<PAGE>
Filed Pursuant to Rule
424 (b)(4)
Registration No. 333-01003
[Unicom logo]
Unicom Corporation
One First National Plaza
P.O. Box A-3005
Chicago, Illinois 60690-3005
Dear Commonwealth Edison Shareholder:
We are writing to inform you that Unicom Corporation ("Unicom") has
determined to offer holders of the Common Stock of Commonwealth Edison Company
("ComEd") the opportunity to exchange those shares on a one-for-one basis for
shares of the Common Stock of Unicom.
More specifically, Unicom is offering, pursuant to the terms and
conditions contained in this Prospectus and the accompanying Letter of
Transmittal (which together constitute the "Exchange Offer"), to exchange one
share of the Common Stock without par value ("Unicom Common Stock") of Unicom
for each share of Common Stock, $12.50 par value per share ("ComEd Common
Stock") of ComEd not held by Unicom. Holders of outstanding shares of the $1.425
Convertible Preferred Stock without par value issued by ComEd (the "ComEd
Convertible Preferred Stock") and the outstanding warrants to purchase ComEd
Common Stock issued by ComEd (the "ComEd Warrants") may participate in the
Exchange Offer by converting their shares of ComEd Convertible Preferred Stock
or their ComEd Warrants into ComEd Common Stock in accordance with the
conversion provisions of those securities, and then tendering the shares of
ComEd Common Stock so received in the Exchange Offer.
A more complete description of the terms and conditions of the
Exchange Offer, including the procedures for tendering shares, is set forth on
pages 7 through 10 of this Prospectus under "The Exchange Offer." Please also
review "Certain Differences Between Shares of Unicom Common Stock and ComEd
Common Stock" prior to making any decision to tender your shares.
Sincerely,
David A. Scholz
Secretary
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS APRIL 26, 1996.
<PAGE>
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON
REQUEST FROM DAVID A. SCHOLZ, SECRETARY, UNICOM CORPORATION, 37TH FLOOR, 10
SOUTH DEARBORN STREET, POST OFFICE BOX A-3005, CHICAGO, ILLINOIS 60690-3005
(TELEPHONE NUMBER 312/394-7399).
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY UNICOM OR ANY UNDERWRITER, DEALER OR AGENT. NEITHER THE DELIVERY
OF THIS PROSPECTUS NOR ANY EXCHANGE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES
CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF UNICOM
SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR
SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS
NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
-----------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information.................................... 2
Incorporation of Certain Information by
by Reference........................................... 3
Unicom Corporation....................................... 3
Commonwealth Edison Company.............................. 4
Prospectus Summary....................................... 4
Reasons for the Exchange Offer........................... 6
The Exchange Offer....................................... 7
Summary of Certain Federal Income
Tax Considerations..................................... 10
Certain Differences Between Shares of
Unicom Common Stock and ComEd
Common Stock........................................... 11
Legal Matters............................................ 12
Experts.................................................. 12
</TABLE>
AVAILABLE INFORMATION
Unicom and ComEd are subject to the informational requirements of the
Securities Exchange Act of 1934, as amended, and in accordance therewith file
reports and other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at
its Regional Offices located at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, IL 60661 and Seven World Trade Center, 13th Floor, New York, NY
10048. Copies of such material can also be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549, at prescribed rates. In addition, reports, proxy statements and other
information concerning Unicom may be inspected at the offices of the New York
Stock Exchange, 20 Broad Street, New York, NY, the Chicago Stock Exchange, 440
South LaSalle Street, Chicago, IL and the Pacific Stock Exchange, 301 Pine
Street, San Francisco, CA, the exchanges on which Unicom Common Stock is listed.
Unicom has filed with the Commission a Registration Statement on Form S-4 under
the Securities Act of 1933, as amended, with respect to the Exchange Offer. This
Prospectus does not contain all of the information set forth in such
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information, reference
is made to such Registration Statement.
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<PAGE>
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by Unicom with the Commission (File No.
