<PAGE> Registration No. 33-________
SECURITIES AND EXCHANGE COMMISSSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Bangor Hydro-Electric Company
(Exact name of registrant as specified in its charter)
Maine 01-0024370
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
33 State Street
Bangor, Maine 04401
(207) 945-5621
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
FREDERICK S. SAMP, ESQ.
General Counsel
Bangor Hydro-Electric Company
33 State Street
Bangor, Maine 04401
(207) 945-5621
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
Please address a copy of all communications to:
DAVID P. FALCK, ESQ.
Winthrop, Stimson, Putnam & Roberts
One Battery Park Plaza
New York, New York 10004-1490
(212) 858-1438
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the Registration Statement becomes effective.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check the
following box. [____]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend interest or reinvestment plans, check the following box. [____]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Each Proposed
Class of Amount to Proposed Maximum MaximumAggregate Amount
Securities to be be Offering Price Offering Registration
Registered Registered <F1> per Share <F2> Price/(2) Fee
<S> <C> <C> <C> <C>
Common Stock 899,875 $17.0625 $15,354,118 $5,295
<FN>
<F1> Includes 117,375 shares issuable upon the exercise of the Underwriters'
option to purchase shares solely to cover over-allotments, if any.
<F2> Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933, as amended,
based on the average of the high and low prices of the Common Stock
reported on the New York Stock Exchange on February 24, 1994.
</TABLE>
The registrant hereby amends this registration statement on such
date or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the registration
statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
1
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of any offer to buy nor shall there be any sale of these
securities in any jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the securities
laws of any such jurisdiction.
SUBJECT TO COMPLETION, DATED MARCH 2, 1994
PROSPECTUS
782,500 Shares
Bangor Hydro-Electric Company
Common Stock
---------------
The Common Stock of Bangor Hydro-Electric Company (the "Company") is listed
on the New York Stock Exchange ("NYSE") under the symbol "BGR." The last
reported sale price of the Company's Common Stock on March 1, 1994 on the
NYSE was $17 per share.
- ---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Underwriting
Price to Discounts and Proceeds to
Public Commissions <F1> Company <F2>
<S> <C> <C> <C>
Per Share $ $
Total <F3> $ $ $
<FN>
<F1> The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
<F2> Before deducting expenses payable by the Company estimated at $95,000,
including certain legal expenses of the Underwriters.
<F3> The Underwriters have been granted an option, exercisable within 30 days
after the date of this Prospectus, to purchase up to 117,375 additional
shares of Common Stock from the Company on the same terms per share
solely for the purpose of covering over-allotments, if any. If all of
such additional shares are purchased, the total Price to Public will be
$ , the total Underwriting Discounts and Commissions will be $
, and the total Proceeds to Company will be $ . See
"Underwriting."
</TABLE>
----------------
The shares of Common Stock are offered by the several Underwriters named
herein, subject to prior sale, when, as and if accepted by them, and subject
to certain conditions. It is expected that certificates for the shares of
Common Stock offered hereby will be available for delivery on or about
, 1994 at the offices of Smith Barney Shearson Inc., 388 Greenwich Street,
New York, New York 10013.
----------------
Smith Barney Shearson Inc.
, 1994
1
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). All such
reports, proxy statements and other information can be inspected and copied
at the public reference facilities maintained by the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
following regional offices of the Commission: Chicago Regional Office, Suite
1400, 500 West Madison Street, Chicago, Illinois 60661-2511; and New York
Regional Office, Seven World Trade Center, New York, New York 10048. Copies
of such material can be obtained from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
at prescribed rates. In addition, material filed by the Company can be
inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
Pursuant to the requirements of the Securities Act of 1933, as amended
(the "Securities Act"), the Company has filed with the Commission a
registration statement on Form S-3 (herein, together with all amendments and
exhibits, referred to as the "Registration Statement") with respect to the
securities offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission.
For further information, reference is hereby made to the Registration
Statement.
_________________________________
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission pursuant to the
Exchange Act are incorporated herein by reference:
(i) the Company's Annual Report on Form 10-K for the year ended
December 31, 1992;
(ii) the Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1993 (as amended by Form 10-Q/A filed August 17, 1993),
June 30, 1993 and September 30, 1993; and
(iii) the Company's Current Reports on Form 8-K dated August 12,
1993, December 15, 1993 and March 2, 1994 (which contains the Company's
1993 audited financial statements and related information).
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of this offering shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing
of such documents. Such documents, and the documents described above, are
hereinafter referred to as "Incorporated Documents."
Any statement contained in an Incorporated Document shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed Incorporated
Document modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
Certain information contained in this Prospectus summarizes, is based
upon, or refers to, information and financial statements contained in one or
more Incorporated Documents; accordingly, such information contained herein
is qualified in its entirety by reference to such documents and should be
read in conjunction therewith.
The Company hereby undertakes to provide without charge to each person
to whom this Prospectus is delivered, on the written or oral request of any
such person, a copy of any or all of the documents referred to above which
have been incorporated in this Prospectus by reference, other than exhibits
to such documents (unless such exhibits are specifically incorporated by
reference into such documents). Requests for such documents should be
addressed to: Bangor Hydro-Electric Company, 33 State Street, Bangor, Maine
04401, Attention: General Counsel; telephone (207) 945-5621.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK
EXCHANGE OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED
AT ANY TIME.
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<PAGE>
SUMMARY INFORMATION
The following summary information is qualified in its entirety by
reference to information appearing elsewhere in this Prospectus and by the
more detailed information and consolidated financial statements which are
incorporated by reference herein. Except as otherwise indicated herein, all
share and per share data in this Prospectus assume that the Underwriters'
over-allotment option is not exercised.
THE COMPANY
The Company is a public utility engaged in the generation, purchase,
transmission, distribution and sale of electric energy in eastern and east
coastal Maine. The Company's franchised service area covers about 4,900
square miles in and around Bangor, Maine, including the resort area of east
coastal Maine, and includes the counties of Penobscot, Hancock and Washington
and portions of Waldo, Piscataquis and Aroostook, Maine, having a population
of approximately 195,000. In 1993, 31.2% of the Company's kilowatt-hour
("KWH") sales were to residential customers, 30.3% were to commercial
customers, 37.3% were to industrial customers, and 1.2% were to other
customers. The Company enjoys a diversified power supply profile, with
ownership interests in hydroelectric facilities, Maine Yankee Atomic Power
Company ("Maine Yankee"), which entitles the Company to purchase a share of
the output at Maine Yankee's nuclear generating facility, and fossil fuel
generating stations. The Company supplements this generation with
substantial purchases of power from the New England Power Pool ("NEPOOL"),
independent non-utility power producers using renewable resources in the
Company's service area and Canadian sources.
THE OFFERING
Common Stock Offered . . . . . . 782,500 Shares
Common Stock Outstanding After the
Offering (as of March 1, 1994) . 7,027,674 Shares
Latest 12-Month Closing Price
Range (through March 1, 1994) . . $24 1/8 to $16 3/4
Closing Price on March 1, 1994 . $17
NYSE Symbol . . . . . . . . . . . BGR
Indicated Annual Dividend per $1.32; paid quarterly
Common Share . . . . . . . . . . To reduce outstanding short-term
Use of Proceeds . . . . . . . . debt incurred primarily to finance
construction expenditures, and for
other working capital needs. See
"Use of Proceeds."
Voting Rights . . . . . . . . . Holders of Common Stock currently
have general voting rights of one-
twelfth of one vote per share,
while holders of Preferred Stock
have one vote per share, except for
holders of the 8.76% Preferred
Stock which does not carry voting
rights except as discussed herein.
See "Description of Common Stock."
- --------------------------
* Management currently intends to recommend to the Board of Directors that
the Company declare a regular quarterly dividend on March 21, 1994 of
$.33 per share on the Company's Common Stock, payable on April 20, 1994
to shareholders of record on March 31, 1994. Holders, as of the record
date, of the Common Stock offered hereby will be entitled to receive this
dividen, if declared.
3
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
(in thousands except per share amounts)
<TABLE>
<CAPTION>
Years Ended December 31,
---------------------------------------------------
1993 <F1> 1992 1991
------------- ---------- -------------
<S> <C> <C> <C>
SELECTED INCOME STATEMENT DATA:
Total operating revenue $ 177,972 $ 176,789 $ 162,243
Operating income 16,799 18,516 16,445
Net income 5,336 10,255 8,199
Earnings applicable to Common Stock 3,691 8,641 6,585
Earnings per common share $ .63 $ 1.60 $ 1.33
Dividends declared per common share 1.32 1.32 1.29
Shares outstanding (average) 5,862 5,393 4,947
<CAPTION>
As of December 31, 1993
-----------------------------------------------------------
Actual Ratio As Adjusted <F3> Ratio
------------- ------------ ------------ ----------
<S> <C> <C> <C> <C>
CAPITALIZATION:
Common Stock $ 93,944 40.3% $106,486 43.4%
Redeemable preferred
stock 15,168 6.6 15,168 6.2
Non-redeemable
preferred stock 4,734 2.0 4,734 1.9
Long-term debt <F2> 119,126 51.1 119,126 48.5
_________ _______ __________ ________
Total capitalization $ 232,972 100.0% $ 245,514 100.0%
========= ======= ========== ========
Short-term debt . . . . . $ 36,000 $ 23,458
<CAPTION>
As of December 31, 1993
-----------------------
<S> <C>
SELECTED BALANCE SHEET
DATA:
Net utility plant . . . . $ 210,422
Total assets . . . . . . 373,521
Book value per common 15.09
share
- -----------------------------
<FN>
<F1> 1993 results of operations were negatively impacted by the establishment
of a $5.6 million (after taxes) reserve against investments in certain
proposed hydroelectric facilities. The reserve reduced 1993 earnings
per share by $.95. See "Recent Developments and Certain Investment
Considerations."
<F2> Less sinking fund requirements of $1.3 million due within one year.
<F3> Adjusted to reflect the use of the proceeds from the sale of the Common
Stock offered hereby (estimated to be $12.5 million) to repay short-term
debt. See "Use of Proceeds."
</TABLE>
4
<PAGE>
Page 5 is a map entitled "Bangor Hydro-Electric Company
Service Area." Inset in the upper right hand corner of the page is a map of
the State of Maine with the service area of the Company shaded. The
remainder of the page is a larger map depicting the counties in and around
the Company's service area. In the larger map, the service area is shaded
and sites of facilities, waterways and certain municipalities are labeled.
5
<PAGE>
THE COMPANY
The Company was incorporated under the laws of the State of Maine in
1924 as a public utility engaged in the generation, purchase, transmission,
distribution and sale of electric energy for residential, commercial,
industrial and governmental uses in eastern and east coastal Maine. The
Company has two material wholly owned subsidiaries, Penobscot Hydro Co., Inc.
("PHC") and Bangor Var. Co., Inc. ("Bangor Var Co."). PHC was incorporated
in 1986 to own the Company's 50% interest in a joint venture, Bangor-Pacific
Hydro Associates, which redeveloped the West Enfield hydroelectric project.
Bangor Var Co. was incorporated in 1990 to hold the Company's 50% interest in
a partnership that owns certain facilities used in the Hydro-Quebec Phase II
transmission project in which the Company is a participant.
In 1993, 31.2% of the Company's kilowatt-hour sales were to residential
customers, 30.3% were to commercial customers, 37.3% were to industrial
customers, and 1.2% were to other customers. The Company enjoys a
diversified power supply profile, with ownership interests in hydroelectric
facilities, nuclear generation and fossil fuel generating stations. The
Company supplements this generation with substantial purchases of power from
NEPOOL, independent non-utility power producers using renewable resources in
the Company's service area and Canadian sources.
