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Registration No.
______________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
__________________
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
__________________
COMMONWEALTH ENERGY SYSTEM
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-1662010
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE MAIN STREET
CAMBRIDGE, MASSACHUSETTS 02142-9150
(Address of principal executive offices) (Zip Code)
617-225-4000
(Registrant's telephone number, including area code)
__________________
James D. Rappoli, Financial Vice President and Treasurer
One Main Street, Cambridge, Massachusetts, 02142-9150
(Name and address of agent for service)
__________________
Approximate Date of Commencement of Proposed Sale to Public:
As soon as practicable after the effective date of this Registration Statement.
__________________
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. / /
CALCULATION OF REGISTRATION FEE
______________________________________________________________________________
Proposed
Proposed Maximum Amount
Amount Maximum Aggregate Of
Title Of Each Class Of To Be Price Offering Registration
Securities To Be Registered Registered Per Unit Price Fee
______________________________________________________________________________
Common Shares of Beneficial
interest, $4 Par Value 1,000,000 Shares $37.94* $37,940,000* $13,082.76
______________________________________________________________________________
*Estimated solely for the purpose of calculating the registration fee.
__________________
This Registration Statement relates to 1,000,000 Common Shares of
Commonwealth Energy System to be registered pursuant to this Registration
Statement and, in addition, pursuant to Rule 429(a), to the 79,079 unsold
Common Shares of the System registered under Registration Statement No. 33-
44161.
__________________
This Registration Statement shall become effective in accordance with
Section 8(a) of the Securities Act of 1933 and Rule 459 thereunder.
______________________________________________________________________________
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PROSPECTUS
Commonwealth Energy System
(A Massachusetts Trust)
DIVIDEND REINVESTMENT AND COMMON SHARE PURCHASE PLAN
Common Shares of Beneficial Interest
($4 Par Value)
__________________
The Dividend Reinvestment and Common Share Purchase Plan (the Plan) of
Commonwealth Energy System (the System) provides holders of its Common Shares
a method of purchasing additional Common Shares without payment of any
brokerage commission or service charge. Any holder of record of Common Shares
is eligible to join the Plan. A participant may withdraw from the Plan at any
time.
Participants in the Plan may:
-- have cash dividends on Common Shares automatically reinvested;
or
-- continue to receive cash dividends and make optional cash
payments which will be invested monthly; or
-- invest cash dividends and make optional cash payments.
The Common Shares offered through the Plan are issued by the System
directly or are purchased on the open market through a Purchasing
Representative chosen by the System. The purchase price for Common Shares
issued by the System directly will be the average of the high and low sale
prices of the System's Common Shares as reported on the New York Stock
Exchange composite transactions tape on the Investment Date, hereinafter
defined, or the next preceding day on which the System's Common Shares were
traded if there is no trade reported on the Investment Date. The purchase
price for Common Shares purchased on the open market will be based on the
prevailing market prices at which the Purchasing Representative acquires the
Common Shares.
This Prospectus relates to 1,000,000 Common Shares of the System
registered pursuant to the Registration Statement of which this Prospectus is
a part and, in addition, pursuant to Rule 429(a) under the Securities Act of
1933, to the 79,079 unsold Common Shares registered under Registration
Statement No. 33-44161. Outstanding Common Shares are, and the Common Shares
offered hereby will be, listed on the New York, Boston and Pacific Stock
Exchanges. The average of the high and low sale prices as listed on the New
York Stock Exchange on September 16, 1994 was $37.94. It is suggested that
this Prospectus be retained for future reference.
Expenses payable by the System in connection with the operation of the
Plan during the next year are estimated to be $25,000.
__________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
__________________
The date of this Prospectus is September 23, 1994.
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No dealer, salesman or any other person has been authorized to give any
information or to make any representations not contained in this Prospectus;
any information or representation not contained herein must not be relied upon
as having been authorized by the System. This Prospectus does not constitute
an offer to sell, or a solicitation of an offer to buy, any securities other
than the securities covered by this Prospectus; nor does it constitute an
offer to sell, or a solicitation of an offer to buy, any of the securities
covered by this Prospectus by the System in any state or to any person to whom
it is unlawful for the System to make such offer or solicitation. Neither the
delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create an implication that there has been no change in the
affairs of the System since the date hereof.
__________________
AVAILABLE INFORMATION
The System is subject to the informational requirements of the Securities
Exchange Act of 1934 and in accordance therewith files reports and other
information with the Securities and Exchange Commission (SEC). Reports, proxy
statements and other information filed by the System can be inspected and
copied at the public reference facilities of the SEC, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, as well as at the following
Regional Offices: 7 World Trade Center, Suite 1300, New York, New York, 10048;
and Northwest Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. The System's Common Shares are listed on the New York,
Boston and Pacific Stock Exchanges and the above material can also be
inspected at their offices. Copies can be obtained by mail at prescribed
rates. Requests should be directed to the SEC's Public Reference Section,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.
Additional updating information with respect to the securities and the
Plan covered herein may be provided in the future to Plan participants by
means of appendices or supplements to the Prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated by reference in this Prospectus the
following documents heretofore filed with the Securities and Exchange
Commission:
1. the System's Annual Report on Form 10-K for the year ended
December 31, 1993;
2. the System's 1994 Proxy Statement and 1993 Financial
Information, dated April 1, 1994, in connection with its Annual
Meeting of Shareholders held on May 5, 1994; and
3. the System's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1994 and June 30, 1994.
