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SECURITIES AND EXCHABGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13E-4
Issuer Tender Offer Statement
(Pursuant to Section 13(e)(1) of the
Securities Exchange Act of 1934)
Atlantic City Electric Company
(Name of the Issuer and Person(s) Filing Statement)
$7.80 No Par Preferred Stock
(Title of Class of Securities)
048303 86 1 ($7.80 No Par Preferred Stock)
(CUSIP Number of Class of Securities)
James E. Franklin II, Esq.
Senior Vice President, Secretary and General Counsel
Atlantic City Electric Company
6801 Black Horse Pike
Egg Harbor Township
New Jersey 08234-4130
(609) 645-4100
Copies to:
Vincent Pagano, Jr., Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
(212) 455-2000
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of the Person(s) Filing Statement)
August 29, 1996
(Date Tender Offer First Published, Sent or Given
to Security Holders)
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2
Calculation of Filing Fee
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Transaction Value* Amount of filing fee:
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$77,700,000 $15,540
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* Pursuant to Section 13(e)(3) of the Securities Exchange Act of 1934, as
amended, and Rule 0-11(b)(1) thereunder, the transaction value was
calculated by multiplying 700,000 shares of $7.80 No Par Preferred Stock by
$111.00, the per share purchase price.
/ / Check box if any part of the fee is offset as provided by rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration
statement number, or the form or schedule, and the date of its filing.
Amount Previously Paid: N/A
Filing Parties: N/A
Form or Registration Nos.: N/A
Date Filed: N/A
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3
EXPLANATORY NOTE
Copies of the Offer to Purchase and the Letter of Transmittal, among other
documents, have been filed by Atlantic City Electric Company, a New Jersey
corporation (the "Company") as Exhibits to this Issuer Tender Offer Statement on
Schedule 13E-4 (the "Statement"). Unless otherwise indicated, all material
incorporated by reference in this Statement in response to items or sub-items of
this Statement is incorporated by reference to the corresponding caption in the
Offer to Purchase, including the information stated under such captions as being
incorporated in response thereto.
Item 1. Security and Issuer.
(a) The name of the issuer is Atlantic City Electric Company, a New
Jersey corporation, which has its principal executive offices at 6801 Black
Horse Pike, Egg Harbor Township, New Jersey 08234-4130 (telephone number
609-645-4100).
(b) The information set forth in the front cover page, "Introduction,"
Section 1 --"Purpose of the Offer; Certain Effects of the Offer; Plans of
the Company After the Offer" and Section 12 --"Transactions and Agreements
Concerning the Shares" of the Offer to Purchase is incorporated herein by
reference.
(c) The information set forth in Section 9 --"Price Ranges of Shares;
Dividends" of the Offer to Purchase is incorporated herein by reference.
(d) Not applicable.
Item 2. Source and Amount of Funds.
(a) The information set forth in Section 11 --"Source and Amount of
Funds" in the Offer to Purchase is incorporated herein by reference.
(b) Not applicable.
Item 3. Purpose of the Tender Offer and Plans or Proposals of the Issuer or
Affiliate.
The information set forth in Section 1 --"Purpose of the Offer;
Certain Effects of the Offer; Plans of the Company After the Offer" in the
Offer to Purchase is incorporated herein by reference.
Item 4. Interest in Securities of the Issuer.
The information set forth in Section 12 --"Transactions and Agreements
Concerning the Shares" in the Offer to Purchase is incorporated herein by
reference.
Item 5. Contracts, Arrangements, Understandings or Relationships with Respect to
the Issuer's Securities.
Not applicable.
Item 6. Persons Retained, Employed or to be Compensated.
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4
The information set forth in Section 14 --"Fees and Expenses" in the
Offer to Purchase is incorporated herein by reference.
Item 7. Financial Information.
(a)-(b) The information set forth in Section 10 --"Certain Information
Concerning the Company" in the Offer to Purchase and Exhibits (g)(1),
(g)(2) and (g)(3) hereto is incorporated herein by reference.
Item 8. Additional Information.
(a) Not applicable.
(b) There are no applicable regulatory requirements which must be
complied with or approvals which must be obtained in connection with the
Offer other than compliance with the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder including,
without limitation, Rule 13e-3 and Rule 13e-4, the rules and regulations
promulgated by the New Jersey Board of Public Utilities and the
requirements of the state securities or "Blue Sky" laws.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
Item 9. Material to be Filed as Exhibits.
Exhibit No. Description
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(a)(1) Offer to Purchase dated August 29, 1996.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees dated August 29, 1996.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(6) Letter to Holders of Shares dated August 29, 1996.
(a)(7) Press Release dated August 29, 1996.
(a)(8) Summary Advertisement dated August 29, 1996.
(a)(9) Guidelines of the Internal Revenue Service for Certification
of Taxpayer Identification Number on Substitute Form W-9.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
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5
Exhibit No. Description
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(g)(1) The Company's Annual Report on Form 10-K for the year ended
December 31, 1995 (incorporated by reference to Commission
File No. 1-3559).
(g)(2) The Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1996 and June 30, 1996
(incorporated by reference to Commission File No. 1-3559).
(g)(3) The Company's Current Reports on Form 8-K dated May
29, 1996, June 26, 1996, July 25, 1996 and August 13, 1996
(incorporated by reference to Commission File No. 1-3559).
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6
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
ATLANTIC CITY ELECTRIC COMPANY
By: /s/ Louis M. Walters
----------------------------------------
Name: Louis M. Walters
Title: Vice President, Treasurer and
Assistant Secretary
Dated: August 29, 1996
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7
EXHIBIT INDEX
Exhibit No. Description
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(a)(1) Offer to Purchase dated August 29, 1996.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees dated August 29, 1996.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(6) Letter to Holders of Shares dated August 29, 1996.
(a)(7) Press Release dated August 29, 1996.
(a)(8) Summary Advertisement dated August 29, 1996.
(a)(9) Guidelines of the Internal Revenue Service for Certification
of Taxpayer Identification Number on Substitute Form W-9.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
(g)(1) The Company's Annual Report on Form 10-K for the year ended
December 31, 1995 (incorporated by reference to Commission
File No. 1-3559).
(g)(2) The Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1996 and June 30, 1996
(incorporated by reference to Commission File No. 1-3559).
(g)(3) The Company's Current Reports on Form 8-K dated May 29,
1996, June 26, 1996, July 25, 1996 and August 13, 1996
(incorporated by reference to Commission File No. 1-3559).
Offer to Purchase for Cash
by
Atlantic City Electric Company
All Outstanding Shares of its $7.80 No Par Preferred Stock
(cumulative) (CUSIP NO. 048303 86 1) at a Purchase Price of $111.00 Per Share
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON MONDAY,
OCTOBER 7, 1996 UNLESS THE OFFER IS
EXTENDED.
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Atlantic City Electric Company, a New Jersey corporation (the "Company"),
invites the holders of its $7.80 No Par Preferred Stock (cumulative) (the
"Preferred") to tender their shares of such stock (the "Shares") at a price of
$111.00 per Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in this Offer to Purchase (the "Offer to Purchase") and in
the Letter of Transmittal (the "Letter of Transmittal" and, together with the
Offer to Purchase, the "Offer"). The Company will purchase all Shares validly
tendered and not withdrawn, upon the terms and subject to the conditions of the
Offer.
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THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 8--"CERTAIN CONDITIONS OF THE OFFER."
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The Shares are traded in the over-the-counter market and are not listed on
any national securities exchange or quoted on the automated quotation system of
a registered securities association. For information concerning the Shares, see
Section 9--"Price Ranges of Shares; Dividends."
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
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THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS
OR MERITS OF SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY
OF THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
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THE COMPANY, ITS BOARD OF DIRECTORS AND ITS EXECUTIVE OFFICERS MAKE NO
RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER ANY
OR ALL SHARES PURSUANT TO THE OFFER. STOCKHOLDERS MUST MAKE
THEIR OWN DECISION AS TO WHETHER TO TENDER SHARES
PURSUANT TO THE OFFER AND, IF SO, HOW MANY
SHARES TO TENDER.
--------------
The Dealer Managers for the Offer are:
Goldman, Sachs & Co.
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The date of this Offer to Purchase is August 29, 1996.
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IMPORTANT
Any stockholder desiring to tender any or all of such stockholder's Shares
should either (1) complete and sign the Letter of Transmittal, in accordance
with the instructions in the Letter of Transmittal, mail it or deliver it by
hand or facsimile transmission, and any other required documents to The Bank of
New York, as Depositary (the "Depositary"), and either deliver the certificates
for such Shares to the Depositary or deliver such Shares pursuant to the
procedure for book-entry transfer set forth in Section 5--"Procedure for
Tendering Shares" or (2) request such stockholder's broker, dealer, commercial
bank, trust company or nominee to effect the transaction for such stockholder.
Stockholders whose Shares are registered in the name of a broker, dealer,
commercial bank, trust company or nominee must contact such broker, dealer,
commercial bank, trust company or nominee if they desire to tender such Shares.
Stockholders who desire to tender Shares and whose certificates for such Shares
are not immediately available, or who cannot comply in a timely manner with the
procedure for book-entry transfer, should tender such Shares by following the
procedures for guaranteed delivery set forth in Section 5--"Procedure for
Tendering Shares."
Questions or requests for assistance or for additional copies of this Offer
to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery or
other tender offer materials may be directed to Georgeson & Company Inc., as
Information Agent, or the Dealer Managers at their respective addresses and
telephone numbers set forth on the back cover of this Offer to Purchase.
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
COMPANY AS TO WHETHER STOCKHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING
SHARES PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER
THAN THOSE CONTAINED HEREIN OR IN THE LETTER OF TRANSMITTAL. IF GIVEN OR MADE,
SUCH RECOMMENDATION, INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY.
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TABLE OF CONTENTS
SUMMARY ................................................................... iii
INTRODUCTION .............................................................. 1
SPECIAL FACTORS ........................................................... 1
Section 1. Purpose of the Offer; Certain Effects of the Offer; Plans of
the Company After the Offer................................... 1
Section 2. Certain Federal Income Tax Consequences....................... 3
Section 3. Certain Legal Matters; Regulatory and Foreign Approvals;
No Appraisal Rights........................................... 5
THE OFFER.................................................................. 6
Section 4. Number of Shares; Purchase Price; Expiration Date; Receipt of
Dividend; Extension of the Offer.............................. 6
Section 5. Procedure for Tendering Shares................................ 6
Section 6. Withdrawal Rights............................................. 8
Section 7. Acceptance for Payment of Shares and Payment of Purchase Price 9
Section 8. Certain Conditions of the Offer............................... 10
Section 9. Price Ranges of Shares; Dividends............................. 11
Section 10. Certain Information Concerning the Company.................... 12
Section 11. Source and Amount of Funds.................................... 14
Section 12. Transactions and Agreements Concerning the Shares............. 14
Section 13. Extension of Tender Period; Termination; Amendments........... 15
Section 14. Fees and Expenses............................................. 15
Section 15. Miscellaneous................................................. 16
ii
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SUMMARY
This general summary is provided solely for the convenience of holders of
Shares and is qualified in its entirety by reference to the full text and more
specific details contained in this Offer to Purchase and the Letter of
Transmittal and any amendments hereto and thereto. Each of the capitalized terms
used in this Summary and not defined herein has the meaning set forth elsewhere
in this Offer to Purchase.
The Company.............................Atlantic City Electric Company.
The Shares..............................Shares of $7.80 No Par Preferred Stock
(cumulative).
Number of Shares Sought.................All outstanding Shares.
Purchase Price..........................$111.00 per Share, net to the seller in
cash. See Section 9--"Price Ranges of
Shares; Dividends."
Conditions to the Offer.................The Offer is not conditioned upon any
minimum number of Shares being tendered.
The Offer is, however, subject to
certain other conditions.
Expiration Date of the Offer............The Offer expires on Monday, October 7,
1996 at 5:00 p.m., New York City time,
unless extended.
How to Tender Shares....................See Section 5--"Procedure for Tendering
Shares." For further information, call
the Information Agent or the Dealer
Managers or consult your broker for
assistance.
Withdrawal Rights.......................Tendered Shares may be withdrawn at any
time until the expiration of the Offer
and, unless theretofore accepted for
payment, may also be withdrawn after
Friday, October 25, 1996. See Section
6--"Withdrawal Rights."
Purpose of the Offer....................'The Company is making the Offer because
it believes that the purchase of Shares
is economically attractive to the
Company. In addition, the Offer gives
stockholders the opportunity to sell
their Shares at a premium over market
price and without the usual transaction
costs associated with a market sale. See
Section 1--"Purpose of the Offer;
Certain Effects of the Offer; Plans of
the Company After the Offer."
Dividends...............................The Board of Directors of the Company
will consider the declaration of
dividends on the Company's capital stock
at its meeting on September 12, 1996.
The Regular Quarterly Dividend on the
Preferred, if, when and as declared,
will be paid on November 1, 1996 to
holders of record as of the close of
business on October 4, 1996. A holder of
record of Shares on October 4, 1996 who
tenders Shares will be entitled to the
Regular Quarterly Dividend, regardless
of when such tender is made. Holders of
Shares purchased pursuant to the Offer
will not be entitled to any dividends in
respect of any later dividend periods.
See Section 9--"Price Ranges of Shares;
Dividends."
Brokerage Commissions...................Not payable by stockholders.
iii
<PAGE>
Stock Transfer Tax......................None, except as provided in Instruction
6 of the Letter of Transmittal. See
Section 7--"Acceptance for Payment of
Shares and Payment of Purchase Price."
Payment Date............................Promptly after the applicable Expiration
Date of the Offer.
Further Information.....................Additional copies of this Offer to
Purchase and the Letter of Transmittal
may be obtained by contacting Georgeson
& Company Inc., Wall Street Plaza, New
York, New York 10005, telephone (800)
223-2064 (toll-free) and (212) 440-9800
(brokers and dealers). Questions about
the Offer should be directed to Goldman,
Sachs & Co. at (800) 828-3182.
iv
<PAGE>
INTRODUCTION
To the Holders of $7.80 No Par Preferred Stock:
Atlantic City Electric Company, a New Jersey corporation (the "Company"),
invites the holders of its $7.80 No Par Preferred Stock (cumulative) (the
"Preferred") to tender their shares of such stock (the "Shares") at a price of
$111.00 per Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in this Offer to Purchase (the "Offer to Purchase") and in
the Letter of Transmittal (which, together with the Offer to Purchase,
constitutes the "Offer"). The Company will purchase all Shares validly tendered
and not withdrawn, upon the terms and subject to the conditions of the Offer.
THE COMPANY, ITS BOARD OF DIRECTORS AND ITS EXECUTIVE OFFICERS MAKE NO
RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER ANY OR ALL SHARES
PURSUANT TO THE OFFER. STOCKHOLDERS MUST MAKE THEIR OWN DECISION AS TO WHETHER
TO TENDER SHARES PURSUANT TO THE OFFER AND, IF SO, HOW MANY SHARES TO TENDER.
