FILED PURSUANT TO PARAGRAPH (b)
OF RULE 424
REGISTRATION NO. 33-59713
PROSPECTUS
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SOUTHERN NEW ENGLAND TELECOMMUNICATIONS CORPORATION
SHAREHOLDER DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
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The Shareholder Dividend Reinvestment and Stock Purchase Plan ("Plan") of
Southern New England Telecommunications Corporation ("Corporation") provides
holders of shares of the Corporation's common stock ("Common Shares") with a
simple and convenient method of purchasing additional Common Shares without
payment of any brokerage commission or service charge. Any holder of record of
Common Shares is eligible to join the Plan.
Investment options offered under the Plan are:
Full Dividend Reinvestment--Reinvest dividends on all Common Shares
held. Participants may also make optional cash payments up to an
aggregate of $10,000 per quarter.
Optional Cash Payments Only--Invest by making optional cash payments
at any time in any amount up to an aggregate of $10,000 per quarter
without reinvesting dividends on Common Shares held.
The price of Common Shares purchased by participants in the Plan depends
upon whether shares are newly issued by the Corporation or purchased by an
independent agent in the open market. The price of shares newly issued by the
Corporation will be the average of the high and low sale prices of the Common
Shares on the New York Stock Exchange on the dividend payment date. The price of
shares purchased by an independent agent will be the average price paid by that
agent.
This Prospectus relates to authorized and unissued Common Shares registered
for purchase under the Plan, which shares, at the sole discretion of the
Corporation, may be newly issued shares, shares purchased in the open market by
an agent independent of the Corporation, or a combination of both. It is
suggested that this Prospectus be retained for future reference.
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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.
Dated May 31, 1995
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AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934 ("Exchange Act") and in accordance therewith
files reports, proxy statements and other information with the Securities and
Exchange Commission ("SEC"). Such reports, proxy statements and other
information filed by the Corporation can be inspected and copied at the public
reference facilities of the SEC, Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, DC 20549, as well as the following SEC Regional Offices: 7
World Trade Center, Suite 1300, New York, NY 10048; and 500 W. Madison Street,
Suite 1400, Chicago, IL 60661. Such material can also be inspected at the New
York and Pacific Stock Exchanges on which the Common Shares are listed. Copies
can be obtained from the SEC by mail at prescribed rates. Requests should be
directed to the SEC's Public Reference Section, Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, DC 20549.
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INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents have been filed by the Corporation with the SEC
(File No. 1-9157) and are incorporated herein by reference:
(1) The Corporation's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994;
(2) The Corporation's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995;
(3) The Corporation's Current Reports on Form 8-K dated January 24, 1995,
April 20, 1995, and May 18, 1995; and
(4) The description of the Common Shares contained in Form 8-B dated May
21, 1986 and Form 8-K dated February 11, 1987.
All documents filed by the Corporation pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus shall be
deemed to be incorporated by reference in this Prospectus and to be 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 for purposes of this Prospectus 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 or in any prospectus
supplement 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 of this Prospectus.
Copies of the above documents (excluding exhibits to such documents, unless
such exhibits are specifically incorporated by reference therein) and of the
Corporation's 1994 Annual Report to Shareholders may be obtained upon written or
oral request without charge by each person, including beneficial owners, to whom
this Prospectus is delivered, from the Director-Investor Relations of the
Corporation, Shareholder Services Center, 1st Floor, 300 George Street, New
Haven, Connecticut 06511 (telephone number 1-800-243-1110).
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THE CORPORATION
The Corporation was incorporated in 1986 under the laws of the State of
Connecticut and has its principal executive offices at 227 Church Street, New
Haven, Connecticut 06510 (telephone number (203) 771-5200).
TABLE OF CONTENTS
Available Information ..................................................... 2
Incorporation of Documents by Reference ................................... 2
The Corporation ........................................................... 3
The Plan .................................................................. 3
Purpose ................................................................. 3
Advantages .............................................................. 3
Administration .......................................................... 4
Participation ........................................................... 4
Costs ................................................................... 5
Purchases ............................................................... 5
Optional Cash Payments .................................................. 5
Reports to Participants ................................................. 6
Dividends ............................................................... 6
Certificates for Common Shares .......................................... 6
Termination ............................................................. 7
Other Information ....................................................... 7
Use of Proceeds ........................................................... 9
Legal Opinion ............................................................. 9
Experts ................................................................... 9
Indemnification of Directors and Officers ................................. 10
SHAREHOLDER DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
The following is a question and answer statement of the provisions of the
Shareholder Dividend Reinvestment and Stock Purchase Plan of the Corporation.