1-11375) are incorporated in this Prospectus by reference and made a part
hereof:
(a) Unicom's Annual Report on Form 10-K for the year ended December
31, 1995 (the "1995 Form 10-K");
(b) Unicom's Quarterly Reports on Form 10-Q for the quarterly periods
ended March 31, 1995 (the "March 31, 1995 Form 10-Q"), June 30, 1995 (the
"June 30, 1995 Form 10-Q") and September 30, 1995 (the "September 30, 1995
Form 10-Q");
(c) Unicom's Current Reports on Form 8-K dated January 26, 1996,
February 20, 1996, and March 14, 1996, and on Form 8-K/A-1 dated March 14,
1996; and
(d) Unicom's Registration Statement on Form 8-A relating to the Unicom
Common Stock.
All documents subsequently filed by Unicom pursuant to Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, after the
date of this Prospectus and prior to the termination of the offering made by
this Prospectus, shall be deemed to be incorporated in this Prospectus by
reference and to be a part hereof from the respective dates of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference in this Prospectus shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained in this Prospectus or in any other subsequently filed document which
also is or is deemed to be incorporated by reference in this Prospectus modifies
or supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
Unicom will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any or all of the documents that have been or
may be incorporated in this Prospectus by reference, other than certain exhibits
to such documents. Such requests should be directed to David A. Scholz,
Secretary, Unicom Corporation, 37th Floor, 10 South Dearborn Street, Post Office
Box A-3005, Chicago, IL 60690-3005 (telephone number 312/394-7399).
UNICOM CORPORATION
Unicom was organized in the state of Illinois on January 28, 1994, and
on September 1, 1994, became the parent holding company of ComEd and Unicom
Enterprises Inc., an unregulated subsidiary engaged, through a subsidiary, in
energy service activities. Unicom owns in excess of 99% of the outstanding
ComEd Common Stock and has the same directors as ComEd. ComEd represents
substantially all of the assets, revenues and net income of Unicom; and Unicom's
resources and results of operations are dependent on, and reflect, those of
ComEd. Unicom also has several other subsidiaries that have been formed to
engage in unregulated activities. Unicom's principal executive offices are
located at 37th Floor, 10 South Dearborn Street, Post Office Box A-3005,
Chicago, IL 60690-3005, and its telephone number is 312/394-7399.
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<PAGE>
COMMONWEALTH EDISON COMPANY
ComEd is engaged principally in the production, purchase,
transmission, distribution and sale of electricity to a diverse base of
residential, commercial and industrial customers. ComEd's electric service
territory has an area of approximately 11,540 square miles and an estimated
population of approximately eight million as of December 31, 1995 and 1994. It
includes the city of Chicago, an area of about 225 square miles with an
estimated population of approximately three million from which ComEd derived
approximately one-third of its ultimate consumer revenues in the twelve months
ended March 31, 1996. ComEd had approximately 3.4 million electric customers at
March 31, 1996. ComEd's principal executive offices are located at 37th Floor,
10 South Dearborn Street, Post Office Box 767, Chicago, IL 60690-0767, and its
telephone number is 312/394-4321.
PROSPECTUS SUMMARY
The following is a summary of certain information contained or
incorporated by reference in this Prospectus and is qualified in its entirety by
the more detailed information and financial statements contained or incorporated
by reference in this Prospectus.
THE EXCHANGE OFFER
The Exchange Offer.............. Unicom is offering to exchange one share of
Unicom Common Stock for each share of ComEd
Common Stock tendered by holders other than
Unicom.
Participation by Holders
of ComEd Convertible
Preferred Stock and
ComEd Warrants................. Such holders may participate in the Exchange
Offer by converting their securities into
ComEd Common Stock in accordance with the
conversion provisions of such securities, and
then tendering the shares of ComEd Common
Stock so received in accordance with the
Exchange Offer.