The Board of Directors of the Company (the "Board") will consider the
declaration of dividends on the Company's capital stock at its September 12,
1996 meeting. The regular quarterly dividend on the Preferred (the "Regular
Quarterly Dividend"), if, when and as declared, will be paid on November 1, 1996
to holders of record as of the close of business on October 4, 1996. A holder of
record of Shares on October 4, 1996 who tenders Shares will be entitled to the
Regular Quarterly Dividend, regardless of when such tender is made. Holders of
Shares purchased pursuant to the Offer will not be entitled to any dividends in
respect of any later dividend periods.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 8--"CERTAIN CONDITIONS OF THE OFFER."
Tendering stockholders will not be obligated to pay brokerage commissions,
solicitation fees or, subject to the Instructions to the Letter of Transmittal,
stock transfer taxes on the purchase of Shares by the Company. The Company will
pay all charges and expenses of the Depositary, Information Agent and the Dealer
Managers incurred in connection with the Offer.
As of August 28, 1996, there were 700,000 Shares issued and outstanding.
The Shares are traded in the over-the-counter market and are not listed on
any national securities exchange or quoted on the automated quotation system of
a registered securities association. Stockholders are urged to obtain current
market quotations for the Shares. The information concerning recent quarterly
trading history of the Shares is set forth in Section 9--"Price Ranges of
Shares; Dividends."
SPECIAL FACTORS
Section 1. Purpose of the Offer; Certain Effects of the Offer; Plans of the
Company After the Offer.
The Company is making the Offer because it believes that, given the current
market prices of the Shares and the opportunity for the Company to replace the
Shares with other securities that in the aggregate have a lower after-tax cost,
the purchase of the Shares pursuant to the Offer is economically attractive to
the Company. See Section 10--"Certain Information Concerning the Company." The
Board, including all non-employee directors of the Company, has authorized the
Offer by a unanimous vote.
The Company believes the Offer is fair to unaffiliated holders of Shares.
In making this determination, the Company considered that (a) the Offer gives
holders of Shares the opportunity to sell their Shares at a
1
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premium over market price and (b) the Offer provides stockholders who are
considering a sale of all or a portion of the Shares the opportunity to sell
those Shares for cash without the usual transaction costs associated with
open-market sales. See Section 9--"Price Ranges of Shares; Dividends." The
Company did not find it practicable to, and did not, quantify or otherwise
assign relative weights to these factors.
Neither the Company nor the Board received any report, opinion or appraisal
from an outside party which is materially related to the Offer, including, but
not limited to, any report, opinion or appraisal relating to the consideration
or the fairness of the consideration to be offered to the holders of the Shares
or the fairness of such Offer to the Company or the unaffiliated holders of
Shares. Neither the Board nor any director has retained an unaffiliated
representative to act solely on behalf of unaffiliated holders of Shares for the
purposes of negotiating the terms of the Offer or preparing a report concerning
the fairness of the Offer.
Except as set forth in Section 10--"Certain Information Concerning the
Company" or in Section 12-- "Transactions and Agreements Concerning the Shares,"
(i) following the consummation of the Offer, the business and operations of the
Company will be continued by the Company substantially as they are currently
being conducted and (ii) neither the Company nor Atlantic Energy, Inc.
("Energy"), the holder of all issued and outstanding common stock of the
Company, has any plans or proposals which relate to or would result in: (a) the
acquisition by any Person of additional securities of the Company or Parent or
the disposition of securities of the Company or Parent, other than in the
ordinary course of business; (b) an extraordinary corporate transaction, such as
a merger, reorganization or liquidation involving the Company, its subsidiary or
Parent; (c) a sale or transfer of a material amount of assets of the Company or
its subsidiary; (d) any change in the present Board or management of the Company
or Parent; (e) any material change in the present dividend rate or policy or
indebtedness or capitalization of the Company; (f) any other material change in
the Company's corporate structure or business; (g) a change in the Company's
By-Laws or the Agreement of Merger, as amended, forming the Company; (h) a class
of equity securities of the Company becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"); or (i) the suspension of the Company's
obligation to file reports pursuant to Section 15(d) of the Exchange Act.
Following the expiration of the Offer, the Company may, in its sole
discretion, determine to redeem Shares then subject to redemption at the
applicable redemption prices, or to purchase any outstanding Shares through
privately negotiated transactions, open market purchases, another tender offer
or otherwise, on such terms and at such prices as the Company may determine from
time to time. The terms of subsequent purchases or offers could differ from
those of the Offer, and may be at a higher price than the related price per
Share offered hereby, except that the Company will not make any such purchases
of Shares until the expiration of ten business days after the termination of the
Offer. Any possible future purchases of Shares by the Company will depend on
many factors, including the market prices of the Shares, the Company's business
and financial position, alternative investment opportunities available to the
Company, the results of the Offer and general economic and market conditions.
See Section 12-- "Transactions and Agreements Concerning the Shares."
As of June 30, 1996, the ratings of the Company's preferred stock by
Standard & Poor's Ratings Group ("S&P") and Moody's Investors Service, Inc.
("Moody's") were BBB+ and Baa1, respectively.
The purchase of Shares pursuant to the Offer will reduce the number of
holders of Preferred and the number of such Shares that might otherwise trade
publicly, and, depending upon the number of Shares so purchased, such reduction
could adversely affect the liquidity and market value of the remaining Shares
held by the public. The extent of the public market for the Preferred and the
availability of price quotations would, however, depend upon such factors as the
number of stockholders remaining at such time, the interest in maintaining a
market in the Preferred on the part of securities firms and other factors.
There are currently issued and outstanding 700,000 Shares of the Preferred
that are traded only in the over-the-counter market. There is currently one
holder of record of the Preferred.
All Shares purchased by the Company pursuant to the Offer will be retired,
cancelled and thereafter returned to the status of authorized but unissued
shares of the Company's preferred stock. The Shares are subject to a sinking
fund which requires that beginning May 1, 2001 and annually on May 1 through
2005, 115,000
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Shares be redeemed at a redemption price of $100 per Share. The Company has the
option to redeem through the operation of the sinking fund up to an additional
115,000 Shares at a redemption price of $100 per Share on each May 1 in each
such year. On May 1, 2006, 125,000 Shares must be redeemed through the operation
of the sinking fund at a redemption price of $100 per Share. In addition, the
Shares are redeemable in whole or in part at the option of the Company at any
time on or after May 1, 2006 at a redemption price of $100 per Share. Upon
liquidation or dissolution of the Company, holders of the Preferred are entitled
to receive a liquidation preference of $100 per Share, plus all accumulated and
unpaid dividends thereon to the date of payment, prior to the payment of any
amounts to holders of the Company's common stock.
THE COMPANY, ITS BOARD AND ITS EXECUTIVE OFFICERS MAKE NO RECOMMENDATION TO
ANY STOCKHOLDER AS TO WHETHER TO TENDER ANY OR ALL SHARES PURSUANT TO THE OFFER.
STOCKHOLDERS MUST MAKE THEIR OWN DECISION AS TO WHETHER TO TENDER SHARES
PURSUANT TO THE OFFER AND, IF SO, HOW MANY SHARES TO TENDER.
Section 2. Certain Federal Income Tax Consequences
EACH HOLDER OF SHARES IS URGED TO CONSULT AND RELY ON SUCH HOLDER'S OWN TAX
ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES TO THE HOLDER OF TENDERING SHARES
PURSUANT TO THE OFFER.
In General. The following summary describes certain federal income tax
consequences relating to the Offer. The summary deals only with Shares held as
capital assets within the meaning of Section 1221 of the Internal Revenue Code
of 1986, as amended (the "Code"), and does not address tax consequences that may
be relevant to investors in special tax situations, such as certain financial
institutions, tax-exempt organizations, life insurance companies, dealers in
securities or currencies, or stockholders holding the Shares as part of a
conversion transaction, as part of a hedge or hedging transaction, or as a
position in a straddle for tax purposes. Each stockholder should consult its own
tax advisor with regard to the Offer and the application of federal income tax
laws, as well as the laws of any state, local or foreign taxing jurisdiction, to
its particular situation.
Characterization of the Sale. A sale of Shares by a stockholder of the
Company pursuant to the Offer will be a taxable transaction for federal income
tax purposes. Under Section 302 of the Code, a sale of Shares by a stockholder
to the Company pursuant to the Offer will be treated as a "sale or exchange" of
such Shares for federal income tax purposes (rather than as a distribution by
the Company with respect to the Shares held by the tendering stockholder) if the
receipt of cash upon such sale (a) results in a "complete redemption" (i.e., a
complete termination of the stockholder's interest) of the Shares and any other
stock in the Company owned by the stockholder, or (b) is "not essentially
equivalent to a dividend" with respect to the stockholder (each as described
below).
If a stockholder is treated as recognizing gain or loss from the
disposition of the Shares for cash, such gain or loss will be equal to the
difference between the amount of cash received by the stockholder pursuant to
the Offer and the stockholder's tax basis in the Shares sold pursuant to the
Offer. Any such gain or loss will be capital gain or loss, and will be long-term
capital gain or loss if the Shares have been held for more than one year. If a
tendering stockholder does not own, either directly or indirectly under the
attribution rules described below, any common stock of Parent, a sale of Shares
by such stockholder to the Company pursuant to the Offer will be treated as a
sale or exchange of such Shares for federal income tax purposes, provided that
the Shares constitute a capital asset in such stockholder's hands. See
"--Section 302 Tests" and "--Constructive Ownership" below.
If a stockholder is not treated under the Section 302 tests as recognizing
gain or loss on an exchange of Shares for cash, the entire amount of cash
received pursuant to the exchange will be treated as a dividend to the extent of
the stockholder's allocable portion of the Company's earnings and profits for
federal income tax purposes. The cash amount of such dividend would be included
in gross income as an ordinary item in its entirety (without reduction for the
tax basis of the Shares sold pursuant to the Offer), no loss would be
recognized, and
3
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the tendering stockholder's basis in the Shares sold pursuant to the Offer would
be added to such stockholder's basis in its remaining Shares or other stock that
it owns in the Company, if any. To the extent the amount of cash received by the
stockholder pursuant to the Offer exceeds such stockholder's allocable portion
of the Company's earnings and profits, such stockholder's basis will be reduced
by the amount of such excess. If the amount of cash received by such stockholder
exceeds its basis in the Shares, the stockholder would be required to treat the
excess as gain from the sale or exchange of property.
If a sale of Shares by a corporate stockholder is treated as a dividend,
the corporate stockholder should consult its own tax advisors about limitations
affecting the availability of the dividends received deduction.
Section 302 Tests. The receipt of cash by a stockholder will be a "complete
redemption" if either (a) all of the Shares and any other stock of the Company
actually and constructively owned by the stockholder are sold pursuant to the
Offer, or (b) all of the Shares and any other stock of the Company actually
owned by the stockholder are sold pursuant to the Offer and, with respect to
Shares and other stock of the Company constructively owned by the stockholder
which are not sold pursuant to the Offer, the stockholder waives constructive
ownership of all such Shares under procedures described in Section 302(c) of the
Code. However, Section 302(c) only permits the waiver of the constructive
ownership rules in limited circumstances. Accordingly, stockholders expecting to
waive constructive ownership should consult their own tax advisors regarding
eligibility and procedural rules applicable to their particular situations.
The receipt of cash by a stockholder will be "not essentially equivalent to
a dividend" if the stockholder's sale of Shares pursuant to the Offer results in
a "meaningful reduction" in the stockholder's interest in the Company. The sale
of Shares to the Company by a tendering stockholder that does not own, either
directly or indirectly under the attribution rules, any common stock of Parent,
or that owns only a small amount of common stock of Parent, should qualify as
"not essentially equivalent to a dividend". However, because what constitutes a
"meaningful reduction" depends upon a variety of factors, stockholders expecting
to rely upon the "not essentially equivalent to a dividend" test should consult
their own tax advisors as to its application in their particular situations.
Constructive Ownership. In determining whether any of the tests under
Section 302 of the Code are satisfied, stockholders must take into account not
only the Shares which are actually owned by the stockholder, but also Shares
which are constructively owned by the stockholder under Section 318 of the Code.
Under Section 318 of the Code, a stockholder may constructively own Shares
actually owned, and in some cases constructively owned, by certain related
individuals or entities and Shares which the stockholder has the right to
acquire by exercise of an option or by conversion. Contemporaneous dispositions
or acquisitions of Shares by a stockholder or related individuals or entities
may be deemed to be part of a single integrated transaction which will be taken
into account in determining whether any of the tests under Section 302 of the
Code have been satisfied.
Foreign Stockholders. The Company will withhold federal income tax at a
rate of 30% from gross proceeds paid pursuant to the Offer to a foreign
stockholder or his agent, unless the Company determines that a reduced rate of
withholding is applicable pursuant to a tax treaty or that an exemption from
withholding is applicable because such gross proceeds are effectively connected
with the conduct of a trade or business by the foreign stockholder within the
United States. For this purpose, a foreign stockholder is any stockholder that
is not (a) a citizen or resident of the United States, (b) a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any state within the United States, or (c) any estate or trust
the income of which is subject to federal income taxation regardless of its
source. Without definite knowledge to the contrary, the Company will determine
whether a stockholder is a foreign stockholder by reference to the stockholder's
address. A foreign stockholder may be eligible to file for a refund of such tax
or a portion of such tax if such stockholder (a) meets the "complete
redemption," or "not essentially equivalent to a dividend" tests described
above, (b) is entitled to a reduced rate of withholding pursuant to a treaty and
the Company withheld at a higher rate, or (c) is otherwise able to establish
that no tax or a reduced amount of tax was due. In order to claim an exemption
from withholding on the ground that gross proceeds paid pursuant to the Offer
are effectively connected with the conduct of a trade or business by a foreign
stockholder within the United States or that the foreign stockholder is entitled
to the benefits of a tax treaty, the foreign stockholder must deliver to the
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Depositary (or other person who is otherwise required to withhold federal income
tax) a properly executed statement claiming such exemption or benefits on
Treasury Form 4224 (Exemption from Withholding on Tax on Income Effectively
Connected with the Conduct of a Trade or Business in the United States) or
Treasury Form 1001 (Ownership, Exemption, or Reduced Rate Certificate),
respectively. Such statements may be obtained from the Depositary. Foreign
stockholders are urged to consult their own tax advisors regarding the
application of federal income tax withholding, including eligibility for a
withholding tax reduction or exemption and the refund procedures.
Backup Withholding. ANY TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO
COMPLETE AND SIGN THE SUBSTITUTE FORM W-9 THAT IS INCLUDED IN THE LETTER OF
TRANSMITTAL (OR, IN THE CASE OF A FOREIGN STOCKHOLDER, FORM W-8 OBTAINABLE FROM
THE DEPOSITARY) MAY BE SUBJECT TO A REQUIRED FEDERAL INCOME TAX BACKUP
WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAYABLE TO SUCH STOCKHOLDER OR OTHER
PAYEE PURSUANT TO THE OFFER. See Section 7-- "Acceptance for Payment of Shares
and Payment of Purchase Price" with respect to the application of the federal
income tax backup withholding.
THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION
ONLY. THE TAX CONSEQUENCES OF A SALE PURSUANT TO THE OFFER MAY VARY DEPENDING
UPON, AMONG OTHER THINGS, THE PARTICULAR CIRCUMSTANCES OF THE TENDERING
STOCKHOLDER. NO INFORMATION IS PROVIDED HEREIN AS TO THE STATE, LOCAL OR FOREIGN
TAX CONSEQUENCES OF THE TRANSACTION CONTEMPLATED BY THE OFFER. STOCKHOLDERS ARE
URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR FEDERAL,
STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF SALES MADE BY THEM PURSUANT TO THE
OFFER AND THE EFFECT OF THE STOCK OWNERSHIP ATTRIBUTION RULES MENTIONED ABOVE.
Section 3. Certain Legal Matters; Regulatory and Foreign Approvals; No Appraisal
Rights.
The Company is not aware of any license or regulatory permit that appears
to be material to its business that might be adversely affected by its
acquisition of Shares as contemplated in the Offer or of any approval or other
action by any government or governmental, administrative or regulatory authority
or agency, domestic or foreign, that would be required for the Company's
acquisition or ownership of Shares pursuant to the Offer, except for approval by
the New Jersey Board of Public Utilities, which has previously been obtained, or
as described under Section 10--"Certain Information Concerning the Company."
Should any other approval or other action be required, the Company currently
contemplates that it will seek such approval or other action. The Company cannot
predict whether it may determine that it is required to delay the acceptance for
payment of, or payment for, Shares tendered pursuant to the Offer pending the
outcome of any such matter. There can be no assurance that any such approval or
other action, if needed, would be obtained or would be obtained without
substantial conditions or that the failure to obtain any such approval or other
action might not result in adverse consequences to the Company's business.
The Company intends to make all required filings under the Exchange Act.
The Company's obligation under the Offer to accept for payment, or make
payment for, Shares is subject to certain conditions. See Section 8--"Certain
Conditions of the Offer."
No approval of the holders of any Shares or the holders of any of the
Company's other securities is required in connection with the Offer.
No appraisal rights are available to holders of Shares in connection with
the Offer.
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THE OFFER
Section 4. Number of Shares; Purchase Price; Expiration Date; Receipt of
Dividend; Extension of the Offer.
Number of Shares; Purchase Price; Expiration Date. Upon the terms and
subject to the conditions described in this Offer to Purchase and in the Letter
of Transmittal, the Company will purchase all Shares validly tendered on or
prior to the Expiration Date (and not withdrawn) at a price of $111.00 per
Share. The later of 5:00 p.m., New York City time, on October 7, 1996, or the
latest time and date to which the Offer is extended, is referred to herein as
the "Expiration Date". The Offer is not conditioned on any minimum number of
Shares being tendered. The Offer is, however, subject to certain other
conditions. Section 8--"Certain Conditions of the Offer."
Receipt of Dividend. The Board will consider the declaration of dividends
on the Company's capital stock on September 12, 1996. The Regular Quarterly
Dividend for the Preferred, if, when and as declared, will be paid on November
1, 1996 to holders of record as of the close of business on October 4, 1996. A
holder of record of Shares on October 4, 1996 who tenders Shares will be
entitled to the Regular Quarterly Dividend, regardless of when such tender is
made. Holders of Shares purchased pursuant to the Offer will not be entitled to
any dividends in respect of any later dividend periods.
Extension of the Offer. The Company expressly reserves the right, in its
sole discretion, at any time or from time to time, to extend the period of time
during which the Offer is open by giving oral or written notice of such
extension to the Depositary and making a public announcement thereof. See
Section 13--"Extension of Tender Period; Termination; Amendments." There can be
no assurance, however, that the Company will exercise its right to extend the
Offer.
If (a) the Company increases or decreases the price to be paid for the
Shares hereunder, and (b) the Offer is scheduled to expire at any time earlier
than the tenth business day from and including the date that notice of such
increase or decrease is first published, sent or given in the manner specified
in Section 13--"Extension of the Tender Period; Termination; Amendments," the
Offer for such Shares will be extended until the expiration of such ten business
day period. For purposes of the Offer, "business day" means any day other than a
Saturday, Sunday or federal holiday and consists of the time period from 12:01
a.m. through 12:00 midnight, New York City time.
Section 5. Procedure for Tendering Shares.
Tender of Shares. To tender Shares validly pursuant to the Offer, each
tendering holder of Shares must either:
(a) send to the Depositary (at one of its addresses set forth on the back
cover of this Offer to Purchase) a properly completed and duly executed Letter
of Transmittal for the Shares being tendered, or facsimile thereof, together
with any required signature guarantees and any other documents required by the
Letter of Transmittal, and either (i) cause certificates for the Shares to be
tendered to be received by the Depositary at one of such addresses or (ii) cause
such Shares to be delivered pursuant to the procedures for book-entry transfer
described below (and a confirmation of such delivery received by the
Depositary), in each case on or prior to the Expiration Date; or
(b) comply with the guaranteed delivery procedure described under
"Guaranteed Delivery Procedure" below.
A tender of Shares made pursuant to any method of delivery set forth herein
or in the Letter of Transmittal will constitute a binding agreement between the
tendering holder and the Company upon the terms and subject to the conditions of
the Offer.
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No alternative, conditional or contingent tenders of Shares will be
accepted.
It is a violation of Rule 14e-4 promulgated under the Exchange Act for
persons to tender Shares for their own account unless the persons so tendering
(a) have a net long position equal to or greater than the amount of Shares
tendered or other securities immediately convertible into, or exercisable or
exchangeable for, the amount of Shares tendered, and will acquire such Shares
for tender by conversion, exercise or exchange of such other securities and (b)
will cause such Shares to be delivered in accordance with the terms of the
Offer. Rule 14e-4 provides a similar restriction applicable to the tender or
guarantee of a tender on behalf of another person. The tender of Shares pursuant
to any one of the procedures described herein will constitute the tendering
stockholder's representation and warranty that (a) such stockholder has a net
long position in the Shares being tendered within the meaning of Rule 14e-4, and
(b) the tender of such Shares complies with Rule 14e-4. The Company's acceptance
for payment of Shares tendered pursuant to the Offer will constitute a binding
agreement between the tendering stockholder and the Company upon the terms and
subject to the conditions of the Offer.
All tendered Shares not purchased pursuant to the Offer will be returned to
the tendering stockholders at the Company's expense promptly following the
Expiration Date.
Book-Entry Delivery. The Depositary will establish an account with respect
to the Shares at The Depository Trust Company ("DTC") for purposes of the Offer
within two business days after the date of this Offer to Purchase. Any financial
institution that is a participant in DTC may make delivery of Shares by causing
DTC to transfer such Shares into the Depositary's account in accordance with the
procedures of DTC. Although delivery of Shares may be effected through
book-entry transfer, a properly completed and duly executed Letter of
Transmittal, or facsimile thereof, together with any required signature
guarantees and any other required documents, must be received by the Depositary
at one of its addresses set forth on the back cover of this Offer to Purchase on
or prior to the applicable Expiration Date, or the tendering holder of Shares
must comply with the guaranteed delivery procedure described below. DELIVERY OF
SUCH LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS TO DTC OR THE
COMPANY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Signature Guarantees and Method of Delivery. Except as otherwise provided
below, all signatures on a Letter of Transmittal must be guaranteed by a
financial institution (including most banks, savings and loan associations and
brokerage houses) that is a participant in the Security Transfer Agents
Medallion Program or the Stock Exchange Medallion Program (each of the foregoing
being referred to as an "Eligible Institution"). Signatures on a Letter of
Transmittal need not be guaranteed if (a) such Letter of Transmittal is signed
by the registered holder of the Shares tendered therewith and such holder has
not completed the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" on the Letter of Transmittal or (b)
such Shares are tendered for the account of an Eligible Institution. If Shares
are registered in the name of a person other than the signatory on the Letter of
Transmittal, or if unpurchased Shares are to be issued to a person other than
the registered holder(s), the certificates must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name or names of
the registered holder(s) appear on the Shares with the signature(s) on the
Shares or stock powers guaranteed as aforesaid. See Instructions 4, 6 and 7 to
the Letter of Transmittal.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE
OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL, REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY.
Guaranteed Delivery Procedure. If a stockholder desires to tender Shares
pursuant to the Offer and cannot deliver certificates for such Shares and all
other required documents to the Depositary on or prior to the Expiration Date,
or the procedure for book-entry transfer cannot be complied with in a timely
manner, such Shares may nevertheless be tendered if all of the following
conditions are met:
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(a) such tender is made by or through an Eligible Institution;
(b) a properly completed and duly executed Notice of Guaranteed
Delivery in the form provided by the Company is received by the Depositary
as provided below on or prior to the Expiration Date; and
(c) the certificates for such Shares (or a confirmation of a
book-entry transfer of such Shares into the Depositary's account at DTC,
together with a properly completed and duly executed Letter of Transmittal,
or facsimile thereof, and any other documents required by the Letter of
Transmittal, are received by the Depositary no later than 5:00 p.m., New
York City time, on the third New York Stock Exchange trading day after the
Expiration Date.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by facsimile transmittal or mailed to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in such Notice.
Determination of Validity; Rejection of Shares; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions as to the form of documents
and the validity, eligibility (including time of receipt) and acceptance for
payment of any tender of Shares will be determined by the Company, in its sole
discretion, and its determination shall be final and binding. The Company
reserves the absolute right to reject any or all tenders of Shares that it
determines are not in proper form or the acceptance for payment of or payment
for which may, in the opinion of the Company's counsel, be unlawful. The Company
also reserves the absolute right to waive any defect or irregularity in any
tender of Shares. No tender of Shares will be deemed to be properly made until
all defects or irregularities have been cured or waived. None of the Company,
the Dealer Managers, the Depositary, the Information Agent or any other person
will be under any duty to give notice of any defect or irregularity in tenders,
nor shall any of them incur any liability for failure to give any such notice.
Section 6. Withdrawal Rights.
Tenders of Shares made pursuant to the Offer may be withdrawn at any time
on or prior to the Expiration Date. Thereafter, such tenders are irrevocable,
except that they may be withdrawn after 12:00 midnight, Friday, October 25, 1996
unless theretofore accepted for payment as provided in this Offer to Purchase.
To be effective, a written or facsimile transmission notice of withdrawal
must be timely received by the Depositary at one of its addresses or facsimile
numbers set forth on the back cover of this Offer to Purchase and must specify
the name of the person who tendered the Shares to be withdrawn and the number of
Shares to be withdrawn. If the Shares to be withdrawn have been delivered to the
Depositary, a signed notice of withdrawal with signatures guaranteed by an
Eligible Institution (except in the case of Shares tendered by an Eligible
Institution) must be submitted prior to the release of such Shares. In addition,
such notice must specify, in the case of Shares tendered by delivery of
certificates, the name of the registered holder (if different from that of the
tendering stockholder) and the serial numbers shown on the particular
certificates evidencing the Shares to be withdrawn or, in the case of Shares
tendered by book-entry transfer, the name and number of the account at DTC to be
credited with the withdrawn Shares and the name of the registered holder (if
different from the name on such account). Withdrawals may not be rescinded, and
Shares withdrawn will thereafter be deemed not validly tendered for purposes of
the Offer. However, withdrawn Shares may be re-tendered by following one of the
procedures described in Section 5--"Procedure for Tendering Shares" at any time
on or prior to the applicable Expiration Date.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by the Company in its sole
discretion, and its determination shall be final and binding. None of the
Company, the Dealer Managers, the Depositary, the Information Agent or any other
person will be under any duty to give notification of any defect or irregularity
in any notice of withdrawal or incur any liability for failure to give any such
notification.
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Section 7. Acceptance for Payment of Shares and Payment of Purchase Price.
Upon the terms and subject to the conditions of the Offer and promptly
after the Expiration Date, the Company will accept for payment and pay for
Shares validly tendered. See Section 4--"Number of Shares; Purchase Price;
Expiration Date; Receipt of Dividend; Extension of the Offer" and Section
8--"Certain Conditions of the Offer." Thereafter, payment for all Shares validly
tendered on or prior to the Expiration Date and accepted for payment pursuant to
the Offer will be made by the Depositary by check promptly after the Expiration
Date. In all cases, payment for Shares accepted for payment pursuant to the
Offer will be made only after timely receipt by the Depositary of certificates
for such Shares (or of a confirmation of a book-entry transfer of such Shares
into the Depositary's account at DTC), a properly completed and duly executed
Letter of Transmittal, or facsimile thereof, and any other required documents.
For purposes of the Offer, the Company will be deemed to have accepted for
payment (and thereby purchased) Shares that are validly tendered and not
withdrawn if and when it gives oral or written notice to the Depositary of its
acceptance for payment of such Shares. The Company will pay for Shares that it
has purchased pursuant to the Offer by depositing the purchase price therefor
with the Depositary. The Depositary will act as agent for tendering stockholders
for the purpose of receiving payment from the Company and transmitting payment
to tendering stockholders. Under no circumstances will interest be paid on
amounts to be paid to tendering stockholders, regardless of any delay in making
such payment.
Certificates for all Shares not purchased will be returned (or, in the case
of Shares tendered by book-entry transfer, such Shares will be credited to an
account maintained with DTC) promptly, without expense to the tendering
stockholder.
Payment for Shares may be delayed in the event of difficulty in determining
the number of Shares properly tendered. In addition, if certain events occur,
the Company may not be obligated to purchase Shares pursuant to the Offer. See
Section 8--"Certain Conditions of the Offer."
The Company will pay or cause to be paid any stock transfer taxes with
respect to the sale and transfer of any Shares to the Company or its order
pursuant to the Offer. However, if payment of the purchase price is to be made
to, or Shares not tendered or not purchased are to be registered in the name of,
any person other than the registered holder, or if tendered Shares are
registered in the name of any person other than the person signing the Letter of
Transmittal, the amount of any stock transfer taxes (whether imposed on the
registered holder, such other person or otherwise) payable on account of the
transfer to such person will be deducted from the purchase price, unless
satisfactory evidence of the payment of such taxes, or exemption therefrom, is
submitted. See Instruction 6 to the Letter of Transmittal.