Purpose
1. What is the purpose of the Plan?
The purpose of the Plan is to provide holders of record of Common Shares
with a simple and convenient method of investing cash dividends and optional
cash payments in additional Common Shares at a price equal to market value,
without payment of any brokerage commission or service charge. The Common Shares
purchased from the Corporation with reinvested cash dividends and supplemental
cash payments will, at the option of the Corporation, be newly issued shares,
shares purchased in the open market by an independent agent, or a combination of
both.
Advantages
2. What are the advantages of the Plan?
Participants in the Plan may:
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(a) have cash dividends on their Common Shares automatically
reinvested;
(b) continue to receive their cash dividends on Common Shares
registered in their names and invest by making optional cash
payments up to an aggregate of $10,000 per quarter; or
(c) invest both their cash dividends and such optional cash payments.
No commission or service charge is paid by participants in connection with
purchases under the Plan. Full investment of funds is possible under the Plan
because the Plan permits fractions of Common Shares, as well as full Common
Shares, to be credited to a participant's account. In addition, dividends in
respect of such fractions, as well as full Common Shares, will be credited to a
participant's account. Dividends on Common Shares in the participant's account
are automatically reinvested in additional Common Shares. The Corporation
assures safekeeping of Common Shares credited to a participant's account under
the Plan since certificates for such Common Shares are not issued unless
requested by the participant. Regular quarterly statements of account provide
simplified recordkeeping.
Administration
3. Who administers the Plan for participants?
The Corporation administers the Plan for participants, keeps records, sends
quarterly statements of account to participants and performs other duties
relating to the Plan.
Participation
4. How does a shareholder participate?
All holders of record of Common Shares are eligible to participate in the
Plan. A holder of record of Common Shares may join the Plan by completing and
signing the Authorization Form and returning it to the Corporation. A return
envelope is provided for this purpose. An Authorization Form may be obtained at
any time by written request to Southern New England Telecommunications
Corporation Shareholder Services, P. O. Box 1101, New Haven, Connecticut 06504,
or by calling the Corporation toll free at 1-800-243-1110 from anywhere in the
continental United States; if within the New Haven area, call 771-6542.
5. When may a shareholder join the Plan?
A holder of record of Common Shares may join the Plan at any time. An
optional cash payment may be made when joining by enclosing a check or money
order (payable in United States dollars) with the Authorization Form.
The Authorization Form must be received by the twentieth day of the month
preceding the month in which a dividend is paid in order to reinvest that
dividend. Any optional cash payments received prior to the dividend payment date
will be invested on such dividend payment date.
For example, in the case of a July 15 dividend, if the Authorization Form
is received by the Corporation not later than June 20, the July 15 dividend
would be reinvested--if the Authorization Form is received after June 20 the
first dividend reinvested would be the October dividend. However, any optional
cash payments received before July 15 would be invested on July 15.
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6. What does the Authorization Form provide?
The Authorization Form provides for the purchase of additional Common
Shares through the following investment options offered under the Plan:
Full Dividend Reinvestment--Reinvest dividends on all Common Shares
held by a participant. Optional cash payments in any amount up to
an aggregate of $10,000 per quarter may also be invested.
Optional Cash Payments Only--Invest by making optional cash payments
at any time in any amount up to an aggregate of $10,000 per
quarter without reinvesting dividends on Common Shares held.
Cash dividends on Common Shares credited to the participant's account under
the Plan are automatically reinvested to purchase additional Common Shares.
7. How may a participant change options under the Plan?
A participant may change the investment option at any time by signing a new
Authorization Form and returning it to the Corporation. An Authorization Form
may be obtained at any time. (See Question 4 for address and telephone number.)
Any change in option with respect to reinvestment of dividends must be received
by the Corporation by the twentieth day of the month preceding a dividend
payment date to allow sufficient time for processing.
Costs
8. Are there any expenses to participants in connection with purchases under
the Plan?