Expiration Date................. The Exchange Offer has no fixed expiration
date. It will remain open until such time as
there are no outstanding shares of ComEd
Convertible Preferred Stock, no outstanding
ComEd Warrants and no outstanding shares of
ComEd Common Stock held by persons other than
Unicom or, if earlier, such date as Unicom may
fix by at least 60 days' prior written notice
to the then registered holders of ComEd
Convertible Preferred Stock, ComEd Warrants
and ComEd Common Stock. See "The Exchange
Offer -- Termination of the Exchange Offer."
Tender Procedure................ A properly completed Letter of Transmittal,
including required attachments, should be sent
to the Exchange Agent. See "The Exchange
Offer -- Procedures for Tendering ComEd
Shares."
Tenders are Irrevocable......... Tenders of ComEd Common Stock pursuant to the
Exchange Offer are irrevocable. Assuming a
properly completed Letter of Transmittal has
been sent, a tender will be processed promptly
upon receipt.
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<PAGE>
Exchange Agent.................. First Chicago Trust Company of New York,
telephone (201) 324-0137
By Mail:
Suite 4660 - Tenders and Exchanges
P.O. Box 2565
Jersey City, New Jersey 07303-2565
By Hand or Overnight Courier:
Suite 4680
14 Wall Street -- 8th Floor
New York, New York 10005
Federal Income Tax
Consequences................... An exchange pursuant to the Exchange Offer
will be tax free for federal income tax
purposes. See "Summary of Certain Federal
Income Tax Considerations."
COMPARISON OF UNICOM COMMON STOCK AND COMED COMMON STOCK
Stock Exchange Listing.......... Unicom Common Stock is listed and traded on
the New York, Chicago and Pacific Stock
Exchanges. ComEd Common Stock is not listed on
a national securities exchange, and Unicom is
not aware of anyone who is making a market in
that stock.
Dividends....................... Dividends paid on shares of ComEd Common Stock
will reflect the performance of ComEd alone,
and will not be affected by losses or profits
of unregulated subsidiaries of Unicom. In
addition, at least in the short term, the
amount of dividends paid on ComEd Common Stock
is expected to be greater than the amount of
dividends paid on Unicom Common Stock, in
order to provide Unicom with a source of funds
to pay its expenses and to invest in its
unregulated activities.
See "Certain Differences Between Shares of Unicom Common Stock and
ComEd Common Stock" for additional information, including a comparison of the
cash dividends paid per share on Unicom Common Stock and ComEd Common Stock.
-5-
<PAGE>
SUMMARY FINANCIAL INFORMATION
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED TWELVE MONTHS ENDED
MARCH 31, 1996 (UNAUDITED) MARCH 31, 1995 (UNAUDITED)
------------------------------------- -------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA) (IN THOUSANDS, EXCEPT PER SHARE DATA)
UNICOM COMED UNICOM COMED
------ ----- ------ -----
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net Operating Revenues $ 7,015,837 $ 7,015,139 $ 6,330,907 $ 6,330,907
Operating Income $ 1,375,468 $ 1,382,026 $ 1,130,909 $ 1,137,273
Net Income on Common Stock $ 687,842 $ 696,433 $ 407,514 $ 413,136
Average Number of Common Shares Outstanding 214,862 214,194 214,193 214,111
Earnings per Common Share $ 3.20 $ 3.25 $ 1.90 $ 1.93
BALANCE SHEET DATA
(AT MARCH 31, 1996 AND 1995):
Total Assets $23,229,188 $23,121,792 $23,283,479 $23,217,518
Common Stock Equity $ 5,816,900 $ 5,759,854 $ 5,455,090 $ 5,405,917
Book Value per Common Share $ 27.04 $ 26.89 $ 25.43 $ 25.24
</TABLE>
PRICE RANGE OF SHARES OF UNICOM COMMON STOCK AND COMED COMMON STOCK/(1)/
<TABLE>
<CAPTION>
1996 1995 1994
------- ---------------------------------------- --------------------------------------------
First Fourth Third Second First Fourth Third Second First
Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unicom Common Stock:
High 35 3/8 33 7/8 30 1/2 27 3/4 26 1/8 24 3/4 23 7/8/(2)/ /(2)/ /(2)/
Low 27 30 1/4 26 1/4 23 5/8 23 1/4 20 5/8 21 1/4/(2)/ /(2)/ /(2)/
ComEd Common Stock:
High /(2)/ /(2)/ /(2)/ /(2)/ /(2)/ /(2)/ 24 7/8/(2)/ 26 28 3/4
Low /(2)/ /(2)/ /(2)/ /(2)/ /(2)/ /(2)/ 22 1/2/(2)/ 22 25 1/8
</TABLE>
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(1) As reported as New York Stock Exchange Composite Transactions.