All documents filed by the System pursuant to Sections 13(a), 13(c), 14,
or 15(d) of the Securities Exchange Act of 1934 subsequent to the date of this
Prospectus and prior to the termination of the offering of the Common Shares
offered under the registration statement of which this Prospectus is a part
shall be deemed to be incorporated by reference in this Prospectus and to be a
part hereof from the date of filing of such documents.
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Any person receiving a copy of this Prospectus may obtain without charge,
upon written or oral request, a copy of any of the documents incorporated in
this Prospectus by reference, other than exhibits to such documents. Requests
should be made by writing to Shareholder Services, Commonwealth Energy System,
P.O. Box 9150, Cambridge, Massachusetts 02142-9150 or by calling the
appropriate toll-free number listed below:
1-800-447-1183
(outside Massachusetts)
1-800-336-3773
(within Massachusetts)
THE SYSTEM
Commonwealth Energy System (the System), a Massachusetts trust with
offices at One Main Street, Cambridge, Massachusetts 02142-9150 (telephone
number 617-225-4000), is an unincorporated business organization with
transferable shares. The System is organized as a business trust under a
Declaration of Trust dated December 31, 1926, as amended, pursuant to the laws
of Massachusetts. The System is an exempt holding company under the
provisions of the Public Utility Holding Company Act of 1935, holding
investments in common stock of four operating public utility companies and a
steam distribution company: Cambridge Electric Light Company, Canal Electric
Company, Commonwealth Gas Company, Commonwealth Electric Company and
COM/Energy Steam Company. All of these subsidiaries are wholly-owned by the
System. The System also owns all of the capital stock of a services company,
an LNG service company and five real estate trusts.
USE OF PROCEEDS
The net proceeds received upon the direct issue of the System's Common
Shares will be advanced by the System to subsidiary companies. The subsidiary
companies will use the advances for the purpose of financing additions to
property, plant and equipment and for general working capital needs.
Where the System elects to forward the reinvested dividends and/or
optional cash payments to a Purchasing Representative who will purchase Common
Shares of the System on the open market at prevailing market prices, the
System will receive no proceeds to advance to subsidiary companies.
DESCRIPTION OF THE PLAN
The following thirty numbered questions and answers constitute the
provisions of the Plan. Shareholders presently enrolled in the Plan need take
no action to continue to participate in the Plan.
Purpose
1. What is the purpose of the Plan?
The purpose of the Plan is to provide holders of record of Common Shares
of the System with a simple and convenient method of either investing cash
dividends on those Common Shares or making optional cash payments, or both, to
purchase additional Common Shares of the System without payment of any
brokerage commissions, fees, service charges or other expenses. In the event
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that these funds are used to purchase Common Shares directly from the System,
the proceeds will be advanced to subsidiary companies for their continuing
construction programs and for general working capital needs. (See Question 26
for tax consequences of participation in the Plan.)
Advantages
2. What are the advantages of the Plan?
Participants in the Plan may (a) have cash dividends on Common Shares
automatically reinvested, or (b) continue to receive cash dividends on Common
Shares and make optional cash payments which will be invested monthly, or (c)
invest both cash dividends on Common Shares and optional cash payments.
No brokerage commissions, fees, service charges, or other expenses are
paid by participants in connection with purchases under the Plan. Commissions
paid by the Plan in the event of open market purchases by the Purchasing
Representative will be taxable to Plan participants. (See Question 26 for
additional information.)
Full investment of funds is possible under the Plan because the Plan
permits fractional shares, as well as whole shares, to be credited to
participants' accounts. In addition, dividends on whole and fractional shares
held in participants' Plan accounts will be reinvested in additional shares
and such shares will be credited to participants' accounts.
Participants avoid the necessity for safekeeping of certificates for
shares held in their accounts under the Plan. The Statements of Account
provide simplified recordkeeping.
Investment Date and Purchase Price
3. What will be the Investment Date and price of Common Shares purchased
under the Plan?
The Investment Date will be the first day of each month. Cash dividends
on Common Shares will be reinvested as of the first day of each month in which
a dividend is paid (dividends are normally paid on the first day of February,
May, August and November). Optional cash payments will be invested as of the
first day of each month following receipt by the System.
The price of Common Shares issued directly by the System will be the
average of the high and low sale prices as reported on the New York Stock
Exchange composite transactions tape on the Investment Date (or the next
preceding day on which the System's Common Shares were traded if there is no
trade reported on the composite transactions tape on the Investment Date).
The price of Common Shares purchased on the open market will be based on
the prevailing market prices at which the Purchasing Representative acquires
the Common Shares.
No interest will be paid on cash payments received by the System.
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Administration
4. Who administers the Plan for participants?
The System, as agent, administers the Plan for participating
shareholders. The System keeps a continuing record of participants' accounts,
prepares and sends Statements of Account to participants and performs other
duties relating to the Plan, including, when appropriate, the forwarding of
cash dividends on Common Shares and optional cash payments to the Purchasing
Representative. The Purchasing Representative acts on behalf of participants
in buying Common Shares of the System on the open market at prevailing market
prices.
Common Shares purchased under the Plan will be registered in the name of
a nominee of the System.
Participation
5. Who is eligible to participate?
All holders of record of Common Shares of the System are eligible to
participate in the Plan. In order to be eligible to participate, beneficial
owners of Common Shares of the System whose shares are registered in names
other than their own (e.g., in the name of a broker or bank nominee) must
become shareholders of record by having their shares registered in their
names.