No. Participants pay no brokerage fees. Any and all fees, commissions and
expenses incurred in administration of the Plan are paid by the Corporation.
Purchases
9. How many Common Shares will be purchased for participants?
Each participant's account will be credited with that number of Common
Shares, including fractions computed to three decimal places, equal to the total
amount to be invested divided by the purchase price.
10. What will be the price of Common Shares purchased under the Plan?
The price of Common Shares newly issued by the Corporation on any dividend
payment date will be the average of the high and low sale prices for such Common
Shares on the New York Stock Exchange (the "NYSE") on the dividend payment date
(or the next preceding day on which there is a sale of Common Shares on the NYSE
if there are no sales of such Common Shares on the dividend payment date). The
price of Common Shares purchased in open market transactions will be the average
price paid by an independent agent who will obtain them during the 2 week period
preceding each dividend payment date. No Common Shares will be sold under the
Plan at less than the $1.00 par value of such Common Shares. In the event the
purchase price of the Common Shares is below par value, the dividend for that
payment period will be sent to the shareholder and any optional cash payments
received will be refunded.
Optional Cash Payments
11. How does the cash payments option work?
On each dividend payment date any optional cash payments received from the
participant prior to such dividend payment date will be applied by the
Corporation to the purchase of additional Common Shares. Dividends on Common
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Shares registered in the participant's name will also be invested unless the
participant has checked the "optional cash payments only" box on the
Authorization Form. Dividends payable on Common Shares credited to the account
of the participant under the Plan will be reinvested in additional Common
Shares.
12. How are optional cash payments made?
The option to make cash payments is available to each participant each
quarter. Optional cash payments by a participant cannot exceed an aggregate of
$10,000 per quarter.
An optional cash payment may be made by a participant when enrolling by
enclosing a check or money order (payable in United States dollars) with the
Authorization Form. Thereafter, to insure the proper crediting of accounts, such
payments should be made through the use of cash payment forms sent to
participants by the Corporation. The same amount of money need not be sent each
quarter and there is no obligation to make an optional cash payment each
quarter.
If a participant wishes to make optional cash payments on a regular basis,
the Corporation will, on request, mail to the participant a notice shortly
before each dividend payment date as a reminder of the time to make the cash
payment.
13. When will optional cash payments received by the Corporation be invested?
Optional cash payments received on or after a given dividend payment date
will be held by the Corporation until the next dividend payment date. (Dividend
payment dates ordinarily are the fifteenth of January, April, July and October.)
No Interest Will Be Paid By The Corporation On Cash Payments. Optional cash
payments will be returned if written notification is received by the Corporation
not later than the day preceding the dividend payment date.
Reports To Participants
14. What reports will be sent to participants in the Plan?
Each participant in the Plan will receive a quarterly statement of account.
These statements are a participant's continuing record of the cost of purchases
and should be retained for income tax purposes. In addition, each participant
will receive a Prospectus for the Plan and copies of the same communications
sent to every other registered holder of Common Shares.
Dividends
15. Will a participant's account be credited with dividends on fractions of
Common Shares?
Yes. A participant's account will be credited with dividends on fractions
of Common Shares.
Certificates For Common Shares
16. Will certificates be issued for Common Shares purchased?
Common Shares purchased under the Plan will be registered in the name of
the Corporation, as agent for participants in the Plan, and certificates for
such Common Shares will not be issued to participants unless requested. The
number of Common Shares credited to an account under the Plan will be shown on
the participant's quarterly statement of account. This protects against loss,
theft or destruction of stock certificates.
Certificates for any number of whole Common Shares credited to an account
under the Plan will be issued within ten business days after receipt of a
written request from a participant who wishes to remain in the Plan. This
request should be
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mailed to Southern New England Telecommunications Corporation Shareholder
Services, P. O. Box 1101, New Haven, Connecticut 06504. Any remaining full
Common Shares and fractions of a Common Share will continue to be credited to
the participant's account.
Common Shares credited to the account of a participant under the Plan may
not be pledged. A participant who wishes to pledge such Common Shares must
request that certificates for such Common Shares be issued in the participant's
name.
Certificates for fractions of Common Shares will not be issued under any
circumstances.
17. In whose name will certificates be registered when issued?
Accounts under the Plan are maintained in the names in which certificates
of the participants were registered at the time they entered the Plan.
