Registration No. 33-44819
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2
To
Form S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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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 Identification No.)
incorporation or organization)
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)
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Frederick S. Samp, Esq.
Vice-President--Finance and Law
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)
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Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of the Registration Statement.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.
[X]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box.
[ ]
If this Form is filed to register additional securities for an offering
pursuant to rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
[ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering.
[ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box.
[ ]
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PROSPECTUS
BANGOR HYDRO-ELECTRIC COMPANY
119,760 Shares
COMMON STOCK
DIVIDEND REINVESTMENT AND
COMMON STOCK PURCHASE PLAN
Bangor Hydro-Electric Company (the "Company") hereby offers
participation in its Dividend Reinvestment and Common Stock Purchase Plan (the
"Plan"). The Plan is designed to provide holders of the Company's common stock,
$5 par value (the "Common Stock") and cumulative preferred stock, $100 par value
(the "Preferred Stock") with a convenient way to purchase shares of Common Stock
by having their cash dividends automatically reinvested or, if they wish, by
making additional cash payments.
Participants in the Plan may:
o Reinvest all or a portion of cash dividends paid on Common
Stock and Preferred Stock registered in their names or Common
Stock credited to their Plan accounts in shares of Common
Stock.
o Make optional cash payments at any time of at least $25 for
any single investment, up to a maximum of $25,000 per calendar
year.
o Receive, upon written request, certificates for whole shares
of Common Stock credited to their Plan accounts.
o Deposit certificates representing Common Stock into the Plan
for safekeeping.
o Sell shares of Common Stock credited to their Plan accounts
through the Plan.
Shares of Common Stock will be purchased under the Plan, at the option
of the Company, from shares purchased in the open market, newly issued shares or
shares held in the treasury of the
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Company. Any open market purchases will be effected through an Independent Agent
(as hereinafter defined) selected by the Company. The Common Stock is listed on
The New York Stock Exchange.
The purchase price of newly issued or treasury shares of Common Stock
purchased under the Plan for an Investment Date (as hereinafter defined) will be
the average of the daily closing prices of the Common Stock reported on The New
York Stock Exchange Composite Tape as published in The Wall Street Journal for
the five trading days preceding that Investment Date. The price of shares of
Common Stock purchased or sold in the open market will be the weighted average
price per share (adjusted, in the case of shares sold in the open market, for
brokerage commissions, any related service charges and applicable taxes) of the
aggregate number of shares purchased or sold, respectively, in the open market
for the relevant period. There will be no discount from these purchase prices
offered for shares of Common Stock purchased under the Plan. The Company will
pay the costs of administration of the Plan, except that Plan participants
("Participants") will bear the cost of brokerage commissions, any related
service charges and applicable taxes relating to shares of Common Stock sold in
the open market.
This Prospectus contains the provisions of the Plan and, therefore,
this Prospectus should be retained by Participants for future reference.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE 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.
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The date of this Prospectus is January 14, 1997.
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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 Commission's regional
offices at Northwestern Atrium Center, 500 West Madison Street, 14th Floor,
Chicago, Illinois 60661 and at Seven World Trade Center, 13th Floor, New York,
New York 10048. Copies of such material can be obtained at prescribed rates from
the Public Reference Section of the Commission at its principal office at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. In addition,
the Commission maintains a Web site that contains reports, proxy and information
statements and other information regarding reporting companies under the
Exchange Act that file electronically with the Commission (including the
Company) at http:\www.sec.gov. Such reports, proxy statements and other
information concerning the Company may also be inspected at the offices of The
New York Stock Exchange, 20 Broad Street, New York, New York 10005, on which the
Common Stock is listed.
This Prospectus constitutes a part of a registration statement (together
with all amendments and exhibits thereto, the "Registration Statement") filed by
the Company with the Commission under the Securities Act of 1933, as amended
(the "Securities Act"). As permitted by the rules and regulations of the
Commission, this Prospectus omits certain information contained in the
Registration Statement, and reference is made to the Registration Statement for
further information with respect to the Company and the shares of Common Stock
registered under the Registration Statement. Any statements contained herein
concerning the provisions of any document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission are not
necessarily complete, and in each instance reference is made to the copy of such
document so filed. Each such statement is qualified in its entirety by such
reference.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission pursuant to the Exchange Act, are incorporated by reference into this
Prospectus and shall be deemed to be a part hereof:
(1) the Company's Annual Report on Form 10-K for the year ended
December 31, 1995;
(2) the Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996, June 30, 1996 and September 30, 1996; and
(3) the Company's Current Reports on Form 8-K dated January 12,
1996, August 21, 1996, September 6, 1996 and December 26, 1996.
All documents subsequently filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
termination of the offering of Common Stock made by this Prospectus shall be
deemed to be incorporated herein by reference and to be a part hereof from the
date of filing of such documents. Such documents, and the documents referred to
above, are hereinafter referred to as "Incorporated Documents."
Any statement contained herein or 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.
The information relating to the Company contained in this Prospectus
summarizes, is based upon, or refers to, information and financial statements
contained in one or more of the Incorporated Documents; accordingly, such
information contained herein is qualified in its entirety by reference to such
Incorporated 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 Incorporated Documents, other than exhibits
to such documents (unless such exhibits are specifically incorporated by
reference into such documents). Requests for copies of such documents or for
additional information regarding the Plan and its Administrator should be
directed to Bangor Hydro-Electric Company, Stockholder Services Department, P.O.
Box 1599, Bangor, Maine 04401-1599 (telephone 207-990-6936).
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THE COMPANY
The Company, incorporated under the laws of the State of Maine, is a
public utility engaged in the generation, purchase, transmission, distribution
and sale of electric energy, with a service area of approximately 5,275 square
miles having a population of approximately 191,000 people. The Company serves
approximately 103,000 customers in portions of the counties of Penobscot,
Hancock, Washington, Waldo, Piscataquis and Aroostook. The Company also sells
energy to other utilities for resale. In 1995, 29.6% of the Company's kilowatt
hour sales were to residential customers, 29.3% were to commercial customers,
39.9% were to industrial customers and 1.2% were to other customers.
The Company holds a 7% ownership interest in Maine Yankee Atomic Power
Company's nuclear generating facility ("Maine Yankee") which entitles the
Company to purchase an approximately equal amount of the output of Maine Yankee,
an entitlement of approximately 61 megawatts. Maine Yankee, 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.
The Company, along with the major investor-owned utilities of New
England, has been a party to the New England Power Pool Agreement ("NEPOOL")
since 1971. NEPOOL provides for joint planning and operation of generating and
transmission facilities in New England, and governs generating capacity reserve
obligations and provisions regarding the use of major transmission lines. The
Company, as a member of NEPOOL, has a capability responsibility which involves
carrying an allocated share of a New England capacity requirement which is
determined for each period based on certain regional reliability criteria.
The Company is subject to the regulatory authority of the Maine Public
Utilities Commission as to retail rates, accounting, service standards,
territory served, the issuance of securities maturing more than one year after
the date of issuance, certification of generation and transmission projects 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, 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. Other activities of the Company
from time to time are subject to the jurisdiction of various other state and
federal regulatory agencies.
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The principal executive offices of the Company are located at 33 State
Street, Bangor, Maine 04401 where its general telephone number is (207)
945-5621.
CERTAIN SIGNIFICANT FACTORS AFFECTING THE COMPANY
The Company has experienced and will continue to be challenged by
important issues and developments facing the electric industry in general and
the Company in particular. These investment factors include:
o Increasing competitive pressures caused by economic conditions
in the Company's service area and the Company's currently high
rate structure;
o The prospect of rapid changes in the nature of federal and state
regulation affecting the Company which, among other things,
could increase competitive pressures;
o The Company's relatively high level of indebtedness, incurred
primarily to buy out certain high cost power purchase contracts;
and
o The Company's ownership participation in Maine Yankee.