6. How does an eligible shareholder participate?
Shareholders of record may join the Plan by signing an Authorization Form
and returning it to Commonwealth Energy System, Dividend Reinvestment Plan,
P.O. Box 9150, Cambridge, Massachusetts 02142-9150. An Authorization Form may
be obtained at any time by written request to the System or by telephoning
Shareholder Services at the appropriate toll-free number listed on page 4 of
this Prospectus.
Shareholders already enrolled in the Plan need take no action to continue
to participate in the Plan.
7. What does the Authorization Form provide?
The signed Authorization Form allows a shareholder to join the Plan and
select a form of participation.
A signed Authorization Form on which the "Dividend Reinvestment and
Optional Cash Payment" box is checked, indicating full participation, directs
the System to reinvest all of the participant's cash dividends on the Common
Shares then or subsequently registered in the shareholder's name and to
receive and invest any optional cash payments the participant chooses to make.
Reinvestment of a portion of a participant's cash dividends on Common Shares
may be accommodated upon request.
A signed Authorization Form on which the "Optional Cash Payment Only" box
is checked, indicating participation through optional cash payments only,
directs the System to continue to send cash dividends on Common Shares to the
shareholder of those Common Shares registered in the shareholder's name and to
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receive and invest only such optional cash payments as the participant chooses
to make.
Regardless of the form of participation elected, the Authorization Form
directs that all dividends paid on Common Shares credited to a participant's
account under the Plan will be reinvested for the participant.
8. When may a shareholder join the Plan?
A shareholder of record of Common Shares may join the Plan at any time.
In order to have cash dividends on Common Shares reinvested, the signed
Authorization Form must be received by the System by the fifteenth of the
month preceding a dividend payment date. Otherwise, the participant will
receive that particular dividend in cash; subsequent dividends, however, will
be reinvested (Common Share dividends are normally paid on the first day of
February, May, August and November).
Cash Dividends
9. How are cash dividends on Common Shares reinvested?
Cash dividends will be used to purchase Common Shares of the System in
either of the following ways as determined by the System:
a.) Open Market Purchases:
The System will forward the cash dividends on Common Shares of Plan
participants to the Purchasing Representative. The Purchasing Representative
will then purchase Common Shares on the open market at prevailing market
prices as promptly as it deems advisable, but no later than the last day of
the month in which a dividend is paid. The purchase will be consistent with
and subject to the Purchasing Representative's fiduciary obligations, market
conditions and the requirements of Federal securities laws. All Common Shares
purchased in this manner will be allocated to the accounts of participants,
and will be deemed invested for income tax purposes on the Investment Date.
b.) Direct Issue Purchases:
On each dividend payment date, the System will apply the dividends on
Common Shares held in a participant's Plan account to the direct issue of
additional Common Shares.
Optional Cash Payments
10. How does the optional cash payment work?
Optional cash payments may be made in varying amounts of at least $10 per
payment but not more than $5,000 per month. There is no obligation to make an
optional cash payment each month.
Optional cash payments will be used to purchase Common Shares of the
System in either of the following ways as determined by the System:
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a.) Open Market Purchases:
On each Investment Date, the System will forward any optional cash
payments received prior to such Investment Date to the Purchasing
Representative. The Purchasing Representative will then purchase Common
Shares of the System on the open market at prevailing market prices as
promptly as it deems advisable but no later than the last day of the month,
consistent with and subject to the Purchasing Representative's fiduciary
obligations, market conditions and the requirements of federal securities
laws. All Common Shares purchased in this manner will be allocated to the
accounts of participants, and will be deemed invested for income tax purposes
on the Investment Date.
If the "Optional Cash Payment Only" box on the Authorization Form is
checked, the System will continue in the usual manner to pay cash dividends on
those Common Shares registered in the participant's name, but the dividends on
Common Shares held in a participant's Plan account will be forwarded to the
Purchasing Representative for investment at prevailing market prices.
b.) Direct Issue Purchases:
On each Investment Date, the System will apply any optional cash payment
received prior to such Investment Date to the direct issue of additional
Common Shares of the System for the account of the participant.
If the "Optional Cash Payment Only" box on the Authorization Form is
checked, the System will continue to pay cash dividends on those Common Shares
registered in the participant's name, but the dividends on Common Shares held
in a participant's Plan account will be applied to the direct issue of Common
Shares from the System for the account of the participant.
11. How are optional cash payments made?
The option to make cash payments will be available to participants each
month. Optional cash payments by a participant must be at least $10 per
payment and may not exceed a total of $5,000 per month. The $10 minimum will
be waived for foreign participants (see Question 27).
Upon enrollment, a participant may make an initial optional cash payment
by enclosing a check with the Authorization Form. A cash payment
acknowledgement form and return envelope (for subsequent optional cash
payments) will be mailed to a participant after each optional cash payment.
Following the investment of the optional cash payment, the System will
also send a current Statement of Account to the participant. Subsequent
optional cash payments may also be made by removing the top portion of the
Statement of Account showing the participant's name, address and account
number and returning the completed form with a check to the System in the
return envelope provided. Checks for optional cash payments must be made
payable to CES-DRP, and mailed to Commonwealth Energy System, Dividend
Reinvestment Plan, P.O. Box 9150, Cambridge, Massachusetts 02142-9150. Please
do not send cash.