Backup Withholding. To prevent backup federal income tax withholding with
respect to the purchase price of Shares purchased pursuant to the Offer, a
holder of Shares (except as set forth herein) must provide the Depositary with
the holder's correct taxpayer identification number and certify whether the
holder is subject to backup withholding of federal income tax by completing the
Substitute Form W-9 included in the Letter of Transmittal. Certain holders of
Shares (including, among others, all corporations and certain foreign
stockholders) are not subject to these backup withholding and reporting
requirements (although foreign stockholders are subject to other withholding
requirements. See Section 2--"Certain Federal Income Tax Consequences"). In
order for a foreign stockholder to qualify as an exempt recipient, the holder
must submit a Form W-8, Certificate of Foreign Status, signed under penalties of
perjury, attesting to that stockholder's exempt status. Unless an exemption
applies under the applicable law and regulations concerning "backup withholding"
of federal income tax, the Depositary will be required to withhold, and will
withhold, 31% of the gross proceeds otherwise payable to a holder of Shares or
other payee unless the holder of such Shares or other payee certifies that such
person is not otherwise subject to backup withholding, provides such person's
tax identification number (social security number or employer identification
number) and certifies that such number is correct. Each tendering holder of
Shares should complete and sign the main signature form and, other than foreign
stockholders, the Substitute Form W-9 included as part of the Letter of
Transmittal, so as to provide the information and certification necessary to
avoid backup withholding, unless an applicable exemption exists and is proved in
a manner
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satisfactory to the Company and the Depositary. Foreign stockholders should
generally complete and sign a Form W-8, a copy of which may be obtained from the
Depositary, in order to avoid backup withholding.
ANY TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE AND SIGN THE
SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL (OR, IN THE CASE OF A
FOREIGN STOCKHOLDER, FORM W-8 OBTAINABLE FROM THE DEPOSITARY) MAY BE SUBJECT TO
REQUIRED FEDERAL INCOME TAX WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAYABLE TO
SUCH STOCKHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER.
Section 8. Certain Conditions of the Offer.
Notwithstanding any other provisions of the Offer, or any extension of the
Offer, the Company will not be required to accept for payment and pay for any
validly tendered Shares and may terminate the Offer (by oral or written notice
to the Depositary and timely public announcement) or may modify or otherwise
amend the Offer if any of the following conditions are not waived or satisfied
on or prior to the Expiration Date:
(a) there shall have been threatened, instituted or pending any action
or proceeding by any government or governmental, regulatory or
administrative agency, authority or tribunal or any other person, domestic
or foreign, or before any court, authority, agency or tribunal that (i)
challenges the acquisition of Shares pursuant to the Offer or otherwise in
any manner, directly or indirectly, relates to or affects the Offer or (ii)
in the reasonable judgment of the Company, would or might materially and
adversely affect the business, condition (financial or other), income,
operations or prospects of the Company and its subsidiary taken as a whole,
or otherwise materially impair in any way the contemplated future conduct
of the business of the Company or its subsidiary or materially impair the
Offer's contemplated benefits to the Company;
(b) there shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment, order or
injunction threatened, proposed, sought, promulgated, enacted, entered,
amended, enforced or deemed to be applicable to the Offer or the Company or
its subsidiary, by any legislative body, court, authority, agency or
tribunal which, in the Company's reasonable judgment, would or might
directly or indirectly (i) make the acceptance for payment of, or payment
for, some or all of the Shares illegal or otherwise restricts or prohibits
consummation of the Offer, (ii) delay or restrict the ability of the
Company, or render the Company unable, to accept for payment or pay for
some or all of the Shares, (iii) materially impair the contemplated
benefits of the Offer to the Company or (iv) materially affect the
business, condition (financial or other), income, operations or prospects
of the Company and its subsidiary taken as a whole, or otherwise materially
impair in any way the contemplated future conduct of the business of the
Company or its subsidiary;
(c) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on any national securities
exchange or in the over-the-counter market, (ii) any significant decline in
the market price of the Shares, (iii) any change in the general political,
market, economic or financial condition in the United States or abroad
that, in the reasonable judgment of the Company, would or might have a
material adverse effect on the Company's business, operations, prospects or
ability to obtain financing generally or the trading in the Shares or other
equity securities of the Company, (iv) the declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States or any limitation on, or any event which, in the Company's
reasonable judgment, might affect the extension of credit by lending
institutions in the United States, (v) the commencement of a war, armed
hostilities or other international or national calamity directly or
indirectly involving the United States; (vi) in the case of any of the
foregoing existing at the time of the commencement of the Offer, in the
Company's reasonable judgment, a material acceleration or worsening
thereof; or (vii) there shall have been any decrease in the ratings
accorded any of the Company's securities by S&P or Moody's or that S&P or
Moody's has announced that it has placed any such rating under surveillance
or review with possible negative implications;
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(d) a tender or exchange offer with respect to some or all of the
Shares or other equity securities of the Company or Parent, or a merger,
acquisition or other business combination for the Company or Parent, shall
have been proposed, announced or made by another person;
(e) there shall have occurred any event or events that have resulted,
or may in the reasonable judgment of the Company result, in an actual or
threatened change in the business, condition (financial or other), income,
operations, stock ownership or prospects of the Company and its subsidiary;
(f) there shall have occurred any decline in the S&P's Composite 500
Stock Index (664.81 at the close of business on August 28, 1996) by an
amount in excess of 15% measured from the close of business on August 28,
1996; or
(g) the Company elects not to proceed with the proposed offering of
the Cumulative Quarterly Income Preferred Securities ("QUIPS") by Atlantic
Capital I, a special purpose business trust controlled by the Company
("Atlantic Capital I"), or the offering of the QUIPS, if commenced, is
terminated on or prior to the Expiration Date;
and, in the reasonable judgment of the Company, such event or events make it
undesirable or inadvisable to proceed with the Offer or with such payment or
acceptance for payment.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances (including any action or
inaction by the Company) giving rise to any such condition, and any such
condition may be waived by the Company at any time and from time to time in its
sole discretion. The failure by the Company at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right and each such
right shall be deemed an ongoing right which may be asserted at any time and
from time to time. Any determination by the Company concerning the events
described above will be final and binding on all parties.
Section 9. Price Ranges of Shares; Dividends.
The Preferred trade in the over-the-counter market to the extent trading
occurs. Trading of the Preferred has been limited and sporadic, and information
concerning trading prices and volumes is difficult to obtain. Depending on the
amount of the Preferred outstanding after the Offer, the liquidity of the
Preferred may be adversely affected.
Stockholders are urged to obtain current market quotations for the Shares.
Dividends. The holders of the Preferred are entitled to receive, when and
as declared by the Board, cash dividends at the annual rate specified for the
Preferred, and no more, cumulative and payable quarterly with respect to each
calendar quarterly period, on each February 1, May 1, August 1 and November 1.
An indenture relating to the proposed issuance of QUIPS by Atlantic Capital I
may provide that dividends on the Company's capital stock may not be paid as
long as any payments on the Company's Deferrable Interest Subordinated
Debentures to be issued under such indenture have been deferred or the Company
is in default under such indenture or its guarantee relating to such QUIPS.
To date, the Company has timely made all quarterly dividend payments on the
Preferred.
The Board of Directors of the Company will consider the declaration of
dividends on the Company's capital stock at its meeting on September 12, 1996.
The Regular Quarterly Dividend for the Preferred, if, when and as declared, will
be paid on November 1, 1996 to holders of record as of the close of business on
October 4, 1996. A holder of record of Shares on October 4, 1996 who tenders
Shares will be entitled to the Regular Quarterly Dividend, regardless of when
such tender is made. Holders of Shares purchased pursuant to the Offer will not
be entitled to any dividends in respect of any later dividend periods.
11
<PAGE>
Section 10. Certain Information Concerning the Company.
The Company was formed under the laws of New Jersey on April 28, 1924 by
merger and consolidation of several utility companies. The Company is engaged in
the generation, transmission, distribution, and sale of electric energy in the
southern part of New Jersey. The Company, which has a wholly owned subsidiary,
Deepwater Operating Company, is the principal subsidiary of Energy, which is a
public utility holding company as defined in the Public Utility Holding Company
Act of 1935 and which has claimed exemption from substantially all of the
provisions of such Act. The other subsidiary of Energy is Atlantic Energy
Enterprises, Inc.
On August 9, 1996, Energy and Delmarva Power & Light Company ("DP&L")
entered into a merger agreement pursuant to which Energy will merge into a
yet-to-be-named new company that will become the parent company of the Company
and DP&L. The merger is expected to be a tax-free, stock-for-stock transaction
accounted for as a purchase. Under the terms of the merger agreement, DP&L
shareholders will receive one share of the new company's common stock for each
share of DP&L common stock. Energy shareholders will receive 0.75 shares of the
new company's common stock and 0.125 shares of the new company's Class A common
stock for each share of Energy common stock. All of the debt and preferred stock
obligations of the Company will continue to be outstanding obligations of the
Company. In order for the merger to be effective, approvals are needed by the
shareholders of both Energy and DP&L and a number of federal and state
regulators. Securing the necessary approvals may take from 12 to 18 months.
There can be no assurance when and if such approvals will be obtained.
The Company's principal office is located at 6801 Black Horse Pike, Egg
Harbor Township, New Jersey, 08232-4130, telephone 609-645-4100. The Company is
subject to regulation by the New Jersey Board of Public Utilities and the
Federal Energy Regulatory Commission. At December 31, 1995, the Company had over
473,000 customers and employed 1,455 persons, of which 622 were affiliated with
a national labor organization. With the exception of a municipal electric system
providing electric service within the municipal boundaries of the City of
Vineland, New Jersey, the Company supplies electric service to the southern
one-third of the State of New Jersey. The Company has qualified to do business
as a foreign corporation in the Commonwealth of Pennsylvania to enable it to
participate in the ownership and operation of generation and transmission
facilities located therein.
The Company has called for redemption on September 16, 1996 all outstanding
shares of its $8.25 No Par Preferred Stock and its 7.52% Cumulative Preferred
Stock.
Registration Statement. The Company and Atlantic Capital I have filed a
registration statement (the "Registration Statement") with the Commission with
respect to the proposed offering of up to $70,000,000 aggregate liquidation
amount of QUIPS, guaranteed by the Company to the extent set forth in the
Registration Statement. Following the commencement of the Offer, and subject to
market and other conditions, the Company intends that Atlantic Capital I will
effect a public offering of QUIPS. As set forth in Section 11--"Source and
Amount of Funds," the Company intends to finance the Offer with the proceeds
from the sale of the QUIPS, which will be loaned by Atlantic Capital I to the
Company. To the extent that the proceeds of the proposed sale of the QUIPS, if
any, are not sufficient, the Company may issue commercial paper or other debt to
finance the Offer.
Selected Financial Data of the Company. The following information is
qualified by the detailed information and financial statements included
elsewhere in this Offer to Purchase, including documents incorporated herein by
reference.
12
<PAGE>
Selected Financial Data
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------------------------------Twelve Months Ended
1991 1992 1993 1994 1995 June 30, 1996
-------- -------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues (000)......... $808,482 $816,931 $865,799 $913,226 $953,779 $1,000,374
Net Income (000)................. $107,428 $107,446 $109,026 $93,174 $98,752 $100,642
Ratio of Earnings to Fixed Charges 3.41 3.55 3.37 3.05 3.16 3.18
Ratio of Earnings to Combined Fixed
Charges and Preferred Dividends. 2.48 2.49 2.44 2.22 2.39 2.47
</TABLE>
<TABLE>
<CAPTION>
As of June 30, 1996
----------------------------------------------
Amount Percentage
(in thousands) (%)
----------------------- ---------------------
<S> <C> <C>
Long Term Debt*............................................................ $ 802,378 45.72%
Cumulative Preferred Stock:................................................
Subject to Mandatory Redemption*.......................................... 125,000 7.12
Not Subject to Mandatory Redemption....................................... 40,000 2.28
Common Equity.............................................................. 787,471 44.88
---------- ------
Total Capitalization...................................................... 1,754,849 100.00
========== ======
</TABLE>
- ----------
* Includes current portion.
Additional Information. The Company is subject to the informational
requirements of the Exchange Act, and, in accordance therewith, files reports
and other information with the Commission. The Company has also filed an Issuer
Tender Offer Statement on Schedule 13E-4 with the Commission which includes
certain additional information relating to the Offer.
Reports, proxy statements and other information filed by the Company with
the Commission pursuant to the informational requirements of the Exchange Act
may be inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington,
D.C. 20549, and at the following Regional Offices of the Commission: Chicago
Regional Office, Suite 1400, Citicorp Center, 14th Floor, 500 West Madison
Street, Chicago, Illinois 60661; and New York Regional Office, 7 World Trade
Center, 13th Floor, Suite 1300, New York, New York 10048. Copies of such
material can be obtained at prescribed rates from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C.
20549. The Commission also maintains a Web site (http://www.sec.gov) that
contains reports, proxy statements and other information regarding the Company.
The Company's Schedule 13E-4 will not be available at the Commission's Regional
Offices.
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1995 (the "Annual Report"), the Company's Quarterly Reports on Form 10-Q for
the quarters ended March 31, 1996 and June 30, 1996 (the "Quarterly Reports"),
and the Company's Current Reports on Form 8-K dated May 29, 1996, June 26, 1996,
July 25, 1996 and August 13, 1996 (the "Current Reports") previously filed by
the Company with the Commission, are incorporated by reference in this Offer to
Purchase and shall be deemed to be a part hereof.
Each document 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
Offer to Purchase and prior to the termination of the Offer shall be deemed to
be incorporated herein by reference and to be a part hereof from the date of
filing such document. Any statement contained herein, or in a document all or a
portion of which is incorporated or deemed to be incorporated by reference
herein, shall be deemed to be modified or superseded for purposes of this Offer
to Purchase 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 of this Offer to Purchase.
13
<PAGE>
The Company undertakes to provide without charge to each person, including
any beneficial owner, to whom this Offer to Purchase is delivered, upon written
or oral request of such person, a copy of the Annual Report, the Quarterly
Reports and the Current Reports, other than exhibits to such documents. Such
requests should be directed to Robert K. Marshall, Manager, Finance & Treasury
Operations, Atlantic City Electric Company, 6801 Black Horse Pike, Egg Harbor
Township, New Jersey 08234-4130, telephone (609) 645-4655).
Section 11. Source and Amount of Funds.
Assuming that all outstanding Shares are validly tendered, the total amount
required by the Company to purchase all Shares subject to the Offer will be
$77,700,000, exclusive of fees and other expenses.
As described under Section 10--"Certain Information Concerning the
Company," a Registration Statement has been filed with the Commission with
respect to the offering of QUIPS by Atlantic Capital I, the proceeds of which
will be invested in the Junior Subordinated Deferrable Interest Debentures to be
issued by the Company. The Company intends to finance the Offer with the
proceeds from the sale of the QUIPS, which will be loaned by Atlantic Capital I
to the Company. To the extent that the proceeds of the proposed sale of the
QUIPS, if any, are not sufficient, the Company may issue commercial paper or
other debt to finance the Offer.
Section 12. Transactions and Agreements Concerning the Shares.
The Shares were issued by the Company in an underwritten public offering
for cash which was registered under the Securities Act of 1933, as amended. Such
offering, which was consummated on May 9, 1991, was for 700,000 Shares at a
price to the public of $100 per Share, and the Company received aggregate
proceeds of $69,720,000 before deducting expenses payable by the Company.
