[Federal Register Volume 59, Number 64 (Monday, April 4, 1994)] [Unknown Section] [Page 0] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 94-7909] [[Page Unknown]] [Federal Register: April 4, 1994] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 35-26013] Filings Under the Public Utility Holding Company Act of 1935 (``Act'') March 28, 1994. Notice is hereby given that the following filing(s) has/have been made with the Commission pursuant to provisions of the Act and rules promulgated thereunder. All interested person are referred to the application(s) and/or declaration(s) for complete statements of the proposed transactions(s) summarized below. The application(s) and/or declaration(s) and any amendments thereto is/are available for public inspection through the Commission's Office of Public Reference. Interested persons wishing to comment or request a hearing on the application(s) and/or declaration(s) should submit their views in writing by April 21, 1994 to the Secretary, Securities and Exchange Commission, Washington, DC 20549, and serve a copy on the relevant applicant(s) and/or declarant(s) at the address(es) specified below. Proof of service (by affidavit or, in case of an attorney at law, by certificate) should be filed with the request. Any request for hearing shall identify specifically the issues of fact or law that are disputed. A person who so requests will be notified of any hearing, if ordered, and will receive a copy of any notice or order issued in the matter. After said date, the application(s) and/or declaration(s), as filed or as amended, may be granted and/or permitted to become effective. Penn Fuel Gas, Inc., et al. (70-8068) Penn Fuel Gas, Inc., (``PFG''), 55 South Third Street, Oxford, Pennsylvania, 19363, a Pennsylvania holding company exempt from registration under section 3(a)(1) of the Act pursuant to rule 2, and Carol Ware Gates, Oxford, Pennsylvania, Marilyn Ware Lewis, Strasburg, Pennsylvania, John H. Ware, IV, Oxford, Pennsylvania, and Paul W. Ware, Strasburg, Pennsylvania (collectively, ``Ware siblings'') have filed an application under sections 9(a)(2) and 10 of the Act in connection with acquisitions of common shares of PFG and related transactions, pursuant to certain trust and voting agreements. Applicants also request an order under section 3(a)(1) exempting PFG from all provisions of the Act, except section 9(a)(2). PFG, through eight wholly owned Pennsylvania gas utility subsidiary companies, provides gas utility service to approximately 65,725 customers, 99.7% of which are located in Pennsylvania.\1\ PFG has outstanding 717,583 shares of its common stock, par value $1.00 per share (``PFG Common Stock''), of which John H. Ware, III and his wife Marian S. Ware own 572,847.25 shares.\2\ --------------------------------------------------------------------------- \1\The utility subsidiaries are Allied Gas Company, Central Penn Gas Company, Counties Gas Company, Interboro Gas Company, Lewistown Gas Company, Union Gas Company, North Penn Gas Company and South Penn Gas Company (``South Penn'') (collectively, ``PFG system companies''). South Penn is the only company that engages in gas operations outside of Pennsylvania. In addition to its customers in that state, South Penn serves 230 customers in Frederick County, Maryland. Its Maryland utility assets represent 4.4% of South Penn's total net utility property, plant and equipment. For the twelve months ended June 30, 1993, South Penn had non- Pennsylvania operating revenues of $433,748, representing 3.3% of its total operating revenues, and net operating income from non- Pennsylvania sales of approximately $40,000. During that period, 0.4% of the total volume of gas sold by PFG system companies was sold to customers outside of Pennsylvania; the system obtained less than 1% of its gas utility gross operating revenues and net gas utility income from sales to customers outside of Pennsylvania; and the system had $544,316 or 0.4%, of its net utility property, plant and equipment located outside of Pennsylvania. \2\The Ware siblings, in their individual capacity, each own less than 5% of the PFG Common Stock. --------------------------------------------------------------------------- John and Marian Ware have established sixteen inter vivos trusts (``Trusts'') for the benefit of their four children and their issue. The Trusts are grouped into four interest groups (``Trust Groups''). Each Trust Group contains four Trusts, each of which benefits one of the four Ware siblings and his or her issue. Each Trust has its situs in Pennsylvania and has two trustees: CoreStates Bank, N.A. (``CoreStates''), a national banking association, as corporate trustee, and the Ware sibling for whose principal benefit the trust has been established, as individual trustee. Upon the granting of the requested order, applicants state that John and Marian Ware, or their respective estates, will make gifts of PFG Common Stock to at least one of the Trusts in each Trust Group in amounts which will result, initially, in each individual trustee having (in conjunction with CoreStates as corporate trustee) power to vote more than 5%, but less than 10%, of the PFG Common Stock.