement
involving an agent or underwriter and any compensation payable under the terms
of such arrangement.
The holders of Common Shares acquired in connection with the
acquisitions as described under "Terms of the Offering", and their respective
pledgees, donees, transferees, or other successors in interest may sell any or
all of such Common Shares from time to time directly to purchasers.
Alternatively, such selling securityholders may from time to time offer such
Common Shares through underwriters, dealers, or agents who may receive
compensation in the form of underwriting discounts, concessions, or
commissions from the selling securityholders and/or purchasers of Common
Shares for whom they act. Underwriters or dealers may also purchase any of
the Common Shares as principals for resale.
<PAGE>
Common Shares may be sold by selling securityholders from time to time
through the facilities of a stock exchange or in the over-the-counter market,
in one or more transactions at a fixed offering price, which may be changed,
at varying prices determined at the time of sale or at negotiated prices, or
otherwise. Such prices will be determined by the various selling
securityholders and their respective purchasers or by agreement between such
entities and any underwriters, dealers, or agents. This Prospectus relates to
sales by selling securityholders in transactions in which they may be deemed
underwriters within the meaning of the Securities Act.
Once any Common Share is sold by any selling securityholder pursuant to
this Prospectus, such Common Share is not thereafter covered by this
Prospectus even if subsequently reacquired by a selling securityholder.
LEGAL MATTERS
Legal matters in connection with the issuance of the Common Shares
offered hereby will be passed upon for the Company by Robert King Wulff,
Corporation Counsel, and/or Kirk L. Ramsauer, Associate General Counsel, 25
Research Drive, Westborough, Massachusetts 01582. The opinion of Mr. Wulff
and/or Mr. Ramsauer as to legal matters in connection with the securities
offered hereby is filed as an exhibit to the registration statement.
EXPERTS
The consolidated balance sheets and statements of capitalization of the
Company and its subsidiaries as of December 31, 1996 and 1995 and the related
consolidated statements of income, retained earnings and cash flows for each
of the three years in the period ended December 31, 1996, all incorporated by
reference in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996, incorporated by reference in this Prospectus, have
been incorporated herein in reliance on the report of Coopers & Lybrand
L.L.P., independent accountants, given on the authority of that firm as
experts in accounting and auditing.
The statements of law and legal conclusions made in this prospectus, not
otherwise attributed, have been reviewed by Robert King Wulff, Corporation
Counsel, and/or Kirk L. Ramsauer, Associate General Counsel, and are made upon
their authority as experts. As of February 15, 1998, Mr. Wulff was the owner
of approximately 8,989 common shares of the Company and Mr. Ramsauer was the
owner of approximately 5,153 common shares and deferred common share
equivalents of the Company.
<PAGE>
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, and, if given
or made, such information or representations must not be relied upon as having
been authorized. This Prospectus does not constitute an offer to sell or the
solicitation of an offer to buy any securities other than the securities
described in this Prospectus or an offer to sell or the solicitation of an
offer to buy such securities in any circumstances in which such offer or
solicitation is unlawful. 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 or that the information contained herein is correct as of any time
subsequent to its date.
TABLE OF CONTENTS
Page
Available Information. . . . . . . . . . . . . . . . . . . . . 3
Incorporation of Certain Documents
by Reference . . . . . . . . . . . . . . . . . . . . . . . . 3
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . 4
Selected Consolidated Financial
Information. . . . . . . . . . . . . . . . . . . . . . . . . 5
Common Share Price Range and Dividends . . . . . . . . . . . . 7
Terms of the Offering. . . . . . . . . . . . . . . . . . . . . 7
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . 8
Offered Securities . . . . . . . . . . . . . . . . . . . . . . 8
Description of Common Shares . . . . . . . . . . . . . . . . . 8
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . 10
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . 10
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
<PAGE>
NEW ENGLAND ELECTRIC SYSTEM
1,000,000
COMMON SHARES
PAR VALUE $1 PER SHARE
-----------------------
PROSPECTUS
-----------------------
, 1998
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
To the extent applicable under the provisions of the Agreement and
Declaration of Trust, the Company will indemnify its directors and officers
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 his position. 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 the Company. Officers and Directors Insurance is also provided.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors and officers of the Company pursuant to the
foregoing provision or otherwise, the Company has been advised that, in the
opinion of the Commission such indemnification is against public policy as
expressed in said Securities Act, and is, therefore, unenforceable.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
List of Exhibits
----------------
4.1 Specimen copy of Common Share Certificate of the Company, incorporated
herein by reference to Exhibit 4.1 to the Company's Registration
Statement on Form S-3 filed with the Commission on August 3, 1989 (File
No. 33-30273).