The Company holds a 7% ownership share in Maine Yankee, which entitles
the Company to purchase an approximately equal amount of the output of that
company's 880 megawatt ("MW") nuclear generating facility, an entitlement
of approximately 62 MW. Other New England utilities hold the
remaining ownership shares of Maine Yankee. The Maine Yankee
facility, which commenced commercial operation on
January 1, 1973, is the only nuclear facility in which the Company has an
ownership interest. Pursuant to a power purchase contract with Maine Yankee,
the Company is obligated to pay its pro rata share of Maine Yankee's
operating expenses, including fuel costs and decommissioning costs. In
addition, under a Capital Funds Agreement entered into by the Company and the
other sponsor utilities, the Company may be required to make its pro rata
share of future capital contributions to Maine Yankee if needed to finance
capital expenditures.
In 1993, 48.4% of the megawatt hours of electricity sold by the Company
was purchased from NEPOOL and other utilities, 20.4% was purchased from Maine
Yankee, 16.7% was generated by the Company's power stations and 14.5% was
purchased from independent non-utility power producers. The Company, along
with the major investor-owned utilities of New England, has been a party to
NEPOOL since 1971. NEPOOL contractual arrangements provide for joint
planning and operation of generating and transmission facilities in New
England, and govern generating capacity reserve obligations and provisions
regarding the use of major transmission lines.
The Company is subject to the regulatory authority of the Maine Public
Utilities Commission ("MPUC") as to retail rates, accounting, service
standards, territory served, the issuance of securities and various other
matters. The Company is also subject to the jurisdiction of the Federal
Energy Regulatory Commission as to certain matters, including licensing of
its hydroelectric stations and rates for wholesale purchases and sales of
energy and capacity and transmission services. Maine Yankee is subject to
extensive regulation by the Nuclear Regulatory Commission.
The principal executive offices of the Company are located at 33 State
Street, Bangor, Maine 04401; telephone (207) 945-5621.
RECENT DEVELOPMENTS AND
CERTAIN INVESTMENT CONSIDERATIONS
Recent Rate Case Results
- ------------------------
On May 18, 1993, the Company filed with the MPUC a general base rate
case proposing a $22.8 million, or 32.9%, increase in base revenues.
Subsequently, the Company reduced its revenue request to $17.6 million. On
February 17, 1994, the MPUC issued an order allowing the Company to increase
its base rates by $11.1 million effective March 1, 1994. This represents a
15.9% increase in base rates; however, when recent reductions in fuel and
energy costs (which are billed to customers through the Company's fuel
adjustment clause) are taken into
6
<PAGE>
account, the base rate increase results in an average rate increase of .6%
over rates that were in place a year ago. The reductions in fuel and energy
costs are primarily due to a buy-out in June 1993 of an expensive purchased
power contract with an independent non-utility power producer and to the
substantial completion of amortization of deferred costs accrued in the
period 1987-1990 under contracts with such producers. The authorized rate of
return on common equity in the new rate order is 10.6%. However, the Company
may not earn its authorized return on equity in 1994 since the revenue
allowance in the MPUC order is based on a more optimistic view of sales
growth during 1994 than is anticipated by the Company, and the decision does
not include the impact of the reduction in annual revenue associated with a
recently authorized industrial customer contract or the costs to be
recognized in 1994 relating to the Company's early retirement program, both
of which are discussed below.
Establishment of a Reserve for Certain Proposed Hydroelectric Investments
- -------------------------------------------------------------------------
The Company established a reserve in December 1993 against amounts
invested through 1993 in licensing activities for proposed additional
hydroelectric facilities at two sites on the Penobscot River. The reserve
amounted to $5.6 million after taxes and had an after-tax negative impact on
1993 earnings of $.95 per common share. The reserve was established
primarily because of concern over the effect of capital-intensive projects
such as new hydroelectric facilities on the level of the Company's electric
rates and because of the Company's inability to predict the outcome of
further required licensing and permitting activities. The projects in
question would require a total investment of about $140 million.
Expenditures for ongoing licensing activities for these proposed facilities
are expected to be minimal in 1994, and will be expensed as incurred.
The Effect of Competition on Future Sales, Earnings and Dividend Policy
- -----------------------------------------------------------------------
An important factor which will impact the Company's future profitability
is the infusion of competition into the electric utility business in the
United States. As utilities adjust to competition their ability to compete
on price becomes increasingly important. Maine utilities, including the
Company, have been experiencing increases in their costs as a result of legal
obligations to purchase power from independent non-utility power producers,
policies regarding utility-financed conservation and demand-side management,
expenditures for low income assistance subsidies, and various other mandates.
These costs have translated into higher rates to customers. Over the last
six years, Maine's electric rates, on average, have increased faster than the
average electric rates in New England, exclusive of Maine. Maine's rates had
been substantially lower, on average, than elsewhere in New England, but with
the rate of increase experienced recently, the average rate in Maine is now
just below the New England average. The Company's average rates are about
equal to the New England average.
As a result of the impact of the foregoing, competition for the electric
customers' business in Maine is keen. Other utilities that purchase
electricity from Maine utilities have access to the competitive power supply
markets, which is causing Maine's utilities to reduce prices to those
customers or lose the business altogether. Although retail electric
customers in Maine are generally unable to purchase directly from other
electricity suppliers under current law, customers are increasingly turning
to alternative methods of providing the desired end-use, or are otherwise
curtailing their purchases of electric energy. In order to meet the
competition for existing business, the Company is having to negotiate prices
for customers that have competitive alternatives for their energy needs or
that would otherwise leave the system.
In the near term, the necessity to reduce prices to retain sales causes
a shortfall in revenues needed to satisfy the Company's overall
revenue requirement. In order to avoid an adverse impact on earnings, this
revenue shortfall must be made up by adjusting rates to other customers, or
by increasing sales, or some combination thereof. The Company believes the
MPUC will allow rate adjustments to account for this impact as necessary as
long as the Company has prudently managed this competitive factor, although
public resistance to rate increases and the possibility of municipalization
of electric service (a practice that is not widespread in Maine) are likely
to act as a constraint in making these adjustments. In the longer term, the
Company believes it could perform successfully in a competitive market,
because despite the Company's current high cost structure the marginal cost
of providing electric service is relatively low. The Company expects that,
if public and regulatory policies were adjusted to permit the active pursuit
of greater sales, the price that could be charged in a competitive
environment, while lower than many of the Company's current rates, would
recover more than the marginal cost of providing the service. The Company
also believes a strategy of greater electrification would, in addition,
produce desirable
7
<PAGE>
environmental quality improvement. If the Company is successful in expanding
its market share with competitive rates, the increased revenue in excess of
marginal cost will enhance earnings and offset the need for other rate
increases. In addition, alternative regulatory methods, which are in the
early stages of exploration at the MPUC, could mitigate the impact on
earnings and accommodate greater pricing flexibility on the part of
utilities.
Under current regulatory policies, the Company has only limited
authority to adjust its prices to meet the competition as described above.
However, the Company is pressing for changes in those policies to expand its
pricing flexibility. The Company has negotiated and put into effect a number
of competitive energy rate arrangements, and more negotiations are under way.
Two of those arrangements have provided for the sale of interruptible energy
to major customers of the Company. For the largest customer, LCP Chemicals,
a chemical manufacturer served largely on an
interruptible basis, the Company implemented a contract whereby the price was
reduced substantially. This lost revenue has been incorporated into the
rates of other customers. A second contract was entered into to secure new
revenues from a large pulp and paper company. This customer has historically
generated its own power, and the new contract provides for the capability for
the Company to sell or buy up to 20 MW of interruptible energy and provides
benefits to both the customer and the Company.
More recently, the Company has been negotiating on a case-by-case basis
with customers that have demonstrated that, without rate relief, they will
curtail their purchases from the Company. The MPUC has recently authorized
the Company to enter into a five-year contract (terminable by the customer
with two years' notice) for the supply of power to one of the Company's
largest firm industrial customers at reduced rates. At the same time, the
MPUC issued an accounting order that would mitigate the negative impact on
earnings of a reduced base rate contribution from this customer.
Nevertheless, since these reduced rates were not considered in the Company's
most recent base rate proceeding, the Company expects that the new contract
will reduce the base rate contribution from that customer by about $1 million
annually from historical levels and will negatively affect the earnings
unless the Company can reduce its costs or increase its revenues from other
sources. However, the Company believes that without the contract, its
earnings would have been affected to a significantly greater degree had the
customer opted for its lower cost energy alternatives. In authorizing the
contract, the MPUC specifically reserved for a future proceeding any
determination of the Company's prudence in entering into the arrangement.
The Company believes it can demonstrate this transaction is prudent and in the
best interest of all of its customers.
Another of the Company's largest firm industrial customers recently
contacted the Company seeking rate concessions in order to maintain current
levels of electric purchases. The Company cannot yet assess the likelihood
of rate reductions for that customer.
More generally, the impact of competition poses the challenge of
minimizing rates to the extent possible. This includes aggressive cost-
cutting in all areas, while continuing to improve the quality of service to
customers. Strategies to compete might also include the acceptance of lower
stockholder returns, forbearance from seeking rate increases, and
reconsideration of recovery of various embedded costs. Two priorities being
pursued in 1994 to cut costs and improve efficiency and effectiveness in
providing service to customers are moving toward a centralized telephone
customer service system and implementing bi-monthly meter reading.
Management is also pursuing other cost-containment measures including
implementing an early retirement program in early 1994, reengineering
business processes to provide greater efficiencies, and identifying new areas
of revenue enhancement in an effort to enhance earnings.
Some initiatives to reduce costs and increase competitiveness will have
a short-term cost that must be recognized in order to achieve long-term
savings. One such initiative is the early retirement program, which will
produce long-term savings by reason of a reduction in the workforce, but
which will cause the Company to recognize a cost in the year of
implementation. In connection with the 1994 early retirement program, the
Company expects to record a cost of approximately $1.5 million (before
taxes) in the first quarter of 1994, which will reduce reported earnings for
the quarter by about $.15 per common share after taxes. Some of this
impact will be made up by reduced payroll costs for the remainder of 1994.
The competitive factors discussed above may affect the level and
consistency of common dividend payout for the Company and other electric
utilities. Historically, a secure, geographically protected market and a
reasonably assured ability to adjust rates to cover increases in costs has,
in general, permitted electric utilities to
8
<PAGE>
establish a pattern of common dividend payment continuity at relatively high
payout ratios, reasonably free of volatility, and with an expectation of
consistent growth over time. This, in turn, has facilitated utilities'
efforts to attract, at reasonable cost, the capital to invest in the plant
and equipment necessary to provide utility service at prices explicitly
capped by a return on investment limited by regulation. With the infusion of
competition into the electric utility business, however, the continuity of
dividend payments will be less certain. As electric utilities lose the
ability to increase prices to cover increased costs, dividend policies will
have to depend more heavily on shorter term expectations for sales and
earnings. Additionally, a perception of greater investment risk in the
industry may require an increase in equity ratios and higher retention of
earnings. Therefore, it is likely that more competition in the electric
utility industry will introduce more volatility in dividend payouts than has
historically been the case. Offsetting these uncertainties, however, is the
possibility of growth in electric sales and earnings which may result from
greater pricing flexibility (depending upon MPUC actions) and an increased
emphasis on marketing and cost-control by the Company. However, there can be
no assurance that such growth in electric sales will in fact occur in amounts
sufficient to offset completely the effects of competition or provide the
ability to maintain consistent dividend levels.