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If a participant's written request is received by the System prior to the
Investment Date, any optional cash payment which would otherwise be invested
will be returned to the participant.
12. What will be done with optional cash payments which are received
late?
Optional cash payments received by the System on or after the Investment
Date will be held until the next Investment Date unless the participant
requests that the payment be returned under both the open market or direct
issue methods. No interest will be paid on optional cash payments. In order
to assure that optional cash payments are received by the System prior to any
Investment Date, it is suggested that participants should allow sufficient
time for mail delivery.
Costs
13. Are there any expenses to participants in connection with purchases
under the Plan?
No. There are no brokerage commissions, fees, service charges or other
expenses when Common Shares are purchased through the Plan. All costs of
administration of the Plan are to be paid by the System. However, commissions
paid by the Plan in the event of open market purchases by the Purchasing
Representative will be taxable to Plan participants.
Purchases
14. How many Common Shares will be purchased for a participant?
The participant cannot specify the number of shares to be purchased
because the number of shares purchased depends on the amount of the
participant's dividend and/or optional cash payments, as well as the purchase
price of the Common Shares. Each participant's account will be credited with
that number of shares, including fractions computed to three decimal places,
equal to the total amount to be invested divided by the purchase price.
Reports to Participants
15. How will participants be advised of their purchase of Common Shares?
As soon as practicable after the Investment Date, the participant will
receive an acknowledgement form from the System. A Statement of Account will
be sent to the participant following activity in the Plan which may be
optional cash payments or the reinvestment of cash dividends on Common Shares.
These statements are the participant's continuing record of the cost of Common
Share purchases and should be retained for income tax purposes.
16. What other communications will participants receive?
Each participant will receive a copy of a current Prospectus. Following
each dividend payment date, a copy of the System's current Quarterly Report to
Shareholders will be mailed with a current Statement of Account. The mailing
will include any supplements or amendments to the current Prospectus. In
addition, the participant will receive the same communications as every other
shareholder, including the System's Annual Report to Shareholders, a Notice of
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Annual Meeting of Shareholders and Proxy Statement, a proxy card (see Question
25), and income tax information forms (see Question 26) reporting dividend
information.
Dividends
17. Will participants be credited with dividends on the fractional shares
held in the Plan?
Yes. It should be noted that the dividends are computed on the total
number of shares which are owned. It makes no difference whether the
participant holds the certificates for the shares or the shares are held in
the Plan.
Certificates for Shares
18. Will certificates be issued for Common Shares purchased?
Normally, certificates for Common Shares purchased under the Plan will
not be issued to participants. The number of shares held in a participant's
account under the Plan will be shown on the participant's Statement of
Account.
Certificates for any number of whole shares credited to a participant's
account under the Plan will be issued upon the written request of such
participant. A participant may use the reverse side of the top portion of the
Statement of Account for this purpose. The issuance of such certificates will
not terminate the participant's continuation in the Plan. Any request for the
issuance of certificates should be mailed to Commonwealth Energy System,
Dividend Reinvestment Plan, P.O. Box 9150, Cambridge, Massachusetts 02142-
9150. Any remaining whole shares and any fractional share will continue to be
held in the participant's account. Certificates for fractional shares will
not be issued under any circumstances.
Shares held in the account of a participant may not be readily
transferable until a certificate is issued and may not be acceptable as
collateral for loans. A participant who wishes to sell or pledge such shares
should request that certificates for such shares be issued in the
participant's name.
19. In whose name will certificates be registered when issued?
Accounts under the Plan are maintained in the names in which certificates
of the participants were registered at the time they entered the Plan.
Consequently, certificates for whole shares issued upon the request of a
participant will only be registered in the name of the participant. A
participant desiring to transfer shares held in the Plan must contact
Shareholder Services in writing and request that the shares be transferred to
the new account.
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Withdrawal
20. When may a participant withdraw from the Plan?
A participant may withdraw from the Plan at any time by giving written
notice to the System.
If a request to withdraw is received by Shareholder Services prior to the
Record Date for any dividend that would otherwise be reinvested for a
participant, the reinvestment feature will be terminated within a reasonable
time after receipt of the request so as to provide for the payment of a cash
dividend for the next quarter. If the request to withdraw is received by
Shareholder Services on or after the Record Date, the dividend paid on the
dividend payment date will be reinvested for the participant's account. The
request for termination will take effect prior to the next dividend payment.
Any optional cash payment which had been sent to Shareholder Services prior to
the receipt by the System of the request for termination will be returned to
the participant if it is practicable to do so.
Following withdrawal from the Plan, all subsequent dividends will be paid
to the shareholder in cash unless and until the shareholder elects to re-
enroll in the Plan (see Question 8).
21. How does a participant withdraw from the Plan?
In order to withdraw from the Plan, a participant must write to
Commonwealth Energy System, Dividend Reinvestment Plan, P.O. Box 9150,
Cambridge, Massachusetts 02142-9150, giving notice of the desire to withdraw
from the Plan and listing the account number. A participant may use the
reverse side of the top portion of the Statement of Account for this purpose.
When a participant withdraws from the Plan, or upon termination of the Plan by
the System, certificates for whole shares credited to the participant's
account under the Plan will be issued and a cash payment will be made for any
fractional share (see Question 22). The System will not repurchase or sell
for any participant any full shares credited to the participant's account in
the Plan.