These and other significant factors are more fully discussed in the
Incorporated Documents, which also contain financial statements and other
important financial information concerning the Company.
APPLICATION OF PROCEEDS
Because purchases of Common Stock under the Plan may be satisfied by any
of (i) the purchase of shares of Common Stock in the open market, (ii) the
purchase of new shares of Common Stock issued by the Company or (iii) the
purchase of shares of Common Stock held in the Company's treasury, the number of
shares of Common Stock, if any, that the Company ultimately will sell under the
Plan is not known. If newly issued or treasury shares of Common Stock are
purchased under the Plan, the proceeds from such sales will be used for general
corporate purposes, including, without limitation, the repayment of outstanding
indebtedness of the Company, the costs of the Company's ongoing construction
program, and working capital requirements. The Company will not receive any
proceeds when shares of Common Stock are purchased under the Plan in the open
market.
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THE PLAN
The Plan was originally approved by the Board of Directors of the Company
and implemented in 1978 (such predecessor plan, as amended and restated from
time to time prior to the date of this Prospectus, the "Predecessor Plan"). In
January, 1997, the Board of Directors amended and restated the Predecessor Plan
in its entirety as the Plan, as set forth herein.
The following is the entire text of the Plan:
Purpose
The purpose of the Plan is to provide a convenient way for holders of
Common Stock and Preferred Stock to purchase shares of Common Stock by (i)
reinvesting all or a portion of the cash dividends paid on Common Stock and
Preferred Stock in shares of Common Stock or (ii) making optional cash payments.
Advantages
o Record or registered holders of Common Stock not already
Participants may become Participants by electing to have
dividend payments on all or a portion of their Common Stock
reinvested in Common Stock, by depositing certificates
representing Common Stock into the Plan for safekeeping or by
making an optional minimum cash investment of at least $25 to
purchase Common Stock through the Plan.
o Record or registered holders of Preferred Stock not already
Participants may become Participants by electing to have
dividend payments on all or a portion of their Preferred Stock
reinvested in Common Stock or by making an optional minimum cash
investment of at least $25 to purchase Common Stock through the
Plan.
o In addition to having their dividend payments on Common Stock
and Preferred Stock reinvested in Common Stock, Participants may
invest additional funds in Common Stock through optional cash
investments of at least $25 for any single investment up to
$25,000 per calendar year. Optional cash investments may be made
occasionally or at regular intervals, as the Participant
desires.
o Funds invested in the Plan are fully invested in Common Stock
through the purchase of whole shares and fractions of shares,
and proportionate cash dividends on fractions of shares of
Common Stock are used to purchase additional shares of Common
Stock.
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o The Plan offers a "safekeeping" service whereby Participants may
deposit, free of any service charges, certificates representing
Common Stock held in certificate form into the Plan. Shares of
Common Stock so deposited will be credited to the account of the
Participant (an "Account"). This service can be selected by
Participants without participating in any other feature of the
Plan.
o A Participant may direct the Company, at any time and at no cost
to the Participant, to transfer all or a portion of the shares
of Common Stock credited to its Account (including those shares
of Common Stock deposited into the Plan for safekeeping) to the
Account of another Participant (or to set up an Account for a
new Participant in connection with such transfer) or to send
certificate(s) representing such shares to the Participant or
another designated person or entity.
o Statements of account ("Statements of Account") will be mailed
to a Participant following each month in which such Participant
has cash dividend payments reinvested in Common Stock, makes an
optional cash investment or deposits, transfers or withdraws
shares of Common Stock credited to such Participant's Account.
In addition, annual Statements of Account will be provided to
each Participant whose Account experienced any such activity
during the prior calendar year, showing all transactions
completed during such year, total shares of Common Stock
credited to the Participant's Account and other information
relating to the Participant's Account. Participants will also be
provided a confirmation promptly after each sale of Common Stock
under the Plan. (Note: Participants should retain all statements
for tax purposes.)
o Participants may direct that all or a portion of their dividend
payments on Common Stock and Preferred Stock, including shares
of Common Stock purchased for a Participant under the Plan and
shares of Common Stock deposited into the Plan for safekeeping,
be reinvested in shares of Common Stock. Dividend payments not
reinvested will be paid in the usual manner.
o Participants may sell shares of Common Stock credited to their
Accounts (including those shares of Common Stock deposited into
the Plan for safekeeping) through the Plan, subject to payment
of expenses. (See "--Sales of Common Stock.")
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Disadvantages
o A Participant has no control over the price and, in the case of
shares of Common Stock purchased or sold in the open market by
an Independent Agent, the time, at which Common Stock is
purchased or sold, respectively, for the Participant's Account.
Purchases in the open market may begin on the relevant
Investment Date and ordinarily should be completed within 15
days after that Investment Date. Funds not invested in Common
Stock within 35 days after receipt of optional cash payments, or
30 days after a Dividend Payment Date (as hereinafter defined)
for reinvested dividends, will be promptly returned to
Participants. The Company assumes no responsibility for the
manner of purchases of shares in the open market by the
Independent Agent. Sales by Participants under the Plan will be
made by an Independent Agent as soon as practicable after
processing the sales request. Therefore, Participants bear the
market risk associated with fluctuations in the price of the
Common Stock. (See "--Investment Dates," "--Purchases of Common
Stock" and "--Sales of Common Stock.")
o No interest will be paid on funds held by the Administrator (as
hereinafter defined) pending investment under the Plan.
o Funds for optional cash investments must be received by the
Administrator no later than five business days prior to an
Investment Date to be invested beginning on that Investment
Date. Otherwise, the investment may be held by the Administrator
and invested beginning on the next Investment Date. Funds for
optional cash investments need not be returned to Participants
unless a written request is received by the Administrator no
later than five business days prior to the applicable Investment
Date, or 35 days have passed since receipt. (See "--Optional
Cash Investments.")
o Participants that reinvest cash dividends will be treated for
United States federal income tax purposes as having received a
dividend on the Dividend Payment Date; such dividend may give
rise to a liability for the payment of income tax without
providing Participants with immediate cash to pay such tax when
it becomes due. (See "--Certain Federal Income Tax
Consequences.")
o Shares of Common Stock deposited in a Participant's Account may
not be pledged until the shares are withdrawn from the Plan.
(See "--Certificates for Shares.")
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Administration
Administration of the Plan is conducted by the bank, trust company,
brokerage firm or other entity (including the Company) appointed from time to
time by the Company to act as administrator of the Plan (the "Administrator").
The Administrator's appointment to serve as such may be revoked by the Company
at any time. The Administrator may resign at any time upon reasonable notice to
the Company. If no Administrator is appointed, the Company shall be deemed to be
the Administrator for purposes of the Plan. The First National Bank of Boston is
currently the Administrator. The First National Bank of Boston also serves as
dividend disbursement agent, transfer agent and registrar for the Common Stock
and the Preferred Stock and currently serves as the Independent Agent (as
defined below).
The Administrator is responsible for administering the Plan, receiving
all cash investments made by Participants, maintaining records of each
Participant's Account activities, issuing Statements of Account and
confirmations and performing other duties required by the Plan. The
Administrator or its nominee, as custodian, will hold one or more certificates
registered in its name representing the aggregate number of whole shares of
Common Stock purchased under, or deposited for safekeeping into, the Plan and
credited to Participants' Accounts. The Administrator will forward funds to be
used to purchase shares of Common Stock in the open market to an agent selected
by the Company (an "Independent Agent") that is an "agent independent of the
issuer," as that term is defined in the rules and regulations under the Exchange
Act, and that otherwise satisfies applicable legal requirements (including,
without limitation, Rule 10b-6 and Rule 10b-18 promulgated under the Exchange
Act). In addition, the Administrator will promptly forward sales instructions to
the Independent Agent. The Independent Agent is responsible for purchasing and
selling shares of Common Stock in the open market for Participants' Accounts in
accordance with the provisions of the Plan. Under certain circumstances, the
Administrator may be an Independent Agent.