Based upon the Company's records and upon information provided to the
Company by its directors and executive officers and those of Parent, neither the
Company nor, to the Company's knowledge, Parent or any director or executive
officer of the Company or Parent, or associate of the foregoing, or any
subsidiary or affiliate of the Company or Parent has engaged in any transactions
involving Shares during the 60 days preceding the date hereof. Neither the
Company nor, to the best of the Company's knowledge, Parent or any director or
executive officer of Company or Parent, or associate of the foregoing, or, any
subsidiary or affiliate of the Company or Parent is a party to any contract,
arrangement, understanding or relationship relating directly or indirectly to
the Offer with any other person with respect to any securities of the Company.
As of August 28, 1996, none of the Company or, to the best of the Company's
knowledge, Parent or any director or executive officer of Company or Parent, or
associate of the foregoing, or any subsidiary or affiliate of the Company or
Parent, or any pension, profit sharing or similar plan of the Company or its
affiliates, owns any Shares, and therefore such persons do not intend to tender
or sell any Shares pursuant to the Offer.
Except as set forth in this Offer to Purchase, neither the Company nor, to
the best of the Company's knowledge, Parent or any director or executive officer
of the Company or Parent, or any associate of the foregoing, or any subsidiary
or affiliate of the Company or Parent, is a party to any contract, understanding
or relationship with any other person relating, directly or indirectly, to, or
in connection with, the Offer with respect to any securities of the Company
(including, but not limited to, any contract, arrangement, understanding or
relationship concerning the transfer or the voting of any of such securities,
joint ventures, loan or option arrangements, puts or calls, guarantees of loans,
guarantees against loss or the giving or withholding of proxies, consents or
authorizations).
Certain of the Shares are held by Chase Manhattan Bank as Custodian for
related Money Market Preferred Stock Custodial Receipts, Series A and Variable
Inverse Preferred Stock Custodial Receipts, Series A. The Company has entered in
an agreement with Lehman Brothers Inc. ("Lehman") pursuant to which the Company
will (i) pay a fee to Lehman for each such Share purchased pursuant to the Offer
or otherwise after expiration of the Offer equal to the fee which would
otherwise be payable to the Dealer Managers (and the
14
<PAGE>
Dealer Managers shall not be entitled to a fee with respect to such Shares)
and/or (ii) purchase from Lehman after the expiration of the Offer any such
Shares which are not so purchased.
Section 13. Extension of Tender Period; Termination; Amendments.
The Company expressly reserves the right, in its sole discretion and at any
time or from time to time, to extend the period of time during which the Offer
is open by giving oral or written notice of such extension to the Depositary.
There can be no assurance, however, that the Company will exercise such right to
extend the Offer. The Company may, in its sole discretion, at any time or from
time to time amend the Offer in any respect. If the Company makes a material
change in the terms of the Offer (including an increase or decrease in the
consideration offered), the Company will extend the Offer. The minimum period
for which the Offer will be extended following a material change or waiver,
other than an increase or decrease in the consideration offered, will depend
upon the facts and circumstances, including the relative materiality of the
change or waiver. With respect to an increase or decrease in the consideration
offered, the Offer may be extended such that the Offer remains open for a
minimum of ten business days following the public announcement of such change.
During any such extension, all Shares previously tendered will remain subject to
the Offer, except to the extent that such Shares may be withdrawn as set forth
in Section 6--"Withdrawal Rights."
If the Company extends the period of time during which the Offer is open,
is delayed in accepting for payment or paying for Shares or is unable to accept
for payment or pay for Shares pursuant to the Offer for any reason, then,
without prejudice to the Company's rights under the Offer, the Depositary may,
on behalf of the Company, retain all Shares tendered, and such Shares may not be
withdrawn except as otherwise provided in this Section 13, subject to Rule
13e-4(f)(5) under the Exchange Act, which provides that an issuer making a
tender offer shall either pay the consideration offered or return the tendered
securities promptly after the termination or withdrawal of the tender offer.
The Company also expressly reserves the right in its sole discretion, to,
among other things, terminate the Offer and not accept for payment or pay for
any Shares tendered or, subject to Rule 13e-4(f)(5) under the Exchange Act,
which requires the Company either to pay the consideration offered or to return
the Shares tendered promptly after the termination or withdrawal of the Offer,
to postpone acceptance for payment of or payment for Shares upon the occurrence
of any of the conditions specified in Section 8--"Certain Conditions of the
Offer" by, in the case of any termination, giving oral or written notice of such
termination to the Depositary and making a public announcement thereof.
Extensions and termination of and amendments to the Offer may be effected
by public announcement. Without limiting the manner in which the Company may
choose to make public announcement of any extension, termination or amendment,
the Company shall have no obligation (except as otherwise required by applicable
law) to publish, advertise or otherwise communicate any such public
announcement, other than by making a release to the Dow Jones News Service,
except in the case of an announcement of an extension of the Offer, in which
case the Company shall have no obligation to publish, advertise or otherwise
communicate such announcement other than by issuing a notice of such extension
by press release or other public announcement, which notice shall be issued no
later than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date. Material changes to information previously
provided to holders of the Shares in this Offer to Purchase or in documents
furnished subsequent thereto will be disseminated to holders of Shares in
compliance with Rule 13e-4(e)(2) promulgated by the Commission under the
Exchange Act.
Section 14. Fees and Expenses.
The Company has retained The Bank of New York, as Depositary, Georgeson &
Company Inc., as Information Agent, and Goldman, Sachs & Co., as Dealer
Managers, in connection with the Offer. The Information Agent and Dealer
Managers will assist stockholders who request assistance in connection with the
Offer and may request brokers, dealers and other nominee stockholders to forward
materials relating to the Offer to beneficial owners. Except as set forth in
Section 12--"Transactions and Agreements Concerning the Shares," the Company has
agreed to pay the Dealer Managers, upon acceptance for payment of Shares
pursuant to the
15
<PAGE>
Offer, a fee of $0.50 per Share so paid for in the Offer. The Dealer Managers
will also be reimbursed by the Company for their reasonable out-of-pocket
expenses, including attorneys' fees. The Dealer Managers have rendered, are
currently rendering and are expected to continue to render various investment
banking and other advisory services to the Company. They have received, and will
continue to receive, customary compensation from the Company for such services.
The Depositary and the Information Agent will receive reasonable and customary
compensation for their services in connection with the Offer and will also be
reimbursed for reasonable out-of-pocket expenses, including attorneys' fees. The
Company has agreed to indemnify the Depositary, the Information Agent and the
Dealer Managers against certain liabilities in connection with the Offer,
including certain liabilities under the federal securities laws. Neither the
Depositary nor the Information Agent has been retained to make solicitations,
and none of the Depositary, the Information Agent or the Dealer Managers have
been retained to make recommendations with respect to the Offer, in their
respective roles as Depositary, Information Agent and Dealer Managers.
The Company will pay (or cause to be paid) any stock transfer taxes on its
purchase of Shares, except as otherwise provided in Instruction 6 of the Letter
of Transmittal.
It is estimated that the expenses incurred by the Company in connection
with the Offer will be approximately as set forth below. The Company will be
responsible for paying all such expenses.
Dealer Managers' fees ............................................. $350,000
Printing and mailing fees ......................................... 7,000
Filing fees ....................................................... 15,540
Legal and miscellaneous ........................................... 42,500
--------
Total .......................................................... $415,040
Section 15. Miscellaneous.
The Offer is not being made to, nor will the Company accept tenders from,
owners of Shares in any jurisdiction in which the Offer or its acceptance would
not be in compliance with the laws of such jurisdiction. The Company is not
aware of any jurisdiction where the making of the Offer or the tender of Shares
would not be in compliance with applicable law. If the Company becomes aware of
any jurisdiction where the making of the Offer or the tender of Shares is not in
compliance with any applicable law, the Company will make a good faith effort to
comply with such law. If, after such good faith effort, the Company cannot
comply with such law, the Offer will not be made to (nor will tenders be
accepted from or on behalf of) the holders of Shares residing in such
jurisdiction. In any jurisdiction in which the securities, blue sky or other
laws require the Offer to be made by a licensed broker or dealer, the Offer will
be deemed to be made on the Company's behalf by one or more registered brokers
or dealers licensed under the laws of such jurisdiction.
16
<PAGE>
The Depositary for the Offer is:
The Bank of New York
By Mail: Facsimile By Hand or:
Transmission: By Overnight Courier
(for Eligible Institutions Only)
Tender & Exchange Department (212) 815-6213 Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, N. Y. 10286-1248 New York, New York 10286
For Information Telephone:
800-507-9357
Any questions or requests for assistance may be directed to the Information
Agent or the Dealer Managers at the respective telephone numbers and addresses
listed below. Requests for additional copies of this Offer to Purchase, the
Letter of Transmittal or other tender offer materials may be directed to the
Information Agent or the Dealer Managers, and such copies will be furnished
promptly at the Company's expense. Stockholders may also contact their local
broker, dealer, commercial bank or trust company for assistance concerning the
Offer.
The Information Agent for the Offer is:
Georgeson & Company Inc.
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800)223-2064
The Dealer Managers for the Offer are:
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
(800) 828-3182
17
LETTER OF TRANSMITTAL
To Accompany
Shares of $7.80 No Par Preferred Stock
(cumulative)
CUSIP NO. 048303 86 1
OF
Atlantic City Electric Company
Tendered Pursuant to the Offer to Purchase
Dated August 29, 1996
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON MONDAY, OCTOBER 7, 1996, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
To: The Bank of New York, Depositary
By Mail: Facsimile By Hand or:
Transmission: By Overnight Courier
(for Eligible Institutions Only)
Tender & Exchange Department (212) 815-6213 Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, N. Y. 10286-1248 New York, New York 10286
For Information Telephone:
800-507-9357
- --------------------------------------------------------------------------------
DESCRIPTION OF SHARES OF $7.80 NO PAR PREFERRED STOCK (CUMULATIVE) TENDERED
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Name(s) and Address(es) of Registered
Holder(s) (If blank, please fill in exactly as name(s) Shares Tendered
appear(s) on certificate(s)) (Attach additional list if necessary)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Total Number
of Shares Number of
Certificate Represented by Shares
Number(s)* Certificate(s)* Tendered**
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
TOTAL
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, the holder will be deemed to have tendered the
full number of Shares represented by the tendered certificate(s). See
Instruction 4.
- --------------------------------------------------------------------------------
Delivery of this instrument to an address other than as set forth above or
transmission of instructions via a facsimile number other than one
listed above will not constitute a valid delivery.
Do not send any certificates to the Dealer Managers, the Information Agent
or Atlantic City Electric Company.
<PAGE>
2
The instructions accompanying this Letter of Transmittal should be read
carefully before the Letter of Transmittal is completed. Questions and requests
for assistance or for additional copies of the Offer to Purchase or this Letter
of Transmittal may be directed to Georgeson & Company Inc., the Information
Agent, at Wall Street Plaza, New York, NY 10005 or telephone (800) 223-2064
(toll free).
This Letter of Transmittal is to be used if certificates are to be
forwarded herewith or if delivery of Shares (as defined below) is to be made by
book-entry transfer to the Depositary's account at The Depository Trust Company
("DTC") pursuant to the procedures set forth under Section 5--"Procedure for
Tendering Shares" in the Offer to Purchase (as defined below).
Stockholders who cannot deliver their Shares and all other documents
required hereby to the Depositary by the Expiration Date (as defined in the
Offer to Purchase) must tender their Shares pursuant to the guaranteed delivery
procedure set forth under Section 5--"Procedure for Tendering Shares" in the
Offer to Purchase. See Instruction 2. Delivery of documents to the Company or to
DTC does not constitute a valid delivery.
<PAGE>
3
- --------------------------------------------------------------------------------
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER TO THE DEPOSITARY'S ACCOUNT AT DTC AND COMPLETE THE FOLLOWING:
Name of tendering institution
-----------------------------------------
Account No. at DTC
----------------------------------------------------
Transaction Code No.
--------------------------------------------------
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE
THE FOLLOWING:
Name(s) of tendering stockholder(s)
------------------------------------
Date of execution of Notice of Guaranteed Delivery
--------------------
Name of institution that guaranteed delivery
---------------------------
If delivery is by book-entry transfer:
Name of tendering institution
------------------------------------------
Account No. at DTC
-----------------------------------------------------
Transaction Code No.
---------------------------------------------------
- --------------------------------------------------------------------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Atlantic City Electric Company, a New
Jersey corporation (the "Company"), the above-described shares (together, the
"Shares") pursuant to the Company's offer to purchase up to 700,000 shares (the
"Shares") of the $7.80 No Par Preferred Stock (cumulative) (the "Preferred") at
a price of $111.00 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated August 29,
1996 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and in
this Letter of Transmittal (which together with the Offer to Purchase
constitutes the "Offer").
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended with
respect to the Preferred, the terms and conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers to, or upon the
order of, the Company all right, title and interest in and to all the Shares
that are being tendered hereby and constitutes and appoints The Bank of New
York, as "Depositary," the true and lawful agent and attorney-in-fact of the
undersigned with respect to such Shares, with full power of substitution (such
power of attorney, being deemed to be an irrevocable power coupled with an
interest), to (a) deliver certificates for such Shares and to accept such Shares
or assign or transfer ownership of such Shares on the account books maintained
by DTC together, in any such case, with all accompanying evidences of transfer
and authenticity, for deposit with the Depositary, (b) present such Shares for
transfer on the books of the Company, (c) issue payment for such Shares and/or
certificates for unpurchased Shares or deliver unpurchased Shares to the account
of the undersigned, and (d) receive all benefits and otherwise exercise all
rights of beneficial ownership of such Shares, all in accordance with the terms
of the Offer. The Depositary will act as agent for tendering stockholders for
the purpose of receiving payment from the Company and transmitting payment to
tendering stockholders.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and that, when and to the extent the same are accepted for
payment by the Company, the Company
<PAGE>
4
will acquire good and unencumbered title thereto, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claim. The
undersigned will, upon request, execute and deliver any additional documents
deemed by the Depositary or the Company to be necessary or desirable to complete
the sale, assignment and transfer of the Shares tendered hereby or transfer
ownership of such Shares.
All authority herein conferred or agreed to be conferred shall survive the
death, bankruptcy or incapacity of the undersigned, and every obligation of the
undersigned hereunder shall be binding upon the heirs, legal representatives,
successors, assigns, executors and administrators of the undersigned. Except as
stated in the Offer, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described under Section 5--"Procedure for Tendering Shares" in
the Offer to Purchase and in the instructions hereto will constitute the
undersigned's acceptance of the terms and conditions of the Offer.