22. What happens to a fractional share when a participant withdraws from
the Plan or the Plan is terminated?
When a participant withdraws from the Plan, a cash payment representing
the proceeds from the sale of any fractional share will be mailed directly to
the participant. This cash payment will be based on the most recent closing
price of the System's Common Shares on the New York Stock Exchange composite
transactions tape when the withdrawal request is received by the System.
Adjustments for fractional shares would also be made upon termination of the
Plan.
Other Information
23. How can a participant sell or transfer all of the shares registered
in the participant's name?
If a participant chooses to sell all of the shares registered in the
participant's name, the participant must first withdraw from the Plan (see
Questions 20 through 22). The System will not sell for any participant any
full shares credited to the participant's account in the Plan.
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If a participant wants to transfer all of the shares held in a joint
account in the Plan, the participant must notify the System in writing. Any
such written requests should be mailed to Commonwealth Energy System, Dividend
Reinvestment Plan, P.O. Box 9150, Cambridge, Massachusetts 02142-9150.
Until the System receives notification from the participant to do
otherwise, the System will continue to reinvest the dividends on the shares
credited to the account of the participant under the Plan.
24. What happens if the System issues a stock dividend, declares a stock
split or has a rights offering?
Stock dividends distributed on shares registered in the name of a
participant on the books of the System, as well as shares distributed on
account of any split of such shares, and warrants issued for rights applicable
to such shares in a rights offering, will be mailed directly to the
shareholder. Stock dividends on shares credited to a participant's account in
the Plan, or upon any split of such shares, will be credited to the
participant's account.
A participant's entitlement in a rights offering will be based upon the
participant's total holdings--those registered in the participant's name on
the books of the System and those credited to the participant's account under
the Plan. However, rights will be issued for the number of whole shares only
and rights based on a fractional share held in a participant's account will be
sold for the participant's account and the new proceeds will be applied as an
optional cash payment to purchase Common Shares under the Plan on the next
Investment Date.
25. How will a participant's shares be voted at shareholders' meetings?
A single proxy for all of the participant's shares--those registered in
the participant's name, if any, and those credited to the account of the
participant under the Plan--will be sent to each participant prior to each
shareholders' meeting. The participant may vote these shares in accordance
with this proxy or may vote in person at the shareholders' meeting.
26. What are the federal income tax consequences of participation in the
Plan?
a.) General:
A participant who did not elect or who was not eligible for the treatment
of reinvested dividends described in paragraph b, below, will be treated, for
federal income tax purposes, as having received on the Investment Date a
dividend equal to the full amount of the cash dividend paid even though that
amount is not actually received by the participant in cash but, instead, is
applied to the purchase of shares for the participant's account. Also, if
Common Shares are purchased on the open market, a participant's share of any
brokerage commissions paid by the System will be taxed as dividend income to
the participant.
A participant will not realize any taxable income upon receiving
certificates for whole shares, either upon the participant's request for
certificates for those shares or upon withdrawal from or termination of the
Plan. However, a participant may realize ordinary income or a capital gain or
<PAGE 13>
loss for a cash payment that is made in settlement of a fractional share upon
withdrawal from or termination of the Plan. Ordinary income or capital gain
or loss may also be realized upon withdrawal from the Plan, when any or all
whole shares are sold by the participant. The amount of income, capital gain
or loss will be the difference between the amount received and the tax basis
for both the fractional and whole shares which are sold.
b.) Individuals Who Elected to Defer Taxes on Reinvested Dividends:
The Economic Recovery Tax Act of 1981 provided that dividends reinvested
in newly issued shares of certain qualified reinvestment plans, such as the
System's, could be excluded from taxable income. The participant could elect
to exclude up to $750 per year ($1,500 on a joint return). This exclusion,
which began in 1982, expired after the 1985 tax year.
If a participant elected to defer the taxes on reinvested dividends
pursuant to this exclusion, Common Shares purchased with those dividends have
a zero tax basis.
c.) Tax Information Forms:
Following each tax year, the System sends each participant a U.S.
Information Return (Form 1099-DIV.) reporting the taxable dividends for that
tax year. This form contains the information necessary to complete the
dividend income information on the participants' federal income tax return.
Generally, the amount in the box labeled "Total Dividends For The Calendar
Year" should be included on a participant's federal income tax return as
taxable income.
For additional information and any questions regarding the tax
consequences of participation in the Plan, participants should consult their
own tax advisors.
27. What provision is made for foreign participants whose dividends are
subject to income tax withholding?
In the case of those foreign participants whose dividends are subject to
United States income tax withholding, the System will apply the net amount of
the dividend of such participants, after the deduction of taxes, to the
purchase of Common Shares. If such foreign participants desire to invest the
full amount of their dividends, they may tender cash payments in United States
dollars to the System equal to the amount of tax withheld. The minimum cash
payment requirement of $10 will be waived to accommodate all payments,
regardless of size, made by foreign shareholders for this express purpose.
Such payments will be invested for the foreign participants on the Investment
Date if received by the System prior to that date. In addition, foreign
participants may, of course, make optional cash payments in United States
dollars.
28. What are the responsibilities of the System under the Plan?
In administering the Plan, the System will not be liable for any act done
in good faith or for any good faith omission to act, including, without
limitation, any claim of liability arising out of failure to terminate a
participant's account upon the participant's death prior to receipt of notice
in writing of such death.
<PAGE 14>
The participant should recognize that the System cannot assure profit or
protect against a loss on the Common Shares purchased by the participant under
the Plan.