The officers of the Company shall make such arrangements regarding
compensation, reimbursement of expenses and indemnification of the Administrator
and any Independent Agent as they from time to time deem reasonable and
appropriate. The Administrator and the Company, or either of them, shall make
such arrangements and enter into such agreements with the Independent Agent in
connection with the activities contemplated by the Plan as the Administrator and
the Company, or either of them, deem reasonable and appropriate.
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Participants may contact the Administrator by writing:
The First National Bank of Boston
c/o Boston EquiService, L.P.
P.O. Box 644
Boston, MA 02102-0644
or by telephoning 800-736-3001 or 617-575-3100 between 9 a.m. and 6 p.m., Monday
through Friday, Boston time.
Eligibility
Any individual, corporation, partnership, limited liability company,
joint venture, association, joint-stock company, trust, estate or unincorporated
association ("Person") which is a record or registered holder of Common Stock or
Preferred Stock is eligible to participate in the Plan, provided that (i) such
Person fulfills the prerequisites for participation described below under
"--Enrollment Procedures" and (ii) in the case of any Person that is a citizen
or resident of, or is organized or incorporated under, or has its principal
place of business in, a country other than the United States, its territories
and possessions, such Person provides evidence satisfactory to the Administrator
that its participation would not violate local laws applicable to the Company,
the Plan and the Participant.
Eligible Securities
The only classes of securities of the Company with respect to which
holders may currently elect to reinvest distributions are the Common Stock and
the Preferred Stock. The Company may from time to time or at any time designate,
in its sole discretion, other equity or debt securities of the Company and its
subsidiaries as eligible for participation in the Plan by notifying the
Administrator in writing of such designation.
Enrollment Procedures
Holders of Common Stock currently participating in the Predecessor Plan,
which is being replaced by the Plan (by means of amendment and restatement),
will automatically be Participants in the Plan without sending in a new
enrollment form ("Enrollment Form"). However, a Participant who wishes to change
its participation in any way (e.g., from partial to full reinvestment) must
submit a new Enrollment Form. As described below under "--Reinvestment of Cash
Dividend Payments," the current reinvestment treatment of dividends on each
Participant's shares held under the Plan will continue unless and until a new
Enrollment Form is submitted by the Participant.
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After being furnished with a copy of this Prospectus, eligible applicants
may join the Plan at any time by completing and signing an Enrollment Form in
the manner set forth below. Requests for copies of Enrollment Forms, as well as
copies of other Plan forms and this Prospectus, should be made in writing or by
telephone to the Administrator's address and telephone numbers listed under
"--Administration" above. Record or registered holders of Common Stock or
Preferred Stock should be sure to sign their name(s) on the Enrollment Form
exactly as they appear on their certificates or instruments.
In order to become a Participant in the Plan, an eligible applicant must
complete and sign an Enrollment Form and return it to the Administrator and (i)
elect to have cash dividends paid on Common Stock of which such applicant is the
record or registered holder invested in additional shares of Common Stock (see
"--Reinvestment of Cash Dividend Payments"), (ii) elect to have cash dividends
paid on Preferred Stock of which such applicant is the record or registered
holder invested in Common Stock (see "--Reinvestment of Cash Dividend
Payments"), (iii) deposit certificates representing shares of Common Stock into
the Plan for safekeeping (see "--Safekeeping Service") or (iv) make an optional
cash investment of at least $25 to purchase Common Stock through the Plan (see
"--Optional Cash Investments").
Beneficial owners of Common Stock or Preferred Stock registered in
"street name" (e.g., in the name of a bank, broker, or trustee) may participate
in the Plan with respect to such securities by either (i) transferring those
shares of Common Stock and Preferred Stock that they wish to be subject to the
Plan into their own name and electing to reinvest cash dividend payments on such
shares in shares of Common Stock and/or (in the case of shares of Common Stock)
depositing such shares of Common Stock into the Plan for safekeeping (see
"--Transfer of Common Stock--From a Broker") or (ii) making arrangements with
the record or registered holder (e.g., their bank, broker or trustee, who will
become the Participant) of such securities to participate in the Plan on the
beneficial owner's behalf.
A Person will become a Participant after a properly completed Enrollment
Form has been received and accepted by the Administrator.
Optional Cash Investments
Participants may make optional cash investments by delivering to the
Administrator (a) a completed optional cash investment form which will be
attached to each Participant's Statement of Account or an Enrollment Form and
(b) a personal check or money order payable to The First National Bank of
Boston. PLEASE DO NOT SEND CASH. NO THIRD PARTY CHECKS WILL BE ACCEPTED.
Optional cash investments must be at least $25 for any single investment and may
not exceed $25,000 in the aggregate per calendar year (the "Maximum Amount"),
which
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amount may be invested all at one time. There is no obligation to make any
optional cash investment, and the amount and timing of such investments may vary
from time to time. The Company reserves the right and option, in its sole
discretion, to waive the Maximum Amount limitation.
Participants who wish to make optional cash investments on a regular
basis may contact the Administrator to request an automatic investment
authorization form. This program provides the convenience of automatic monthly
investments deducted directly from your bank account, without the need to mail
checks.
The Company anticipates that an Investment Date will occur once every
month. See "--Investment Dates." Optional cash investments will be invested in
Common Stock beginning on the first Investment Date following their receipt by
the Administrator, provided that such funds are received by the Administrator no
later than five business days prior to an Investment Date to be invested
beginning on that Investment Date. Otherwise, the investment may be held by the
Administrator and invested beginning on the next succeeding Investment Date. See
"--Investment Dates" and "--Purchases of Common Stock." No interest will be paid
on funds held by the Administrator pending investment. Accordingly, Participants
should transmit cash investments so as to reach the Administrator shortly (but
not less than five business days) before an Investment Date.
Upon a Participant's written request, received by the Administrator no
later than five business days prior to the applicable Investment Date, a cash
investment not already invested in Common Stock will be returned to the
Participant. However, no refund of a check or money order will be made until the
funds from such instruments have been actually collected by the Administrator.
Accordingly, such refunds may be significantly delayed. If the written request
to stop investment is received by the Administrator within five business days
prior to an Investment Date, any cash investment then held by the Administrator
will be invested in Common Stock beginning on such Investment Date.
Funds for optional cash investments, pending investment pursuant to the
Plan, will be credited to a Participant's Account and held in a bank account
that will be segregated from any other funds or monies of the Company. Funds not
invested in Common Stock within 35 days of receipt will be promptly returned to
the Participant. All funds are subject to collection by the Administrator of
full face value in U.S. funds. The method of delivery of any funds is at the
election and risk of the Participant and will be deemed received when actually
received by the Administrator. If the delivery is by mail, it is recommended
that the mailing be made sufficiently in advance of the Investment Date.
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Cash dividends paid on shares of Common Stock credited to a Participant's
Account that were purchased through the Plan with optional cash investments will
be reinvested in shares of Common Stock in accordance with the Participant's
reinvestment election designated on an a completed Enrollment Form or an
optional cash investment form, as the case may be. If a Participant does not
make an election, cash dividends paid on shares of Common Stock credited to a
Participant's Account that were purchased through the Plan will be reinvested.
Reinvestment of Cash Dividend Payments
Participants may elect to invest in Common Stock by reinvesting all or a
portion of cash dividends paid on all or a portion of (i) Common Stock and
Preferred Stock registered in their names, (ii) Common Stock purchased through
the Plan and credited to their Accounts and (iii) Common Stock deposited into
the Plan for safekeeping, by designating such election on their Enrollment Form.