4.2 Declaration of Trust of the Company, dated as of January 2, 1926, as
amended, incorporated herein by reference to Exhibit 3 to the Company's
Annual Report on Form 10-K for the year ended December 31, 1994 (File
No. 1-3446).
5.1 Opinion of Robert King Wulff, Esq. and Kirk L. Ramsauer, Esq. with
respect to the legality of the securities being registered, containing
consent.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Robert King Wulff, Esq. and Kirk L. Ramsauer, Esq. (contained
in the opinion filed as Exhibit 5.1 to this Registration Statement).
24.1 Power of attorney.
24.2 Certified vote of the Board of Directors.
ITEM 22. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made
of the securities registered hereby, a post-effective amendment to
this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this 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 this registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected
in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20 percent change in the
<PAGE>
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this
registration statement or any material change to such
information in this registration statement;
provided, however, that the undertakings set forth in paragraphs
(i) and (ii) above do not apply if the information required to be
included in a post-effective amendment by these paragraphs is
contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities 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) 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.
(4) That, for purposes of determining any liability under the
Securities 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 this
registration statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(5) Prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this
registration statement, by any person or party who is deemed to be
an underwriter within the meaning of Rule 145(c), the issuer
undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters,
in addition to the information called for by the other items of
the applicable form.
(6) That, every prospectus (i) that is filed pursuant to the
immediately preceding paragraph or (ii) that purports to meet the
requirements of Section 10(a)(3) of the Securities Act and is used
in connection with the offering of securities subject to Rule 415,
except to the extent permitted to be filed as a prospectus
supplement, will be filed as a part of an amendment to the
registration statement and will not be used until such amendment
is effective, and that, for purposes of determining any liability
under the Securities 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 bona fide offering thereof.
(7) The undersigned Registrant hereby undertakes to respond to
requests for information that is incorporated by reference into
the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form,
within one business day of receipt of such request, and to send
the incorporated documents by first class mail or other equally
prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration
statement through the date of responding to the request.
(8) The undersigned Registrant hereby undertakes to supply by means of
a post-effective amendment all information concerning a
transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement
when it became effective.
<PAGE>
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer, or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer, or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act, and will be governed by
the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the Town of Westborough, The
Commonwealth of Massachusetts, on the 5th day of March, 1998.
NEW ENGLAND ELECTRIC SYSTEM
s/Richard P. Sergel
By:_____________________________
Richard P. Sergel
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed below by the following persons in the capacities and
on the date indicated.
We, the undersigned officers of New England Electric System, hereby
authorize and direct John G. Cochrane, Jennifer L. Kenney, James P. Meehan,
and Robert King Wulff, or several of them, as attorneys-in-fact, to execute in
the name and on behalf of each of the undersigned persons, in the respective
capacities indicated below, any amendment or amendments to the registration
statement of New England Electric System under the Securities Act.
(Signature and Title)
(i) Principal Executive Officer:
s/Richard P. Sergel
____________________________
Richard P. Sergel
President and Chief Executive Officer
(ii) Principal Financial Officer:
s/Michael E. Jesanis
______________________________
Michael E. Jesanis
Senior Vice President and Chief
Financial Officer
(iii) Principal Accounting Officer
s/John G. Cochrane
______________________________
John G. Cochrane
Treasurer
(iv) Directors: (a majority)
Joan T. Bok
Alfred D. Houston
Paul L. Joskow
John M. Kucharski
Edward H. Ladd
Joshua A. McClure
George M. Sage
Richard P. Sergel
Charles E. Soule
Anne Wexler
James Q. Wilson
James R. Winoker
s/Jennifer L. Kenney
All by:_________________________
Jennifer L. Kenney
Attorney-in-Fact
Date as to all signatures
on this page: March 5, 1998
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. The
provisions of this paragraph, however, shall not have the effect of, or
constitute, a condition, stipulation, or provision binding any person to waive
compliance with any provision of the Securities Act as amended or of the rules
and regulations of the Securities and Exchange Commission thereunder.