Adoption of the Plan does not constitute any assurance that dividends
will be paid in the future or that they will be paid on the same dividend
payment dates as in the past.
29. Who interprets and regulates the Plan?
The System reserves the right to interpret and regulate the Plan as
deemed desirable or necessary. Any such interpretation or regulation made in
good faith by the System will be binding upon all participants.
30. May the Plan be changed or discontinued?
Although the System hopes that shareholder response will justify
continuing the Plan indefinitely, the System reserves the right to suspend or
terminate the Plan at any time. The System may also make modifications to the
Plan. No such modifications may impair the rights of the participants with
respect to investments theretofore made under the Plan. Any such suspension,
termination or modification will be communicated to all shareholders, both
participants and non-participants.
DESCRIPTION OF COMMON SHARES
The following is a brief summary of certain provisions of the System's
Declaration of Trust affecting the Common Shares of Beneficial Interest, $4
par value.
Dividend Rights and Limitations on Payment of Dividends
Subject to the dividend and sinking fund requirements of the System's
Cumulative Preferred Shares (the Preferred Shares), the holders of the Common
Shares may receive out of funds legally available for the payment of dividends
such dividends as may from time to time be declared by the Trustees of the
System. Under the System's $40 Million Note Agreement (privately placed
Senior Notes), dated June 28, 1989, the System may pay or declare a dividend
if no event of default is existing or to the extent that the aggregate of all
dividend declarations, payments and distributions after December 31, 1988
shall not exceed the Company's aggregate Consolidated Net Income earned since
December 31, 1988 plus $60,000,000 (adjusted to remove the effect of any
losses, write-offs or write-downs relating to the investment of any
consolidated subsidiary in any generating station (not in commercial operation
as of the date of the Note Agreement) as recorded on the consolidated books of
account of the System as of December 31, 1988). The amount of the System's
retained earnings available for cash dividends at December 31, 1993 was
$85,187,000.
Under the terms of the System's Declaration of Trust relating to
Preferred Shares, dividends on Common Shares may not be paid nor may the
System purchase any Common Shares until after dividends accrued on all
outstanding Preferred Shares to the last preceding quarterly dividend payment
date have been paid in full; nor may dividends be paid on the Common Shares
when any required sinking fund redemption payment on the Preferred Shares is
<PAGE 15>
in arrears. No preferred dividends or required sinking fund redemption
payments are in arrears.
Voting Rights
With the exception of certain specified voting rights of the Preferred
Shares described herein, all voting rights of the System are vested in the
holders of Common Shares and each Common Share is entitled to one vote. The
holders of the Preferred Shares of all series, voting as a class, are entitled
to elect two Trustees if and so long as six full quarterly dividends on any
Preferred Shares shall have accrued and remain unpaid, the remaining seven
Trustees to be elected by the holders of the Common Shares. In addition, the
vote of the holders of at least two-thirds of the Preferred Shares of all
series (or any series specially affected) is required as a condition to (i)
altering the terms of the Preferred Shares in any manner substantially
prejudicial to the holders thereof, and (ii) creating any class ranking prior
to or on parity with the Preferred Shares in respect of either the payment of
dividends or the distribution of assets.
Without the vote of the holders of at least a majority of all Preferred
Shares outstanding, the System may not (a) merge or consolidate with any other
corporation or association unless the System is the successor, or otherwise
sell or transfer its assets as, or substantially as, an entirety, or (b) issue
any additional Preferred Shares or any class of shares ranking prior to or on
a parity with the Preferred Shares unless, after giving effect to such issue,
(i) consolidated net income of the System and its subsidiaries (after adding
back interest charges on funded debt of the System) for any twelve consecutive
months within the preceding fifteen months was one and one-half times the sum
of annual interest charges on funded debt of the System plus the annual
dividend requirements on Preferred Shares and on any class of shares ranking
prior to or on a parity with the Preferred Shares and (ii) capital and paid-in
premiums on outstanding Common Shares and any other shares ranking junior to
the Preferred Shares, plus consolidated retained earnings of the System and
its subsidiaries, are at least equal to capital and paid-in premiums
represented by Preferred Shares and all other shares ranking prior to or on a
parity with the Preferred Shares.
Liquidation Rights
On any liquidation of the System, the holders of Common Shares are
entitled to share pro rata all assets after payment of debts and the
liquidation preference plus accrued dividends of all series of Preferred
Shares.
Preemptive Rights
Common shareholders have no preemptive rights in cases where additional
Common Shares are issued otherwise than for cash, or offered for cash publicly
by competitive bidding, or sold for cash to or through underwriters or
investment bankers for public sale, or offered pursuant to a plan whereby
holders may purchase Common Shares by either investing cash dividends from
Common Shares or making optional cash payments, or to the issue of Common
Shares where such shares are offered to the Employees Savings Plan of
Commonwealth Energy System and Subsidiary Companies. If Common Shares are to
be issued or sold for cash in any other manner, they must first be offered pro
rata to the holders of the Common Shares at such price and on such terms and
<PAGE 16>
conditions and for such period as may be determined by the Trustees unless the
holders of two-thirds of the outstanding Common Shares (or if treasury shares
are to be resold for cash, a majority of the outstanding Common Shares)
consent to some other disposition.
Miscellaneous
There are no sinking fund provisions and no rights of conversion or
redemption applicable to the Common Shares.