If a Participant does not make an election, cash dividends paid on shares of
Common Stock credited to a Participant's Account that were purchased through the
Plan or deposited into the Plan for safekeeping will be reinvested. Participants
electing partial reinvestment of cash dividend payments on any Common Stock or
Preferred Stock must designate the specific shares of Common Stock or Preferred
Stock for which such partial reinvestment is desired and the whole number
thereof. Once a Participant elects reinvestment, cash dividend payments made on
the designated Common Stock and Preferred Stock will be reinvested in shares of
Common Stock. The amount so reinvested will be reduced by any amount that is
required to be withheld under any applicable tax or other statutes. If the
Participant has specified partial reinvestment, that portion of cash dividend
payments not designated for reinvestment will be sent to the Participant by
check in the usual manner or, with regard to the partial reinvestment of cash
dividends on Common Stock credited to the Participant's Account, by electronic
direct deposit, if the Participant has elected the direct deposit option. See
"--Direct Deposit of Dividends Not Reinvested."
Dividends designated by a Participant for reinvestment shall be paid to
the Administrator or its nominee on behalf of such Participant and will be
invested in Common Stock beginning on the date of payment, which is usually the
20th day of January, April, July and October. See "--Investment Dates" and
"--Purchases of Common Stock." Dividend payments not invested in Common Stock
within 30 days of receipt will be promptly returned to the Participant. Cash
dividend payment reinvestment amounts, pending investment pursuant to the Plan,
will be credited to a Participant's Account and held in a bank account that will
be segregated from any other funds or monies of the Company. See "--Investment
Dates." No interest will be paid on such funds held by the Administrator pending
investment.
Under the Predecessor Plan, dividends on all shares of Common Stock
credited to a Participant's Account were fully reinvested, irrespective of such
Participant's previous election
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to participate in the Predecessor Plan on a "full dividend reinvestment,"
"partial dividend reinvestment" or "optional cash only" basis. The current
reinvestment treatment of dividends on each Participant's shares held under the
Plan will continue unless and until a new Enrollment Form is submitted by the
Participant.
Changing Plan Options
A Participant may change his or her Plan options, including (i) changing
the reinvestment levels (i.e., full, partial or none) of cash dividend payments
on Common Stock and Preferred Stock and (ii) changing the designation of Common
Stock and Preferred Stock on which cash dividend payments are subject to
reinvestment, by delivering written instructions or a new Enrollment Form to
that effect to the Administrator. To be effective with respect to a particular
cash dividend payment, any such instructions must be received by the
Administrator on or before the record date relating to such cash dividend
payment. If such instructions are not received by the Administrator on or before
the record date, the instructions will not become effective until after such
dividend is paid. The shares of Common Stock purchased with such funds will be
credited to the Participant's Account. After the Administrator's receipt of
effective option changing instructions, cash dividend payments on Common Stock
and Preferred Stock as to which the reinvestment election has been revoked will
be paid in cash or by electronic direct deposit, if the Participant has elected
the direct deposit option. See "--Direct Deposit of Dividends Not Reinvested."
Direct Deposit of Dividends Not Reinvested
A Participant who elects not to reinvest all cash dividends on shares of
Common Stock and Preferred Stock may receive such nonreinvested cash dividends
by electronic direct deposit to the Participant's predesignated bank, savings or
checking account. To receive such direct deposit of funds, Participants must
complete and sign a Direct Deposit Authorization Form and return it to the
Administrator. Direct deposit will become effective as promptly as practicable
after receipt of a completed Direct Deposit Authorization Form. Changes in
designated direct deposit accounts may be made by delivering a completed Direct
Deposit Authorization Form to the Administrator.
Cash dividends on shares of Common Stock and Preferred Stock not
designated for reinvestment and not directly deposited will be paid by check on
the applicable payment date therefor.
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Investment Dates
An "Investment Date" under the Plan will be (i) each date that cash
dividends are paid on Common Stock (a "Dividend Payment Date") and (ii) in any
month in which no such Dividend Payment Date occurs, the 20th day of such month;
provided that, in each case, if such date is not a business day, the Investment
Date will be the immediately following business day. The Dividend Payment Date
is set by the Board of Directors and historically has been the 20th day of
January, April, July and October. Purchases in the open market will begin on the
relevant Investment Date and may be completed over a period of time. See
"--Purchases of Common Stock."
Dividends are paid as and when declared by the Company's Board of
Directors. There can be no assurance as to the declaration or payment of any
dividend, and nothing contained in the Plan obligates the Company to declare or
pay any such dividend on Common Stock. The Plan does not represent a guarantee
of future dividends.
Purchases of Common Stock
Shares of Common Stock purchased for Participants under the Plan will be
either shares of Common Stock purchased in the open market by an Independent
Agent or newly issued shares or shares held in the treasury of the Company, at
the Company's option. The primary consideration in determining the source of
shares of Common Stock to be used for purchases under the Plan is expected to be
the Company's determination to increase equity capital. As of the first
Investment Date following the date of this Prospectus, shares of Common Stock
purchased for Participants under the Plan will be purchased in the open market
by an Independent Agent. The Company may not change the source of purchases of
the shares (i.e., from the Company or in the open market) more than once in any
three-month period. At any time that shares of Common Stock are purchased for
Participants under the Plan in the open market, the Company will not exercise
its right to change the source of purchases of shares of Common Stock absent a
determination by the Company's Board of Directors or the Chief Financial Officer
that the Company has a need to increase equity capital or there is another valid
reason for such change.
Purchases of shares of Common Stock from the Company, whether
newly-issued or treasury shares, will be made on the relevant Investment Date at
the Company Share Purchase Price for such Investment Date. "Company Share
Purchase Price" means, with respect to any date, the average of the daily
closing prices of the Common Stock reported on The New York Stock Exchange
Composite Tape as published in The Wall Street Journal for the five trading days
preceding such date. In the absence of knowledge of inaccuracy, the
Administrator may rely upon such prices as published in The Wall Street Journal.
In the event no trading is reported for the applicable trading days, the Company
Share Purchase Price may be determined by the Company on the basis of such
market quotations as
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it deems appropriate. No brokerage commissions will be charged on shares
acquired directly from the Company.
Purchases in the open market will begin on the relevant Investment Date
and shall be completed no more than 30 days after that Investment Date, unless
such completion at a later date is necessary or advisable (i) to comply with
applicable law, including, without limitation, any federal securities laws, or
(ii) to maintain an orderly market in the Common Stock. Funds not invested in
Common Stock within 35 days of receipt of optional cash investments, or 30 days
after the applicable Dividend Payment Date in the case of reinvested dividends,
will be promptly returned to Participants. The price of any shares of Common
Stock purchased in the open market for Participants will be the weighted average
price per share (excluding brokerage commissions, any related service charges
and applicable taxes) of the aggregate number of shares purchased for the
relevant Investment Date.
The number of shares (including any fraction of a share rounded to three
decimal places) of Common Stock credited to the Account of a Participant with
respect to a particular Investment Date will be determined by dividing the total
amount of cash dividends and optional cash investments to be invested for such
Participant on such Investment Date by the relevant purchase price per share.
Such shares shall be registered in the name of the Administrator or its nominee
as custodian for the Participants.
With regard to open market purchases of shares of Common Stock by an
Independent Agent, none of the Company, the Administrator (if it is not also the
Independent Agent) or any Participant will have any authority or power to direct
the time or price at which shares may be purchased, the markets on which the
shares are to be purchased (including on any securities exchange, in the
over-the-counter market or in negotiated transactions), or the selection of the
broker or dealer (other than any Independent Agent) through or from whom
purchases may be made, except that the timing of such purchases must be in
accordance with the terms and conditions of the Plan. Open market purchases may
be upon such terms and conditions with respect to price and delivery to which
the Independent Agent (including the Administrator if it is also an Independent
Agent) may agree. The Independent Agent may commingle each Participant's funds
with those of other Participants for the purpose of executing purchase
transactions. Dividend and voting rights will commence upon settlement, whether
shares are purchased from the Company or any other source.