Although the Company faces near-term challenges as a result of having
relatively high rates in an increasingly competitive market, and the factors
described above will play a larger role in dividend payment considerations,
the Company does not presently anticipate the need to reduce the level of the
common dividend. This judgment is based on assumptions of at least a modest
increase in sales, the ability of the Company to control operation and
maintenance expenses and capital expenditures, and the feasibility of relatively
modest rate increases in future years. While the Company believes these
assumptions to be reasonable at this time, no assurance can be given that
these assumptions will be accurate or that developments will not change the
prospects for dividend payments. The Company expects that future growth in
earnings and dividends will be derived primarily from the growth in the
business necessary to serve an expanding economy, success in achieving a
larger share of the energy market in a competitive environment, and
management's continued commitment to improving the efficiency and
effectiveness of the Company's operations.
USE OF PROCEEDS
The net proceeds of the shares of Common Stock offered hereby (estimated
to be $12.5 million) will be applied to reduce outstanding short-term debt
incurred primarily to finance construction expenditures, and for other
working capital needs. The Company's short-term debt totalled $38 million at
February 11, 1994 and bore interest at that date at a weighted average annual
rate of 3.6%.
CONSTRUCTION PROGRAM AND FUTURE FINANCING
The Company's construction program consists primarily of extensions and
improvements to its transmission and distribution facilities, capital
improvements to existing generating stations and licensing and relicensing
costs of hydroelectric projects. Construction expenditures amounted to $33.6
million in 1993. Construction expenditures, including allowance for funds
used during construction, are expected to aggregate about $66 million for the
1994-1996 period. It is expected that the Company's net cash flow provided
from operations (after deducting preferred and common stock dividends paid)
will be approximately 60% of construction expenditures over this three-year
period. The balance of funds required are expected to be obtained from bank
borrowings (on an interim basis) and issuances of first mortgage bonds,
preferred stock and additional shares of Common Stock.
Long-term debt and preferred stock sinking fund requirements for 1994
through 1996 total approximately $4.4 million and $3 million, respectively.
An additional $9.3 million is anticipated to be retired as a result of
optional redemption and sinking fund payments during that period.
9
<PAGE>
COMMON STOCK DIVIDENDS AND PRICE RANGE
Future dividends will be dependent upon the Company's earnings,
financial condition, capital requirements and other factors as the Board of
Directors of the Company may deem relevant. See "Recent Developments and
Certain Investment Considerations."
The following table sets forth the high and low sales prices of the
Common Stock as reported by the NYSE
and dividends per share on the Common Stock for the periods indicated.
<TABLE>
<CAPTION>
Dividends
Declared
Fiscal Period High Low Per Share
--------------- -------- ---------- -----------
<S> <C> <C> <C>
1992
First Quarter $18 1/8 $17 1/4 $ .33
Second Quarter 18 1/4 17 1/4 .33
Third Quarter 19 7/8 16 3/4 .33
Fourth Quarter 20 1/4 18 1/4 .33
1993
First Quarter $24 1/8 $17 7/8 $ .33
Second Quarter 23 5/8 19 5/8 .33
Third Quarter 23 1/8 20 7/8 .33
Fourth Quarter 21 3/8 18 1/8 .33
1994
First Quarter $19 $16 3/4 *
(through
March 1, 1994)
</TABLE>
- -----------------------------
* Management currently intends to recommend to the Board of Directors that
the Company declare a regular quarterly dividend on March 21, 1994 of
$.33 per share on the Company's Common Stock, payable on April 20, 1994
to shareholders of record on March 31, 1994. Holders, as of the record
date, of the Common Stock offered hereby will be entitled to receive
this dividend, if declared.
On March 1, 1994, the last reported sale price of the Common Stock as
reported on the NYSE was $ 17 per share. The number of record holders of
the Company's Common Stock was 7,504 as of February 25, 1994.
The Company maintains a Dividend Reinvestment and Common Stock Purchase
Plan ("Plan"), the terms of which are set forth in a separate prospectus.
The Plan provides holders of record of the Company's Common Stock and holders
of the Company's cumulative preferred stock, $100 par value, with a
convenient method of purchasing Common Stock by having their cash dividends
automatically reinvested and/or by making additional cash payments. No
brokerage commissions or service charges are charged to participants for
purchases made under the Plan. The price per share of Common Stock purchased
pursuant to the Plan will be 100% of the average of the high and low sale
prices for the Company's Common Stock as reported by the NYSE on the date
that dividends are paid.
10
<PAGE>
DESCRIPTION OF COMMON STOCK
The following description is a summary of certain provisions with
respect to the Company's Common Stock contained in the Company's Certificate
of Organization and By-Laws. Such summary is qualified in its entirety to
the more detailed provisions of such documents, which have been incorporated
by reference as exhibits to Incorporated Documents described under
"Incorporation of Certain Documents By Reference."
General
The Company's authorized capital stock consists of 7,500,000 shares of
Common Stock, $5 par value, and 400,000 shares of Preferred Stock, $100 par
value. At December 31, 1993, 6,225,394 shares of Common Stock were
outstanding and 197,340 shares of Preferred Stock (in 4 separate series) were
outstanding.
The Common Stock has no conversion rights nor is it subject to any
redemption or sinking fund provisions. The issued and outstanding Common
Stock is, and the additional shares of Common Stock issued hereby will be,
after issuance, fully paid and nonassessable. No Common Stock may be
purchased by the Company when there is an arrearage of dividends on Preferred
Stock.
Dividend Rights
Holders of Common Stock are entitled to participate in dividends as and
when declared by the Company's Board of Directors, provided that all
dividends on the Company's Preferred Stock (which are fully cumulative) have
been paid or provided for to the date of payment of a proposed dividend on
Common Stock. Cash dividends have been declared and paid on Common Stock on
a quarterly basis.
Voting Rights
Holders of Common Stock currently have general voting rights of one-
twelfth of one vote per share. Holders of Preferred Stock have general
voting rights of one vote per share, except for holders of the Company's
8.76% Preferred Stock, which does not carry voting rights except as discussed
below. On issues determined by general voting rights, it would be possible
for votes represented by Preferred Stock to combine with votes represented by
less than a majority of Common Stock to affect the rights of holders of all
Common Stock.
Neither the Common Stock nor the Preferred Stock has cumulative voting
rights.
Holders of Preferred Stock, including holders of the 8.76% Preferred
Stock, voting as a single class, also have the power to elect at any annual
meeting the smallest number of directors necessary to constitute a majority
of the full Board of Directors in the event of a default in the payment of an
amount equal to or exceeding four quarterly dividend payments or in the event
of a failure to make any required sinking fund payment with respect to the
Preferred Stock, in such case which is in existence at the time of such
annual meeting. This special voting right expires when any such default or
failure is cured.
The Company's Certificate of Organization contains provisions stating
that: (i) the Board of Directors shall be divided into three classes, as
nearly equal in number as possible, each of which will serve for three years,
with one class being elected each year, (ii) directors may be removed without
cause only with the approval of the holders of at least 80% of the votes
entitled to be cast by the holders of all the then outstanding shares of
Voting Stock of the Company, (iii) any vacancy on the Board of Directors
shall be filled by a majority vote of the Continuing Directors, though less
than a quorum, and (iv) unless recommended by a majority of Continuing
Directors, the foregoing provisions may be amended only by approval of the
holders of at least 80% of the votes entitled to be cast by the holders of
all of the then outstanding shares of voting stock, voting together as a
single class. These provisions also apply in the event of the exercise by
holders of Preferred Stock of the right to elect a majority of the Board of
Directors upon a default or failure to pay dividends or make sinking fund
payments, as described above. If such an election occurs, the Continuing
Directors shall have the right to designate which of the existing directors
will be temporarily displaced by the new directors so elected.
11
<PAGE>
Liquidation Rights
Subject to the rights of senior securities, holders of Common Stock are
entitled to a distribution of assets upon liquidation, according to their
respective shares.
Preemptive Rights
The Company's By-Laws provide that prior to the issuance of any stock
having voting rights, the Company's Board of Directors shall determine
whether such stock will be subject to preemptive rights of the holders of
outstanding stock. No holders of the Company's outstanding Common Stock or
Preferred Stock will be given any such preemptive rights with respect to
shares of Common Stock offered hereby. Except to the extent that the Board
of Directors shall determine as above provided, no preemptive rights shall
apply to any of the stock of the Company.
Provisions Concerning Business Combinations
The Company's Certificate of Organization requires that certain
"Business Combinations," including mergers, consolidations, share exchanges
and sales of a substantial amount of assets, between the Company and a
"Related Person" be approved by the affirmative vote of the holders of at
least 80% of the outstanding Voting Stock unless the transaction is approved
by a majority of the "Continuing Directors" of the Company. A "Related
Person" is defined as any person who is the beneficial owner of (i) 10% or
more of the then outstanding shares of any class of "Voting Stock" (as
hereinafter defined) of the Company or (ii) Voting Stock representing 10% or
more of the votes entitled to be cast by the holders of all the then
outstanding shares of Voting Stock of the Company. "Continuing Directors"
are defined as members of the Board as constituted prior to the time such
Related Person became a Related Person with such additional persons as such
members shall appoint or nominate for election by the stockholders. In
addition to the voting requirements set forth above, the Certificate of
Organization requires that as a result of such business combination,
stockholders of every class or series of outstanding securities of the
Company receive at least a certain minimum price for their shares and that
certain other conditions are satisfied. The Company's "Voting Stock"
consists of all outstanding shares of Capital Stock of the Company having
general voting rights including preferred stock. These provisions along with
the other provisions discussed above under "Voting Rights," may deter
attempts to change control of the Company (by proxy contest, tender offer or
otherwise) and may make more difficult a change in control of the Company
that is opposed by the Company's Board of Directors.
Registrar and Transfer Agent
Chemical Bank and Mellon Securities Trust Company are the Co-Registrars
and Chemical Bank is the Transfer Agent for the Common Stock of the Company.
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the
Underwriters named below have severally agreed to purchase an aggregate
782,500 shares of Common Stock from the Company, each Underwriter having
agreed to purchase the number of shares set forth opposite its name.
Number
Name of Shares
- ---- ---------
Smith Barney Shearson Inc. . . . . . . . . . . . . . . . . .
___________
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . 782,500
===========
12
<PAGE>
The Company has been advised by Smith Barney Shearson Inc. as
Representative of the Underwriters that the Underwriters propose to offer the
shares of Common Stock to the public at the initial public offering price set
forth on the cover page of this Prospectus and to certain dealers at a price
which represents a concession not in excess of $. per share below the
price to the public. The Underwriters may allow, and such dealers may
reallow, a concession not in excess of $. per share to certain other
dealers. The nature of the Underwriters' obligations is such that they are
committed to take and pay for all the shares of Common Stock offered hereby
if any are taken.
The Company has granted an option to the Underwriters, exercisable
within 30 days after the date of the Underwriting Agreement, to purchase up
to a maximum of 117,375 additional shares of Common Stock at the same price
per share that the Company will receive for shares being purchased by the
Underwriters as described above. The Underwriters may purchase such shares
only to cover over-allotments made in connection with the sale of the 782,500
shares shown in the foregoing table. If the Underwriters purchase any of the
additional shares of Common Stock which are subject to the over-allotment
option, each of the Underwriters will be committed, subject to certain
conditions, to purchase approximately the same percentage thereof which the
number of shares to be purchased by it as shown in the foregoing table bears
to 117,375.
The Company has agreed to indemnify the Underwriters against certain
liabilities under the Securities Act of 1933.
The Company has agreed (with certain exceptions) not to sell any Common
Stock for a period of 90 days after the date of this Prospectus without the
prior written consent of the Representative of the Underwriters.
LEGAL MATTERS
Certain legal matters with respect to the Common Stock offered hereby
will be passed upon for the Company by Frederick S. Samp, Esq., General
Counsel of the Company. Certain legal matters will be passed upon for the
Underwriters by Winthrop, Stimson, Putnam & Roberts, New York, New York.