Certificates for whole Common Shares will be similarly registered when issued.
Termination
18. How is participation in the Plan terminated?
In order to terminate participation in the Plan, a participant must send a
written request to Southern New England Telecommunications Corporation
Shareholder Services, P. O. Box 1101, New Haven, Connecticut 06504. When
participation in the Plan is terminated, whole Common Shares in a participant's
account under the Plan will be credited to that shareholder's account in
book-entry form, unless the participant requests stock certificates and a cash
payment will be made for any fraction of a Common Share, based on the current
market price of Common Shares less any related brokerage fees and any transfer
tax. Upon termination from the Plan, the participant may request that all of the
Common Shares be sold. Normally, the sale will be made for the account of the
participant by an independent fiduciary institution designated by the
Corporation, within seven business days after receipt of the request. The
participant will receive the proceeds of the sale less any brokerage fees and
any transfer tax.
19. When may participation in the Plan be terminated?
Participation in the Plan may be terminated at any time.
20. When may an investment for a dividend payment date be stopped?
Without terminating participation in the Plan, a shareholder may stop all
investment on a dividend payment date if written instructions to stop such
investment are received not later than the day preceding the dividend payment
date.
Other Information
21. What happens when a participant sells or transfers all of the Common Shares
registered in the participant's name?
If a participant disposes of all Common Shares registered in the
participant's name, the Corporation will continue to reinvest the dividends on
the Common Shares credited to the participant's account under the Plan until
otherwise notified. However, if the Plan account in such a case is credited with
less than one full Common Share, the Corporation reserves the right to close the
account and remit to the participant the value of such fractional Common Share
determined in accordance with the procedure for the payment for fractional
Common Shares described in answer to Question 18.
22. What happens if the Corporation issues a stock dividend or declares a
stock split?
Any Common Shares distributed as a result of a stock dividend or stock
split by the Corporation on Common Shares credited to the account of a
participant under the Plan will be added to the participant's account. Stock
dividends or split
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Common Shares distributed on Common Shares registered in the name of the
participant will be credited to that shareholder's account in book-entry form in
the same manner as to shareholders who are not participating in the Plan.
23. How will a participant's Common Shares be voted at meetings of
shareholders?
Any Common Shares held in the Plan for a participating shareholder will be
voted as the shareholder directs. Participating shareholders will receive a
single proxy covering all Common Shares registered in their names as well as all
whole Common Shares credited to their accounts under the Plan. If no Common
Shares are registered in a participant's name, a proxy card will be furnished to
the participant for whole Common Shares credited to the participant's account
under the Plan.
If no instructions are received on a proxy card returned, properly signed,
with respect to any item thereon, all of a participant's Common Shares--those
registered in the participant's name, if any, and those credited to the
participant's account under the Plan--will be voted in the same manner as for
non-participating shareholders who return proxies and do not provide
instructions, in accordance with the recommendations of the Corporation's Board
of Directors. If the proxy card is not returned or if it is returned unsigned,
none of the participant's Common Shares will be voted unless the participant
votes in person.
24. What are the Federal income tax consequences of participation in the Plan?
A ruling was received from the Internal Revenue Service concerning Federal
income tax consequences for Plan participants. Under the ruling:
(1) A participant in the Plan will be 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 otherwise payable to the
participant on such date with respect to the participant's Common
Shares and the tax basis of Common Shares credited to the participant's
account will equal the amount of such dividend. The tax basis of Common
Shares purchased with an optional cash payment and credited to the
participant's account will be the amount of such optional cash payment.
(2) A participant's holding period for Common Shares credited to the
participant's Plan account begins on the day following the dividend
payment date.
(3) A participant will not realize any taxable income when the participant
either receives book-entry credits or stock certificates for whole
Common Shares credited to the participant's account, either upon the
participant's request for certain of those Common Shares or upon
termination of participation in or termination of the Plan.
(4) A participant will realize gain or loss when Common Shares are sold or
exchanged, whether pursuant to the participant's request upon
termination of participation in the Plan (see Question 18) or by the
participant after receipt of Common Shares from the Plan, and, in the
case of a fractional Common Share, when the participant receives a cash
adjustment for a fraction of a Common Share credited to the
participant's account upon termination of participation in or
termination of the Plan; and the amount of such gain or loss will be
the difference between the amount which the participant receives for
the Common Shares or fraction of a Common Share, and the tax basis
therefor.