The outstanding Common Shares are, and the Common Shares offered hereby
will be, when duly issued full-paid and nonassessable.
The System is an unincorporated business trust with transferable shares.
The System's Declaration of Trust provides that every person shall look only
to the trust estate for payment of damages or otherwise and that all written
agreements and obligations entered into by the System shall refer to this
provision. The Declaration of Trust also states that the shares shall be
full-paid and nonassessable, except as otherwise specifically provided in the
certificates. Notwithstanding such provisions, the Supreme Judicial Court of
Massachusetts has in some circumstances imposed personal partnership liability
upon shareholders of an unincorporated business trust where the trust provides
for ultimate control by shareholders. In the opinion of Michael P. Sullivan,
Vice President, Secretary and General Counsel for the System, while a
partnership may technically exist, the possibility of any such personal
liability of the System's shareholders is remote because shareholders are pro-
tected from personal liability on contract obligations containing the so-
called limited liability clause which the System customarily inserts in all
contract obligations, including debt securities, because the System is a
holding company and not an operating company and the possibility of tort
claims (which in any event except for fraud are adequately insured against) is
therefore minimized, and because it has been the System's experience that its
tax liabilities are adequately covered by its income.
The Transfer Agent and Registrar for the Common Shares is The First
National Bank of Boston, Boston, Massachusetts.
LEGAL OPINIONS
Legal matters in connection with this offering will be passed upon for
the System by one or both of Messrs. Michael P. Sullivan, Vice President,
Secretary and General Counsel and Richard J. Morrison, Assistant General
Counsel and Assistant Secretary for the System, One Main Street, P.O. Box
9150, Cambridge, MA 02142-9150. As of September 1, 1994, Mr. Sullivan is the
beneficial owner of 2,040 Common Shares of the System.
EXPERTS
The statements made as to matters of law and legal conclusions under the
caption "Description of Common Shares" have been reviewed by Mr. Sullivan and
are made on his authority as an expert.
The consolidated financial statements and schedules of the System and
subsidiaries included or incorporated by reference in the System's Annual
Report on Form 10-K and incorporated by reference in this registration
statement have been audited by Arthur Andersen LLP, independent public
<PAGE 17>
accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said reports.
INDEMNIFICATION
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to trustees, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
__________________
The name "Commonwealth Energy System" means the trustees for the time
being (as trustees but not individually) under a Declaration of Trust dated
December 31, 1926, as amended, which is hereby referred to, and a copy of
which has been filed with the Secretary of The Commonwealth of Massachusetts.
Any agreement, obligation or liability made, entered into or incurred by or on
behalf of said System binds only the trust estate, and no shareholder,
director, trustee, officer or agent assumes, or shall be held to, any
liability by reason thereof.
<PAGE 18>
__________________________________________ ______________________________
COM/Energy
CONTENTS Commonwealth Energy System
Page
Available Information................ 3 DIVIDEND REINVESTMENT
Incorporation of Certain Documents by
Reference.......................... 3 and
The System........................... 4
Use of Proceeds...................... 4 COMMON SHARE PURCHASE PLAN
Description of the Plan.............. 4
Description of Common Shares......... 14
Legal Opinions....................... 16
Experts.............................. 16
Indemnification...................... 17
Common Shares of
Beneficial Interest
($4 Par Value)
September 23, 1994
PROSPECTUS
__________________________________________ ______________________________
<PAGE 19>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The estimated expenses in connection with the proposed distribution of
existing Common Shares are set forth below:
Registration fee..................................... $ 13,083
Services of COM/Energy Services Company in connection
with the preparation of the Registration Statement,
Prospectus, exhibits and other documents........... 7,100
Printing............................................. 2,530
Postage.............................................. 4,300
Accounting fees...................................... 3,500
Legal fees........................................... 2,000
"Blue Sky" fees and expenses......................... 1,000
Stock exchange listing fees.......................... 9,000
Miscellaneous expenses............................... 3,000
Total estimated expenses............................. $ 45,513
Item 15. Indemnification of Directors and Officers
Each trustee, officer, agent or representative is entitled to
reimbursement or indemnification against any and all loss, costs, expense and
liability incurred or to be incurred by him in good faith in the execution of
his duties. Each present and future trustee, officer, agent or representative
is entitled to reimbursement or indemnification by the System for or against
all expenses reasonably incurred or imposed by him in connection with, or
arising out of, any action, suit or proceeding in which he may be involved by
reason of his being or having been a trustee, officer, agent or representative
of the System, where disposition of such action, suit or proceeding is made in
favor of such trustee, officer, agent or representative; provided that no
reimbursement shall be made until such time has elapsed that appeal can no
longer be taken and that, in the judgement of the trustees, such action, suit
or proceeding will not be recommended.
No trustee, officer, agent or representative of the System shall be
liable for any act, omission, step or conduct taken or had in good faith which
is required, authorized or approved by any order or orders issued pursuant to
the Public Utility Holding Company Act of 1935, the Federal Power Act or any
state statute regulating the System or its subsidiaries. The provisions
hereof shall be brought to the attention of any court and, if found by the
court not to constitute a valid defense on the grounds of not being applicable
to the particular class of plaintiff, each such trustee, officer, agent or
representative shall be reimbursed for, or indemnified against, all expenses
and liabilities incurred by him or imposed on him, in connection with, or
arising out of, any such action, suit or proceeding based on any act,
omission, step or conduct taken or had in good faith, and such expenses and
liabilities shall include, but shall not be limited to, judgements, court
costs and attorneys' fees.