From time to time, Winthrop, Stimson, Putnam & Roberts provides legal
services to the Company.
EXPERTS
The consolidated balance sheets and statements of capitalization as of
December 31, 1993 and 1992 and the consolidated statements of income,
retained earnings and cash flows for each of the three years in the period
ended December 31, 1993, incorporated by reference in this Prospectus, have
been incorporated herein in reliance on the report of Coopers & Lybrand,
independent accountants, given on the authority of that Firm as experts in
accounting and auditing.
13
<PAGE>
No dealer, salesperson or
other person has been
authorized to give any
information or to make any
representations not contained
in this Prospectus and, if
given or made, such
information or representations
must not be relied upon as
having been authorized by the
Company or any of the
Underwriters or by any other
person. This Prospectus does
not constitute an offer to
sell or a solicitation of an
offer to buy a security other
than the shares of Common
Stock offered hereby, nor does
it constitute an offer to sell
or a solicitation of an offer
to buy any of the securities
offered hereby to any person
in any jurisdiction in which
it is unlawful to make such an
offer or solicitation to such
person. Neither the delivery
of this Prospectus nor any
sale made hereunder shall
under any circumstances create
any implication that the
information contained herein
is correct as of any date
subsequent to the date hereof.
__________________
TABLE OF CONTENTS
Page
----
Available Information 2
Incorporation of Certain
Documents by Reference 2
Summary Information 3
Bangor Hydro-Electric Company
Service Area 5
The Company 6
Recent Developments and Certain
Investment Considerations 6
Use of Proceeds 9
Construction Program and Future
Financing 9
Common Stock Dividends and
Price Range 10
Description of Common Stock 11
Underwriting 12
Legal Matters 13
Experts 13
782,500 Shares
Bangor
Hydro-Electric
Company
Common Stock
__________________
PROSPECTUS
, 1994
__________________
Smith Barney Shearson Inc.
14
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Securities and Exchange Commission filing fee . $ 5,295
Costs of printing and engraving* . . 17,000
Accounting fees and expenses* . . . . . . . . . 19,000
Fees and expenses of underwriters' counsel . . 25,000
Fees of Transfer Agent and Registrar . . . . . . . 2,000
Blue sky fees and expenses* . . . . . . . . . . 6,000
NYSE listing fee . . . . . . . . . . . . . . . 2,739
NASD listing fee . . . . . . . . . . . . . . . 2,047
Miscellaneous expenses* . . . . . . . . . . . . 15,919
Total . . . . . . . . . . . . . . . . . . $95,000
=======
- -------------------
* Estimated
Item 15. Indemnification of Directors and Officers by the Registrant
As permitted by the Maine Business Corporation Act, Article VII of the
By-Laws of the Company requires indemnification by the Company of any person
who is or was a director, officer or employee of the Company, or is or was
serving at the request of the Company as a director, officer, trustee,
partner, fiduciary, employee or agent of another enterprise, against
expenses, including attorneys' fees, judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with an action,
suit or proceeding, civil or criminal, administrative or investigative, if he
acted in good faith and in a manner he reasonably believed to be in the best
interests of the Company or, with respect to any criminal action or
proceeding, if he had no reasonable cause to believe his conduct was
unlawful. The indemnification applies in the case of threatened actions and
in the case of actual proceedings where the person being indemnified has been
successful on the merits. Expenses may be advanced by the Company prior to
final disposition of a proceeding, upon certain determinations and with the
understanding that the advance shall be refunded unless it is ultimately
determined that the person is entitled to indemnification. The
indemnification provided by the By-Laws is not exclusive of other rights of
indemnification under any agreement, vote of stockholders, disinterested
directors or otherwise. The Company also maintains insurance for officers
and directors against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. The effect of this insurance is to
indemnify any officer or director of the Company against expenses, including,
without limitation, attorneys' fees, judgments, fines and amounts paid in
settlement, incurred by an officer or director upon a determination that such
person acted in good faith. The premiums for such insurance are paid by the
Company.
Item 16. Exhibits
The following documents are filed as part of this Registration Statement
or incorporated by reference herein:
Exhibit
No. Description of Exhibits
------- -----------------------
1 - Form of Underwriting Agreement.*
4.1 - Form of Common Stock Certificate (Filed as an exhibit to Form
S-2, Reg. No. 33-39181 as Exhibit 4.1).
4.2 - Certificate of Organization of the Company, together with
amendments thereto (Filed as an exhibit to Form S-2, Reg. No.
33-39181 as Exhibit 3.1).
1
<PAGE>
4.3 - Articles of Amendment increasing Company's authorized capital
stock (Filed as an exhibit to Form S-3, Reg. No. 33-62500 as
Exhibit 4.3).
4.4 - By-Laws of the Company (Filed as an exhibit to Form S-3, Reg.
No. 33-62500 as Exhibit 4.4).
5 - Opinion of Frederick S. Samp, Esq., as to securities being
registered.*
23.1 - Consent of Frederick S. Samp, Esq. (Contained in Exhibit 5).*
23.2 - Consent of Coopers & Lybrand, Independent Accountants.*
24.1 - Power of Attorney (See signature page to this Registration
Statement).
------------------------------
* Filed herewith
Item 17. Undertakings
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to directors, officers or
controlling persons of the registrant pursuant to the provisions described
under Item 15 above or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, as amended, each filing of the registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange
Act of 1934 that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(2) For purposes of determining any liability under the Securities
Act of 1933, as amended, the information omitted from the form of
prospectus filed as part of this Registration Statement in reliance upon
Rule 430A and contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) of 497(h) under the Securities Act of
1933, as amended, shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(3) For purposes of determining any liability under the Securities
Act of 1933, as amended, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Bangor, State of Maine on the 2nd
day of March, 1994.
BANGOR HYDRO-ELECTRIC COMPANY
By: /s/ Robert S. Briggs
-------------------------------
Robert S. Briggs
Chairman, President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert S. Briggs, Robert C. Weiser and David
R. Black and each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution for him and his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or their substitutes may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or Amendment thereto has been signed below by the
following persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Robert S. Briggs Chairman, President and Chief March 2, 1994
--------------------------- Executive Officer
Robert S. Briggs (Principal Executive Officer)
/s/ John P. O'Sullivan Vice President - Rinance and March 2, 1994
--------------------------- Administration
John P. O'Sullivan (Principal Financial Officer)
/s/ David R. Black Controller March 2, 1994
--------------------------- (Principal Accounting
David R. Black Officer)
/s/ William C. Bullock, Jr. Director March 2, 1994
---------------------------
William C. Bullock, Jr.
--------------------------- Director March 2, 1994
Jane Bush
/s/ David M. Carlisle Director March 2, 1994
---------------------------
David M. Carlisle
/s/ Alton E. Cianchette Director March 2, 1994
---------------------------
Alton E. Cianchette
/s/ Helen S. Dudman Director March 2, 1994
---------------------------
Helen S. Dudman
/s/ G. Clifton Eames Director March 2, 1994
---------------------------
G. Clifton Eames
/s/ Robert H. Foster Director March 2, 1994
---------------------------
Robert H. Foster
/s/ Carroll R. Lee Director March 2, 1994
---------------------------
Carroll R. Lee
<PAGE> Exhibit 1
782,500 Shares
BANGOR HYDRO-ELECTRIC COMPANY
Common Stock
UNDERWRITING AGREEMENT
----------------------
March ____, 1994
SMITH BARNEY SHEARSON INCORPORATED
As Representative of the Several Underwriters
c/o SMITH BARNEY SHEARSON INCORPORATED
1345 Avenue of the Americas
New York, New York 10105
Ladies and Gentlemen:
Bangor Hydro-Electric Company, a Maine corporation (the "Company"),
proposes to issue and sell an aggregate of 782,500 shares of its common
stock, $5.00 par value per share, to the several Underwriters (defined
below). The Company's common stock, $5.00 par value, is hereinafter referred
to as the "Common Stock" and the 782,500 shares of Common Stock to be issued
and sold to the Underwriters by the Company are hereinafter referred to as
the "Firm Shares." The Company also proposes to sell to the Underwriters,
upon the terms and conditions set forth in Section 2 hereof, up to an
additional 117,375 shares (the "Additional Shares") of Common Stock. The
Firm Shares and the Additional Shares are hereinafter collectively referred
to as the "Shares."
The Company wishes to confirm as follows its respective agreements
with the Representative (defined below) and the other several Underwriters on
whose behalf the Representative is acting, in connection with the several
purchases of the Shares by the Underwriters.
The term "Underwriters," as used herein, shall be deemed to mean
the several persons, firms or corporations named in Schedule I hereto
(including any substituted Underwriters
1
<PAGE>
under the provisions of Section 10) and the term "Representative," a used
herein, shall be deemed to mean the representative or representatives of such
Underwriters by whom or on whose behalf this Underwriting Agreement is
signed. If there shall be only one person, firm or corporation named in said
Schedule I, the term "Underwriters," and the term "Representative," as used
herein, shall mean that person, firm or corporation.
1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-3 under the Act
(the "registration statement"), including a prospectus subject to completion
relating to the Shares. The term "Registration Statement" as used in this
Agreement means the registration statement (including all financial schedules
and exhibits), as amended at the time it became effective. If it is
contemplated, at the time this Agreement is executed, that a post-effective
amendment to the registration statement will be filed and must be declared
effective before the offering of the Shares may commence, the term
"Registration Statement" as used in this Agreement means the registration
statement as so amended by said post-effective amendment. Such term shall
also include Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A. "Rule 424" and "Rule 430A" refer to
such rules and regulations under the Act. "Rule 430A Information" means
information with respect to the Shares and the offering thereof permitted to
be omitted from the Registration Statement when it became effective pursuant to
Rule 430A. The term "Prospectus" as used in this Agreement means the
prospectus in the form included in the Registration Statement, or, if the
prospectus included in the Registration Statement omits information in
reliance on Rule 430A under the Act and such information is included in a
prospectus filed with the Commission pursuant to Rule 424(b) under the Act,
the term "Prospectus" as used in this Agreement means the propectus relating
to the Shares that is first filed pursuant to Rule 424(b). The term
"Preliminary Prospectus" as used in this Agreement means the prospectus
subject to completion in the form included in the registration statement at
the time of the initial filing of the registration statement with the
Commission, and as such prospectus shall have been amended from time to time
prior to the date of the Prospectus. "Effective Date" shall mean each date
that the Registration Statement and any post-effective amendment or
amendments thereto became effective. Any reference in this Agreement to the
registration statement, the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Act, as of the date of the registration statement, the Registration
Statement, such Preliminary Prospectus or the Prospectus, as the
2
<PAGE>
case may be, and any reference to any amendment or supplement to the
registration statement, the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include any
documents filed after such date under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") which, upon filing, are incorporated by
reference therein, as required by paragraph (b) of Item 12 of Form S-3. As
used herein, the term "Incorporated Documents" means the documents which are
incorporated by reference into the registration statement, the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto.
2. Agreements to Sell and Purchase. The Company hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell
to each Underwriter and, upon the basis of the representations, warranties
and agreements of the Company herein contained and subject to all the terms
and conditions set forth herein, each Underwriter agrees, severally and not
jointly, to purchase from the Company, at a purchase price of $_____ per
Share (the "purchase price per Share"), the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto (or such number of
Firm Shares increased as set forth in Section 10 hereof).
