SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 28, 1998
CONNECTICUT ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
Connecticut 1-8369 06-0869582
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
855 Main Street
Bridgeport, Connecticut 06604
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (800) 760-7776
None
(Former name or former address, if changed-since last report.)
Item 5. Other Events.
On July 28, 1998, the Board of Directors of Connecticut Energy Corporation
(the "Company") declared a dividend distribution of one Right for each
outstanding share of Common Stock, par value $1.00, of the Company (the
"Common Stock") to shareholders of record at the close of business on
September 18, 1998 (the "Record Date"). The Rights are to be issued pursuant
to a shareholder rights plan which was approved by the Board of Directors on
July 28, 1998. Each Right entitles the registered holder to purchase from
the Company one-half of one share of Common Stock at a price of $90.00 per
share (the "Purchase Price"), being $45.00 per half share, subject to
adjustment. The description and terms of the Rights are set forth in a
Rights Agreement (as modified or supplemented and in effect from time to
time, the "Rights Agreement") between the Company and Boston EquiServe
Limited Partnership, as Rights Agent (the "Rights Agent").
Distribution Date; Transfer of Rights
Until the earlier to occur of (i) ten business days following the date (the
"Shares Acquisition Date") of the public announcement that a person or group
of affiliated or associated persons (an "Acquiring Person") has acquired, or
obtained the right to acquire, beneficial ownership of Common Stock or other
voting securities of the Company ("Voting Stock") that have 15% or more of
the voting power of the outstanding shares of Voting Stock or (ii) ten
business days (or such later time as may be specified by the Board of
Directors of the Company and the Independent Directors) following the
commencement or announcement of an intention to make a tender offer or
exchange offer the consummation of which would result in such person
acquiring, or obtaining the right to acquire, beneficial ownership of Voting
Stock having 15% or more of the voting power of the outstanding shares of
Voting Stock of the Company (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to any of
the Company's Common Stock certificates outstanding as of the Record Date,
by such Common Stock certificate. The Rights Agreement provides that, until
the Distribution Date, the Rights will be transferred with and only with the
Company's Common Stock. Until the Distribution Date (or earlier redemption
or expiration of the Rights), new Common Stock certificates issued after the
Record Date upon transfer or new issuance of the Company's Common Stock will
contain a notation incorporating the Rights Agreement by reference. Until
the Distribution Date (or earlier redemption or expiration of the Rights),
the surrender for transfer of any of the Company's Common Stock certificates
outstanding as of the Record Date will also constitute the transfer of the
Rights associated with the Common Stock represented by such certificate. As
soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of
record of the Company's Common Stock as of the close of business on the
Distribution Date and such separate Right Certificates alone will evidence
the Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire at the close of business on July 28, 2008, unless earlier redeemed or
exchanged by the Company as described below.
Exercise of Rights for Common Stock of the Company
In the event that a Person becomes an Acquiring Person at any time following
the Distribution Date, each holder of a Right will thereafter have the right
to receive, upon exercise, Common Stock (or, in certain circumstances, cash,
property or other securities of the Company) having a value equal to two
times the Purchase Price of the Right then in effect. Notwithstanding any of
the foregoing, following the occurrence of such event set forth in this
paragraph, all Rights that are, or (under certain circumstances specified in
the Rights Agreement) were, beneficially owned by any Acquiring Person will
be null and void.
Exercise of Rights for Shares of the Acquiring Company
In the event that, at any time following the Shares Acquisition Date, (i) the
Company is acquired in a merger or other business combination transaction, or
(ii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights which previously have been
voided as set forth above) shall thereafter have the right to receive, upon
exercise, Common Stock of the acquiring company having a value equal to two
times the Purchase Price of the Right then in effect.
Adjustments to Purchase Price
The Purchase Price payable, and the number of shares of Common Stock (or
other securities, as the case may be) issuable upon exercise of the Rights
are subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of, the Common Stock, (ii) upon the grant to holders of the
Common Stock of certain rights or warrants to subscribe for or purchase
shares of the Common Stock or convertible securities at less than the then
Current Market Price of the Common Stock or (iii) upon the distribution to
holders of the Common Stock of evidences of indebtedness or assets (excluding
regular periodic cash dividends or dividends payable in the Common Stock) or
of subscription rights or warrants (other than those referred to above).