<PAGE>
EXHIBIT INDEX
Exhibit Description Page
- ------- ----------- ----
4.1 Specimen copy of Common Share Incorporated by
reference
4.2 Declaration of Trust of the Incorporated by
Company, dated as of January 2, reference
1926, as amended
5.1 Opinion of Robert King Wulff, Filed herewith
Esq. and Kirk L. Ramsauer with
respect to the legality of the
securities being registered,
containing consent
23.1 Consent of Coopers & Lybrand Filed herewith
L.L.P.
24.1 Power of attorney Filed herewith
24.2 Certified vote of the Board Filed herewith
of Directors
<PAGE>
Exhibit 5.1
25 Research Drive, Westborough, Massachusetts 01582
=====================================================
March 5, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: Common Shares of New England Electric System
Dear Commissioners:
The undersigned, counsel for New England Electric System (the Company),
have been of counsel for the Company in connection with its proposed issue and
sale of up to 1,000,000 additional common shares in connection with the
acquisition of assets, businesses, or securities of energy-related companies
as defined in Rule 58(b) of the Public Utility Holding Company Act of 1935.
As such counsel, we have reviewed the various documents and proceedings
relating to said issue, including, without limiting the foregoing, the
prospectus and registration statement and the corporate and regulatory
authority with reference to said issue. Accordingly, we are familiar with the
proceedings taken in connection with such issue.
Based on the foregoing, and subject to the additional actions yet to be
taken indicated below, it is our opinion that:
1. The Company is a duly created and existing voluntary association in
The Commonwealth of Massachusetts. The authorized shares of the Company
consist of 150,000,000 shares of the par value of $1 each. The Board of
Directors has authorized the proposed issue and sale of up to 1,000,000 common
shares, as permitted by the Agreement and Declaration of Trust dated January
2, 1926, as amended (the Agreement). The common shares to be issued in
connection with these transactions will be treasury shares which are currently
held or may be acquired by the Company.
2. When duly issued and paid for, the additional common shares will be
validly issued, full-paid and nonassessable, and the holders thereof will be
entitled to the rights and privileges appertaining thereto set forth in the
Agreement. Article 9 of the Agreement provides in substance that no
shareholder, director, officer, or agent shall be held to any liability in
contract, tort, or otherwise; that every person shall look only to the trust
estate for payment or damages or otherwise, and that in every written
agreement or obligation reference shall be made to the Agreement and to the
substance of such part of the above provisions of Article 9 as are applicable,
and that neither the Board of Directors nor the Trustee nor any officer,
agent, or representative shall have any power or authority to enter into any
agreement or obligation on behalf of the Company except in accordance with the
provisions of said Article 9. Article 10 of the Agreement provides that no
trustee, director, officer, or agent of the Company shall be entitled to look
to the shareholders personally for indemnity against liability incurred by
them or to call upon the shareholders for the payment of any assessment except
only in the case of shares which by their express terms are issued part-paid
and assessable and then only as therein provided. In Article 27 of the
Agreement it is further provided that all shares issued and to be issued shall
be full-paid and nonassessable except to the extent otherwise specifically
provided in the certificates representing such shares. The Agreement
<PAGE>
expressly declares in Article 39 that a trust and not a partnership is deemed
to be created and that the shareholders shall be deemed to hold only the
relationship of cestuis que trustent to the Trustee. Despite these
provisions, the shareholders of a voluntary association such as the Company
might, with respect to the liability 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 the Company. We consider the possibility of any such liability
remote because, in our opinion, shareholders are protected under the laws of
Massachusetts from personal liability on contract obligations arising from
instruments containing the substance of such of said provisions of Article 9
as are applicable (it being the practice of the Company to insert such in all
contract obligations, including all debt securities), and because the Company
is a holding company so that 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 the Company is a holding company, in suits
and claims against its subsidiaries, including environmental claims, courts
and agencies might disregard corporate formalities and assign liability to the
Company despite traditional principles of corporate law. Further, we
understand that unincorporated voluntary associations have been treated as
general partnerships under the laws of a few states. Even so, for the reasons
cited above and because of the substantial capitalization of the Company and
its subsidiaries, we consider the possibility of personal liability of the
shareholders of the Company to be remote.