The Company also agrees, subject to all the terms and conditions
set forth herein, to sell to the Underwriters, and, upon the basis of the
representations, warranties and agreements of the Company herein contained
and subject to all the terms and conditions set forth herein, the
Underwriters shall have the right to purchase from the Company, at the
purchase price per Share, pursuant to an option (the "over-allotment option")
which may be exercised at any time and from time to time prior to 9:00 p.m.,
New York City time, on the 30th day after the date of the Prospectus (or, if
such 30th day shall be a Saturday or Sunday or a holiday, on the next
business day thereafter when the New York Stock Exchange is open for
trading), up to an aggregate of 117,375 Additional Shares from the Company.
Additional Shares may be purchased only for the purpose of covering over-
allotments made in connection with the offering of the Firm Shares. Upon any
exercise of the over-allotment option, each Underwriter, severally and not
jointly, agrees to purchase from the Company the number of Additional Shares
(subject to such adjustments as the Representative may determine in order to
avoid fractional shares) which bears the same proportion to the number of
Additional Shares to be sold by the Company as the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule I hereto (or such
number of Firm Shares increased as set forth in Section 10 hereof) bears to
the aggregate number of Firm Shares to be sold by the Company.
3. Terms of Public Offering. The Company has been advised by the
Representative that the Underwriters propose to
3
<PAGE>
make a public offering of their respective portions of the Shares as soon
after the Registration Statement and this Agreement have become effective as
in the Representative's judgment is advisable and initially to offer the
Shares upon the terms set forth in the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriters of and payment for the Firm Shares shall be made at the office
of Smith Barney Shearson Incorporated, 1345 Avenue of the Americas, New York, NY
10105, at 10:00 a.m., New York City time, on _________, 1994 (the "Closing
Date"). The place of for the Firm Shares and the Closing Date may be varied
by agreement among the Representative and the Company.
Delivery to the Underwriters of and payment for any Additional
shares to be purchased by the Underwriters shall be made at the
aforementioned office of Smith Barney Shearson Incorporated at such time on
such date (the "Option Closing Date"), which may be the same as the Closing
Date but shall in no event be earlier than the Closing Date nor earlier than
three nor later than ten business days after the giving of the notice
hereinafter referred to, as shall be specified in a written notice from the
Representative on behalf of the Underwriters to the Company of the
Underwriters' determination to purchase a number, specified in such notice,
of Additional Shares. The place of closing for any Additional Shares and the
Option Closing Date for such Shares may be varied by agreement between the
Representative and the Company.
Certificates for the Firm Shares and for any Additional Shares to
be purchased hereunder shall be registered in such names and in such
denominations as the Representative shall request prior to 1:00 p.m., New
York City time, on the third business day preceding the Closing Date or any
Option Closing Date, as the case may be. Such certificates shall be made
available to the Representative in New York City for inspection and packaging
not later than 9:30 a.m., New York City time, on the business day next
preceding the Closing Date or the Option Closing Date, as the case may be.
The certificates evidencing the Firm Shares and any Additional Shares to be
purchased hereunder shall be delivered to the Representative on the Closing
Date or the Option Closing Date, as the case may be, against payment of the
purchase price therefor by certified or official bank check or checks payable
in New York Clearing House (next day) funds to the order of the Company.
5. Agreements of the Company. The Company agrees with the
several Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it
is necessary for a post-effective amendment to the Registration Statement to
be declared effective before the offering of the Shares may commence, the
Company will endeavor to
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cause such post-effective amendment to become effective as soon as possible
and will advise the Representative promptly and, if requested by the
Representative, will confirm such advice in writing, when such post-effective
amendment has become effective.
(b) The Company will advise the Representative promptly and, if
requested by the Representative, will confirm such advice in writing: (i) of
any request by the Commission for any amendment of or a supplement to the
Registration Statement, any Preliminary Prospectus or the Prospectus or for
additional information; (ii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of the
suspension of qualification of the Shares for offering or sale in any
jurisdiction or the initiation or threat to the Company of initiation of any
proceeding for such purpose; and (iii) within the period of time referred to
in paragraph (f) below, of any change in the Company's condition (financial
or other), business, prospects, properties, net worth or results of
operations, or of the happening of any event which makes any statement made
in the Registration Statement or the Prospectus (as then amended or
supplemented) untrue or which requires the making of any additions to or
changes in the Registration Statement or the Prospectus (as then amended or
supplemented) in order to state a material fact required by the Act or the
regulations thereunder to be stated therein or necessary in order to make the
statements therein not misleading, or of the necessity to amend or supplement
the Prospectus (as then amended or supplemented) to comply with the Act or
any other law. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, the Company will
make every reasonable effort to obtain the withdrawal of such order at the
earliest possible time.
(c) The Company will furnish to the Representative, without
charge, (i) two signed copies of the registration statement as originally
filed with the Commission and of each amendment thereto, including the
consolidated financial statements and all exhibits to the registration
statement, (ii) such number of conformed copies of the registration statement
as originally filed and of each amendment thereto as the Representative may
request, (iii) such number of copies of the Incorporated Documents, without
exhibits, as the Representative may request, and (iv) two copies of the
exhibits to the Incorporated Documents.
(d) The Company will not (i) file any amendment to the
Registration Statement or make any amendment or supplement to the
Prospectus of which the Representative shall not previously have been advised
or to which the Representative shall object after being so advised or
(ii) so long as, in the opinion of counsel for the Underwriters, a Prospectus is
required to be delivered in connection with sales by andy Underwriter or
dealer, fule any information, documents or reports pursuant to the
Exchange Act without delivering a copy of such information, documents or
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<PAGE>
reports to the Representative prior to or concurrently with such filing.
(e) Prior to the execution and delivery of this Agreement, the
Company has delivered or will deliver to the Representative, without charge,
in such quantities as the Representative has requested or may hereafter
request, copies of each form of the Preliminary Prospectus. The Company
consents to the use, in accordance with the provisions of the Act and with
the securities or Blue Sky laws of the jurisdictions in which the Shares are
offered by the several Underwriters and by dealers, prior to the date of the
Prospectus, of each Preliminary Prospectus so furnished by the Company.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period, as in the opinion
of counsel for the Underwriters, a prospectus is required by the Act to be
delivered in connection with sales by any Underwriter or dealer, the Company
will expeditiously deliver to each Underwriter and each dealer, without
charge, as many copies of the Prospectus, and of any amendment or supplement
thereto, as the Representative may request. The Company consents to the use
of the Prospectus, and of any amendment or supplement thereto, in accordance
with the provisions of the Act and with the securities or Blue Sky laws of
the jurisdictions in which the Shares are offered by the several Underwriters
and by all dealers to whom Shares may be sold, both in connection with the
offering and sale of the Shares and for such period of time thereafter as the
Prospectus is required by the Act to be delivered in connection with sales by
any Underwriter or dealer. If during such period of time any event shall
occur that in the judgment of the Company or in the opinion of counsel for
the Underwriters is required to be set forth in the Prospectus, as then
amended or supplemented, or should be set forth therein in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary to supplement or amend the
Prospectus (including by way of filing under the Exchange Act any document
which, upon filing, becomes an Incorporated Document) in order to comply with
the Act or any other law, the Company will forthwith prepare and, subject to
the provisions of paragraph (d) of this Section 5, file with the Commission
an appropriate supplement or amendment thereto (or such document) so that the
statements in the Prospectus as so amended or supplemented will not, in the
light of the circumstances under which they were made, be misleading, or so
that the Prospectus will comply with the Act or any other law, and will
expeditiously furnish to the Underwriters and such dealers as the
Representative shall specify, such number of copies thereof as such
Underwriters or dealers may reasonably request. In the event that the
Company and the Representative agree that the Prospectus should be amended or
supplemented, the Company, if requested by the Representative, will promptly
issue a press release announcing or
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<PAGE>
disclosing the matters to be covered by the proposed amendment or supplement.
(g) The Company will cooperate in good faith with the
Representative and with counsel for the Underwriters in connection with the
registration or qualification of the Shares for offering and sale under the
securities or Blue Sky laws of such jurisdictions as the Representative may
designate and will file such consents to service of process or other
documents necessary or appropriate in order to effect such registration or
qualification, will maintain such qualifications in effect for so long as may
be required for the distribution of the Shares and will pay or reimburse the
Underwriters for counsel fees, filing fees and out-of-pocket expenses in
connection with such qualification and review; provided that in no event
shall the Company be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action which would subject it
to service of process in suits, other than those arising out of the offering
or sale of the Shares in any jurisdiction where it is not now so subject or
to pay, or to reimburse the Underwriters for, such counsel fees exceeding
$10,000 or to incur, or to reimburse the Underwriters for, any such fees and
expenses if no Shares are delivered to and purchased by the Underwriters
hereunder because of a default by one or more of the Underwriters.
(h) The Company will make generally available to its security
holders and to the Representative a consolidated earnings statement, which
need not be audited, of the Company and its subsidiaries covering a twelve-
month period commencing after the Effective Date and ending not later than 15
months thereafter, as soon as practicable after the end of such period, which
consolidated earnings statement shall satisfy the provisions of Section 11(a)
of the Act or Rule 158 under the Act.
(i) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to
Section 10 hereof or by notice given by the Representative terminating this
Agreement pursuant to Section 10 or Section 11 hereof) or if this Agreement
shall be terminated by the Underwriters because of any failure or refusal on
the part of the Company to comply with the terms or fulfill any of the
conditions of this Agreement, the Company agrees to reimburse the
Representative for all out-of-pocket expenses (including fees and expenses of
counsel for the Underwriters) incurred by the Representative in connection
herewith.
(j) The Company will apply the net proceeds from the sale of the
Shares to be sold by it hereunder substantially in accordance with the
description set forth in the Prospectus.
(k) The Company will timely file the Prospectus pursuant to Rule
424(b) under the Act and will advise the Representative of the time and
manner of such filing.
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<PAGE>
(l) The Company will not sell, contract to sell or otherwise
dispose of any Common Stock, any securities convertible into or exercisable
or exchangeable for Common Stock, or grant any options or warrants to
purchase Common Stock, except pursuant to this Agreement, or except pursuant
to the Company's Dividend Reinvestment and Common Stock Purchase Plan, for a
period of 90 days after the date of the Prospectus, without the
Representative's prior written consent.
(m) Except as stated in this Agreement and in the Preliminary
Prospectus and Prospectus, the Company has not taken, nor will it take,
directly or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of
the Common Stock to facilitate the sale or resale of the Shares.
(n) The Company will use its best efforts to have the shares of
Common Stock which it agrees to sell under this Agreement listed, subject to
notice of issuance, on the New York Stock Exchange on or before the Closing
Date.
6. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter that:
(a) each Preliminary Prospectus included as part of the
registration statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Act, complied
when so filed in all material respects with the provisions of the Act. The
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus;
(b) the Company and the transactions contemplated by this
Agreement meet the requirements for the use of Form S-3 under the Act. The
registration statement in the form in which it became effective and also in
such form as it may be when any post-effective amendment thereto shall become
effective and the prospectus and any supplement or amendment thereto when
filed with the Commission under the Rule 424(b) under the Act, complied or
will comply in all material respects with the provisions of the Act and did
not or will not at any such times contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, except that this
representation and warranty does not apply to statements in or omissions from
the registration statement or the prospectus made in reliance upon and in
conformity with information relating to any Underwriter furnished to the
Company in writing by or on behalf of any Underwriter through the
Representative expressly for use therein;
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<PAGE>
(c) the Incorporated Documents heretofore filed, when they were
filed (or, if any amendment with respect to any such document was filed, when
such amendment was filed), complied in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder,
any further Incorporated Documents so filed will, when they are filed, comply
in all material respects with the requirements of the Exchange Act and the rules
and regulations thereunder; no such document when if was filed (or, if an
amendment with respect to any such
document was filed, when such amendment was filed), contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to
make the statements therein not misleading; and no such further document, when
it is filed, will contain an untrue statement of a material fact or will
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading;
(d) except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto),
neither the Company nor any of its subsidiaries has incurred any liability or
obligation, direct or contingent, or entered into any transaction, not in the
ordinary course of business, that is material to the Company and its
subsidiaries taken as a whole, and there has not been any change in the
capital stock, or material increase in the short-term debt or long-term debt,
of the Company or any of its subsidiaries, or any material adverse change, or
any development involving or which may reasonably be expected to involve, a
prospective material adverse change, in the condition (financial or other),
business, net worth or results of operations of the Company and its
subsidiaries taken as a whole;
(e) as of the date of this Agreement, the Company has an
authorized capitalization as set forth in the Registration Statement and the
Prospectus; all of the issued and outstanding shares of Common Stock of the
Company have been duly and validly authorized and issued and are fully paid
and non-assessable; the Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Maine, with full power and authority to own, lease and operate its properties
and conduct its business as described in the Registration Statement and the
Prospectus, to execute and deliver this Agreement and to issue and sell the
Shares as herein contemplated;
(f) each of the Company's subsidiaries (individually a "Subsidiary"
and collectively, the "Subsidiaries") has been duly organized and is validly
existing as a corporation in good standing under the laws of its jurisdiction
of incorporation with full power and authority to own, lease and operate its
property and conduct the business in which it is presently engaged;
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<PAGE>
(g) all of the issued and outstanding shares of capital stock of
each of the Subsidiaries, except East Branch Improvement Company, are owned
by the Company or one of the Subsidiaries; all of such shares have been duly
and validly authorized and issued and are fully paid and non-assessable; and
are so owned by the Company free and clear of any pledge, lien, charge,
encumbrance, security interest or other claim; there are no outstanding
rights, subscriptions, warrants, calls, preemptive rights, options or other
agreements of any kind with respect to the common stock of the Subsidiaries,
except East Branch Improvement Company;
(h) the Company and each of its Subsidiaries are duly qualified or
licensed by, and are in good standing in each jurisdiction in which they
conduct their respective businesses and in which the failure, individually or
in the aggregate, to be so licensed or qualified could have a material
adverse effect on the operations, business or condition of the Company and
its Subsidiaries, taken as a whole; and the Company and each of its
Subsidiaries are in compliance in all material respects with the laws,
orders, rules, regulations and directives issued or administered by such
jurisdictions;
(i) the Board of Directors of the Company or a committee thereof
duly authorized by the Board of Directors of the Company has duly adopted
resolutions authorizing the issuance and sale of the Shares by the Company;
the Shares to be sold by the Company, when issued and delivered to the
Underwriters as contemplated hereby, will be duly authorized and validly
issued, fully paid and non-assessable, and free and clear of any pledge,
lien, charge, encumbrance, security interest, preemptive right or other
claim;
(j) the Company has the corporate power and authority to enter
into this Agreement and to issue, sell and deliver the Shares to be sold by
it to the Underwriters as provided herein, and this Agreement has been duly
authorized, executed and delivered by the Company and is a legal, valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as rights to indemnity and contribution
hereunder may be limited by federal or state securities laws;
(k) the Common Stock of the Company, including the Shares,
conforms to the description thereof contained in the Registration Statement
and Prospectus, and the certificates for the Shares are in due and proper form
and the holders of the shares will
not be subject to personal liability by reason of being such holders;
(l) all approvals, authorizations, consents or orders of or filings
with any commission, board, body, authority or or agency required in
connection with the issuance and sale of the
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<PAGE>
Shares as contemplated hereby have been obtained, other than in connection
with the necessary qualification under the securities or blue sky laws of the
various jurisdictions in which the Shares are being offered by the
Underwriters;
(m) neither the Company nor any of its Subsidiaries is in breach
of, or in default under (nor has any event occurred which with notice, lapse
of time, or both would constitute a breach of, or default under) its
respective Certificate of Organization or by-laws, or other organizational
documents, any license, franchise, certificate of public convenience and
necessity, bond, note or any other evidence of indebtedness, indenture,
mortgage, deed of trust, bank loan or credit agreement, lease or any other
agreement or instrument to which the Company or any of its Subsidiaries is a
party or by which any of them or their respective properties may be bound or
affected where such breach or default could have a material adverse effect on
the Company and its Subsidiaries taken as a whole;
(n) the execution, delivery and performance of this Agreement, the
incurrence of the obligations herein set forth and the consummation of the
transactions contemplated hereby will not (i) conflict with, or result in any
breach of or constitute a default under (nor constitute any event which with
notice, lapse of time, or both would constitute a breach of, or default
under), any provisions of the respective Certificate of Organization or by-
laws, or other organizational documents, of the Company or any of its
Subsidiaries or under any provision of any license, franchise, certificate of
public convenience and necessity, bond, note or any other evidence of
indebtedness, indenture, mortgage, deed of trust, bank loan or credit
agreement, lease or any other agreement or instrument to which the Company or
any of its Subsidiaries is a party or by which any of them or their
respective properties may be bound or affected, or under any federal, state,
local or foreign law, regulation or rule or any decree, judgment or order
applicable to the Company or any of its Subsidiaries or (ii) will result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its Subsidiaries pursuant to the
terms of any agreement or instrument to which any of them is a party or by
which any of them may be bound or to which any of the property or assets of
any of them is subject;
(o) the Company and each of its Subsidiaries have all necessary
licenses, franchises, certificates of public convenience and necessity,
authorizations, consents and approvals and have made all necessary filings
required under any federal, state, local or foreign law, regulation or rule
and have obtained all necessary authorizations, consents and approvals from
other persons, in order to own its respective properties and to conduct their
respective businesses except where the failure so to have, have made or have
obtained would not have a material adverse effect on the operations, business
or condition of the Company and its Subsidiaries, taken as a whole; and
neither the Company
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<PAGE>
nor any of its Subsidiaries is in violation of, or in default under, any such
authorization, consent or approval or any federal, state, local or foreign
law, regulation or rule or any decree, order or judgment applicable to the
Company or any of its Subsidiaries where such violation or default could have
a material adverse effect on the operations, business, condition, prospects
or property of the Company and its Subsidiaries, taken as a whole;
(p) except as set forth in the Prospectus, there are no actions,
suits or proceedings pending or, to the best knowledge of the Company,
threatened against the Company or any of its Subsidiaries or any of their
respective properties, at law or in equity, before or by any federal, state,
local or foreign governmental or regulatory commission, board, body,
authority or agency which could result in a judgment, decree or order having
a material adverse effect on the operations, business, condition, prospects
or property of the Company and its Subsidiaries, taken as a whole;
(q) all legal or governmental proceedings, contracts, licenses,
agreements or documents of a character which are required to be filed as
exhibits to the Registration Statement or any Incorporated Document or to be
summarized or described in the Registration Statement or the Prospectus have
been so summarized, described or filed as required;
(r) the consolidated financial statements, together with related
schedules and notes, of the Company and its Subsidiaries included or
incorporated by reference in the
Registration Statement and Prospectus (and
any amendment or supplement thereto) present fairly in all material respects
the financial condition of the Company and its Subsidiaries as of the dates
indicated and the results of operations and the cash flows of the Company and
its Subsidiaries for the periods specified; such consolidated financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis, except as set forth in
the Prospectus, during the periods involved;
(s) no holder of any security of the Company has any right to
require registration of shares of Common Stock or any other security of the
Company because of the filing of the registration statement or consummation
of the transactions contemplated by this Agreement;
(t) Coopers & Lybrand, whose reports on the consolidated financial
statements of the Company and its Subsidiaries have been filed with the
Commission as part of the Registration Statement and the Prospectus (or any
amendment or supplement thereto) or incorporated by reference therein, are
independent public accountants with respect to the Company and its
Subsidiaries as required by the Act; and
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(u) the Company and each Subsidiary are exempt from the provisions
of the Public Utility Holding Company Act of 1935, as amended, other than the
provisions of Section 9(a)(2) thereof, and there are not pending, or to the
knowledge of the Company, contemplated any proceedings or actions (whether
through judicial or administrative review or otherwise) to abrogate or modify
such exemption.
7. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless the Representative and each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages, liabilities and expenses (including reasonable costs
of investigation) arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus or in the Registration Statement or the Prospectus or in any
amendment or supplement thereto, or arising out of or based upon any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages, liabilities or expenses arise out of
or are based upon any untrue statement or omission or alleged untrue
statement or omission which has been made therein or omitted therefrom in
reliance upon and in conformity with the information relating to such
Underwriter furnished in writing to the Company by or on behalf of any
Underwriter through the Representative expressly for use in connection
therewith; provided, however, that the indemnification contained in this
paragraph (a) with respect to any Preliminary Prospectus shall not inure to
the benefit of any Underwriter (or to the benefit of any person controlling
such Underwriter) on account of any such loss, claim, damage, liability or
expense arising from the sale of the Shares by such Underwriter to any person
if a copy of the Prospectus shall not have been delivered or sent to such
person within the time required by the Act and the regulations thereunder,
and the untrue statement or alleged untrue statement or omission or alleged
omission of a material fact contained in such Preliminary Prospectus was
corrected in the Prospectus, provided that the Company has delivered the
Prospectus to the several Underwriters in requisite quantity on a timely
basis to permit such delivery or sending. The foregoing indemnity agreement
shall be in addition to any liability which the Company may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Company, such Underwriter or such
controlling person shall promptly notify the Company and the Company shall
assume the defense thereof, including the employment of counsel and payment
of all fees and expenses. Such Underwriter or any such controlling person
shall have the right to employ separate counsel in any such action, suit or
proceeding and to participate in the defense thereof, but
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the fees and expenses of such counsel shall be at the expense of such
Underwriter or such controlling person unless (i) the Company has agreed in
writing to pay such fees and expenses, (ii) the Company has failed to assume
the defense and employ counsel, or (iii) the named parties to any such
action, suit or proceeding (including any impleaded parties) include both such
Underwriter or such controlling person and the Company
Company and such Underwriter or such controlling person shall have
been advised by its counsel that representation of such indemnified party
and the Company byt the same counsel would be
inappropriate under applicable standards of professional conduct (whether
or not such representation by the same counsel has been
proposed) due to actual or potential differing interests between them (in
which case the Company shall not have the right to assume the defense of such
action, suit or proceeding on behalf of such Underwriter or such controlling
person). It is understood, however, that the Company shall, in connection
with any one such action, suit or proceeding or separate but substantially
similar or related actions, suits or proceedings in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for
the reasonable fees and expenses of only one separate firm of attorneys (in
addition to any local counsel) at any time for all such Underwriters and
controlling persons not having actual or potential differing interests with
the Representative or among themselves, which firm shall be designated in
writing by Smith Barney Shearson Incorporated, and that all such fees and
expenses shall be reimbursed as they are incurred. The Company shall not be
liable for any settlement of any such action, suit or proceeding effected
without its written consent, but if settled with such written consent, or if
there be a final judgment for the plaintiff in any such action, suit or
proceeding, the Company agrees to indemnify and hold harmless any
Underwriter, to the extent provided in the preceding paragraph, and any such
controlling person from and against any loss, claim, damage, liability or
expense by reason of such settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, and any person who controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, to
the same extent as the foregoing indemnity from the Company to each
Underwriter, but only with respect to information relating to such
Underwriter furnished in writing by or on behalf of such Underwriter through
the Representative expressly for use in the Registration Statement, the
Prospectus or any Preliminary Prospectus, or any amendment or supplement
thereto. If any action, suit or proceeding shall be brought against the
Company, any of its directors, any such officer, or any such controlling
person based on the Registration Statement, the Prospectus or any Preliminary
Prospectus, or any amendment or supplement thereto, and in respect of which
indemnity may be sought against any Underwriter pursuant to this paragraph
(c), such Underwriter shall have the rights and duties given to the Company
by
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paragraph (b) above (except that if the Company shall have assumed the
defense thereof such Underwriter shall not be required to do so, but may
employ separate counsel therein and participate in the defense thereof, but
the fees and expenses of such counsel shall be at such Underwriter's
expense), and the Company, its directors, any such officer, and any such
controlling person shall have the rights and duties given to the Underwriters
by paragraph (b) above. The foregoing indemnity agreement shall be in
addition to any liability which the Underwriters may otherwise have.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities or expenses
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other
hand from the offering of the Shares, or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the one hand and the
Underwriters on the other in connection with the statements or omissions that
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the
total underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault of the Company on the one hand and the Underwriters on the
other hand shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company on the one hand or by the Underwriters on the other hand and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined
by a pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses
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<PAGE>
reasonably incurred by such indemnified party in connection with
investigating any claim or defending any such action, suit or proceeding.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price of the Shares underwritten by it and distributed to the public exceeds
the amount of any damages which such Underwriter has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 7 are
several in proportion to the respective numbers of Firm Shares set forth
opposite their names in Schedule I hereto (or such numbers of Firm Shares
increased as set forth in Section 10 hereof) and not joint.