Prior to the Distribution Date, the Board of Directors of the Company may
make such equitable adjustments as it deems appropriate in the circumstances
in lieu of any adjustment otherwise required by the foregoing.
With certain exceptions, no adjustment in the Purchase Price will be required
until the earlier of (i) three years from the date of the event giving rise
to such adjustment or (ii) the time at which cumulative adjustments require
an adjustment of at least 1% in such Purchase Price. No fractional shares of
Common Stock will be issued and, in lieu thereof, an adjustment in cash will
be made based on the market price of the Common Stock on the last trading
date prior to the date of exercise.
Redemption and Exchange of Rights
At any time prior to 5:00 P.M. Eastern Standard Time on the tenth day
following the Shares Acquisition Date, the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the "Redemption Price").
Under certain circumstances set forth in the Rights Agreement, the decision to
redeem shall require the concurrence of a majority of the Independent Directors.
Immediately upon the action of the Board of Directors of the Company electing to
redeem the Rights with, if required, the concurrence of the Independent
Directors, the Company shall make announcement thereof, and upon such action,
the right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
At any time after the occurrence of the event set forth under the heading
"Exercise of Rights for Common Stock of the Company" above, the Board of
Directors (with the concurrence of a majority of the Independent Directors)
may exchange the Rights (other than Rights owned by an Acquiring Person,
which have become void), in whole or in part, at an exchange ratio of one
share of Common Stock, and/or other securities, cash or other assets deemed
to have the same value as one share of Common Stock, per Right, subject to
adjustment.
Until a Right is exercised or exchanged for Common Stock, the holder thereof,
as such, will have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends. While the
distribution of the Rights will not be taxable to stockholders or to the
Company, stockholders may, depending upon the circumstances, recognize
taxable income in the event that the Rights become exercisable for Common
Stock or other consideration of the Company or for the stock of the Acquiring
Person as set forth above, or are exchanged as provided in the preceding
paragraph.
Amendments to Terms of the Rights
Any of the provisions of the Rights Agreement may be amended by the Board of
Directors of the Company without the consent of the holders of the Rights
prior to the Distribution Date. Thereafter, the provisions of the Rights
Agreement may be amended by the Board of Directors in order to cure any
ambiguity, defect or inconsistency, or to make changes which do not adversely
affect the interests of holders of Rights (excluding the interest of any
Acquiring Person); provided, however, that no supplement or amendment may
be made on or after the Distribution Date which changes those provisions
relating to the principal economic terms of the Rights. The Board
of Directors may also, with the concurrence of a majority of the Independent
Directors, extend the redemption period for up to an additional 20 days.
The term "Independent Directors" means any member of the Board of Directors
of the Company who was a member of the Board prior to the date of the Rights
Agreement, and any person who is subsequently elected to the Board if such
person is recommended or approved by a majority of the Independent Directors,
but shall not include an Acquiring Person or any representative thereof.
A copy of the Rights Agreement is filed herewith as Exhibit 1. The foregoing
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to such Exhibit, which is hereby incorporated
herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits. The following exhibits are filed herewith and
incorporated herein by reference:
Exhibit Number
1 Rights Agreement dated as of July 28, 1998 between Connecticut
Energy Corporation and Boston EquiServe Limited Partnership, as
Rights Agent.
2 Press Release dated July 28, 1998.
EXHIBIT INDEX
Number Description Page
99.1 Rights Agreement dated as of July 28, 1998 8
between Connecticut Energy Corporation and
Boston EquiServe Limited Partnership,as Rights
Agent.
99.2 Press Release dated July 28, 1998. 68
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CONNECTICUT ENERGY CORPORATION
Dated: August 4, 1998 By: /s/ Carol A. Forest
Name: Carol A. Forest
Title: Vice President, Finance,
Chief Financial Officer,
Treasurer and Assistant
Secretary