(2) Unicom Common Stock commenced trading on the New York, Chicago and Pacific
Stock Exchanges on September 1, 1994. ComEd Common Stock ceased trading on
those exchanges on that date.
REASONS FOR THE EXCHANGE OFFER
The primary purpose of the Exchange Offer is to give the holders of ComEd
Convertible Preferred Stock, ComEd Warrants and ComEd Common Stock the
opportunity to obtain stock for which there is a public market. ComEd Common
Stock is not listed or traded on a stock exchange whereas Unicom Common Stock is
listed and traded on the New York, Chicago and Pacific Stock Exchanges.
-6-
<PAGE>
The Exchange Offer also provides holders of ComEd Convertible
Preferred Stock, ComEd Warrants and ComEd Common Stock an opportunity to share
in the results of Unicom's unregulated subsidiaries. Such subsidiaries,
however, are not expected to make a material contribution to Unicom's revenues
or income in the near future. See "Certain Differences Between Shares of Unicom
Common Stock and ComEd Common Stock -- Dividends."
THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this
Prospectus and in the accompanying Letter of Transmittal (which together
constitute the "Exchange Offer"), Unicom is offering to exchange one share of
Unicom Common Stock for each share of ComEd Common Stock tendered. Holders of
ComEd Convertible Preferred Stock and ComEd Warrants may participate in the
Exchange Offer by converting such securities into ComEd Common Stock according
to the conversion provisions of such securities, and then tendering the shares
of ComEd Common Stock so received in accordance with the Exchange Offer.
As of March 31, 1996, 95,966 shares of ComEd Convertible Preferred
Stock, 82,536 ComEd Warrants and 10,242 shares of ComEd Common Stock not held by
Unicom were outstanding.
PROCEDURES FOR TENDERING COMED SHARES
A holder of shares of ComEd Common Stock who wishes to participate in
the Exchange Offer must forward a properly completed and executed Letter of
Transmittal, including all other documents required by such Letter of
Transmittal, to First Chicago Trust Company of New York (the "Exchange Agent"),
if delivered by mail, to First Chicago Trust Company of New York, Suite 4660 -
Tenders and Exchanges, P.O. Box 2565, Jersey City, New Jersey 07303-2565, and
if delivered by hand or by overnight courier, to First Chicago Trust Company of
New York, Suite 4680, 14 Wall Street -- 8th Floor, New York, New York 10005.
THE METHOD OF DELIVERY OF LETTERS OF TRANSMITTAL AND ALL OTHER REQUIRED
DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDERS. IF SUCH DELIVERY IS BY
MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL, PROPERLY INSURED, WITH RETURN
RECEIPT REQUESTED, BE USED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ASSURE TIMELY DELIVERY.
If the Letter of Transmittal is signed by a person(s) other than the
registered holder(s) of shares of ComEd Common Stock, such shares must be
endorsed or accompanied by appropriate powers of attorney, in either case signed
exactly as the name or names of the registered holder(s) that appear on the
tendered shares.
If the Letter of Transmittal or any certificates for ComEd Convertible
Preferred Stock, ComEd Warrants or ComEd Common Stock or powers of attorney are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and, unless waived by
Unicom, proper evidence satisfactory to Unicom of their authority so to act must
be submitted.