(f) No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under
this Section 7 shall be paid by the indemnifying party to the indemnified
party as such losses, claims, damages, liabilities or expenses are incurred.
The indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company set forth in this Agreement
shall remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Company, its directors or officers, or any
person controlling the Company, (ii) acceptance of any Shares and payment
therefor hereunder, and (iii) any termination of this Agreement. A successor
to any Underwriter or any person controlling any Underwriter, or to the
Company, its directors or officers, or any person controlling the Company,
shall be entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Section 7.
8. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Firm Shares hereunder are
subject to the following conditions:
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(a) If, at the time this Agreement is executed and delivered, it
is necessary for a post-effective amendment to the registration statement to
be declared effective before the offering of the Shares may commence, such
post-effective amendment shall have become effective not later than 5:30
p.m., New York City time, on the date hereof, or at such later date and time
as shall be consented to in writing by the Representative, and all filings,
if any, required by Rules 424 and 430A under the Act shall have been timely
made and prior to the Closing Date the Company shall have provided evidence
satisfactory to the Representative of such timely filing; and no stop order
suspending the effectiveness of the registration statement shall have been
issued and no proceeding for that purpose shall have been instituted or, to
the knowledge of the Company or any Underwriter, threatened by the
Commission, and any request of the Commission for additional information (to
be included in the registration statement or the prospectus or otherwise)
shall have been complied with to the Representative's satisfaction.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition (financial or other),
business, properties, net worth, or results of operations of the Company or
its Subsidiaries not contemplated by the Prospectus, which in the
Representative's opinion, would materially, adversely affect the market for the
Shares, or (ii) andy event or development relating
to or involving the Company or any officer or director of the Company
which makes any statement made in the Prospectus untrue or which, in the
opinion of the Coumpnay and its counsel or the
Underwriters and their counsel, requires the making of any addition to or
change in the Prospectus in order to state a material fact
required by the Act or any other law to be stated therein or necessary in
order to make the statements therein not misleading, if amending or
supplementing the Prospectus to reflect such event or development would, in
the Representative's opinion, adversely affect the market for the Shares.
(c) The Representative shall have received on the Closing Date, or
the Option Closing Date, as the case may be, an opinion of Frederick S. Samp,
Esq., counsel for the Company, dated the Closing Date, or the Option Closing
Date, as the case may be, and addressed to the Representative, to the effect
that:
(i) the Company and each of its Subsidiaries have been duly
organized and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation with
full corporate power and authority to own, lease and operate their
respective properties and to conduct their respective businesses as
described in the Registration Statement and Prospectus (and any
amendment or supplement thereto);
17
<PAGE>
(ii) the Company has the corporate power and authority to
enter into the Agreement and to issue, sell and deliver the Shares to be
sold by it to the Underwriters as provided herein, and the Agreement has
been duly authorized, executed and delivered by the Company and is a
valid, legal and binding agreement of the Company, enforceable against
the Company in accordance with its terms, except as enforcement of
rights to indemnity and contribution hereunder may be limited by Federal
or state securities laws or principles of public policy and subject to
the qualification that the enforceability of the Company's obligations
hereunder may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium, and other laws relating to or
affecting creditors' rights generally, and by general equitable
principles;
(iii) the Company has an authorized capitalization as set forth
in the Registration Statement and Prospectus; the outstanding shares of
Common Stock of the Company have been duly and validly authorized and
issued, and are fully paid, non-assessable and free of statutory and
contractual preemptive rights; the Common Stock of the Company,
including the Shares, conforms in all material respects to the
description thereof contained in the Registration Statement and
Prospectus; the certificates for the Shares are in due and proper form;
and the holders of the Shares will not be subject to personal liability
by reason of being such holders;
(iv) all of the issued and outstanding shares of common stock
of each of the Subsidiaries, except East Branch Improvement Company, are
owned directly by the Company; all of such shares have been duly and
validly authorized and issued and are fully paid and non-assessable and
are so owned free and clear of any pledge, lien, charge, encumbrance,
security interest or other claim; there are no outstanding rights,
subscriptions, warrants, calls, preemptive rights, options or other
agreements of any kind with respect to the common stock of the
Subsidiaries, except East Branch Improvement Company;
(v) the Shares, when issued and delivered to and paid for by
the Underwriters, will be duly and validly authorized and issued and
will be fully paid and non-assessable, and free of statutory and
contractual preemptive rights;
(vi) the Company and each of its Subsidiaries are duly
qualified or licensed in each jurisdiction in which they conduct their
respective businesses and in which the failure, individually or in the
aggregate, to be so licensed or qualified could have a material adverse
effect on the operations, business or condition of the Company and its
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<PAGE>
Subsidiaries, taken as a whole, and the Company and each of its
Subsidiaries are duly qualified, and are in good standing, in each
jurisdiction in which they own or lease real property or maintain an
office and in which such qualification is necessary;
(vii) the Registration Statement and all post-effective
amendments, if any, have become effective under the Act and, to the best
knowledge of such counsel after reasonable inquiry, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for the purpose are pending before or
contemplated by the Commission; and any required filing of the Prospectus
pursuant to Rule 424(b) has been made in accordance with Rule 424(b);
(viii) neither the Company nor any of its Subsidiaries is in
breach of, or in default under (nor has any event occurred which with
notice, lapse of time, or both would constitute a breach of, or default
under), its respective Certificate of Organization or by-laws, or other
organizational documents, any license, franchise, certificate of public
convenience and necessity, bond, note or any other evidence of
indebtedness, indenture, mortgage, deed of trust, bank loan, credit
agreement, lease or other material agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which any of them or
their respective properties may be bound or affected where such default
could have a material adverse effect on the operations, business or
condition of the Company and its Subsidiaries, taken as a whole, nor is
the Company or any of its Subsidiaries in violation of any law,
ordinance, administrative or governmental rule or regulation applicable
to the Company or any of its Subsidiaries or of any decree of any court
or governmental agency or body having jurisdiction over the Company or
any of its Subsidiaries;
(ix) the Company and each of its Subsidiaries have all
necessary licenses, franchises, certificates of public convenience and
necessity, authorizations, consents and approvals and have made all
necessary filings required under any federal, state, local and foreign
law, regulation or rule and have obtained all necessary authorizations,
consents and approvals from other persons in order to conduct their
respective businesses as described in the Registration Statement and
Prospectus, the absence of which could have a material adverse effect on
the Company and its Subsidiaries, taken as a whole;
(x) all approvals, authorizations, consents or orders of or
filings with any commission, board, body, authority or agency required
in connection with the issuance and sale of the Shares as contemplated
hereby have been obtained in all jurisdictions, except such counsel need
19
<PAGE>
express no opinion as to any necessary qualification under the
securities or blue sky laws of the various jurisdictions in which the
Shares are being offered by the Underwriters;
(xi) the Registration Statement and the Prospectus and any
supplements or amendments thereto (except for the consolidated financial
statements and the notes thereto and the schedules and other financial
and statistical data included therein, as to which such counsel need not
express any opinion) comply as to form in all material respects with the
requirements of the Act; and each of the Incorporated Documents (except
for the consolidated financial statements and the notes thereto and the
schedules and other financial and statistical data included therein, as
to which such counsel need not express any opinion) complies as to form
in all material respects with the Exchange Act and the rules and
regulations of the Commission thereunder;
(xii) the execution, delivery and performance of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby do not and will not conflict with or result in any
breach of, or constitute a default under (nor constitute any event which
with notice, lapse of time, or both, would constitute a breach of or
default under), any provisions of the respective Certificate of
Organization or by-laws, or other organizational documents, of the
Company or any of its Subsidiaries or under any provision of any
license, franchise, certificate of public convenience and necessity,
bond, note or any other evidence of indebtedness, indenture, mortgage,
deed of trust, bank loan, credit agreement, lease or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or
by which any of them or their respective properties may be bound or
affected, or under any federal, state or local law, rule or regulation
applicable to the Company or any of its Subsidiaries, under any federal,
state, local or foreign judgment, order or decree applicable to the
Company or any of its Subsidiaries, or will result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its Subsidiaries;
(xiii) there are no actions, suits or proceedings pending or, to
the knowledge of such counsel, threatened against the Company or any of
its Subsidiaries or any of their respective properties, at law or in
equity or before or by any commission, board, body, authority or agency
which are required to be described in he Registration Statement and
Prospectus (or any amendment or supplement thereto), but counsel, an
unfavorable judgment, decree, or order could have a material adverse
effect on the Company or any of its Subsidiaries; and
20
<PAGE>
(xiv) there are no contracts, licenses, agreements, leases or
documents, of a character which are required to be summarized or
described in the Registration Statement or the Prospectus (or any
amendment or supplement thereto) which have not been so summarized or
described or to be filed as an exhibit to the Registration Statement or
any Incorporated Document that are not described or filed as required,
as the case may be, and any such summary or description and any
references to statements of law or legal conclusions in the Registration
Statement or the Prospectus (or any amendment or supplement thereto) are
accurate and present fairly the information required to be shown.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants of the
Company, and representatives of the Underwriters at which the contents of the
Registration Statement and Prospectus, including review and discussion of the
contents thereof (including review and discussion of the contents of all
Incorporated Documents) and, although such counsel is not passing upon and
does not assume responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement or Prospectus, on the
basis of the foregoing nothing has come to the attention of such counsel that
causes him to believe that the Registration Statement (including the
Incorporated Documents) or any amendment thereto at the time such
Registration Statement or amendment became effective contained an untrue
statement of a material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
or the Prospectus (including any amendments or supplements thereto), as of
its date and as of the Closing Date or Option Closing Date, as the case may
be, contained or contains an untrue statement of a material fact or omitted
or omits to state a material necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading (it
being understood that such counsel need express no opinion with respect to
the consolidated financial statements and schedules and other financial and
statistical data included in the Registration Statement or the Prospectus or
any Incorporated Document).
(d) The Representative shall have received on the Closing Date, or
the Option Closing Date, as the case may be, an opinion of Winthrop, Stimson,
Putnam & Roberts, counsel for the Underwriters, dated the Closing Date, or
the Option Closing Date, as the case may be, with respect to the issuance and
sale of the Shares, the Registration Statement, the Prospectus and other
related matters as the Representative may reasonably require, and the Company
shall have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters. Winthrop, Stimson,
Putnam & Roberts may rely upon the opinion of Frederick S. Samp, Esq.
referred to in paragraph (c) above as to all matters of Maine Law.