Unless otherwise indicated under "Special Payment Instructions," the check
for the purchase price of any Shares purchased, and/or the return of any Shares
not tendered or not purchased, will be issued in the name(s) of the undersigned
(and, in the case of Shares tendered by book-entry transfer, by credit to the
account at DTC designated above). Similarly, unless otherwise indicated under
"Special Delivery Instructions," the check for the purchase price of any Shares
purchased and/or the return of any certificates for Shares not tendered or not
purchased (and accompanying documents, as appropriate) will be mailed to the
undersigned at the address shown below the undersigned signature(s). In the
event that both "Special Payment Instructions" and "Special Delivery
Instructions" are completed, the check for the purchase price of any Shares
purchased and/or the return of any Shares not tendered or not purchased will be
issued in the name(s) of, and such check and/or any certificates will be mailed
to, the person(s) so indicated. The undersigned recognizes that the Company has
no obligation, pursuant to the "Special Payment Instructions," to transfer any
Shares from the name of the registered holder(s) thereof if the Company does not
accept for payment any of the Shares so tendered.
- ------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 4, 6 and 7)
To be completed ONLY if the check for the
purchase price of Shares purchased and/or
certificates for Shares not tendered or not
purchased are to be issued in the name of
someone other than the undersigned.
Issue / /check and/or / /certificate(s) to:
Name ___________________________________
(Please Print)
Address _________________________________
________________________________________
(include Zip Code)
________________________________________
(Taxpayer Identification or
Social Security No.)
- ------------------------------------------
- ------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 4, 6 and 7)
To be completed ONLY if the check for the
purchase price of Shares purchased and/or
certificates for Shares not tendered or not
purchased are to be mailed to someone other than
the undersigned or to the undersigned at an
address other than that shown below the
undersigned's signature(s).
Mail / /check and/or / /certificate(s) to:
(Please complete Substitute Form W-9 below)
Name ___________________________________
(Please Print)
Address ________________________________
(Include Zip Code)
----------------------------------------
<PAGE>
5
- --------------------------------------------------------------------------------
SIGN HERE
(Please Complete Substitute Form W-9 Below.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Signature(s) of Owners(s)
Dated , 1996
---------------------------------------------------------------------
Name(s)
-------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please Print)
Capacity (full title)
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Address
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Area Code and Telephone No.
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(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
stock certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please set forth full title and see
Instruction 5.)
GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 5)
Name of Firm
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Authorized Signature
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Name
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Title
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Address
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Area Code and Telephone No.
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Dated , 1996
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The Letter of Transmittal is to be used for the tender of Shares of the
Preferred only.
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a financial
institution (including most banks, savings and loan associations and brokerage
houses) that is a participant
<PAGE>
6
in the Security Transfer Agents Medallion Program or the Stock Exchange
Medallion Program (any of the foregoing, an "Eligible Institution"). Signatures
on this Letter of Transmittal need not be guaranteed (a) if this Letter of
Transmittal is signed by the registered holder(s) of the Shares (which term, for
purposes of this document, shall include any participant in DTC whose name
appears on a security position listing as the owner of Shares) tendered herewith
and such holder(s) has not completed the box entitled "Special Payment
Instructions" or the box entitled "Special Delivery Instructions" on this Letter
of Transmittal or (b) if such Shares are tendered for the account of an Eligible
Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Shares. This Letter of Transmittal
is to be used either if certificates are to be forwarded herewith or if delivery
of Shares is to be made by book-entry transfer pursuant to the procedures set
forth under Section 5--"Procedure for Tendering Shares" in the Offer to
Purchase. Certificates for all physically delivered Shares, or a confirmation of
a book-entry transfer into the Depositary's account at DTC of all Shares
delivered electronically, as well as a properly completed and duly executed
Letter of Transmittal (or facsimile thereof) and any other documents required by
this Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth on the front page of this Letter of Transmittal on or prior
to the Expiration Date (as defined in the Offer to Purchase). Stockholders who
cannot deliver their Shares and all other required documents to the Depositary
on or prior to the Expiration Date must tender their Shares pursuant to the
guaranteed delivery procedure set forth under Section 5--"Procedure for
Tendering Shares" in the Offer to Purchase. Pursuant to such procedure: (a) such
tender is made by or through an Eligible Institution, (b) a properly completed
and duly executed Notice of Guaranteed Delivery in the form provided by the
Company is received by the Depositary on or prior to the applicable Expiration
Date and (c) the certificates for such Shares (or a confirmation of a book-entry
transfer of such Shares into the Depositary's account at DTC), together with a
properly completed and duly executed Letter of Transmittal, or facsimile
thereof, and any other documents required by such Letter of Transmittal, are
received by the Depositary no later than 5:00 p.m. New York City time on the
third New York Stock Exchange trading day after the Expiration Date, all as
provided under Section 5--"Procedure for Tendering Shares" in the Offer to
Purchase.
The method of delivery of Shares and all other required documents is at the
option and risk of the tendering stockholder. If certificates for Shares are
sent by mail, registered mail with return receipt requested, properly insured,
is recommended.
No alternative, conditional or contingent tenders will be accepted. See
Section 4--"Number of Shares; Purchase Price; Expiration Date; Receipt of
Dividend; Extension of the Offer" in the Offer to Purchase. By executing this
Letter of Transmittal (or facsimile thereof), the tendering stockholder waives
any right to receive any notice of the acceptance for payment of the Shares.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. Partial Tenders (not applicable to stockholders who tender by book-entry
transfer). If fewer than all the Shares represented by any certificate delivered
to the Depositary are to be tendered, fill in the number of Shares that are to
be tendered in the box entitled "Number of Shares Tendered." In such case, a new
certificate for the remainder of the Shares represented by the old certificate
will be sent in the name of and to the person(s) signing this Letter of
Transmittal, unless otherwise provided in the "Special Payment Instructions" or
"Special Delivery Instructions" boxes on this Letter of Transmittal, as promptly
as practicable following the expiration or termination of the Offer. All Shares
represented by certificates delivered to the Depositary will be deemed to have
been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the certificates without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are held of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of certificates or separate stock powers
are required unless payment of the purchase price is to be made to, or Shares
not tendered or not purchased
<PAGE>
7
are to be registered in the name of, any person other than the registered
holder(s). Signatures on any such certificates or stock powers must be
guaranteed by an Eligible Institution. See Instruction 1.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on the certificates
for such Shares. Signature(s) on any such certificates or stock powers must be
guaranteed by an Eligible Institution. See Instruction 1.
If this Letter of Transmittal or any certificate or stock power is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory to
the Company of the authority of such person so to act must be submitted.
6. Stock Transfer Taxes. The Company will pay or cause to be paid any stock
transfer taxes with respect to the sale and transfer of any Shares to it or its
order pursuant to the Offer. If, however, payment of the purchase price is to be
made to, or Shares not tendered or not purchased are to be registered in the
name of, any person other than the registered holder(s), or if tendered Shares
are registered in the name of any person other than the person(s) signing this
Letter of Transmittal, the amount of any stock transfer taxes (whether imposed
on the registered holder(s), such other person or otherwise) payable on account
of the transfer to such person will be deducted from the purchase price unless
satisfactory evidence of the payment of such taxes, or exemption therefrom, is
submitted. See Section 7--"Acceptance for Payment of Shares and Payment of
Purchase Price" in the Offer to Purchase. Except as provided in this Instruction
6, it will not be necessary to affix transfer tax stamps to the certificates
representing Shares tendered hereby.
7. Special Payment and Delivery Instructions. If the check for the purchase
price of any Shares purchased is to be issued in the name of, and/or any Shares
not tendered or not purchased are to be returned to, a person other than the
person(s) signing this Letter of Transmittal or if the check and/or any
certificate for Shares not tendered or not purchased are to be mailed to someone
other than the person(s) signing this Letter of Transmittal or to an address
other than that shown above in the box captioned "Description of Shares
Tendered," then the boxes captioned "Special Payment Instructions" and/or
"Special Delivery Instructions" on this Letter of Transmittal should be
completed. Stockholders tendering Shares by book-entry transfer will have any
Shares not accepted for payment returned by crediting the account maintained by
such stockholder at DTC from which such transfer was made.
8. Substitute Form W-9 and Form W-8. The tendering stockholder is required
to provide the Depositary with either a correct Taxpayer Identification Number
("TIN") on Substitute Form W-9, which is provided under "Important Tax
Information" below, or a properly completed Form W-8. Failure to provide the
information on either Substitute Form W-9 or Form W-8 may subject the tendering
stockholder to 31% Federal income tax backup withholding on the payment of the
purchase price. The box in Part 2 of Substitute Form W-9 may be checked if the
tendering stockholder has not been issued a TIN and has applied for a number or
intends to apply for a number in the near future. If the box in Part 2 is
checked and the Depositary is not provided with a TIN by the time of payment,
the Depositary will withhold 31% on all payments of the purchase price
thereafter until a TIN is provided to the Depositary.
9. Requests for Assistance or Additional Copies. Any questions or requests
for assistance may be directed to Georgeson & Company Inc., as "Information
Agent," or Goldman, Sachs & Co., as "Dealer Managers," at their respective
telephone numbers and addresses listed below. Requests for additional copies of
the Offer to Purchase, this Letter of Transmittal or other tender offer
materials may be directed to the Information Agent or the Dealer Managers and
such copies will be furnished promptly at the Company's expense. Stockholders
may also contact their local broker, dealer, commercial bank or trust company
for assistance concerning the Offer.
10. Irregularities. All questions as to the form of documents and the
validity, eligibility (including time of receipt) and acceptance of any tender
of Shares will be determined by the Company, in its sole discretion, and its
determination shall be final and binding. The Company reserves the absolute
right to reject any and all tenders of Shares that it determines are not in
proper form or the acceptance for payment of or payment for Shares that may, in
the opinion of the Company's counsel, be unlawful. The Company also reserves the
absolute right to waive any of the conditions to the Offer or any defect or
irregularity in any tender of Shares and the Company's interpretation of the
terms and conditions of the Offer (including these instructions) shall be final
and binding. Unless waived, any defects or irregularities in connection with
tenders must be cured within such time as the Company shall determine. None of
the Company, the Dealer Managers, the Depositary, the Information Agent or any
other person shall be under any duty to give
<PAGE>
8
notice of any defect or irregularity in tenders, nor shall any of them incur any
liability for failure to give any such notice. Tenders will not be deemed to
have been made until all defects and irregularities have been cured or waived.
IMPORTANT: This Letter of Transmittal (or a facsimile copy thereof), duly
executed, together with certificates or confirmation of book-entry transfer and
all other required documents must be received by the Depositary, or the Notice
of Guaranteed Delivery must be received by the Depositary, on or prior to the
Expiration Date (as defined in the Offer to Purchase).
IMPORTANT TAX INFORMATION
Under Federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary (as payer) with
either such stockholder's correct TIN on Substitute Form W-9 below or a properly
completed Form W-8. If such stockholder is an individual, the TIN is his or her
social security number. For businesses and other entities, the TIN is the
employer identification number. If the Depositary is not provided with the
correct TIN or properly completed Form W-8, the stockholder may be subject to a
$50 penalty imposed by the Internal Revenue Service. In addition, payments that
are made to such stockholder with respect to Shares purchased pursuant to the
Offer may be subject to backup withholding. The Form W-8 can be obtained from
the Depositary. See the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional instructions.
If Federal income tax backup withholding applies, the Depositary is
required to withhold 31% of any payments made to the stockholder. Backup
withholding is not an additional tax. Rather, the Federal income tax liability
of persons subject to backup withholding will be reduced by the amount of the
tax withheld. If withholding results in an overpayment of taxes, a refund may be
obtained.
Purpose of Substitute Form W-9 and Form W-8
To avoid backup withholding on payments that are made to a stockholder with
respect to Shares purchased pursuant to the Offer, the stockholder is required
to notify the Depositary of his or her correct TIN by completing the Substitute
Form W-9 attached hereto certifying that the TIN provided on Substitute Form W-9
is correct and that (a) the stockholder has not been notified by the Internal
Revenue Service that he or she is subject to Federal income tax backup
withholding as a result of failure to report all interest or dividends or (b)
the Internal Revenue Service has notified the stockholder that he or she is no
longer subject to Federal income tax backup withholding. Foreign stockholders
must submit a properly completed Form W-8 in order to avoid the applicable
backup withholding; provided, however, that backup withholding will not apply to
foreign stockholders subject to 30% (or lower treaty rate) withholding on gross
payments received pursuant to the Offer.
What Number to Give the Depositary
The stockholder is required to give the Depositary the social security
number or employer identification number of the registered owner of the Shares.
If the Shares are in more than one name or are not in the name of the actual
owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report.
<PAGE>
9
<TABLE>
Payer's Name: the Bank of New York
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<S> <C>
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN IN Social security number OR
THE BOX AT RIGHT AND CERTIFY BY Employee Identification Number
Form W-9 SIGNING AND DATING BELOW: TIN ______________________________
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Name (Please Print) PART 2
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Address Awaiting TIN / /
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City State Zip
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Department of the PART 3--CERTIFICATION--UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT:
Treasury
Internal Revenue (1) The number shown on this form is my correct taxpayer identification number (or a TIN has
Service not been issued to me but I have mailed or delivered an application to receive a TIN or
Payer's Request for intend to do so in the near future).
Taxpayer
Identification (2) I am not subject to backup withholding either because I have not been notified by the
Number (TIN) and Internal Revenue Service (the "IRS") that I am subject to
backup withholding as a result of a Certification failure to report all interest
or dividends or the IRS has notified me that I am no longer
subject to backup withholding.
(3) All other information provided on this form is true, correct and complete.
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SIGNATURE: DATE:
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You must cross out item (2) above if you have been
notified by the IRS that you are currently subject
to backup withholding because of underreporting
interest or dividends on your tax return.
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</TABLE>
NOTE:FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE
ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING
CERTIFICATE IF YOU CHECKED THE BOX IN PART 2 OF THE SUBSTITUTE FORM W-9.
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CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 31%
of all payments of the purchase price made to me will be withheld until I
provide a number.
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<PAGE>
The information Agent for the Offer is:
Georgeson & Company Inc.
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
The Dealer Managers for the Offer are:
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
(800) 828-3182
Atlantic City Electric Company
Notice of Guaranteed Delivery of
Shares of $7.80 No Par Preferred Stock (cumulative)
This form, or a form substantially equivalent to this form, must be used to
accept the Offer (as defined below) if certificates for the shares of $7.80 No
Par Preferred Stock (cumulative) (the "Shares") are not immediately available,
if the procedure for book-entry transfer cannot be completed on a timely basis,
or if time will not permit all other documents required by the Letter of
Transmittal to be delivered to The Bank of New York, as Depositary on or prior
to the expiration of the Offer. Such form may be delivered by hand or
transmitted by mail, or by facsimile transmission, to the Depositary. See
Section 5--"Procedure for Tendering Shares" in the Offer to Purchase. The
Eligible Institution (as defined herein) which completes this form must
communicate the guarantee to the Depositary and must deliver the Letter of
Transmittal and certificates for Shares to the Depositary within three New York
Stock Exchange trading days after the Expiration Date. Failure to do so could
result in a financial loss to such Eligible Institution.