\3\ Applicants anticipate that John and Marian Ware will ultimately transfer, by inter vivos or testamentary disposition, a sufficient number of shares to each Trust Group so that each individual trustee will have (in conjunction with CoreStates as corporate trustee) power to vote more than 10% of the PFG Common Stock.\4\ --------------------------------------------------------------------------- \3\Under the terms of each Trust, the concurrence of the corporate trustee and the individual trustee is necessary to vote the shares of PFG Common Stock held by the Trust. Under the Pennsylvania Business Corporation Law of 1988, however, if the trustees disagree on how to vote the PFG Common Stock and, thereafter, only one of the trustees attends the shareholder meeting at which the vote is to be taken, PFG is generally required to recognize the action of the attending trustee as the action of both trustees. Each trustee thus has the potential power to vote all of the shares of PFG Common Stock held by the Trust. \4\The applicants state that all of the shares of PFG Common Stock that are now held or may hereafter be acquired by the Trusts, the trustees and the Ware siblings in their individual capacities are subject to restrictions on transfer by a Shareholder's Agreement dated November 19, 1992. --------------------------------------------------------------------------- The applicants and CoreStates intend to enter into a shareholders' voting agreement (''Voting Agreement'') which provides, among other things, that the power to vote all PFG Common Stock then held and thereafter acquired by the Trusts, the individual trustees and corporate trustee, and the Ware siblings in their individual capacities will be delegated to Marilyn Ware Lewis, effective upon the granting of the requested order.\5\ Applicants state that the delegation of voting power will facilitate a smooth transition of voting control to Ms. Lewis, whose general business experience is expected to promote the efficient and economic operation of the PFG system. --------------------------------------------------------------------------- \5\As noted previously, each Ware sibling currently holds, in an individual capacity, less than 5% of the PFG Common Stock. Applicants do not anticipate that the Ware siblings will acquire any additional PFG Common Stock in their individual capacities. Additional authorization of the Commission will be obtained before any Ware sibling acquires an amount that would result in that individual's owning, controlling or holding with power to vote 5% or more of the PFG Common Stock. --------------------------------------------------------------------------- Applicants request authorization under sections 9(a)(2) and 10 for each of the four Trust Groups and each individual trustee, as a co- trustee with CoreStates, to acquire an initial amount of 5% or more of the PFG Common Stock.\6\ Applicants further request any authorization that may be necessary for Ms. Lewis, in her individual capacity, to obtain the delegated power to vote the PFG Common Stock pursuant to the Voting Agreement.\7\ --------------------------------------------------------------------------- \6\The individual trustees will rely on the exemption from section 9(a)(2) provided by rule 11(d) with regard to any acquisition of PFG Common Stock made subsequent to the initial acquisition. CoreStates will rely on the exemption from section 9(a)(2) provided by rule 3(b) with respect to its acquisitions of PFG Common Stock. \7\Specifically, applicants request any necessary authorization for Ms. Lewis, in her individual capacity, to obtain a delegation of the right to vote 5% of the PFG Common Stock. Ms. Lewis will rely on the exemption from section 9(a)(2) provided by rule 11(d) with regard to any delegation under the Voting Agreement that results in the power to vote, in her individual capacity, more than 5% of PFG Common Stock. --------------------------------------------------------------------------- Applicants also request an order under section 3(a)(1) exempting PFG from all provisions of the Act, except section 9(a)(2). Applicants state that PFG and all of its public-utility subsidiary companies are incorporated in Pennsylvania, and that the utility business of PFG and each of its public-utility subsidiary companies is predominantly intrastate in character and carried on substantially in Pennsylvania. Applicants state that none of the trustees, Trusts or Trust Groups will be a holding company within the meaning of the Act as a result of the proposed transactions. CoreStates, as a bank-fiduciary, will rely on rule 3(a) to exempt it from any obligation, duty, or liability imposed upon it as a holding company. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Margaret H. McFarland, Deputy Secretary. [FR Doc. 94-7909 Filed 4-1-94; 8:45 am] BILLING CODE 8010-01-M