3. The issue of these common shares is subject to appropriate action by
the Securities and Exchange Commission under the Public Utility Holding
Company Act of 1935 and receipt of full consideration for the shares, and the
sale of the additional common shares is subject to a registration statement
with respect thereto becoming effective under the Securities Act of 1933, as
amended. This opinion does not relate to qualifications or registration of
shares under securities or "blue sky" laws of the several states.
As required by Section 7 of the Securities Act of 1933, as amended, we
hereby give our consent to the use of our names in the accompanying
registration statement and related prospectus of the Company with reference to
the additional common shares, to which this opinion is an exhibit, and to the
use of this opinion in connection therewith.
Very truly yours,
s/ Kirk L. Ramsauer
Kirk L. Ramsauer
Associate General Counsel
s/ Robert King Wulff
Robert King Wulff
Corporation Counsel
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-4, to register one million shares of Common Stock, of our report dated
February 28, 1997, on our audits of the financial statements of New England
Electric System. We also consent to the reference to our firm under the
caption "Experts".
s/Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
March 5, 1998
<PAGE>
Exhibit 24.1
POWER OF ATTORNEY
Each of the undersigned directors of New England Electric System (the
Company) individually as a director of the Company, hereby constitutes and
appoints John G. Cochrane, Jennifer L. Kenney, James P. Meehan, or Robert King
Wulff, individually, as attorneys-in-fact to execute on behalf of the
undersigned the Company's registration statement on Form S-4 for the issue and
sale of up to 1,000,000 common shares of the Company, to be filed with the
Securities and Exchange Commission, and to execute any appropriate amendment
or amendments to such registration statement as may be required by law.
Dated this 24th day of February, 1998.
s/ Joan T. Bok s/ George M. Sage
_________________________ ________________________
Joan T. Bok George M. Sage
s/ Richard P. Sergel
_________________________ ________________________
William M. Bulger Richard P. Sergel
s/ Alfred D. Houston s/ Charles E. Soule
_________________________ ________________________
Alfred D. Houston Charles E. Soule
s/ Paul L. Joskow s/ Anne Wexler
_________________________ ________________________
Paul L. Joskow Anne Wexler
s/ John M. Kucharski s/ James Q. Wilson
_________________________ ________________________
John M. Kucharski James Q. Wilson
s/ Edward H. Ladd s/ James R. Winoker
_________________________ ________________________
Edward H. Ladd James R. Winoker
s/ Joshua A. McClure
_________________________
Joshua A. McClure
<PAGE>
Exhibit 24.2
SIGNATURES
The signature pages of this registration statement and of any amendment
or amendments thereto hereafter filed shall be deemed to include the
following:
VOTED: That this Company file one or more registration statements with
the Securities and Exchange Commission under the Securities Act of
1933 with reference to the Additional Common Shares; that the
officers of the Company or John G. Cochrane, Jennifer L. Kenney,
ames P. Meehan, or Robert King Wulff, as attorney-in-fact for this
Company are severally authorized in the name and on behalf of the
members of this Board, to execute and file such registration
statements, and any amendment or amendments thereto as the officer
or officers or attorney-in-fact so acting deem advisable; and that
the principal executive officer or officers, the principal
financial officer, and the principal accounting officer of this
Company are authorized to execute such registration statements and
such amendment or amendments thereto.
I, Cheryl A. LaFleur, hereby certify that I am Secretary of New England
Electric System; that the foregoing is a true copy from the records of votes
duly passed at a meeting of the Directors of said company duly held February
24, 1998, at which meeting a quorum was present and acting throughout; and
that said vote remains in full force and effect without alteration.
A T T E S T: s/ Cheryl A. LaFleur
___________________________
Secretary