To: The Bank of New York, Depositary
By Mail: Facsimile By Hand or:
Transmission: By Overnight Courier
(for Eligible Institutions Only)
Tender & Exchange Department (212) 815-6213 Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, N. Y. 10286-1248 New York, New York 10286
For Information Telephone:
800-507-9357
Delivery of this instrument to an address other than as set forth above or
transmission of instructions via a facsimile number other than one listed above
will not constitute a valid delivery.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Atlantic City Electric Company, a New
Jersey corporation (the "Company"), upon the terms and subject to the conditions
set forth in the Offer to Purchase dated August 29, 1996 (the "Offer to
Purchase"), and the Letter of Transmittal (which, together with the Offer to
Purchase, constitutes the "Offer"), receipt of which is hereby acknowledged, the
number of shares of the $7.80 No Par Preferred Stock of the Company listed
below, pursuant to the guaranteed delivery procedure set forth in Section
5--"Procedure for Tendering Shares" in the Offer to Purchase.
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Number of Shares:
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Certificate Nos. (if available):
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If Shares will be tendered by book-entry
transfer: Name of Tendering Institution:
===========================================================
Account No. at
The Depository Trust Company:
===========================================================
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Signature
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Name(s) of Record Holder(s)
(Please Print)
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Address
============================================================
Area Code and Telephone Number
============================================================
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GUARANTEE
(Not to be used for signature guarantee)
The undersigned financial institution (including most banks, savings and
loan associations and brokerage houses) that is a participant in the Security
Transfer Agents Medallion Program or the Stock Exchange Medallion Program (each,
an "Eligible Institution") guarantees (a) that the above-named person(s) has a
net long position in the Shares being tendered within the meaning of Rule 14e-4
promulgated under the Securities Exchange Act of 1934, as amended, (b) that such
tender of Shares complies with Rule 14e-4 and (c) to deliver to the Depositary
at one of its addresses set forth above certificate(s) for the Shares tendered
hereby, in proper form for transfer, or a confirmation of the book-entry
transfer of the Shares tendered hereby into the Depositary's account at The
Depository Trust Company, together with a properly completed and duly executed
Letter of Transmittal (or facsimile thereof), with any required signature
guarantee(s) and any other required documents, all within three New York Stock
Exchange trading days after the Expiration Date.
- ------------------------------------ ----------------------------------------
Name of Firm Authorized Signature
- ------------------------------------ ----------------------------------------
Address Name
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City, State, Zip Code Title
- ------------------------------------ ----------------------------------------
Area Code and Telephone Number
Dated: , 1996
------------------------
DO NOT SEND CERTIFICATES WITH THIS FORM. YOUR CERTIFICATES MUST BE SENT WITH THE
LETTER OF TRANSMITTAL.
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2
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Atlantic City Electric Company
Offer to Purchase for Cash
All Outstanding
Shares of $7.80 No Par Preferred Stock
(cumulative) CUSIP No. 048303 86 1
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON MONDAY, OCTOBER 7, 1996 UNLESS THE OFFER IS EXTENDED.
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August 29, 1996
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Atlantic City Electric Company, a New Jersey
corporation (the "Company"), to act as Dealer Managers in connection with the
offer to purchase all outstanding shares of its $7.80 No Par Preferred Stock
(cumulative) (the "Shares") at a price of $111.00 per Share, net to the seller
in cash, upon the terms and subject to the conditions set forth in the Offer to
Purchase dated August 29, 1996 (the "Offer to Purchase"), and in the Letter of
Transmittal (which, together with the Offer to Purchase, constitutes the
"Offer"). The Company will purchase all Shares validly tendered and not
withdrawn, upon the terms and subject to the conditions of the Offer (as
described in the Offer to Purchase).
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. The Offer is, however, subject to certain other conditions. See
Section 8 -- "Certain Conditions of the Offer" in the Offer to Purchase.
We are asking you to contact your clients for whom you hold Shares
registered in your name (or in the name of your nominee) or who hold Shares
registered in their own names. Please bring the Offer to their attention as
promptly as possible.
The Company will, upon request, reimburse Soliciting Dealers for reasonable
and customary handling and mailing expenses incurred by them in forwarding
materials relating to the Offer to their customers. For purposes of this letter,
Soliciting Dealer includes (i) any broker or dealer in securities, including
Goldman, Sachs & Co., as "Dealer Managers," in its capacity as a broker or
dealer, which is a member of any national securities exchange or of the National
Association of Securities Dealers, Inc. (the "NASD"), (ii) any foreign broker or
dealer not eligible for membership in the NASD which agrees to conform to the
NASD's Rules of Fair Practice in soliciting tenders outside the United States to
the same extent as if it were an NASD member, or (iii) any bank or trust
company. The Company will pay all stock transfer taxes applicable to its
purchase of Shares pursuant to the Offer, subject to Instruction 6 of the Letter
of Transmittal.
<PAGE>
No broker, dealer, bank, trust company or fiduciary shall be deemed to be
the agent of the Company, The Bank of New York, as "Depositary," the Dealer
Managers or Georgeson & Company Inc., as "Information Agent," for purposes of
the Offer.
For your information and for forwarding to your clients, we are enclosing
the following documents:
1. The Offer to Purchase;
2. A Letter of Transmittal for your use and for the information of
your clients;
3. A letter to holders of the Shares from the Vice President,
Treasurer and Assistant Secretary of the Company;
4. A Notice of Guaranteed Delivery to be used to accept the Offer if
the Shares or any other required documents cannot be delivered to the
Depositary by the expiration of the Offer;
5. A letter which may be sent to your clients for whose accounts you
hold Shares registered in your name or in the name of your nominee, with
space for obtaining such clients' instructions with regard to the Offer;
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9, providing
information relating to backup federal income tax withholding; and
7. A return envelope addressed to The Bank of New York, as Depositary.
We urge you to contact your clients as promptly as possible. Please note
that the Offer and withdrawal rights expire at 5:00 p.m., New York City time, on
Monday, October 7, 1996, unless the Offer is extended.
THE COMPANY, ITS BOARD OF DIRECTORS AND ITS EXECUTIVE OFFICERS MAKE NO
RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER ANY OR ALL SHARES
PURSUANT TO THE OFFER. STOCKHOLDERS MUST MAKE THEIR OWN DECISION AS TO WHETHER
TO TENDER SHARES PURSUANT TO THE OFFER AND, IF SO, HOW MANY SHARES TO TENDER.
Any questions or requests for assistance or additional copies of the
enclosed materials may be directed to the Information Agent, or to us, as Dealer
Managers, at the respective addresses and telephone numbers set forth on the
back cover of the enclosed Offer to Purchase.
Very truly yours,
Goldman, Sachs & Co.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
THE AGENT OF THE COMPANY, THE DEALER MANAGERS, THE INFORMATION AGENT OR THE
DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY
STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
2
Atlantic City Electric Company
Offer to Purchase for Cash
Shares of its $7.80 No Par Preferred Stock (cumulative)
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON MONDAY, OCTOBER 7, 1996 UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
To Our Clients:
Enclosed for your consideration are the Offer to Purchase dated August 29,
1996 (the "Offer to Purchase"), and the Letter of Transmittal (which together
constitute the "Offer") setting forth an offer by Atlantic City Electric
Company, a New Jersey corporation (the "Company"), to purchase all outstanding
shares of its $7.80 No Par Preferred Stock (cumulative) (the "Shares") at a
price of $111.00 per Share, net to the seller in cash, upon the terms and
subject to the conditions of the Offer. The Company will purchase all Shares
validly tendered and not withdrawn, upon the terms and subject to the conditions
of the Offer (as described in the Offer to Purchase).
We are the holder of record of Shares held for your account. A tender of
such Shares can be made only by us as the holder of record and pursuant to your
instructions. The Letter of Transmittal is furnished to you for your information
only and cannot be used by you to tender Shares held by us for your account.
We request instructions as to whether you wish us to tender any or all of
the Shares held by us for your account, upon the terms and subject to the
conditions set forth in the Offer to Purchase and the Letter of Transmittal.
Your attention is invited to the following:
(1) The Offer is for all outstanding Shares. The Offer is not
conditioned upon any minimum number of Shares of Preferred being tendered,
but the Offer is subject to certain other conditions.
(2) The Offer and withdrawal rights will expire at 5:00 p.m., New York
City time, on Monday, October 7, 1996, unless the Offer is extended. Your
instructions to us should be forwarded to us in ample time to permit us to
submit a tender on your behalf. If you would like to withdraw your Shares
that we have tendered, you can withdraw them so long as the Offer remains
open or at any time after the expiration of 40 business days from the
commencement of the Offer if such Shares have not been accepted for
payment.
(3) Any stock transfer taxes applicable to the sale of Shares to the
Company pursuant to the Offer will be paid by the Company, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
The Company, its Board of Directors and its Executive Officers make no
recommendation to any stockholder as to whether to tender any or all Shares
pursuant to the Offer. Stockholders must make their own decision as to whether
to tender Shares pursuant to the Offer and, if so, how many Shares to tender.
If you wish to have us tender any or all of your Shares held by us for your
account upon the terms and subject to the conditions set forth in the Offer,
please so instruct us by completing, executing, detaching and returning to us
the instruction form on the detachable part hereof. An envelope to return your
instructions to us is enclosed. If you authorize tender of your Shares, all such
Shares will be tendered unless otherwise specified on the detachable part
hereof. Your instructions should be forwarded to us in ample time to permit us
to submit a tender on your behalf by the expiration of the Offer.
<PAGE>
The Offer is being made to all holders of Shares. The Company is not aware
of any state where the making of the Offer is prohibited by administrative or
judicial action pursuant to a valid state statute. If the Company becomes aware
of any valid state statute prohibiting the making of the Offer, the Company will
make a good faith effort to comply with such statute. If, after such good faith
effort, the Company cannot comply with such statute, the Offer will not be made
to, nor will tenders be accepted from or on behalf of, holders of Shares in such
state. In those jurisdictions where securities, blue sky or other laws require
the Offer to be made by a licensed broker or dealer, the Offer shall be deemed
to be made on behalf of the Company by Goldman, Sachs & Co., as Dealer Managers,
or one or more registered brokers or dealers licensed under the laws of such
jurisdictions.
2
<PAGE>
Instructions
With Respect to Offer to Purchase for Cash of All Outstanding
Shares of $7.80 No Par Preferred Stock (cumulative)
of
Atlantic City Electric Company
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated August 29, 1996, and the Letter of Transmittal (which
together constitute the "Offer") in connection with the Offer by Atlantic City
Electric Company (the "Company") to purchase all outstanding shares of $7.80 No
Par Preferred Stock (cumulative) (the "Shares") at a price of $111.00 per Share,
net to the undersigned in cash.
This will instruct you to tender to the Company the number of Shares
indicated below (or, if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions of the Offer.
- --------------------------------------------------------------------------------
Number of Shares to be Tendered: Shares*
Dated: , 1996
- --------------------------------------------------------------------------------
SIGN HERE
Signature(s):
-------------------------------------------------------------------
Name(s):
------------------------------------------------------------------------
Address:
------------------------------------------------------------------------
Social Security or Taxpayer ID No.:
---------------------------------------------
- --------------------------------------------------------------------------------
- ------------------
* Unless otherwise indicated, it will be assumed that all Shares held by us
for your account are to be tendered.
3
August 29, 1996
Dear Stockholder:
Atlantic City Electric Company (the "Company") is offering to purchase (the
"Offer") all outstanding shares of its $7.80 No Par Preferred Stock (cumulative)
(the "Shares") at a price of $111.00 per Share.
All of the Shares that are properly tendered (and not withdrawn) will,
subject to the terms and conditions set forth in the enclosed Offer to Purchase
and the Letter of Transmittal be purchased at the price therefor, net to the
selling stockholder in cash.
If you do not wish to participate in the Offer, you do not need to take any
action.
The Offer is explained in detail in the enclosed Offer to Purchase and the
Letter of Transmittal. If you want to tender your Shares, the instructions on
how to tender Shares are in the enclosed materials. I encourage you to read
carefully these materials before making any decision with respect to the Offer.
The Offer gives stockholders the opportunity to sell their Shares at a
premium over the market price and without the usual transaction costs associated
with a market sale.
The Company, its Board of Directors and its executive officers make no
recommendation to any stockholder as to whether to tender any or all Shares
pursuant to the Offer. Stockholders must make their own decision as to whether
to tender Shares pursuant to the Offer and, if so, how many Shares to tender.
Sincerely,
LOUIS M. WALTERS
Vice President, Treasurer and
Assistant Secretary
August 29, 1996
ATLANTIC CITY ELECTRIC COMPANY
ANNOUNCES THE TENDER FOR
$7.80 NO PAR PREFERRED STOCK
Atlantic City Electric Company ("ACE") announced today (August 29, 1996)
that its Board of Directors has authorized a cash tender offer for all
outstanding shares of its $7.80 No Par Preferred Stock (cumulative).
ACE is offering to purchase all outstanding shares of the $7.80 No Par
Preferred Stock at a per share purchase price of $111.00.
The $7.80 series is traded in the over-the-counter market and is not listed
on any national securities exchange or quoted on the automated quotation system
of a registered securities association.
The offer and withdrawal rights will expire at 5:00 p.m., New York City
time, on Monday, October 7, 1996. The tender offer is not conditioned upon any
minimum number of shares being tendered, but is subject to certain other
conditions.
The dealer managers for the offer are Goldman, Sachs & Co. and the
depositary for the tendered shares will be The Bank of New York. Questions or
requests for assistance may be directed to Georgeson & Company Inc., the
information agent, at Wall Street Plaza, New York, New York 10005 (telephone
1-800-223-2064) or Goldman, Sachs & Co. at 1-800-828-3182.
# # #
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares. The Offer is made solely by the Offer to Purchase dated August
29, 1996 and the Letter of Transmittal. The Offer is being made to all holders
of Shares; provided, that the Offer is not being made to, nor will tenders be
accepted from or on behalf of, holders of Shares in any jurisdiction in which
making or accepting the Offer would violate that jurisdiction's laws. In those
jurisdictions whose securities, blue sky or other laws require the Offer to be
made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of the Company by Goldman, Sachs & Co. or one or more registered brokers
or dealers licensed under the laws of such jurisdictions.
$70,000,000
Notice of Offer to Purchase for Cash
by
Atlantic City Electric Company
All Outstanding Shares of its $7.80 No Par Preferred Stock
(Cumulative) at a Purchase Price of $111.00 Per Share
CUSIP No. 048303 86 1
Atlantic City Electric Company, a New Jersey corporation (the "Company"),
invites the holders of the above-referenced $7.80 No Par Preferred Stock
(cumulative) (the "Preferred") to tender their shares of such stock (the
"Shares"), subject to the conditions set forth in the Offer to Purchase dated
August 29, 1996 (the "Offer to Purchase") and in the Letter of Transmittal
(which, together with the Offer to Purchase, constitutes the "Offer"). The
Company will purchase all Shares validly tendered and not withdrawn upon the
terms and subject to the conditions of the Offer.