The foregoing rights shall not be exclusive of any other rights to which
any trustee, officer, agent or representative might otherwise be entitled.
<PAGE 20>
The above is a summary of certain provisions of the System's Declaration
of Trust, as amended, relating to indemnification of trustees and officers of
the System.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to trustees, officers or persons controlling the
Registrant pursuant to the foregoing provisions, the Registrant has been
informed that in the opinion of the SEC such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable.
Item 16. Exhibits
Exhibit 1. Underwriting agreement.
Not applicable.
Exhibit 2. Plan of acquisition, reorganization, arrangement, liquidation
or succession.
Not applicable.
Exhibit 4. Instruments defining the rights of security-holders, including
indentures.
Filed herewith as Exhibit 1:
Declaration of Trust of Commonwealth Energy System dated December 31,
1926, as amended by vote of the shareholders and trustees on May 5, 1994.
Filed herein by reference:
Copy of Note Agreement ($40 Million Privately Placed Senior Notes)
dated June 28, 1989 has been filed by the Registrant with the SEC as Exhibit 1
to the September 1989 Quarterly Report on Form 10-Q (File No. 1-7316) and is
incorporated herein by reference thereto.
Exhibit 5. Opinion regarding legality.
Filed herewith as Exhibit 2:
Opinion of Michael P. Sullivan, Vice President, Secretary and General
Counsel of the System.
Exhibit 8. Opinion regarding tax matters.
Not applicable.
Exhibit 12. Statements regarding computation of ratios.
Not applicable.
Exhibit 15. Letter regarding unaudited interim financial information.
Not applicable.
<PAGE 21>
Exhibit 23. Consents of experts and counsel.
Filed herewith:
- Consent of counsel is contained in Exhibit 2 to this Registration
Statement.
- Consent of Independent Public Accountants is filed as Exhibit 3 to
this Registration Statement.
Exhibit 24. Power of attorney.
Not applicable.
Exhibit 25. Statement of eligibility of trustee.
Not applicable.
Exhibit 26. Invitations for competitive bids.
Not applicable.
Exhibit 27. Financial Data Schedule.
Not applicable.
Exhibit 28. Information from reports furnished to state insurance
regulatory authorities.
Not applicable.
Exhibit 99. Additional exhibits.
Filed herewith:
- Authorization of Trustees for designated persons, as Attorney-in-
Fact, to execute any amendment or amendments to this Registration Statement is
filed as Exhibit 4 to this Registration Statement.
Filed herein by reference:
- Agreement between the System, as agent for the Dividend Reinvestment
and Common Share Purchase Plan of Commonwealth Energy System, and the
Purchasing Representative to acquire Common Shares of the System on the open
market for Plan participants has been filed by the Registrant with the
Commission as Exhibit 2 to Amendment No. 1 to Form S-3, Registration Statement
File No. 2-96768, and is incorporated herein by reference thereto.
<PAGE 22>
Item 17. Undertakings
A. The undersigned issuer hereby 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 the 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 the Registration Statement;
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement.
Provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) do not
apply if the registration statement is on Form S-3 or Form S-8, and
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 the
registration statement.
(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 offering thereof.
(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 Plan.
B. 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 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in
the Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
<PAGE 23>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Cambridge, Commonwealth of
Massachusetts, on the dates indicated.
COMMONWEALTH ENERGY SYSTEM
BY WILLIAM G. POIST
William G. Poist, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates indicated.
(i) Principal Executive Officer:
WILLIAM G. POIST September 22, 1994
William G. Poist,
President and Chief Executive Officer
(ii) Principal Financial Officer:
JAMES D. RAPPOLI September 22, 1994
James D. Rappoli,
Financial Vice President and Treasurer
(iii) Principal Accounting Officer:
JOHN A. WHALEN September 22, 1994
John A. Whalen,
Comptroller
(iv) A Majority of the Board of Trustees:
SINCLAIR WEEKS, JR. September 22, 1994
Sinclair Weeks, Jr., Chairman of
the Board
SHELDON A. BUCKLER September 22, 1994
Sheldon A. Buckler, Trustee
HENRY DORMITZER September 22, 1994
Henry Dormitzer, Trustee
BETTY L. FRANCIS September 22, 1994
Betty L. Francis, Trustee
<PAGE 24>
SIGNATURES
(Continued)
FRANKLIN M. HUNDLEY September 22, 1994
Franklin M. Hundley, Trustee
WILLIAM J. O'BRIEN September 22, 1994
William J. O'Brien, Trustee
WILLIAM G. POIST September 22, 1994
William G. Poist, Trustee
G. L. WILSON September 22, 1994
Gerald L. Wilson, Trustee
<PAGE 25>
EXHIBIT INDEX
Reference in
Number Registration Statement
in SEC
Exhibit Exhibit
Table Description Number
4 Declaration of Trust as Amended May 5, 1994.... 1
5 Opinion of Counsel, including Consent.......... 2
23 Consent of Independent Public Accountants...... 3
99 Authorization for Attorney-in-Fact to execute
amendments to the Registration Statement..... 4
99 Agreement between the System and the Purchasing
Representative............................... *
4 Note Agreement ($40 Million Privately Placed
Senior Notes) dated June 28, 1989............ *
_________________
* Incorporated herein by reference at pages 20 or 21.