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<PAGE>
If tendered shares of ComEd Common Stock are registered in the name of
the signer of the Letter of Transmittal and the shares of Unicom Common Stock to
be issued in exchange therefor are to be issued in the name of the registered
holder (which term, for the purposes described herein, shall include any
participant in The Depository Trust Company ("DTC") (also referred to as a book-
entry transfer facility) whose name appears on a security listing as the owner
of the ComEd Shares), the signature of such signer need not be guaranteed. In
any other case, the tendered shares of ComEd Common Stock must be endorsed or
accompanied by written instruments of transfer in form satisfactory to Unicom
and duly executed by the registered holder and the signature on the endorsement
or instrument of transfer 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, an "Eligible Institution"). If the shares of
Unicom Common Stock are to be delivered to an address other than that of the
registered holder appearing on the register for the shares of ComEd Common
Stock, the signature on the Letter of Transmittal must be guaranteed by an
Eligible Institution.
The Exchange Agent will establish an account with DTC with respect to
shares of ComEd Common Stock for the purpose of facilitating the Exchange Offer,
and subject to the establishment of such account, any financial institution that
is a participant in DTC's system may make book-entry delivery of shares of ComEd
Common Stock into the Exchange Agent's account with respect to ComEd Common
Stock in accordance with DTC's Automated Tender Offer Program ("ATOP")
procedures for such book-entry transfers. However, the exchange for any shares
so tendered will only be made after timely confirmation (a "Book-Entry
Confirmation") of such Book-Entry Transfer of such ComEd Common Stock into the
Exchange Agent's account, and timely receipt by the Exchange Agent of an Agent's
Message (as such term is defined in the next sentence) and any other documents
required by the Letter of Transmittal. The term "Agent's Message" means a
message, transmitted by DTC and received by the Exchange Agent and forming a
part of a Book-Entry Confirmation, which states that DTC has received an express
acknowledgment from a participant tendering shares of ComEd Common Stock that is
the subject of such Book-Entry Confirmation that such participant has received
and agrees to be bound by the terms of the Letter of Transmittal, and that
Unicom may enforce such agreement against such participant.
All questions as to the validity, form, eligibility and acceptance of
shares of ComEd Common Stock tendered for exchange will be determined by Unicom
in its sole discretion, which determination shall be final and binding. Unicom
reserves the absolute right to reject any and all tenders of any particular
shares not properly tendered or not to accept any particular shares in cases
where such acceptance might, in the judgment of Unicom or its counsel, be
unlawful. Unicom also reserves the absolute right to waive any defects or
irregularities or conditions of the Exchange Offer as to any particular shares
of ComEd Common Stock (including the right to waive the ineligibility of any
holder who seeks to tender shares of ComEd Common Stock in the Exchange Offer).
The interpretation of the terms and conditions of the Exchange Offer (including
the Letter of Transmittal and the instructions thereto) by Unicom shall be final
and binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of shares of ComEd Common Stock for exchange must be
cured within such time as Unicom shall determine. Neither Unicom nor any other
person shall be under any duty to give notification of defects or irregularities
with respect to tenders of shares for exchange, nor shall any of them incur any
liability for failure to give such notification.
ACCEPTANCE OF SHARES FOR EXCHANGE; DELIVERY OF UNICOM COMMON STOCK
Subject to the condition expressed under "Condition to the Exchange
Offer" below, and provided the Exchange Offer has not been terminated as
described under "Termination of the Exchange Offer" below, Unicom will accept
all shares of ComEd Common Stock that are properly tendered and First Chicago
Trust Company of New York, as registrar for shares of Unicom Common Stock, will
register and deliver the shares of Unicom Common Stock issuable in exchange
therefor promptly after receipt of such shares of ComEd Common Stock.
-8-
<PAGE>
In all cases, issuance of the shares of Unicom Common Stock for shares
of ComEd Common Stock that are accepted for exchange pursuant to the Exchange
Offer will be made only after receipt by the Exchange Agent of a properly
completed and duly executed Letter of Transmittal accompanied by the shares of
ComEd Common Stock. If any tendered shares of ComEd Common Stock are not
accepted for any reason set forth in the terms and conditions of the Exchange
Offer, such unaccepted or non-exchanged shares will be returned to the tendering
holder thereof promptly.