On September 12, 1996, the Board of Directors of the Company will consider
the declaration of dividends on the Company's capital stock. The Regular
Quarterly Dividend (as defined in the Offer to Purchase) for the Preferred, if,
when and as declared, will be paid on November 1, 1996 to holders of record as
of the close of business on October 4, 1996. A holder of record of Shares on
October 4, 1996 who tenders Shares pursuant to the Offer will be entitled to the
Regular Quarterly Dividend payable November 1, 1996, regardless of when such
tender is made.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 8--"CERTAIN CONDITIONS OF THE OFFER" IN THE OFFER TO PURCHASE.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON MONDAY, OCTOBER 7, 1996, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
Upon the terms and subject to the conditions described in the Offer to
Purchase and in the Letter of Transmittal, the Company will purchase all Shares
validly tendered and not withdrawn on or prior to the Expiration Date (as
defined in the Offer to Purchase).
The Company is making the Offer because it believes that the purchase of
Shares is economically attractive to the Company. In addition, the Offer gives
stockholders the opportunity to sell their Shares at a premium over market price
and without the usual transaction costs associated with a market sale.
The Company, its Board of Directors and its executive officers make no
recommendation to any stockholder as to whether to tender any or all Shares
pursuant to the Offer. Stockholders must make their own decision as to whether
to tender Shares pursuant to the Offer and, if so, how many Shares to tender.
The Company reserves the right, at any time or from time to time, to extend
the period of time during which the Offer is open by giving oral or written
notice of such extension to The Bank of New York, as depositary (the
"Depositary"), and making a public announcement thereof.
Tenders of Shares made pursuant to the Offer may be withdrawn at any time
on or prior to the Expiration Date. Thereafter, such tenders are irrevocable,
except that they may be withdrawn after 12:00 midnight, Friday, October 25, 1996
unless theretofore accepted for payment by the Company as provided in the Offer
to
<PAGE>
Purchase. For a withdrawal to be effective, a written or facsimile transmission
notice of withdrawal must be timely received by the Depositary at one of the
addresses or facsimile numbers set forth on the back cover of the Offer to
Purchase and must specify the name of the person who tendered the Shares to be
withdrawn and the number of Shares to be withdrawn. If the Shares to be
withdrawn have been delivered to the Depositary, a signed notice of withdrawal
with signatures guaranteed by an Eligible Institution (as defined in the Offer
to Purchase) (except in the case of Shares tendered by an Eligible Institution)
must be submitted prior to the release of such Shares. In addition, such notice
must specify, in the case of Shares tendered by delivery of certificates, the
name of the registered holder (if different from that of the tendering
stockholder) and the serial numbers shown on the particular certificates
evidencing the Shares to be withdrawn or, in the case of Shares tendered by
book-entry transfer, the name and number of the account at The Depository Trust
Company ("DTC") to be credited with the withdrawn Shares and the name of the
registered holder (if different from the name of such account). Withdrawals may
not be rescinded, and Shares withdrawn will thereafter be deemed not validly
tendered for purposes of the Offer. However, withdrawn Shares may be re-tendered
by again following one of the procedures described in Section 5--"Procedure for
Tendering Shares" in the Offer to Purchase at any time prior to the Expiration
Date.
The Company will be deemed to have purchased tendered Shares validly
tendered and not withdrawn if and when it gives oral or written notice to the
Depositary of its acceptance for payment of Shares.
The information required to be disclosed by Rule 13e-4(d)(1) of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended, is
contained in the Offer to Purchase and is incorporated herein by reference.
Copies of the Offer to Purchase and the Letter of Transmittal are being
mailed to registered holders of Shares and will be furnished to brokers, banks
and similar persons whose names, or the names of whose nominees, appear on the
Company's stockholder list or, if applicable, who are listed as participants in
DTC's security position listing for subsequent transmittal to beneficial owners
of Shares.
The Offer to Purchase and the Letter of Transmittal contain important
information that should be read carefully before any decision is made with
respect to the Offer.
Any questions or requests for assistance may be directed to the Information
Agent or the Dealer Managers at their respective telephone numbers and addresses
listed below. Requests for additional copies of the Offer to Purchase, the
Letter of Transmittal or other tender offer materials may be directed to the
Information Agent or the Dealer Managers, and such copies will be furnished
promptly at the Company's expense. Holders of Shares may also contact their
local broker, dealer, commercial bank or trust company for assistance concerning
the Offer.
Information on the Offer is available from "MCM Corporate Watch Services"
on Telerate page 42,000.
The Information Agent for the Offer is:
GEORGESON
& COMPANY INC.
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect:
(212) 440-9800
All Others Call Toll Free:
(800) 223-2064
The Dealer Managers for the Offer are:
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
(800) 828-3182
August 29, 1996
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER OF SUBSTITUTE FORM W-9
Section references are to the Internal Revenue Code.
Purpose of Form.--A person who is required to file an information return
with the IRS must obtain your correct TIN to report income paid to you, real
estate transactions, mortgage interest you paid, the acquisition or abandonment
of secured property or contributions you made to an IRA. Use Form W-9 to furnish
your correct TIN to the requester (the person asking you to furnish your TIN)
and, when applicable, (1) to certify that the TIN you are furnishing is correct
(or that you are waiting for a number to be issued), (2) to certify that you are
not subject to backup withholding, and (3) to claim exemption from backup
withholding if you are an exempt payee. Furnishing your correct TIN and making
the appropriate certifications will prevent certain payments from being subject
to backup withholding.
Note: If a requester gives you a form other than a W-9 to request your TIN,
you must use the requester's form.
How to Obtain a TIN.--If you do not have a TIN, apply for one immediately.
To apply, get Form SS-5, Application for a Social Security Card (for
individuals), from your local office of the Social Security Administration, or
Form SS-4, Application for Employer Identification Number (for businesses and
all other entities), from your local IRS office.
To complete Form W-9 if you do not have a TIN, write "Applied for" in the
space for the TIN in Part I (or check box 2 of Substitute Form W-9), sign and
date the form, and give it to the requester. Generally, you must obtain a TIN
and furnish it to the requester by the time of payment. If the requester does
not receive your TIN by the time of payment, backup withholding, if applicable,
will begin and continue until you furnish your TIN to the requester.
Note: Writing "Applied for" (or checking box 2 of the Substitute Form W-9)
on the form means that you have already applied for a TIN or that you intend to
apply for one in the near future.
As soon as you receive your TIN, complete another Form W-9, include your
TIN, sign and date the form, and give it to the requester.
What is Backup Withholding?--Persons making certain payments to you after
1992 are required to withhold and pay to the IRS 31% of such payments under
certain conditions. This is called "backup withholding". Payments that could be
subject to backup withholding include interest, dividends, broker and barter
exchange transactions, rents, royalties, nonemployee compensation and certain
payments from fishing boat operators, but do not include real estate
transactions.
If you give the requester your correct TIN, make the appropriate
certifications, and report all your taxable interest and dividends on your tax
return, your payments will not be subject to backup withholding. Payments you
receive will be subject to backup withholding if:
1. You do not furnish your TIN to the requester, or
2. The IRS notifies the requester that you furnished an incorrect TIN, or
3. You are notified by the IRS that you are subject to backup withholding
because you failed to report all your interest and dividends on your
tax return (for reportable interest and dividends only), or
4. You do not certify to the requester that you are not subject to backup
withholding under 3 above (for reportable interest and dividend
accounts opened after 1983 only), or
5. You do not certify your TIN. This applies only to reportable interest,
dividend, broker or barter exchange accounts opened after 1983, or
broker accounts considered inactive in 1983.
Except as explained in 5 above, other reportable payments are subject to
backup withholding only if 1 or 2 above applies. Certain payees and payments are
exempt from backup withholding and information reporting. See Payees and
Payments Exempt From Backup Withholding, below, and Example Payees and Payments
under Specific Instructions, below, if you are an exempt payee.
Payees and Payments Exempt From Backup Withholding.--The following is a
list of payees exempt from backup withholding and for which no information
reporting is required. For interest and dividends, all listed payees are exempt
except item (9). For broker transactions, payees listed in (1) through (13) and
a person registered under the Investment Advisers Act of 1940 who regularly acts
as a broker are exempt. Payments subject to reporting under sections 6041 and
6041A are generally exempt from backup withholding only if made to payees
described in items (1) through (7), except a corporation that provides medical
and health care services or bills and collects payments for such services is not
exempt from backup withholding or information reporting. Only payees described
in items (2) through (6) are exempt from backup withholding for barter exchange
transactions, patronage dividends and payments by certain fishing boat
operations.
(1) A corporation. (2) An organization exempt from tax under section
501(a), or an IRA, or a custodial account under section 403(b)(7). (3) The
United States or any of its agencies or instrumentalities. (4) A state, the
District of Columbia, a possession of the United States or any of their
political subdivisions or instrumentalities. (5) A foreign government or any of
its political subdivisions, agencies, or instrumentalities. (6) An international
organization or any of its agencies or instrumentalities. (7) A foreign central
bank of issue. (8) A dealer in securities or commodities required to register in
the United States or a possession of the United States. (9) A futures commission
merchant registered with the Commodity Futures Trading Commission. (10) A real
estate investment trust. (11) An entity registered at all times during the tax
year under the Investment Company Act of 1940. (12) A common trust fund operated
by a bank under section 584(a). (13) A financial institution. (14) A middleman
known in the investment community as a nominee or listed in the most recent
publication of the American Society of Corporate Secretaries, Inc., Nominee
List. (15) A trust exempt from tax under section 664 or described in section
4947.
Payments of dividend and patronage dividends generally not subject to
backup withholding include the following:
o Payments to nonresident aliens subject to withholding under section
1441.
o Payments to partnerships not engaged in a trade or business in the
United States and that have at least one nonresident partner.
o Payments of patronage dividends not paid in money.
o Payments made by certain foreign organizations.
Payments of interest generally not subject to backup withholding include
the following:
<PAGE>
o Payments of interest on obligations issued by individuals.
Note: You may be subject to backup withholding if this interest is $600 or
more and is paid in the course of the payer's trade or business and you have not
provided your correct TIN to the payer.
o Payments of tax-exempt interest (including exempt-interest dividends
under section 852).
o Payments described in section 6049(b)(5) to nonresident aliens.
o Payment on tax-free covenant bonds under section 1451.
o Payments made by certain foreign organizations.
o Mortgage interest paid by you.
Payments that are not subject to information reporting are also not subject
to backup withholding. For details, see sections 6041, 6041A(a), 6042, 6044,
6045, 6049, 6050A and 6050N, and their regulations.
Penalties
Failure to Furnish TIN.--If you fail to furnish your correct TIN to a
requester, you will be subject to a penalty of $50 for each such failure unless
your failure is due to reasonable cause and not to willful neglect.
Civil Penalty for False Information With Respect to Withholding.--If you
make a false statement with no reasonable basis that results in no backup
withholding, you are subject to a $500 penalty.
Criminal Penalty for Falsifying Information.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
Misuse of TINs.--If the requester discloses or uses TINs in violation of
Federal law, the requester may be subject to civil and criminal penalties.
Special Instructions
Name.--If you are an individual, you must generally provide the name shown
on your Social Security card. However, if you have changed your last name, for
instance, due to marriage, without informing the Social Security Administration
of the name change, please enter your first name, the last name shown on your
Social Security card, and your new last name.
If you are a sole proprietor, you must furnish your individual name and
either the SSN or EIN. You may also enter your business name or "doing business
as" name on the business name line. Enter your name(s) as shown on your Social
Security card and/or as it was used to apply for your EIN on Form SS-4.
Signing the Certification.
1. Interest, Dividend, Broker and Barter Exchange Accounts Opened Before
1984 and Broker Accounts Considered Active During 1983. You are required to
furnish your correct TIN, but you are not required to sign the certification.
2. Interest, Dividend, Broker and Barter Exchange Accounts Opened After
1983 And Broker Accounts Considered Inactive During 1983. You must sign the
certification or backup withholding will apply. If you are subject to backup
withholding and you are merely providing your correct TIN to the requester, you
must cross out item 2 in the certification before signing the form.
3. Real Estate Transactions. You must sign the certification. You may cross
out item 2 of the certification.
4. Other Payments. You are required to furnish your correct TIN, but you
are not required to sign the certification unless you have been notified of an
incorrect TIN. Other payments include payments made in the course of the
requester's trade or business for rents, royalties, goods (other than bills for
merchandise), medical and health care services, payments to a nonemployee for
services (including attorney and accounting fees) and payments to certain
fishing boat crew members.
5. Mortgage Interest Paid by You, Acquisition or Abandonment of Secured
Property or IRA Contributions. You are required to furnish your correct TIN, but
you are not required to sign the certification.
6. Exempt Payees and Payments. If you are exempt from backup withholding,
you should complete this form to avoid possible erroneous backup withholding.
Enter your correct TIN in Part 1, write "EXEMPT" in the block in Part II, and
sign and date the form. If you are a nonresident alien or foreign entity not
subject to backup withholding, give the requester a complete Form W-8,
Certificate of Foreign Status.
7. Tin "Applied For." Follow the instructions under How To Obtain a TIN on
page 1, and sign and date this form.
Signature.--For a joint account, only the person whose TIN is shown in Part
I should sign.
Privacy Act Notice.--Section 6109 requires you to furnish your correct TIN
to persons who must file information returns with the IRS to report interest,
dividends, certain other income paid to you, mortgage interest you paid, the
acquisition or abandonment of secured property or contributions you made to an
IRA. The IRS uses the numbers for identification purposes and to help verify the
accuracy of your tax return. You must provide your TIN whether or not you are
required to file a tax return. Payers must generally withhold 31% of taxable
interest, dividend and certain other payments to a payee who does not furnish a
TIN to a payer. Certain penalties may also apply.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER OF SUBSTITUTE FORM W-9
What Name and Number To Give the Requester
================================================================================
For this type of account: Give name and SSN of:
1. Individual The individual
2. Two or more individuals (joint The actual owner of the account or,
Account) if combined funds, the first
individual on the account(1)
3. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
4. a. The usual revocable savings The grantor-trustee(1)
trust (grantor is also trustee)
b. So-called trust account that The actual owner(1)
is not a legal or valid trust
under state law.
5. Sole proprietorship The owner(3)
================================================================================
================================================================================
For this type of account: Give name and EIN of:
6. Sole proprietorship: The owner(3)
7. A valid trust, estate or pension Legal entity(4)
trust
8. Corporate The corporation
9. Association, club, religious, The organization
charitable,educational or other
tax-exempt organization
10. Partnership The partnerhip
11. A broker or registered nominee The broker or nominee
12. Account with the Department The public entity
of Agriculture in the name of a
public entity (such as a state or
local government, school
district or prison) that receives
agriculture program payments.
================================================================================
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's SSN.
(3) Show your individual name. You may also enter your business name. You may
use your SSN or EIN.
(4) List first and circle the name of the legal trust, estate or pension trust.
(Do not furnish the TIN of the personal representative or trustee unless
the legal entity itself is not designated in the account title).
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
