[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]


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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\
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    \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.
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    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\
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    \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.
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    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.
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    \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.
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    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\
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    \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.
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    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