CONDITION TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, Unicom
shall not be required to accept for exchange, or to issue shares of Unicom
Common Stock in exchange for, any shares of ComEd Common Stock and may terminate
or amend the Exchange Offer, if at any time before the acceptance of such shares
of ComEd Common Stock for exchange or the exchange of shares of Unicom Common
Stock for such shares of ComEd Common Stock any statute, rule or regulation
shall have been enacted, or any action shall have been taken by any court or
governmental authority which, in the sole judgment of Unicom, would prohibit,
restrict or otherwise render illegal consummation of the Exchange Offer.
Unicom expressly reserves the right to terminate the Exchange Offer
and not accept for exchange any shares of ComEd Common Stock upon the occurrence
of the foregoing condition (which represents the only material condition to the
acceptance by Unicom of properly tendered shares of ComEd Common Stock). In
addition, Unicom may amend the Exchange Offer at any time if the condition set
forth above occurs.
The foregoing condition is for the sole benefit of Unicom and may be
asserted by Unicom regardless of the circumstances giving rise to such condition
or may be waived by Unicom in whole or in part at any time and from time to time
in its sole discretion. The failure by Unicom at any time to exercise 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.
In addition, Unicom will not accept for exchange any shares of ComEd
Common Stock tendered, and no shares of Unicom Common Stock will be issued in
exchange for any such shares, if at such time any stop order shall be threatened
or in effect with respect to the Registration Statement.
TERMINATION OF THE EXCHANGE OFFER
Although the Exchange Offer has no fixed expiration date, Unicom has
reserved the right to terminate the Exchange Offer (i) under the condition
described under "Condition to the Exchange Offer" above and (ii) upon sixty
days' prior written notice to the then registered holders of ComEd Convertible
Preferred Stock, ComEd Warrants and ComEd Common Stock. In the latter case,
such notice shall be made by mailing a copy thereof to each such registered
holder at his, her or its address as it shall appear in the securities register
of ComEd. Any such notice shall be deemed given when mailed and shall not be
affected by any failure of the registered holder to receive it.
ASSISTANCE
All executed Letters of Transmittal should be directed to the Exchange
Agent. Questions, requests for assistance and requests for additional copies of
this Prospectus, the Letter of Transmittal and other related documents should be
directed to Unicom, Attention: Secretary, 37th Floor, 10 South Dearborn Street,
Chicago, Illinois 60690-3005, telephone number (312) 394-7399 or to the Exchange
Agent, Attention: Tenders and Exchanges, Suite 4660, P.O. Box 2565, Jersey City,
New Jersey 07303-2565, telephone number (201) 324-0137.
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<PAGE>
FEES AND EXPENSES
Unicom will not make any payments to brokers, dealers or others
soliciting acceptance of the Exchange Offer and will not reimburse brokers,
dealers or others for mailing these materials.
The expenses to be incurred in connection with the Exchange Offer will
be paid by Unicom and are estimated in the aggregate to be approximately
$101,000 and include accounting, legal, filing and other fees and expenses.
TRANSFER TAXES
In order to preserve the tax free nature of the Exchange Offer for
federal income tax purposes, Unicom will not pay any transfer taxes applicable
to the exchange of shares of ComEd Common Stock tendered and accepted pursuant
to the Exchange Offer. Such taxes, if any, will be the responsibility of the
tendering holder.