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Safekeeping Service
At the time of enrollment, or at any later time, Participants may take
advantage of the Plan's cost-free safekeeping services. Common Stock held in
certificate form by, and registered in the name of, a Participant may be
deposited into the Plan, to be held by the Administrator or its nominee, by
delivering a completed Enrollment Form and such certificates to the
Administrator. If the delivery is by mail, it is recommended that the
Participant use properly insured, registered mail with return receipt requested.
Such certificates should not be endorsed. The shares of Common Stock so
deposited will be transferred into the name of the Administrator or its nominee,
as custodian, and credited to the Participant's Account. Thereafter, such shares
of Common Stock will be treated in the same manner as shares of Common Stock
purchased under the Plan and credited to the Participant's Account. References
herein to shares of Common Stock credited to a Participant's Account will
include shares of Common Stock deposited into the Plan for safekeeping unless
otherwise indicated. Cash dividends paid on shares of Common Stock credited to a
Participant's Account that were deposited into the Plan for safekeeping will be
reinvested in shares of Common Stock in accordance with the Participant's
reinvestment election designated on its Enrollment Form.
Sales of Common Stock
A Participant may request, at any time, that all or a portion of the
shares of Common Stock credited to its Account be sold by delivering to the
Administrator a completed Sale/Transfer/Withdrawal Request Form. The
Administrator (if it is not also an Independent Agent) will forward the sale
instructions to an Independent Agent as soon as practicable after (i) receipt of
Sale/Transfer/Withdrawal Request Forms relating to a total of at least 100
shares and (ii) at least ten business days have elapsed since the most recent
forwarding of sale instructions to the Independent Agent, except as described in
the following paragraph. (The intent is to forward sale instructions to the
Independent Agent every ten business days, if sale requests totaling at least
100 shares have been received.) An Independent Agent will sell such shares as
soon as practicable (in accordance with stock transfer requirements and federal
and state securities laws) after processing the request and will transmit by
first class mail to the Participant the proceeds of the sale (less brokerage
commissions, any related service charges and applicable taxes). Proceeds of
shares of Common Stock sold through the Plan will be paid to the Participant by
check.
The price of any shares of Common Stock sold in the open market for
Participants will be the weighted average price per share (adjusted for
brokerage commissions, any related service charges and applicable taxes) of the
aggregate number of shares sold for the relevant period. With regard to open
market sales of Common Stock by an Independent Agent, none of the Company, the
Administrator (if it is not also the Independent Agent) or any Participant will
have any authority or power to direct the time or price at which shares may be
sold, the markets on which the shares are
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to be sold (including on any securities exchange, in the over-the-counter market
or in negotiated transactions), or the selection of the broker or dealer (other
than any Independent Agent) through or from whom sales may be made, except that
the timing of such sales must be in accordance with the terms and conditions of
the Plan.
If instructions for the sale of shares of Common Stock on which cash
dividends are not being reinvested are received by the Administrator on or after
the record date relating to a Dividend Payment Date but before the Dividend
Payment Date, the sale will be processed as described above and a separate check
for the dividends will be mailed to the Participant at its address of record
following the Dividend Payment Date or will be directly deposited into the
Participant's designated direct deposit account, as applicable. If instructions
for the sale of shares of Common Stock on which cash dividends are being
reinvested are received by the Administrator on or after the record date
relating to a Dividend Payment Date but before the Dividend Payment Date, the
dividends paid on the Dividend Payment Date will be invested in Common Stock
through the Plan, and (i) if the Participant's sale instructions cover less than
all of the shares of Common Stock credited to its Account, the sale will be
processed as described above and the newly purchased shares will be credited to
its Account or (ii) if the Participant's sale instructions cover all of the
shares of Common Stock credited to its Account, the sale instructions will not
be processed until after the dividends have been invested in Common Stock
through the Plan at which time all of the shares credited to its Account,
including the newly purchased shares, will be sold and the proceeds transmitted
to the Participant. See "--Reinvestment of Dividends on Remaining Shares" for
the reinvestment level of dividends on shares of Common Stock credited to a
Participant's Account after a sale.
Withdrawal of Shares of Common Stock
A Participant may withdraw all or any part (other than fractions) of the
Common Stock credited to its Account from the Plan at any time by delivering to
the Administrator (i) appropriate instructions, if the Participant will be the
record holder of such Common Stock after withdrawal, or (ii) a completed
Sale/Transfer/Withdrawal Request Form and a stock assignment (stock power), if
the Participant will not be the record holder of the Common Stock after
withdrawal. Upon the Administrator's receipt of the proper documentation,
certificates representing the designated Common Stock will be mailed to the
Participant, the Participant's broker or any other Person that the Participant
has designated.
If a completed Sale/Transfer/Withdrawal Request Form with regard to
shares of Common Stock credited to a Participant's Account on which cash
dividends are not being reinvested is received on or after the record date
relating to a Dividend Payment Date but before the Dividend Payment Date, the
withdrawal will be processed as described above and a separate check for the
dividends will be mailed to the Participant at its address of record following
the Dividend Payment Date or will be
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directly deposited into the Participant's designated direct deposit account, as
applicable. If a completed Sale/Transfer/Withdrawal Request Form with regard to
shares of Common Stock credited to a Participant's Account on which cash
dividends are being reinvested is received by the Administrator on or after the
record date relating to a Dividend Payment Date but before the Dividend Payment
Date, the dividends paid on the Dividend Payment Date will be invested in Common
Stock through the Plan, and (i) if the Participant's withdrawal instructions
cover less than all of the shares of Common Stock credited to its Account, the
withdrawal will be processed as described above and the newly purchased shares
will be credited to its Account or (ii) if the Participant's withdrawal
instructions cover all of the shares of Common Stock credited to its Account,
the withdrawal instructions will not be processed until after the dividends have
been invested in Common Stock through the Plan, at which time certificates
representing all of the shares credited to its Account, including the newly
purchased shares, will be sent to the Participant or other designated recipient.
See "--Reinvestment of Dividends on Remaining Shares" for the reinvestment level
of dividends on shares of Common Stock credited to a Participant's Account after
a withdrawal.
Certificates representing whole shares of Common Stock withdrawn from the
Plan will be sent to the Participant at its address of record, or the
Participant's designated recipient, by first class mail as soon as practicable
following the Administrator's receipt of the required documentation, subject to
the provisions of the preceding paragraph. Withdrawal of shares of Common Stock
does not affect reinvestment of cash dividends on the shares withdrawn unless
(i) the Participant is no longer the record holder of such shares, (ii) the
reinvestment is specifically discontinued by the Participant (see "--Changing
Plan Options") or (iii) the Participant terminates its participation in the Plan
(see "--Termination of Participation by a Participant").
Transfer of Common Stock
From a Broker--Owners of Common Stock or Preferred Stock held
beneficially in "street name" may participate in the Plan with respect to such
securities by either (i) transferring those shares that they wish to be subject
to the Plan into their own name and depositing shares of Common Stock into the
Plan for safekeeping and/or electing to reinvest cash dividend payments on such
shares of Common Stock or Preferred Stock in shares of Common Stock or (ii)
making arrangements with the record or registered holder (e.g., their bank,
broker or trustee, who will become the Participant) of such securities to
participate in the Plan on the beneficial owner's behalf. In order to transfer
such securities under clause (i), a Participant must instruct the "street name"
holder to transfer the Common Stock or the Preferred Stock to the Participant
or, in the case of Common Stock to be deposited into the Plan for safekeeping,
to the Administrator for credit to the Participant's Account. If the Person is
already a Participant, the shares of Common Stock and Preferred Stock must be
transferred to the Participant in the same name in which the Participant's
Account is registered. If the Person does not have an Account, participation in
the Plan will commence when the shares of
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Common Stock or Preferred Stock are registered in its name and a properly
completed Enrollment Form is received by the Administrator.