25. What are the effects of the Interest and Dividend Tax Compliance Act of
1983 on the Plan?
If a participant has failed to furnish a valid taxpayer identification
number to the Corporation, unless the participant is exempt from the withholding
requirements described in section 3406 of the Internal Revenue Code, then the
Corporation must withhold 31% from the amount of Common Share dividends, the
proceeds of the sale of fractional Common Shares
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and the proceeds of any sale of whole Common Shares. In addition, section
3406 of the Internal Revenue Code provides that if a new participant, who
enrolls after December 31, 1983, fails to certify that such participant is not
subject to withholding on interest and dividend payments, then 31% must be
withheld from the amount of Common Share dividends. The withheld amounts will be
deducted from the amount of dividends and the remaining amount will be
reinvested.
26. What is the responsibility of the Corporation under the Plan?
The Corporation, in administering the Plan, will not be liable for any act
done in good faith or for any good faith omission to act, including, without
limitation, any claim of liability arising out of failure to terminate a
participant's account upon such participant's death prior to receipt of notice
in writing of such death.
Participants should recognize that the Corporation cannot assure them of a
profit or protect them against a loss on Common Shares purchased by them under
the Plan.
Although the Plan contemplates the continuation of quarterly dividend
payments, the payment of future dividends will depend upon future earnings, the
financial condition of the Corporation and other factors.
27. May the Plan be changed or discontinued?
The Corporation reserves the right to suspend, modify or terminate the Plan
at any time. All participants will receive notice of any such suspension,
modification or termination. Upon termination of the Plan by the Corporation,
either book-entry credits or certificates for whole Common Shares credited to a
participant's account under the Plan will be issued and a cash payment will be
made for any fraction of a Common Share.
USE OF PROCEEDS
The Corporation does not know either the number of Common Shares that will
ultimately be purchased under the Plan or the prices at which such Common Shares
will be sold. The Corporation intends to apply such proceeds as are received for
the construction of plant and facilities and for expansion and improvement of
telephone services provided by the Corporation; for investment in its
unregulated subsidiaries; and for general corporate purposes. The Corporation is
unable to determine the amount of the proceeds which will be allocated to each
of these purposes.
LEGAL OPINION
Madelyn M. DeMatteo, Vice President, General Counsel and Secretary of the
Corporation, provided the opinion on the validity of the Common Shares being
registered herein. As of May 18, 1995 Ms. DeMatteo owned 13,798 Common Shares
and has options to acquire 69,550 additional Common Shares.
EXPERTS
The consolidated financial statements and financial statement schedule of
the Corporation incorporated by reference or included in the Annual Report on
Form 10-K for the fiscal year ended December 31, 1994 are incorporated herein by
reference in reliance upon the reports of Coopers & Lybrand L.L.P., independent
accountants, given on their authority as experts in accounting and auditing.
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INDEMNIFICATION OF DIRECTORS AND OFFICERS
The general statutes of the State of Connecticut specify when a Connecticut
corporation shall indemnify any shareholder, director, officer, employee or
agent. Generally, the Connecticut statute (Conn. Gen. Stat. 33-320a) provides
that in order to be indemnified the shareholder, director, officer, employee or
agent (1) must not have been adjudged to have breached his duty to the
corporation or (2) must have acted in good faith and in a manner he reasonably
believed to be in the best interests of the corporation and, with respect to any
criminal action or proceeding, he must have had no reasonable cause to believe
his conduct was unlawful.
As permitted under Section 33-290 of the Connecticut General Statutes, the
registrant's certificate of incorporation (subject to certain specified
exceptions involving violations of law, self-dealing, lack of good faith,
abdication of duty, and illegal distributions and improper loans) limits the
personal liability of its directors for monetary damages to the registrant or
its shareholders for a breach of duty as a director to the amount of
compensation received by the director for serving the registrant during the year
of violation.
The directors and officers of the registrant are covered by insurance
policies indemnifying them against certain liabilities, including certain
liabilities arising under the Securities Act of 1933, which might be incurred by
them in such capacities and against which they cannot be indemnified by the
registrant.
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