SUMMARY OF CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
In the opinion of Sidley & Austin, counsel to Unicom, the following
summary describes the principal federal income tax consequences of the Exchange
Offer to the holders of ComEd Common Stock, ComEd Convertible Preferred Stock
and ComEd Warrants. The discussion is based upon the Internal Revenue Code of
1986, as amended (the "Code"), applicable Treasury Regulations thereunder,
Internal Revenue Service rulings and judicial decisions, all as in effect as of
the date hereof. There can be no assurance that future changes in the law will
not affect the accuracy of the statements or conclusions set forth herein. In
addition, the opinion is based on certain representations made by Unicom to
Sidley & Austin and may not be relied upon subsequent to the date any such
representations become untrue. Unicom will amend or supplement this Prospectus,
if appropriate, should any of such representations become untrue and affect such
opinion. EACH HOLDER OF COMED COMMON STOCK, COMED CONVERTIBLE PREFERRED STOCK
OR COMED WARRANTS IS URGED TO CONSULT SUCH HOLDER'S OWN TAX ADVISOR AS TO THE
SPECIFIC TAX CONSEQUENCES TO SUCH HOLDER OF THE EXCHANGE OFFER, INCLUDING THE
EFFECT OF ANY SUBSEQUENT CHANGES IN THE LAW AND THE APPLICATION OF FOREIGN,
STATE, LOCAL AND OTHER TAX LAWS.
CONVERSION OF COMED CONVERTIBLE PREFERRED STOCK OR COMED WARRANTS
A holder of ComEd Convertible Preferred Stock or ComEd Warrants who
converts such securities into ComEd Common Stock in accordance with the
conversion provisions of those securities will not recognize any gain or loss as
a result of such conversion, except with respect to cash, if any, received in
lieu of fractional shares of ComEd Common Stock. The tax basis of the shares of
ComEd Common Stock received upon such conversion (including fractional shares of
ComEd Common Stock for which cash is received) will be the same as the tax basis
of the securities exchanged therefor. A holder of ComEd Convertible Preferred
Stock or ComEd Warrants who receives cash in lieu of a fractional share of ComEd
Common Stock will recognize gain or loss equal to the difference, if any,
between such holder's tax basis in the fractional share (as described above) and
the amount of cash received.
The holding period for shares of ComEd Common Stock received upon
conversion of ComEd Convertible Preferred Stock will include the holding period
for such shares of ComEd Convertible Preferred Stock, provided such shares of
ComEd Convertible Preferred Stock were held as capital assets by the stockholder
at the time of such conversion. The holding period for shares of ComEd Common
Stock received upon conversion of ComEd Warrants will begin the date such
warrants are exercised.
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<PAGE>
EXCHANGE OF COMED COMMON STOCK FOR UNICOM COMMON STOCK
An exchange of ComEd Common Stock for Unicom Common Stock pursuant to the
Exchange Offer will qualify as a "reorganization" within the meaning of section
368(a) of the Code. Accordingly, (i) a stockholder of ComEd will not recognize
any gain or loss upon the exchange of his or her shares of ComEd Common Stock
for shares of Unicom Common Stock pursuant to the Exchange Offer; (ii) the tax
basis of the shares of Unicom Common Stock received in exchange for shares of
ComEd Common Stock pursuant to the Exchange Offer will be the same as the tax
basis of the shares of ComEd Common Stock exchanged therefor; and (iii) the
holding period for the shares of Unicom Common Stock received in exchange for
shares of ComEd Common Stock pursuant to the Exchange Offer will include the
stockholder's holding period for such shares of ComEd Common Stock, provided
such shares of ComEd Common Stock were held as capital assets by the stockholder
at the time of such exchange.
CERTAIN DIFFERENCES BETWEEN SHARES OF
UNICOM COMMON STOCK AND COMED COMMON STOCK
STOCK EXCHANGE LISTING
Shares of Unicom Common Stock are, and shares of Unicom Common Stock issued
in connection with the Exchange Offer will be, listed for trading on the New
York, Chicago and Pacific Stock Exchanges. Shares of ComEd Common Stock are not
listed on a stock exchange, and Unicom is not aware of anyone who is making a
market in that stock.