21
<PAGE>
(e) The Representative shall have received letters addressed to
the Representative and dated the date hereof and the Closing Date from
Coopers & Lybrand, independent certified public accountants, substantially in
the forms heretofore approved by the Representative.
(f)(i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there
shall not have been any change in the capital stock of the Company nor any
material increase in the short-term or long-term debt of the Company (other
than in the ordinary course of business) from that set forth or contemplated
in the Registration Statement or the Prospectus, or any amendment or
supplement thereto; (iii) there shall not have been, since the respective
dates as of which information is given in the Registration Statement and the
Prospectus, or any amendment or supplement thereto, except as may otherwise
be stated in the Registration Statement and Prospectus, or any amendment or
supplement thereto, any material adverse change in the condition (financial
or other), business, prospects, properties, net worth or results of
operations of the Company and its Subsidiaries taken as a whole; (iv) the
Company and its Subsidiaries shall not have any liabilities or obligations,
direct or contingent (whether or not in the ordinary course of business),
that are material to the Company and its Subsidiaries, taken as a whole, other
than those reflected in the Registration
Statement or the Prospectus, or any amendment or supplement thereto; and
(v) all the representations and warranties of the Company contained in this
Agreement shall be true and correct on
and as of the date hereof and on and as of the Closing Date as if made on and
as of the Closing Date, and the Representative shall have
received a certificate, dated the Closing Date and signed by the chief
executive officer and the chief financial officer of the Company (or such
other officers as are acceptable to the Representative), to the effect set
forth in this Section 8(g) and in Section 8(h) hereof.
(g) The Company shall not have failed at or prior to the Closing
Date to have performed or complied with any of its agreements herein
contained and required to be performed or complied with by it hereunder at or
prior to the Closing Date.
(h) The Company shall have furnished or caused to be furnished to
the Representative such further certificates and documents as the
Representative shall have requested.
(i) Prior to commencement of the offering of the Shares, the
Shares shall have been listed, subject to notice of issuance, on the New York
Stock Exchange.
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<PAGE>
All such opinions, certificates, letters and other documents will
be in compliance with the provisions hereof only if they are satisfactory in
form and substance to the Representative and its counsel.
Any certificate or document signed by any officer of the Company
and delivered to Representative or to counsel for the Underwriters, shall be
deemed a representation and warranty by the Company to each Underwriter as to
the statements made therein.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction on and as of any Option
Closing Date of the conditions set forth in this Section 8, except that, if
any Option Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in paragraphs (c) through (g) shall be dated
the Option Closing Date in question and the opinions called for by
paragraphs (c), (d) and (e) shall be revised to reflect the sale of
Additional Shares.
9. Expenses. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by the
Company of its obligations hereunder: (i) the preparation, printing (or
reproduction) and filing with the Commission of the Registration Statement
(including consolidated financial statements and exhibits thereto), each
Preliminary Prospectus, the Prospectus, and each amendment or supplement to
any of them; (ii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of such
copies of the Registration Statement, each Preliminary Prospectus, the
Prospectus, the Incorporated Documents, and all amendments or supplements to
any of them, as may be reasonably requested for use in connection with the
offering and sale of the Shares; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Shares,
including any stamp taxes in connection with the original issuance and sale
of the Shares; (iv) the printing (or reproduction) and delivery of this
Agreement, the preliminary and supplemental Blue Sky Memoranda and all other
agreements, memoranda, correspondence and other documents printed (or
reproduced) and delivered in connection with the offering of the Shares; (v)
the listing of the Shares on the New York Stock Exchange; (vi) the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the several states as provided in Section 5(g)
hereof (including the reasonable fees, expenses and disbursements of counsel
for the Underwriters relating to the preparation, printing (or reproduction)
and delivery of the preliminary and supplemental Blue Sky Memoranda and such
registration and qualification); (vii) the filing fees and the fees and
expenses of counsel for the Underwriters in connection with any filings
required to be made with the National Association of Securities Dealers,
Inc.; (viii) the fees and expenses of the Company's accountants and the
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<PAGE>
fees and expenses of counsel for the Company; and (ix) up to $28,000 for fees
of counsel for the Underwriters in connection with the offering of the
Shares.
10. Effective Date of Agreement. This Agreement shall become
effective: (i) upon the execution and delivery hereof by the parties hereof;
or (ii) if, at the time this Agreement is
executed and delivered, it is necessary for a post-effective amendment to
the registration statement to be declared effective before the offering of the
Share may commence, when notification of the
effectiveness of such post-effective amendment has been released by
the Commission. Until such time as this Agreement shall have
become effective, it may be terminated by the Company, by notifying the
Representative or by the Representative of the several Underwriters notifying
the Company.
If any one or more of the Underwriters shall fail or refuse to
purchase Firm Shares which it or they have agreed to purchase hereunder, and
the aggregate number of Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than
one-tenth of the aggregate number of the Firm Shares, each non-defaulting
Underwriter shall be obligated, severally, in the proportion which the number
of Firm Shares set forth opposite its name in Schedule I hereto bears to the
aggregate number of Firm Shares set forth opposite the names of all
non-defaulting Underwriters or in such other proportion as the Representative
may specify in accordance with Section 20 of the Master Agreement Among
Underwriters of Smith Barney Shearson Incorporated, to purchase the Firm
Shares which such defaulting Underwriter or Underwriters agreed, but failed
or refused, to purchase. If any Underwriter or Underwriters shall fail or
refuse to purchase Firm Shares and the aggregate number of Firm Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Firm Shares and arrangements satisfactory to the Representative and
the Company for the purchase of such Firm Shares by one or more non-
defaulting Underwriters or other party or parties approved by the
Representative and the Company are not made within 36 hours after such
default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case which does not
result in termination of this Agreement, either the Representative or the
Company shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in
the Registration Statement and the Prospectus or any other documents or
arrangements may be effected. Any action taken under this paragraph shall
not relieve any defaulting Underwriter from liability in respect of any such
default of any such Underwriter under this Agreement. The term "Underwriter"
as used in this Agreement includes, for all purposes of this Agreement, any
party not listed in Schedule I hereto who, with the approval of the
Representative and the approval of the
24
<PAGE>
Company, purchases Firm Shares which a defaulting Underwriter agreed, but
failed or refused, to purchase.
Any notice under this Section 10 may be made by telegram, telecopy
or telephone but shall be subsequently confirmed by letter.
11. Termination of Agreement. This Agreement shall be subject to
termination in the Representative's absolute discretion, without liability on
the part of any Underwriter to the Company, by notice to the Company, if
prior to the Closing Date or any Option Closing Date (if different from the
Closing Date and then only as to the Additional Shares), as the case may be,
(i) trading in securities generally on the New York Stock Exchange, American
Stock Exchange or National Association of Securities Dealers Automated
Quotation System shall have been suspended or materially limited, (ii) a
general moratorium on commercial banking activities in New York or Maine
shall have been declared by either federal or state authorities, or (iii)
there shall have occurred any outbreak or escalation of hostilities or other
international or domestic calamity, crisis or change in political, financial
or economic conditions, the effect of which on the financial markets of the
United States is such as to make it, in the Representative's reasonable
judgment, impracticable or inadvisable to proceed with or continue the
offering of the Shares or to enforce contracts for the resale of the Shares
by the Underwriters. Notice of such termination shall be promptly given to
the Company by telegraph, telecopy or telephone and shall be subsequently
confirmed by letter.
12. Information Furnished by the Underwriters. The statements set
forth in the last paragraph on the cover page, the stabilization legend on
the inside front cover, and the first and third paragraphs under the caption
"Underwriting" in any Preliminary Prospectus and in the Prospectus,
constitute the only information furnished by or on behalf of the Underwriters
through the Representative as such information is referred to in Sections
6(b) and 7 hereof.
13. Miscellaneous. Except as otherwise provided in Sections 5, 10
and 11 hereof, notice given pursuant to any of the provisions of this
Agreement shall be in writing and shall be delivered (i) if to the Company,
at the office of the Company at 33 State Street, Bangor, Maine 04401, Attention:
Robert S. Briggs, President and
Chief Executive Officer or (ii) if to the Representative, care of Smith
Barney Shearson Incorporated, 1345 Avenue of the Americas, New York, New York
10105. Attention: Robert L. Gaeckle, Managing Director, Corporate Finance
Division.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company, its directors and officers, and the other
controlling persons referred to in Section 7 hereof and their respective
successors and assigns, to
25
<PAGE>
the extent provided herein, and no other person shall acquire or have any
right under or by virtue of this Agreement. Neither the term "successor" nor
the term "successors and assigns" as used in this Agreement shall include a
purchaser from any Underwriter of any of the Shares in his status as such
purchaser.
14. Applicable Law; Counterparts. This Agreement shall be
governed by and construed in accordance with the laws of the State of New
York applicable to contracts made and to be performed within the State of New
York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
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<PAGE>
Please confirm that the foregoing correctly sets forth the
agreement between the Company and the Representative.
Very truly yours,
BANGOR HYDRO-ELECTRIC COMPANY
By __________________________
Name: Robert S. Briggs
Title: President
Confirmed as of the date
first above mentioned on
behalf of themselves and the
other several Underwriters named
in Schedule I hereto.
SMITH BARNEY SHEARSON INCORPORATED
As Representative of the
Several Underwriters
By SMITH BARNEY SHEARSON INCORPORATED
By ____________________________
Name: Robert L. Gaeckle
Title: Managing Director
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<PAGE>
SCHEDULE I
BANGOR HYDRO-ELECTRIC COMPANY
Number of
Underwriter Firm Shares
- ----------- -----------
Smith Barney Shearson
Incorporated .......
_______
Total....... 782,500
=======
28
Exhibit 5
March 2, 1994
Bangor Hydro-Electric Company
33 State Street
Bangor, Maine 04401
Re: Registration Statement on Form S-3
Registration No. 33-
-----------------------------------
Gentlemen:
This opinion and consent is furnished by me as counsel for Bangor Hydro-
Electric Company (the "Company"), to be included as Exhibit 5 of the
Company's Registration Statement on Form S-3 as filed with the Securities and
Exchange Commission on March 2, 1994. The Registration Statement covers the
registration of 899,875 shares of the Company's Common Stock, $5 par value,
to be issued and sold by the Company pursuant to an underwriting agreement
(the "Underwriting Agreement") between the Company and Smith Barney Shearson
Incorporated.
I have examined such corporate records, certificates and other documents
pertaining to the Company and have reviewed such questions of law as I
consider necessary and appropriate in order to render this opinion. On the
basis of such examination and review, I am of the opinion that:
1. The Company is a legally organized and validly existing corporation under
the laws of the State of Maine.
2. The execution, delivery and performance by the Company of the
Underwriting Agreement has been duly authorized by appropriate corporate
action.
3. The issuance of the 899,875 shares of Common Stock has been duly
authorized, and upon the effectiveness of the Registration Statement and the
sale and delivery pursuant to the Underwriting Agreement of the Common Stock
and the share certificates representing them, the shares of Common Stock will
be validly and legally authorized and issued, fully paid and non-assessable.
I hereby give my consent to the use of my name wherever it appears in the
above mentioned Registration Statement and the related Prospectus, as the
same has been or may hereafter be amended.
Very truly yours,
/s/ Frederick S. Samp
Frederick S. Samp
General Counsel
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement
of Bangor Hydro-Electric Company on Form S-3 of our reports dated February
17, 1994 on our audits of the consolidated financial statements and financial
statement schedules of Bangor Hydro-Electric Company as of December 31, 1993
and 1992, and for the years ended December 31, 1993, 1992 and 1991, which
reports are included in the Company's Current Report on Form 8-K dated March
2, 1994. We also consent to the reference to our firm under the caption
"Exports".
/s/ COOPERS & LYBRAND
Portland, Maine
March 2, 1994