To a Broker--A Participant wishing to transfer all or any part of the
shares of Common Stock credited to its Account to a brokerage account may do so
by delivering to the Administrator a completed Sale/Transfer/Withdrawal Request
Form and a stock assignment (stock power), acceptable to the Administrator. The
completed Sale/Transfer/Withdrawal Request Form must specify the whole number of
shares of Common Stock, if less than all of such shares credited to its Account,
and the name and address of the brokerage firm to which the shares are to be
transferred, including the name of the specific broker handling the account and
the broker's telephone number. The transfer will be handled as described in
"--Withdrawal of Shares of Common Stock" above.
Gift or Transfer of Shares of Common Stock Within Plan--If a Participant
wishes to transfer, whether by gift, private sale or otherwise, ownership of all
or a part of the shares of Common Stock credited to its Account to the Account
of another Participant or to establish by such transfer an Account for a Person
not already a Participant, the Participant may do so by delivering to the
Administrator a completed Sale/Transfer/Withdrawal Request Form and a stock
assignment (stock power). The transfer will be effected as soon as practicable
following the Administrator's receipt of the required documentation, subject to
the provisions of the second paragraph under "--Withdrawal of Shares of Common
Stock." No fraction of a share of Common Stock credited to a Participant's
Account may be transferred unless one whole share is transferred. Requests for
interaccount transfers are subject to the same requirements as for the transfer
of securities generally, including the requirement of a guarantee of signature
on the stock assignment. Stock power forms are available at local banks,
brokerage firms and from the Administrator. See "--Reinvestment of Dividends on
Remaining Shares" for the reinvestment level of dividends on shares of Common
Stock credited to a Participant's Account after a transfer.
Shares of Common Stock so transferred will be credited to the
transferee's Account. Unless a transferee who is already a Participant otherwise
directs the Administrator in writing by completion of an Enrollment Form, the
reinvestment of cash dividends on the transferred shares will be made in
proportion to the reinvestment level (i.e., full, partial or none) of the other
shares of Common Stock credited to the transferee's Account. If the transferee
is not already a Participant, an Account will be opened in the transferee's name
and it may make elections with regard to reinvestment of cash dividends on such
transferred shares and other services provided by the Plan on the Enrollment
Form that is provided to such transferee. If no election is made, cash dividends
will be fully reinvested. Unless otherwise requested by the transferor,
transferees will be sent a Statement of Account showing the transfer of such
shares into their Accounts. The transferor may request that such Statement of
Account be returned to the transferor for personal delivery. The Administrator
shall comply with
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any such request of a transferor relating to Statements of Account as soon as
practicable following receipt of such request.
Reinvestment of Dividends on Remaining Shares
If a Participant is reinvesting cash dividends paid on only a portion of
the shares of Common Stock credited to its Account through the Plan and the
Participant elects to sell, withdraw or transfer a portion of the shares
credited to its Account, cash dividends on the remainder of the shares credited
to its Account, up to the number of shares designated for reinvestment prior to
such sale, withdrawal or transfer, will continue to be reinvested through the
Plan, except where the Participant gives specific instructions to the contrary
in connection with such sale, withdrawal or transfer. For example, if a
Participant who had elected to have cash reinvested through the Plan on 50
shares of a total of 100 shares of Common Stock credited to its Account elected
to sell, withdraw or transfer 25 shares, cash dividends on 50 shares of the
remaining 75 shares credited to its Account would be reinvested through the
Plan. If instead the Participant elected to sell, withdraw or transfer 75
shares, cash dividends on the remaining 25 shares credited to his Account would
be reinvested through the Plan.
Reports to Participants
Statements of Account will be mailed to each Participant following each
month where the Participant has cash dividend payments reinvested in Common
Stock, makes an optional cash investment or deposits, transfers or withdraws
shares of Common Stock. With respect to each any calendar year in which a
Participant's Account experiences any of the foregoing activity, such
Participant will also receive, following such year, a Statement of Account
showing all transactions for the Participant's Account during such year, the
number of shares of Common Stock credited to the Account, the amount of cash
held in the Account and other information for the Account. The Administrator
also will send each Participant a confirmation promptly after each sale of
Common Stock under the Plan. Participants should retain these Statements of
Account and confirmations for tax purposes.
Participants will receive copies of all communications sent to holders of
Common Stock. This may include semi-annual reports to stockholders, annual
reports to stockholders, proxy material, consent solicitation materials and
Internal Revenue Service information, if appropriate, for reporting dividend
income. All notices, Statements of Account and other communications from the
Administrator to Participants will be addressed to the latest address of record.
Therefore, it is important that Participants promptly notify the Administrator
of any change of address.
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Certificates for Shares
A Participant may obtain, free of charge at any time, a certificate for
all or a part of the whole shares of Common Stock credited to its Account upon
written request to the Administrator. Such certificate(s) will be mailed by
first class mail to the Participant's address of record. Any remaining whole or
fractional shares of Common Stock will continue to be credited to the
Participant's Account.
Except for transfers described in "--Transfer of Shares of Common Stock,"
shares of Common Stock credited to a Participant's Account may not be pledged or
assigned. A Participant who wishes to pledge or assign shares of Common Stock
must request that they be withdrawn from the Plan. See "--Withdrawal of Shares
of Common Stock."
Certificates for fractional shares of Common Stock will not be issued to
Participants under any circumstances.
Termination of Participation by a Participant
A Participant may at any time terminate its participation in the Plan by
delivering a completed Sale/Transfer/Withdrawal Request Form to the
Administrator to that effect. Upon the Administrator's receipt of such written
notification, the Participant will receive (i) a certificate for all of the
whole shares of Common Stock credited to its Account, (ii) any dividends and
cash investments credited to its Account and (iii) a check for the cash value of
any fraction of a share of Common Stock credited to its Account. Such fraction
of a share will be valued at the closing price of the Common Stock reported on
The New York Stock Exchange Composite Tape as published in The Wall Street
Journal with respect to the date of receipt of a completed
Sale/Transfer/Withdrawal Request Form. In the event no trading is reported for
the applicable trading day, the value may be determined by the Company on the
basis of such market quotations as it deems appropriate.
Costs
The Company will pay all administrative costs and expenses associated
with the Plan. Participants will bear the cost of brokerage commissions, any
related service charges and applicable taxes incurred on all sales of shares of
Common Stock made in the open market. All of such foregoing costs borne by the
Participants will be included as adjustments to sales prices. It is estimated at
this time (but not assured) that such brokerage commissions will not exceed 15
cents per share and that such service charges will not exceed $10 per
transaction. The Company will bear the cost of brokerage commissions, any
related service charges and applicable taxes on all purchases of shares of
Common Stock made in the open market. There will be no brokerage commissions or
related service charges for shares of Common Stock purchased directly from the
Company.
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Certain Federal Income Tax Consequences
The following discussion is a summary of the material United States
federal income tax consequences of participation in the Plan and does not
purport to be complete. The effect of such tax consequences upon any Participant
will depend upon such Participant's individual circumstances and, together with
the state and local tax consequences of participation, should be discussed by
each Participant with its own tax advisor.