DIVIDENDS
The dividends paid on shares of ComEd Common Stock will reflect the
performance of ComEd alone, and will be unaffected by losses or profits of
unregulated subsidiaries of Unicom. In at least the short term, dividends on
shares of Unicom Common Stock will depend substantially upon the earnings,
financial condition and capital requirements of ComEd and on ComEd's ability to
pay dividends on the shares of ComEd Common Stock owned by Unicom. In addition,
in at least the short term, the amount of dividends paid on shares of ComEd
Common Stock is expected to be greater than the amount of dividends paid on the
shares of Unicom Common Stock, in order to provide Unicom with a source of funds
to pay its expenses and to invest in its unregulated subsidiaries. In the long
term, however, if Unicom's unregulated subsidiaries are successful, the assets
and earnings of such subsidiaries should benefit holders of shares of Unicom
Common Stock.
CASH DIVIDENDS PAID BY UNICOM AND COMED PER SHARE OF COMMON STOCK
<TABLE>
<CAPTION>
1996 First 1995 (by quarters) 1994 (by quarters)
Quarter ------------------------------- -------------------------------
---------- Fourth Third Second First Fourth Third Second First
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unicom 40c 40c 40c 40c 40c 40c --- --- ---
ComEd 40c 40c 40c 40c 40c 40c 40c* 40c 40c
</TABLE>
* Excludes a special dividend (consisting of $40 million cash and the
common stock of Unicom Enterprises Inc.) effected on September 1, 1994 in
connection with the transaction by which Unicom became the parent holding
company of ComEd.
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<PAGE>
COMPARISON OF SHAREHOLDERS' RIGHTS
Unicom and ComEd are both Illinois corporations. The rights of holders of
shares of Unicom Common Stock are governed by the Articles of Incorporation of
Unicom (the "Unicom Articles") and the rights of holders of shares of ComEd
Common Stock are governed by the Restated Articles of Incorporation of ComEd
(the "ComEd Articles").
CORPORATE PURPOSE. The Unicom Articles give Unicom broad corporate powers
to engage in any lawful activity for which a corporation may be formed under the
laws of the state of Illinois. The ComEd Articles specify that the corporate
purposes for which ComEd may engage in business are those related to electric,
gas and certain other utility businesses and related activities.
PREFERRED AND PREFERENCE STOCK. The Unicom Articles do not authorize any
preferred or preference stock. Authorization of any Unicom preferred stock or
preference stock or additional shares of Unicom Common Stock would require the
approval of the holders of the shares of Unicom Common Stock. By contrast, the
ComEd Articles authorize the issuance of preferred, preference and prior
preferred stock. As of March 31, 1996, there were no shares of prior preferred
stock, 95,966 shares of ComEd Convertible Preferred Stock and 16,434,539 shares
of preference stock (in several series) outstanding. ComEd preference and prior
preferred stocks are issuable in series and may be issued with or without
mandatory redemption requirements, as designated by the ComEd Board of Directors
in connection with the issuance of a particular series. There are no
restrictions upon the issuance of any authorized shares by either Unicom or
ComEd except for any actions required to be taken by such corporation's Board of
Directors under Illinois law.
COMMON STOCK. The Unicom Articles authorize the issuance of 400,000,000
shares of Unicom Common Stock, whereas the ComEd Articles authorize the issuance
of 250,000,000 shares of ComEd Common Stock. As of March 31, 1996, there were
215,113,831 shares of Unicom Common Stock and 214,195,814 shares of ComEd Common
Stock outstanding. As of March 31, 1996, Unicom owned 214,185,572 shares of the
outstanding ComEd Common Stock, representing in excess of 99% of such stock and
in excess of 92% of the outstanding voting stock of ComEd on such date.
LEGAL MATTERS
The validity of the shares of Unicom Common Stock to be issued in the
Exchange Offer and certain other matters related thereto will be passed upon on
behalf of Unicom by Sidley & Austin, Chicago, Illinois.
EXPERTS
The financial statements and schedules included or incorporated by
reference in the 1995 Form 10-K Report, the March 31, 1995 Form 10-Q Report, the
June 30, 1995 Form 10-Q Report, the September 30, 1995 Form 10-Q Report and the
January 26, 1996 Form 8-K Report have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are incorporated herein in reliance upon the authority of said firm
as experts in accounting and auditing in giving said reports.
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