A Participant will be required to include in income for United States
federal income tax purposes amounts reinvested in Common Stock in respect of
dividends on its Common Stock and Preferred Stock subject to the Plan in the
manner that would be required if it had instead received such dividends
directly, even though no such amount is actually received by the Participant in
cash, but instead is applied to the purchase of shares of Common Stock for the
Participant's Account. A Participant whose Account is credited with shares of
Common Stock purchased in the open market with respect to which the Company has
paid the Participant's share of brokerage commissions and service fees will be
treated as having received additional dividend income for United States federal
income tax purposes in the amount of the Participant's share of brokerage
commissions and service fees paid by the Company.
A Participant's tax basis for shares of Common Stock purchased pursuant
to the Plan will be equal to the cost of such shares as discussed above (which
cost in the case of shares purchased in the open market will include amounts in
respect of brokerage commissions, service charges and any applicable taxes).
Such shares of Common Stock will have a holding period beginning on the day
after the shares are allocated to the Participant's Account.
All or a portion of the dividends reinvested in Common Stock pursuant to
the Plan may be a return of capital and, as such, would not be taxable as
ordinary dividend income. Reports will be provided to stockholders that will
indicate if the Company has made a return of capital distribution during the
year. Stockholders receiving a return of capital distribution must reduce their
tax basis in the shares on which such distribution is made by the amount of the
distribution that is a return of capital. If the amount that is a return of
capital exceeds the tax basis, the excess must be reported as capital gain.
A Participant will not realize any taxable income when it receives
certificates for whole shares previously credited to its Account under the Plan.
Gain or loss will be recognized by the Participant when it sells such whole
shares previously received in certificated form, when shares of Common Stock
credited to its Account are sold through the Plan or when cash is paid for any
fractional shares credited to its Account upon termination of participation. The
amount of such gain or loss will be the
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difference between the amount the Participant receives for such shares (or
fractional shares) and its tax basis in those shares (or fractional shares).
Miscellaneous
Stock Splits, Stock Dividends and Rights Offerings
Any shares or other securities representing stock splits or other noncash
distributions on shares of Common Stock credited to the Account of a Participant
will be credited to the Participant's Account. Stock splits, combinations,
recapitalizations and similar events affecting shares of Common Stock credited
to a Participant's Account will be credited to the Participant's Account on a
pro rata basis.
In the event of a rights offering, a Participant will receive rights
based upon the total number of whole shares of Common Stock credited to its
Account.
Voting of Proxies
A Participant will have the exclusive right to exercise all voting rights
respecting shares of Common Stock credited to its Account. The Administrator
will forward all stockholder materials relating to shares of Common Stock
credited to a Participant's Account to the Participant. A Participant may vote
any shares of Common Stock credited to its Account in person or by proxy. A
Participant's proxy card will include shares of Common Stock credited to its
Account and shares of Common Stock registered in its name. Shares of Common
Stock credited to a Participant's Account will not be voted unless the
Participant or its proxy votes them.
Solicitation of the exercise of Participants' voting rights by the
management of the Company and others under a proxy or consent provision
applicable to all holders of Common Stock shall be permitted. The Administrator
shall notify the Participants of each occasion for the exercise of their voting
rights or rights with respect to a tender offer or exchange offer within a
reasonable time before such rights are to be exercised. Such notification shall
include all information distributed to the stockholders of the Company by the
Company regarding the exercise of such rights.
Limitation of Liability
None of the Company, the Administrator (including the Company if it is
acting as such) or any Independent Agent will be liable for any act done in good
faith, or for the good faith omission to act, in connection with the Plan,
including, without limitation, any claim of liability arising out of failure to
terminate a Participant's Account upon such Participant's death or adjudication
of incompetence
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prior to receipt of notice in writing of such death or adjudication of
incompetence, or with respect to the prices at which shares of Common Stock are
purchased or sold for the Participant's Account and the times when such
purchases and sales are made, or with respect to any loss or fluctuation in the
market value after the purchase or sale of such shares.
The Participants should recognize that the Company cannot assure a profit
or protect against a loss on the shares purchased by a Participant.
Interpretation and Regulation of the Plan
The officers of the Company are authorized to take such actions to carry
out the Plan as may be consistent with the Plan's terms and conditions and with
applicable law. The Company reserves the right to interpret and regulate the
Plan as the Company deems desirable or necessary in connection with the Plan's
operations.
Change or Termination of the Plan
The Company reserves the right, in its sole discretion, to suspend,
modify, amend or terminate the Plan at any time, in whole, in part or in respect
of Participants in one or more jurisdictions, without the approval of
Participants, provided that no such action shall decrease the Account of any
Participant. Notice of such suspension, modification, amendment or termination
will be sent to all affected Participants (which notice may be before or after
the fact), who will in all events have the right to withdraw from participation.
Upon any whole or partial termination of the Plan by the Company, each affected
Participant will receive (i) a certificate for all of the whole shares of Common
Stock credited to its Account, (ii) any dividends and cash investments credited
to its Account and (iii) a check for the cash value for any fraction of a share
of Common Stock credited to its Account. Such fraction of a share shall be
valued at the closing price of the Common Stock reported on The New York Stock
Exchange Composite Tape as published in The Wall Street Journal with respect to
the date of termination.
Termination of Participation by the Company
The Company reserves the right, in its sole discretion and for any
reason, to terminate any Participant's participation in the Plan after written
notice mailed to such Participant at the address appearing on the
Administrator's records. The Company anticipates that (without limitation) the
participation of any Participant who does not have at least one whole share of
Common Stock credited to its Account, and does not own any Common Stock or
Preferred Stock for which cash dividend payments are designated for reinvestment
pursuant to the Plan, will be so terminated. A Participant whose participation
has been terminated will receive (i) a certificate for all of the whole shares
of
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Common Stock credited to its Account, (ii) any dividends and cash investments
credited to its Account and (iii) a check for the cash value of any fraction of
a share of Common Stock credited to its Account. Such fraction of a share shall
be valued at the closing price of the Common Stock reported on The New York
Stock Exchange Composite Tape as published in The Wall Street Journal with
respect to the date of termination.
Governing Law; Acceptance of Terms and Conditions
The Plan shall be construed, regulated and administered under the laws of
the State of Maine. Each Participant, by completing an Enrollment Form and as a
condition of participation in the Plan, for itself, its heirs, executors,
administrators, legal representatives and assigns, approves and agrees to be
bound by the provisions of the Plan and any subsequent amendments thereto, and
all actions of the Company and the Administrator thereunder.
PLAN OF DISTRIBUTION
The Common Stock being offered hereby is offered pursuant to the Plan,
the terms of which provide for the purchase of shares of Common Stock, either
newly issued shares or shares held in the treasury of the Company, directly from
the Company, or, at the Company's option, by an Independent Agent on the open
market. Initially, shares of Common Stock purchased for Participants under the
Plan will be purchased in the open market by an Independent Agent. The Plan
provides that the Company may not change its determination regarding the source
of purchases of shares under the Plan more than once in any three-month period.
The Company will pay all administrative costs and expenses associated
with the Plan. Participants will bear the cost of brokerage commissions, any
related service charges and applicable taxes incurred on all sales of shares of
Common Stock made in the open market. The Company will bear the costs of
brokerage commissions, any related service charges and applicable taxes on all
purchases of shares of Common Stock made in the open market. All of such
foregoing costs borne by the Participants will be included as adjustments to
sales prices. It is estimated at this time (but not assured) that such brokerage
commissions will not exceed 15 cents per share and that such service charges
will not exceed $10 per transaction. There will be no brokerage commissions or
related service charges for shares of Common Stock purchased directly from the
Company.
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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 the Registration Statement.
Dividend Rights
Holders of Common Stock are entitled to participate in dividends as and
when declared by the Company's Board of Directors out of funds legally available
therefor, 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 historically have been
declared and paid on Common Stock on a quarterly basis. The Company is currently
subject to certain financing agreements that contain provisions restricting to
various degrees the declaration and payment of dividends on the Company's
capital stock, and may enter into additional such agreements in the future.
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 so as 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, have the power to elect 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.
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.
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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 in respect of shares of Common Stock
issued under the Plan. The By-Laws further provide that, with respect to the
issuance of additional shares of authorized but unissued Preferred Stock, the
Board of Directors may confer special voting rights (including, in the event of
default in payment of dividends, the power to elect a majority of directors) and
the power to consent or object to any matter which the Board of Directors may
specify.
Other Provisions
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.
Subject to the rights described above of the holders of Preferred Stock
to elect directors upon a failure to pay an amount equal to or exceeding four
quarterly periods, 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 the approval of the holders of at
least 80% of the votes entitled to be cast by the holders of all the
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<PAGE>
then outstanding shares of Voting Stock, voting together as a single class.
These provisions, along with the "fair price" provisions discussed above, 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.
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 any additional shares of Common Stock issued under the Plan 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.
The First National Bank of Boston is the Transfer Agent for the Common
Stock and the Preferred Stock of the Company.
EXPERTS
The consolidated balance sheets and the statements of capitalization as
of December 31, 1995 and 1994 and the consolidated statements of income,
retained earnings and cash flows for each of the three years in the period ended
December 31, 1995, incorporated by reference in this Prospectus, have been
incorporated herein in reliance on the report of Coopers & Lybrand, L.L.P.,
independent accountants, given on the authority of that Firm as experts in
accounting and auditing.
LEGAL OPINIONS
Legal matters with respect to the Common Stock offered hereby have been
passed upon by Frederick S. Samp, Esq., who is currently Vice President--Finance
and Law of the Company.
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<PAGE>
INDEMNIFICATION
Section 719 of the Maine Business Corporation Act provides that every
corporation shall have the power to indemnify any officer, director, employee or
agent of the Company against certain liabilities. Section 10 of Article VII of
the By-Laws of the Company provides in pertinent part that every current or
former director, officer, employee or agent of the Company who was, or is a
party or is threatened to be made a party to any threatened, pending or
completed action by reason of the fact he is or was serving in such capacity
shall be indemnified by the Company against expenses, judgments, fees and
settlements reasonably incurred to the full extent permitted by Maine law.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is therefore unenforceable.
The Company also maintains insurance for officers and directors against
certain liabilities, including liabilities under the Securities Act, the
premiums for which are paid by the Company. 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.
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================================================================================
No dealer, salesman or other person has been authorized to give any
information or to make any representations in connection with this offering
other than those contained in this Prospectus, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, any of the securities offered hereby in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of the Company, its subsidiaries or
the Plan since the date of this Prospectus or that the information set forth
herein is correct as of any time subsequent to the date hereof or the date of
filing of any documents incorporated by reference herein.
--------------------------
TABLE OF CONTENTS
Page
----
PROSPECTUS
Available Information ..................................................... 2
Incorporation of Certain Documents
by Reference............................................................ 3
The Company................................................................ 4
Certain Significant Factors Affecting
the Company........................................................... 5
Application of Proceeds.................................................... 5
The Plan................................................................... 6
Plan of Distribution....................................................... 26
Description of Common Stock................................................ 27
Experts.................................................................... 29
Legal Opinions............................................................. 29
Indemnification............................................................ 30
================================================================================
================================================================================
[LOGO]
119,760 Shares
Common Stock
($5 par value)
-------------------
PROSPECTUS
-------------------
DIVIDEND
REINVESTMENT AND
COMMON STOCK
PURCHASE PLAN
January 14, 1997
================================================================================
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Set forth below is an estimate* of the approximate amount of fees and
expenses payable by the Registrant in connection with the issuance and sale of
the Common Stock.
Registration Fee under the Securities
Act of 1933, as amended................................... $ 2,754
Blue Sky Fees and Expenses.................................. 6,000
Printing and Engraving...................................... 7,500
Accounting Fees and Expenses................................ 10,000
Legal Fees and Expenses..................................... 35,000
Miscellaneous Expenses...................................... 20,246
-------
TOTAL.............................................. $81,500
=======
*All items are estimated except the first.
Item 15. Indemnification of Directors and Officers.
As permitted by the Maine Business Corporation Act, Section 10
of Article VII of the ByLaws of the Company requires indemnification by the
Company of any person who is or was a director, officer, employee or agent, or
is or was serving at the request of the Company as a director, officer, 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, 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. 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.
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<PAGE>
Item 16. Exhibits.
The following documents are filed as part of this Registration
Statement or incorporated by reference herein:
4.01(a) Certificate of Organization, together with amendments thereto
(Filed as Exhibit 3.1 to the Company's Registration Statement
on Form S-2 (File No. 33-39181) and incorporated by reference
herein).
4.01(b) Articles of Amendment (Filed as Exhibit 4.3 to the Company's
Registration Statement on Form S-2 (File No. 33-63500) and
incorporated by reference herein).
4.01(c) Articles of Amendment (Filed as Exhibit 3(a) to the Company's
report on Form 10-K for the year ended December 31, 1995 (File
No. 0-505) and incorporated by reference herein).
4.02 By-Laws (Filed as Exhibit 4.4 to the Company's Registration
Statement on Form S-2 (File No. 33-63500) and incorporated by
reference herein).
* 5.01 Opinion of Frederick S. Samp, Esq. as to legality of the
Common Stock offered hereby.
23.01 Consent of Coopers & Lybrand, L.L.P.
* 23.02 Consent of Frederick S. Samp, Esq. (contained in Exhibit
5.01).
* 24.01 Power of attorney (previously filed as Exhibit 25.01)
* Previously filed.
Item 17. Undertakings
The undersigned Registrant hereby undertakes that for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby also undertakes:
(1) to file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of this Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this
Registration Statement; and
(iii) to include any material information with respect
to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such
information in this Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this
Registration Statement;
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<PAGE>
(2) that, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein and the offering of such securities at that time shall
be deemed to be the initial bona fide thereof; and
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has duly caused this amendment to the
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Bangor and State of Maine on the 14th day of
January, 1997.
BANGOR HYDRO-ELECTRIC COMPANY
(Registrant)
By: /s/ FREDERICK S. SAMP
_________________________
Frederick S. Samp
Vice President--Finance and Law
(Principal Financial Officer)
Pursuant to the requirements of the Securities Act of 1933, as amended,
this amendment to the registration statement has been signed below on January
14, 1997 by the following persons in the capacities indicated.
Signatures Title
---------- -----
*
________________________ President and Chairman of the Board of Directors
Robert S. Briggs
/s/ FREDERICK S. SAMP Vice President--Finance and Law (Principal)
________________________ Financial Officer)
Frederick S. Samp
/s/ DAVID R. BLACK
________________________ Controller (Principal Accounting Officer)
David R. Black
*
________________________ Director
William C. Bullock, Jr.
*
________________________ Director
Jane J. Bush
*
________________________ Director
David M. Carlisle
*
________________________ Director
Alton E. Cianchette
________________________ Director
Marion M. Kane
*
________________________ Director
G. Clifton Eames
________________________ Director
Norman A. Ledwin
*
________________________ Director
Carroll R. Lee
*By: /s/ FREDERICK S. SAMP
______________________
Frederick S. Samp
(Attorney-in-Fact)
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<PAGE>
Exhibit 23.01
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Amendment 2 to the
registration statement on Form S-3 (File No. 33-44819) of our report dated
February 1, 1996, on our audits on the financial statements of Bangor
Hydro-Electric Company (the Company), which report appears in the Company's 1995
Form 10-K.
We also consent to the reference to our firm under the caption
"Experts".
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 10, 1997
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